Proposed changes in the cable provider's fees for Web use could crimp demand for download services and hurt Net innovationDone right, a plan by Time Warner's (TWX) cable division to charge higher fees for heavy Internet users could become a boon for most Web customers. Done wrong, the new pricing could slow growth for fledgling video download services and discourage Web entrepreneurs from starting their own bandwidth-intensive businesses.
Time Warner Cable plans to test a multitiered price system for high-speed broadband service later this year. New customers in the trial area of Beaumont, Texas, will be charged different rates based on the amount of data consumed in a month, much like a cell-phone plan charges based on minutes used.
Some consumer groups say the proposal could benefit average consumers who use the Web moderately, for such services as e-mail and the occasional YouTube (GOOG) video, rather than frequent network-clogging downloads. Tiered pricing would provide many users faster service by forcing the small percentage of Web surfers tying up the network to pay a premium.
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