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June 3, 2008

Time Warner Goes Ahead With Bandwidth Cap Test

Time Warner Cable is going ahead with its test of metered Internet services, using Beaumont, Texas as the test market.  As noted in several stories on this, Time Warner doesn't have much competition in Beaumont.  The company can put the screws to the customer without too much fear of losing customers.  If there ever was an argument for broadband competition, this is it.  The low end version would have a speed cap of 768 kbps and 5 GB a month for $29.95, while the high end will offer speeds up to 15 Mps and 40 GB of bandwidth for $54.90.  There will be a $1 charge for every GB exceeding those limits.  Time Warner claims that this will only affect 5% of its customers that use more than half the bandwidth of its system.  Maybe. 

That may be true now.  Peer to peer file sharing is the bane of ISPs but popular with customers for all kinds of reasons .  While companies are quick to seize on the issue of pirated content as a way of justifying their actions to attack P2P use, P2P is actually used by many companies as a way of distributing legitimate content.  That was one of the issues in the Comcast hearings before the FCC.  Could Time Warner be considering the day when more and more content will be delivered to homes by the Internet rather than on fixed media?  A metered approach could affect download services from Amazon, Netflix, Apple, and others.  Standard video may not be affected much because the necessary files may be compressed into several GB per movie.  However, HD content can run into the tens of GB per title.  If you can't limit customers by speed without getting a look see by the FCC, you can charge them for bandwidth, especially when the content comes from someone who is seen as a competitor. 

One other point regarding this test comes to mind, and it involves privacy.  In theory, the really heavy bandwidth users are likely downloading pirated media (the mindset of many an ISP).  Should anyone go over the limit, can they merely expect a bill or will they have their download habits scrutinized?  And if so, will that information be handed over to trade associations with a penchant for lawsuits?  Just wondering.  And will there be any meters for customers to know when they come up against the limit?  This will get interesting.  I remember years ago when visionaries were telling us how our refrigerators would be connected to the Internet.  Maybe I don't want my refrigerator taking up valuable bandwidth trying to figure out if my carton of milk is going bad.  It's one goofy example, but consumers may not go for the reasonable innovations if they have to pay extra to use them. 

One suggestion:  The government should mandate that electronic interaction with government agencies and resources be exempt from these metering plans.  Schools and libraries should also be exempt. 

Details are in Information Week, TechNewsWorld, and PC World.

June 3, 2008 | Permalink

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