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Time-Warner Considers Per-Gigabyte Service Fee, After iTunes

destinyland writes "Time-Warner is now mulling a plan to charge a per-gigabyte fee for internet service. A leaked memo reveals they're now watching how many gigabytes customers use in a 'consumption-based' pricing experiment in Texas, which we discussed early last month. The announced plan was that they were considering a tier-based approach, as opposed to per-gigabyte fees. 'As few as 5 percent of our customers use 50 percent of the network,' Time-Warner complains, with plans to cap usage at 5-gigabytes, and more expensive pricing plans granting 10-, 20-, and 40-gigabyte quotas. Steven Levy at the Washington post suggests Time-Warner's real aim is to hobble iTunes, raising the cost of a movie download by $10 (or $30 for a high-definition movie). Eyeing Time-Warner's experiment, Comcast cable also says they're evaluating a pay-per-gigabyte model."

17 of 557 comments (clear)

  1. The problem with consolidated multimedia by elrous0 · · Score: 5, Insightful
    When the same company provides your cable service (including your cable pay-per-view service), your internet service, AND produces media content themselves; is there any doubt that this will cause a serious conflict of interest that will harm the consumer? Time-Warner has EVERY incentive to keep you from using movie download services instead of their own pay-per-view service and EVERY incentive to stop movie/TV pirate sites (to keep you from pirating Warner movies and TV).

    This is why consolidation in media is such a BAD, BAD, BAD thing for consumers. When one single company (or even small group of companies) owns your newspaper, television stations, internet service, telephone company, cable company, etc. they basically own *YOU*.

    --
    SJW: Someone who has run out of real oppression, and has to fake it.
  2. Not only is it a step in the wrong direction... by hbean · · Score: 5, Interesting

    ...but its an absolute shot in the foot for their business.

    Right now, I could call up Verizon and get FiOS. In about 6 months I'll be able to call up Verizon and get FiOS TV. Hell, theyre currently installing FiOS in my parents tiny village of about 5000.

    These cable companies are facing the first real competition they've ever had and instead of reacting by making their service better, they're planning out ways to make their service worse.

    And no, this isn't some sort of viral FiOS ad. I'm just a dumbfounded consumer.

    --
    "Give someone a program, frustrate them for a day... Teach someone to program, frustrate them for a lifetime."
  3. Users Used by _Sprocket_ · · Score: 5, Insightful

    'As few as 5 percent of our customers use 50 percent of the network,' Time-Warner complains... So does that mean only 5 percent of their customers are making good use of what they paid for?
  4. Charge or don't charge but don't hide it by Neil+Watson · · Score: 5, Insightful

    Charge me for bandwidth usage or charge me true unlimited bandwidth usage. I think that either method could be accetaple provided there was no throttling, blocking or hidden charges or caps.

    1. Re:Charge or don't charge but don't hide it by TheRaven64 · · Score: 5, Interesting
      Exactly. Cut the marketing bullshit and give me a plain-English SLA. For a consumer connection, with a cheap price, the SLA might not be that great, but it should be well specified. I want to know:
      • The minimum speed that I am guaranteed to get.
      • The maximum speed I will get under optimal conditions.
      • The percentage of the time I can expect to be within n% of the maximum speed.
      • The maximum amount of downtime allowed before I am compensated.
      • The maximum transfer I am allowed per month and the cost per GB of going over.
      Ideally, each ISP would provide a grid with different levels / prices for each of these categories and I would be able to put together a plan that met my needs. They could even unify their consumer and business pricing structures, so businesses picked from the same grid but, if they were doing anything important with their connection, chose the higher level options.

      As long as there's competition, and the customer is well-informed about the service they are buying, then a free market works. If either of these conditions fails then you might need some regulation.

      --
      I am TheRaven on Soylent News
  5. Time Warner and Comcast are cordiallly invited... by mrchaotica · · Score: 5, Funny

    ...to FUCK OFF AND DIE, because I'll go back to fucking dial-up before I pay their ransom!

    --

    "[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz

  6. Good luck with that guys by beavis88 · · Score: 5, Interesting

    I, beavis88, hereby pledge I will immediately terminate my Time Warner Cable "service" in the event they implement this new scheme without SUBSTANTIALLY reducing the price of the "low tier". I don't even run BT or pirate movies/music, and I probably came close to 5GB downloaded *yesterday* - Vista and Windows 2008 .isos from MSDN, plus watched a movie online from Netflix. Now if they want to make it worth my while to reduce my usage, I might be amenable - but if they want to cap my usage, and keep charging the same insanely high prices, then fuck it, I'll put up with shitty, slow DSL.

  7. Re:U.S. falling behind by MonoSynth · · Score: 5, Insightful

    that has much more to do with the less sophisticated law enforcement in those countries...

  8. Time for the Electric Company to Jump in for Real by webword · · Score: 5, Informative

    Is it time for broadband over powerlines finally?

    The networking is already in your house:

    "Providing broadband service to these customers would simply require adding equipment to their wires. The feature of BPL that would make it more attractive than DSL or cable modem is that BPL customers would immediately have in-house networks without having to purchase and install additional wiring in their homes."

    Plug in a wireless hub or router and you're ready to roll.

    Although all of this brings up the next problem: You're dealing with *another* monopoly. Bah!

  9. A bunch of smoke being blown in your... by WindowLicker916 · · Score: 5, Interesting

    I work for Comcast in the bay area and by spec our nodes are not to exced 70% usage. Which we managed just fine. We have tons of fiber not even lit in order to meet demand.

    So these companies complaining makes no sense. In fact they just shared our regional numbers with us and HSI was profitable by some comparable sum equal to video.

    IMO these companies should just become common carriers like AT&T and provide you access. Other companies should provide IPTV which would either be free or subscription based. Thats where I see the industry hopefully going!

  10. Re:5GB?! by MobyDisk · · Score: 5, Insightful

    WOW.

    An ISP has partnered with various content providers to offer specialized service: Network Neutrality nightmare #1 is here! To everybody who said all this network neutrality stuff was theoretical and we should wait until it happens - here's your example. Now, do we have to wait until this happens in the U.S. before we get some neutrality legislation?

    I know that the parent poster was using this example to be a good thing, but it isn't. It is now cheaper for him to buy stuff from iTunes instead of Amazon. It's cheaper to play games from the companies they've partnered with. I'm sure that non-commercial games with large downloads aren't getting these special benefits. Nor small Linux distros. This sounds like a great way for an ISP to slip non-neutral policies into place: 1. Create some sort of cap that applies to everyone. 2. Make exceptions to the cap. Now, instead of it looking like they are penalizing Amazon's music download service, they can say they are doing something helpful to the iTunes users. Same thing, different spin.

  11. Re:MOD PARENT UP by mrxak · · Score: 5, Interesting

    It's not just that these companies create content, or that they need somebody else to pay for high-bandwidth users, it's that there's no competition in their markets. You have one cable company (usually) that has a cable franchise in the area. You might have one DSL company too (if you can really call that broadband). That's usually it for most people. So if you want speed x, you're forced to use company y, and they have no incentive to lower their prices. A company comes along that wants to lay down their own coax or fiber cables, and the established company can lobby against them getting their own franchise. There's nothing natural about these "natural monopolies", they are monopolies enforced by local government under the influence of the monopolies. There are very few market forces at work, so your cable company can charge whatever they want and then pull moves like this to get even more out of you.

  12. Re:MOD PARENT UP by sudnshok · · Score: 5, Insightful

    That's fine as long as people who barely use any bandwidth see their prices REDUCED. Someone using 50MB per month should certainly not pay more than $5/mo.

    --
    People who say "money does not buy happiness" are just people without money trying to make themselves feel better.
  13. Re:U.S. falling behind by Araxen · · Score: 5, Funny

    then they'll encourage more bandwidth usage and plow some of the new profits back into infrastructure I bet you fall for Hillary Clinton crying too.
  14. Re:5GB?!-Breaking the honesty barrier. by AKAImBatman · · Score: 5, Insightful

    Why should you hate to say the truth? The people who pirate brought this whole mess upon themselves and they don't have the balls to take responsability for it. Leaving the honest to suffer and clean-up after them. Phoeey! They're no friends of ours.

    I downloaded the entire first season of Lost from iTunes at one point. That single download was (IIRC) over 9GB. I have rented several movies from iTunes in the past few weeks, each one around 1.5GB in size. I have taken an active interest in history and archeology as of late and have downloaded as many as 5 History Channel shows in a single weekend, each between 450MB and 1.5GB in size. (The History Channel has some special feature shows which are basically movies.)

    I'd easily trample 5GB for my entertainment before you even START looking at my bandwidth usage for getting Solaris 10 & OpenSolaris downloads; evaluating the latest Linux version; playing video games online; downloading the latest OO.org, Netbeans, Seamonkey, Firefox, Opera, Safari, iTunes, GIMP, and other software that I need to keep up to date on a regular basis. Oh, and then there are free videos like Star Wreck, YouTube, Starship Exeter, New Voyages, Hidden Frontier, Java Gaming Vidcast, watching the lastest Macworld Expo, the JavaOne presentations, the Sun announcements, etc., etc., etc., etc.

    Oh! And let's not forget about my day-to-day tasks of obtaining libraries, SDKs, documentation, and other tools I need for my work and hobby. (HTML & PDF documentation can easily exceed hundreds of megs for many projects. Some exceed several GB. Don't even ask me about the time I tried to get a copy of MonoDocs by spidering the MonoDoc website.)

    As if that isn't enough, taking my game console online to play web games, watch videos, and otherwise interact over the web with the console easily chews through a significant chunk of bandwidth. A 3-10 MB Flash Game or a 20MB video clip might not seem like much, but it starts to add up after a while.

    Am I a power user? Sure. And I'm more than willing to pay for quality service that provides me what I need to use my connection to its fullest potential. But don't think for a moment that using your connection implies illegal activity. There's more than enough data churning around the 'net before you even touch the illegal stuff. And when I'm paying upwards of $50/mo for broadband, you had better bet that I expect to be able to transfer as much as a hundred GB a month. As someone already mentioned, bandwidth is more than cheap enough to make that much transfer cost-effective.
  15. Nothing New, we do it already and people LOVE IT by rezalas · · Score: 5, Interesting

    I work for Allegiance Communications in Oklahoma, and we already do this basically. The difference is that we have bandwidth / gig packages without caps, we just charge extra if you go over your limit and most people don't have a problem with that. for example, if you choose our top end package for home use (residential gamer package) you get 5 meg down 1.5 meg up, and usage rate of 50 gigabytes per month. If you go over the 50, you get charged. However most people (even people downloading movies) don't use that up. Those who do are likely hosting servers or doing something else and don't mind if they get charged the extra fee simply because they were told before hand that we do it. Now we are even looking at offering extra usage each month for small fees (an extra 50gigs for $7 more, ect). Usage fees without caps and monitoring can work, it just has to be done ethically. As for the low low bandwith of 1 gig... well, even our basic users occupy that. Anything less than 10gig a month (which is as low as we go) is just ripping off your customers.

  16. Re:MOD PARENT UP by Monkeybaister · · Score: 5, Interesting

    I don't think many slashdotters are privy to the actual costs of internet connections. I work in the networking department at my work where we had a T3 (45 Mbps). We've moved to leased fiber to a co-loc and now have 250 Mbps for less. It's the same ISP, all we did was take the phone company out and costs went way down.

    The cable and phone companies are able to charge so much because they are the only last mile connection in many places. Having a data connection (phone, TV, internet) that the government (controlled at the town/state level) treats like the roads would be great.

    My model would have the government run single-mode fiber to every house and bring it all together in a building in each town (or maybe larger). It would then be the responsibility of a company to actually give service over the fiber to homes. This would allow people much more flexibility, so if a group of people want to just share 100 Mbps from a big ISP, they have the power to do so.