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Time Warner Cable Launches Usage Cap Trial

By Gary Kim, Contributing Editor

Starting June 5, 2008, new Time Warner (News - Alert) Cable Internet subscribers in Beaumont, Texas, will have monthly allowances for the amount of data they upload and download. Those who go over the limit will be charged $1 per gigabyte, Associated Press reports.

 

The "excessive use" problem seems confined to about five percent of Time Warner Cable broadband users, says Kevin Leddy, Time Warner Cable EVP.

 

Buckets will range from a low of about 5 Gbytes a month for users on the 768 kbps service costing $29.95 a month, up to about a cap of 40 Gbytes for users of the $54.90 per month service operating at 15 Mbps.

 

If Time Warner is correct, and only about five percent of users really impose excessive loads, there is little reason late adopters will have to fear running over their limits. One has to assume the heavy users already are signed up. And a heavy user would not have incentives to switch from unmetered plans to the new plans, so there appears little danger on the public relations front.

 

Metered usage, to be sure, is not popular. But few users ever encounter a problem. That might not be the case in the future if Internet-delivered HDTV starts to become popular. And that might be one reason Time Warner wants to institute the new caps: they will discourage that sort of behavior.

 

Telephone companies arguably do not have quite the incentive to discourage "over the top" video consumption, which means some potential marketing upside. Of course, there's a downside if all or most of the heavy users migrate over to telco networks. Really, what a service provider wants is lots of users who pay for big pipes, but don't stress the network much. Heavy users offer none of those advantages.

 

The main pushback will come at first, since few users have any idea how much bandwidth they actually consume. But Time Warner Cable subscribers will be able to check out their data consumption on a "gas gauge" on the company's Web page.

 

Metered billing could affect video application providers, though.

 

Comcast (News - Alert) Corp., the country's largest cable company, has suggested that it may cap usage at 250 gigabytes per month.

 

 

 

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

 

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