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April 16, 2009

Time Warner Cable Drops Bandwidth Caps

Time Warner Cable's plan to add caps to Internet usage with fees for going above the caps are dead for now.  The company says it didn't expect the consumer backlash it received.  The caps were ridiculously low and the charges for increased downloads were ridiculously high.  The initial test priceswere 5GB on a 768 Kbps line for $29.95 or 40GB on a 15 MBps line for $54.90 per month.  Every Gigabyte after that would cost $1.  Not bad if TWC was the only game in town, which, coincidentally, seemed to be the case for the test cities.  One rationale for imposing bandwidth caps is to protect the network from congestion.  Commentators seemed to believe that TWC may be more interested in protectingitself from competition via Internet video sites.  More people watching video via the Internet means less ad money for the cable giant's own offerings.  TWC had said that competition would sort things out, but the tests brought some congressional scrutiny.  Net neutrality advocates saw this situation as a good opportunity to push their agenda which scared TWC enough to suggest to the FCC that it should stay away from the issue.  Ars Technica has done an excellent job at chronicling the events and debunkingsome of the statements TWC was making in defending the pricing structure.  The United States may not have the best broadband as measured against world standards, but most Americans connected to the web expect unlimited access to anything legal.  Companies such as TWC need to stop manufacturing nonexistent crises such as network overload when trying to justify squeezing more money out of consumers.

April 16, 2009 | Permalink

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