Time Warner Cable To Test Metered Internet Access - InformationWeek
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6/3/2008
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Time Warner Cable To Test Metered Internet Access

Time Warner Cable may start charging customers $1 for each gigabyte of content they download from the Internet over a specified allotment.

Time Warner Cable plans to start testing on Thursday metered Internet access, charging consumers $1 for each gigabyte of content over their allotment.

Reports of the test, which would start in Beaumont, Texas, sparked immediate criticism from tech bloggers who believe it is an abuse of a regional monopoly. Time Warner, on the other hand, told Reuters and the Associated Press that the additional charge was necessary to address the problem of 5% of customers using half of the capacity on local cable lines.

"We think it's the fairest way to finance the needed investment in the infrastructure," Kevin Leddy, Time Warner Cable's executive VP of advanced technology, told the AP. Time Warner Cable was not immediately available for comment.

The cable company told Reuters that it plans to offer multiple levels of service that would start at $29.95 per month for speeds of 768 Kbps with a limit on downloads of 5 GB, which would amount to more than 340,000 e-mails, 170 hours of online games or downloading more than 1,300 songs. At the high end, customers could pay $54.90 a month for download speeds of 15 Mbps and a limit of 40 GB, which amounts to 124 hours of standard-definition videos or downloading over 11,000 songs.

The attacks came quickly from the blogosphere. Tech blogger Michael Arrington of TechCrunch said Time Warner was limiting usage in order to get more customers into their network. "Since there is little or no competition for Internet connectivity, they don't have to worry so much about losing customers."

Such practices by cable or phone companies would hurt innovation since many new startups in the areas of online video and gaming rely on customers having "all-you-can-eat" connections for one monthly price.

"I'm almost never in favor of government intervention of markets, but monopolies are an exception," Arrington said. "We need to encourage data usage by consumers, not the opposite. The cable companies are standing in the way of economic growth and innovation."

Time Warner is not the first cable company to address the problem of high usage among a relatively small group of subscribers. A study by the Max Planck Institute found that Comcast has engaged in routine blocking or throttling of BitTorrent files at all hours of the day, not just in period of peak congestion as the company has claimed. BitTorrent is a peer-to-peer communications protocol that Web sites use to let people download movies and share files between their computers.

The Comcast-BitTorrent dispute has become a flash point in the ongoing debate of whether Internet providers should be forced to offer the same level of service to all users, regardless of protocols, applications, or download levels.

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