| NEW YORK
NEW YORK Jan 16 Time Warner Cable Inc TWC.N
said on Wednesday it is planning a trial to bill high-speed
Internet subscribers based on their amount of usage rather than
a flat fee, the standard industry practice.
The second largest U.S. cable operator said it will test
consumption-based billing with subscribers in Beaumont, Texas
later this year as a part of a strategy to help reduce
congestion of its network by a minority of consumers who pay
the same monthly fee as light users.
The company believes the billing system will impact only
heavy users, who account for around 5 percent of all customers
but typically use more than half of the total network
bandwidth, according to a company spokesman.
Slowing network congestion due to downloading of large
media files such as video is a growing problem for Time Warner
Cable. The company said the problem will worsen as video
downloading becomes more popular.
But the move could prove controversial. Unlike with utility
bills such as the phone or electricity, which have
traditionally been based on usage, U.S. high-speed Internet
subscribers have come to expect a fixed monthly charge. An
Internet bill typically only varies based on the speed of the
consumer's Internet access.
Time Warner Cable, which has 7.4 million residential
Internet subscribers, is hoping the move will not confuse
consumers if introduced nationwide and is planning a trial
"Largely, people won't notice the difference," said the
Time Warner Cable spokesman. "We don't want customers to feel
they're getting less for more." News of Time Warner Cable's
plans was originally leaked on an online industry forum
Other cable operators may follow Time Warner Cable's lead
and phone companies such as Verizon Communications Inc (VZ.N)
and AT&T Inc (T.N) are likely to be watching the New York-based
cable operator's plans.
As U.S. consumers have become more used to streaming and
downloading digital media over the Web, their Internet service
providers have started to come under pressure to be able to
keep up with growing demand in a cost-effective manner.
Comcast Corp (CMCSA.O), the largest cable operator with
around 13 million Internet subscribers, has been accused by
consumer groups of blocking Web traffic moving across its
networks, prompting a notice of inquiry by the Federal
Communications Commission earlier this week.
Comcast denies it blocks any Internet traffic saying it
uses bandwidth management technology to help improve the
customer experience but which may slow down some file
(Editing by Lincoln Feast)