60 Comments

Summary:

Is Time Warner Cable crazy? As I review the pricing plans unveiled today for the broadband and cable provider’s tiered levels of service, I can’t help but wonder that. Earlier this year, the company said it would experiment with tiered pricing in Beaumont, Texas, and now […]

Is Time Warner Cable crazy? As I review the pricing plans unveiled today for the broadband and cable provider’s tiered levels of service, I can’t help but wonder that. Earlier this year, the company said it would experiment with tiered pricing in Beaumont, Texas, and now has set up a pricing plan that ranges from $29.95 a month for something I’d call “barely broadband” at 768 kilobits per second with a 5-gigabyte monthly cap to $54.90 per month for 15 megabits per second and a 40-gigabyte cap. Overage fees will be $1 per gigabyte, and customers will be able to monitor their bandwidth consumption via the company’s web site.

The pricing takes effect Thursday in Beaumont but Time Warner Cable says it doesn’t know if and when it will try this elsewhere. I’ve got a personal stake in this story as Time Warner Cable is my current ISP. I pay about $35 a month for my connection, which is between 1 and 1.5 Mbps, and stream a lot of content from sites such as Hulu and iTunes. Plus, I’m constantly downloading software from the web in the form of fat updates or just to try things out.

On the other hand, it would be worth it to pay more to get a 15 Mbps connection if that’s indeed what I would get, but the bandwidth cap would limit me to watching about 40 hours of standard video content from my PC a month, plus my regular surfing habits and email use. (I suppose this is more transparent than P2P throttling, though).

But here’s where I question Time Warner Cable’s sanity: By offering tiered service at 15 Mbps it’s promising me faster speeds that I will have limited opportunity to use, potentially driving me into the arms of another provider. Additionally, the cable guys are in a fight to the death with the telephone companies, who are unlikely to resort to such plans because they don’t have the same limitations when delivering last-mile services.

For people who get or send a lot of media online, neither of Time Warner Cable’s tiers are a good option, which means they’ll have to turn to other providers. For me, that means DSL from AT&T, as U-verse or FiOS isn’t available in my area. And for a technology teleworker, that’s the equivalent of giving an engineer a slide rule. I don’t think Time Warner Cable will win by trying to hold back changes wrought by ubiquitous broadband with a pricing plan, but it seems hell-bent on trying.

  1. If Time Warner introduces this in my city, I’ll switch to DSL.

    Share
  2. I use Time Warner in NC pay $44.95 for 1.5Mbs, if they increase the rate I would rather use something else, but unfortunately we don’t have much of a choice, all of them charge the same. It is collusion at best but nobody cares.

    Share
  3. Framboulatos Monday, June 2, 2008

    The only reason they can even dream (of testing) such a pricing structure is the lack of competition. Which is the same reason they can get away with throttling.

    Share
  4. I also am a TW subscriber, mostly happy. I would gladly pay bigger bucks for a 15MBs connection, but would find that completely useless with a 40GB cap. Just my work takes at least a quarter of that, and then like you I am constantly trying out software, streaming video, audio, etc.

    I would be gone in a flash. They really need to revisit their “power user” tier. It is all out of whack.

    Switching carriers is really a pain. If I bail on them, they would have a hard time getting me back, just as it has been hard for ATT & another local choice in Austin to pull me away from TW. But this kind of plan would be my marching order. And I also get my phone and TV from them. They would lose all of that, over $150/month. Pretty stupid idea.

    Share
  5. [...] for 55 dollars? Are you freaking kidding me? A faster connection — yes, but isn??t that faster sphttp://gigaom.com/2008/06/02/time-warner-cable-broadband-tiers-lead-to-fears/Complaints Board wgranberrywmconnect.comwgranberrywmconnect.com Complaints: No way to get online [...]

    Share
  6. this has to be treated like roads and highways very soon .. the private sector simply is unable to see the bigger picture about life on earth in this century …

    Share
  7. Heh. Isn’t the industry moving the other way? I remember when AOL capped you to 10 hours. Then it was 100, now it’s unlimited always-on access. In today’s world with broadband, I’ve go my Tivo and several computers with always on connections. When I’m home, my cell phone connects via wifi, and I use vonage for VOIP.

    In a day and age where connectivity is king, Time Warner seems to be going the other way.

    Share
  8. [...] metered broadband is coming to the US market place. Time Warner is the first major cable company to announce its metered broadband strategy & prices for a small Texas market, in what can be described as [...]

    Share
  9. [...] metered broadband are coming to the US market place. Time Warner is the first major cable company to announce its metered broadband strategy & prices for a small Texas market, in what can be described as [...]

    Share
  10. [...] metered broadband are coming to the US market place. Time Warner is the first major cable company to announce its metered broadband strategy & prices for a small Texas market, in what can be described as [...]

    Share
  11. hey FCC, wake up! …that is, unless no one in government cares that telecoms are raping us for higher margins while letting our one uncontrolled link to the international community languish.

    Share
  12. [...] that Time Warner Cable is testing a bill-by-the-byte approach for Internet access, it’d be nice to have a simple way to measure individual Internet use. [...]

    Share
  13. 40 GB per month for $55? That’s insane!!!!

    Media Temple will sell you a shared hosting account with 100GB of transit per month for $20. I’m sure you can get at least 100 Mbps through this connection (if not GigE).

    Granted, there is an additional expense related to having the cable in your home but that doesn’t come close to justifying such high bandwidth prices.

    If they want to rid themselves of P2P traffic clogging their networks then price the bandwidth based on uploaded or pushed data.

    Verizon: When will FiOS be available in the East Village?

    Share
  14. [...] Needless to say, this metering thing raised quite a ruckus in the blogosphere. Silicon Alley Insider notes that the pay-per-use trial will fail. Jeff Jarvis says Time Warner is choking its customers. Headline of the day goes to GigaOm, who noted all the tiers for fears. [...]

    Share
  15. [...] With less options for users, we start to see ISPs experimenting with tiered broadband plans. GigaOm reports that Time Warner Cable Broadband “… has set up a pricing plan that ranges from $29.95 a month for [...] 768 kbps with a [...]

    Share
  16. @ Chris

    This is why they can raise their prices so high in certain markets. They know you can’t go anywhere else for your service. :(

    At least your bill won’t be as high as this consumers Comcast Bill:

    http://pixible.com/2008/06/3-million-dollar-comcast-bill-accused-of-rape/

    Share
  17. Time Warner service absolutely stinks !!!
    Don’t see how they can get away with this.

    Share
  18. I’m off to another carrier the moment that pricing arrives here in New York – thats insane.

    Hope you are reading this Verizon etc etc, I’d be planning my next rollout to every location that Time Warner announces this new pricing scheme to – lol like shooting fish in a barrel sometimes.

    Cheers,
    Dean Collins
    http://www.Cognation.net

    Share
  19. To the good people of Beaumont Texas: Please help out the rest of the USA and yourselves by not purchasing a subscription from TW Cable. If either DSL or FIOS was not available I would go back to a phone dial up service such as Net Zero before I would pay for the metered broadband.

    Share
  20. Reading this article and the comments is killing me. (Mike, you would go back to dial-up???!) Stacy when you write “they don’t have the same limitations when delivering last-mile services”, you are not accurate. The DSLAM has to backhaul to the telco Internet POP. In many cases, it is by an NxT1 service not fiber, especially when the DSLAM is in a subdivision. Telco DSL does indeed have bottlenecks. And I don’t know about the rest of you, but Bright House has always treated me way better than Verizon. And DSL has had more outages than RR by a long shot, plus not nearly as fast. Telcos already cap cellular data. You don’t think they will follow suit eventually? For many of you, broadband is like airlines — all the choices suck, so you go what works best from your airport.

    Share
  21. I read that today and immediately started looking into DSL. If they decide to make my connection “limited”, then I’m dropping them and switching. There’s no need to put up with that sort of nonsense when other options are available.

    Share
  22. An analogy – a buffet charging per plate rather than all you can eat – would you go there?

    Share
  23. [...] Pity the people of poor Beaumont, TX. They’re the guinea pigs in Time Warner’s experiment with tiered pricing for internet usage. It’s supposed to be a way to prevent peer to peer traffic from gumming up the works, and it’s certainly not a popular solution. [...]

    Share
  24. [...] Warner’s announcement that they are testing metered bandwidth usage is quickly establishing a leadership position that may take years to fight [...]

    Share
  25. [...] if you take into account our average behavior online, data transfers start to add up really fast. Stacey crunched the numbers yesterday and came up with an interesting conclusion: If you bought the monthly 15 mbps/40 GB [...]

    Share
  26. [...] if you take into account our average behavior online, data transfers start to add up really fast. Stacey crunched the numbers yesterday and came up with an interesting conclusion: If you bought the monthly 15 mbps/40 GB [...]

    Share
  27. [...] seriousness. Cisco’s data actually is important to note, especially in the light of the recent tiered/metered broadband moves by US carriers and their demagogy about bandwidth [...]

    Share
  28. [...] seriously. Cisco’s data is actually important to note, especially in the light of the recent tiered/metered broadband moves by U.S. carriers and their demagogy about bandwidth [...]

    Share
  29. [...] seriously. Cisco???s data is actually important to note, especially in the light of the recent tiered/metered broadband moves by U.S. carriers and their demagogy about bandwidth [...]

    Share
  30. [...] seriously. Cisco’s data is actually important to note, especially in the light of the recent tiered/metered broadband moves by U.S. carriers and their demagogy about bandwidth [...]

    Share
  31. [...] seriously. Cisco’s data is actually important to note, especially in the light of the recent tiered/metered broadband moves by U.S. carriers and their demagogy about bandwidth [...]

    Share
  32. [...] seriously. Cisco???s data is actually important to note, especially in the light of the recent tiered/metered broadband moves by U.S. carriers and their demagogy about bandwidth [...]

    Share
  33. [...] seriously. Cisco’s data is actually important to note, especially in the light of the recent tiered/metered broadband moves by U.S. carriers and their demagogy about bandwidth [...]

    Share
  34. [...] Leinwand, Thursday, July 3, 2008 at 9:36 AM PT Comments (0) According to AT&T, Time Warner and others, usage-based pricing is coming to your Internet connection. While the reasons for this [...]

    Share
  35. [...] Leinwand, Thursday, July 3, 2008 at 9:36 AM PT Comments (0) According to AT&T, Time Warner and others, usage-based pricing is coming to your Internet connection. While the reasons for this [...]

    Share
  36. [...] Malik, Tuesday, July 22, 2008 at 6:01 AM PT Comments (0) Time Warner Cable and AT&T are busy trying to force their vision of the metered Internet on the consumers, taking [...]

    Share
  37. [...] Malik, Tuesday, July 22, 2008 at 6:01 AM PT Comments (0) Time Warner Cable and AT&T are busy trying to force their vision of the metered Internet on the consumers, taking [...]

    Share
  38. Not that anyone will listen but read carefully if you really want to learn something. I run an ISP. I have been in this business since the days of the DOS based BBS system.

    Currently on the ISP that I operate 1.2 percent of the users use 50% of all the bandwidth. This is NOT a typo! So if we kick off the 1.2 percent we would lose hundreds of dollars and save thousands in bandwidth alone. Then you have all the other network upgrades that have to be made to support this extensive usage. So for each dollar we lose we save ..maybe 10! Do the math!

    1) Time Warner is not crazy. Those customers that would be hit with the surcharge are NOT profitable. If a customer pays you $50 per month and costs you $250 to $1000 per month in bandwidth, who cares if they quit. I actually encourage them to go to a competitor.

    2) Usage limits are coming. get used to it. With all the streaming video etc on the way if ISPS don’t start limiting high usage users they will lose money. If they get forced to allow anyone to do whatever they want on their own network than expect your monthly fees to at least double.

    Most of the people who have no clue about this business complain about limits, Peer to Peer blocks, slow downs etc. If these ISPS did not take these steps your voip phone would die, your online games would suck and you would not be happy with the service. So get over it.

    For all those uneducated people who have always worked for someone else and never run a business I have a simple question. Would you like to run/own or operate a business that loses money? No?

    If some of you know it all people think you know somehting and can do a better job of running an ISP I’ll set you up as an ISP for $50k approximately and you can sell accounts with unlimited use..i’ll give you 6 months tops and you will looking for another 50K just to keep running.

    So those who threaten to quit and go to another ISP…go for it. TW will be happy and rightfully so while the competitor will choke and die from the influx of bandwidth hogs jumping off Time Warner.

    Tim
    Someone who actually knows a bit about reality here!

    Share
    1. Tim….are you crazy! I think you are. Listen ,in this time and day, more and more people are able to create competition. Very few people are going to put up with this bullying by Time Warner Cable, and they will go to another competition when they find one. Do you really think that most of us are going to put up with that? You must be out of touch with all of the smart chaps now jumping at the chance of inventing competition to Time Warner. Technology is so advanced now,and large corporations are so mistrusted by the public, that someone is going to create a competition that is going to make them a lot of money and basically let Time Warner know that they can not win on this one. Yahoo.com thought that they were the only top dog until Google came around….Myspace thought they were head honcho until Facebook, and so on…. We live in a society where if you can’t please the customer, and they see you as ripping them off, there is always another group of people waiting to take your spot and invent the next big thing….so Time Warner cable is not different….there will be a replacement to go along with what we currently have. Get with it, you obviously not on the up and up with current technology advances.

      Share
    2. Tim, I do run my own business, and understand your point. Profitability is a good thing. If the business model is broken, it needs to change. Will consumers accept it, is the question?

      Let’s view this from the consumer’s side for a minute. Just one example…let’s say I’m a cable subscriber, and use their internet service. Oh, and they’ve just instituted a tiered usage plan with overage fees. And I download HD movies, or watch my favorite TV programs online. In the example of an HD movie, that could cost me about $30 (see (http://bits.blogs.nytimes.com/2008/01/17/time-warner-download-too-much-and-you-might-pay-30-a-movie/). Who’s going to pay that? (more than once) Anybody?

      I agree with the referenced article…I think these folks are trying to get in front of the growing demand for downloaded video. What would cable companies do if we could download all of our video (TV) content from the internet?

      And if “extremely high users” are the villains here, why not punish them via published policies? In the TW case, I think more people will bump against that 40Gb download than you might think at first. And more will going forward with on-demand video….which is *exactly* what I’m sure TW is counting on.

      Share
  39. [...] trying to cut down on bandwidth hogs by offering different tiers of service. Time Warner Cable is testing a 5 GB service tier delivered at 728 kbps in Texas, but Frontier doesn’t seem to have an offering with a larger [...]

    Share
  40. [...] makes the scheme even more devious and clever is that it saves the service providers’ video franchises. I had earlier pointed out that most of these carriers have spent billions of dollars to upgrade [...]

    Share
  41. [...] And Frontier’s cap seems particularly stupid given that Time Warner hasn’t yet begun implementing a tiered system in Frontier’s region and will offer a cap that exceeds 5 GB if it does. As the Free [...]

    Share
  42. [...] behavior. And Frontier’s cap seems particularly stupid given that Time Warner hasn’t yet begun implementing a tiered system in Frontier’s region and will offer a cap that exceeds 5 GB if it [...]

    Share
  43. [...] grace period is ending for Time Warner Cable customers in Beaumont, Texas, who are part of the ISPs tiered broadband trials. A spokesman for Time Warner Cable declined to comment but confirmed that residents would soon see [...]

    Share
  44. [...] Comcast announcing a 250 GB cap on its broadband service and Time Warner trialling a tiered service with limits that range from 5 GB to 40 GB, we’ve decided to challenge people to break those [...]

    Share
  45. [...] Warner got the ball rolling back in January, and in June it announced a trial limiting folks to tiers from 5 GB per month to 40 GB per month. Billing began this [...]

    Share
  46. [...] Time Warner Cable is also doing a similar strategy with tiered plans ranging from 5 GB to 40 GB. Bandwidth overage is billed at an additional $1 per 1GB. (This is still an experimental pricing plan on selected areas. – GigaOm) [...]

    Share
  47. [...] Time Warner Cable is also doing a similar strategy with tiered plans ranging from 5 GB to 40 GB. Bandwidth overage is billed at an additional $1 per 1GB. (This is still an experimental pricing plan on selected areas. – GigaOm) [...]

    Share
  48. [...] Warner Cable is trialing a metered bandwidth offering in Beaumont, Texas, with tiers of service ranging from 5 GB per month through 40 GB per month. When users reach their [...]

    Share
  49. [...] Time Warner’s caps start at 5 GB per month and stop at 40 GB per month. Frontier’s also start at 5 GB per month, and last week Frontier’s CEO said the company would also offer larger tiers. The filing states that AT&T will also offer customers a meter to show consumers how much bandwidth they have consumed, which is more than Comcast (with its 250 GB cap) or even Time Warner have offered.  AT&T also plans to notify customers when they reach the 80 percent threshold of their tiered plan. Only after the second instance of breaking through the set cap, will customers be charged on a per gigabyte basis. [...]

    Share
  50. [...] Time Warner’s caps start at 5 GB per month and stop at 40 GB per month. Frontier’s also start at 5 GB per month, and last week Frontier’s CEO said the company would also offer larger tiers. The filing states that AT&T will also offer customers a meter to show consumers how much bandwidth they have consumed, which is more than Comcast (with its 250 GB cap) or even Time Warner have offered.  AT&T also plans to notify customers when they reach the 80 percent threshold of their tiered plan. Only after the second instance of breaking through the set cap, will customers be charged on a per gigabyte basis. [...]

    Share
  51. [...] real competition. Although, I may be too cynical, as I bet that TWC will find it hard to implement tiered bandwidth when going head-to-head for broadband and cable subscribers with Verizon, which has shown no [...]

    Share
  52. [...] On the conference call, COO Landel Hobbs said Time Warner Cable also plans to expand its metered broadband to more cities this year. I’ve emailed the company get more details, such as the specific [...]

    Share
  53. [...] Time Warner Cable Broadband Tiers Lead to Fears ("Is Time Warner Cable crazy?") [...]

    Share
  54. [...] March 31, 2009 | 10:15 PM PT | 0 comments It was only a matter of time before Time Warner Cable expanded its efforts to bring tiered broadband out of the tiny town of Beaumont, Texas. According to BusinessWeek, Time Warner is expanding its trials to San Antonio, Austin, Texas and [...]

    Share
  55. You will now have to pay extra for:
    * Banner ads being forced on you
    * People putting mp3 and wav backgrounds music on their pages (myspace, facebook, etc…)
    * Large resolution images (which may be uploaded at a higher resolution then necessary by an inexperienced developer)
    * Windows updates & Software updates in general (FireFox, Safari, Opera, Flash, Java, Acrobat, etc…)
    * Antivirus updates
    * Netflix
    * Television episodes posted by their respective networks
    * YouTube
    * Email Attachments
    * Comet chat clients (requiring high bandwidth to maintain connection)
    * Online games
    * iTunes & Amazon downloads
    * File transfers between office/home/school (Access to online school library resources)
    * Remote desktop bandwidth
    * Unwanted traffic (port scans, automated exploits, DoS)
    * Internet radio

    Share
  56. [...] when ISPs talk about meters they’re talking about different service tiers that don’t reflect actual usage, but herd customers into set plans where most will be paying [...]

    Share
  57. [...] the door to metered pricing plans on wireline broadband networks such as those attempted in 2008 by Time Warner Cable and AT&T. In a speech this morning outlining his network neutrality proposal, Julius [...]

    Share

Comments have been disabled for this post