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AOL to Cable Subscribers: The Party's Over

Tuesday, April 9, 2002

As noted here in the past, the cost of broadband services has been steadily rising for some time now. In a move that is sure to cause a tremendous backlash and probably a few class action lawsuits, Time Warner announced that they will be charging their cable subscribers for the bandwidth they use over a certain amount.

Now, we'll be the first to admit that selling a finite resource on an "all you can eat" basis makes very little sense. The problem, however, is that Time Warner sold their customers one service and will now be providing them a completely different one.

This isn't the first time cable companies offering Internet access have come under fire for bait and switch tactics. When broadband cable was originally rolled out in most areas for instance, it was advertised as unmetered, unthrottled bandwidth with up to T1 speeds. Once the cable companies had signed up a sufficient number of subscribers, however, they dropped the "unthrottled" adjective, limiting each subscriber to 1/3 or 1/2 of T1 speeds. Lawsuits followed.

Even if the cable companies hadn't reversed direction on their billing practices, consumers have some genuine concerns about the new billing rates. With the continuing threat of viruses and the advent of spyware, there are applications running on many computer systems using up great amounts of bandwidth without the user's knowledge (much less consent). This means that a customer's computer could be racking up a bill while they are asleep or at work.

Obviously the cable company shouldn't have to pay the cost of bandwidth used by customers' computers which are infected with viruses. However, the only other solution would be to further limit the amount of bandwidth a customer can use at any given moment. An observant person might note that this would then bring cable modem speeds even closer to traditional modem speeds, making it difficult to justify the higher price tag of cable modem services.

This news is portentous to all broadband users. Every time a company in the industry as large as Time Warner raises its prices or changes it billing, other companies seem to follow suit shortly after.

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