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[qi:004] Updated: 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; Rochester, N.Y.; and Greensboro, […]

[qi:004] Updated: 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; Rochester, N.Y.; and Greensboro, N.C. Data collection in Austin, San Antonio and Rochester will begin in April with metered billing to begin this summer, the business weekly reports. Greensboro apparently will get its wallet raided a bit sooner.

Update: Time Warner finally got back to me to clarify a few points. First, the important stuff: They will create a “super tier” that offers up to 100 GB before overage charges apply, but they haven’t yet decided how much it will cost. Also, Time Warner will monitor downloads starting in April but the actual metered billing in San Antonio and Austin, Texas, will begin in September. Three months before they plan to charge folks under the tiered plans, they will notify customers, offer them a meter and let them see how the metered billing will affect them. Read the official statement.

Time Warner is joining other ISPs in trying to squeeze more money from their broadband pipes, generally in the name of needing to upgrade the network or to stop bandwidth hogs.  But in truth, caps and tiered plans are about limiting competition (especially from online video), and squeezing customers, because a lack of competition means they can. Here’s the money quote from the BW article:

“We need a viable model to be able to support the infrastructure of the broadband business,” Time Warner Cable CEO Glenn Britt says in an interview. “We made a mistake early on by not defining our business based on the consumption dimension.”

As an Austin Time Warner Cable customer, I’m completely in the dark about these plans, but maybe I’ll have a notification email in my inbox tomorrow. A customer support person didn’t know about tiered broadband plans, but thought they might be cutting off people who are dubbed excessive users in Waco, Texas, about 45 minutes away. Calls to the Time Warner PR folk have not been returned.

In an earlier interview, a local Time Warner Cable engineer noted that the average Austin TWC customer downloads 6 GB per month. Given that Time Warner’s tiers range from 5 GB per month at $29.95 on the low end to 40 GB per month for $54.90 at its peak, with 10 GB and 20 GB tiers falling somewhere in between, it sounds like the average Austin resident will have to pay around $40 a month for 7 Mbps down. Plus $1 per GB in overage fees. Needless to say, I’m not looking forward to it.

Keep in mind that these are not even ultrafast DOCSIS 3.0 services customers of other cable companies will be paying for. This is basic cable broadband, which amounts to highway robbery when compared to paying $62.95 per month for 22 Mbps of downstream speed and up to 5 Mbps up from Comcast (with a 250 GB per month cap). But given that the communications market is so uncompetitive, that’s not an option I have. It’s AT&T DSL or trying to manage under a cap.

Should Time Warner deign to give this subscriber any further information, I’ll share it with you guys. Meanwhile, consider Austin innovation to be on the verge of being stifled. AT&T is the other major player in this market, and it’s working on its own tiers.

  1. Give them an inch and they’ll take a mile. I guess this means that their tests are going profitable. Doesn’t seem right to me that they are limiting bandwidth while working on a walled garden of online video only available to subscribers. Too bad the FTC lacks the willpower or the teeth to actually do anything about it. Not much consolation, but at least subscribers have the option of going DSL.

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  2. I think it’s also worth pointing out that using an average number is a bit misleading. There are more people who only care about the net for email and who use very little bandwidth then pirates downloading HD content, I’d be more interested in knowing what the median subscriber downloads per month, I think you’d get a more realistic estimate for what the average cost will actually be.

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    1. Stacey Higginbotham Wednesday, April 1, 2009

      I agree but it’s a number they don’t give out., However, according to the BusinessWeek article in Beaumont about 14% of the trial participants exceeded their cap and had to pay additional fees that averaged about $19 a month. That’s pretty significant.

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      1. Stacey,

        Any thoughts on a possible connection between this and the 2 year lock-in contract they’re pushing??

        I just signed off on it last week thinking I had made the right move ($300 in savings) – but now worry that I fell for a rather ingenious bait-and-switch =/

        Companies like TWC don’t just shave off $300 without some sort hidden gotcha. I knew there had to be a catch – never thought it would show up this soon after though.

        Thanks for keeping a close eye on this story.

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  3. I installed Tomato on my router this month to monitor my broadband usage across all of my internet devices. From 3/9 to 3/31 my family used 117gb (105gb down – 11gb up) of bandwidth. That’s four of us using the internet including streaming video and skype. So a full month might be 150gb to 175gb.

    So as you can see these cap levels will KILL online video and VOIP. It will be interesting to see if Time Warner will include their VOIP in the cap.

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  4. Has it been announced if this concept is in place if you have your cable and phone through them? Now that they are selling their own VOIP I can’t see that they would be able to put these caps on their own products. I’m a blogger and have absolutely no idea how much bandwidth I use (I know, I’ll have to find out) but we use VOIP all the time so I am concerned.

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  5. [...] is reporting that Time Warner Cable is expanding its initial trial that requires users to pay per bandwidth used [...]

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  6. christina viering Wednesday, April 1, 2009

    I use voip all the time too.

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  7. What about those of us that stream Netflix? I pay my subscription, I pay my Microsoft tax to let me play it through the XBOX 360, and now I’ll be limited to watching a few videos every month?

    BS and I won’t stand for it.

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    1. … and what exactly are you going to do about it? Face it, cowboy. They got ya by the short & curlies.

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  8. Does anyone know how Japan’s ISP’s charge for broadband service? I know that they have had way faster upload and download speeds than the US for a while now, but i wonder what they pay for it?

    I found this online, but it mainly addresses speed concerns, not pricing…

    http://www.overclockersclub.com/news/24229/

    Broadband in Japan is $60.00/month for 150 megabits per second (Mbps). The closest thing the United States has to that is 50 Mbps for an average of $120/month. London has the US beat in starting prices because it’s only $9/month to get 8 Mbps which is more of an introductory speed. For a paltry 1 Mbps in New York, you’d have to pay $20/month. We start to notice a pattern when we compare the US to Iceland and how much of each population has adopted broadband. In Iceland, 83% of the people have broadband, comparatively, in the United States (this I found quite interesting) only 59% of the people have broadband.

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  9. “Does anyone know how Japan’s ISP’s charge for broadband service?”

    Yahoo Broadband is a big player in Japan and they just charge tiered pricing depending on speed and network type (ADSL vs fiber, etc)

    Same thing with South Korea. No metered nonsense for broadband.

    If TWC rolls out this pricing structure in NYC region, I’m dropping them immediately. They’re really going to take a lot of PR hits and lose customers.

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