ECA Pleased To See Time Warner Back Down on Price-Gouging Bandwidth Caps

Consumers won a big victory this week as Time Warner Cable backed down on a plan that would have placed a cap on bandwidth usage for broadband customers, while at the same time charging users a wildly inflated price per gigabyte.

When Time Warner announced recently that it would expand its broadband caps into New York and North Carolina, Ars Technica reports that the plan immediately ran afoul of Rep. Eric Massa (D-NY) and Sen. Chuck Schumer (D-NY). The two lawmakers helped torpedo Time Warner’s scheme.

The Entertainment Consumers Association, which also lobbied vigorously against the Time-Warner plan, was delighted with the cable provider’s decision to back down. ECA VP and General Counsel Jennifer Mercurio commented on the outcome:

We’re pleased that Time Warner has come to their senses on this issue… Having worked against caps and tiered pricing for over a year, and being the leading consumer rights organization to aggressively defend the American public on this issue, we’re glad to see our efforts pay off even as we continue to work with Senator Schumer, Congressman Massa, and others to stop this type of consumer price gauging moving forward.

When Mercurio mentions price gouging, she’s not kidding. Price comparison done by Nate Anderson of Ars Technica show how blatantly Time Warner planned to rip off its customers:

As TWC expands its test markets for the data caps, it offers plans with 5GB of monthly data transfer for $30. Plans with 40GB of data go for $55… That base rate works out to a truly jaw-dropping $6 per GB per month, and it’s so far out of line with competitors’ plans as to shock even the most cynical heart.

Take AT&T’s DSL, for comparison… AT&T DSL comes out to 9¢ per GB. Verizon’s fiber-optic FiOS system… this comes out to $.11 per GB. Upgrading to the much faster 50Mbps service for $144.95 a month still means that the charge per GB is only 36¢.

The situation is similar at other cable operators. Comcast offers Internet service starting at $42.95 per month and has a 250GB cap in place; this works out to 17¢ per GB.

FULL DISCLOSURE DEPT: The ECA is the parent company of GamePolitics.

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  1. axiomatic says:

    If cable companies want to charge rediculous prices, then let them. But then there HAS to be an end to the monopolies in certain areas if they want to proceed with this pricing lunacy. They can’t have it both ways.

    So as long as the FCC ends the monoplies in certain areas where cable is the only choice I have no problem with Time Warner pricing themselves out of the game. Good riddance. I hope they choke on the short term profits that will eventually lead to long term bankruptcy at TW.

  2. dedre says:

    Yikes…the capitalist in me says "yea fair-use would kill them from competition with rates that crazy, let them eat cake and see if they live" but the internet-archivist in me screams "WTF!!??!??OMFWTFFBBQ!!!11"

    I’m glad my internet is county owned and operated, the only time they had a problem with me is when my download settings were still on from visiting my mom’s (and she had dish internet when it was still new and cool) and I ended up essentially filling their packet queue because my bandwidth settings were set to god-like proportions; they just wagged their finger, reset me, and we both went our happy ways since (and I seriously download at least 100Gb/month)

  3. Michael Chandra says:

    Judging from the fact OnLive (which has limited potential) needs a 1.5 Mbs (or is it MBs?) connection, I agree it runs into severe limitations with this kind of ‘deals’.

  4. Dustin1986 says:

    When I heard about these caps I was worried about my netflix instant streaming and buying games on Steam, but then I realized it’s eveb worse than that. This plan wouldn’t just kill off what I have now, it would also kill the things that haven’t been invented yet. What about that onlive service that everyone’s so excited about? How could anyone get a bandwidth intensive product off the ground in that environment?

    Just imagine, five years from now, using an internet that’s not any better or more useful than the one we have now. That’s depressing.

  5. Clever says:

    I always have a jealous chuckle when I hear about bandwidth caps in other countries. We have bandwidth caps for everyone, including most businesses, here. Could you imagine paying 15 cents per MB when you went over your limit when that limit is around 50GB with no warning? Of course you can always just be shaped down to dial-up speeds…

    I pay $140 AUD for ADSL2+ with a 55GB limit (they don’t even offer higher)…that’s $2.54 per GB….if they cap us on the NBN *shakes fist*…

  6. SeanB says:

    My upload/download combined always exceeds 100GB per month, and often exceeds 130. I pay a flat rate per month, every month, and have a 8mb/1mb line that never falters.

    I’d hate to live somewhere that politicians had to get involved to keep that going.

  7. Vake Xeacons says:

    I think you underestimate TW. They’re pretty tough.

    How do you think this plan got so far? Unfortunately, there are still those who don’t understand what caps are. Hell, they don’t even know what a Gig is, so they have no idea how bad they’d get gipped. And they’d pay it. We’d all pay…


  8. shady8x says:

    I really don’t see a problem with Time Warners plan to rip off its customers so long as the mentioned competitores are competing in the same area… this would have simple killed Time Warner internet. The End.

    Now it will continue to compete despite the fact that Time Warner is apparently evil…

  9. Murdats says:

    so downloading those 10-15gig steam games you purchased while watching TV online, using voip and watching youtube videos. all at the same time as 3 other people in your house – yeah no one but people using bittorrent uses any bandwidth right?

    and how are online HD movie and tv services meant to take off when no one can use them because they are worried about their caps? this is the problem we have in Australia (with capped internet, and increasingly uploads are counting towards that cap)

  10. shamrock says:

    This is an interesting story. I think we are all fooling ourselves if we think that this is NOT the future. Capping bandwidth? Think about this. Is anyone here willing to share what they do with their bandwidth? Like tally up what it was you were downloading? The reality is, that most of the bandwidth usage is for torrents. You know, the "free" stuff. I know there are some legit means of driving up your bandwidth per month, but let’s be serious. Let’s be good boys and girls and send our governments our bandwidth usages each month. I’m just saying, at some point, they have to have a solution to illegal downloads. I partially support them going in this direction. Again, they have to control the tap.

  11. Andrew Eisen says:

    No one puts a cap on my consumption of porn!  Ain’t no way, ain’t no how!


    Andrew Eisen

  12. Aliasalpha says:

    Wow, I feel like my ADSL2+ is almost decent value now. I’m paying the equivelent of us$57 a month for 160gb. Then again I’m getting screwed out of a lot of that because the bandwidth is time divided, I get a peak & off-peak period the off-peak is from 3am to 10am every day with a data allowance is 120GB out of my 160…

    Its not too bad really, I just queue large downloads to happen overnight, its just annoying that I have to wait until mmorning to watch my newly downloaded porn

  13. Alareth says:

    Just a quick note, AT&T didn’t buy Bellsouth.  When AT&T went up for sale, SBC bought the rights to the name and did an across the board rebranding of all it’s holdings to AT&T.


    Same company with all new signs and letterhead.

  14. tollwutig says:

     IF I am not mistaken Greensboro, NC also is a virtual TWC monopoly.   I know that TWC has all but bought out every Cable company in NC and their only real competitor in highspeed internet is DSL and everyone in NC thinks At&T is evil for buying BellSouth (who wasn’t highly thought of).


    Now given the information I’ve found in these articles it also explains why 3 local channels here in Charlotte have been in dispute in the past year over carrying said channel on its cable network.   TWC has made sure  everyone KNEW it was the channel’s fault because TWC put out an ad blizt to the public about it.  The channels also made public service announcements but at the same time I highly doubt TWC allowed those announcements to get through to their customers.


    Basically TWC offered each channel substantially LESS money to license carrying the channel through cable, claiming with the switch to Digital signals it was incurring more costs on its network.  

    Now given this DISH & Direct didn’t do such a thing but then they have more HD channels in the first place.


    This just strikes of "we want our monopoly on TV & Internet back!!!"

  15. ZippyDSMlee says:

    Its not even that normal surfing can take as much as 10-20GB a month and thats wihtout heavy audio/video useage they want to rake in money comming and going at the cost of doing whats right…


    Gore,Violence,Sexauilty,Fear,Emotion these are but modes of transportation of story and thought, to take them from society you create a society of children and nannys, since adults are not required.

  16. JC says:


    Now, I still rather see about legislation looming in the air to deter them from even THINKING about trying this…

    There’s a conflict of interest when a content owner (TWC) has control over other distribution methods (BT, streams, etc) and offer the same content and basically extort more money from you for choosing another method.

    I just hope those NY guys keep on the prowl and see about legislation existing regardless. As some have said, they’ll just wait for the smoke to clear… I rather not be the case and wish companies would just play nice… but *sigh*…

  17. ZippyDSMlee says:

    Ya comiecast is doing it too, TWC is just waiting for the smoke to clear before doing it again…… ain’t nothing gonna change till  big brother forces them to change… or a few class action lawsuits…


    Gore,Violence,Sexauilty,Fear,Emotion these are but modes of transportation of story and thought, to take them from society you create a society of children and nannys, since adults are not required.

  18. axiomatic says:

    But they didn’t. They have already said it will rise again. So all that is happened is that it is delayed until they figure out a way to spin it so we consumers don’t know its happeneing, or hide it in some other legal double talk.


  19. Cerabret100 says:

    Comcast has a cap?  that’s news to me.

    Of course i doubt many people approach the 250GB mark on a regular basis.

  20. Valdearg says:

    Honestly, the internet really shouldn’t be controlled by any of these companies. They are there to provide access, and we gladly pay them for it. But moderating and limiting the usage, coupled with charging thier customers more and more money is just wrong.

    IMO, internet access should be free, personally. Every household in America should have free, unfettered access to the web. However, that would require the government to take over ISP’s to provide those services, and, we all know that certain aspects of society would throw a fit. Not that I would blame them.

  21. Pete M says:

    As noted by others, there were so many inconsistencies in Time Warner’s plan and press releases. They claim they pursued this venture in an effort to defend the low-bandwidth users and to seek capital to upgrade their infrastructure. Yet, there own claims proved that only a small minority were actually overusing their tier. Also if the intent was to go to consumption based pricing, why would the same idea not apply to their cable business (pay for only the channels you use/time you watch)?

    It is no coincidence they chose a city like Rochester either. The lack of FiOS and only small market share of Frontier made it an ideal test location so they could tout the numbers for justification of further integration. Best of all is their release to the FTIC regarding "now is not the time to enter into a debate of Net Neutrality". In their viewpoint, this is supposed to have after the precedent has been set and their foothold solidfied.

  22. Valdearg says:

    As a customer of TWC, let me just say "PHEW!" Caps like that are just wrong. We pay a monthly fee already, and just because we happen to use it more, it doesn’t mean that we should be charged more, especially with that pricing structure. WTF?

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