Pay Per Byte: Time Warner's Broadband Pricing Experiment

GasPump.jpgThis story flew under the radar yesterday. But it just may be a harbinger of things to come. Soon, we may be paying for Internet service the same way we pay for everything else—by how much we consume.

(AP, 1/17/08) Time Warner Cable said it will experiment with a new pricing structure for high-speed Internet access later this year, charging customers based on how much data they download.

The company, the second-largest cable provider in the U.S., will start a trial in Beaumont, Texas, in which it will sell new Internet customers tiered levels of service based on how much data they download per month, rather than the usual fixed-price packages with unlimited downloads.

Company spokesman Alex Dudley said the trial was aimed at improving the network performance by making it more costly for heavy users of large downloads. Mr. Dudley said that a small group of super-heavy users of downloads, around 5% of the customer base, can account for up to 50% of network capacity.

Mr. Dudley said he didn’t know what the pricing tiers would be nor the download limits. He said the heavy users were likely using the network to download large amounts of video, most likely in high definition.

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