Time Warner Unveils 40 GB Bandwidth Cap

Time Warner Cable will soon be expanding its bandwidth capping plans to more cities.

At a time when new media and entertainment delivery systems are evolving and leaning on internet distribution, internet service providers are cracking down on the bandwidth that its users consume.

Time Warner Cable, which owns the Road Runner internet service, will this month begin monitoring the activity of its customers in Austin, TX, San Antonio, TX and Rochester, NY, according to BusinessWeek. Roll out of the new program will happen sometime closer to summer, with Greensboro, NC being the first city to see the change.

New customers in those markets will be put on tiered and capped plans with monthly bandwidths limits starting at a miniscule 5 GB for the entry level $29.95 fee all the way to an paltry 40 GB for $54.90. The levels will be 5, 10, 20 and 40 GB, with overages charged at $1 per GB.

"We need a viable model to be able to support the infrastructure of the broadband business," Time Warner Cable CEO Glenn Britt said in an interview. "We made a mistake early on by not defining our business based on the consumption dimension."

With competitors such as Comcast offering 250 GB cap, Time Warner Cable’s top limit of 40 GB seems backwards in comparison.

With video streaming services such as Netflix on the PC, Xbox 360 or other set top boxes, such a cap could severely limit utility or make internet bills skyrocket. Analysts estimate that a family who opts for the 40 GB plan and streams 7.25 hours of online video a week could end up spending $200 per month on broadband usage fees. For the sake of comparison, the average American household spends 60 hours per week watching TV.

Time Warner Cable defends its plans by saying that most people do not use that much data. Basing its claims from a trial of 100,000 customers in Beaumont, TX about 14 percent exceeded their cap and had to pay about $19 in overages. Time Warner Cable added that the top quarter of users consumed 100 times more data than the bottom quarter of users. We explain this simply by that there are those who use the internet for modern services such as video delivery, and another type of customer that just uses it to send emails.

For the sake of the progression of new technologies, we hope Time Warner Cable at least offers its customers a little more freedom in how they use the internet.