Time Warner Cable Inc. has been testing its usage based broadband for well over a year in parts of the U.S. The theory behind the test was to see how the public would react to putting a cap on the amount of bandwidth consumed. Obviously the test has gone well enough, in their opinion, to announce the plans to everyone.
CEO Glenn Britt told an investor group on Monday that they will expand the usage policy to all systems by the end of the year. The new offering will be dubbed The Essentials Plan and it allows customers to consume 5 gigabytes (GB) per month. Every GB over the cap will cost $1, but this will not exceed $25 in overages during any given month.
Current customers have the right to opt in as this plan will not be forced onto customers. An opt out is also available at any point during service. The cap appears to be truly geared towards low usage customers who want to be on a cheaper plan. The Standard, Basic and Lite tiers of service will have the capability. Higher bandwidth offerings like the Turbo and Docsis 3.0 plans will remain usage cap free.
The ever growing trend of putting caps on any type of data is expanding. Cell providers Verizon and AT&T have also started putting data caps on their monthly plans. This move has forced many customers into using more Wi-fi at home to stay under the wireless data cap. With Time Warner now offering a limit, the ease of turning on your phones Wi-fi is a little tougher for some. Eventually, this cap could be mandatory and more ISP’s will surely follow.
For users who stream or are trying to cut the cable tv cord it is not comforting news. The living room has become a hotbed for bandwidth and people stream TV, movies, phone service, games, music and live radio everyday.
Streaming services such as Netflix and Hulu use large amounts of bandwidth if used on a regular basis. Redbox recently announced that they will also begin to stream movies for a monthly fee. The online content movement started and it has only shown signs of growth over the past few years.
Consumers have reason to be concerned with this information. AT&T did not force existing users onto the new share plans, but they did offer certain new features to only these plans. If customers wanted to use the iPhone 5’s Facetime feature over cellular, their plan needed to be a new Mobile Share data plan. After heavy public backlash, AT&T backed off the new plan only approach, but it was attempted which is concerning. Time Warner could try similar sales strategies in the future and customers should always read the fine print before signing a new contract.