They are attempting to do is what many Canadian internet providers do — set a limit on how much you can download in a single month, and charge you for the overages.
Mr. Dudley said the company was still working on what to charge people who exceed their limits, but he pointed to Bell Canada, which has imposed bandwidth limits on its customers. According to its Web site, Bell Canada charges as much as 7.50 Canadian dollars ($7.42) for each gigabyte when customers exceed the 30-gigabyte limit on a plan that costs 29.95 Canadian dollars a month. Since the average high-definition movie is 4 gigabytes to 5 gigabytes, that would mean a charge of at least $30 a download for customers on a plan like that who were over their limit.
Now this move is one that is fueled by fear, honestly. Time Warner is one of the big players in most media outlets. A lot of what gets downloaded nowadays are movies. Hi-def movies, when compressed, come out to about 4-5 gigabytes of data. A standard-definition movie, compressed into Xvid or avi, is about a third to a quarter of that, still not inconsiderable. Time Warner also admits that they’re mostly concerned wuith cracking down on the big downloaders — apparently half of their download traffic comes from about 5% of their customers.
However, this can get really ugly, really fast. People buy movies and TV shows, including Time Warner properties, off of services like iTunes. They (legally) watch them over Hulu, and other services like them.
To make things worse, I can guarantee that they won’t alter the systems that are already in place that restrict the customer. Some ISPs do things like automatically “throttle” (read: slow down) traffic like BitTorrent. Most ISPs now have tiered pricing for speed, or have a “turbo” option where you spend an extra $10 and get more download/upload speeds. I did have that with SBC/AT&T, but the base speed with Time Warner was plenty for me. Anyway… you can bet your bottom dollar that THOSE restrictions will not be going away.
Even better, this will end up being pure profit for TWC:
[T]he marginal cost of extra bandwidth is very small, he said. For broadband Internet service, 80 percent to 90 percent of the costs are fixed regardless of use. And the all-in cost of a gigabyte of use is about 10 cents or less.
Nice move, guys. I really hope your Texas test-market fails miserably… if it ever reaches my locale, I will be right back to a competing service within days. I will also take my cable TV and telephone with me. The Cable monopoly died a while ago; you may be the only CABLE provider, but you are not the only television provider in town.
