Time Warner Revises Plans to Charge for Internet Bandwith Usage

Broadband internet provider Time Warner Cable seems to have caved slightly to the rising public sentiment against their plans to charge its subscribers for the amount of bandwidth they use.

Yesterday, the company announced a revised pricing structure. While the new structure still charges for usage, it does seem a bit more accommodating.

"Some recent press reports about our four consumption based billing trials planned for later this year were premature and did not tell the full story," said Landel Hobbs, Chief Operating Officer, Time Warner Cable, in a statement. "With that said, we realize our communication to customers about these trials has been inadequate and we apologize for any frustration we caused. We've heard the passionate feedback and we've taken action to address our customers' concerns."

Here's a breakdown of the changes the company is making to their plan:

• To accommodate lighter Internet users and those who need a lower priced option, we are introducing a 1 GB per month tier offering speeds of 768 KB/128 KB for $15 per month. Overage charges will be $2 per GB per month. Our usage data show that about 30% of our customers use less than 1 GB per month.

• We are increasing the bandwidth tier sizes included in all existing packages in the trial markets to 10, 20, 40 and 60 GB for Road Runner Lite, Basic, Standard and Turbo packages, respectively. Package prices will remain the same. Overage charges will be $1 per GB per month.

• We will introduce a 100 GB Road Runner Turbo package for $75 per month (offering speeds of 10 MB/1 MB). Overage charges will be $1 per GB per month.

• Overage charges will be capped at $75 per month. That means that for $150 per month customers could have virtually unlimited usage at Turbo speeds.

• Once we implement this trial, we will not immediately start billing customers for overage. Rather, we will first provide two months of usage data. Then we will provide a one-month grace period in which overages will be noted on customers' bills, but they will not be charged. So, customers will have an opportunity to assess their usage and right-size their service packages before usage charges are applied.

• Trials will begin in Rochester, N.Y., and Greensboro, N.C., in August. We will apply what we learn from these two markets when we launch trials in San Antonio and Austin, Texas, in October, but we will guarantee at least the same level of usage capacity in these trials.

• As we launch DOCSIS 3.0 in the trial markets, we plan to offer a 50/5 MB speed tier for $99 per month.

It's better than the original plan, but still a step in the wrong direction, one that could having U.S. customers facing the same sort of issues gamers in countries like Australia face on a daily basis.

(I'm not picking on Australia, I just visit there a lot and get lots of earfuls from Luke about it in the Tower.)