Time Warner postpones plan to Cap Internet Use

Technology.am(Apr. 17, 2009) — Time Warner Cable Inc. is postponing its plan to bill customers based on how much Internet traffic they generate, following mounting public and political outcry.

time-warner-cableTime Warner Cable’s capitulation doesn’t indicate well for the future of metered billing of the Internet, in which people who use more bandwidth pay more.

Frontier Communications Corp., a Time Warner Cable rival in one key test market, Rochester, N.Y., also has dropped its plans for metering Internet use.

New York-based Time Warner Cable had 8.7 million, making it the third-largest Internet service provider in the country.

The cable company started testing metered billing in Beaumont, Texas, last year, offering plans with 5 gigabytes to 40 gigabytes of monthly traffic, and then charging $1 extra for each gigabyte over that.

Many ISPs cap their subscribers’ monthly traffic usage, but the thresholds are usually much higher — at Comcast Corp., it’s 250 gigabytes. It’s also very unusual for ISPs to charge extra when customers go over their limits.

But Lauren Rich Fine, research director for ContentNext Media, called consumption-based broadband billing “a huge step backwards.”

She added, “Inner-city youth’s ability to go online is the best way to give them broad access societally. Consumption-based models will end up being a bigger burden on less affluent people.”

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