Time Warner's Overage Caps May Be Set Very Low

from the that's-not-overage----that's-normal-usage dept

Last week Broadband Reports broke the story of Time Warner’s decision to test overage charges for their biggest users. I don’t think it really makes sense for ISPs to charge in a way that makes their own services less valuable, but that’s a different story. As long as the caps are clearly stated, it’s worth seeing what happens. However, most of the talk about the caps seemed to suggest they would focus only on the off-the-charts extreme users of bandwidth in the “top 5%.” However, Broadband Reports has another report now, suggesting that Time Warner will be testing a few different cap levels, including as low as 5GBs/month, which seems excessively low. If you’re doing perfectly normal things, such as watching (authorized!) online videos or doing remote backups, 5GB can disappear mighty quickly. That doesn’t seem like a way to stop “excessive” use. It seems like a way to squeeze more money out of a large percentage of users. On top of that, this gives less and less incentive for Time Warner to improve their network. The more they can claim the need for these congestion charges, the more money they can make. That seems backwards. Of course, this wouldn’t be an issue if there were serious broadband competition, but that’s still a long way away apparently.

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Companies: time warner cable

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Comments on “Time Warner's Overage Caps May Be Set Very Low”

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38 Comments
Simon says:

Breaking the net

Here’s the problem, most people put up with spam, large flash ads etc. because it really costs them nothing but a minor inconvenience. Now as soon as ISP’s put limits on traffic, they’ve put a price on everything that comes down the pipe – I’m effectively paying per email, per stupid ad which I would never click on. I for one would be cranking up my web filtering to get rid of all the crap I don’t want, but currently tolerate. This is turn will mess up much of the ad-paid-for nature of the web.

Hulser says:

Re: Breaking the net

You point out a possible effect on advertising, but what about spam? You have the knowledge to filter out unwanted content, but how is Joe Average going to react when spam goes from just “annoying” to “annoying and costs me money”? All I gotta say is any ISP who puts on limits better double their support/billing staff because they’re going to be flooded with people who want a refund for downloading spam or some Windows service pack.

Oh, and speaking of service packs, do we really want to set up a system that would discourage people from downloading security fixes to Windows or their favorite anti-virus software? You’ll have people skipping critical updates because they’re worried that they’re too close to their new limit.

Joel Coehoorn says:

May be a non-issue

I think if implemented well, these limits could be a good thing, even if they’re set very low. Consider the following:

DOCSIS 3.0 is coming very soon, which will allow download speeds dramatically faster than what many of us are used to seeing. Imagine your internet connection being faster than your local 100Mbps LAN, at least for download. This has a potential to dramatically impact their network usage, especially if they see it as an opportunity to really differentiate themselves from DSL (5Mbps DSL vs 160Mbps cable- the cable is now 32X faster) and grow their subscriber base. When deciding when, how, and if to roll out the new speeds, they’re naturally going to be concerned about over-extending their network.

So they’ll at least look at limits. Let’s say the limit is something very low, like 5GB. Let’s also say the overage rate is very cheap- such that if you used an extra 40GB one month you still only pay an extra $15 or so. To make the change more palatable, they lower the base rate about $10 dollars on several of their plans, with the expectation that in most cases they’ll either get the money back or reduce network usage.

That seems at first like a net loss for them. If right now they’re selling x amount of bandwidth for x amount of money, it would just be giving people the opportunity to buy less bandwidth. Since they’re in the business of selling bandwidth, this doesn’t sound like a good idea. However, the difference would be more than made up if it means they can significantly increase the number of subscribers. Since we’re talking about a base price that’s now comparable to DSL with much faster speed, this is a real possibility. Sure, there are overages, but the overage rate isn’t bad, and the whole overage thing can be hidden in fine print anyway. In theory, if they set the limit carefully most people won’t hit it.

What if this makes the difference between them rolling out DOCSIS 3.0 later this year, ahead of the competition, or waiting for other upgrades to network infrastructure to finish another year or two down the road. If adding a simple, open, and easily user-managed throttle to the network makes the difference between getting the new speeds this year, and let’s you actually manage your costs better, it might not be so bad.

Chuck Norris' Enemy (deceased) says:

Re: May be a non-issue

Say someone is paying around $100 a month (from other posts I have read) and they are allowed 5GB. That is a $20 per GB cost. After hitting the limit the cost per GB drops to $1 or less. There is no incentive here to cut your usage (if bandwidth is really the problem). So it is obviously a money grab on TW’s part. For those who aren’t cramming the internets using maybe 1GB/month to check email. They are still paying a $100, thereby subsidizing the bandwidth hogs. For low-end users, a price per GB plan would look better, wouldn’t it?

fretlessc says:

Re: Re: May be a non-issue

Unfortunately, you can bet the lower rates will not be substantial. People that use such low bandwith shouldn’t be paying for broadband in the first place, but of course the cable companies have accessibility monopolies on many building and neighborhoods. Caps for extreme users might be reasonable, though unwanted, but as mentioned above, this is nothing so reasonable.

Killer_tofu (profile) says:

Re #6 Matt

That would be how it would end perhaps, but Only in areas where there is actual competition. Which is from my understanding not much of the US at all.

I have a whopping 1 choice for high speed. Unless you count satellite, but that latency is too much for playing any game online and just will not do. For actual earth competition, I have a choice of Comcast, or Comcast. And thats it. Nobody else gets my area. Not even the stupid AT&T with their dumb filter ideas or TW with their stupid cap testing.
And there are months where I have downloaded extremely excessively (youtube, massive surfing, playing games), yet I have never seen my bandwidth be cut down or scaled back. I dunno if they practice it in our area.
Then again I live in Michigan, and with all of the people who are moving out over the past 2 years they probably have more bandwidth here than they know what to do with it.

JDigital says:

I dont care.

Verizon is putting FiOS in my complex right now, and as soon as its available I’m switching. No more milking me for my money from TW.

I don’t understand what is with these companies lately. Blockbuster recently tryed to raise my rates for online movie rentals by $7 a month, I was paying $17.99 and they tryed to jack me to $24.99/mo for the exact same service… I bet Netflix is glad to get my $16.99 a month now.

Now Time Warner… I guess they realize later than sooner that getting $150+/mo is a lot better than $0.

I, for one, welcome our fiber owning overlords.

Joe says:

this move would really hurt slingbox

I was traveling for all of Q4 2007 and used a slingbox to watch tv back home. One month, I had my home internet service cut off as I had reached 75gb of transfer. That was just from having it running for a couple of hours in the evening. Much much less than normal tv usage. A 5 gb cap could severely hurt sling as a company as they depend on open bandwidth.

Anonymous Coward says:

HAHAHAHAHA keep dreaming...

So they’ll at least look at limits. Let’s say the limit is something very low, like 5GB. Let’s also say the overage rate is very cheap- such that if you used an extra 40GB one month you still only pay an extra $15 or so.

37.5 cents per gig overage??? HAHAHA what fairy tale land of magic do you live in where you think that is likely???

Companies like these consider the term “Overage” to mean “Open Season”. I’ve never heard of a per/GB overage charge less than 75 cents per, and even a rate that low is exceedingly rare. My local cable provider still charges $1/GB on monthly overages, but I have a 40GB/mo limit and I can prepay to cover overages at .50/GB giving me a “half price” cushion to avoid paying their full overage fee.

Anyone who thinks that companies lowering caps is anything other than an attempt to increase income from overages is totally diluting themselves.

Anonymous Coward says:

two way street

If they are going start capping, then they need to start discounting for not reaching advertised speeds. 5Mbps my ass, I’m lucky if I can get 1Mbps at ideal situations. I’d actually like to see either some CA suits against them for false advertising or even have the gov step in already. My bill has increased >100% and my speeds are no different than they were when I had first gotten cable almost 10 years ago.

Thanks to the great monopoly my only alternative in my area is dial up. I think it is time that the bribes stopped, the customers stop getting shafted, and the telco/cable companies start acting a customer service.

Kevin says:

How do they count it?

Do they count traffic sent down the pipe to your cable modem or do they count traffic sent down the pipe to your cable modem in response to a request from your cable modem? In other words, is it stateful when it counts traffic?

I don’t know about you guys, but my connection at home gets constantly hammered with port scans and other hack attempts all the time. In fact, some of those come from TW as they’re trying to find out if I’m running a server, especially an unsecured server. Am I going to have to pay for that? And of course there’s the spam and unwanted advertisements.

Come to think of it, since so much of the traffic going to your cable modem is going to be beyond your control, you could probably make a convincing case that charging people for overages isn’t legal. Maybe you could get the FTC involved in this.

Chronno S. Trigger says:

Re: How do they count it?

My modem and router’s activity lights are constantly blinking, even when no network cables are connected. I asked a tech once and he said that it’s how the system stays connected. I wonder how much data that is.

Been running a network monitor since this article first started. In the past two hours I have used 380MB (big B not little b). I was connected to a client threw RDT. If any one knows how RDT works you know that it doesn’t use that much bandwidth. About 5K/s for this connection, dial-up speeds. Since all I do is connect to clients computers all day, that adds up to about 7.6G per week. I can crush that just by looking at the Mythbusters streaming media.

Joel Coehoorn says:

Re: Re: How do they count it?

You cable modem connects to a network device in a rack somewhere. That device handles all the little keep-alive and connection traffic. I would assume that data rate only applies to traffic that passes beyond that device.

Now whether the port-scans and such apply, I don’t know. I have to think that such scans would be pretty random and evenly distributed, in which case I would hope TW would make a monthly adjustment to account for that. But then, that may be asking a lot.

Kent says:

Pricing

This is ridiculous and I’m glad that I have a couple alternatives from TW in my area. Currently I’m using a local provider and I only pay 143 a month after taxes for local and long distance telephone (with a standard reliable hard-line, no less), 5 Mbps (which is the advertised AND actual speed), and HD Cable with HBO and Showtime.
Thank god for competitive markets.

John (profile) says:

Sounds like a policy to make more money

This sounds like a policy from the “how can we get more money from the customer” department.
If bandwidth really is an issue for TWC, wouldn’t it be better to install more lines or hardware? Ah, yes, but it’s “cheaper” to just charge some people more money… cheaper in dollars, but what about the customer relations cost?

As usual, the policy will start with the “high-end” users and then trickle down to everyone else. After all, if they set the limit at a “high” 20G per month, how long will it be until the average user starts to hit this limit simply by watching legal videos, such as HBO programs?

And like some previous posters said, if I was only allocated 5G of bandwidth a money, you bet your butt I’d be watching everything that came through.
It’s like saying you only have $20 to spend on groceries- you’ll be watching where every single cent goes.

In the case of surfing the web, would every Flash banner, ad, cookie, and spam e-mail be counted towards my 5G allotment? In that case, not only does spam become an annoyance, but it’s also taking money out of my pocket!

That’s a good point about Windows Update- if people are near their allotment for the month, will they skip installing Vista SP3 because it’s a 500M download? Who’s responsible if the user’s computer then gets hit by a virus that takes advantage of the unpatched computer?
Maybe the user is cash-strapped that month and it’s either pay $20 for the overage charge to download the patch or have an extra $20 to spend on groceries.

And, again, as some posters have pointed out, TWC probably has a monopoly in some areas. Customers *can’t* get DSL or any other broadband service. So the choice is pay up, reduce your Internet usage, or go without.

AT&T was broken up in the 1980’s for being a monopoly, Microsoft was taken to court for being a monopoly, but why is it that cable companies are allowed to have a monopoly over a geographic area?

Gunnar says:

As someone who lived under this (at Penn State, we got 1.5 gig up and down a week) I can say that it sucked in 2002. We went from having slow (for T1 speeds, still faster than anything I’ve gotten on cable or dsl since) to speeds so fast we could blow through our allowance in mere seconds. And when you went over, you were restricted to a 56k connection.

It was supposed to be a temporary solution, but it lasted until I graduated three-and-a-half years later, and may still be the the dorms there are wired.

It instilled worry and fear into nearly everyone on my floor. My roommate worked at the campus tech repair place and we had a constant stream of tech-illiterate students coming in and asking why their internet was going so slow.

This will generate huge user anger.

John says:

Even worse will be the effect it has on smaller web sites and blogs, particularly those whose viewpoints aren’t mainstream.

I can easily Time Warner having “specials” where certain content from them or their affiliates won’t count toward the artificially low cap, i.e. you can have Time Warner’s viewpoint all you want for free but you’ll pay dearly if you want anyone else’s.

fretlessc says:

They need flack!

I for one will absolutely drop TimeWarner the second they try to implement such a restrictive and undue policy. I would rather pay some other company to run wires to my neighborhood than be taken advantage of (more) by TimeWarner.
Is anyone organizing to let them know this is unacceptable? They are still technically in a ‘testing’ phase. If they realize how many customers they will lose, maybe they will reconsider dipping so far into normal bandwith usage? This certainly won’t be supported by Google, Amazon, NBC, etc., companies that make lots of money hosting large video, backup, etc. How can people also organize to make competition more available? Can neighborhoods organize to bring good competition or DSL to buildings where it’s now unavailable?
Something needs to be done to prevent them milking some of the best products of the internet.

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