& cplSiteName &

TWC Dons Larger Consumption Caps

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
4/10/2009
50%
50%

Bowing to pressure brought on by consumers and politicos, Time Warner Cable Inc. (NYSE: TWC) is beefing up its current and upcoming metered, usage-based Internet trials, and, as expected, will debut a new "super tier" that caps consumption at 100 Gigabytes per month before overage charges apply. (See Congressman Mad About TWC's Internet Meter .)

Among the new tiers, outlined in a statement issued by Time Warner Cable COO Landel Hobbs early Thursday evening, the MSO intends to try out a 100 GByte Road Runner "Turbo" package that sells for $75 per month and offers speeds of 10 Mbit/s downstream and 1 Mbit/s upstream. If those customers exceed the cap, the MSO will then charge $1 for every GB thereafter.

To "accommodate lighter Internet users," the MSO is placing a relatively microscopic 1 GB cap on a new tier that costs $15 per month, and offers speeds of 768 kbit/s down by 128 kbit/s upstream. Customers who take that tier will be hit with a charge of $2 per GB if they exceed that cap. TWC said its usage data shows that about 30 percent of its cable modem subs use less than 1 GB per month.

The operator is also increasing the caps on its existing consumption-based trial packages. The chart below details all of the MSO's new tiers and the changes being made to its existing ones.

Table 1: Tiers for Fears

Road Runner tier Speed (downstream) Previous monthly consumption cap New monthly consumption cap Overage charge
"Lower priced option" Lite tier* 768 kbit/s N/A 1 GB $2 per GB
Lite 768 kbit/s 5 GB 10 GB $1 per GB
Basic 3 Mbit/s 10 GB 20 GB $1 per GB
Standard 7 Mbit/s 20 GB 40 GB $1 per GB
Turbo 10 Mbit/s 40 GB 60 GB $1 per GB
"Super-sized" Turbo* 10 Mbit/s N/A 100 GB $1 per GB
*New consumption-based tier
Source: Time Warner Cable




In another change that's similar to a policy in use by Canada's Rogers Communications Inc. (NYSE: RG; Toronto: RCI), Time Warner Cable will cap overage charges at $75 per month. With that in place, customers can subscribe to the Turbo tier and get "virtually unlimited" usage for $150 per month, the MSO said. (See Rogers Takes Internet Meter to the Masses.)

Following the trial already underway in Beaumont, Texas, TWC expects to launch metering trials using the new policies this August in Rochester, N.Y.; and Greensboro, N.C. The MSO will then introduce similar tests in its San Antonio and Austin markets.

As was the case in Beaumont, TWC won't immediately start to charge for overages. Billing on overages won't go live until after TWC provides customers with two months of usage data, and an additional one-month "grace period."

In its defense, TWC said the new consumption-based Internet billing policies are necessary as Internet usage and the variable costs to keep the broadband network maintained and upgraded to accommodate that growth both continue to rise.

"Rather than raising prices on all customers or limiting usage, we think the fairest approach is to move to a tiered model in which users pay more if they use more," Hobbs wrote.

Meanwhile, critics of the tests maintain that metered broadband policies aim to discourage customers from using Web-fed, "over-the-top" video services while concurrently maintaining lucrative margins on high-speed Internet services.

Docsis 3.0 hint
In the statement, Hobbs also leaked out some news about Time Warner Cable's planned Docsis 3.0 trials, noting that the MSO plans to start off with a wideband service that offers speeds of 50 Mbit/s downstream and 5 Mbit/s upstream for $99 per month.

He didn't identify which markets will get wideband first, but the MSO has previously hinted that its New York City system, where it competes with Verizon Communications Inc. (NYSE: VZ), will be among those to get Docsis 3.0 in the early going. (See Britt: Docsis 3.0 Coming to NYC.)

— Jeff Baumgartner, Site Editor, Cable Digital News

(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
bored_lurker
50%
50%
bored_lurker,
User Rank: Light Beer
12/5/2012 | 4:07:21 PM
re: TWC Dons Larger Consumption Caps


Interesting, as an article that ran yesterday in Ars Technica looked at provider pricing. They compared ATT and VZ at $0.09 and $0.11 per Gb respectively and TWC at $6 per Gb. So now it is only $2.00 per Gb if you don't count the $15 for the first Gb? I guess that's not bad if you just check you email once or twice week. Whether you agree or not the article is worth a read:


http://arstechnica.com/tech-po...


Bored

Michael Harris
50%
50%
Michael Harris,
User Rank: Light Beer
12/5/2012 | 4:07:19 PM
re: TWC Dons Larger Consumption Caps
So they pulled this "400 GB" number out of thin air to use as the baseline for comparison?
Here it seems AT&T is looking at ranges of 50-150 GB for its trial.
http://www.lightreading.com/do...
bored_lurker
50%
50%
bored_lurker,
User Rank: Light Beer
12/5/2012 | 4:07:17 PM
re: TWC Dons Larger Consumption Caps


Yep, pretty much, which is why I said "Whether you agree or not". I thik the point is that an all-you-can-eat plan means you could pull *at least* 400G. How many people would? I don't know. Interesting though that Comcast has a 250G cap which works out to .17 per G.


As an aside another new article popped up today on Tom's Hardware which says capping is a form of DRM:


http://www.tomshardware.com/ne...


Seems to be quite the buzz out there.


fgoldstein
50%
50%
fgoldstein,
User Rank: Light Sabre
12/5/2012 | 4:07:17 PM
re: TWC Dons Larger Consumption Caps


If capping's the new DRM, then getting a water bill is the new being locked in a desert prison, or something silly like that.  I mean, gimme a break.  DRM is a real issue, violatiang privacy.  Limiting profligate consumption is totally unrelated.


Tran Nguyen in Tom's whines that if he uses the Internet to download all of his TV and movie watching for the month, it can exceed the cap, and waaaaahhh!   Well, then, DON'T DO THAT.  The Internet is NOT free to provide, no matter what these guys think.


Their earlier tiers were way too low -- 40 GB/mo for the top tier was very restrictive. At 100 GB, it's tolerable.  Residential service is cheap *because* it's heavily oversuscribed.  Price out a commercial LAN-oriented T1 or higher to see the difference.

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Sabre
12/5/2012 | 4:07:16 PM
re: TWC Dons Larger Consumption Caps


 


I would suspect that duopolies will not be greatly cap friendly as well either, however that will depend on how competition evolves.  For example, I note that AT&T is starting their cap (trial - exploration - pick a word) in a city where the cable provider is putting in a cap.


seven


 

bored_lurker
50%
50%
bored_lurker,
User Rank: Light Beer
12/5/2012 | 4:07:16 PM
re: TWC Dons Larger Consumption Caps


Let me make sure no one is misunderstanding me, I am not advocating no caps. I agree 100G is plenty of bandwidth for most people (although I am not sure I want to pay $75 for it).  I am merely pointing out that there is a LOT of buzz on tech sites. Pretty much anyone who reads this site makes a living off of bandwidth in one way or another - including me.


As far as the price goes anyone can charge what they want, it is a free market. In my neighborhood if TWC charged $75 for 100 Gb I would walk over to VZ. And my next door neighbor, who just checks email, may stay with TWC since it is only $15 a month for that first Gb. That is the way it should work, let the market decide what is a fair price.


I think a lot of this is people feel like they have gone from unlimited phone calling to metered use; like going from all-you-can-eat to ala cart - because they have/will. The question they have is "is it fair?". I think most of us know equipment isn't free and neither are inter-connection fees. But I think we ought to not stick our heads in the sand about the ire this has created. 


When I said there is a lot of buzz I meant a LOT of buzz (on tech sites). Just check out slashdot.org and you will see what I mean. There are multiple articles there including one from this morning about "New York Representative Eric Massa, who now says he will draft legislation to curb tiers, particularly in areas where a broadband provider owns a monopoly on service."


P.S. Not all the comments on the tech sites are anti-teir pricing. Many make the same point on those sites being bandwidth costs money.

OldPOTS
50%
50%
OldPOTS,
User Rank: Light Beer
12/5/2012 | 4:06:06 PM
re: TWC Dons Larger Consumption Caps


Well this is being tracked by the public, besides the techies. The Dallas DMN ran a feature on the subject in the Business section front page.


http://www.dallasnews.com/shar...


The best comment thet confirms many of my posts on network costs; they are discovering that the cheap network ain't so cheap when those shared customer really use the network they sold them for those new applications.


Their education requires changing expectations for what they sold.


OP

Featured Video
From The Founder
The 'gleaming city on a hill,' Steve Saunders calls it. But who is going to take us from today's NFV componentry to the grand future of a self-driving network? Here's a look at the vendors hoping to make it happen.
Flash Poll
Upcoming Live Events
September 28, 2017, Denver, CO
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 10, 2017, The Westin Times Square, New York, NY
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Could the Connected Car Help Prevent Terrorism?
Dan Jones, Mobile Editor, 9/15/2017
AT&T Wants to Ditch the Dish
Mari Silbey, Senior Editor, Cable/Video, 9/13/2017
Apple's New iPhones: No Gigabit LTE for You!
Dan Jones, Mobile Editor, 9/14/2017
Cities Slam FCC on Broadband Proceedings
Mari Silbey, Senior Editor, Cable/Video, 9/15/2017
Animals with Phones
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed