Gaming and Tiered Internet Pricing

Back at the begining of the year I had read about Time Warner experimenting with different pricing structures for their internet access. At the time I thought little about it since it was just a test program and I didn't think it had a chance in hell of becoming accepted. Most people are smart enough to want to avoid overly complex billing systems. One only has to look at cellphones and credit card contracts to find out that the consumer loses when excessive legalse is added to a service.

However, other cable companies have recently started complaining about heavy users who they say are responsible for consuming more then 46% of their bandwidth. This wouldn't really be that much of a problem except that existing cable lines can't support the growing demand for internet bandwidth. New internet applications and an increasing amount of online games seem to be behind this trend and actually detract from the demand for traditional television. Some conspiracy theories say cable companies would really like to use tiered pricing to stop the increasing amount of television content going online.

In an effort to raise money for laying new cable line the cable companies say they need a more competitive pricing structure. Thus Time Warner and others are trying to pitch to their customers that most of them are only light internet users and they would pay less under a new pricing plan. This would be correct in the short term but eventually with the increasing popularity of the Internet everyone will become a heavy user. However, most cable companies would love to lay the groundwork for internet overage fees before this becomes the case and more people would protest the change.

One only has to look at the tier pricing Time Warner is using in the test area where a 5 GB a month plan would cost 30$ and a 40 GB a month plan would cost 55$. Most gamers seeing the options would obviously opt to have the 40 GB plan and think they were safe. But the problem is that if your techno savy enough to play online games then you also probably downloading music, movies, and other forms of media. What about streaming sites like Hulu and Youtube? The truth is that within five years almost no one is going to be able to survive on 5 GB a month.

I'll say again its obvious that the real goal here is to allow internet service providers to collect overage fees in much the same manner as cell phone providers. In the initial test program Time Warner only charges 1$ per 1 GB over your limit. But once overage fees are established you know they would quickly get out of control. Anyone who has ever had a huge overdraft fee on a bank account for a small overage amount knows what I'm talking about. Plus once fees enter into the picture most companies have no ethical problem manipulating circumstances to produce the highest potential overage fees.

P.S. Anyone want to guess the amount of bandwidth Age of Conan patches will take up this month alone? So far I'm guess 7 GB at least.