Time Warner Cable Taxes Bandwidth: You Lose, They Lose
June 3rd, 2008
On the same day Starbucks rolled out free Wi-Fi to customers (purchase required), Time Warner Cable also rolled out Internet bandwidth overage fees. The two companies actions couldn’t be more different. Starbucks has realized that instead of charging for Internet access, an annoyance for users, free Wi-Fi will attract more customers and keep them in their stores increasing the chance of purchases. Time Warner has taken the opposite approach by taxing users who consume more bandwidth than Time Warner Cable likes. Their executive vice president of advanced technology, Kevin Leddy, explained that he believes “it’s the fairest way to finance the needed investment in the infrastructure.”
I don’t use Time Warner Cable for Internet access but they do provide me with cable TV for a modest monthly price of $103.11 (digital HD with HBO is expensive — don’t let their ads tell you otherwise). I decided to figure out how much this new tax would cost me if I used them for Internet access given my current bandwidth usage.
Checking my Tomato router logs, I downloaded 44.36 GB and uploaded 33.22 GB in May 2008 which reflects a pretty typical month for me. A large majority of this bandwidth is due to my Vudu box which is constantly transferring movies over a peer-to-peer network (it’s legal of course) but a significant amount of it is also probably from iTunes purchases and watching TV shows at ABC.com and Hulu.
Time Warner Cable’s new fees reflect total amount transferred (in my case 77.58 GB for the month). Their new pricing is $29.95 for a paltry 768 Kbps transfer rate and a 5 GB monthly limit and $54.90 for a much faster 15 Mbps with a 40 GB limit and $1/GB over the limit. I’m currently an AT&T High Speed Elite subscriber for which I pay $34.99/month and get close to a 6.0 Mbps downstream with a 768 Kbps upstream with no known limit. Let’s compare that to Time Warner Cable’s fees:
- AT&T High Speed Internet Elite: cost per month $34.99
- TWC 768 Kbps Package: $29.95 + $72.58 overage fee = $102.53
- TWC 15 Mbps Package: $54.90 + $37.58 overage fee = $92.48
With those prices, AT&T is almost a third cheaper any way you slice it.
It’s too bad Time Warner Cable is moving in this direction. Digital distribution is really starting to hit the mainstream with devices like the Vudu, AppleTV, and Roku’s Netflix Player. I fired up iTunes and selected a random movie, 27 Dresses which is 1.25 GB. Do you really want to have to think about paying your ISP an extra $1.25 when you rent a movie for $3.99 (that’s almost a 24% tax which would be even higher for an older movie)? Hopefully we’ll see consumers leave Time Warner Cable for other ISPs and Time Warner Cable can continue to deliver sub par cable TV until they find themselves obsolete when everything is delivered over IP.
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