Time Warner’s new CEO, Glenn Britt, issued a statement yesterday saying the company had shelved the pricing trials in Rochester, N.Y.; Austin and San Antonio, Texas; and Greensboro, N.C. Those trials, which started only two weeks earlier, charged subscribers for the amount of bandwidth they used. Time Warner called it a “consumption-based” model.
The cable giant’s plan was to price its home broadband service by tiers according to how much data customers use. Critics of the plan said it would raise rates dramatically for those who use Internet video, phone and other bandwidth-heavy applications.
Time Warner Cable recently backed off from its attempt to impose “usage-based pricing” of its Road Runner service in several regions of New York, after Democratic Senator Chuck Schumer strenuously opposed such a plan. But cable companies will continue to push its heavy usage penalties, until regulation is in place to stop them, say consumer rights critics.
The Federal Communications Commission is preparing a study of cable companies for Congress, due next year. The commission will evaluate pricing, speed, affordability and availability, and the cable companies are terrified federal regulations are on the way.
Late last year, Time Warner Cable had dropped access to Usenet Newsgroups to its customers as well.
The cost of equipment to upgrade Internet capacity is falling rapidly and is about to fall more with new high-speed technology, called Docsis 3, which will increase capacity and offer speedier downloads.
To keep up with this growing demand, carriers have said that they have to enlarge their networks quickly and deploy more efficient technologies that increase capacity. It seems inevitable to all parties that Internet access will cost more, but making the transition to a new pricing scheme based on consumption can’t be done overnight.
Time Warner Cable said it was going to focus for now on making measurement tools available so consumers can learn how much bandwidth they consume.
Under the trial that was shelved, customers were asked to choose Internet usage plans that capped monthly uploads and downloads at 10GB, 20GB, 40GB or 60GB. Customers would pay $1 per gigabyte if they went over those caps, with overage fees limited to $75.
Time Warner will be charging $99 a month and Comcast $139 a month, for its new 50-megabit service. Comcast currently charges approximately $45 a month for 8-megabits-per-second downloads. Countries like Japan that have competition between its Internet providers, charge $60 a month for 160-megabits-per-second. All services and plans offered by these ISPs is supported by all Newsdemon.com Newsgroups membership.