"Bandwidth Cap" is a misnomer... and it's illegal

The Wrong Term

For much of this debate about Time Warner's consumption-based billing plan we've been using the wrong terminology -- bandwidth caps.

If you consider my previous posts (yes, I mis-used the term as well), bandwidth is merely a measure of the network speed and that has always been capped. Time Warner sells access levels based on speed, standard and turbo at rates of 10 Mpbs and 15 Mbps respectively. By the very definition of access speed the bandwidth is capped at a maximum. So our focus isn't on bandwidth caps so much as it is on data consumption.

Consumption-based Billing Is Illegal

Further consider that Time Warner only has a right to charge fees for what it owns or is licensed to distribute. This means that Time Warner has the right to charge fees for access to its Internet backbone infrastructure, but only access. The content of the Internet may or may not be licensed to Time Warner and certainly everything found online is not owned or licensed to Time Warner.

According to various sections of the U.S. Copyright Law, it would be massive copyright infringement (punishable up to $150,000 per infringement and arguably on a scale large enough to be considered criminal) for Time Warner to charge subscribers for content from the Internet without either being the copyright holder or a licensed distributor.

It only follows that consumption-based billing is equivalent to charging for data, not access -- data for which Time Warner does not own or have a legal right to redistribute and charge a fee. Therefore consumption-based billing is outright illegal.

I am not a lawyer by any means. I have spent a fair amount of my life in the legal industry and have participated in several mock trials in addition to being an active proponent of open source software and Linux, so I am quite familiar with copyright law in the United States of America and I'm a bit surprised this hasn't been brought up before. I'd be interested in hearing the explanation from a judge as to how this would not fall under the purview of copyright infringement.

[Update 4/8/2009 12:07PM]

To clarify, I am saying that because Time Warner is effectively charging for content (data downloaded) and not for access to that content, they are in violation of the content owner's rights to monetize their own works since I'm sure TWC is not paying anything out to the content owners for the fees they collect in overage charges.

If TWC however changed their data usage cap to a time usage cap like AOL did back in the day, then they'd be in the copyright clear. You would now be limited by the amount of time you spent online, not the amount of data you download (which doesn't impact bandwidth at all and doesn't contribute to any perceived "crisis").

For example, the low tier might be 60 hours a month for $20 (about 2 hours per day) and the high tier would be 300 hours a month (about 10 hours a day) for much more.

People would at least know exactly what the caps mean and it wouldn't affect their bandwidth / connection speed. Maybe a discounted connection (< 10Mbps) could be offered for even lower, but quite frankly it's more profitable for everyone ("heavy" users and "light" users alike) to pay the same amount because TWC makes a huge profit off the "light" users since they rarely spend time using the bandwidth they're given.