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.

That's f'd up. I'd be POed. My phone company just started offering 12 mb service too. They better not start thinking about this crap, I'll get cable. I have 5 computers that I keep updated and running. Not to mention Rhapsody, youtube, PS3, deephouse streams, dishnetwork crap, and a whole lot of other crap. I know for sure I'm a heavy user. I'd drop em like a bad habit.

__________________
Even if you hold the minority opinion, stick to your guns and go against the flow if that's what you truly believe. (CnRedd)

I read about this in one of my newletters. If COX Cable goes for it. I will drop their landline phone and cable service and just use the broadband to pay bills online and if enough is left over come here.

DirecTV wants me back anyway. lol

From one of my newsletters. So no link as it is my inbox. Also that is why I have to post it all.

Follow-up: The changing role of the ISP

Last week, we discussed how ISPs are changing from a "full Internet service" model to mere bandwidth providers, expecting their customers to go elsewhere (or pay extra) for email, newsgroup services, web hosting and other services that once were routinely included in your monthly ISP fee. Quite a few of you had something to say on that subject.

A surprising number of you said you don't have a problem with the changes; many of you haven't been using the ISP-provided services anyway. Dave H. said, "with the increased usage of myspace, facebook, blogspot, and the like, people don't need those ISP-provided web space(s) anymore." As for email, he adds, "my ISP went from @home.com to @attbi.com to @comcast.net, with my email address changing each time - and not by any choice of mine. That's one reason I switched to gmail as soon as I heard about it. With gmail, I have an email address that should never change, even if my ISP decides to change its name. Additionally, if I get upset at my provider, using a gmail account as my primary address is one less reason I have to worry about kicking my ISP to the curb!"

Smith S. agrees about the extra services: "Don't use 'em. Wouldn't notice. Wouldn't care. My FiOS gets me online where I have everything I need for free. I've never thought of it as me paying for those extra services...more [like] the 'free toaster' when you open a checking account." Bill B. put it succinctly: "I never use the ISP except as a path to the internet ... They can get rid of the ash and trash and just give me high bandwidth connection and I'm happy."

And some of you go further than not caring - you're happy about the change. David P. said, "Speaking as a small business owner with a mailing list, I am delighted that ISP's are not offering mail services. It is one less thing to update when customers move. I know when I see a comcast.net email address that it is probably an unsophisticated computer user who will find a way to drop off of the mailing list accidentally. Gmail is forever." I found that comment interesting, because I tend to think "unsophisticated user" when I see a Gmail, Hotmail or Yahoo account. Just goes to show how perceptions differ.

Dave also noted that "When talking about the triopoly and growing consolidation of ISP services you fail to take into account the growth and proliferation of wireless ISP capabilities" and "Essential services were moved faster than we could drag out the PC's. There will be growing competition on price/service as different models of ISP's become more prevalent."

Not everyone likes the trend toward "bare bones" service from their ISPs, though. Gerald D. said, "I do believe that if AT&T wanted to go the route of not hosting email (POP servers) then I would probably be inclined to drop all accounts with AT&T including residential services and possibly move to cable." Ray D. said, "I currently use Cox Cable as my ISP. I would be very disappointed if they dropped email service because that is essentially a cost increase to me because I will have to pay Yahoo or Hotmail a fee to deliver my email to Outlook." (This isn't entirely accurate; you can configure Outlook 2003 or 2007 to connect to a free Windows Live Hotmail account; you just need to download and install the Microsoft Office Outlook Connector. To find out more, see
http://www.vistanews.com/ABE9JI/0807...look-Connector

When it comes to mom and pop shops vs. the Big Boys, once again readers surprised me, with more of you voting for the large companies. Chris B. said, "I prefer a large ISP to a smaller one (I use AT&T), for several reasons. Small ones were always changing hands, being bought out, merging, etc. and my e- mail address had to change with every move they made."

Others disagree. Bruno S. said, "The continuing trend of bigger companies taking over the services of smaller service providers is a very dangerous scenario. We see it with almost any large conglomerate, once any possible option of a different provider is gone, the cost of their services sky-rocket." He continues: "Gmail and a few others are becoming the only option but what happens when they are the only game in town? The so called 'free email' with disappear like the passenger pigeon and the dodo and they will charge any price they like." And Kenneth F. said, "I like using a small company. When I send a complaint, it goes straight to the man who runs it, and the job gets done. No Indian call centers or mindless 'consumer correspondents' are ever involved."

From the other side of the pond, Dev S. offers this opinion: "I think ISPs should stick [with] being providers of internet access and those that only do that here in the UK (usually the much smaller ones) are much better at customer service than the big volume providers who also try to in effect compete for content and get both wrong."

More than a few of you have taken the plunge and are hosting your own mail services. John W. uses open source mail server software and notes that "Setting up the mail server was easy, and even configuring the MX records was pretty straightforward. I really would encourage anyone who is unhappy with the level of service they're getting to go down this route."

On that note, we thank all of you who wrote on this topic.