Time Warner Shelves Bandwidth Caps For Now

As part of its education strategy, Time Warner Cable says it will work on making measurement tools to help customers track bandwidth usage.
As part of its education strategy, Time Warner Cable said it would work on making measurement tools that would help customers track bandwidth usage. The company said such tools would be made available "as quickly as possible."

Critics had said that TWC's switch to metered Internet billing would have substantially raised rates for many customers, including small businesses. In addition, the higher prices would have hurt innovation on the Internet as a result of many TWC subscribers scaling back usage to save money. TWC has 8.4 million cable broadband customers.

Proponents of consumption-based pricing say it's a fairer model then bundled pricing, because heavy users would pay more, while light users pay less. In addition, cable and telecommunication companies would be able to serve more people on their networks without degrading performance and ultimately make more money to recoup the hundreds of billions of dollars that the industry claims it has spent on deploying broadband.

TWC isn't the only Internet service provider looking at consumption-based pricing. Comcast has already imposed a 250-GB monthly limit for residential use, and AT&T is reportedly considering a 150-GB cap.

Many experts believe some form of metered Internet billing, which exists in other countries, will eventually come to the United States. Gartner analyst Elroy Jopling told InformationWeek in a recent interview that the Internet is becoming a utility, much like electricity and water. "If you water your lawn every day, then you have to pay for it," Jopling said.

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