Time Warner Cable is planning to start charging its Internet customers by the volume of their downloads and introduce overage fees if one goes over the cap. By doing this TWC hopes to protect its TV cable business from the threat of movie downloading. FreePress, the consumer group, is encouraging its members to sign an anti-cap petition and submit it to Congress. According to FreePress, TWC's behavior is anticompetitive and should be investigated.
TWC proposes a tiered system that starts with $15 a month for 1GB of downloads with a $2 penalty for every GB above the cap. The highest tier costs $150 a month with no cap. TWC is testing its new program in Texas and is planning to expand its trial to some of New York and North Carolina markets.
I think this article relates to the topis of ethical and social issues in information systems. Movie downloading has become largely available due to advances in IS. High Internet connection speed allows to download movies in minutes for free without having to pay extra for movie channels. This is hurting cable companies that have historically thrived on charging customers extra if they want to have movie channels, and they have to find a way to make a profit. Is it justifiable for TWC to introduce caps on downloads? Will customers stay with TWC or will they find a different provider? I think most customers would go somewhere else if they had a choice, but they don't always do since cable providers often enjoy a monopoly in the area where their services are provided. So, TWC would take advantage of its customers which I believe is unfair.
References:
1. Consumer Group Asks Congress to Investigate Bandwidth Caps.
http://blog.wired.com/business/2009/04/consumer-group.html April 10, 2009
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They've already rolled out this program to several communities and had good success with it.
ReplyDeleteMy question is, why do I need to pay a full cable bill, if I only watch Sponge Bob Square pants two hours a day?