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Time Warner Tests Metered Internet

3 Jun, 2008 By: John L. Erik G.

Time Warner Cable is considering charging its Internet subscribers for excessive Web use and is testing a metering program in Beaumont, Texas, according to The Associated Press.

Service tiers range from $29.95 per month for 768 kilobits per second and a 5GB monthly cap, to $54.90 per month for 15 megabits per second and a 40GB limit. Those who go over will be charged $1 per GB.

Casual Internet users would have little reason to fear the cap, as 1GB constitutes about 3,000 Web pages or 15,000 e-mails without attachments. Those who download movies or TV shows should take note, however, as a standard-definition movie comprises about 1.5GB, with high-def movies at 6GB to 8GB.

Time Warner Cable has about 90,000 customers in the trial area, but only new subscribers are subjected to the test phase. Subscribers can check their data consumption on a gauge at the company's Web page. GB surcharges won't be applied for the first two months, according to the AP.

Cable companies are seeking ways to rein in heavy Internet users, with Time Warner reporting that just 5% of its users clog up half the capacity of its cable lines. Metering usage is common overseas, especially in Asia and Europe, but has not caught been applied to American consumers accustomed to an “all-you-can-eat” Internet menu.

“Many providers traditionally charged for capacity and there is a clear cost to the provider to maintain this capacity,” said independent analyst Rob Enderle. “People are generally going to need to watch how much stuff they are storing because it can become a nightmare to manage over time if they don't.”

Comcast Corp., the country's largest cable company, has hinted at a 250GB monthly allowance.

Richard Doherty, technology analyst with The Envisioneering Group in Long Island, N.Y., said metered billing would have little effect on music downloads due to their limited size, but he said the same could not be said for video.

“The free lunch in the U.S. is almost over,” Doherty said. “Warner is at least acknowledging it.”

He said online rental pioneer Netflix, which recently unveiled a (Roku-built) set-top box that receives unlimited Internet video streams, as well as Apple, Microsoft, Real Networks, Vonage, Vongo and others, are actively lobbying Congress, seeking government intervention to avoid consumers suddenly being hit with triple monthly charges.

Doherty said cable operators have begun slowing their network speeds, aimed at curtailing excessive Web usage by consumers.

“With a skinnier hose you can't fill the pool as often,” he said.

The analyst said cable operators would rather the marketplace — not government regulation — resolve the issue.

“It's an election year and [elected officials] are distracted by politics not consumer advocates,” Doherty said.

Bend Cable Communications in Oregon once offered multitier bandwidth allowance similar to the Time Warner test, but abandoned the program in favor of an across-the-board 100GB cap with a $1.50 per GB overage fee.

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