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Time Warner Cable tries metering Internet use (Merged x 3)


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http://biz.yahoo.com/ap/080117/time_warner_cable_internet.html?.v=2

Time Warner Cable Will Do Trial on Setting High-Speed Internet Charges Based on Usage

NEW YORK (AP) -- Time Warner Cable will experiment with a new pricing structure for high-speed Internet access later this year, charging customers based on how much data they download, a company spokesman said Wednesday.

The company, the second-largest cable provider in the United States, will start a trial in Beaumont, Texas, in which it will sell new Internet customers tiered levels of service based on how much data they download per month, rather than the usual fixed-price packages with unlimited downloads.

Company spokesman Alex Dudley said the trial was aimed at improving the network performance by making it more costly for heavy users of large downloads. Dudley said that a small group of super-heavy users of downloads, around 5 percent of the customer base, can account for up to 50 percent of network capacity.

Dudley said he did not know what the pricing tiers would be nor the download limits. He said the heavy users were likely using the network to download large amounts of video, most likely in high definition.

It was not clear when exactly the trial would begin, but Dudley said it would likely be around the second quarter. The tiered pricing would only affect new customers in Beaumont, not existing ones. Time Warner Cable is a subsidiary of Time Warner Inc., the world's largest media company.

This seems like a terrible idea IMO. Essentially you could have a month of heavy usage and get hammered with overage charges, I'll take the flat fee anyday. I don't have time warner but for those who do, pay attention to this.

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horrible idea for them. those 5% of high usage users will simply switch to a flat-fee service (where available), and time warner will be stuck getting less revenue from the lower bandwith customers.

the only way it would work is if all companies made this switch simultaneously, and then of course customers would be outraged.

So I take it back, this would never stick.

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Bad for consumers that use a lot of bandwidth. Probably good for service providers.

It'd be interesting to see an analysis of customers lost because of this vs. plant that does not have to be expanded in order to meet increasing customers/increasing customers' needs as a result of this sort of policy.

No doubt, Time Warner's bet is that the high bandwidth customers cost them more than they are worth (or certainly more than they are being charged).

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That's bad for ecommerce in general. As network speeds increase (keep in mind as a nation we are no where near the front) companies online offer more video and larger images. If the providers start charging for downloads than things like instant movie rental online and online purchasing of software will be hit hard.

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Sounds like a good idea as long as they actually don't enforce QoS (Quality of Service) and P2P throttling for those of the heavy users that are willing to pay for it.

It would also serve as an interesting educational tool for those users that hog the bandwidth by running P2P applications all damn day long. It shifts the cost of providing bandwidth where it belongs and has potential to dramatically improve network performance by getting rid of the leaches that don't feel they should have to pay.

The problem I see however is the fact that a good percentage of PCs nowadays is spyware/trojan infected and that users do not necessarily have the ability to detect those system compromises.

Time Warner stands to risk churning a lot of those type of customers that feel that they have been billed for excess bandwidth due to no fault of their own.

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i really hope that this doesnt become the fixed pricing plan for time warner. i really didnt want to go with them because of no nfl network and bad service both customer and product but have been pleasantly surprised. i have never had any problems with them save for my dvr boxes breaking but they always just replace them no questions asked.

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  • 4 months later...

Here we go. :doh: Sounds like the crap my Canadian friends deal with, those that have Rogers Cable.

http://biz.yahoo.com/ap/080602/tec_time_warner_cable_internet.html?.v=4

NEW YORK (AP) -- You're used to paying extra if you use up your cell phone minutes, but will you be willing to pay extra if your home computer goes over its Internet allowance?

Time Warner Cable Inc. customers -- and, later, others -- may have to, if the company's test of metered Internet access is successful.

ADVERTISEMENT

On Thursday, new Time Warner Cable Internet subscribers in Beaumont, Texas, will have monthly allowances for the amount of data they upload and download. Those who go over will be charged $1 per gigabyte, a Time Warner Cable executive told the Associated Press.

Metered billing is an attempt to deal fairly with Internet usage, which is very uneven among Time Warner Cable's subscribers, said Kevin Leddy, Time Warner Cable's executive vice president of advanced technology.

Just 5 percent of the company's subscribers take up half of the capacity on local cable lines, Leddy said. Other cable Internet service providers report a similar distribution.

"We think it's the fairest way to finance the needed investment in the infrastructure," Leddy said.

Metered usage is common overseas, and other U.S. cable providers are looking at ways to rein in heavy users. Most have download caps, but some keep the caps secret so as not to alarm the majority of users, who come nowhere close to the limits. Time Warner Cable appears to be the first major ISP to charge for going over the limit: Other companies warn, then suspend, those who go over.

Phone companies are less concerned about congestion and are unlikely to impose metered usage on DSL customers, because their networks are structured differently.

Time Warner Cable had said in January that it was planning to conduct the trial in Beaumont, but did not give any details. On Monday, Leddy said its tiers will range from $29.95 a month for relatively slow service at 768 kilobits per second and a 5-gigabyte monthly cap to $54.90 per month for fast downloads at 15 megabits per second and a 40-gigabyte cap. Those prices cover the Internet portion of subscription bundles that include video or phone services. Both downloads and uploads will count toward the monthly cap.

A possible stumbling block for Time Warner Cable is that customers have had little reason so far to pay attention to how much they download from the Internet, or know much traffic makes up a gigabyte. That uncertainty could scare off new subscribers.

Those who mainly do Web surfing or e-mail have little reason to pay attention to the traffic caps: a gigabyte is about 3,000 Web pages, or 15,000 e-mails without attachments. But those who download movies or TV shows will want to pay attention. A standard-definition movie can take up 1.5 gigabytes, and a high-definition movie can be 6 to 8 gigabytes.

Time Warner Cable subscribers will be able to check out their data consumption on a "gas gauge" on the company's Web page.

The company won't apply the gigabyte surcharges for the first two months. It has 90,000 customers in the trial area, but only new subscribers will be part of the trial.

Billing by the hour was common for dial-up service in the U.S. until AOL introduced an unlimited-usage plan in 1996. Flat-rate, unlimited-usage plans have been credited with encouraging consumer Internet use by making billing easy to understand.

"The metered Internet has been tried and tested and rejected by the consumers overwhelmingly since the days of AOL," information-technology consultant George Ou told the Federal Communications Commission at a hearing on ISP practices in April.

Metered billing could also put a crimp in the plans of services like Apple Inc.'s iTunes that use the Internet to deliver video. DVD-by-mail pioneer Netflix Inc. just launched a TV set-top box that receives an unlimited stream of Internet video for as little as $8.99 per month.

Comcast Corp., the country's largest cable company, has suggested that it may cap usage at 250 gigabytes per month. Bend Cable Communications in Bend, Ore., used to have multitier bandwidth allowances, like the ones Time Warner Cable will test, but it abandoned them in favor of an across-the-board 100-gigabyte cap. Bend charges $1.50 per extra gigabyte consumed in a month.

http://www.timewarnercable.com

http://www.bendcable.com

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I don't think some type of cap is unreasonable. I don't need to pay the same amount for my home connection as someone next door who is downloading HD movies all day.

I'd like the (relatively small) pipe I have paid for to be available when I want it.

:2cents:

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IMO, the only way to make this fair is to uncap the minimum amount you pay.....if you are going to charge heavy users more, then light users should be able to pay as little as $10 if that is all they are doing.....they won't do that of course.

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IMO, the only way to make this fair is to uncap the minimum amount you pay.....if you are going to charge heavy users more, then light users should be able to pay as little as $10 if that is all they are doing.....they won't do that of course.

course not,

this is all just a way to provide less service and charge more for it.

i think some of the other giants such as apple and google might have something to say about this... plus this sounds like it would hurt time warner... think about how much advertising they would lose if people stopped using their live feeds to conserve bandwith.

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From DSLReports (actually they broke this 5 months ago) confirmed by AP today...
The Associated Press is now confirming that the trial, originally slated for the first quarter, will begin this Thursday. The trial will apply caps ranging from 5GB-40GB across the company's existing tiers, charging users $1 per each additional gigabyte consumed. Only new customers will be charged, but not for the first two months. All customers will have access to a new bandwidth meter.
The trial will apply a 40GB cap on their fastest 15Mbps tier, an idea I'm sure the folks at Verizon are thrilled with, given that tier is supposed to compete with their uncapped FiOS product. According to the Time Warner Cable memo from January obtained by Broadband Reports, the trial is, in part, an effort to perfect the marketing of per-byte billing.
...
A Time Warner Cable spokesman says this is "the fairest way to finance the needed investment in the infrastructure." Does applying a 5GB cap on a $30, 768kbps tier strike you as fair, if it's the "bandwidth hogs" causing congestion issues? Time Warner Cable claims that 5% of subscribers consume half of all network resources, yet you'll notice that instead of capping just those users or forcing them to a business tier, they're taking aim at all users.
That's because despite what public relations officials claim, the push toward "over use fees" has less to do with fairness and more to do with increasing already plump revenue while cashing in on competing video services (Vuze, AppleTV, piracy). Incumbent carriers have very healthy profits under the existing flat-rate pricing system. More than enough for upgrades, the latest and greatest traffic shaping gear, and absurd executive compensation. Don't believe the bandwidth armageddon hype.
I have TWC right now and I guarantee that if this happens I'll switch to DirectTV and change my Internet to an unlimited DSL plan. I don't really do anything time-sensitive, however I do think my average month gets beyond 40GB... sheesh... that's not a lot.
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I just did a rough estimate of how much I'd get charged. Are you guys ready for this?

First column is an estimate of how much I downloaded, second is how much uploaded, and third would be my over-charges. I'm just estimating since I don't feel like doing precise math. Putting my uploads at 1.5x download since a) I normally keep about a 3x ratio when I do torrents, and B) I think torrents are half of my bandwidth. I also use a Korean service that is unmonitored but also uploads. I'd say 85% of my downloads are the things that the copyright police haven't gone after (foreign tv and sports), and the rest of the 15% is stuff they have gone after. I estimated my GB amount from the number of DVDs that I've burned per month and assumed that I only had to burn because my hard-drive had no more space on it.

October 2006: 52 GB, 75 GB, $80

November 2006: 80 GB, 120 GB, $160

December 2006: 100 GB, 150 GB, $210

January 2007: 80 GB, 120 GB, $160

February 2007: 40 GB, 60 GB, $60

March 2007: 64 GB, 96 GB, $120

April 2007: 40 GB, 60 GB, $60

May 2007: 96 GB, 142 GB, $200

June 2007: 44 GB, 62 GB, $68

July 2007: 52 GB, 75 GB, $80

August 2007: 96 GB, 142 GB, $200

September 2007: 40 GB, 60 GB, $60

October 2007: 96 GB, 142 GB, $200

November 2007: 96 GB, 142 GB, $200

December 2007: 80 GB, 120 GB, $160

January 2008: 40 GB, 60 GB, $60

February 2008: 40 GB, 60 GB, $60

March 2008: 52 GB, 75 GB, $80

April 2008: 28 GB, 56 GB, $30

May 2008: 28 GB, 56 GB, $30

Total: $2278 + %20 (for streaming and web-browsing) = ~ $2700. Averages out to something like $135 per month. Yeah... that was a fun exercise... anyone else want to play?

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Question for the guys out there who are more tech savvy than myself ..

Is there any way that this is ultimately a good thing? I've read bits and pieces of warnings that with the increased video usage and increasing use of bandwidth that over time the internet will need to be re-tooled to accommodate such demands. Is there any legitimacy to these concerns? If so .. would metered service like this possibly curb the unequal strain created by more aggressive downloaders, etc?

I know that most people who understand this well enough will probably detest the idea of something that could limit their use .. and I understand it's implementation is most likely more out of concern for maintaining certain profit margins rather than the well-being of any internet infrastructure (a concept I have little to no grasp of..) ... but I just thought I would pose the question.

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from the way i understand it... the internet won't get clogged up-- thats just fear mongering so some companies can avoid updating their infrastructure.

this will just lead to the crippling of future services: such as streaming film sites that have limited commercial interruption. if you miss your favorite tv show it could cost you silly amounts of money to watch it online. yada yada... there is nothing good that could come of this outside of price gouging.

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