Consumption Based Billing – Time Warner Wants It

Time Warner had been testing what they call Consumption Based Billing. They have since stopped their trials since there was a public outcry over the issue. From what I read it appears that users would be limited to the amount they could download by the GB. A meter would keep track of how much you downloaded per month and you would be billed accordingly.

Interesting concept. Maybe they can put a meter on our TV’s and bill us on how much time we spend watching the television. Why are they doing this? They are doing this for you and me. That’s what they say. According to their web site, Time Warner states:

Time Warner Cable also announced that it is working to make measurement tools available as quickly as possible.  These tools will help customers understand how much bandwidth they consume and aid in the dialog going forward.

Britt added, “We look forward to continuing to work with Senator Schumer, our customers and all of the other interested parties as the process moves forward, to ensure that informed decisions are made about the best way to continue to provide our customers with the level of service that they expect and deserve from Time Warner Cable.”

How about this:

We don’t have any specific plans at this point other than to begin a conversation with customers and other people who have an interest in this.  As we move along we will be very open and transparent about any future plans that might develop as a result.

Typical corporate lingo. No matter what the consumers say it appears that Time Warner may go along with their plan.

Here’s my plan. If Time Warner wants to charge rates like a utility, than they should be regulated like a utility.

What do you think?

Comments welcome.


Article Written by

I have been writing for Lockergnome for eight years.

  • mhz

    Well it depends on why they’re doing it. If there is so much bandwidth usage by some parties that it inhibits normal usage by others, then you have to charge the larger consumers more money, because they are blocking your ability to provide the agreed upon service to your smaller consumers.

    I don’t know if thats what they’re up against, but if so, then it makes sense to charge based on consumption.

    Think about it. What if you turn on your water at home, and you only get a little trickle, because your neighbor is has built a nursery and is maxing out the delivery infrastructure and consuming all available water pressure while you wish to take a shower.

    Now if you’re both paying $50. a month, but he happens to be “upstream” of you, then too bad for you…I guess you’ll have to go shower in his irrigation sprinklers. Would that be fair?

    Nope. For your $50./month you are going to demand that you can take a shower whenever you want. You’re going to call the water company and demand improvements to the system so that the nursery cannot deprive you of water pressure. The improvements cost money, and you’re certainly not going to invest your money, since HE’S the one using all the water.

    The water company will have to charge the neighbor per unit of consumption…thats the only way they would have the money to enhance the infrastructure to accommodate all customers.

  • Mike

    Just this morning we dropped some frills from TW because the bill is way high as it is. Not sure I’d worry about bandwidth to much as I don’t DL movies and videos or itunes or those sorts of items.
    Still all in all it would be a nuisance to have to pay metered service and I agree with you that it should be regulated just like a utility company.
    Those frills are the premium channels.HBO.Showtime and Cinemax.

  • Ron Schenone

    Thanks for the comments.

  • the oracle

    This is ridiculous, no matter what the justification. The times when internet usage was low, and billing was high, was a golden era for the ISPs. That was when they should have socked the money into infrastructure, leaving much for the profit coffers. (this includes the years 1993-2002)

    Now that people are using more, the ISPs waant to change the model because it puts them, again, at a large advantage.
    People won’t want to put up with it, as they see how much profit has been made by the ISPs during the time when costs (relatively) were high. Now, with economies of scale, pricing should go down, if anything.

    This is analogous to telling people who visit the smorgasbord that each extra trip will be an extra charge – pretty soon, the word gets around, and the smorgasboard has lost its customer base. They have all gone to the next one, down the street, where the management has not lost its mind.

  • Ron Schenone

    Hi Marc,
    Excellent points.

  • Goose

    Whaddya mean Corporate lingo? Sounds like our OBOMBA Government lingo to me…….

  • Ron Knights

    Ok, I don’t understand.

    Have they dumped this idea?! Or have they just given it a new name?!

    My understanding of Time Warner is that everything is bandwidth.

    Your Cable Telephone, Cable TV and Cable Internet consume bandwidth.

    If you do a lot of everything at once, your bandwidth slows down.

    A few months ago I killed my Digital Cable because I could get most of my TV Shows online… through Time Warner’s Roadrunner Internet Service.

    Now they want to charge me more for downloading the TV I’m not watching on Digital Cable?!

    Maybe I should get the Digital Cable back again?!

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  • Ron Schenone

    Hi Ron,
    I don’t believe they have dumped the idea. They just merely have it on hold. Your situation is a good example of why TW wants to use Consumption Based Billing. They make it sound like it is good for consumers, but in your case will most likely end up with higher rates.

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  • Georges K.

    Ron, I agree with you, I’m in the same exact boat. I canceled my digital cable with TW because I was able to get most of the shows I watch online. it looks like if they follow that route, we may end up better off just getting back our digital cable, and avoiding the potential congestion while watching all the shows…

    It really does sound that this idea is going against the main stream of technology, and bandwidth requirements nowadays as whole.

    I think about services like Netflix Instant watch … what will happen to them when people are going to start being conscientious about their bandwidth usage… perhaps, we should just go start waiting for the good’ole DVDs to get mailed to us, or better yet, go back to Blockbuster. tangent: last week, I went to rent a spur of the moment movie at blockbuster, and end up with 2 movies, and paid something like $10!! that’s almost a one month Netflix subscription! what are they thinking?!

    Personally, I’d hate the fact that I’m being capped, and I usually tend to get an unlimited plan so that I wouldn’t have to worry about it (if I’m usually borderline on usage, of course).

  • mhz

    I see what you guys are saying. It sounds like you’re saying that they are offering this online TV service that they don’t really have the bandwidth to support smoothly, and now trying to pay for it on the fly by increasing the rates.

    The right thing for them to do would be notify you BEFORE you signed up for the service that they were going to charge for bandwidth, and give you a breakdown of how many hours of online TV would equal how much $, so that you could compare against the cost of digital cable. That would sort of be fair.

    I work at a hospital where the cafeteria sells all kinds of salad bar stuff that you can get yourself, for .30 cents/oz. Even though people see the sign warning them, there is not a scale for them to use, and they are terrible at estimating the weight, so they always have to pay more than they expected at the checkout.

    It is embarrassing as an employee to see visitors treated that way. It is set up to trick them, intentionally or not.

    You have to give customers an accurate way to judge how much it will cost them ahead of time, so they can make an informed decision, or else you’re just a lying manipulator, trying to steal their money.

  • Ron Schenone

    This is kind of like the credit card companies. Raising rates and making them retro on your previous balance. What the hell is going on in our society? Greed seems to have taken over everything.

  • John McElhenney

    Here’s a letter Google and others delivered to North Caronlina’s legislature in response to that states efforts to eliminate Municipal Broadband options. This is as Time Warner and Comcast are working in the other direction.

    May 4, 2009

    The Honorable Joe Hackney
    North Carolina House of Representatives
    2207 State Legislative Building
    Raleigh, NC 27601-1096

    Dear Speaker Hackney:

    We, the undersigned private-sector companies and trade associations urge you to oppose HB1252, the so-called “Level Playing Field Act.” HB1252 is “level” only in the sense that it will harm both the public and private sectors. It will thwart public broadband initiatives, stifle economic growth, prevent the creation or retention of thousands of jobs, and diminish quality of life in North Carolina. In particular, it will hurt the private sector by undermining public-private partnerships, hamstringing our ability to sell our goods and services, interfering with workforce development, and stifling creativity and innovation.

    The United States is currently suffering through one of the most serious economic crises in decades. We also continue to lag behind the leading nations in per capita broadband adoption, access to high-capacity networks, cost per unit of bandwidth, and growth of new broadband users. To address these concerns, Congress and the Obama Administration have made more than $7 billion available to catalyze public and private efforts to accelerate deployment of broadband infrastructure and services. States can ill afford to enact measures like HB1252, which impair use of these broadband funds and the ability of the public and private sectors to work hand-in-hand to reverse these trends.

    We support strong, fair and open competition to ensure users can enjoy the widest range of choice and opportunities to access content online, which is the heart of economic development in an information-based global market. HB1252 is a step in the wrong direction. North Carolina should be lowering barriers to public broadband initiatives rather than establishing new ones, so that we and other high technology companies can spread and prosper across this beautiful state. Please oppose HB1252.


    American Public Power Association
    Atlantic Engineering Group, Inc.
    Fiber to the Home Council
    Google, Inc.
    Intel Corporation
    Utilities Telecom Council
    Telecommunications Industry Association

    cc: Governor Bev Perdue (by fax)
    Secretary of Commerce J. Keith Crisco (by fax)
    Rep. Hugh Holliman (by email)
    Rep. William Wainwright (by email)
    Rep. Paul Stam (by email)
    Senator Marc Basnight (by email)
    Senator Tony Rand (by email)
    Senator Katie Dorsett (by email)
    Senator Phil Berger (by email)
    Senator R.C. Soles (by email)
    Rep. Ty Harrell (by email)
    Senator David Hoyle (by email)
    House Public Utilities Committee members (by email)

    Check and for more information on this fight.


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  • Jeremy

    I hope that this idea never gets put in place. With everything going onto the internet how can they treat it like a utility. I personally have an in my household a 4 computers, an iPod Touch (uses my wifi), a 360, and a Wii. I would honestly venture to guess that atleast half of all the activities done on these systems are in the “cloud” of the internet. I have a netflix subscription and I stream movies to my TV from it. Over half the “television” I watch now comes over the internet.

    Lets hope this is just a phase…

  • Ryan Farmer

    “We look forward to bribing Senator Schumer, screwing over our customers and setting up a protection racket for any websites that want to be exempt as the process moves forward, to ensure that our customers feel like their opinion matters when we have no serious competition in their area, we will have a comment form with a submission button that immediately deletes their input. And we will continue to provide our customers with the crappy level of service and tons of outages that they expect and deserve from Time Warner Cable.”

  • Eric L.

    If this ever does happen, I’ll be charging the cable co. for all the GB that I wasn’t able to D/L. Every time the lines are down, or I’m not able to get to a site.

    It’s the same with Doctor’s offices…. They make you reschedule if your 5 min late, but it’s OK if they make you wait 30-60 min in the waiting room to see them…. as if you don’t have other commitments, appointments, work, or a life…. as if their time is more valuable than their’s.

    So if the cable Co’s want to start limiting my connectivity, well, I’ll be sending them a bill, and I will follow up with harassing phone calls several times a day until payment is received.

    Wouldn’t surprised me on bit if something like this comes to pass though…. It’s only a matter of time before you need to go to your local town hall and pay for a permit to fart in your own home….. oh wait, they all ready do that…they tax you for water and sewage….lol


  • Diego

    first of all, hello to all.
    im an outsourcer for TWC working at customer service,
    all of you make exellent points, it is true that, paying for what u use would make a lot of people´s service cost a lot more, but its also true that other people may pay less…
    just to make it clear im entirely against this new billing method, which has not taken place yet, n i hope it never does, what the first person said its true, that if someone uses it more n does not allow u to get the service that ur paying for, then they should pay more, but then u have to think about all the small business n house business that use the service, and that HAVE to use more bandwith than other, they would be greatly affected by this, so this is like a double edge razor,
    Of course to time warner theres no loss here, its all profit…
    but hey, we havent been told of this change yet, i saw it on the website, so i guess it wont happen anytime soon. hopefully it will never happen