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Time Warner Wants to Gouge for Internet Access

Posted by Jonathan | Filed under Internet, Technology

Does Time Warner want to offer more service to a broader base of customers, or are they looking for new ways to generate revenue through backdoor methods? It is the same goal.

Time Warner Cable company spokesman Alex Dudley announced Wednesday that the broadband service provider will be testing new pricing tiers for their new broadband cable users later this year. The idea is designed to tax the heaviest users of the companies bandwidth, about 5% of users who use 50% of the network capacity according to Dudley.

There can only be two reasons for this change in pricing structures, and in the end it boils down to only one. Either Time Warner is trying to even the playing field by discouraging internet users from making heavy downloads, so they can accommodate more subscribers on their current network space, or they have found a convenient argument to simply charge more money for users that are actually using their internet service to the full capacity. Both options accomplish the same goal, which is to make more money for Time Warner Cable. And you cannot blame them for doing what the business is designed to do, make money.

But while this may seem like a fair way of handling over-usage of the internet (is there such a thing) by the few, is this truly a good idea to gouge those who use the internet the most? How many of these customers are small businesses, or those who are using their unlimited downloads to create a living, do research, or simply use the web to make their lives more productive? Are 95% of broadband users limited in their use of the network because of 5% of users? I do not know who comprises this 5% of users, but Dudley makes it sound that it is people who are downloading large amounts of high definition movies. That might put a kink in Netflix plan to offer high def movies online.

What about the customers who use a VoIP (Voice over Internet Protocol) service other than Time Warner’s? Maybe they are part of the 5% of users. I know that Vonage will use a good amount of my bandwidth and inhibit extremely large downloads and uploads when I’m on the phone. Could this be a way to force more people to use Time Warner VoIP, instead of a competitors service?

I am sorry Mr. Lefor, but your Vonage service exceeded our low price tiering for broadband. But if you switch to our all-in-one package of phone, cable tv and broadband you can have our maximum broadband download package.

The assumption after hearing this news is that Time Warner wants to make broadband more affordable for more customers. That sounds good and very philanthropic, but I doubt that Time Warner is going to drop to $9.95 broadband plans for the average user that checks their e-mail and visits a couple of their favorite websites. In all likelihood, rate plans well stay about the same $39.95-44.95, while the bootlegger (5% of Time Warners customers) that are downloading hundreds of high definition movies, or the chatty Kathys on VoIP will be charged a much higher rate for hogging the network space. Or worse yet, the low priced internet broadband will be packaged with cable tv and phone, so they can claim you are getting a better price for broadband even though you now pay 2 times more for unlimited downloads.

While no specific date for their new tiered pricing trial was given, Dudley said to start looking for it in the 2nd qaurter, in Beaumont, TX where the trial will take place.

AP story found on Wired News: Time Warner Links Web Prices With Usage

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Tags: Internet, Technology