Time Warner shelves plans for monitored Internet

by Laura Smith, April 18, 2009

The Pendulum

 

Photo by Lindsay Fendt

Photo by Lindsay Fendt

In early April, Time Warner announced its new plan for a metered Internet service in which plans similar to those for cell phones would be required for all Triad residents. The plan would monitor customers’ broadband data use, and charge them according to the amount of data they download and upload per month.

 

Last Thursday, Time Warner decided to extended its current “education period,” in which the company will educate customers on how the capping will work and shelve trials for the testing of the tiered pricing.

“It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing,” said Time Warner Cable Chief Executive Ofiicer Glenn Britt in an April 16 press release.

The company announced it is working to make measurement tools available as soon as possible to help customers understand how much bandwidth they consume.

University of North Carolina at Greensboro student Jonathan Hill said he disagreed there is confusion about the proposal at a protest Saturday against Time Warner.

“We know as consumers how we use the Internet,” he said. “We’re not confused. We know how this will affect us.”

Greensboro resident Ian McDowell agrees.

“It’s condescending to customers,” he said.

The service is also being installed in Rochester, N.Y. and Austin and San Antonio, Texas. Plans would range from $29.95 to $54.90 a month and will cap usage at 5, 10, 20 and 40 gigabytes of data a month. For every extra gigabyte used, customers will pay an extra $1.
According to Time Warner, the decision for this capping was made to decrease the amount of usage.

“Usage on the network is increasing by about 50 percent a year,” said Melissa Buscher, director of media relations for Time Warner Cable’s Carolinas region. “The Internet is not designed to handle all the uploads.”

According to Buscher, 30 percent of Time Warner customers use less than one gigabyte a month.

The company said the service will be more form- fitting to customers’ needs through the different plans.

“For someone who checks their e-mail two days a week, why should they pay the same price as those who download five movies a week?” Buscher said.

The service has already been trialed in Beaumont, Texas, where 86 percent of customers saw no change in their bill.

But according to a recent article by the Greensboro News & Record, approximately 14 percent of users went over their data cap and additional fees averaged $19 a month.

Also, statistics from the Time Warner Cable 2008 Annual Report show revenue went up 11 percent last year and costs went down 12 percent, making it unclear as to why the company decided to put the plan into action if current heavy costs of broadband use are not a factor.

In addition to Time Warner customers, Greensboro city council members have been outraged by the decision.

Councilwoman Mary Rakestraw said she is most concerned about how it will affect journalists, stay at home mothers and small business owners who heavily use the Internet.
”I think this is going to be very critical to them and possibly very hurtful,” she said. “I’d like to see Time Warner re-think what they’re about to do. This is an expense they more than likely have not planned to incur.”

Professor of communications Janna Anderson is concerned about the future of how Internet decisions, such as this one, are made.

“Large telecommunications companies, cable companies and other media businesses that make gigantic profits from control of information are working to manipulate people’s access to the Internet into the cable TV model of controlled access rather than addressing the need to innovate new ways to approach the business of global information-sharing,” she said. “If citizens do not choose to pay attention to this and take action, they may find access to information will regress to old patterns.”

Communications professor Ken Calhoun said he agrees and is worried about the monopolizing position of Time Warner’s plan.

“We’re in a unique, unprecedented period of history where media is so openly available,” he said. With this plan, “there is potential to stifle innovation … you’d be discouraged from maybe developing new ideas.”

It is not known how long the education period for customers will last.

“This is not by any stretch the end of this issue,” said News & Record columnist and blogger Edward Cone. “These issues are not dying because video does suck up bandwidth.”
But Cone also said there are better ways to deal with the issue.

“This is unrealistic as where the average consumer will be in a few years,” he said. “Down the road, some ideas about tiered pricing will come up … but there are ways to do it that are fair.”

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