Time Warner plans metered internet rates for broadband users

by Tiberius Jonez

In a move sure to outrage the gaming community and many broadband users in general, Time Warner Cable Inc on Thursday will begin testing a service that charges consumers of high-speed Internet service based on their usage.

According to the story from Reuters, the test will take place in Beaumont, Texas, where broadband subscribers will be charged $1 per gigabyte above monthly allowances. The new policy is intended to address the top 5 percent of users, who have spent a "disproportionate" amount of time on Time Warner Cable's network, a company spokesman said.

Such usage is "taxing the infrastructure," according to a spokesman for Time Warner. "In order to make investments in the infrastructure, we have to find the revenue to pay for it."

Consumers in the test region will be offered several levels of service. A $29.95 per month plan for slower speeds of 768 kilobits per second and a 5 gigabyte limit would let users send and receive about 349,525 e-mails, play 170 hours of online games, or download 1,383 digital songs per month.

At the high end, a $54.90 monthly fee for a 15-megabit-per-second service and a 40 gigabyte monthly limit would allow subscribers to watch 124 hours of standard-definition videos or download 11,070 songs.

Metered rates could definitely have an impact on gamers who play several hours a week of multiplayer games on Xbox Live or PlayStation Network. Imagine the poor World of Worldcraft crowd - ZOMG!

I am not happy about this at all. I don’t know what it would mean for my family’s monthly cable bill – but I can tell you this much; if it means an increase for my service we will be looking long and hard at switching to satellite internet and T.V. service. Our cable bill is already over $200 a month and any more is just not acceptable.

Time Warner is also missing the point that the top 5% of users are the ones that get the most new users to come on board to broadband because they are the ones that are the best source of viral marketing for broadband companies. By alienating them like this, Time Warner could suffer a serious backlash that they have not anticipated.

For Time Warner to justify the metered rates as the only way to cover infrastructure costs rings hollow to me. In 2005, on top of his $12.2 million in pay and stocks, the company provided CEO Richard Parsons $100,000 for financial services, $321,127 for travel expenses and $52,800 to rent a Los Angeles apartment. Apparently, they are not exactly living paycheck to paycheck like most of us.

If Time Warner goes to metered rates and you’re a TW customer, would you cut your internet usage to pay less, pay more to stay the same, or pay substantially more to have greater capacity? Or would you try to switch away from them entirely? Comment and let us know.