As company PR tests its 'message' in cap trial market....
When I originally
broke the story that Time Warner Cable was planning to trial very low caps (5-40GB) and overage fees ($1 per additional gigabyte) in their Beaumont, Texas market, the leaked memo indicated only
new users would be automatically capped. But an additional goal for the trial, according to the memo, was to test "marketing and messaging to customers." In other words: how do you convince existing users that getting less product for more money (
$1/GB is a 1,000-1,500% markup over cost) is actually a good thing?
Well, in the trial market, Time Warner Cable begins with a regional
website that insists caps and overage fees "make your Internet experience better." But since there's a few smart people out there, they're also engaged in another, rather underhanded way of getting consumers to embrace caps and overages. A
new promotion in the market promises triple play users they'll be locked in at a bundled discount rate for twelve months if they sign a new contract.
Announcing Price Lock Guarantee, our best value for preferred Internet customers. It’s the easy way to get 3 great services together and save on regular monthly rates. Just add Digital Cable and Nationwide Phone Service to your existing Road Runner Standard service - and lock in guaranteed savings for a year. It’s that easy. No complicated bills. No surprises. One package, from one company, on one simple bill.
 Although the initial 20GB plan is price locked, Internet usage above the consumption allowance is not and will be billed at $1 per GB per month. -TWC contract fine print |
Sounds great. Such price-lock guarantees are increasingly common in many markets, as both cable and phone companies try to retain existing customers using bundle discounts and long-term contracts. Except that buried in the fine print of this particular offer is the fact that if the user signs this new deal, they're by proxy agreeing to Time Warner Cable's new caps and overage fees:
Road Runner Standard package provides 7Mbps service and includes an Internet usage consumption allowance of 20GB per month. Although the initial 20GB plan is price locked, Internet usage above the consumption allowance is not and will be billed at $1 per GB per month.
So an existing 7Mbps customer who previously enjoyed unlimited access, signs up thinking he's getting savings, but instead gets $1 per GB overage fees. If he's a fairly standard broadband user who downloads music, demos, HD films, or yes, sinful pirated P2P TV shows -- he'll probably wind up paying considerably more than he used to. Especially if he's part of a household of connection users. That same household is also now facing a $150 early termination fee on an auto-renewing contract. No surprises? Savings? Not so much.
"I will SERIOUSLY, and I MEAN S E R I O U S L Y SERIOUSLY; be looking at alternatives to Road Runner Internet if these atrocious and archaic caps even THINK about touching my account," says one Time Warner Cable customer in our forums. If you live in a market where FiOS is deployed, you probably won't have to worry about it. If this trial moves forward, it's the users in less competitive markets who'll be paying a dollar per gigabyte.
Time Warner Cable does operate a
caps and overages feedback website for those interested.
