Friday, January 18, 2008

Metered Bandwidth!

Saul Hansell writes in Friday Jan 18th's New York Times that Time Warner Cable is testing a new rate plan that would charge internet customers an extra fee for exceeding a bandwidth threshold.

Alexander Dudley, a Time Warner spokesman, said that the exact terms had
not been set, but that packages would probably offer between 5 gigabytes and 40
gigabytes a month. The top plan would cost roughly the same as the company’s
highest-speed service, which typically runs between $50 and $60 a month.

As Hansell points out, this seems to have less to do with the cost of excessive bandwidth usage (if you are targeting peer to peer usage, then the threshold should be measured in terabytes) and more to do with preventing average internet users from becoming accustomed to downloading entertainment from the internet. These internet viewers would be watching less cable television.

The New York Times is running an article on the same date (today, Friday Jan 18) written by Miguel Helft that says that 138 million Americans watch more than 3 hours of internet video per day.

Helft quotes Josh Bernoff from Forrester research:

If you are [a television executive], the fact that people are watching a few hours of online video a month is of some concern,” Mr. Bernoff said. “But if there is some
member of your audience who is there for one or two hours a day, you’ve lost
them. They are never coming back.”

Hopefully, there is enough competition amongst internet providers to squash this trend before real harm is done.

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