Shooting Yourself in the Foot: Time Warner's Usage Caps

Last week, we learned from a leaked memo that Time Warner Cable is preparing to roll out usage-based broadband service tiers to new customers in Beaumont, Texas. The company has since confirmed its plans, with monthly bandwidth caps set at 5GB, 10GB, 20GB and 40GB. Customers who exceed their cap would be hit with an undetermined per-gigabyte charge, but Bell Canada’s overage fees, which range from CAN$1.00 to CAN$7.50 per gigabyte, may give some inkling of where Time Warner’s overage fees will end up. Usage caps are a short-sighted response to capacity constraints, one that’s likely to hurt the company more than it will help in the long run–especially with new broadband options on the horizon.

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