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Time-Warner Cable (TWC) is the largest high-speed Internet service provider in Central Texas. Their broadband residential access product is called “Road Runner“. In April 2009, news reports revealed that TWC intends to make significant changes to the “Road Runner” product plans and pricing. Many Austin-area residents are unhappy with the proposal.

This web site contains information about what TWC has proposed and why many customers consider this a problem. Elsewhere on this web site you can find out about actions you can take, and resources where you can learn more.

The Situation

April 16 update: TWC announced today they are putting the metered billing trials on hold, but proceeding with the “customer education process.”

TWC has proposed adding bandwidth caps to all Road Runner residential broadband plans. The cap would be a maximum transfer amount per month, with an overage charge if you exceed your cap. At this time, Road Runner plans are unlimited (no caps).

The current and proposed pricing plans are shown below:

Current Proposed
Plan Name Speed Price Cap Plan Name Speed Price Cap Overage
(unknown) 768 Kb/sec $15/mo 1 GB/mo $2/GB
Lite 768 Kb/sec $27/mo none Lite 768 Kb/sec $27/mo 10 GB/mo $1/GB
Basic 3 Mb/sec $35/mo none Basic 3 Mb/sec $35/mo 20 GB/mo $1/GB
Standard 7 Mb/sec $40/mo none Standard 7 Mb/sec $40/mo 40 GB/mo $1/GB
Turbo 15 Mb/sec $50/mo none Turbo 15 Mb/sec $50/mo 60 GB/mo $1/GB
Super 15 Mb/sec $75/mo 100 GB/mo $1/GB

This table shows, for instance, if you currently are a Road Runner “Standard” plan customer,  the proposed changes would not affect your monthly cost or download speed,  but you would now have a 40GB/mo usage cap with an additional $1 charge for each additional 1GB of usage.

TWC has identified four cities across the nation to test its metered Internet pricing. Trials will begin in Rochester, N.Y. and Greensboro, N.C. in August. Trials will begin in Austin and San Antonio in October. TWC plans to run the trials for three months in a city before commencing overage charges.

The Problem

One of the main concerns raised by the TWC plan is that it could cost people additional money—maybe a lot of money. Standard definition video requires about 1GB/hour bandwidth. That means there will be about 1 gigabyte of data transferred for every hour you watch video. So a 20GB cap means you have sufficient bandwidth to watch about 20 hours of video.

If you reach your usage cap and try to stream a movie across your Internet connection, TWC is going to assess a surcharge. You’d pay about $2 for a typical movie. Most people believe that a $2 surcharge for watching a movie is completely unreasonable. (Remember, that’s on top of whatever costs you paid to the content provider to get that movie.) High-definition video is worse. It uses about 2GB-4GB/hour, so that surcharge could jump as high as $8 for a single high-def movie.

Also, a lot of people are concerned that the TWC pricing plan will throttle innovation on the Internet. That’s because new, innovative Internet services present the possibility of using larger amounts of bandwidth. The proposed pricing will prevent “early adopters” from trying out these new services, making it unlikely they will ever have a chance to move into the mainstream.

Other people have raised the concern that TWC may be using their position as the premier broadband provider in Central Texas to manage the competitive threat that Internet video poses to cable television, their most profitable service. Nielsen reports that the average American watches over 127 hours of television a month. Broadband caps would prevent a significant shift away from conventional video to Internet-based viewing. Stacey Higgenbotham notes that the proposed pricing is structured to ensure that revenue would not be impacted by such a shift.

That’s why people are upset. They believe that the TWC plan will cost us more and harm innovation.

Take Action

Now that you understand the issue, we have some ideas on how you can take action.