Harold, we over at ThirdPipe have the same concerns. Fact we see a most ugly scenario where TW would do nothing essentially other than rake in the extra fees but do nothing about the congestion. It smacks of hush money for the abusers all because TW set the bar too low on the rates.

The other problem is futures. We have a nascent TVoIP industry attempting to take hold. Metered services would squash that in a heartbeat. But again if the bar is set too low then folks pay a tad more and now 95% of the users are using 100% of the network. So you're back to square one.

We need the equivalent of the Railroad Act of the 1800's. Only for telecom.

From a Time Warner Statement:

“Company spokesman Alex Dudley said the trial was aimed at improving the network performance by making it more costly for heavy users of large downloads.

Dudley said that a small group of super-heavy users of downloads, around 5 percent of the customer base, can account for up to 50 percent of network capacity.”

So Time Warner plans to make it “more costly”, for what? Using the capacity paid for? A common download broadband speed is 4 Megabits per second. Although the fine print explains that the connection is provided on “good faith” terms - which means it can be interrupted or downgraded at will by Time Warner, the marketing and advertising designed to sell the connection is clear - the connection is made intentionally attractive as having 4 Mbps of available, maximum capacity.

It's like buying a car with a top speed of 90 mph. One may rarely drive that fast, but that's what was paid for and expected to be available as desired.

So what's the problem with using the full capacity of the broadband connection paid for as well? Why are these customers instead classified into the “heavy user” category?

The answer is this is not the customers' problem. It's Time Warner's problem for overselling the capacity in the first place. As stated above, Time Warner complains that 5% of the customers use up to 50% of the capacity. So why didn't it build the system network large enough to provide what was sold?

Do 5% of the customers of a 90 mph car that actually drive 90 mph cause the car company a problem? Even if all car customers drove at 90 mph, why is that a problem for the car company? The problem occurs only if the cars don't perform at 90 mph as sold, and even then, it's not the customers' problem.

Now that users are starting to use more capacity per customer, Time Warner is backpedaling from its marketing promises and claiming “heavy users” must “pay more”. Why? Because they're using all of what was sold to them, while before they were using only part of it?

Instead of Time Warner providing the original broadband speed necessary to serve ALL customers on the network at the MAXIMUM SPEED SOLD per customer, it is now planning to single out customers who actually use the maximum speed and raise the price - again, just for using what they were sold, like driving the car at 90 mph instead of 50 mph.

Why shouldn't the Federal Trade Commission or the Federal Communications Commission intervene in on the basis of deceptive business practices? If all cars were sold as 90 mph cars but only 5% of them could actually go that fast, wouldn't that be deceptive for the other customers who cannot go 90 mph as the cars were sold? And if the car company attempted to charge extra, after the fact, so all cars could go 90 mph, wouldn't that be deceptive as well?

If certain customers are indeed exceeding the maximum 4 Mbps capacity of the connection as originally sold, that's a different question and perhaps they should pay more. If so, then that should be the starting, floor point for new, higher metered rates above 4 Mbps - not a retroactive starting point that penalizes existing customers who are just now starting to use the full speed of the connection as sold, up to 4 Mbps.

Another way to ask the question is, if Time Warner insists that “heavy users” should pay more, then why shouldn't “light users” get a refund - or lower rate - for not using all of what they paid for in the first place?

Finally, it is essential to understand that Time Warner is a landline monopoly or duopoly in many places, which explains why it can casually announce price increases that violate existing contracts by raising prices rather than providing the capacity sold.

While not an explicit violation of net neutrality by direct, selected content manipulation, this policy could become a serious implicit violation of net neutrality by restricting certain high-volume uses through prohibitively high prices assessed retroactively in areas where there are no competitive alternatives.

The other problem is that this is a very blunt instrument. The p2p bandwidth hogs are largely a problem during peak usage times. In the middle of the night, light users are not affected by bandwidth hogs. A better approach would be to have a BW cap that only applies during certain times (e.g. any traffic between midnight and 8 AM is uncapped). This is a better way to optimizing the service experience for light users and bandwidth hogs.

I wonder if another way to look at this is for the broadband providers to charge 'carriage fees' to those ecommerce companies who increasingly use rich media as part of their offerings? Today, cable charges carriage to QVC, HSN, ShopNBC etc; cable pockets that money. Why should EBay, Amazon etc have a 'free ride' into the home when the other traditional home shopping company's have to pay? Wouldn't those broadband carriage fees be sufficient to fund the broadband providers networks?

Barry, that is the argument for Whitacre Tiering. You can see my economic rationale for opposing it here:
http://www.wetmachine.com/i...

Specific to ecommerce, with expanding bandwidth and video capability available via broadband, perhaps the TV ShopNets should abandon cable carriage all together and become broadband home shop nets. Together the big 3 TV home shopnets pay $500-$600M annually for carriage. They shut that off and watch local cable bills increase