The NewsDemon Blog

Time Warner Cable unveiled a new pricing structure for broadband Internet access to quell customer criticism questioning the service provider’s plans to cap bandwidth usage.

In a statement released to the media on Thursday, Time Warner COO Landel Hobbs says, “Some recent press reports about our four consumption based billing trials planned for later this year were premature and did not tell the full story. With that said, we realize our communication to customers about these trials has been inadequate and we apologize for any frustration we caused. We’ve heard the passionate feedback and we’ve taken action to address our customers’ concerns.”

Time Warner says the new pricing model is a direct result of increased content on the internet and they say “bandwidth consumption is growing exponentially.”

Among the changes:

• Bandwidth tier sizes in trial markets, including Rochester, will be increased to 10, 20, 40 and 60GB for Road Runner Lite, Basic, Standard and Turbo packages, respectively. Package prices will remain the same, ranging from $29.95 to $54.90 per month. Overage charges will be $1 per GB per month. Previously, the tier sizes were 5, 10, 20 and 40GB.
• A new 100 GB Road Runner Turbo package for $75 a month will offer speeds of 10 MB/1 MB. Overage charges will be $1 per GB per month.
• A new 1 gigabyte-per-month tier, offering speeds of 768 kilobytes download/128 kilobytes upload, will cost $15 a month, with overage charges of $2 per GB per month. Hobbs said the company’s usage date shows that about 30 percent of Time Warner customers use less than 1GB a month.

• Overage charges will be capped at $75 per month. “That means that for $150 per month customers could have virtually unlimited usage at Turbo speeds,” Hobbs said.

If Internet users don’t moderate their bandwith consumption, and providers don’t put in caps on their usage, the Internet could start seeing “brownouts” by 2012, said Time Warner Cable’s chief operating officer Landel Hobbs today.

Preventing outages for users was the rationale behind Hobbs’ latest statement on Time Warner Cable’s plans to expand its metered broadband trials to more areas of the U.S. The cable company is testing a “pay-by-the-byte” approach to billing and consumption of Internet services, rather than the flat-price “all you can eat” model of most competitors.

Time Warner representative stressed that the tiered pricing models are just trials at this point and customers won’t be immediately billed or impacted. Instead, Time Warner will provide two months of data usage and then a one-month grace period in which overages will be noted on customers’ bills, but they won’t be charged. They state that this gives customers a chance to access their usage and pick the right service package before charges are applied.

The company also said the plan’s trial will begin in Rochester and Greensboro, N.C., in August, and said it plans to launch the super-fast DOCSIS 3.0 service in the trial markets.

Comcast is another provider that is capping usage, but with a larger 250 GB limit. Even so, it seems odd that while the rest of the world is offering faster, unlimited broadband access for approximately $20 a month, the United States is looking to adopt a more restrictive policy that threatens to stifle innovation for the sake of salvaging yet another dying business.

How this affects downloads of headers and the bandwidth consumption of many newsgroups is something that these plans fail to address as well as the other limits this plan will cause:.Time Warner’s cap level is tier-based with the maximum set at 40 gigabytes per month with a $1 charge for every gigabyte of overage. An average HD quality movie downloaded from iTunes is around 4 GB with an HD TV show hovering around 2 GB. For NetFlix, this can easily double in size for BluRay downloads. If you were to watch one TV show a night, you’d be over the cap by 20 GB, or an extra $20 on your bill. Not including viewing YouTube videos, digital photos, or Web browsing.