Time Warner testing usage-based billing

[Ghoulish Delight]

I haven't found details, but Time Warner in Texas is testing a system where they will bill cable internet users for bandwidth usage rather than a flat fee. They claim that it will only affect the top 5% of users and that most people won't notice a difference.

The concept doesn't make me happy. Hell, that's one of the reasons AOL used to suck so much. For 10 years we've gotten pretty used to "If you have access, it's unlimited access." The thought of having to think, "shoot, have I gone over my internet usage allotment" is a sucky thought.

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[Morrigoon]

What a boon for the providers of satellite in the area.

[Cadaverous Pallor]

Hmm, kinda sucks, but I guess it's only fair, right?

[Chernabog]

Originally Posted by Cadaverous Pallor

Hmm, kinda sucks, but I guess it's only fair, right?

Not fair at all. It costs Time Warner next to zero for people that go over TW's imposed limit. This is just a way for TW to eke every last penny out of their customers.

Currently I annoyed with them because I paid a cable bill for two months in full on 12/29. Zero balance on the account. January bill comes, and has an extra charge for a late fee, back-date posted 12/22. How obnoxious is that?!? And yes, there was a late fee on the December bill too. So basically they charged double late fees. But who the hell wants to sit on the phone for an hour with their billing? Might as well pay it.

And don't get me started on how they upgraded our DVR, but made us pay for the cable to connect it to the television.

Or how they told us it was $10 extra a month to send us Hi-Def, but failed to mention that it was an additional $10 to RECEIVE the hi-def signal they were sending.

If our dog-hating landlord didn't also hate satellite dishes, there's no way we'd have Time Warner for anything.

[Ghoulish Delight]

Originally Posted by Chernabog

Not fair at all. It costs Time Warner next to zero for people that go over TW's imposed limit. This is just a way for TW to eke every last penny out of their customers.

If a small percentage of users are causing network demands to outpace their infrastructure, then it can cost them quite a bit, either in the cost of upgrading the network or in the cost of losing customers due to poor network performance. If, as they are stating, they are trying to curb only the heaviest of users (i.e. which would pretty much be people who have their computers doing nothing but downloading movies all day), it makes perfect sense. I don't necessarily have faith that that's all it will effect, but I can certainly see practical business reasons to do it.

Currently I annoyed with them because I paid a cable bill for two months in full on 12/29. Zero balance on the account. January bill comes, and has an extra charge for a late fee, back-date posted 12/22. How obnoxious is that?!? And yes, there was a late fee on the December bill too. So basically they charged double late fees. But who the hell wants to sit on the phone for an hour with their billing? Might as well pay it.

Have you tried? As I posted elsewhere, my most reason CS experience with Time Warner was a 180 degree turnaround from their sh*ttiness of the past.

[Chernabog]

Originally Posted by Ghoulish Delight

I don't necessarily have faith that that's all it will effect, but I can certainly see practical business reasons to do it.

Yeah, and that "extra" -- is it actually COSTING them money, or simply eating a little into their profits (I have a hunch it's the latter).

And what's to stop them from arbitrarily doing the following:

TW Exec 1: "Well, the top 5% of people on the at-home cable service are eating into our profits by excessive bandwidth."

TW Exec 2: "Oh, so we're going to charge the top 5% some usage charges?"

TW Exec 1: "Um, you must be new here. We're going to charge the top 20% for these "excessive bandwidth" charges, and tell people we're only charging the top 5%, because nobody's really watching us and the people at home won't know either".

TW Exec 2: "Muahahahaha!"

TW Exec 1: "Muahahahaha!"

(Sorry I picture them like the green aliens in the Simpsons).

Have you tried? As I posted elsewhere, my most reason CS experience with Time Warner was a 180 degree turnaround from their sh*ttiness of the past.

In all honesty I haven't. The last time I tried to contact them was 2 weeks ago (15 minutes on hold), to ask a question about and then pay the bill to begin with, and THEN they charged me a double late fee. So no, it isn't worth my time.

[Not Afraid]

We'd have the lowest bill in town!

[Alex]

Well, most of the providers have contract clauses stipulating that they have the ability to throttle excessive usage or upgrade account types. There are plenty of stories out there of various providers forcing users to upgrade to business account (which cost a lot more) based on usage volume.

To make it more palatable, though, if I were running things I'd also provide discounts to the bottom end of users too. But its weird how people don't mind this billing model in one area (cell phones) but the screaming is long and loud in this area.

[Ghoulish Delight]

Originally Posted by Alex

But its weird how people don't mind this billing model in one area (cell phones) but the screaming is long and loud in this area.

It has to do with what the market is accustomed to combined with how the services are used.

That model has been in place for telephone use pretty much since telephones became a household thing. Pay for your call. Want to pay less, use it less.

And while internet use started like that with the portal services like AOL and Prodigy, it quickly went out of favor. My guess for the reason is that the length of time you use the internet (the old "bill for usage" model") was in many ways out of the consumer's control. It's not their fault a page took forever to load, or a download got corrupted so they had to spend the time downloading it again. That, combined with the open-ended nature of internet usage, it was simply not as easy to curtail one's use the way we're used to with phones.

So once that model went out the window, we've now had 10 years to become accustomed to unlimited use. It's hard to go back at that point. Of course, the method of determining usage amounts is different, being bandwidth instead of time connected. But some of the same arguments still apply ("Hey, is it my fault the website I chose to go to was loaded with data-intensive multimedia content"). Of course, if they balance the billing right such that general web browsing, video viewing, some itunes downloads and a Skype call or 10 during a month leaves the vast majority of users paying something close to what they are paying now, it might not be an issue. But I still think it's rather jarring to force everyone to make that mental switch from unlimited to having to monitor every kilobyte of use.

[Alex]

Yeah, and that "extra" -- is it actually COSTING them money, or simply eating a little into their profits (I have a hunch it's the latter).

I'm afraid I don't see a difference between the former and the latter.

And I also don't see what "fair" has to do with it. They charge on the model they want to charge. There are alternative methods of accessing the internet. Customers agree to it or they take their business elsewhere.

Makes me think of a comment during an NPR story yesterday on how some hospitals are charging insurance plans more for the same procedures than other hospitals. "Is there a good reason for this or are they just charging what the market will bear?" asked the reporter. To me, the second part is a good reason.

If cable internet were the only way (and since cable company's generally have a regional monopoly) I'd have concerns, but they provide a service and if they want to charge more for people who use it more (regardless of what that actually costs them) then go ahead says I.