Time Warner Bandwidth Caps - Cause For Concern?
NewsAdmin Staff Writer

You return home from a long day of work, and look forward to unwinding in front of the TV with some Chinese take-out. As you savor the first bite of your eggroll, you flick through the onscreen show guide and plot your course for the evening... "Lost", "Life on Mars", "Squid Invasion", and the History Channel's "MonsterQuest" if you manage to make it that far without overdosing on General Tso's chicken. Five minutes into the new episode of "Lost" your TV screen goes black and displays a "You've exceeded your monthly viewing quota" message. You give the remote a couple smacks into the palm of your hand, turn the TV set off & on several times, and mutter several expletives under your breath, none of which encourages the onscreen message to disappear. The phone rings at that moment, and as you pickup the incoming call a voice on the other end informs you that you can continue your TV viewing for a small fee, or you can use the down time to learn a second language or explore a new hobby until your viewing quota is reset next month.

As absurd as this scenario may seem, Time Warner plans to apply a similar consumption based billing model to their broadband Internet service. Since June 2008 Time Warner has been running a pilot program that enforces a monthly bandwidth cap for Roadrunner customers in Beaumont, Texas (5GB / $29.95 month, 40GB / $54.90 month). Customer uploads and downloads are tallied throughout the month, and if someone exceeds the bandwidth cap, their account will be charged $1 for every extra GB. This month, Time Warner announced that the pilot program went so well that they plan to introduce the same billing model to other cities that have yet to be named.

Time Warner insists that 5% of their customers use 1/2 the capacity of their network, so the new billing model is intended to make those 5% pay a fee that is proportional to the resources they consume. Fair enough, but when you consider that a single HD movie download is often 5GB in size, or the volume of grandkid photos exchanged between parents & grandparents, we have to question whether Time Warner's 5GB monthly cap targets more than just excessive bandwidth users within their network.

A popular theory being kicked around is that a large percentage of Time Warner's customers prefer to visit 3rd parties for their favorite content (multimedia websites, P2P, Usenet, etc.) and under their current business model Time Warner is not able to profit from that traffic. By establishing unreasonable download caps, Time Warner will discourage the use of competing sites, and will force customers back to the services & content offered within Time Warner's network. Cable companies essentially enjoy a monopoly, and it's becoming increasingly more difficult to find a city in the U.S. where consumers have their choice of more than one broadband ISP. With that in mind it's not a stretch of the imagination to envision these companies wanting to control not only your Internet access, but the services & content you're able to access with that Internet connection.

For customers that persist in uploading & downloading elsewhere, they'll ultimately pay a steep fee for doing so, allowing Time Warner to profit from any access to 3rd party sites. We haven't taken a survey, but we'd guess that these sites... YouTube, NetFlix, iTunes, etc... aren't entirely happy with Time Warner making themselves an uninvited partner in their businesses. In an ironic twist, Time Warner recently discontinued their Usenet service because they believed the content to be inappropriate and unpopular with users, yet their consumption based billing model will allow them to profit from Roadrunner customers who download more than 5GB per month from independent Usenet providers. Rather than develop services that would be of interest to their customers, Time Warner has discovered that it's easier, cheaper & more profitable to apply a usage fee to popular 3rd party sites.

Whether it's restricting connection speeds, or establishing bandwidth limits, these folks are laying the ground work for an Internet that will one day be managed entirely by a handful of large cable companies. A significant amount of power and money stands to be made from such an arrangement, so the motivation is there for these companies to work toward that objective. It may sound like a conspiracy theory to some, but if the Time Warner's of the world have already limited where you can purchase a broadband Internet connection, and if they're restricting where & what you can access with that connection, we might already be there.

Return to the main "News & Commentary" index