Time Warner to Expand Bandwidth Caps

Last year, Time Warner Cable became the first major U.S. Internet service provider to charge customers depending on the amount of bandwidth they used each month. Although initially just a trial, the test in Beaumont, Texas apparently went so well that the company is looking to expand the test to four more undisclosed markets in order to better test the system’s ability to meter and bill accurately.

Similar to the way in which cell phone providers give you a monthly allotment of minutes and charge extra for overage, some ISPs are imposing caps on how much their subscribers can download each month. Although many ISPs have monthly download caps, Time Warner Cable was one of the first ISPs to set relatively low limits at 5 gigabytes for subscribers on the $30/month plan; each additional gigabyte was $1 more. While it takes thousands of emails and Web page loads to hit a gigabyte of use, video and software downloads quickly consume much larger quantities of data.

As one might expect, these bandwidth caps have created a number of critics. Some consumer advocates are concerned the limits could discourage people from using the Internet and could stifle online video. On the flip side, ISPs such as Time Warner are realizing they must invest in their own networks in order to support high demand for online video and other bandwidth-intensive downloads. As a result, the companies are looking for ways to pass the expansion costs to the consumers.

According to Time Warner Cable spokesman Alex Dudley, a "small but vocal percentage" of users in Beaumont were not happy with the amount of data they could use. During the trial, the top tier allowed for 40 gigabytes per month. The company plans to introduce plans with larger monthly limits as well as less expensive plans for more casual users.

Time Warner Cable isn’t the only big player who is looking at caps. Late last year, AT&T, the largest ISP, began experimenting with bandwidth caps of 60 to 150 gigabytes per month in Reno, Nev. Of the top four ISPs in the country, only Verizon Communications has no caps on its wireline broadband service.