Going Medieval: Time-Warner Begins Metered Bandwidth Testing
by Michael Arrington on June 2, 2008

This Thursday, new cable Internet customers in Beaumont, Texas will no longer have unmetered Internet bandwidth - they’re guinea pigs in a new pricing scheme being pushed by Time-Warner that will give users between 5 and 40 gigabytes in total monthly data usage (uploads and downloads combined). Data usage over that amount will be billed at $1 per gigabyte. Competitor Comcast is also considering metered bandwidth.

The goal is to limit average data usage, allowing Time-Warner to get more customers into their existing fiber infrastructure. Since there is little or no competition for Internet connectivity, they don’t have to worry so much about losing customers.

The entire model lies in stark contrast to the competitive markets set up in South Korea and elsewhere, and it’s going to hurt innovation in the U.S. Many new startups, particularly those focused on video and online gaming, rely on their customers having access to high bandwidth, all you can eat connections.

Cable companies have regional monopolies and are able to extract excess profits from these monopolies. Innovation and the health of the ecosystem is dependent on a competitive marketplace. If one part of the market falls behind (and we’re already behind in broadband penetration and average data speeds), it becomes very difficult for the ecosystem to remain competitive.

I’m almost never in favor of government intervention of markets, but monopolies are an exception. We need to encourage data usage by consumers, not the opposite. The cable companies are standing in the way of economic growth and innovation. We can’t afford a decade or more of screwing around before trying to fix this. Let’s start now.

Comments

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The day TW brings this to Austin is the day I switch service providers.
The Netflix services look better and better, then I’ll just have to deal with the evil empire of ATT.

 

Welcome to my world…the world of satellite connections. This is the kind of thing we rural folks who rely on satellite for our “broadband” connections have dealt with all along. I won’t feel like the kountry kousin anymore. :)

 

The competitive market will invite satellite broadband players to examine the potential to gain access if there is enough of a demand and obvious dissatisfaction among the consumers

 

I had a small taste of this a few weeks at a hotel in Bulgaria that charged their internet fees by bandwidth. I had no idea how much bandwidth I needed.

Is there a way to see what we use at home in a given month from our home Comcast account? My router may have this info in its logging — I’ll have to look.

 

This is destroying net neutrality in a whole new way - by segregating people based on $$$. People with money will be able to afford full throttle, unlimited data connectivity whereas the poor and even middle class who cant afford the all-you-can-eat data packages will be now second class citizens of the Net.

These monopolist Telecomm and cable companies have been turned the US into a third world country as far as mobile and broadband connectivity is concerned. Instead of investing in new, cutting edge technologies, the Phone and Cable companies are taking a step backwards. what a shame.

 

I say it again and again…. “Thank god I’m not living in Texas.”

 

That’s what I have in Australia, 60GB limit with iinet. I’ve only occasionally even reached that even with heavy torrenting. With a big enough cap it’s no problem, but I’ve never understood why we have caps in the first place

 

I feel for these people… this *and* having to live in Beaumont, Texas. (It’s the armpit of Texas).

 

No need to be rude about TX. I am from Australia, and I think TX is a great state to live in after having lived in dreary old Manhattan, Atlanta and other places in the USA.

 

The problem about Friedmanian open-market is this. You eventually get monopolies and if state does not come into the game, usually game overs at a night.

 

Heh, considering that you can now use your cellphone as a modem, and Sprint is already offering unlimited phone-as-modem plans $49.99/month, their hopes of there being no competition is going to dwindle fast. :)

I mean, not quite as fast as cable currently (they claim avg 600 kbps - 1.4 mbps download, 350 kbps - 500 kbps upload), but that is likely to change sooner rather than later, especially if TW is going to give them the incentive to do so.

 

I know the business plans cost a lot more money, and that simply telling someone to switch to a small business plan to escape these caps isn’t a solution I can’t help mentioning it. Ever since Time Warner increased their speeds here, and brought their home-based small business plans down in price I’ve been a Time Warner user. For only $100 I get 2 up and 15 down without any caps or other restrictions such as throttling. It’s great to have that nice upload speed to test out new ideas or websites that I don’t quite want to throw into a proper data center.

Also, check out if DSLExtreme is available in your area as I use them as a back-up for the cable connection, and primarily to run all of the VOIP based phones. Great prices, friendly support, and no caps or throttling.

 

if this works - watch timewarner sign on netflix (or apple, etc.) and say that if you use netflix for movie downloads, these won’t count towards you bandwidth usage.

 

WHAT?!? THIS IS AN OUTRAGE!!!!!

Good thing I don’t live there!

 

@9: yeah, TX is a great place indeed - if you are from Australia! everything is relative of course.

 

this sucks. better dig out the dishtv offer from the trash. Only a few years ago there was no cable Internet in these parts (started in 2003). freedom isn’t free I guess. Could be a new start-up opportunity? Buying up and reselling bandwidth. How about a mobile WiFi truck or geosynchronous kites that amplify bandwidth and redistribute to areas like your suburban block?

 

This is expected and will continue. There is a tension between providing what people want - a loaf of bread - and what they are willing to pay for - a slice of bread.

Basically, these are non trivial capital capital expenditures, and there is a lot of spend here that has to be recovered. Doesn’t matter if there is competition or not, the costs are the same. If you want more details, let me know and more gory details on how this works can be yours.

 

Hey cable companies - you’re doing it wrong.

 

This is a very sad day for the internet..

 

Go ahead Time-Warner, you don’t scare Jeff Bezos. Amazon Broadband is coming! : )

 

Thanks for the call to action. Don’t wait on the state to fix it. Support net neutrality.

 

I wonder if it is possible at all to deal with this? I guess that telco and club has spend time and money not only to recover monopolies back, but also to ensure that antimonopoly disruption can not happen to them again…. :)

 

Aren’t the telco/cable monopolies in place because of government involvement in getting ubiquitous access? Most the cable companies are allowed their control over the lines because they pay the local municipalities/politicians, the reason this is even a problem is because we give them exclusive rights to the infrastructure. As far as I understand, shouldn’t the extent of government regulation here should be to just allow multiple providers access to the lines?

 

Does anyone have statistics on how much data transfer people use?

I don’t mind if this puts some kind of limit on the top 1-2% of users, especially if they’re “abusing” the connection, however if it means that 25%+ of users have to spend more, that won’t be all that great.

 

Texas is a great place to live. I am glad that I am living in Texas AND that I have DSL…

 

How did they choose Beaumont to take a dump on? Poor Beaumontians :(

 

I call bullshit on the cable industry. You’re 100% right that limiting bandwidth stands in the way of economic growth and innovation. This may be a great opportunity for all of the Internet’s top blogs to sum the power of their voices and prevent metered bandwidth from spreading to other parts of the country. We need to abolish it in the early stages, otherwise, fuck.

 

This will give new meaning to Internet Bandwidth Theft ..

I guess this is the time to start developing software that helps you share bandwith with your grandma that just uses it for email .

 

Go ahead Time-Warner, you don’t scare Jeff Bezos, Amazon Broadband is coming! : ) lifeonamazon.com

 

The digital divide just grew exponentially! -How sad for students and others without the means to pay for additional bandwidth. And don’t forget the the people working and playing in MUVES and MMORPGS they are really gonna get screwed!

 

“The problem about Friedmanian open-market is this. You eventually get monopolies and if state does not come into the game, usually game overs at a night.”

Example please?

I really don’t see a problem with this. If they can get better performance for what 95% of people do, and the few torrenters leave their network, I guarantee they are happy.The reality is in all-you-can-eat, the normal users subsidize the huge users.

I switched to $35 Cricket EVDO because I don’t need as much, I do occasionally wish I had 20+ Mb/s like my old Comcast but I also like being able to use it anywhere.

Last note– my EVDO provider has ‘caps’, but I called and they said they are only used in cases where it negatively affects other people’s usage, and so far that’s been the case. I run torrents and download video all the time, well beyond my cap and I’ve heard nary a peep. I don’t begrudge them wanting to maintain a service level though.

And the LAST thing I want is some tool in DC mandating how the Internet should work.

 

*wonders if anyone actually knows how much transfer they use per month*

I watch 6-7 movies a month streamed, download about another ten. Use the internet a lot since I work on it, and still don’t go over my cap. Unless you’re downloading 40 HD movies a month then it’s not that big of a hassle. Also, my ISP ‘only’ limits the speed after you go over the cap, so I won’t wind up with a huge bill.

No need to exaggerate and act like it’s the end of the Internet

 

Does anyone think this is a good idea ??

I think Limited Bandwidth would help everyone in the long run. Bandwidth is a limited commodity (u need to add more capacity to increase bandwidth). So currently by providing unlimited bandwidth ur essentially asking people who use less bandwidth pay for the people who use more (a zero sum game). If you pay per mb or gb, people would only pay for what they use and the market will find the right price (based on supply and demand). Its always better for free market to find the right price rather than companies fix the price.

Ideally most ppl would see a reduction in the monthly bills coz they would be in the lower bracket of usage. In essence it would mean I choose more carefully what I view on youtube rather than watch every video.

 

the Armageddon … its finally here

 

This is a perfect example of why the UTOPIA project (google it) was such an awesome thing. They took the infrastructure out of the hands of the corporations and then forced them to compete over it.

In that environment there could be a place for a company that offered a tiered solution with bandwidth caps. I’m sure my grandmother doesn’t transfer a gig/month, but I use Speakeasy because I often transfer several gigs every day.

 

The day this shit becomes standard, is the day that I once again whip out my Swedish citizenship and leave the U.S. for good!

GREAT IDEA! Works amazingly well with Netflix for downloading movies!
Retards..

 

Also: Try sticking to 40GB when you start downloading lets say.. A box set of 4 seasons of ayour favorite tv-show on Blue-ray!

$800 internet bill anyone?

 

So what happens when the taxpayers subsidize the building of the bakery so everyone can get a loaf of bread, then the baker decides they want to charge by the slice anyway while at the same time demanding more taxpayer subsidies to build more bakeries?

 

When freedom is taken away in smaller increments, most people dont notice and get used to living under control over time. First they will put a cap that is insignificant, say at 60GB, then there will be premium and standard packages for “new” subscribers that put caps data at perhaps 40GB for new subscribers vs. 60 GB for old timers, then it will be less and less. this is an old business tactic.

For those who think that cable and phone companies are just trying to weed out Torrenters so they can provide better service to the other 95% are part of the problem. Even though people “abusing” bandwidth (whatever the hell that means) may be inconvenient, it is protecting the rights of these 5% that will ultimately protect our own rights when we become part of that inconvenient 5% at some point. And these “abusive” 5% are breeding ground for innovation, entrepreneurship and freedom of creativity and expression.

 

I’m almost never in favor of government intervention of markets, but monopolies are an exception.

You’re still not in favor of government intervention. The monopolies were granted by the government in the first place.

 

This model is a cash cow for mobile networks. I hope the common folks aren’t stupid enough to fall for this crap.

 

This is already pretty common with many ISPs.

Cox San Diego limits regular cable modem customers to 40 GB downloads per months and 10 GB upload per month, while premium ($13/mo more for 12 mbps down 1 mbps up) is limited to 60 GB downloads and 15 GB uploads.

Limits:
http://www.cox.com/policy/limitations.asp

Prices:
http://www.cox.com/sandiego/hi.....eplans.asp

And here is a good tool that I use to monitor bandwidth usage (no affiliation):
http://www.bandwidth-meter.net/

-Steve

 

To all those up in arms over bandwidth throttling: would you tell your mother what you are doing with all that bandwidth?

No. I don’t have stats to substantiate my implication.

Given that bandwidth is limited, which customers should suffer? Should it be Grandma waiting to see pictures of the grandkids or should it be the dude that is too cheap to buy/rent a dvd and is downloading a movie via bittorrent?

 

Well, the limited monthly data usage is the standard here in Portugal. It’s also common that cable companies offer “happy-hours” during which the data usage is not counted. That’s usually during the night (1-9am in my case).

And I have to say it sucks! I have to keep tabs on how much I’m “spending” and I have reminders sent to me when I go over 50%, 75% and 85%.
With these conditions I would never consider hosting any kind of webpage/application in my own server…

 

Ahha,

I think America is going backward. Because India is actually started internet in metered bandwidth now in India they started loosen up. So I think USA is going backward when all the countries India , China and Asian countries are going forward.

 

Scott Stole my thunder with the obvious point of how they even got to be monopolies in the first place. Looking for regulation from the same system that provides the force to back up the monopoly is as old world thinking as the actions of the telco’s involved.

I like Cereal Divider’s take.. Let’s get that last mile and invalidate it because regardless of any access agreement the main provider shares with those it’s forced to that’s not going to drive costs down just turn into the same type of confuseopoly that the Cell phone providers run.

 

“Time-Warner: The power of you, as measured (and controlled) by us.”

 

And the really infuriating thing is that the US tax payer -already paid- for high speed internet. I’m sorry I don’t have the source but the telecoms have already gotten a huge amount of money to build the network of the future, but after they got the money they decided they didn’t need to build it anyway.

Now they’re going to force the people to pay for this all over again. When is anyone going to stand up for the people instead of the interests of the big corporations? When will this bilking finally stop?

Here is a link: http://www.techdirt.com/articl.....40_F.shtml

 

@37

They don’t need to remove your data allocation in small pieces. All they have to do is keep it the same. With the rate at which internet usage requirements are growing, this will amount to the same thing…

If you really want to see where a Teleco monopoly is heading, take a look at what AT&T did to South Africa when they landed a monopoly there:

http://slashdot.org/article.pl.....26/1642210

SA’s 3 gig caps have been around since ADSL was introduced there.

 

This is the type of disgusting monopolistic shit I saw in Australia when I worked there in 2003-2005.

The question is how will this be enforced in the US as there is no Telstra like monopoly (or Telstra/Optus duopoly, whichever for the pedantic bitches). You basically need a cartel to enforce such garbage on consumers, but considering the political power that Telcoms buy in the US with good old fashioned corruption (er…campaign contributions) anything can happen, right?

This leads to nothing but significantly reduced use of the internet, it’s a major drag on consultants and anybody trying to quickly innovate (how many tiny software startups can experiment with new sites and services with $1/GB overcharge), and it’s simply disgusting, greedy, monopolistic hogwash.

I hope spreading the word on this trial helps get people to jump ship from this shit-service.

 

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