News

Policing the Pigs

6/07/2008 2:00 AM Eastern

It’s a tale of two trials.

Time Warner Cable and Comcast last week each kicked off tests aimed at dealing with the small percentage of broadband subscribers who chew up the vast majority of capacity on their networks.

Time Warner Cable is experimenting with a financial stick in what would represent a fundamental departure from the industry’s standard unlimited-usage pricing.

Comcast is looking to new, user-based bandwidth controls that put the heaviest consumers at the back of the line.

“These are two ways of saying, 'If you go to the all-you-can-eat buffet and really do eat all you can eat, here’s what the ramifications will be,’ ” said Leichtman Research Group president Bruce Leichtman.

Downstream Speed Monthly Price Usage Cap (Upstream and Downstream)
SOURCE: Time Warner Cable
768 Kbps $29.95 5 Gbytes
7 Mbps $44.95 20 Gbytes
15 Mbps $54.90 40 Gbytes


$1 PER GIGABYTE

In Time Warner Cable’s case, the operator planned to begin charging new broadband customers in its small system in Beaumont, Texas, $1 for each Gigabyte consumed beyond a preset cap.

There’s no unlimited-usage option in the Beaumont trial, according to Time Warner Cable spokesman Alex Dudley: “This is a test, and we want to see how the caps work.”

The usage caps, which include both uploads and downloads, will apply only to new customers. Subscribers will be able to check their current month-to-date usage totals on a Time Warner Cable Web site.

The monthly pricing (as part of a bundle) and limits for the three packages are: $29.95 for 768 Kilobits per second down and a 5-Gb cap; $44.95 for 7 Megabits per second down and a 20-Gbyte cap; and $54.90 for 15 Mbps and a 40-Gb cap.

Time Warner Cable said its goal with the trial in Beaumont — a system that serves about 90,000 voice, video and Internet customers in 15 towns — is to improve overall network performance, by reining in the biggest bandwidth hogs.

About 5% of the operator’s subscribers use more than 50% of total network bandwidth, according to Dudley.

Technology bloggers pounced, complaining bitterly that the move was greedy and destined to fail.

“TWC is Insane (and Anti-competitive),” posted Zatz Not Funny!’s Dave Zatz. (For more blogger comment, see “Volume Control,” page 30.)

One conspiracy theory: that Time Warner Cable is trying to pinch off all-you-can-eat Internet access to protect its core TV services, so that customers will have to pay through the nose to watch Internet TV and download movies from the iTunes Store.

“It is TW’s FU to the net-neutrality debate: If we can’t gouge both ends of the pipe, we’ll doubly gouge the one that is stuck with us,” Seeking Alpha blogger Jeff Jarvis wrote.

Leichtman was skeptical usage-based pricing would become the norm in the United States, even though it is common in Europe and elsewhere. “Consumers have clearly shown that the flat-rate, unlimited-usage model is what they prefer,” he said.

Other operators already have usage caps on their broadband service, but do not impose overage charges.

For example, Cox Communications’ “preferred” broadband package, which provides download speeds of 5 to 9 Mbps, limits per-month consumption to 40 Gbytes downstream and 10 Gbytes upstream.

“To date, our approach has been to work with customers who are significantly exceeding their limits via communications,” Cox director of media relations David Grabert said.

Comcast has a policy of issuing warnings to excessive users — and has on occasion disconnected repeat offenders.

While it does not define data thresholds, a Comcast subscriber who downloads more than 50,000 songs or sends out 40 million e-mail messages per month would trigger a warning to cut back on usage.

According to Comcast, far less than 1% of its subscribers use “excessive” amounts of bandwidth.

Spokesman Charlie Douglas said Comcast has considered setting a usage threshold of 250 Gbytes per month and has examined overage-pricing models. However, he added, the operator has no current plans to implement them.

HAMPERING HOGS

Instead, Comcast seeks a technology answer to the bandwidth-pig problem.

The operator is testing “protocol-agnostic” network management systems in two markets, hoping to find a way of checking unusually heavy Internet users that won’t run afoul of regulators.

Comcast’s trials began June 5 in Chambersburg, Pa., and Warrenton, Va., and will run for 30 days, followed by a similar test in Colorado Springs, Colo.

Comcast will test three different vendors’ bandwidth-management platforms, though Douglas declined to name the suppliers.

It has been widely reported that Comcast has used Sandvine’s system to throttle back BitTorrent-based peer-to-peer traffic.

In March, Comcast said it would abandon its current practice of specifically curtailing BitTorrent application traffic, and instead would work with BitTorrent and other peer-to-peer companies to find an alternative way of managing heavy users.

The company took that step after so-called net neutrality activists accused the cable giant of violating Federal Communications Commission guidelines for acceptable network management.

The new network-management systems Comcast is testing identify subscribers who are consuming more than their fair share of available Internet resources over a certain period of time. The systems then throttle back those customers’ Internet connections until their usage falls below established bandwidth thresholds or until network congestion ends.

Douglas said Comcast’s objective is to get a better idea of the optimal settings for throttling back heavy users, and of which vendor’s platform best meets its needs.

Comcast said it has notified customers in the test markets via e-mail, and posted a “frequently asked questions” document about the trials on its Web site.

September