Time Warner Pulls Plug On Metered Billing Tests

fudreporter is one of many who writes to tell us that Time Warner is not planning to continue their tiered consumption tests at this time. The company is not completely admitting defeat, stating that they "may return to the idea in the future," but for now the test has been shut down. "The plan would have established several tiers based on how much consumers use the Internet. Time Warner Cable had said at the time that it believed that consumers who download the most content need to pay more to cover infrastructure upgrades. The plan was first announced two weeks ago, then modified with higher download caps last week. In a news release yesterday, Glenn Britt, the chief executive of Time Warner Cable, said, 'We will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met.'"

Comments

Wouldn't be all that upset

[explosivejared]

Some bloggers also speculated that the plan was part of a scheme to discourage people from watching streaming videos online rather than watching Time Warner Cable on television, which Time Warner officials denied.

I wouldn't actually be all that upset if Time Warner was able to kill video streamed over the Internet. I like the way the Internet is now. Maybe I'm being too conservative, but moving video over from the sunk cost that is the cable network we already have in place is going to be too costly and to me seems dangerous to the Internet as we know it.

I personally think tiered pricing is a move in the right direction, though. As it stands now, heavy transfer people are being subsidized by those who are light users. This does not exempt communications companies from being held responsible for the universal service funds they most likely squandered, but consumption based billing only makes sense. It always surprises me how this remains a perpetual issue.

Re:Wouldn't be all that upset

[Hatta]

Maybe I'm being too conservative, but moving video over from the sunk cost that is the cable network we already have in place is going to be too costly and to me seems dangerous to the Internet as we know it.

Moving data across the cable network is free. The cable company owns those lines and doesn't pay for moving data across it any more than you pay for moving data across your lan. It's only the data that goes across the backbone that costs. If anything, cable companies should be hosting local mirrors of things like Hulu, or encouraging greater USENET use.

Re:If they'd just started with a simple price per

[rickb928]

The water analogy is priceless...

Even where there is potentially plenty of water, drinkable water is NOT an unlimited resource. And it's not 'there' if you don't use it. Water evaporates and leaks. But the reality is that water, like bandwidth, is a finite resource. It costs to find water, transport and store it, make it drinkable, and then dispose of it. If you use more, it gets scarcer.

Bandwidth is also finite. It costs money to provision for it, actually maintain it, solve problems.

Some of you may remember when you were responsible for the Internet link at work - when the DDS2 circuit didn't cut it any more, the ISDN line was maxed out (thank God!) and then the T-1 wasn't enough, and 4 T-1s bonded couldn't handle it. With every increase in bandwidth came more costs, for a new or more DSU/CSU, new router, firewall. You used an external mail server to filter the spam, saving 90% of your POP/SMTP traffic. You blocked WebShots, and your CEO drove you c-r-a-z-y with the constantly-updating cnnmoney.com Now it's Flash that eats bandwidth, and you want to block YouTube, Facebook, and Hulu to keep from cranking up another link just to satisfy non-business browsing.

I understand the cable cos dilemma - Only a few users can hammer bandwidth, and affect everyone. The cost is spread, but not enough.

But that's the business. If you don't want to be held to account for selling an 'unlimited' service you need to limit, maybe you need to re-think your marketing and product. If I were managing the Internet service at a business, and the boss told me that fast response and reliability were mission-critical, I'd just tell him the cost. It's the reliable-fast-cheap thing again. Any two of the three, sir.

So Time-Warner, maybe you should reconsider the unlimited thing altogether. When the price gets high enough, someone will come in and compete. Until then, keep looking over your shoulder.

ps- Former co-workers of mine who are at Time-Warner working in the networking group tell me it's a constant tug of war, keeping the system responsive and costs low. They understand, but of course they have no real power. And then the consultants come in....