Trial on Internet Caps Expanded

Time Warner Cable has announced the successful completion of its trial run on Internet caps. The company, who would become the first major U.S. Internet service provider to charge customers extra if they exceeded a certain amount of data traffic each month, says that the test will be expanded to four more markets.

Time Warner Cable has set relatively low limits, 5 gigabytes for subscribers paying $30 a month, and is charging $1 for each gigabyte over that limit. To reach a gigabyte of usage, a consumer would have to download thousands of e-mails and web pages. However, much more data is consumed through video and software downloads.

Time Warner Cable recognizes the skeptical feelings coming from consumer advocates who are saying that people could be discouraged from using the Internet and that online video could potentially no longer be seen as an alternative to cable TV.

According to the company, the Beaumont, TX market revealed that the system was capable of metering and billing more accurately. The test also revealed that customers wanted more online video, which requires a substantial investment in the network. To meet the demand, Time Warner Cable spokesman Alex Dudley said, “we’re willing to make that, and we’re trying to find an equitable way to distribute the cost of that investment.”

Dudley also said a “small but vocal percentage” of users in Beaumont were unhappy with the amount of data that they could use. Time Warner is planning on introducing plans with larger monthly “buckets” of data as well as cheaper ones for casual users to address the concerns received.

Companies are now following Time Warner’s lead after hearing about the success of its trial period and the positive feedback that has been received from users who recognize that Time Warner is moving toward making the system more user-friendly. AT&T experimented with bandwidth caps of 60 to 150 gigabytes per month in Reno, NV at the end of last year and Comcast has capped use at 250 gigabytes for its users.