Meter Running on All-You-Can-Eat
Time Warner Cable didn't have to do any thinking outside of the box to come up with a new pricing plan for the delivery of Internet services. Instead, TW simply found an old box from the 1990's and blew the dust off metered service with usage caps.
Like other cable companies, TW's lines are clogged with only five percent of users sucking up to 50 percent of the cable giant's upload and download capacity. Comcast attempted to deal with the problem by targeting programs like BitTorrent with throttling techniques and found itself a target of a Federal Communications Commission network neutrality investigation.
TW hopes to avoid that sort of embarrassment by offering tiered service (something the cablecos know all about) with monthly allowances for downloading and uploading files. Users exceeding their monthly allowance will pay $1 per gigabyte. According to the Associated Press, the plan will be tested marketed in Beaumont, Tex., beginning later this week.
"We think it's the fairest way to finance the needed investment in the infrastructure," Kevin Leddy, TW's executive vice president of advanced technology, told the AP.
TW's tiers will begin at $30 a month for 768 kilobits per second service with a 5-gigabyte cap. The top tier goes for $55 a month for 15 megabits per second and a 40-gigabyte cap.
For those of you old enough to remember the dial-up era of U.S. Internet service, usage caps were SOP for ISPs like AOL. The caps went away with the advent of broadband service as rival ISPs began challenging AOL's huge market share by offering unlimited usage. Even AOL finally dropped its caps.
Now, it appears, the cable industry is looking back to the 20th Century to deal with its 21st Century issues. One cable company closely following TW's test will be Comcast, which is also considering usage caps since its throttling approach has ignited the ire of both consumers and regulatory agencies.