Time Warner: Download Too Much and You Might Pay $30 a Movie

Let’s say you buy a new Apple TV because you want to rent high-definition movies. And say you are about to move to Beaumont, Tex. If so, you might wind up paying Time Warner Cable as much as $30 when you download a movie using its high-speed Internet service.

Time Warner said on Wednesday that it was going to start testing a new rate plan in Beaumont that would limit the amount of bandwidth each customer can use each month before additional fees kick in. Alexander Dudley, a Time Warner spokesman, said that the exact terms had not been set, but that packages would probably offer between 5 gigabytes and 40 gigabytes a month. The top plan would cost roughly the same as the company’s highest-speed service, which typically runs between $50 and $60 a month.

Mr. Dudley said the company was still working on what to charge people who exceed their limits, but he pointed to Bell Canada, which has imposed bandwidth limits on its customers. According to its Web site, Bell Canada charges as much as 7.50 Canadian dollars ($7.42) for each gigabyte when customers exceed the 30-gigabyte limit on a plan that costs 29.95 Canadian dollars a month. Since the average high-definition movie is 4 gigabytes to 5 gigabytes, that would mean a charge of at least $30 a download for customers on a plan like that who were over their limit.

On more expensive plans, the over-limit charges at Bell Canada are as low as 1 Canadian dollar a gigabyte. That would represent a $4 to $5 charge for an HD movie for people over their monthly limits. Standard-definition movies are typically 1 gigabyte to 2 gigabytes.

Mr. Dudley said that Time Warner wants to test bandwidth limits to crack down on a minority of customers who are heavy downloaders. Indeed, only five percent of customers use half of its total bandwidth, he said.

I spoke to Dave Burstein, the editor of DSL Prime, and one of the most knowledgeable people around on the economics of high-speed Internet service.

He argued that Time Warner’s interest in bandwidth caps had little to do with its own costs and a lot to do with the emergence of movie downloads and streaming television programs over the Internet.

“The smart people at Time Warner are scared of people watching TV directly over the Internet,” he said. “‘Lost’ and ‘Desperate Housewives’ look better over the Internet than they do on digital cable.”

Moreover, the marginal cost of extra bandwidth is very small, he said. For broadband Internet service, 80 percent to 90 percent of the costs are fixed regardless of use. And the all-in cost of a gigabyte of use is about 10 cents or less. Most cable and phone systems keep their costs secret. Mr. Burstein cited an interview he conducted two years ago with Tony Werner, then the chief technical officer of Liberty Global, John Malone’s collection of European cable systems. Costs in Europe, he added, are likely to be a bit higher than in the United States.

Mr. Dudley disputed this view. “This is not targeted at people who download movies from Apple,” he said. “This is aimed at people who use peer-to-peer networks and download terabytes.”

Reaction to Time Warner’s test has been somewhat mixed. Some, of course, see this as a price increase that gives mainstream users the added stress of keeping track of bandwidth use.

Others suggest that it is a more straightforward pricing system that does make heavy users pay more, especially since some Internet service providers are quietly slowing down or otherwise restricting some service, most notably to users of the BitTorrent file-sharing protocol. That’s why Public Knowledge, a group that is certainly not afraid to criticize telecom companies, put out a statement praising the test:

Time Warner’s pricing test could be a welcome development for consumers and for the cable industry. Consumers will have a better idea of how they are using their Internet connections and will have the flexibility to adjust according to the rates. Cable companies could be able to better manage their networks and costs, so they won’t have to resort to cutting off customers for exceeding phantom usage levels or throttling some applications.

Whether cable users agree, or they start to complain because of occasional surprise bills for $30 movie downloads, depends on how Time Warner actually structures its rate plans.

“A big part of what we are doing is to test customer feedback,” Mr. Dudley said. “We want our customers to feel like they are getting a good value.”

source: http://bits.blogs.nytimes.com/2008/01/17/time-warner-download-too-much-and-you-might-pay-30-a-movie/?ref=technology 

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okay, so aside from the general feelings of outrage I did have one very specific question.  The article states, "...the average high-definition movie is 4 gigabytes to 5 gigabytes...".  How can that be true?  ...or, if that's true why does blu-ray and hd dvd need soo much space (i.e. every saying that hd dvd's 31ish gigs not being enough and needing blu-ray's 50ish gigs).   I'm confused and tired, someone help me.

I would quit my cable company in a heartbeat if they try to do some bullshit like this.

See, this is one of the reasons that I get in the car and hop over to Blockbuster when I want to rent a movie.

But about the question of why BR/HDDVD are necessary, I believe that a 2-hour SD only takes about 1-2 gb. On a DVD, this means they have 7 gb left for extra content. For an HD movie using 4-5 gb, there isn't much room for extra content on a DVD, necessitating more storage.

 i am at a loss.  "extras" take up 90% of the room of a blu ray disc.  i personally hate extra features.

Answering your question first. One of the ironies of digital distribution of data is that its about compressing, or decreasing the amount of data sent. That is the strength in the format. The downside is signal degradation, and hardware limitations. In other words the cable signal you received ten years ago for your favorite channel took up perhaps ten times the bandwidth of the same digital signal today.

Obviously it serves a digital distributors best interests to compress their data, or minimize the amount of data that must be sent. So they use digital trickery. For instance for each frame of video they might only update twenty percent of the picture. The rest of the static frame may not be refreshed. Technically there is no reason to do it, and nobody actually notices. However in doing this data might only need to be twenty percent of the average of an otherwise piece of uncompressed data.

Technically you are right in where your going the space used on the newer formats is mostly superfluous. However there are subtle differences in quality, and more specifically functionality. Further more space on discs has rarely been a issue for the industry did you know that there is such a thing as double sided DVDs almost nobody uses them, but it's just cheaper I suppose to print up a second disc if one is not enough.

Were I in this market I suppose I would be looking into alternate forms of internet access. We already pay a premium for the service. Further more the promise of the service is the ability to download large volumes of data. Telling consumers they can use so little is like saying we can get you there faster, but once your there you cannot do anything. That said what would be the use of the service at that point. Better to go back to cheaper phone service providers, or look into wireless networks.

I'm glad I'm not using Time Warner...

I'm glad I'm not using that service either. I'd have to pay hella for what I dl/ul. At one sports site I visit this is what I've Uploaded in the past 4-5 weeks since I got my fiber optical connection (100mbit connection FTW!) installed (smbu2001 - 1.22 TB, yes terabytes!), haha :) not even counting what I downloaded!

 Spiderman 3 in 1080p with five 5.1 lossless audio tracks takes up 43 GB.

i dont know the exact specifics, but i believe it is how the data is stored. a dvd will rip to a hard drive as an .avi as 700-1,400 mega bytes, hi def movies are 2-4 gigs as an .avi file. the extra space is not for extra content though, it just has to do with media type (Ie disk/ hard drive). a iso is still the exact same size as it would be on disk.

edit: some more info from wiki: "As is typical for disc images, in addition to the data files that are contained in the ISO image, it also contains all the filesystem metadata, including boot code, structures, and attributes." it looks like the disk needs additinal info on how to play the files (chapters and menus) where as non disc formats do not.

I was going to point out how wildly inaccurate that statement was, but you beat me to it.

It's all about the bitrate. Superbit DVD's tend to use about 8gb for a film whatever the length. A HD movie needs about 4x as much space as an SD movie to maintain the same image quality (at a higher res obviously). Therefore, a 2 hour movie in HD could use as little as 4-5gb, but the image quality would be terrible.

EDIT: That would be assuming they used the same codecs, which is admittedly unlikely as HD formats support more (and better) codecs. It's all theoretical, but 4-5gb would look shit even in VC-1 or H.264.