Time-Warner Considers Per-Gigabyte Service Fee, After iTunes

destinyland writes "Time-Warner is now mulling a plan to charge a per-gigabyte fee for internet service. A leaked memo reveals they're now watching how many gigabytes customers use in a 'consumption-based' pricing experiment in Texas, which we discussed early last month. The announced plan was that they were considering a tier-based approach, as opposed to per-gigabyte fees. 'As few as 5 percent of our customers use 50 percent of the network,' Time-Warner complains, with plans to cap usage at 5-gigabytes, and more expensive pricing plans granting 10-, 20-, and 40-gigabyte quotas. Steven Levy at the Washington post suggests Time-Warner's real aim is to hobble iTunes, raising the cost of a movie download by $10 (or $30 for a high-definition movie). Eyeing Time-Warner's experiment, Comcast cable also says they're evaluating a pay-per-gigabyte model."

what to do...

[jwegy]

>> 'As few as 5 percent of our customers use 50 percent of the network,'
They should lower the fees for the guys aren't using as much bandwidth rather than raise the fees for the guys that are. That will never happen though.

Re:5GB?!

[DuncanE]

We have had tiered pricing like this for a many years in Australia.

And its not about iTunes downloads.

My ISP (iinet.net.au) charges me $XX dollars for XX GB of usage per month on a 24Mbps ADSL2 connection. This is very common in Australia. My XX's are $49 for 10GB of usage but other higher and lower plans are available. After that I am "shaped" to a 64kbs connection.

Sounds bad right? But...

If I get me email off their POP server that doesnt count towards usage.

And they have some kind of agreement with Apple (mirror maybe?) that itunes downloads dont count. (NOTE: This partnership with Apple is highly visible and advertised on their website)

They also have a mirror for just about every linux distro (they are an official Ubuntu mirror) and for almost all game demos and patches. Not only does this not count towards my usage, but it means I can get these at the maximum speed of my connection as the download is only one short hop away (think linux iso in 3 to 4 minutes).

About the only thing that really counts towards your usage is web browsing - which even in a month of heavy use doesnt come close to the limit at about 2 to 3 GB - and BitTorrent/P2P which I have to admit I do use sometimes.

I hate to say it but if we all downloaded legal video content the ISPs wouldnt have to look at this. They would just setup legal local mirrors for large files.

I'm glad I switched from Roadruner to FiOS

[Anonymous Coward]

Not only is my FiOS 10x the speed of the archaic cable service from Time Warner (currently getting 50mbps), but there are no caps (yet). I watch tons of video online (mostly documentaries on google video) and I know it's about 40 gigs a month no doubt. That and streaming internet radio all the time as well as d/ling Linux and Solaris DVD .iso images I am getting what I pay for ($90).

I don't think a cap is the way to go. Perhaps price per gigabyte/terabyte??? Sort of like the electric company when they charge you for kilowatt hours. That's the way to go, none of this capping nonsense.

Also if you're getting charged by the gigabyte/terabyte, better MAKE SURE that you're getting 100mbps speeds or higher. So you have crappy service and now you have to pay more? Yep, sounds like the Cable companies to me. LOL!

Time for the Electric Company to Jump in for Real

[webword]

Is it time for broadband over powerlines [eei.org] finally?

The networking is already in your house:

"Providing broadband service to these customers would simply require adding equipment to their wires. The feature of BPL that would make it more attractive than DSL or cable modem is that BPL customers would immediately have in-house networks without having to purchase and install additional wiring in their homes."

Plug in a wireless hub or router and you're ready to roll.

Although all of this brings up the next problem: You're dealing with *another* monopoly. Bah!

Re:Time for the Electric Company to Jump in for Re

[iguana]

I am not an expert but from what I've learned working with folks in the US electrical utilities, broadband over powerlines is extremely difficult due to the poor quality of power lines. They're designed to haul electricity, not data. Raw electricity is very forgiving. Analog signals (e.g., Ethernet) aren't. Very very noisy, poor lines, ancient (50+ years) hardware make high quality data transmissions unlikely.

If BOP would really work, why do we still have human meter readers? Why doesn't the meter transmit its usage back over the same lines it's pulling power? Meter reading is one of the biggest costs of a utility company so they have big incentives to fix the problem. Lots of companies try to make remote monitoring hardware but don't get very far due to the poor (data) capabilities of the network.

I'm not discounting the idea completely. Just saying that, in my limited knowledge, it's fraught with practical problems and is unlikely to be a solution anytime soon.

Serbia already has this...

[Trollovich]

In certain areas in Serbia you can get Wifi this way. You buy an amount of data (the minimum is 100MB, which costs about 1.5US$), and then you use that on the city-wide wifi network until it runs out.
It is pretty successful I think, since the flat-rate users are capped in favor of the MB-based ones, so I bet that Time Warner will declare the experiment 'successful' and then use this new metric (in case the users don't revolt or start to flee the service).
Let me tell you, dear Time Warner users that this will SUCK bigtime. Better change providers before this happens.

EASY FIX, they won't listen to!

[sys_mast]

Just call it, something like 'close to unlimited' and print very clearly the maximum transfer, should be a couple hundred gig per month. And setup a good policy for going over or close to over. The price for the 95% should STAY THE SAME or GO DOWN. Those 5% heavy users should pay MORE, but they should be clearly aware of the policy, and the service can NOT be called 'unlimited'

The difference between edge and data center bw

[Anonymous Coward]

Your stat is a bit off, the cost per GB is only that low (I would have written $0.10, but OK...) is when you get the data in a multi-homed Tier 1 data center sitting on top of an interstate fiber nexus.

The cost of "edge" bandwidth is much higher as you have local bottlenecks in your Metropolitan Area Network (MAN).

A fairer comparison might be to the cost of industrial T1, E10, and T3 products which bring bandwidth the "last mile" to industrial facilities. That would give you an edge cost somewhere around $1.00 per GB.

If edge bandwidth was as cheap as you say, hosting providers would still host in their own physical facilities, whereas most of them use cages in centralized data centers to take advantage of the much cheaper DC bandwidth.

Re:MOD PARENT UP

[NormalVisual]

They live in an apartment building that won't let them install a satellite dish, like the majority of new yorkers, so basically they are at the mercy of Time Warner cable.

The FCC may have something to say about that [fcc.gov].

Last mile

[dropadrop]

Yup, in Finland ADSL prices came down, and quality went up when the local body governing telecommunications ordered to open up the last mile. The companies owning the infrastructure has to rent it for a fair price based on real expenses and a reasonable profit margin. And it really has helped. Within the first year adsl connection speeds where raised three times (so your 1Mb connection became 2Mb and then 8Mb) while the price remained the same. This happened in any location where there was enough inhabitants for it to be worth it to install a dslam (so some of the most remote areas still don't have enough competition).