Time Warner announced that they're going to start charging customers for high speed internet access based on the amount of data they transfer each month and if customers exceed their designated amount of data they'll be charged extra. From the piece on WXII's website:
Customers will select from plans that cost between $29.95 to $54.90 a month and will be charged overage fees when they exceed their monthly allotted amount, according to an article in BusinessWeek.
The company is planning to offer four levels at 5, 10, 20 and 40 gigabytes (GB) respectively. Time Warner said customers will be charged $1 for each gigabyte downloaded that exceeds their plan's cap.
Sounds like a Verizon Wireless plan doesn't it?
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Befuddled 
wonder if that is a wise business mood considering that the most active consumers of broadband is what marketers and advertisers are looking for on the Internet. If every internet provider starts billing by usage, then people will start ratcheting down their usage especially towards the end of their monthly billing period.
Not hard with iTunes downloads of music and video to start running up the totals. they say only a small percentage of users hit that 40GB limit but in the Internet of the future which so many are touting especially for business opportunities, expect that to escalate.
Wonder if you under use your quota for month, do you have rollover GBs for the following month?
Brian, all very good questions and points. I expect a little push back from
some customers and yawns from others. With three teenagers and one home
office I think I’ll be on their high range.
Flood city council meetings. Demand them to introduce TWC to serious competition from other cable providers is one part of a muti-pronged approach. People need to raise hell.
I’m probably on the high end of usage, too. One of my unanswered questions is this: Is there an accurate way for a consumer to track their usage so that they can know where they stand. I believe we will be subject to Time Warner’s verdict with no meter that we can check. There should be a transition period prior to this taking effect, during which customers are shown their usage numbers. Otherwise, how do you decide which plan to subscribe to?
I’ll also point out which I did in my piece on it (http://life.firelace.com/2009/04/the-last-straw-with-time-warne.php) that let’s all remember where wireless plans are going. Starting with Sprint and eventually everyone else, there are now “unlimited” use plans. Which means that the evolution is towards unlimited, not away. TWC’s move is regressive.
Let’s also consider the fact that the actual cost of cellular carriers over the air is very much limited and thus expensive. You only have so much spectrum to work within and the technological advancements are always “how to use that spectrum more efficiently”. This versus cable operations where they have the bandwidth but they’re trying to just charge you for something that they’re not using all of since they have room to maneuver by data capping.
I’m curious how TWC will treat customers like myself who bundled all three services for a set price by signing a two year contract. Something tells me there is a few phrases in the finest of print reminding me that the terms of service can change at any time.
I’m not a big user by any means, but, and someone who correct me if I am wrong, we do watch 3-6 streaming Netflix films a month + the average amount of random online vids (youtube, news feeds, etc). Further, I’m a Zune guy (there are not many of us out there — don’t laugh!).
I don’t even know what a Torrent is (someone noted on another forum that it’s folks who do something “Torrenty” that TWC is trying to slow down).
Like Leatherwing says, the key is going to be understanding how we can monitor the rate of our own usage.
I really don’t think this has anything to do with low usage customers subsidizing high bandwidth customers, as Time Warner claims. They were happy with that structure for a long time (just like an all you can eat buffet can handle a few big-eaters – they know that most users’ usage will never approach the provider’s cost).
The truth is they are fighting their entertainment competitors – Netflix, Hulu.com, most networks, etc. Why pay for Time Warner Video on demand when I can watch Netflix streaming movies for a flat monthly subscription. Why pay for Time Warner DVR when I can watch network shows any time I want from the networks’ websites.
But this will have an economic effect on anyone who does business online. Telecommuters, freelance web developers, small software developers with national or international clients, will all feel the bite from this move by Time Warner. At a time when the Triad needs to be lean and competetive, we’ll be shackled as one of the few regions in the country with a tiered system (initially at least) because Time Warner has no viable competitor in this market.
AMR, if your Netflix movies are high def, 6 movies a month would put you above 12 Gb per month, plus whatever other bandwidth you consume. That would put you in the 3rd highest tier, at least.
If they implement tiered pricing? Then after your two year contract (in accordance to what they’ve said at least), what will happen is that you get screwed twice on your billing. I mean this from calculating it from your phone perspective. First, you’re already “paying” for your phone service. But then, since there is a data cap, you’re also “paying” on the data end of it. They can’t do anything about this because:
1) If they say that they’ll allow all voip traffic through, then that means they’re not calculating volume of traffic but traffic shaping. That starts going down the slippery slope of privacy since you can determine what packets are what and start to piece things together (I can actually show how being on the same network, you can piece together images that are being surfed on the same network as a proof of concept).
2) If they say that they’re going to let their own phone service through and charge for other Voip services (like Vonage) then it’s predatory marketing since you’re providing an advantage above your competition by limiting your competition on your network. Which would then drop into a legality issue.
I think they backed themselves into a corner by offering the voip phone plans, unless they’re going to pull those completely to move into a tiered internet billing. If they move forward on both ends, you can guarantee that there will be some lawsuits being filed since you can’t have your cake and eat it too. At least I can’t see it being justified, regardless of how I feel about it.
I doubt there will be rollover. Even in cellular, the only carrier that does that is T-Mobile. And for good reason from a business model perspective. Unless you keep on top of your users and their traffic patterns, that can seriously eat back into your profit margins.
Interesting and potentially painful. Thanks for the breakdown, darkmoon.