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Will Time Warner's Proposed Bandwidth Caps Hurt Online Gaming?

This story was written by Tameka Kee.
*Time Warner* may have revised its controversial plan to roll out metered broadband access packages (complete with bandwidth caps, via PC Mag), but it's still moving forward with the trials in two states. The issue of how much more expensive the pay-per-download plan will be remains a hot-button topic for consumer advocates (per Mediapost) and legislators like N.Y. Congressman Eric Massa, but it could also affect gaming companies like *Microsoft*, *Sony* and newcomer OnLive.

Both Microsoft (NSDQ: MSFT) and Sony (NYSE: SNE) are bulking up their libraries of downloadable content, and OnLive aims to entice gamers with a micro-console that only plays online gamesbut if metered access plans make downloading games or playing online too expensive, then these emerging business models are shot.

But judging from their responses to MTV Multiplayer about the issue, the three companies don't seem to be very concerned.

Microsoft is taking a wait-and-see stance, telling Multiplayer: "We're watching these tiering proposals as they evolve." Sony spokesperson Abigail Murphy said players shouldn't worry, since the minimum plan (60GB) is "more than suitable" for the average user's download needs.

Meanwhile, OnLive founder Steve Perlman was the most vocalwhich makes sensegiven that his broadband-dependent service has the most at stake. He told Multiplayer that users would hit bandwidth caps from watching TV or movies well before well before they hit the limit with OnLive. Perlman added that the fees would drive them away from providers like Time Warner (NYSE: TWX), to alternate carriers that offered better pricing: "It will be a very long time before OnLive comes anywhere near the broadband penetration of YouTube, Hulu, iTunes, *Amazon*, mtv, abc/nbc/cbs/fox/hbo.com, etc., if ever. So, we won't be the ones testing this issue."

Photo Credit: wlodi


By Tameka Kee

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