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Summary:

[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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  10. well I for one uses the internet for emails and blogging so I don’t use much of a bandwidth.

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  11. [...] “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.”  (Giga Om) [...]

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  12. 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

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  13. I wonder if anyone has considered what this is going to do for software patches. If Microsoft or Apple, or anyone else for that matter wants to push a patch for bugs in their software, they’d better be willing to pay “ME” for the bandwidth. People may just stop updating their software, that will certainly make Windows more secure.
    Also, if I go to a website I’ll sure as heck never ever click on a little blinking ad or watch a video of the latest greatest product again. I’ll just block them all. I can’t afford to waste the bandwidth.

    No more buying music or video from iTunes or Amazon and no I won’t just go out and buy the CD. I went close to 15 years without buying any music before iTunes and I’ve spent hundreds of dollars there now since it’s launch.

    How will this affect free WiFi? With all those people milking the free WiFi at your local hotspot, will businesses no longer be able to afford to offer this free service and simply pull the plug on the expense?
    It may actually be a good time to look once again at AOL dial up. If we can’t use the internet we may as well go back to a 20 buck a month dial up system for email and a few other simple tasks.

    Now I understand that a lot of this may be extreme, but I suspect there may be a lot of backlash from what seems to be nothing more than a money grab from these companies.

    This could be a nice place in time for Satellite internet companies to pick up a lot of new customers. Especially if they hit the ad airwaves with “Sign up with us, we don’t cap your bandwidth.”

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    1. +1 with what Shenzhov said.

      Also, with metering in effect, why bother creater faster cable modem or increasing speeds? So that we can hit our caps that much quicker and give TWC more $$$?

      Also, this limitation would be very bad for companies like Netflix and Amazon that allow you to download videos. I wonder if there is some kind of plan for TWC to boost its own movie/streaming via cableboxes (i.e. you don’t pay bandwidth charges for On Demand)?

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  14. Ya, this is total BS. Our tech level is already lower than much of the rest of the world. And this is just another HUGE step backwards. Netflix will be useless in those areas. It takes a 1M/sec connection to do minimum streaming and a 6M/sec connection for their basic HD streaming. 6M/sec = 360M/min = 43G/2 hours. Now these are bits, not bytes, but, is TWC measuring bits, or bytes? Still even if it was bytes, that 1 HD movie just burned 5.4G of that bandwidth…

    I’m pissed because I work from home. (hear me rant in my blog on my site). And ofcorse, they are the only game in town… So I’m going to be forced to go to business class just to get uncapped performance. So they just got like another $150/month out of me…

    My back-side hurts. I can’t believe there isn’t talk of a lawsuit yet.

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  15. [...] Here is a good blog posting about it. This is Time Warners official response. [...]

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  16. In England a company named NTL also tried consumption based billing. There was such outrage, customers were canceling
    their service with NTL. Within ONE month NTL reversed their new billing policy. If EVERY TW customer effected by this new
    billing scheme cancels their service, then it will hit TW where it truely hurts, their wallets. But it will take everyone biting the bullet and canceling service for it to be effective. Also, a supervisor named Iris Andrews is someone we can all call and complain too about this outrageous change in terms. We spoke to her last night for 30 minutes. Just call 336-584-1383 and get through to a representative, tell them you need to speek to Iris Andrews, and you should be connected shortly. If we dont stand together in this then TW will keep looking for new and inventative ways to charge us for services that we already pay out the wa-zoo for!
    UNITED WE STAND!!!!!

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    1. You really think that is going to happen? Come on… People won’t just stop using a utility service like the Internet. If your local cable provider is your only option, and you don’t have DSL in your region, then this is all a lot of hot air and you can’t change a thing. Suck it up sister.

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  17. [...] Time Warner Cable expands metered broadband, protests start. [...]

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  18. [...] A number of user-created websites quickly popped up urging customers to contact Time Warner Cable in protest. Users of news aggregation systems like Redditt and Digg screamed bloody murder. Website commentary wasn’t much kinder, most sites classifying the move as unnecessary, anti-competitive, and a threat to content innovation. [...]

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  19. [...] Higginbotham | Monday, April 6, 2009 | 1:21 PM PT | 0 comments When it comes to trialing its metered broadband service, Time Warner Cable’s choice to do so in the tech-savvy city of Austin, Texas, was no [...]

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  20. [...] seen an increase in the number of customers signing up in its Rochester, N.Y., market after rival Time Warner Cable last week named the city as a trial market for its own tiered broadband plans, also likely played a role, notes StoptheCap.com, which broke the [...]

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  21. [...] Higginbotham | Monday, April 6, 2009 | 5:49 PM PT | 0 comments When Time Warner Cable rolls out its new pricing plans, it won’t base its tiers simply on consumption, but will also consider broadband speed as [...]

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  22. [...] (my network provider) trying and failing to correctly implement bandwidth measuring tools for their upcoming volume cap.   (I keep getting passed a private IP.) Categories About This Site «Major libc [...]

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  23. [...] consumers’ access to broadband. Massa, who represents an area near Rochester, N.Y., where Time Warner has expanded its metered billing trials, seems to agree with my assessment that the Internet is critical to both individuals and economic [...]

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  24. There’s a really simple solution to all of this… If you download terabytes of content per month, get a satellite feed installed and use that for the big downloads. Its fast, and as long as you don’t need a lot of latency (read this as online gaming, VOIP, etc.) then it will take care of all of the big downloads and as long as you keep it seperate from your regular download activities then you can direct it to handle the big stuff, and keep your local cable net connection for surfing Facebook or whatever other pointless things you do on it.

    Now if you are not tech savvy to handle this sort of thing, or can’t afford another Internet connection, what the hell are you downloading terabytes of data per month for anyway?

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  25. [...] (my network provider) trying and failing to correctly implement bandwidth measuring tools for their upcoming volume cap.   (I keep getting passed a private [...]

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  26. makeminegreen Friday, April 17, 2009

    I’m also in Austin, working remotely, for a company that just declared it will stop reimbursing its telecommuters for broadband after this month. With tiered billing, both the big bump in online usage from my work activities and my VoIP usage (which is only for work) will surely mean an even higher amount that my employer will no longer reimburse.

    Why is Internet use being considered for tiered billing but even if you watch only one cable channel, you have to pay the same price as if you watch them all? (Same anti-customer logic as when you order a hamburger, you’re charged to add cheese but not given a discount when you 86 the onions, lettuce, tomato and pickles.)

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  27. [...] one of the two New York congressmen who spoke out strongly against efforts by Time Warner Cable to expand its tiered billing trials. Under its plan, announced March 31, residential customers in five cities would have paid a [...]

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  28. [...] amount per month is a service, but once carriers started seeing usage go up, some of them moved to implement usage-based pricing plans that changed broadband into a metered utility. But consumers, who were being charged per gigabyte, [...]

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  29. 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 thanks

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  30. [...] traffic to run over networks, won’t affect some of the high-profile consumer issues such as metered broadband or handset exclusivity. So if this doesn’t mean the iPhone will be available on Verizon, or [...]

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  31. I’m pissed because I work from home. (hear me rant in my blog on my site). And ofcorse, they are the only game in town… So I’m going to be forced to go to business class just to get uncapped performance. So they just got like another $150/month out of me…

    Share
  32. [...] than triple (PDF). Recently, however, wire-line and wireless providers are circling back, either trialing or instituting tiered or pay-per-use pricing, and in the world of cloud computing, pay-per-use is [...]

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  33. any idea how to reduce the bill or tepering with it????

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