Go over your paltry monthly allotment of bandwidth and pay $1 per GB

Time Warner is starting a new internet access payment method trial in Beaumont, Texas that is a throwback to the early days of the Internet when you paid for the amount of data you sent or received rather than the simple flat rate virtually all internet users currently enjoy.

Time Warner told the Associated Press that it would begin placing limits for data sent and received over its cable broadband network in Beaumont. The limits would only be placed on new customers. What’s not clear is if after the test for new customers the limits would be applied to existing customers as well.

The cable company says that it will place limits on its service that vary depending on the plan customers opt for. Service with Internet and video or phone at $29.98 per month would give customers pokey downloads at 768 kbps and have an absolutely shameful per month limit of only 5GB. That means these customers couldn’t watch one single typical HD movie with Apple TV without going over their monthly allotment.

The fastest plan to be offered to new customers will provide downloads of 16 Mbps with a cap of 40GB per month. That cap equates to watching about 6 or 7 HD streamed movies per month. Of course that is assuming you only plan to stream movies from Apple TV or the new Netflix Roku box. The limits even apply to the web pages you surf, emails you send and information you upload.

The penalty for going over the pathetic monthly bandwidth limit is extreme -- $1 per gigabyte. That means Time Warner plans to charge customers who exceed the bandwidth cap a whopping $6-$8 more per HD movie streamed from Apple TV or a similar service.

Time Warner defends its move to bandwidth limits by saying that 5% of the company’s customers use up to half of the available network capacity.

Kevin Leedy, time Warner Cable’s executive vice president of advanced technology told the Associated Press, “We think it's [bandwidth limits] the fairest way to finance the needed investment in the infrastructure.”

Time Warner first announced its plans for the test in early January 2008. To many this sounds like nothing more than an underhanded attempt to squeeze more money out of a subscriber base at the moment that streaming video rentals are starting to take off.

If Time Warner is successful in slipping this plan past its subscribers and other cable providers follow suit, this could be a serious blow to streaming rentals. Then again, this could be just the move that DSL companies have been hoping cable companies make. Let the exodus begin Time Warner customers.

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