Time Warner Revises, Defends Bandwidth Caps: 'Unlimited Usage at Turbo Speeds' $150 Per Month

As it continues to field test metered bandwidth usage in the U.S., internet provider Time Warner has revised, detailed and defended its current and upcoming trials.

The revisions include a lower-priced entry plan and higher data caps. The company argues that tiered plans--in which customers have a set bandwidth limit and are charged if they go over--are necessary because "Internet demand is rising at a rate that could outpace capacity within a few years" and "could result in Internet brownouts."

Overage charges will be limited to $75 per month. "That means that for $150 per month customers could have virtually unlimited usage at Turbo speeds," said the company.

Time Warner is not alone in its hopes to bring the model, which is already used overseas, to the United States. Many worry about the impact this could have on gaming, especially as digital downloads and streaming services like OnLive gain popularity.

The company stressed that these are trials, adding "our plans will evolve as well and aren't set in stone" and that it looks "forward to more dialogue as we progress in these trials." An e-mail address was provided for that feedback, realideas@twcable.com.

The program rolls out to Rochester, N.Y., and Greensboro, N.C. in August, and will expand to San Antonio and Austin, TX in October. More details follow below, pulled directly from the company's official response to "the passionate feedback."

It will take a lot of money to fix the problem. Rather than raising prices on all customers or limiting usage, we think the fairest approach is to move to a tiered model in which users pay more if they use more.

If we don't act, consumers' Internet experience will suffer. Sitting still is not an option. That's why we're beginning the consumption based billing trials. It's important to stress that they are trials. The feedback we've received from our customers has been very helpful. We've made changes to the terms in our current and upcoming trial markets as follows:

• 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.