E-Commerce

Time Warner Cable to experiment with Net pricing

Time Warner Cable has announced that it will begin an experiment with a new pricing structure in a limited market. It is considering charging customers based on how much data they download.

Time Warner Cable has announced that it will begin an experiment with a new pricing structure in a limited market. It is considering charging customers based on how much data they download.

From the Los Angeles Times:

The nation's second-largest cable provider will start a trial in Beaumont, Texas, in which it will sell new Internet customers tiered levels of service based on how much data they download per month, rather than the usual fixed-price packages with unlimited downloads.

Company spokesman Alex Dudley said the trial was aimed at improving the network's performance by making it more costly for heavy users of large downloads. He said a small group of super-heavy users of downloads, about 5% of the customer base, could account for as much as 50% of network capacity.

It is rumored that Comcast has also considered this kind of pricing structure, but it has never moved forward. Overall, there is a fear of customer backlash over such a move.

Some people even think that this is a blatant effort to stop companies like Netflix and more recently iTunes from successfully providing movie rentals from the consumer's computer.

What are your thoughts? When you signed up for service, did you sign up for unlimited service? Do you think that this decision by Time Warner represents a significant change to the contract you agreed to?

Additional information:

Time Warner Cable Eyeing Overage Charges? (Broadband Reports.com)

Time Warner Cable Experimenting With Overage Charges for Top Users (Techdirt)

Leaked Memo: Time Warner Cable to trial hard bandwidth caps (Ars Technica)

Editor's Picks