Time Warner to test usage-based Internet billing

Plan could upset heavy broadband users, who have been paying a flat fee, report says

By Linda Rosencrance

January 17, 2008 12:00 PM ET

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Computerworld - Time Warner Cable Inc. will begin testing a new billing system that charges subscribers based on usage, rather than the industry standard flat fee, according to a news report.

The cable company, which has 7.4 million residential Internet subscribers, said it will test usage-based billing with subscribers in Beaumont, Texas later this year, Reuters news service reported. Time Warner Cable said the move will help reduce network congestion caused by a minority of consumers who use more bandwidth but pay the same monthly fee as customers who use less.

The company said it believes the new billing system will only affect heavy users 5% of all its customers who normally use more than half of the total network bandwidth, a company spokesman told Reuters.

Consumers who download large media files, such as videos, cause network congestion, which Time Warner Cable said will only get worse as more customers download more videos.

But the plan could anger heavy broadband users, who are used to being billed a flat fee each month. In general, Internet service bills only vary based on the speed of the user's online access, Reuters said.

"Largely, people won't notice the difference," a Time Warner Cable spokesman told Reuters. "We don't want customers to feel they're getting less for more."

Reuters said news of Time Warner Cable's plans was originally leaked on an online industry forum BroadbandReports.com.

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