Time Warner Cable has released new details on its planned test later this year of a consumption-based billing plan for residential customers of its Internet services. The Triad area is scheduled to be one of the test markets.
In a statement issued Thursday night, Landel Hobbs, the chief executive of Time Warner Cable, said that trials in this market and in Rochester, N.Y., would begin in August. They would expand to San Antonio and Austin, Texas, in October.
The plan would charge overage fees for customers who go past established downloading limits. In the Triad, those figures would be 10 gigabytes a month for users of Road Runner Lite; 20 GB for Road Runner Basic; 40 GB for Road Runner Standard, the most popular level of service; and 60 GB a month for Road Runner Turbo. Overages would be $1 a gigabyte each month, with a cap of $75 for overage charges in a month. The basic cost of the services would remain the same.
The plan would add two options for the lightest and heaviest users of the Internet. The low end would be a 1 GB-a-month tier for $15 a month, with overage charges of $2 for each GB. The higher option would be a 100-GB Turbo package for $75 a month, with $1 overage charges for each GB.
One gigabyte equals about three hours of streaming standard-definition video, 45 minutes of high-definition streaming video, or more than 250 music files.
Once the trial starts, Time Warner Cable will give users three months to understand how much data they download. Users will not be charged overage fees during that period, and according to Hobbs, will "have an opportunity to assess their usage and right-size their service packages."
Time Warner Cable said it needs to add the caps so that the heaviest users of Internet services can pay for infrastructure improvements as demand rises.
The announced plan has met with backlash from some customers who say that putting a cap on Internet downloads will stifle creativity.
"I think it's still ludicrous," said John Oglesby, a Winston-Salem resident who has been following the proposal. "I still think it's going to have a detrimental effect on innovation, and also on students and education. So many students are going to online learning now. If usage caps have to come into play at all, the numbers have to be a lot higher than what Time Warner is proposing."
Oglesby is currently unemployed and uses the Internet to look for work. "Even when I was employed, a lot of my work was telecommuting," he said.
He added that many small businesses, which often begin at home, may fail or never be started because of restrictive pricing.
Oglesby and others suspect that part of Time Warner Cable's motivation is to discourage people from using the Hulu and Netflix Web sites to watch TV shows and movies, as opposed to watching Time Warner Cable's programming.
"One reasonable theory making the rounds is that bandwidth itself is a red herring, and the real concern is cannibalization," according to an article at Wired.com, a tech-news Web site. As more broadband customers shift video viewing to the Web, cable companies fear a steep drop in TV revenues.
"Bandwidth caps may not make sense as a cost-saving move for Road Runner, but they might look tempting to cable executives hoping to save cable TV."
■ Tim Clodfelter can be reached at 727-7371 or at tclodfelter@wsjournal.com.
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