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Time Warner Cable wants $55 for 40GB

By stretch | Friday, April 3, 2009 at 1:22 a.m. UTC

Do you ever experience a vague naseau when you see something at which you'd like to laugh, but can't shake a nagging feeling in the back of your mind that things are about to get much worse? That's how I feel when I read stories like this: Time Warner Cable Expands Internet Usage Pricing.

It seems that Time Warner Cable is a slow learner, having decided to proceed with their mad experiments in metered residential Internet access. I shared my thoughts on this scam back in June, and the argument hasn't changed. To review (from the article referenced above):

In the case of Time Warner Cable, customers will be charged from $29.95 to $54.90 a month, based on data consumption and desired connection speed. Customers will be charged $1 for each gigabyte (GB) over their plan's cap. Time Warner Cable offers four cap levels of 5, 10, 20, and 40 GB.

$55/mo for 40GB (that's $1.38 per GB), plus $1 per GB of overage. How much are you paying right now for broadband? I pay $44/mo for unmetered service at 12 Mbps through Cox at my current residence in Northern Virginia, and I can guarantee that I pull considerably more than 40GB in a month. But wait, it gets better:

The company's trial in Beaumont, Tex., lasted several months. Of the 10,000 broadband customers enrolled - about 25% of the company's total for Beaumont - about 14% exceeded their cap and had to pay additional fees that averaged about $19 a month.

In other words (according to the quote), roughly one in seven customers in the trial ended up paying, on average, $74 for what they thought would be a $55 plan (assuming these were all 40GB plans; if not, the overage charges begin to look even worse). Of course, the stats don't account for people who wisely discontinued their service with TWC as soon as they heard about the scheme. One could speculate that the customers remaining, then, don't pay too much attention to their Internet service and likely aren't "power users." Yet a good percentage of them still got hit by overage charges.

If anyone reading this happens to work at Time Warner Cable and could offer some bit of insight into this fiasco, I'd love to hear it.

(An additional point to ponder: What happens when Granny's PC on a 5GB plan gets compromised and spends a few weeks moonlighting as a pirate FTP server?)

UPDATE: To debunk some of the arguments presented in the comments, I offer this exceptionally well-timed NYT article, World's Fastest Broadband at $20 Per Home. Japan obviously has no problem expanding its infrastructure; what's our excuse?

Posted in Rants


Jeremy L. Gaddis
April 3, 2009 at 1:44 a.m. UTC

(An additional point to ponder: What happens when Granny's PC on a 5GB plan gets compromised and spends a few weeks moonlighting as a pirate FTP server?)

We know what'll happen. Since it's no fault of Time Warner's, Granny will be held responsible, of course.

I guess she should've bought that value-added h4x0r protection insurance for an additional $10/mo., huh?

April 3, 2009 at 2:24 a.m. UTC

Welcome to Australia. We've had these issues for ages.

April 3, 2009 at 6:54 a.m. UTC

Poland, Warsaw - Real 10 Down/1 Up Mbps. Cable provider - UPC. No limits. No blocked ports. It cost me around 25$ per month. I can terminate agreement in one month. But 4 years back we have similar situation here. Every provider had limits. Now only mobile.

April 3, 2009 at 8:09 a.m. UTC

Data caps suck, but be honest 40 gigs is a huge amount of data and anyone who gets through that much in a month has probably been pirating a lot of films and music.

I'm on a 10Mbit package but my ISP throttles me down to about 1Mbit during peak hours (7pm-11pm). I would rather have a data cap.

Ivan Pepelnjak
April 3, 2009 at 9:10 a.m. UTC

Welcome to real world.

Every service provider's pricing structure is calculated based on an oversubscription factor (a user with xMB link will not use xMB most of the time). As soon as even a small fraction of users starts getting way out of line, the whole calculation breaks down.

Now you have three options:

  • increase the prices for everyone to subsidize the "bandwidth usurpers". This would be the expected reaction if an SP would be in "social services" business.
  • reduce the quality of service for the usurpers. Some SPs (mostly cable operators) don't have that option (and the "net neutrality" pundits would start jumping up and down)
  • charge more only if you far exceed the oversubscription expectations (which is what TW is doing).

As for the FTP granny, it would be quite simple to implement fixed caps (or usage-per-day). Would Time Warner do it? Ahmm ...

April 3, 2009 at 11:38 a.m. UTC

There is a good internet infrastructure in Romania now, you pay between 10-25 USD/month for unlimited internet [Fair Use Policy- OFF] ( FO/Cable - up to 50Mb in country/ up to 8Mb outside of country).
In UK you pay between 15-30GBP/month for "unlimited" internet [Fair Use Policy - ON] (ADSL - up to 8Mb)

April 3, 2009 at 12:32 p.m. UTC

@Ivan: You're assuming that their network is overcapacity to begin with. And even if it is, what have they been doing for the last several years? Companies like Verizon have at least caught on that this Internet thing is here to stay, and have been investing heavily in future-proofing their infrastructure.

@Al: It might seem like a lot of data if you're getting throttled to 1 Mbps on a regular basis, but with a more decent pipe you'd be surprised how easy it is to burn up 40 GB.

April 3, 2009 at 1:11 p.m. UTC

I'm worried how something like this will effect a large group of soho teleworkers in my company that are on full time VPN tunnels to their homes.

April 3, 2009 at 1:12 p.m. UTC

My current net connection costs me £14/month in the UK for a up-to-8Mb connection (I usually get ~4.5-5Mb) with a monthly allowance of 5GB, but it is unmetered from 1am to 6am, and I'm generally happy with the arrangement.

I don't see this introduction of bandwidth caps as a problem, unless customers are not given any choice, choice between different suppliers, and choice between different price/usage plans. (Although I gather 'choice' in different broadband suppliers is not exactly widespread in the US?)

April 3, 2009 at 1:45 p.m. UTC

In France,there is: a 28Mbps/1Mbps ADSL access (unmetered service), OF access 100Mbps/50Mbps if avaible to your zone, ADSL TV + DVB-T (more than 60 channels and many in HD) with HDMI on the set top box, Free national phone + many free landlines international call (more than 50 countries), for geeks the ISP provide a SIP account, static or dynamic IP, Wifi 802.11n, 10GBytes of web storage (PHP/Mysql/etc.), /64 IPv6 for those who want it, native IPv6 (not tunneling), * and more.

The stunning thingy is the price, 30 euros for the whole package, without hidden fees.

This ISP started this offer few years ago (I think 4 years), of course when they started this business the offer were not so exhaustive but they put new technologies many times a year.

Not all of the ISP in the country are like this one, but many have to compete on this territory so the prices stands but they have begun a services war.

Well try to forget my crappy english ;)

April 3, 2009 at 1:45 p.m. UTC

I agree with Ben.

It doesn't bother me. The only reason anyone is bitching is because they're charging for what used to be free. If it had been that way from the start, nobody would have a problem. It's the mentality of the American people to believe they are somehow entitled to something, solely because they once had it. If you don't like it, don't buy from them. This is the price you pay for capitalism. You want to let private industry compete against one another? You allow them to make their own rules?

This is what you get.

April 3, 2009 at 3:00 p.m. UTC

I have Bahnhof in Sweden, and am paying 185 SEK/month (~$23) for 10/10 unmetered bandwidth.

Ivan Pepelnjak
April 3, 2009 at 5:43 p.m. UTC

@Stretch: what they did or did not do doesn't really matter. Everyone will sooner or later experience the same problem. You can't offer "all you can eat" buffet if some people have stomach capacity that is hundreds of times bigger than the average. Either your buffet is too expensive for the average visitor or you'll start making losses sooner or later.

The "old" cable companies are probably the first to hit the wall because they effectively have a huge shared LAN (and very little QoS with old DOCSIS equipment) to which all subscribers are connected.

April 4, 2009 at 12:34 a.m. UTC

Welcome to Australian internet, where our largest ISP offered a 200mb cable and adsl plan not too long ago.

April 4, 2009 at 1:16 a.m. UTC

I agree metered access is horrible however consider this regarding cable modem architecture. At best the CMTS downstream capacity is about 37Mbps to share among a few hundred subscribers (non DOCSIS 3.0 ). A few dozen heavy users affect all users on that downstream.
In a perfect world that 37Mbps is split evenly (assuming TDMA) but there's a number of variables that counter that method. Ultimately providers have the options of either charging additional fees for high usage or split users by making the downstreams less densely populated. Either way that costs money and who pays? The customers.
I'd rather those who negatively affects connectivity by maintaining transfers to bittorent or P2P networks to pay more. Someone mentioned having unmetered access during off peak hours which could help to come to a happy medium.
Of course this is only one point in a very controversial subject. Either way providers and subscribers have to compromise one way or another.

April 4, 2009 at 9:35 p.m. UTC

Why can Japan offer it? Because they have 100 million people in a tiny island?

April 5, 2009 at 3:14 a.m. UTC

The idea of charging for downloading more than 40GB/month is a great idea... if it is 10-20 years ago. In this age of video downloads and streaming it is ridiculous to put these caps in place. These ISPs should have reinvested a portion of their profits into their infrastructure all these years in order to keep up with demand rather than waking up one day, finding out they are unable to handle the demands of customers, and deciding to charge the customers more money to bail them out.

April 6, 2009 at 1:40 a.m. UTC

Ditto Project2501. The major ISPs in Canada moved to consumption based pricing some time ago with very steep penalties for exceeding the monthly limit. Personally I could care less sine I hardly pull more than 3.5GB per month. I would like Canada to accelerate its move toward the GSM/EDGE data prices that are available in the U.S.A. Heck, GSM/EDGE data is cheaper in the Dominican Republic than it is in Canada.

April 6, 2009 at 1:52 a.m. UTC

Samuel, Telstra who provide some of the scummiest limits here made a profit of over US$4billion last year and they still don't do anything about it, and why would they people still sign up

April 16, 2009 at 7:27 p.m. UTC

Seriously, $1 per gig over 40GB? I can EASILY consume 40gb/month between website administrating, linux servers, online gaming..

I used to be a huge fan of TWC but obviously they've cowered in their corner and are starting to get greedy..

April 17, 2009 at 9:03 p.m. UTC

Romania: 10Mbps down / 10Mbps up from/to internet, 50Mbps from/to Romania, 1 VoIP landline with really good prices, 1 mobile subscription & phone with the same prices + TV subscription with 50+ channels, all for about $15. No bandwidth meter and decent quality&support.

April 29, 2009 at 5:13 a.m. UTC

Here in Canada I'm $40/mo for 100Mbit down, 5Mbit up, residential fiber optic, no monthly cap. :)

It's not as common as it should be, though.

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