Time Warner Cable will officially begin their previously announced broadband bandwidth cap trial in Beaumont, TX this week. Time Warner tells the Associated Press that on average, 5% of their subscribers account for 50% of the bandwidth consumption. Depending on the tier selected, customers will have a cap on the total amount of bandwidth they can use each month, measured by both download and upload traffic. If they exceed their designated bandwidth cap, they will be charged at the rate of $1/Gigabyte per month. Kevin Leddy, Time Warner Cable’s executive vice president of advanced technology tells the Associated Press, “We think it’s the fairest way to finance the needed investment in the infrastructure.”
Of course, there are different viewpoints about Time Warner’s real motivation. Could it be an attempt to discourage customers from using competing services for video content? Video is the most intensive broadband bandwidth hog today. A full length high definition movie downloaded over the Internet can equate to 6 gigabytes of data. Considering alternative sources for video consumption are flourishing on the Internet, a conspiracy minded theorist could easily draw the conclusion that Time Warner wants to make it a little more expensive for customers to enjoy these competitive offerings. Netflix, Amazon, and others are pursuing direct to consumer movie download services. Other services including Hulu and Joost aim to offer a compelling mix of video content for Internet download. Quite candidly, the day when consumers can choose to forgo a traditional subscription video model in favor of an Internet only video content delivery option is quickly approaching (if it’s not already here). The video below reveals Time Warner Cable’s CEO Glenn Britt’s view of the spin off of Time Warner Cable from their parent company Time Warner, as well as his take on the impact of Internet video on the cable business.
Is Time Warner trying to slow the trend of Internet video from taking hold by making it more costly for their broadband subscribers? Perhaps. But issues like this are rarely that simple. The reality is probably a little more complex, involving network efficiency and optimization strategies, as well as implementing an element of fairness to broadband availability. After all, it’s not an unlimited resource. Why shouldn’t the bandwidth hogs pay more? Making customers pay for the bandwidth they actually use isn’t exactly anarchy. It’s a model that consumers are used to in other areas including, electricity, water, and transportation. Should bandwidth be different?
This latest move by Time Warner Cable is just outright anti-competitive. The FCC should slam the door on this model. The US is behind in broadband and this is only going to slow it down even more.
Hey with no representatiion there is no taxation!! Don’t pay taxes if they do nothing. Let’s all revolt!
I understand all the sides of this argument. But the area that doesn’t get a lot of discussion is the confusion this will cause with customers. Does anyone really think that the average customer knows what a gigabyte is, or even a megabyte. I could see this causing a flood of calls to customer service. I hope they are ready for it.
Maybe I’m not getting this, but won’t their competitors have a field day with this. Unless they only roll it out in areas where they have no competition.