Time Warner tests multi-tiered pricing structure based on broadband usage

“In a move that’s sure to rile many of its’ customers, Time Warner says it plans to test a new pricing structure for high-speed Internet usage that charges subscribers based on the amount of content they download,” Scott Nichols blogs for PC World.

“Time Warner currently charges customers a flat monthly rate for Internet access. According to reports Time Warner will test a new pricing model that creates a multi-tiered pricing plan based on broadband usage,” Nichols blogs. “Time Warner would put caps on usage and charge more should you use too much bandwidth based on your monthly plan. For example, if you view too many streamed online videos, buy too many songs from iTunes, or are a heavy user of P2P services than you might get hit with a Time Warner ‘overage charge.'”

Full article here.

The Associated Press reports, “Company spokesman Alex Dudley said the trial was aimed at improving the network performance by making it more costly for heavy users of large downloads. Dudley said that a small group of super-heavy users of downloads, around 5% of the customer base, can account for up to 50% of network capacity.”

“Dudley said he did not know what the pricing tiers would be nor the download limits. He said the heavy users were likely using the network to download large amounts of video, most likely in high definition,” AP reports. “It was not clear when exactly the trial would begin, but Dudley said it would likely be around the second quarter. The tiered pricing would only affect new customers in Beaumont, not existing ones.”

Full article here.

[Thanks to MacDailyNews Reader ” Ampar” for the heads up.]

68 Comments

  1. Ok, well might be time to switch to DSL if I will need to pay for bandwidth.
    SAT tv has more HD channels and better packages. This just might be what pushed me to go with SAT tv over cable. Cable has been a nice easy format but for sure has less quality in comparison to SAT line up, but the draw was the open bandwidth of internet access.
    Take that away and there is no point.

  2. lack of competition gives one cable company per city too much power.

    here, it is either cable internet or DSL.

    I prefer cable internet over DSL.

    I hope cox cable doesn’t get any bright ideas and copy this bandwidth limiting idea.

  3. Time-Warner concurs with Apple that the web will be inundated with music and video downloads, and has cleverly devised a plan to build a toll road to iTunes.

    Who would you rather have as your ISP?

    (i) Time-Warner
    (ii) Apple
    (iii) some other company

  4. This is the thin end of the wedge. New customers now, then on to the existing customers. What’s the betting that your TW bill will not decrease if you are a low bandwidth user?
    Comcast already has a “secret” limit, above which they will shut you down.

  5. Wonderful! There must be big smiles at Apple and Google. The cable industry has fallen into the trap and is committing suicide. The competition, led by Google, will soon route around the cable companies’ declining service in order to deliver the content that the cable companies have been providing.

    Apple will benefit enormously, by having one of their chief rivals in content access and delivery gutted by the short swords with which the latter have chosen to slit their own bellies.

  6. Ok, well might be time to switch to DSL if I will need to pay for bandwidth.

    Absolutely! Because DSL will never start charging for high-use, will they?

    Face it, all internet providers that sell “all you can download” are selling something they don’t have: unlimited bandwidth. With larger and larger files being downloaded in ever greater numbers, the providers’ capacity is being used up. This leaves them with two options: expensive capacity upgrades, so they can continue to sell “all you can download”, or stop selling “all you can download”.

    Now which option do you think a for-profit corporation will choose?

    ——RM

  7. What everyone is missing is that TimeWarner may b e targeting “heavy” users today, but as movie downloading (iTunes) becomes more popular, nearly everyone will be doing it.

    This is nothing more than a tax on movie downloads. A way to cash in on Apple’s/iTunes success.

  8. Reading everyone’s comments it occurred to me there was another reason for this pricing change.

    Time Warner is positioning themselves to make up lost income from their own on demand movie rental business.

    iTunes will be a hit, I have no doubt about that, And as the number of available movies increases on iTunes, there is a very real possibility that movie rentals on Time Warner will go down.

    Time Warner is just the first to come up with a strategy to offset revenue declines brought on by iTunes movie rentals. As an investor in AAPL I view this move as very positive confirmation of future Apple growth.

  9. ISP business really just a fraud. Selling customers high speed connections and hoping that people would never use them.

    Record companies want you to keep paying forever and ISPs want you to pay, but not use. When you do use, they get pissed off.

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