Time Warner Announces Plan to Charge Customers Based on Internet Usage

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By Kerry Trimmer

As Slashdot reported last Wednesday, a leaked internal memo indicates that Time Warner will begin testing a new tiered billing plan that could impact Internet usage patterns and, in turn, digital marketing strategies. Time Warner will begin testing the new plan, which charges customers based on their Internet downloads and monthly data consumption, in Beaumont, Texas later this year.

Time Warner hasn’t set a pricing plan yet, though likely tiers for monthly usage would be: 5 GB, 10 GB, 20 GB and 40 GB. Notably, however, the top plan (likely 40 GB) would cost about the same as the company’s fixed-price, highest-speed service, which typically runs between $50 and $60 a month.

This isn’t the first instance of service providers capping users’ bandwith access. Last year, a number of Comcast customers reported that their access was suddenly suspended after they reached a bandwith limit of 90 GB. Comcast was quick to point out that its service cap only affected a minute percentage of its user-base (.01%) and that customers in jeopardy of reaching the cap were notified beforehand.

Like Comcast, Time Warner argues that its service caps will only affect a small customer base. That’s all fine and well - but it still begs the question: will regular customers alter their Web-usage patterns if they are given the choice of self-regulating their bandwith consumption to save money? Or, will users be forced to reconsider visiting rich-media sites like YouTube if data consumption becomes financially prohibitive?

(This New York Times article speculates that video downloads could end up costing $30 a pop under Time Warner’s proposed plan. That’s enough to make most folks skip YouTube and drive over to Blockbuster.)

For right now, though, there does not seem to be too much reason for concern. Time Warner’s plan is only in its infancy and, if the Comcast example is an accurate indicator, the vast majority of Internet users won’t be affected. Still, it’s an important story for digital marketers to monitor - without (near) ubiquitous broadband access, many of the features currently used to push products and build brands online could be rendered largely ineffective. Let’s see what the good people in Beaumont have to say for themselves.