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.
33 trackbacks so far
11:27 PM PT
[...] 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 [...]
5:44 AM PT
[...] 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 [...]
5:51 AM PT
[...] 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 [...]
5:53 AM PT
[...] 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 [...]
8:04 AM PT
[...] 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. [...]
9:51 AM PT
[...] 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. [...]
9:57 AM PT
[...] 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 [...]
9:06 PM PT
[...] Time warner tiers make me cry [...]
7:34 AM PT
[...] 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. [...]
12:04 PM PT
[...] Warner’s announcement that they are testing metered bandwidth usage is quickly establishing a leadership position that may take years to fight [...]
8:17 PM PT
[...] 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 [...]
5:39 AM PT
[...] 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 [...]
8:38 AM PT
[...] 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 [...]
1:06 PM PT
[...] 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 [...]
5:16 PM PT
[...] 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 [...]
7:02 PM PT
[...] 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 [...]
10:41 PM PT
[...] 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 [...]
1:13 AM PT
[...] 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 [...]
4:01 AM PT
[...] 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 [...]
9:36 AM PT
[...] 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 [...]
9:36 AM PT
[...] 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 [...]
6:02 AM PT
[...] 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 [...]
12:29 PM PT
[...] 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 [...]
10:29 PM PT
[...] 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 [...]
4:55 PM PT
[...] 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 [...]
1:51 PM PT
[...] 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 [...]
9:00 AM PT
[...] 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 [...]
10:21 AM PT
[...] 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 [...]
6:00 PM PT
[...] 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 [...]
7:08 AM PT
[...] 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) [...]
5:35 AM PT
[...] 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) [...]
4:00 PM PT
[...] 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 [...]
2:32 PM PT
[...] 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. [...]
16 comments so far
6:25 PM PT
If Time Warner introduces this in my city, I’ll switch to DSL.
7:32 PM PT
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.
8:21 PM PT
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.
9:53 PM PT
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.
12:05 AM PT
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 …
5:29 AM PT
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.
6:51 AM PT
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.
8:49 AM PT
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?
11:09 AM PT
@ 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:
(link)
11:24 AM PT
Time Warner service absolutely stinks !!!
Don’t see how they can get away with this.
1:47 PM PT
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
(link)
5:09 PM PT
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.
9:34 PM PT
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.
3:37 AM PT
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.
7:14 AM PT
An analogy - a buffet charging per plate rather than all you can eat - would you go there?
6:48 PM PT
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!
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