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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.