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Big broadband users: Get ready to pay more

Friday, April 3, 2009
(Updated 8:03 am)
By Joe Killian
Staff Writer

GREENSBORO -- Looking to save money? Turn down the thermostat. Don’t leave the water running. And, starting this fall, watch your Web surfing.

Time Warner Cable has made the Triad a test market for metered Internet service — a plan to monitor customers’ broadband data use and charge heavy users extra fees.

Cable customers who have a specially priced deal, like an introductory plan or other promotion, will see no immediate change.

But when those contracts are up, they will have to choose a plan ranging from $29.95 to $54.90 a month. Plans will cap usage at 5, 10, 20, and 40 gigabytes of data per month. Customers will pay an extra $1 for every extra gigabyte they use.

“Video is where we see the most online data usage,” said Melissa Buscher, director of media relations for Time Warner Cable’s Carolinas region. “When we set up our infrastructure and our pricing plans, we couldn’t have anticipated what’s happened in online video. Hulu, Netflix, streaming television shows on Web sites — we’re seeing an online data increase of 50 percent every year.”

Buscher said to make sure everyone gets the Internet speed they’re used to, some heavy-use customers will have to begin paying more.

“This will really give people the option of deciding how much they want to pay for the service they actually use,” Buscher said.
“With these new plans, no longer will people who aren’t downloading heavily have to subsidize Internet use for those who are heavy downloaders.”

But customers used to unlimited data at a flat monthly rate said they were offended by the change.

“To say other people are subsidizing me is ridiculous,” said Jay Montlo, 23. “They sold me an unlimited plan and I bought it because I watch a lot of online video and I’m an online gamer. Now, they’re going back and saying it’s not fair for me to use so much of something that’s unlimited for everyone.”

Buscher said the new price structure may be a hard adjustment, but the company’s months of testing in Beaumont, Texas, lead him to believe most customers won’t see much of a difference.

“We estimate 86 percent of our customers will see no change in price,” she said. “And like with their cell phone plans, some may realize they don’t need 40 gigs of data every month, and they can drop down to a cheaper plan.”

In Beaumont, about 14 percent of users went over their data cap.

Additional fees averaged $19 a month.

But Beaumont, Texas, is different from Greensboro. It’s smaller, has an older population, fewer college students and doesn’t have the vibrant online community that once earned this city the nickname “Blogsboro.”

“I don’t have any idea how much bandwidth I use right now,” said Roch Smith, a local Web designer and blogger. “I don’t really think of it that way.”

There will be a three-month “education process” before the pricing shift, Time Warner said. Customers can log in to their accounts to track their usage before choosing their new plan in the fall.

But Smith said making customers more wallet-conscious about the way they use the Internet will stifle creativity and keep them from embracing new video and audio products online.

That could be part of the motivation, several customers suggested, because Time Warner has seen increased online competition for its cable TV and movie-on-demand products.

Smith said whatever the reason, the move will mean less innovation.

“I think it’s just a terrible thing for the city to have our highest-speed broadband priced in a way that’s unlike every other city our size,” Smith said. “Making us a 'test market’ makes people on the cutting edge pay more and discourages people from discovering new things, things that are going to be very important in the future.”

Contact Joe Killian at 373-7023 or joe.killian@news-record.com

Accompanying Photos

File photo (News & Record)

Photo Caption: The state sales tax would be applied to more items including software downloaded over the Internet.

MORE ONLINE

Business Week: Time Warner Cable Expands Internet Usage Pricing

1 GB Equals...

70,000 e-mails

1,344 hours of Web surfing

569 photos

277 music files

7 hours of low-resolution video (average YouTube resolution)

3 hours of standard definition streaming video

45 minutes of high-definition streaming video

Source: Time Warner Cable

Comments

This article has been closed to new comments. Comments are generally closed after 14 days. However, comments may be closed earlier at the discretion of the News & Record.

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jeffreyhsykes

April 2, 2009 - 11:20 am EDT

Well, we knew this was coming. Like Mr. Smith, I have significant concerns about the impact of this new fee structure on businesses that are based on communication via the web.

I know of a small local firm that sells its products and services on six continents by using the web to market and communicate with customers, in addition to using web based interfaces to ship, process and track its products across the globe.

This fee structure could cut into that firm's viability and seems much like an unnecessary tax on business activity.

conturax

April 2, 2009 - 11:52 am EDT

Smooth move, Time Warner. Set caps so low that you squash any ideas of online video, multimedia, etc- thus protecting your own video & TV revenue. 40GB, are you kidding me? Comcast recently started this in other markets and their monthly cap is 250GB. You guys are incredibly stupid and will lose a boatload of customers including me starting next month. Hope its worth it greedy SOB's.

AT&T is gonna give you a great Xmas present this year from all the customers they are going to get from you as a result of your greed.

Norm*

April 2, 2009 - 12:53 pm EDT

same thought, went from the article to ATT to check out rates and plans. However, because I don't have a land line anymore I had to use there "is dsl in your area" search function. Wouldn't work with firefox, have to use Internet Explorer. Not a good sign from a company in the business of selling internet access and tech services. I'm old enough to remember Ma Bell and I'm afraid she's back and just as ugly to do business with as in the 60's.

Illiterati

April 2, 2009 - 6:41 pm EDT

I had the same problem with ATT's site. I'm on a Mac, which doesn't even support IE anymore, so no go. Can't sign up with a communications company that hasn't figured out how to code a site that will communicate with every browser. Let's hope they read the news today that Firefox is the leading browser in Europe, and has an ever-growing market share right here in their home court.

gwthornt

April 3, 2009 - 5:13 pm EDT

AT&T is currently testing a 150 GB limit in Reno, NV and Beaumont, TX. It will probably be here soon.

BigMo

April 2, 2009 - 11:52 am EDT

Well we should have known. How about those customers with contracts that are still valid?

mhutch

April 3, 2009 - 10:00 am EDT

I would hope so, after all they expect us to hold up our end of the contract or be penalized for early termination. Would it not make sense that the contract and guarantee of 'lowest rate and locked in for 2 years' should also hold.

If not I am sure there will be a couple class actions filed against them. Also looks like a great opportunity for DISH and FIOS

hardcashe

April 3, 2009 - 10:57 pm EDT

FIOS is a premium option - that costs more than standard broadband cable and about what business class cable costs. If you have the cash to spend FIOS is the mid to long term solution. However, it is the highest cost - and it is not yet providing download speeds faster than Cable - and when it does start showing its potential for ultra-band speed you will be waiting for your computer and a server.

bbsmith2

April 5, 2009 - 10:10 pm EDT

FIOS is not considered a premium option, unless you count faster speeds and a lower price as premium. If you look at my post or Verizon's website you'll see you can get FIOS for $44.99, that's cheaper than TWC which is $49.99.

FIOS is 10 up and 2 down. TWC is 7up and 0.3 down.

Maybe you were thinking of U-verse? It's only $5 more than TWC and faster.

scottb

April 2, 2009 - 12:53 pm EDT

With such low caps, I will certainly consider leaving time Warner for Internet service. @BigMo, this would likely give customers an out since it's a change to TWC's terms.

hardcashe

April 3, 2009 - 10:59 pm EDT

Cable does not have a contract. Cable is month to month. Nothing keeping anyone with cable. However, the phone companies do have contracts - and Satellite, as I recall, will stick you with dish and box fees if you jump early.

brvhrt

April 5, 2009 - 12:22 am EDT

They do have contracts. I have one and in fact, they are offering one now.

jandrew28

April 2, 2009 - 12:56 pm EDT

I recently moved here from Raleigh and Time Warner never ceases to amaze me. I had to close my Raleigh account, turn in my box and modem, move, open up a new account and get a new box and modem (which surprisingly look a lot like the ones I left in Raleigh). I could not even bring my @nc.rr.com e-mail address with me; I had to have a new @triad.rr.com address. I have the same exact service here that I had there, but when the “promo” period is over, my bill will be $15 more here than it was there. Now this “by usage” deal guarantees it will be even higher. I have had to call TWC three times in my 6 months here to fix issues with their service, bad box, bad signal strength, and they still can’t figure out why my internet service is slow. Three years in Raleigh, I never had to call them once, other than to set everything up. The service in Raleigh is 10 better than here, more intuitive, better channel selection, better picture quality, more HD channels and faster internet speed. I understand that they use different networks in the two locations, but hopefully, they will get there act straight and convert Greensboro and the surrounding area to the same style network as Raleigh. But, this “usage” billing is a sign that customer service is even further down the list of important issues, than I thought it was. Guess it’s time to check into AT&T and revise the satellite issue.

hardcashe

April 3, 2009 - 11:01 pm EDT

One thing to do right away - dump your .rr account. POP3 server's are a nightmare to setup on mail clients, iPhones, etc. Get an internet based e-mail service like Google's Gmail. With Gmail you also get Google Docs. And your e-mail is not tied to a provider - when you change providers no impact on the way you get your mail.

jandrew28

April 4, 2009 - 10:40 am EDT

hardcashe, don't worry, I have always had a "web based" e-mail. When I moved I asked TWC if they knew how stupid it was that I could check my rr email from anywhere in the world, but I couldn't keep the same address when i moved 80 miles west. Surprisingly, they admitted they knew it was stupid but that they could not do anything about it, because the networks were different. I have told them on multiple occasions that they should make the Greensboro area's system more like the Raleigh area's system, since they are working on making everything the same. Sadly, with making Greensboro a test market, I probably won't find out if they accomplish it or not, as I will move to satellite or AT&T or maybe even use my wireless providers service, all are slower, but I have had it with TWC. I called and asked about this new rate plan and they have no idea what they are going to do and they can not tell you what your average usage has been over the past several months.

thegoodguylives

April 2, 2009 - 12:57 pm EDT

I urge anyone who is worried about this change to write a letter or send an email to Time Warner. I already have. They need to hear that people are concerned.

lily

April 3, 2009 - 1:20 pm EDT

Time Warner needs to start listening to all of their customers or they will not have any!!!!! We can hardly afford the basic cable and basic internet we have now. Now that the entire Triad Area is suffering from this Economic Mess, they're kicking us while were down. I did w/o Cable/Internet for almost a year to save up to get it back and now this. If anything they need to lower their prices rather than raise them.

hardcashe

April 3, 2009 - 11:08 pm EDT

Time Warner is well aware of the climate they have created.

This is the broadband provider's response to content provider's who are now using their pipe to deliver content the competes against Cable's own cable content. Everything was honky dory until compression standards started improving to the point you can now watch an HD movie on iTunes or a full screen standard def on Netflix.

As an example - my wife an I now get NetFlix to watch HBO shows, etc. and stream NetFlix movies. We have basic cable - but are not sure we really need it - possibly for News Hour and Comedy Central. What we do pay for is $45 a month for broadband. If we could not stream movies we would have a DVR and HBO, Showtime from cable for episodes and movies, and pay about $150 a month to Time Warner.

histrion

April 4, 2009 - 10:39 am EDT

I think TW's setting themselves up for an anti-competitive practices law suit or fifty. Looks like we're back to the bad old days of the 60's and 70's...

bbsmith2

April 2, 2009 - 12:59 pm EDT

So lets break it down.

1 Standard Def (SD) movie is 4Gb
1 HD movie is 8Gb
1 TV show, Hour long, is 1Gb
1 Song, 3 min average is 10Mb

So if the average family of 4 watches 4 (3 SD and 1 HD) movies online per month. They maybe watch a season of their favorite show (22 episodes). They download 1 album per month. Play online games through a PS3 or 360. Watch any YouTube or other online video clips. Then take into account normal internet usage.

Movies = 20Gb
TV Show = 22Gb
Music = 200Mb

Just that above equals 42.2Gb of info per month. That does not take into account your average usage while surfing, online gaming you or your kids might do and all those pictures get in your email.

I know you're wondering how are people using that much or how possible it is. Netflix has online video like the article says, well what the article didn't say was how popular online Netflix was. Netflix sells a wireless online set top box for $99, not to mention blu-ray players that have built in Netflix player. Currently the Xbox 360 allows you to watch Netflix and soon the PS3 will allow it. Apple has their own set top box that you can stream movies from Itunes to. I'm sure everyone has seen the Hulu commercials, through them you can watch TV shows and some movies.

As you can see it is easier to stream movies and shows from the internet than ever before. For everyone that has a digital camera you can share your pictures through the internet. You can upload them to sites like Flicker or even use things like Kodak EasyShare. Do you have an Ipod or Iphone? Chances are you download music, movies or shows for it. All in all you can reach your cap and go way over it quicker then you realize. It is surprising how much you can do in a month through the internet and it's easy to see how a family would have to pick the highest plan or seriously cripple their internet usage.

wreck86

April 3, 2009 - 4:01 pm EDT

You hit the nail on the head. Time Warner can't stand that they can't get a piece of that Netflix action under the current contracts, so now they are going to make sure by charging for the data transfer.

It also sets up a system, at our expense, so that in the future we can be taxed on the amount of information we are downloading too.

hardcashe

April 3, 2009 - 11:13 pm EDT

Complete violation of net neutrality. Now there is nothing stopping Obama and the FCC from stepping in and ending this attack on internet content. The FCC already hates cable - as long as AT&T is not proposing something similar we should get quick action (Too many former AT&T heads running the FCC).

bbsmith2

April 5, 2009 - 12:41 am EDT

I've been keeping up with my usage since yesterday (4/3) and so far I am up to 2.86Gb. If I keep up with this amount of usage I will hit 50Gb by the end of the month. For me it's been normal usage with some online gaming. The wife has used it to prepare for her next weeks lesson plans and her normal usage. As a family we've watched a movie and an episode of a TV show.

I'll post again in a week to update the usage. If anyone would like to know how to measure their usage and they have a Linksys router email me and let me know.

uncwgm

April 2, 2009 - 11:20 pm EDT

What also gets me is that the only 4 markets implementing this are in areas without much direct competition or FIOS fiber optic service.

Essentially Time Warner has told the residents of Greensboro, we are going to charge you more than almost every other market in the country.

Sounds like discriminatory or predatory pricing, especially if you look at the demographics of Greensboro.

I'm going to contact the atty general's office and ask them to investigate this selective move by TWC.

We will be charged more than almost every other market they serve.

Interesting they implement here where they have a known MONOPOLY on the cable market.

hardcashe

April 3, 2009 - 11:16 pm EDT

The silicon valley has Comcast and has begun rolling out something similar - there's is a 40g rule - they slow you down - it is actually much better than what Time Warner is proposing as it is over a 24 hour period as I recall. Anyway - no FIOS in NorCal. Nothing close to Comcast broadband speed. And it is the center of the tech world.

theravada

April 2, 2009 - 1:26 pm EDT

I'm not going to even bother with Time Warner Cable anymore. It's already bad enough dealing with their "customer service" every time the connection goes out, with operators insisting that resetting your modem should fix everything, and upon failure of that strategy the service technician failing to show for a scheduled appointment. There are legitimate reasons for going over 40gb a month, from streaming videos to keeping software up to date, syncing data (home pictures, videos, etc) with remote storage providers in case of a computer crash, even online gaming. Meanwhile, AT&T is offering 6.0mbps unlimited download for $42.95/month. Seems like an easy choice.

erikhuey

April 2, 2009 - 1:28 pm EDT

see http://triadmediawatch.blogspot.com/2009/04/time-warner-prepares-to-rip-...

bbsmith2

April 2, 2009 - 1:39 pm EDT

And to follow up what I said, Here are some of the speed differences between TWC and their competitors.

TWC $49.99
7Mbps download and 384Kbps upload

Verizon FiOS - $44.99
10Mbps down - 2Mbps up

Comcast - $42.99
6Mbps down - 384Kbps up

AT&T (DSL) - $35.00
6Mbps down - 768Kbps

AT&T (U-verse) - $55.00
10Mbps down - 1.5Mbps up

Mbps = Megabytes per second (1000Mb = 1Gb)
Kbps = Kilobytes per second (1000Kb = 1Mb)

FiOS is currently in Durham and U-verse is in Cary.

AT&T and Verizon don't have usage caps and Comcast has a 250Gb cap. All the other choices offer equal or better download and upload speeds for cheaper or about the same price as TWC. It's not TWC's service that I am complaining about it's the lack of choices here in Greensboro that I complain about. I would love to have Verizon here or U-Verse. Both carry superior products when it comes to internet. I hope at the least this educates some folks in what we are missing when compared to what is out there.

Hoosierdaddy

April 2, 2009 - 11:09 pm EDT

I'm not sure how this info is relevant. Neither U-Verse nor FIOS is available in Greensboro. I would give ANYTHING for either of those services to become available in the Triad. It would give me great pleasure to tell Time Warner to kiss my a**. They've had a monopoly on information services for too long! It's time for some competition. C'mon AT&T! C'mon Verizon! You've got an eager and highly motivated customer base just waiting for you here!

bbsmith2

April 5, 2009 - 12:32 am EDT

The reason for giving the different companies and pricing plans was to show the difference in what TWC offers compared to others. The main thing to realize is that because of the franchise agreement the city has with TWC we as a consumer base are denied choices. That was the main point behind that post.

If I was going to delve more into this I could point out Wilson, NC and their Greenlight Service.
http://www.greenlightnc.com/
It is an undertaking by the city of Wilson to run their own internet and cable services. They offer speeds of 20Mbps both up and down for $60 per month. Granted Wilson, NC has 40k to 50k people and is much smaller than Greensboro. It does go to show what a city could do if it wanted to. With the types of speeds they give for businesses, it does make Wilson an attractive place to new businesses and a chance for established businesses to grow.

I know TWC has done much for this city in the way the provide for the schools. They sponsor the Teacher of the Year and provide free cable to the schools. That is a pretty nice thing that they do. The question is does all that they do for the schools outweigh the lack of choices we are given as a consumer? Maybe the city looked at the shiny gifts given by TWC and became distracted.

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