Time Warner Cable faced unprecedented consumer backlash and a public relations nightmare when the company tried to impose caps as low as 5GB and per byte overages as high as $5 per gigabyte back in 2009. Consumers clearly understood that there was no practical justification for imposing such limits on modern, upgraded networks in an age of plummeting bandwidth costs, and that the move was simply a cash grab and a way to protect TV revenues from Internet video. As we noted at the tail end of 2009
it was inevitable that Time Warner Cable was going to try again, and every so often CEO Glenn Britt pops up to reiterate his interest in the idea.
Britt has consistently suggested that the company would not be able to financially survive without a shift to per byte pricing, yet company earnings continue to grow under the flat-rate billing model. Last quarter earnings were $420 million, nearly $80 million more than the same quarter last year. Britt once again discussed the company's lust to bill by the byte and in the process wandered slightly off script -- finally acknowledging that residential broadband pricing really isn't tied to real world costs
. It's clear Britt's still pondering usage billing despite the 2009 PR beating, but his language has softened somewhat, conceding they'll at least need to continue offering an unlimited tier:
After following Britt’s public statements for more than two years about this subject, we detected a moderating view. Britt told investors he believes “there should remain an unlimited plan for those who want to buy that,” and suggested Time Warner Cable might not be interested in applying usage pricing on every level of its broadband service. That could be good news, so long as Britt doesn’t believe the price of “unlimited” should be the $150 a month the company proposed in 2009.
“We’re more focused on affordability and lower income people who might be light users and might seek to pay less because they use less,” Britt said. “That’s a much better context than the usual ‘oh those people using all the bandwidth’ and caps and all that stuff."
Britt has played a lot of lip service to lower cost broadband and TV services over the last year, as the company worries about defecting low-income customers and their subscriber losses to telcoTV and satellite. However, the company still operates in largely uncompetitive markets where they don't need to worry about price, and supposed TV tiers aimed at lower-income users have offered dubious value and come with significant restrictions
. It seems more than likely that Britt's vision of broadband value will have similar characteristics.