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Time Warner Curbs Internet Usage


Chicago (IL) - In an effort to curb massive bandwidth usage by its customers, Time Warner Cable has come up with a new old idea - to put a cap on your download volume each month. If you are over that limit, you will be paying extra and don’t expect that extra inconvenience to be any cheaper than what you are paying for your Internet Service today.

We can’t really say that Internet service providers are spoiling us here in North America with low prices or globally competitive bandwidths. But reading what Time Warner Cable told the Associated Press earlier today got us scratching our heads.

Time Warner Cable has begun putting new subscribers to its service on metered accounts. This new model, apparently limited to the area of Beaumont, Texas, provides users a certain "allowance" and will charge users $1 per gigabyte when they exceed their limit. Kevin Leddy, Time Warner Cable’s executive vice president of advanced technology, told the AP that this metered billing approach is an attempt "to deal fairly with Internet usage", given the fact that just 5% of the company’s subscribers are taking up "half of the capacity on local cable lines".

It is understandable that Time Warner Cable is looking for ways to balance its capacity, but it is always problematic taking something away from users they are used to and this specific approach seems to be a bad idea no matter how you look at it.

According to the AP article, Time Warner Cable is offering tiers that will range "from $29.95 a month for relatively slow service at 768 Kb/s and a 5 gigabyte monthly cap to $54.90 per month for fast downloads at 15 Mb/s and a 40 GB cap." By any measure, these are pricey plans, even if we don’t consider the download cap. Both downloads and uploads will count toward the monthly cap, by the way. Justifying its metered approach, Leddy told the AP that "We think it’s the fairest way to finance the needed investment in the infrastructure."

Compared to its rivals, the new offered does not look especially attractive. AT&T, for example, is currently offering 1.5 Mb/s download speeds via its DSL service with no cap for $25 per month.

It is questionable whether metered use is convincing enough to change Internet usage habits of users, especially in times that are dominated by multimedia media that are being delivered over the Internet. If you enjoy YouTube, enjoy downloading your digital music over iTunes and if you have begun streaming home videos through Netflix, Time Warner Cable is probably not for you, at least not in those areas where the company curbs Internet usage.

A 5 GB cap will give users a bandwidth of about 166 MB per day, which may not be enough for most users and families out there today. A 40 GB cap elevates the average daily download volume to 1.3 GB, which should be enough, if you are not downloading a movie every day. But some may argue that for $55 a month, there should not be a cap at all.

This looks like a classic case in which a company is shooting itself in the foot.

  • Christopher1
    I hate to say this, but 166MB's a day is not enough for even the person doing the barest of the barest of online surfing or downloading.
    That 40GB's a month is also not enough for even the middle-range downloaders as well, since movies, music and streaming video are pretty big files.
    I'll be blunt: I stayed away from Bittorrent for a month not too long ago, and I was shocked at how much bandwidth I had used at the end of the month: 100GB's.
    Now, I am on the internet quite a bit watching online video, posting on forums, etc........ but no more than other people my age are.
    So if my bandwidth usage is that high JUST with using internet browsers and FTP.... these amounts for a normal user are kinda 'low', to be blunt.
  • Learn_w_Graffix
    Is TW the only ISP in that area? If so, the poor folks there will have no choice (other than dial-up). Interesting how the cable companies promised commercial-free TV when they first started laying cable through everyone's yard; now cable TV is filled with commercials! Who is supposed to regulate / protect consumers from monopolies like cable Internet providers? If there was true competition, TW would only do what customers thought was fair. Without it, customers are stuck.
  • well, well..
    i'm a subscriber of time warner, but if that is the approach they are taking now.
    i feel sorry for them. but i prefer to pay 70 usd DSL 8 mbps to earthlink, that having a cap on my downloads. i have a htpc. and i download almost all HD documentary and play then on my HTPC and that alone is more than 90gb a month, and i do it every now and then, not all day or all weeks. I feel sorry for timewarner, but with new technology coming really fast on their way. Verizon fios, New IP tv and satellite. and many other ways to be online. i really don't see a bright future for time warner..
  • In 2005, Kansai Electric Power started 1 Gbit/s FTTH service at 8700yen (90US$).

    wiki article on "Internet in Japan".

    TWC has NO GROUNDS to charge $55 for such terrble service, especially capped! They say consumers have gotten used to unlimited bandwidth. TWC has gotten used to getting away with half-assed service and charging for it.

    I really hope an HONEST company comes around and provides fiber connections with 10x the speed at half the cost, as is possible.
  • gm0n3y
    Wow, I probably average about 5-10GB a day down and even more up. So for this service I'd be paying $55 plus (at 5 up/down a day) $260 for extra usage (300GB over 30 days). WTF is this crap. Right now I pay about $100 (after tax) for 18Mb/s unlimited and digital cable w/ some extra channels thrown in. I would NOT pay $315 a month just for internet.
  • Luscious
    They seem smart enough to know that only 5% of users are hogging the majority of their bandwidth - why don't they tax those 5% of users instead of every subscriber? Oh, excuse me, the TW CEO's "greedy son" is included in that 5%...

    Next they'll be charging us a quarter every time we double-click on firefox. Nice job corporate America. What happened to freedom???