Time Warner to Test Usage-Based Internet Billing

Posted on Jan 17, 08 02:40 PM PDT

Time Warner Cable will conduct a billing test in Beaumont (Texas) to see if it can reduce “network congestions” by making heavy users pay more than light users. Time Warner describes the situation like this: heavy users are 5% of the customers, but use 50% of the bandwidth.

I think that Time Warner Cable is trying to improve its 6.84% profit margin rather than solving a “network congestion” problem that few customers, if any, complain about. What is not clear to me is what would happen to the “light users”. Will they be billed on usage as well – or would they stay on a flat-fee plan? As a consumer, I think that if Time Warner wants to use a pay-per-usage (or pay per Gigabytes) billing, every account should be subject to it, so that people who use little bandwidth can save.

From a business perspective, doing a pay-per-usage billing for all doesn’t look like a good idea: “light users” might flock to Time Warner, while “heavy users” will jump elsewhere. In the end, the market will decide. What so you think?

Update: if this is a good example, Bell Canada, charges $7.5 (Canadian) for each GB when customers go beyond 30GB/month. It is interesting to know that it is common for webistes to pay about 12c/GB for bandwidth, so $7.5 seems utterly abusive to me.

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