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Billing By Gigabyte Tested

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The Associated Press

Published: June 3, 2008

NEW YORK - You're used to paying extra if you use up your cell phone minutes, but will you be willing to pay extra if your home computer goes over its Internet allowance?
Time Warner Cable Inc. customers - and, later, others - may have to, if the company's test of metered Internet access is successful.

On Thursday, new Time Warner Cable Internet subscribers in Beaumont, Texas, will have monthly allowances for the amount of data they upload and download. Those who go over will be charged $1 per gigabyte, a Time Warner Cable executive told the Associated Press.

Metered billing is an attempt to deal fairly with Internet usage, which is very uneven among Time Warner Cable's subscribers, said Kevin Leddy, Time Warner Cable's executive vice president of advanced technology.

Just 5 percent of the company's subscribers take up half of the capacity on local cable lines, Leddy said. Other cable Internet service providers report a similar distribution.

"We think it's the fairest way to finance the needed investment in the infrastructure," Leddy said.

Metered usage is common overseas, and other U.S. cable providers are looking at ways to rein in heavy users. Most have download caps, but some keep the caps secret so as not to alarm the majority of users, who come nowhere close to the limits. Time Warner Cable appears to be the first major ISP to charge for going over the limit. Other companies warn, then suspend, those who go over.

Because their networks are structured differently, phone companies are less concerned about congestion and are unlikely to impose metered usage on DSL customers.

Time Warner's tiers will range from $29.95 a month for relatively slow service at 768 kilobits per second and a 5-gigabyte monthly cap to $54.90 per month for fast downloads at 15 megabits per second and a 40-gigabyte cap. Those prices cover the cable portion of subscription bundles that include video or phone services. Both downloads and uploads will count toward the monthly cap.

A possible stumbling block for Time Warner Cable is that customers have had little reason so far to pay attention to how much they download from the Internet, or to know much traffic makes up a gigabyte. That uncertainty could scare off new subscribers.

Those who mainly do Web surfing or e-mail have little reason to pay attention to the traffic caps: a gigabyte is about 3,000 Web pages, or 15,000 e-mails without attachments. But those who download movies or TV shows will want to pay attention. A standard-definition movie can take up 1.5 gigabytes, and a high-definition movie can be 6 to 8 gigabytes.
Time Warner Cable subscribers will be able to check out their data consumption on a "gas gauge" on the company's Web page.

The company won't apply the gigabyte surcharges for the first two months. It has 90,000 customers in the trial area, but only new subscribers will be part of the trial.

Metered billing could also put a crimp in the plans of such services as Apple Inc.'s iTunes that use the Internet to deliver video. DVD-by-mail pioneer Netflix Inc. just launched a TV set-top box that receives an unlimited stream of Internet video.

Bend Cable Communications in Bend, Ore., used to have multitier bandwidth allowances for Internet customers, but abandoned them in favor of an across-the-board 100-gigabyte cap. Bend charges $1.50 per extra gigabyte consumed in a month.

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