Time Warner Cable plans to test its controversial, new scheme to have users pay by the gigabyte in Rochester, New York, but the area’s freshman congressman calls usage caps greedy and plans to introduce legislation to stop it.
New York Democratic Rep. Eric Massa called TWC’s proposal to switch its 8.4 million cable broadband customers to metered internet billing an "outrageous plan to tax the American people."
Massa, a longtime blogger at the liberal site DailyKos, says he will be joined by a "legion of activists" and called the fight against usage caps a "national issue of generational consequences." However, Massa’s fight will not get far without support from powerful House members,including Virginia Democrat Rick Boucher who now controls a key committee on telecoms and the internet.
Critics say usage caps will cost users more and hurt innovation on the net — especially in new video services, as subscribers begin to calorie-count their internet usage.
TWC’s new tiered pricing structure for its Roadrunner internet service starts at $15 for a plan that allows 1 GB a month with an overage charge of $2 per GB. (A GB of data equals about three hours of online video from Hulu.com and about half of a rented standard definition movie.)
"That $146 million is a small part of the variable costs," Dudley said. "Demands placed on network are a factor, such as ‘Do we have to split a node to accommodate heavy use?’ Those are capital costs that are directly related to use."
TWC first tested the plans in Beaumont, Texas, and is now collecting usage data in Rochester, New York and the Texas cities San Antonio ,Austin, in preparation for an expanded metered billing test later this summer.
Nearly all U.S. residential broadband providers sell their services based on bandwidth speeds, with no mention of a usage cap. Experts say that’s in part because there’s little data for the companies to base their pricing on, and because if one company offers unlimited data, the others do as well, at least in markets where there is broadband competition. Broadband usage continues to grow, most recently thanks to an explosion in online video services, but the cost of moving those bits also continues to fall.
Time Warner isn’t alone in its campaign to crack down on heavy net users. AT&T announced last November that it would test monthly bandwidth caps and overage fees. Comcast installed a 250-GB cap last
August; Canada’s Rogers enforces a 60 GB limit; and New York-based DSL
provider Frontier has a miserly 5-GB limit (though public pressure forced the company not to enforce it)
August; Canada’s Rogers enforces a 60 GB limit; and New York-based DSL
provider Frontier has a miserly 5-GB limit (though public pressure forced the company not to enforce it)
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