Time Warner tries change to Internet rate system
NEW YORK (AP) — Time Warner Cable will experiment with a new pricing structure for high-speed Internet access later this year, charging customers based on how much data they download, a company spokesman said Wednesday.
The company, the second-largest cable provider in the United States, will start a trial in Beaumont, Texas, in which it will sell new Internet customers tiered levels of service based on how much data they download per month, rather than the usual fixed-price packages with unlimited downloads.
Company spokesman Alex 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.
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.
Time Warner Cable is a subsidiary of Time Warner Inc., the world’s largest media company.
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I disagree with this idea and the apparent reasoning behind it; The real issue is that most internet service providers have oversold their network capabilities and capacities. End of story.
I agree that a minority of users use the majority of the service, but that’s a rule of thumb in business; 20% of your clients account for 80% of your business.
The accusation that they are targeting users who download terabytes per month is a farce unless these users have enterprise level connections and storage at their disposal. And if that’s the case, I can’t imagine why they would be included in this new pricing scheme.
For example:
1 terabyte = 1,000,000,000,000 bytes
Most people at home have a 3 or 5 megabit connection (megabit is different from megabyte).
3 megabit = 375 bytes per second
5 megabit = 625 bytes per second
A user with a 5 megabit connection would require 445 hours (18.5 days) of constant downloading at 100% of their maximum download rate to reach the 1 terabyte mark.
If only a small minority of users are using all the bandwidth their network does not have enough capacity. If every user used 100% of their monthly allowance the network would crash, and that’s what they are afraid of – especially with the launch of more and more online distribution channels like HD movies through iTunes. This will push more users to use more of their monthly transfer limit and they are likely to all use it at the same times – evenings and weekends.
FYI: Bell Sympatico only impose monthly limits if you have a contract. Users like me who are month-to-month are free of these limits.
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