Policy + charging

TWC Tees Up Metered Internet Trial

Some Time Warner Cable Inc. (NYSE: TWC) high-speed Internet customers will soon start to test drive a controversial usage-based service model that could signal an eventual shift away from all-you-can eat billing policies.

Time Warner Cable has confirmed that it will begin to trial a metered Internet platform in Beaumont, Texas, on Thursday. The test, which will apply only to new Internet customers there, will charge $1 for every gigabyte they consume above the threshold.

News that the MSO was working on such a system surfaced in January. (See TWC to Test Broadband Toll Booth .)

That threshold, or consumption cap, will vary depending on the customer's level of service. On the low end, the MSO will enlist a monthly consumption cap of 5 GBytes for its 768 kbit/s (downstream) tier. The cap will rise to 40 GBytes for the high-end 15 Mbit/s service.

Its mid-range, 7 Mbit/s service will be capped at 20 gigabytes per month.

Those initial levels are dwarfed when compared to what some other operators are considering or about to implement. Comcast Corp. (Nasdaq: CMCSA, CMCSK) is believed to be mulling a threshold in the neighborhood of 250 GBytes. (See Comcast Caps Coming? ) Meanwhile, BendBroadband of Oregon is elevating its cap to 100 gigabytes per month.

Time Warner Cable decided to focus the test on new customers and only one market to ensure that this first implementation goes smoothly, spokesman Alex Dudley says.

And keep in mind, it's only a test. As Time Warner Cable learns from the Beaumont trial and moves the model into more markets, the usage-based approach "may look very different than it does now," Dudley says.

The Beaumont subscribers will be able to see how much bandwidth they're using via a Web-based "gas gauge" developed by Time Warner Cable. By comparison, Rogers Communications Inc. (NYSE: RG; Toronto: RCI) of Canada is using an electronic bulletin system from PerfTech Inc. to notify customers when they are approaching or have exceeded the cap.

Dudley said Time Warner Cable wrestled with other notification processes, including those served by email or phone calls, "but we decided that the always-on gas gauge was the fairest approach."

MSOs are beginning to look at consumption caps as they find that a small fraction of customers tend to use the bulk of available bandwidth. They argue that metered billing will aid in network management and allocate capacity fairly across the subscriber base. "Optimizing the experience for all of our customers is the goal," Dudley says. "A vast majority of subscribers will notice no difference whatsoever."

The MSO expects that 5 percent of its subscriber base, assuming they are in the "right" tier of service, would be at risk of exceeding the thresholds being tested in Beaumont.

Although that's a small group, it's also a vocal group, and, as Contentinople points out, could affect how often consumers access Internet-sourced video content.

But beyond a small minority, will usage-based billing cause a significant resistance from consumers? One analyst doesn't believe so.

"I don’t expect to see any backlash, especially if it [the policy] is in writing and explains what the consequences are if you abuse [the network]," says Bruce Leichtman, president and principal analyst of Leichtman Research Group Inc. (LRG) .

And, he adds, operators may be better off without some of those bandwidth hogs.

"Ultimately, a company has to think, is that a customer I really want, and what's the benefit of that customer?" Leichtman says, recalling that Sprint Corp. (NYSE: S) severed ties with about 1,000 customers last year because they were abusing the company's customer service privileges. "To some degree, the bottom line is the bottom line."

— Jeff Baumgartner, Site Editor, Cable Digital News

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metroman 12/5/2012 | 3:39:38 PM
re: TWC Tees Up Metered Internet Trial

....and not turning it off will cause retransmissions due to congestion/packet loss at some other point in the data path. If not then why have it in the first place?

You might as well ask if they are going to increase buffer sizes to prevent retransmissions? Are they going to only deploy a non-blocking architecture with no over booking to avoid retransmissions?

paolo.franzoi 12/5/2012 | 3:39:38 PM
re: TWC Tees Up Metered Internet Trial
Is the carrier promising to turn off WRED? This will cause additional transmission by the customer that is not his or her fault.

ethertype 12/5/2012 | 3:39:37 PM
re: TWC Tees Up Metered Internet Trial What if the provider actually had some way of telling you what was using all your bandwidth, and thus could alert you to apps you didn't want/need or malware using your machine as a bot? What if they even gave you a plain English summary and gave you the option to block or turn off some of that traffic so that it wouldn't ruin your quota?

Oh, look! That thing they were using to throttle BitTorrent (before customers noticed and screamed and forced them to stop) might actually work! Maybe providers will finally figure out that deep packet inspection is most valuable when you let the user decide how to use it in a completely transparent fashion, instead of the provider doing sneaky stuff with it. Set the prices, give the users the tools, and let them decide.
paolo.franzoi 12/5/2012 | 3:39:37 PM
re: TWC Tees Up Metered Internet Trial

What I am trying to point out that in a lossy environment, that counting peoples bandwidth consumed is an interesting proposition.

Where do they count it? What do they do with retransmissions? Theoretically, some UDP streams can come your way and you have little to no control over shutting them off.

Viruses and Spyware also generate traffic that the user may be unaware of.

I was using this as a way of talking about the measurement.

OldPOTS 12/5/2012 | 3:39:36 PM
re: TWC Tees Up Metered Internet Trial DPI won't allow me to stop those pesky highly automated BW consuming advertisements I get without requesting them.

Maybe I'll have to quit going to LR/CDN when the meter rotates fast!

paolo.franzoi 12/5/2012 | 3:39:35 PM
re: TWC Tees Up Metered Internet Trial
See ether, you miss the point.

I started back in the Enterprise space working on leased line modems. We built management systems to ensure that customers were getting the line condition that they paid for and often were not receiving.

So, if I were TWC...let's see....oh yeah - I WOULD LIE AND CHARGE YOU ANYWAY! - since you have no way of proving that you did not source or receive x amount of traffic...you have to pay or be disconnected. If that didn't work, I would start throwing away lots of traffic to ensure there were lots of retransmissions to ensure that you exceeded the limit.

The only way this works is if there is independent verification of the service. Without it, this is a great way to earn extra revenue. So, who is going to INDEPENDENTLY monitor all Internet Traffic to the user to ensure compliance? The NSA?

tmc1 12/5/2012 | 3:39:33 PM
re: TWC Tees Up Metered Internet Trial I agree, what about all of the ads that i don't want to see or download and the video content that starts on many webpages without me requesting. How are they going to restrict all of that nuisance traffic?
rjs 12/5/2012 | 3:39:30 PM
re: TWC Tees Up Metered Internet Trial Good to know that Jeff.

I guess TWC is following the traditional sales and
marketing strategy of a utility .... test the customer patience and pain threshold.

I prefer the Google sales strategy of giving the customer what he wants --- eg Gmail giving 1GB storage as standard made it a no-brainer for the customer.

My gut feeling is that TWC sales will alienate the customers who are the practitioners of the art of arithmetic -- sadly, there is a good chance TWC may get away with it!!

Here is the bare minimum for me to stick with a TWC "broadband" connection.

1) Minimum download and upload of 500kbps
2) Download/upload limit of 400GB


Jeff Baumgartner 12/5/2012 | 3:39:30 PM
re: TWC Tees Up Metered Internet Trial The size of the caps TWC is testing is definitely the biggest source of complaints I've seen...and those caps are pretty small compared to some others that are being tried out and deployed. so it will be interesting to see if the MSO set the bar that low to see what kind of reaction it would get...and adjust accordingly.
rjs 12/5/2012 | 3:39:30 PM
re: TWC Tees Up Metered Internet Trial Think about it, TWC is basically telling everyone that they have stepped back ten years.

100GB/Mo = 100/30/24/3600 GB/s = 39KB/s aggregate

I think I will stay with DSL, unless, TWC seriously increases this 100GB/Mo ..... I am not against metered use, just be reasonable, atleast get the
aggregate rate close to the DSL rate (which is throttled as well).

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