In a move that’s sure to have a vast multitude of people (gamers especially) shredding the self-esteem of innocent customer service agents everywhere, Business Week reported Time Warner Cable is rolling out a tiered pricing structure in several markets across the country. That means the more internet bandwidth you use – whether for gaming, internet surfing, downloading movies or files or whatever – the more money you’ll be shelling out. It’s similar to current cell phone plans and it’s “a strategy that’s likely to rankle consumers but be copied by competitors,” as the article so succinctly states it.

This development can only be construed as bad news for gamers (unless, of course, you’ve been looking for a really good reason to kick that World of Warcraft habit. A crumbling social life is one thing, but having to pay $500 in overage charges every month? That’s motivation). It might still be a long way off, but I’m curious to see how this affects the number of people on Xbox Live and the PlayStation Network. This seems like one of those developments where the effects are much farther-reaching than ever anticipated.

According to the article, the highest tier you can purchase (for nearly $55) only affords you 40 gigabytes of bandwith. Download a few demos and a movie to your Xbox and you’ve already chewed through 10-15% of your data transfer for the month! That’s not to mention the file sizes of high definition content. At five to eight gigs per film, one high def movie could eliminate 20% of your bandwidth in the click of a button. I have no figures to back this up, but I would think that many of the tech-savvy folks that use their PS3′s and Xbox 360′s on even a semi-regular basis also use their computers daily. Even someone that would consider themselves a casual gamer could go through their alotted bandwidth in two weeks time and have to pay the rest of the way.

Also, does the possibility of multiple hundreds of dollars in overage charges instantly kill the recently announced OnLive gaming service? Only time will tell, but it certainly can’t help a platform that has already had it’s viability called into question. This Joystiq interview with OnLive’s founder Steve Perlman sort of addresses the issue, but he refers specifically to Comcast’s bandwidth cap of 250 gigabytes. That’s an embarrassment of riches in ones and zeros compared to 40 gigs Time Warner is offering.

Time Warner claims that a only small percentage of customers will even appraoch the highest limit. That may be true now, but as my buddy Mike so astutely pointed out, the bigwigs at TW know the future of media is in digital distribution. Five years from now, when Netflix is zapping movies right to your TV and Valve’s Steam service is the main method of selling video games, everyone and their mother is going to be crossing the pay-for-data threshold. I only hope Time Warner takes some the money they siphon off of people and use it to upgrade their rapidly deprecating cable infrastructure.

Even if you don’t have Time Warner in your area, the threat of other providers following suit is enough to put everyone on alert. As a Time Warner cable and Roadrunner (that’s the name of TW’s internet service for those who don’t have it… now the horribly Photoshop’d, copyright-infringing image above makes more sense) internet subscriber, this news hits me close to home both literally and figuratively: A lot of what I do personally and professionally relies heavily on my internet connection, and one of the initial tiered markets is an hour down the I-90 from me in Rochester, New York. I have Xbox Live, I have Netflix and an instant queue, I use Amazon and iTunes to download music, therefore I’ll be screwed when I’m paying for data transfer. It’s only a matter of time before the new billing system shows up here in Buffalo, and it’ll probably be sooner rather than later. I guess it’s about time I look into Verizon FiOs… or guess the password of my neighbor’s wireless connection.