This plan, the company tells us, will permit up to 100 GB of file transfers before subscribers have to pay a $1 per GB overage charge. Time Warner Cable has not decided the pricing or speeds for this plan, a rep tells us.
The company will test consumption-based billing in four more markets this year, including Austin and San Antonio, Tex. and Rochester, N.Y. (Austin, a high-tech city with a large university population, will be a particularly interesting trial.) It’s been testing the service in Beaumont, Tex. since last year.
U.S. Internet providers have typically charged a flat fee for unlimited broadband access, but Time Warner is trying to change that to a consumption-based model. Consumers could be wary of unexpectedly huge cable Internet bills — easily more than $100 per month if you watch a lot of Web video — but Time Warner tells us that only about 14% of its Beaumont trial subscribers went over their monthly caps.
“It’s still a trial,” says a company spokesman. “We’re going to learn a lot more.”
That means nothing is written in stone. It’s possible Time Warner Cable could change caps, overage fees, or even abandon the plan if customers revolt.
The changes come as cable companies look for more sources for growth — most people who are going to sign up for cable have already done so — and new ways to profit off Web video, which could disrupt the cable companies’ main TV businesses.
As we explained earlier:
Plans will range from $30 to $55 per month, depending on the cap — 5 GB, 10 GB, 20 GB, and 40 GB caps are available, with a $1 per GB overage charge,
. Those caps are very low compared to rival Comcast’s (CMCSA) 250 GB cap. No word if Time Warner Cable’s forthcoming Web video service will count toward its caps.
What does this mean for you? If you watch about 7 hours a week of standard-def video, or 2.5 hours a week of hi-def Web video, you could easily pass even the 40 GB cap. After that, each iTunes movie rental — or Netflix (NFLX) stream, or whatever — could cost $1 to $4 more. Or Hulu episodes could cost $0.30 to $0.50. That doesn’t even include your other Web usage, such as downloading music, using the Web, etc.
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