Time Warner halts metered billing tests

Time Warner Cable has put the brakes on a trial that was testing its new "consumption-based billing" system for its broadband service, the company said Thursday.

Chief Executive Glenn Britt said in a statement that there has been "a great deal of misunderstanding" by consumers and lawmakers who have criticized the plan.

Britt said that the company still believes that consumption-based billing may be the best way to handle rising network costs among its heaviest bandwidth users. But he conceded the company will not proceed with tests until it consults further with customers and interested parties.

Sen. Chuck Schumer (D-N.Y.) and Rep. Eric Massa (D-N.Y.) announced Time Warner's change of heart during a rally in Rochester, N.Y., the Rochester Democrat and Chronicle reported earlier on Thursday.

Massa, who represents Rochester, was an early opponent of the plan and has promised to introduce legislation that he has said would protect consumers against companies introducing tiered services, such Time Warner's proposed billing plan.

Massa is still not giving up on his legislation that would ban metered billing.

Time Warner had quietly been testing its metered billing service in Beaumont, Texas, since last year. But last week, the nation's second largest cable provider said that it was planning to expand the test of the bandwidth caps to other cities, including Austin, San Antonio, Rochester, N.Y., and Greensboro, N.C.

The way the plan worked is that Time Warner would cap data downloads and uploads at 10 gigabytes to 60 gigabytes a month with prices ranging from $25 to $65 per month, depending on the region. The company also planned to introduce a new plan that would have offered 100GB of downloads for $75 a month. Additional downloads would be charged $1 a GB with a cap of $75 on the extra fee, essentially making an unlimited plan cost $150 per month.

Time Warner said that it was testing metered billing because some of its subscribers were using an inordinate amount of bandwidth. And as more video and peer-to-peer services come online, the company said that it needed a new business model to handle the rising cost of maintaining and managing its network.

But consumer advocates have argued that Time Warner is simply trying to protect its cable TV business by making it very expensive for users to watch competing video services online. Public Knowledge, one of the more vocal opponents to Time Warner's metering plans, was pleased with the company's decision to table the tests.

"The company properly listened to its subscribers, the public, and policymakers, all of whom were highly critical of the proposition in the first place," Gigi Sohn, president and co-founder of Public Knowledge, said in a statement. "It quickly became clear the plan had nothing to do with managing Time Warner's network, and everything to do with increasing profits at the expense of captive customers in an uncompetitive broadband market."

[1g2j]

Once you go unlimitrd. Its hard to turn back.

[shootfirst]

It is quite obvious that Time Warner did this to lean people away from using streaming content back to cable. The bandwidth caps were kind of ridiculous for the prices they wanted. If they had gone with better pricing scheme they would have been much better off. However putting limits on broadband usage is going to increase their maintenance and overhead.

Time Warner has the funds to make services available much like Netflix does and better. Sure the future for cable is grim. As the future comes everyone will be more and more used to on demand viewing for a fair price. Paying more to see a movie on payperview than going to the movies is just insane. I don't have cable because I can watch all my shows on the web without as much annoying commercials as on TV. I also have netflix that I can get virtually any movie that I want per month, along with entire seasons of tv shows.

The fact is that Time Warner needs to be innovative and come up with new ideas. If I were them or any cable company I would partner up with netflix as there are some real possibilities there. Time Warner should be looking to provide even better broadband and since they are in position to do it they can then offer the next tier in services.

[Lerianis3]

I have to agree. I saw the prices they wanted for 50GB's of bandwidth... I nearly poo'd myself, it was so funny! I got 250GB's from Comcast (actually more, because I have gone over their 'bandwidth cap' quite a few times since it was announced, with no moans from Comcast!) for 50 dollars.

Companies are going to have to realize that customers do NOT WANT TO HAVE TO MONITOR THEIR BANDWIDTH CONSUMPTION! They just want to be able to bittorrent, watch online videos, etc. as much as they want, without having to worry about BS like that!

[Bill__Dollar]

Uhm, I don't think its correct to say Public Knowledge is "one of the more vocal opponents to Time Warner's metering plans." When TWC first announced the Texas trial last year, the group released a press statement with the title "Public Knowledge Praises Time Warner Pricing Model." See: http://www.publicknowledge.org/node/1355

The statement said ?Time Warner?s pricing test could be a welcome development for consumers and for the cable industry. Consumers will have a better idea of how they are using their Internet connections and will have the flexibility to adjust according to the rates."

So it's clear now that real grassroots outrage has sprung up against Time Warner, this so-called "consumer group" is reversing itself to capture press attention.

[[e-mail]]

I believe that web reports using TWC's own annual report indicate that their network costs have been going >down< not up. Therefore we cannot completely believe "Britt said that the company still believes that consumption-based billing may be the best way to handle rising network costs "

[clynx]

Data caps are CENSORSHIP. Period.
Buy a new router if having bottle neck. Dah?

[Friday7]

They spent only $180 million or so expanding and improving their network last year, on revenue of over 4 BILLION. If they had to double that amount to keep up with bandwidth growth for just 3 years (a natural leveling of usage should occur by then, we're already trending in that direction) then that's a small price to pay.
The CEO does want this story to die because new funding is on the line....

Time Warner Cable tells FCC to shut up about net neutrality
http://arstechnica.com/telecom/news/2009/04/time-warner-cable-to-fcc-shut-up-about-net-neutrality.ars

They TW and others ISP don't get it. We can use a variable amount of bandwidth and we want to use other providers like netflix, hulu, vonage, iTunes and the like. Because paying twice is not acceptable. Time Warner failed to mention that they are coming out with a video on demand. Extra bandwidth does not cost anymore then the normal amount.

[Toulinwoek]

Rising network costs...this is a big, fat myth, if not an out-and-out lie. Because of these greedy dastards, the U. S. is lagging behind many places in the world in consumer Internet bandwidth. I don't begrudge a company wanting to make money; after all that's why they're in business, but this corporate greed has just got to stop, it just needs to STOP!
I know "Free Enterprise" is one of our sacred cows, but my God, I actually think that Free Enterprise to some extent feeds (and feeds on) greed.

[lkrupp]

Bite me. Really. I hope your employer decides to reign in the greed, seek less profit, and gives you a pink slip to make ends meet. Really, I do.

[d3vildog69]

Ikrupp - Really dude? I know his whole free enterprise thing was a little much... but dude. Chill out.

[michaelolenick]

Normally I'd say companies can be as greedy as they want to be, but the problem with Internet providers is that they're monopolies. There is only one source in the overwhelming majority for high-speed Internet access, and the reason there's only one source is that government has rules blocking competitors from making an alternate cable system. The reason I read that Time-Warner scrapped their plans is that the phone company providing much slower DSL refused to go along with the metering.

Monopolies are not regular businesses.

If Time-Warner wanted to allow two genuine competitors to be able to offer cable service, assuming this is technologically feasible, I'd be comfortable with them setting whatever limits they want as long as they don't collude w/ those competitors. But until that happens -- until there's substantive, meaningful broadband competition -- they shouldn't be allowed to pretend like they're a regular business.

[forrestcupp]

What about the Linux users who don't watch TV shows on the net, but they have to download entire operating systems and all of the software that they use?

[guayape]

I'm a Linux user, an XP, Vista user but LINUX is my choice. So what about us?
I'm GNU/Linux!

[Dwight1949]

I am Linux user and I do watch TV on the net which doesn't take all that much bandwich.
It takes around 150 to 200 kilobytes per sec to run smoothly as I recall. In Japan the internet
runs at 30 gigs per sec and here our Big Boys act like 1.5 to 3 Gigs per sec is something.
These companies need to made into regulated Ultilities like the power company.

Too Many Parasites............too many Executive Big Boys at TW..................Dwight

[stevicus]

@Dwight:

You mean megs - I am in Japan and the fiber is 1 gig, ADSL typically 30 megs depending on how far you are from the exchange.

[frvstandard]

Apparently Time Warner's director of digital communications thinks the Twitter comentary is a joke.

@ jeffTWC tweeted "I'm leaving to get a drink now. Just thought you'd want to know that."

[bigdogpete43]

As an ISP myself, I have ran the numbers on this. The payback is not there, so that is why they stopped. Its actually more expensive to implement all the equipment and billing platforms to do this than the cost savings involved. It wasn't because they cared, it was a business decision.

Regardless of that, I understand their need to control their OWN bandwidth and their OWN network, which is leased to you. Let me reiterate--they OWN their network.

Metered services are coming, there is no doubt, its just too early in its technology life to make it viable. For those that think the internet is free, our bandwidth consumption has tripled over the last three years while our subscribers have grown by about 10% per year. True we are still in business, but when margins get squeezed, service levels will go down.

[d3vildog69]

They Lease the network to me, as in I AM PAYING for it, along with other consumers who make this company possible. They wanna **** off their entire consumer base cause they can't afford to buy a new router (and don't tell me there isn't better cause japan, and several other countries operate at much higher speeds than us), then they are high and dry with their awesome.. empty network.

[Lerianis3]

by d3vildog69 April 16, 2009 5:09 PM PDT
They Lease the network to me, as in I AM PAYING for it, along with other consumers who make this company possible. They wanna **** off their entire consumer base cause they can't afford to buy a new router (and don't tell me there isn't better cause japan, and several other countries operate at much higher speeds than us), then they are high and dry with their awesome.. empty network.
____________________________________________

EXACTLY RI:GHT! If Japan can afford to have 100MBPS (and going to 1GBPS speeds soon!)..... why can't the United States? Answer: Our comapnies are too freaking greedy and have too much of a monopoly in nearly all areas.

[PointerNull]

"If Japan can afford to have 100MBPS (and going to 1GBPS speeds soon!)..... why can't the United States?"

Because Japan has the population density to support it. People in North America are more spread out and it costs more to deliver service to them.

[gertruded]

If we don't get these greedy corporations under some control we are all lost. The current control the corporations have over our country is destroying our country.

A corporation is an entity created and licensed to operate by the government, it is a creation of our government. When a corporation gets too much power it must be brought in line.

[PointerNull]

Last week I saw an invoice for the modules that were required to support a 10G circuit from coast to coast. These modules are essentially ultra-high end 'network cards'. The invoice came to around $300.000. It did not include:

- fibre
- chassis to hold the cards
- aggregation/distribution switches
- repeaters
- rent, power, heat, water, peering charges nor any of the other fees for the repeater shacks or equipment sites across the country
- people to install the equipment

What I'm trying to drive home is this fact: being an ISP is a *very* capital-intensive business. You need *lots* of money just to be in the game. Statements like "just buy another router" and "rising network costs are a myth" are astounding in their ignorance.

Here are the only options:

1. Continue with the status quo. This will lead to crappy service as the ISPs will not upgrade their networks. Bandwidth demands are increasing regularly (we budget for 50% each year - what other business has to cope with that kind of growth curve) and will continue to increase. Without regular expansion, everyone's high-speed connection is 6-18 months from uselessness.

2. Traffic management, including traffic caps, filtering & hobbling selected services. Personally I don't like this one. It complicates the ISP's network and removes it from being a 'common carrier'. Threatens network neutrality. Also makes everyone pay for the actions of a few.

3. Pay per use. This option makes the most sense but causes the most uproar (see above). This makes every user responsible for their own traffic. The biggest users become the ISP's best customers. No need for bandwidth caps or traffic shaping. Best business model.

Those are the only options. Network gear doesn't come cheap, neither does fibre nor people to make all the stuff work (I'm one of them and no, I don't work cheap either) While I would like to see free unlimited Internet, the piper must eventually be paid. The pay-per-use model is the fairest and most sustainable.

TANSTAAFL

[Lerianis3]

Network gear doesn't come cheap? BWAHAHAHAHAHA! Oh man.... I haven't heard anything THAT funny since I was 2! The fact is that networking gear from Cisco IS cheap. The real issue is that these companies want obscene profits to justify their massive bonuses being given to top management, so they are not properly upgrading/updating their networks.

Pay per use? Excuse me, but I am already 'paying per use'. That is what my 50 dollars to the farking cable company is for, for my USAGE! And when I tell you what the costs are for 500GB's of bandwidth, you are going to PLOTZ....... 5 dollars! So, they are making a....... 1000% profit (excluding networking costs, which cannot be THAT high) off me? Yeah, they are getting enough of my dollars to justify totally unlimited, un-traffic managed, un-EVERYTHINGED network access 24/7.

[PointerNull]

"The fact is that networking gear from Cisco IS cheap"
Cisco?? We use Cisco for management and access switches. I'm talking about Fujitsu DWDM gear. If you know of any cheap sources of carrier-class MAN and WAN equipment, please let me know. We'll be happy to use them.

"And when I tell you what the costs are for 500GB's of bandwidth, you are going to PLOTZ....... 5 dollars!"
Please provide some details. What is your source for that number and what exactly do you mean? Are you claiming that it only costs 5$ to deliver a 500Gbps connection or that it costs 5$ to deliver 500Gb between two points. Up until now, I had only heard of 100Gbps being achieved in laboratory conditions.

I don't think you have the faintest clue of what you are talking about. What other sustainable business offers unlimited consumption for a fixed price? You pay according to your use of electricity, phone, water, gas, food ... It only makes sense. It's natural to want things and not have to pay for it. I want a Ferrari. But that's not how the world works. Everything - EVERYTHING- has to be paid for.

TANSTAAFL

[gertruded]

Our corporate system must be changed before we are all lost and our country is destroyed by greed.

[RideMan]

The question: "What other sustainable business offers unlimited consumption for a fixed price? You pay according to your use of electricity, phone, water, gas, food..."

The answer: I presently enjoy fixed price/unlimited use subscription periods for my local telephone landline, my DSL internet service, my cellular long distance service, my cable TV service, garbage collection, and my admission to twelve (soon to be 26) different amusement parks. If my lifestyle were different you could probably add in gymnasium or health club, local swimming pool, zoo, museum, symphony orchestra, or any number of other services. It is a common business model whenever the incremental cost of increasing access to any particular customer is relatively low.

[PointerNull]

"I presently enjoy fixed price/unlimited use subscription periods for my local telephone landline, my DSL internet service, my cellular long distance service, my cable TV service, garbage collection, and my admission to twelve (soon to be 26) different amusement parks. If my lifestyle were different you could probably add in gymnasium or health club, local swimming pool, zoo, museum, symphony orchestra, or any number of other services. It is a common business model whenever the incremental cost of increasing access to any particular customer is relatively low."

Interesting examples. Check your contracts for your phone services - I'm guessing that you will find some limit in there. Most plans advertised as 'unlimited' actually have some high but definite limit (like 1000 minutes or so). Pools, zoos, museums and symphonies are funded through tax dollars so they don't apply. Garbage collection is not unlimited - try disposing of some construction debris or an old car and you'll find that out.

The amusement parks and gym examples are actually particularly appropriate. What happens when you go to Disney World during peak season? You wait in line for two hours to go on a ride. They can't adjust their capacity in response to demand, so they deliver varying levels of service. The process of making your way through the line (and the gift shops!) performs their 'traffic shaping'.

It is common to give the ILLUSION of unlimited service when the the incremental cost of increasing access to any particular customer is relatively low. However it is only an illusion, a marketing trick. The business of providing Internet access is in it's growth phase right now and probably will be for the next ten years. Only after the infrastructure in overbuilt to the point where it can satisfy 99% of the user's demands will an 'unlimited' service be possible.

[GlennAllen]

Yeah, ri-i-i-ght... "rising network costs"? Translation: We wanted our profits to be (even more) obscene; they weren't, so we came up with this plan.

[grenner_0]

Having asked TWC customer service about this issue and not getting any straightforward answers this whole episode is frustrating. I've been their customer for 10 years and recently thought about removing the digital TV and digital phone service and going internet-only. Obviously they're aware that customers are trending that way and intend to cash in on it.

Also don't appreciate the comments I've been seeing about "customer education". It seems like a big issue is that TWC is of the mindset that their internet customers are really so stupid that we have to be educated so that we truly understand all the great benefits capping has to offer.

The answer is staring them in the face... evolve their cable service to be an on-demand internet video service instead of some hybrid program schedule/on-demand wannabe.

[Lerianis3]

Ah, but the networks would SCREAM if they would do that, saying that the cable companies would have "TOO MUCH CONTROL OVER WHAT THEY OFFER TO THEIR CUSTOMERS!"

Personally...... I like that control. As long as the companies offer ALL the cable shows ALL the time, with the advertisements that the networks wish for them to have..... what's the big problem here? Personally, I think that would save a LOAD of bandwidth and free up a lot of space on the cables: make it so that 'cable networks' beam a digital copy of the show to the cable companies, they put it on their servers, and people access it when they wish to access it.
Of course, the REAL motive for not doing that is that channels like the 'Golf' channel would die their well-deserved deaths.

[eswinson]

I live in Greensboro, ( well actually I live and work in Ukraine but my family lives in Greensboro) one of the proposed "test" markets for tiered pricing. I'm a huge consumer of bandwidth for Slingbox and Netflicks and Hulu thorough a vpn/proxy I set up on my home network. When I first heard about the plan my first reaction was to find another provider. Then I realized they were the only broadband play in town. Verizon's Fios is not available yet and the DSL providers are not offering anything beyond 1 and 2 Mb with very little limited upload speeds. So essentially while not technically a monopoly for internet services in the area they practically are when it comes to high-speed broadband. I'm all for free markets and capitalism but this was abusive. I am certain that they would not be attempting these trials in a market where they have significant competition.

I think a smarter business model for them would be to let cable content subscribers have unlimited access to programming though their computer on an "all you can eat" basis if I could have a netflicks or hulu interface for TW content i.e. meaning the same stuff on hulu plus all the premium channels and movies on demand I would have no issues with paying for cable TV programming. I don't mind paying for stuff I like and want and I don't think everything should be free because we run a risk of commoditizing content the point where it is no longer profitable to produce quality content. But I don't agree with paying a middle man that wants to profit from content delivery without compensating the content providers. Or worse case taxing me to get content that I am already paying to to receive like slingbox, netflicks and iTunes.

[drbyte]

Funny how you can have your dvr going all day and all night downloading HD Content, which are huge huge files, without limit or cap the first. NO restrictions on how much you can watch or record. Seems cable companies want to limit the amount of internet you use because it's a conflict of interest for them.

I got a call from Comcast (IL) about the 250gb cap and boy are they cryptic and arrogant with the whole thing. They give you the number of what you did for the month like you have commited a federal crime (400gb last month). There's NO way to monitor usage with a networked home, can't explain how internet down the pipe is different from HD cable to the dvr, warning of suspension of internet for 12 months for a second offense....like your going to come back after 12 months in the penalty box. I can go to my cell companies site and i see how many minutes I've used. Comcast can't seem to come up with something similar for customers. What they do come up with is commercial after commercial of blazing fast internet speeds that you have to use like your walking on thin ice.

Luckily they aren't the only provider in my town (thank goodness). We pay over 2k a year for comcast, and they just lost that money starting next month. What a sad state of affairs, to have people actually believing there is such a thing as a bandwith hog for internet. Amazing. These companies are all on the same page cuz they see the possible shift from cable tv to just internet as young people find less and less use for television. I hope this cap nonsense will be exposed for the BS it is.

[afterhours]

Buy a smart switch and you can monitor this stuff readily. It is how they do it. Or, use an app like SurplusMeter to monitor your actual bandwidth on a per-machine basis.

[tech_crazy]

And what's your proposal for VoIP boxes etc?

[drbyte]

We have 2 laptops, ps2, 360 and a desktop networked to a lynksys. They should provide a way to monitor this, they want everyone to be modern and tech happy right? Who just has 1 device connected to the internet these days, who what do normal folks know about switches? They are even cryptic with the billing period.

[chuck_whealton]

I fully agree with other posters and one of the paragraphs in the article - they're simply trying to protect their cable television service.

If their service is priced like their Internet access (appeared to be) and my own cable television service, it's overpriced already and gee, we wouldn't want to allow people a way around that, now would we?

Charles Whealton

[afterhours]

Here's a concept: if you pay for your bandwidth, will you suddenly give a rat's ass that your machine is spewing forth thousands of spam an hour, or taken over as a p0rn bittorrent bot? Would it force the clueless to clean up their computers, and save the rest of us some percentage of headache because they are unwittingly part of the botnet problem?

There is nothing wrong with paying for what you use. It was the pricing schedule TW screwed up with. We are all frogs in a pot. Turn the heat up slowly. Start with $0.01/Gb/month over a base amount. Up that slowly over time. The frogs are less likely to jump out of the pot. The boneheads at TW still don't get this basic psychological tenet when dealing with the couch potato public. Nor do the petroleum companies, cell phone companies, etc. Only the electric utilities, crack dealers and sellers of icecream understand this well. (Have you noticed how a 'half-gallon' of icecream went up from $2.99 to $3.29 to $3.69. Then the half gallon went to 1.75 L --- ooooh, metric. But it's less. Then the price of 1.75L went to $3.99, and to $4.29, and to $4.99, and to $5.49. Then 1.75L went to 1.5L at the same price. And the price is up to $5.99. It is ingenious. Wish I had thought of it. Glad TW didn't have the brains to do so.

Taking their rules in the oposite direction, if I USE ONLY 1GB then I should only have to pay $1 for my service right? NOT! Me thinks this is just another ploy to line their pockets!
Just like the phone company that has rollover minutes, they don't pay you back for those minutes you didn't use and probably never will. it just sounds good, but they still pick your pocket with high rates and never just charge only for the minutes you do use.
And about those rising internet costs. 1G or 10G their cost is the same, our cost increases dramaticaly.
And Yes, I feel really bad when a billionaire whines about not making enough money

[Stammy12]

The whole metered billing concept has the ability to kill the internet. I really do not believe that these companies have such high network and bandwidth costs that they need to cap.

Bandwidth usage has gone up, but not to the amount that the companies say it has. Most families are not gouging bandwidth, they are just normal users and raising everyones prices and capping will not be effective.

I get most of my movies now streamed through my VUDU Box, and with bandwidth caps I might go over the limit. I don't believe it is a internet providers responsibility to kill new technology. Just let us use new technology in peace.

[SiliconDragon]

I want TWC to answer a question. If metering billing is so fair then why have they not implemented it for their TV side? Consumers have actually been asking for that. Let us pay for the stations and or programming we watch and stop making us pay for the 100+ stations we don?t.