Time Warner Cable To Start Per-Gigabyte Fee Trial On Thursday - Company begins to implement caps and 'over use fees'

I broke the news in January that Time Warner Cable was planning to test overage charges in the Beaumont, Texas market (once Time Warner saw our leaked memo, they pretended the plan was to announce the project all along). The Associated Press is now confirming that the trial, originally slated for the first quarter, will begin this Thursday. The trial will apply caps ranging from 5GB-40GB across the company's existing tiers, charging users $1 per each additional gigabyte consumed. Only new customers will be charged, but not for the first two months. All customers will have access to a new bandwidth meter.

We think it's the fairest way to finance the needed investment in the infrastructure,"

-Time Warner Cable, on their new "over use" fees

The trial will apply a 40GB cap on their fastest 15Mbps tier, an idea I'm sure the folks at Verizon are thrilled with, given that tier is supposed to compete with their uncapped FiOS product. According to the Time Warner Cable memo from January obtained by Broadband Reports, the trial is, in part, an effort to perfect the marketing of per-byte billing:

Following the trial, a determination will be made as to whether or not existing subscribers should be charged. We will be testing technical backend as well as Marketing and Messaging to customers. We will use the results of the trial to evaluate results for possible future nationwide rollouts.

I also broke the story that Comcast is exploring overage charges. However, that plan will come with a more reasonable 200GB cap, while charging customers a $15 penalty for each 10GB over that cap customers travel.

A Time Warner Cable spokesman says this is "the fairest way to finance the needed investment in the infrastructure." Does applying a 5GB cap on a $30, 768kbps tier strike you as fair, if it's the "bandwidth hogs" causing congestion issues? Time Warner Cable claims that 5% of subscribers consume half of all network resources, yet you'll notice that instead of capping just those users or forcing them to a business tier, they're taking aim at all users.

That's because despite what public relations officials claim, the push toward "over use fees" has less to do with fairness and more to do with increasing already plump revenue while cashing in on competing video services (Vuze, AppleTV, piracy). Incumbent carriers have very healthy profits under the existing flat-rate pricing system. More than enough for upgrades, the latest and greatest traffic shaping gear, and absurd executive compensation.

Don't believe the bandwidth armageddon hype.