Time Warner to Test Internet Billing Based on Usage

Subscribers in Beaumont, Texas will be the first of Time Warner’s Internet customers to be billed based on bandwidth usage, rather than a flat fee. The trial, to begin later this year, is part of a strategy to ease network congestion and offer higher quality service to all its subscribers.

Time Warner believes consumption-based billing will primarily impact only heavy users, which account for about 5 percent of all customers. Downloading of video and large media files are to blame for slowing network problems, and the company hopes the new billing system will better manage the small percentage of users that account for nearly half of the total network’s bandwidth.

With 7.4 million residential Internet subscribers, Time Warner wants to avoid confusing customers should the trial prove successful and become implemented nationwide. The company says most subscribers won’t notice the difference and that the move is necessary to meet the growing demand for bandwidth as video downloading becomes more popular.

Under pressure to keep pace with growing demand in a cost-effective manner, other Internet service providers may likely adopt similar billing plans based on the outcome of the New York-based cable operator’s tests.

---Randy Swisher Editor, The Digest