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Time Warner: Metered Broadband Will Prevent "Internet Brownouts"

Chief operating officer reveals details of tiered pricing plans

By Martin H. Bosworth
ConsumerAffairs.com

April 10, 2009

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.

"Here at Time Warner Cable, consumption among our high-speed Internet subscribers is increasing by about 40 percent a year," Hobbs said. "As a facilities based provider, we’ve built a network that must be maintained and upgraded. We have increasing variable costs and we have to continue to invest in the network itself. "

The idea of "Internet brownouts" comes from the "exaflood," the concept that the many interlocking networks that form the modern Internet will break under the strain of accomodating increasing data consumption. First advanced as early as 1995, the theory was revived in 2007 due to the increasing prominence of online video streaming and television broadcasting.

Proponents of the "exaflood" used the concept to oppose "net neutrality," the idea that all Internet users should access all content equally, without hindrance or favoritism. The "exaflood" concept was substantially refuted by research indicating that worldwide Internet consumption was growing modestly, and actually declining in some regions, as recently as December 2008.

New details on "tiers"

Hobbs also added more detail on Time Warner Cable's new packages and pricing plans under the tiered model, which include:

• A 1 gigabyte (GB) per month tier offering speeds of 768 kilobytes (KB) download /128 KB upload for $15 per month, comparable to DSL speeds. Over-use charges would be $2 per GB per month. Hobbs said this package would be for "light" Internet users.

• The current Internet offerings would get increased bandwidth tier sizes, to 10, 20, 40 and 60 GB for the company's Lite, Basic, Standard and Turbo packages, respectively. The package prices would remain the same, and over-use charges would be $1 per GB per month.

• The company will introduce a 100 GB Road Runner Turbo package for $75 per month (offering speeds of 10 MB/1 MB). Overage charges will be $1 per GB per month.

• Hobbs said that all overage charges would be capped at $75 a month.

• Time Warner Cable will also roll out new upgraded DOCSIS 3.0 infrastructure in the trial markets where caps are being tested, at speeds of 50 megabytes (MB) for download and 5 MB for upload, at $99 per month.

The trial markets currently include Rochester, New York, Beaumont, Texas, and Greensboro, North Carolina, which will see the new plans rolled out by August. Depending on the result of the trials, the services may roll out to Austin and San Antonio, Texas, by October.

First reactions to the latest tier plans were critical. Scott Cranfill, a Rochester-based Web developer who has been campaigning against the caps, said that it was "[mindboggling] that TWC thinks tossing us such a paltry bone as 20 more GB and a cap on overages will be good enough. Not good enough."

Karl Bode, editor of Broadband Reports, said that "A real concession would be if the carrier announced they were eliminating overages completely, and affixing caps that were more reasonable as the age of HD video approaches. "

The chief criticism of metered broadband plans — besides claims that the over-use charges are too high — is that it will scare users away from watching video online, or uploading their own videos, for fear of breaching their plan's cap and paying extra fees. Critics say the purpose of metered broadband plans is to protect cable and telecom companies' investments in existing television networks.

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