Meter Running on All-You-Can-Eat
Time Warner Cable didn't have to do any thinking outside of the box to come up with a new pricing plan for the delivery of Internet services. Instead, TW simply found an old box from the 1990's and blew the dust off metered service with usage caps. Like other cable companies, TW's lines are clogged with only five percent of users sucking up to 50 percent of the cable giant's upload and download capacity. Comcast attempted to deal with the problem by targeting programs like BitTorrent with throttling techniques and found itself a target of a Federal Communications Commission network neutrality investigation. TW hopes to avoid that sort of embarrassment by offering tiered service (something the cablecos know all about) with monthly allowances for downloading and uploading files. Users exceeding their monthly allowance will pay $1 per gigabyte. According to the Associated Press, the plan will be tested marketed in Beaumont, Tex., beginning later this week. "We think it's the fairest way to finance the needed investment in the infrastructure," Kevin Leddy, TW's executive vice president of advanced technology, told the AP. TW's tiers will begin at $30 a month for 768 kilobits per second service with a 5-gigabyte cap. The top tier goes for $55 a month for 15 megabits per second and a 40-gigabyte cap. For those of you old enough to remember the dial-up era of U.S. Internet service, usage caps were SOP for ISPs like AOL. The caps went away with the advent of broadband service as rival ISPs began challenging AOL's huge market share by offering unlimited usage. Even AOL finally dropped its caps. Now, it appears, the cable industry is looking back to the 20th Century to deal with its 21st Century issues. One cable company closely following TW's test will be Comcast, which is also considering usage caps since its throttling approach has ignited the ire of both consumers and regulatory agencies. |
Comments (4)
Vendors of downloadable media such as iTunes should be rightly alarmed by this recidivism. In the 21st century, 40 gigabytes is small potatoes for an entire month. (Users will concentrate their big downloads in February, the shortest month.) What is TimeWarner Cable doing with their monthly user fees if they are not already building out their infrastructure? Good argument for being regulated as a utility monopoly.
Waiting for WiMAX....
Posted by Stratocaster | June 4, 2008 1:58 PM
MSN tried charging for monthly service to a lot of people who were already used to getting it free. Their answer to MSN's new monthly charge was to drop it. I personally know lots of people not using MSN now because of their new monthly cost. I do not pay for MSN because it was part of my internet package and if my provider thinks that I will pay extra for MSN they are dead wrong. I will change internet providers first because I can.
Posted by chip | June 5, 2008 12:04 PM
For most customers there is no choice as to *high-speed* internet service. Where is the monopolies commission when you need them?
Comcast and friends should ONLY be able to do this in markets where they can clearly demonstrate a viable alternative. This should go down to the individual address level. Can only get high-speed internet from one DSL provider and not cable - no caps allowed. Can only get it from a single cable supplier and not via DSL - no caps allowed.
The ISPs should be putting their efforts into getting Americas internet systems back into the first world. We are *way* behind most of Europe, and as far as Asia is concerned we are a laughing stock.
Posted by Only Me! | June 5, 2008 2:55 PM
I think it's time these companies either gave back public funds or improved infrastructure. Japan now has 30 times the download speed of the average US citizen and why? Time Warner and others that accepted funding and government deregulation in 1984 when Congress wanted to get cable going just wasted it. So much so that these companies had to be reregulated in 1992. Later in the Telecom Act of 1996 more money was given away to provide access to schools and basic service to everyone in the USA and they were deregulated again.
Companies like Time Warner and the rest squandered those funds but didn't improve service s ending with profits going to stock holders instead of improved infrastructure.
Posted by Robert Stanton | June 6, 2008 11:38 AM