When Time Warner Cable introduces a new payment structure for Internet service later this year, it says it will place customers in plans aligned with their current usage.
That means subscribers to the company's Road Runner service shouldn't face higher costs, spokesman Alex Dudley said Thursday.
Despite the assurance, news that the company is switching from a flat monthly rate — the industry standard for years — to a charge based on usage rankled customers and consumer advocates who questioned the motives behind the change and what it would mean for the budgets of households where use of Internet services is growing.
The new pricing structure doesn't affect commercial accounts.
Critics pointed out that the new structure includes an extra charge for customers who exceed the usage allowed under their plan. And they said that if Internet use continues to grow, especially video downloading, then many customers could quickly be forced into more expensive tiers.
Chris Murray, senior counsel on media and communications issues for Consumers Union, said his organization is worried that Time Warner Cable is simply looking for more money in an already profitable business. He said he's concerned that the company is trying to minimize competition from Web sites such as Hulu.com and Netflix.com that distribute some of the same content Time Warner Cable does via its cable service.
Dudley responded: "We want our customers to download as much data as they want from wherever they want. All we ask is that they pay for whatever they consume."
That's exactly what bothers Tess Crozier, 58, of Chili. She said she now pays $25.90 for her Internet service with Time Warner Cable and noted she would pay at least $29.99 under the new plan. She likes downloading music from iTunes occasionally and watches a TV show about once a week on http://www.hulu.com, so she knows she isn't a high-volume user. But she's annoyed by the prospect of any price increase.
"The bottom line is I'd be paying more than I'm paying, and I'd be paying more and getting the same thing," Crozier said.
The Rochester area is one of five across the country where Time Warner Cable will try out the new payment structure before deciding whether to implement it nationally. Beginning this summer, the company will send usage data to customers in their bills and make the information available online.
In the fall, the company said, it will automatically place customers in plans commensurate with their current service, unless the customer asks for something different.
Road Runner Lite customers would move into the 5-gigabyte usage plan for $29.99, Road Runner Standard Tier customers to the 20-gigabyte plan for $49.99, and Road Runner Turbo customers to the 40-gigabyte plan for $54.90.
Customers will be able to choose any of those plans, along with a 10-gigabyte plan for $39.99 and a 100-gigabyte plan for a price yet to be determined. All prices are approximate, Dudley said.
Customers could save money if they underuse the plan they have now and find a smaller gigabyte plan that suits them better, he said. Like the current tiers, the gigabyte plans have different speeds. The higher the price, the faster the service.
Dudley said customers will be able to monitor their usage online and can change plans whenever they want. Overages will cost $1 per gigabyte.
Beaumont, Texas, is one of the cities participating in the trial run and is further along than Rochester or the other cities, San Antonio and Austin, Texas, and Greensboro, N.C.
In Beaumont, 14 percent of customers are paying monthly overage charges averaging $19.
Dudley said usage-based pricing is more equitable. Currently, he said, the majority of customers are subsidizing the use of a small group who use a massive portion of bandwidth.
Video downloading has increased in popularity and uses up more gigabytes than most online activities. According to Apple Inc., a high-definition version of the hit movie Quantum of Solace uses 3.54 gigabytes, while a standard-definition version is 1.55 gigabytes.
Some users, Dudley said, are downloading several hundred high-definition videos a month and paying the same as someone who downloads none.
On Thursday, Time Warner Cable technicians hooked up Road Runner service to Kevin Leas' Penfield home. The 23-year-old freelance photographer and his family decided to switch to Road Runner after several years with another local provider. They were thrilled with the prospect of getting a solid signal while they watched television shows online and uploaded photos to the Web for an introductory rate of $29.99. But news of the new payment plan lessened their enthusiasm.
Leas' work requires him to download and upload large quantities of photos and video, which he fears will cost him dearly once the introductory rate expires.
He also uses a Vonage phone system, which according to Time Warner Cable will also count against his allowance.
Just the idea of the new plan upset him.
"What once was a universally accepted format of paying a flat rate for your service is going away," Leas said.
Time Warner's plan to alter Internet pricing tiers draws criticism
Time Warner's plan to alter Internet pricing tiers draws criticism
Time Warner's plan to alter Internet pricing tiers draws criticism
Oh just wait, remember when the phone companies had to deal with computers that were infected and dialing all sorts of long distance calls? Guess what, now people will be part of bot nets or what have you, go over the limit and get charged for bandwidth they didn't "use".
[align=center]A self-aware artificial intelligence would suffer from a divide by zero error if it were programmed to be Amish[/align]
by your plan, some people's rates would go up and others would go down. i would have no problem with that. except here (i live in one of the lucky winning cities), all rates are going up. it's just time warner trying to hose everyone, which is nothing new. we have only one other broadband option in this city and it's a local provider. i find it hard to believe that bandwidth is so expensive in this day and age.b-man1 wrote:i'm all for paying for what you use (which also means NOT paying for what you do not use). that, or just go after the 5% of abusers that use up more than the other 95% of regular customers.
i am a pretty low bandwidth user myself...i bet the majority of what i use is from youtube. i do occasional large file downloads, but not much. i also rarely use peer-to-peer or other file sharing services. i can't even guess what my actual usage is...less than 5GB per month i bet. i imagine heavy users of hulu and other online video sources would be affected...as well as (of course) those that illegally download movies and music. i won't turn this thread into THAT discussion, but i can't imagine most home users using those upper tiers unless they are doing a fair amount of "questionable" downloads. if that is the case, then they should be charged more.Road Runner Lite customers would move into the 5-gigabyte usage plan for $29.99, Road Runner Standard Tier customers to the 20-gigabyte plan for $49.99, and Road Runner Turbo customers to the 40-gigabyte plan for $54.90.
Customers will be able to choose any of those plans, along with a 10-gigabyte plan for $39.99 and a 100-gigabyte plan for a price yet to be determined. All prices are approximate, Dudley said.
this is kind of in the same arena as me wishing airlines would charge passengers by TOTAL travel weight (weighing the person, all of their bags, etc)...not just by having limits on each bag. i know, off topic, but it's the same logic. this comes from a recent trip where i was told my single checked bag was four (4) pounds over the limit and that would cost me $90 extra. meanwhile, someone else can check two bags that would total 49 lbs more than my one (or they could weigh 300lbs more than me physically) and still not pay more.
pay for what you use. i also want a la carte tv service...just bill me for the shows i watch, not for a month of service that sits there wasted. note: if they DO charge by usage then everyone should get top tier speeds...that is only fair. speed should not be limited if that is the case, IMO.
ok, out of curiosity I looked at my network connection and and I did a total of 1mm packet (in+out) in the last 3 days. some p2p but mostly WOW
apparently A typical packet contains perhaps 1,000 or 1,500 bytes.
so 1mm x 1,000 (1500) = 1 gigabyte? (1.5 Gigabyte)
so I wol dbe looking at ~10gb (15) per month?
anyone who can figure this out pls jump in
apparently A typical packet contains perhaps 1,000 or 1,500 bytes.
so 1mm x 1,000 (1500) = 1 gigabyte? (1.5 Gigabyte)
so I wol dbe looking at ~10gb (15) per month?
anyone who can figure this out pls jump in
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Update!
Time Warner to Offer Unlimited Bandwidth for $150 a Month
Time Warner Cable's COO responds to criticism of the company's plan to cap bandwidth usage on its broadband Internet services by announcing a new pricing structure for the plan.
In response to a slew of criticism over its plan to cap customers’ bandwidth allowance, Time Warner Cable announced new price tiers for a three-state trial.
In addition to 5, 10, 20 and 40GB caps, the company said this week that it would offer a 100GB tier for heavy users. Prices (so far) would range from $29.95 to $75.00 a month, and users would be charged an extra dollar for every additional gigabyte they download, up to a maximum of $75. An “unlimited” bandwidth plan, therefore, tops out at $150.
Time Warner’s Chief Operating Officer Landel Hobbs released a statement on April 9 expressing regret for not adequately communicating to customers its plan to initiate consumption-based billing trials for its broadband Internet services. “We realize our communication to customers about these trials has been inadequate and we apologize for any frustration we caused,” he said in the statement. “We’ve heard the passionate feedback and we’ve taken action to address our customers’ concerns.
Hobbs said the “ever-increasing flood of content on the Internet,” which is causing bandwidth consumption to grow exponentially, is a good thing. However, he noted the costs associated with this increased Internet usage. “Here at Time Warner Cable, consumption among our high-speed Internet subscribers is increasing by about 40 percent a year,” he said. “As a facilities based provider, we’ve built a network that must be maintained and upgraded. We have increasing variable costs and we have to continue to invest in the network itself.”
Rival company Comcast also imposes a bandwidth cap on users, with the basic service topping out at 250GB and costing around $43 a month. “This is a common problem that all network providers are experiencing and must address,” Hobbs said, noting other providers, such as AT&T and Cox Communications, have instituted consumption-based billing.
Hobbs also offered an olive branch to customers in affected areas, explaining that once the trial is implemented, Time Warner will not immediately start billing customers for overage. Rather, it will first provide two months of usage data and then a one-month grace period in which overages will be noted on customers’ bills, but they will not be charged. “So, customers will have an opportunity to assess their usage and right-size their service packages before usage charges are applied,” he said.
Trials will begin in Rochester, N.Y., and Greensboro, N.C., in August. Hobbs said the company would apply what it learns from those two markets when it launches trials in San Antonio and Austin, Texas, in October. “The Internet is dynamic and continually evolves, so our plans will evolve as well and aren’t set in stone,” Hobbs said. “We’ll look forward to more dialogue as we progress in these trials.”