Time Warner Cable tries metering Internet use

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AP

Time Warner Cable tries metering Internet use

Monday June 2, 5:37 pm ET

By Peter Svensson, AP Technology Writer

Time Warner Cable starts customer trial with metered Internet access in Texas

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.

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

[Aggie87]

Two thoughts - if they're going to do this (meter people), they should lower the costs for those that use less than "average".

Also, I don't watch 80% of the channels that cable companies force you to pay for if you want "expanded basic" or whatever it's called. How about a pay as you go plan for cable tv too, where you pick and choose your channels. They make you pay for crap you don't want to get the 5-10 semi-decent channels.

[Shawn]

Two thoughts - if they're going to do this (meter people), they should lower the costs for those that use less than "average".

Also, I don't watch 80% of the channels that cable companies force you to pay for if you want "expanded basic" or whatever it's called. How about a pay as you go plan for cable tv too, where you pick and choose your channels. They make you pay for crap you don't want to get the 5-10 semi-decent channels.

Ala-Carte service for cable would be hard to implement since so much revenue comes from so few channels. Customers demand more content choices, but many of these channels don't really bring in much money. Thus the lower revenue channels get bundled together with the higher earning ones, to help distribute the cost and make the bottom line look better. I sat in on an industry meeting once where they discussed this issue and said that if they went ala-carte that cable companies would have to drop many of the channels (due to lack of return on investment) and many of these channels would be forced to shut down.

Not surprisingly many of the higher quality channels would be the ones to get axed.

Edited June 3, 2008 by Shawn

[Chuck Nessa]

We would all suffer if customers could choose channels. Say goodbye to the CSPANs and much of the best programming. Thank the folks for "expanded basic".

[Van Basten II]

What's new about metering uploading and downloading files on the web, i thought every internet provider did that.

Right now, what i do is to pay a surcharge of 50 $ per month plus my regular fee of internet use and i can do upload and download as much as i want. Weirdly if i upgraded my speed i would not be able to do that.

By the way guys, they're not talking about cable ...

[Chuck Nessa]

By the way guys, they're not talking about cable ...

I know but I'm really exhausted from trying to put postage stamps on my emails.

[Aggie87]

We would all suffer if customers could choose channels. Say goodbye to the CSPANs and much of the best programming. Thank the folks for "expanded basic".

I'd be willing to pay $1.00 per month for CSPAN in exchange for not having to pay $1/month for each of The Speed Channel, The Golf Channel, any of the QVC type channels, the Hallmark Channel, and so forth. I know those channels have their supporters, but they can pay the $1/month for those, as far as I'm concerned.

I'm sure there's a way to make things work like that, as least as an alternative to the expanded basic choice.

[Chuck Nessa]

Yeah, like the "free market" really works.