Time Warner Cable will launch a trial program on Thursday which will impose monthly Internet consumption caps on new subscribers in Beaumont, Texas. Following a two-month grace period, cable users will pay $1 for each additional gigabyte consumed beyond the cap.

Time Warner Cable's plan to test metered service was originally revealed to the public when an internal company memo was leaked in January and later confirmed by the company. The memo indicated that the results of the trial would be used to determine whether to roll out the bandwidth-capping plan to other regions.

Kevin Leddy, Time Warner Cable executive vice president of advanced technology, told the Associated Press that the variable billing model is being adopted to address the disparity in bandwidth consumption among Time Warner Cable users. Five percent of the subscribers are consuming half of the local line capacity, Leddy says.

The caps differ depending on the tier of service paid for by the consumer. The lowest level of service is a 768Kbps connection with a 5GB cap for $29.95 per month. The high-end package will offer 15MBps with a 40GB cap for $54.90 per month. Consumers will pay by the gigabyte for consumption in excess of the established caps. Customers will be able to see how much bandwidth they have left by visiting the Time Warner Cable web site.

As we noted in our detailed look at the scheme back in January, usage caps will likely drive consumers to conventional DSL or emerging alternatives such as Verizon's much-loved FiOS service and WiMAX-based solutions. Unfortunately, many are stuck in regions that suffer from meager broadband competition and have few options available.

Time Warner Cable's bandwidth caps might seem like acceptable limitations at first glance, but they look a lot less attractive when one considers the growing number of important services we use that soak up lots of bandwidth. The Internet is increasingly being used as a vector for distributing software and digital video content and also facilitates multiplayer gaming, video conferencing, real-time collaboration, interactive remote desktop access, file backups, and many other bandwidth intensive activities.

Generous caps (say, 200GB a month) designed only to rein in the top 1 percent of users sound more like a fair proposition, but a 5GB cap when paying thirty bucks a month? One can get uncapped DSL from companies like AT&T (that also offers more speed) for less than this.

1) I am curious about this "re-distribution" of cost.
I wouldn't be surprised if "low-end" bandwidth users are getting a meager cut (if any), while this just provides an excuse to up the price for the high-end bandwidth users.

2) It will be interesting to see how this resolves itself.
Obviously there will be complaints, but with little competition for alternatives in some areas, and five percent using half the resources...
(Although that's not the same thing as "five percent being impacted by this plan".... )

3) "Heavy" users could come in different flavors.
Googling around, it looks like an online game like World of Warcraft consumes about 4MB total (2.5 download / 1.5 upload) per hour.
So 100 hours per month would consume 400 MB, well below 5Gb. I doubt MMORPG is that big of a problem

Some of the areas I suspect you WILL see an impact is in businesses.
Part of my job responsibilities is to analyze logs. Even zipped, some of these assignments requires downloading 50 MB (and more...)
Creating a power-point presentation of several megabytes, and then e-mailing that out to a distribution list of multiple people (several megabytes times several people receiving => many more megabytes)

The article is sketchy on a discussion of exactly how the high-end users are distributed, by I wouldn't be surprised if corporate, industrial America is a prime user.