Time Warner plays the usage game with broadband
Don Reisinger had the opportunity to sit down with a representative from Time Warner Cable to get the low-down on its new usage billing approach. And as Don points out, look for this to be a flop.
Time Warner Cable, a company that has historically been the object of much debate, recently saw a leaked memo hit the wire that claimed the company would be instituting a tiered approach at offering broadband.
To be rolled out in Beaumont, Texas, the trial plan calls for new customers to choose plans based on their expected amount of monthly usage and be charged accordingly.
And while some pundits have spewed their typical invective without gathering any information whatsoever, I had the opportunity to chat with Alex Dudley, a Time Warner representative, to get the details on what's going on and what Time Warner customers can expect going forward.
According to Dudley, customers will be able to choose from four monthly usage tiers -- 5Mbits, 10Mbits, 20Mbits or 40Mbits. If usage goes over the customer's cap amount, they will then be charged a set fee per Mbit over, which Dudley could not disclose.
Dudley claims that as it stands, Time Warner customers are indulging in an "all you can eat" Internet connectivity plan that has clogged the network at peak times and has contributed to speeds that are much lower than advertised.
Dudley cited internal Time Warner figures claiming 5 percent of its customers make up 50 percent of the entire network's activity because of P2P networks and the downloading of HD video. This plan is an attempt to curb that perceived problem.
So far, there is no word on pricing, but Dudley did say that he expects that to come out as the company gets closer to the trial period.
As a whole, it's too early to say that this plan is either the savior we've all been waiting for (quite unlikely) or the hell that we expect from these cable companies. After all, who can judge a plan when prices aren't even known? In fact, it's entirely possible that we might be able to win out with this new approach.
Let's be honest: does anyone actually know exactly how much usage they incur each month on the Internet? I certainly don't and I spend most of my day on it. But if you're paying $45 per month for 10 percent of the promised speed and unlimited usage even though you use about 3Mbits per month, wouldn't you be happy to know that you can get the same kind of service for, say, $35 because of Time Warner's new approach?
Now, what are the chances of that happening? Probably slim. But there is still a possibility and it shouldn't be overlooked.
To be quite honest, I don't have too much of a problem with this plan as it stands right now. After all, the chances of this being rolled out nationwide are slim and with concerns over 'Net Neutrality, I think this is nothing more than a proof-of-concept.
Of course, will it actually help increase your speeds and create a more efficient network? I doubt it. Sure, Time Warner is quick to say it will, but I doubt too many people will change their habits online and as long as it's the same network, it'll be plagued by the same issues.
Realizing this, I asked Dudley a simple question: "Does Time Warner Cable throttle that 5 percent of major network users?"
He simply said that his company does not comment on that and users should consult their use agreement to see exactly what Time Warner could do if it sees people using too much bandwidth.
Take that as you will, but the answer seems quite clear to me. Knowing that, I simply don't understand why Time Warner believes this could change things. Just because the plans change, it doesn't mean customer use should (or will) change as well.
But in the end, it's still too early to say exactly what kind of impact this could have on Time Warner customers. Personally, I think this will be rolled out in Texas sometime this summer and we'll never hear another thing about it. The reason? Simple: nothing will change in terms of usage and Time Warner will probably find that this new pricing scheme doesn't boost the bottom line. Beyond that, I think it's nothing more than a proof-of-concept just to show lawmakers and the company's political opponents what it can do.
Trust me, don't get too excited over it -- this plan isn't going anywhere.