Chicago (IL) - Last year, Time Warner became the first major ISP to charge customers for exceeding a maximum monthly bandwidth allowance. The success of this cap resulted in other ISPs quickly following suit - though at much higher allowances. Time Warner is now looking again to break new ground and expand what their company calls "a trial" to reduce package-included bandwidth allowances for even more users.
Said Time Warner Cable spokesman, Alex Dudley, "It's clear to us that customers want online video, which requires substantial investment in the network. We're willing to make that, and we're trying to find an equitable way to distribute the cost of that investment."
According to Time Warner, the intent behind bandwidth caps is to have those with higher bandwidth needs pay for the necessary upgrades to bring the higher speed systems to everybody.
Previous trials in Beaumont, TX, for example, have shown that Time Warner's system is capable of accurately assessing bandwidth usage and adjusting their user's billings correctly. Time Warner had set a relatively low maximum monthly bandwidth usage of 5 Gigabytes for their $30/month service. For each additional Gigabyte, Time Warner would charge $1 more. According to Dudley, a "small but vocal percentage" of users were very unhappy with this plan as they were hard-capped at 40 Gigabytes per month.
The trial in Beaumont was so successful the company is now looking to expand their bandwidth cap program into other cities as well.
Time Warner is the #3 ISP in the United States with 8.7 million subscribers. Last year AT&T, the #1 ISP, began placing bandwidth caps on users in Reno, NV at a hefty 50 to 150 Gigabytes per month. Comcast, the #2 ISP, has also capped its Internet use at 250 Gigabytes per month.