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Time Warner COO: Metered Billing Is What Consumers Want
Which would be a good point, were it actually true...
by Karl Bode 01:02PM Tuesday Apr 07 2009
Time Warner Cable techs and the company's PR folk spent last week being smacked around by the Internet for the company's plan to expand ultra-low caps and metered billing into four additional markets. Back from last week's Cable Show in DC, Time Warner Cable COO Landel Hobbs has now jumped into the debate, offering a public statement. Hobbs defends the plan by citing (so far nonexistent) DOCSIS 3.0 deployment, promising a higher 100GB cap is coming for "heavy users," and by insisting that per-byte billing is what consumers want:
quote:
As the amount of usage has dramatically diverged among users, this is becoming inherently unfair and not the way most consumers want to pay for goods they consume.
Of course, consumers made it pretty clear last week across a vast variety of outlets that metered billing for broadband wasn't what they wanted. And if it really was something consumers wanted, Time Warner Cable wouldn't be intentionally avoiding offering such a incredibly desired service in markets where Verizon offers uncapped and faster Verizon FiOS service. If consumers really wanted to pay $1 per gigabyte, Time Warner Cable would be happily testing the metered billing option in New York City, where they'll compete with FiOS.

Hobbs repeats the now-familiar industry meme that the move to metered billing is being done out of some kind of philanthropic desire for fairness -- not because Time Warner Cable wants to protect cable TV revenues from Internet video -- or because charging customers massive overages for bandwidth that costs pennies is hugely profitable. 1000%-1500% overage markups over cost are not only super fair, argues Hobbs, knee-capping American families just as HD Internet video takes off will help increase the use of broadband:
quote:
I think that such pricing options are not only fair, but also will actually encourage more use of broadband overall.
Of course $1/GB overages will encourage more use of broadband -- just not theirs.

I think that (metered billing is) not only fair, but also will actually encourage more use of broadband overall.
-Time Warner Cable COO Landel Hobbs
Meanwhile, were the move really about fairness, they wouldn't be punishing their entire customer base for the gluttony of 1% of their customers. Like Comcast, Time Warner Cable could simply impose a very high cap to rein in these customers, or force those heavy users to higher business-class tiers without resorting to charging overage fees.

Were it really about fairness, customers who utilize virtually no network resources would pay virtually no money.

Do you think Time Warner Cable is hard at work on a new, $4.95/month "grandma Xtreme tier" that accurately reflects her occasional e-mail and Weather.com use? Do you think Time Warner Cable really wants a massive swath of their userbase -- many of whom currently pay $45 or more per month just to check e-mail and browse the Internet -- to really be billed accurately for their usage? Of course not.

No, the use of overage fees and metered billing isn't about fairness -- it's about monetizing and/or impeding the Internet video consumption of tomorrow's regular families, while creating a new revenue metric that can be jacked ever skyward to please investors when quarterly profit boosts are needed.

The argument that Time Warner Cable wants to make more money probably would be less insulting if the company simply came out and stated the move is to make more money. The attempt to frame this as an issue of altruism adds a layer of insult to injury for consumers. The already very-profitable company, which last week stated that flat-rate billing was not a "viable" billing model, has yet to offer a shred of hard data to support this conclusion.

Time Warner Cable is still fielding (polite) input via realideas@twcable.com.


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Shamayim
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reply to RadioDoc

Re: No They Don't

said by RadioDoc:

I find this statement to be utterly laughable:

said by TWCs wildly thrashing PR Department :

As the amount of usage has dramatically diverged among users, this is becoming inherently unfair . . .
They are exploiting the currently wildly popular though absurd liberal mindset that fairness, rather than achievement, is the greatest cultural virtue, which in a free society of course is laughable.
--
Who is Jesus? and Why it matters (to YOU).


fifty nine

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reply to bakorican

Re: Metered Broadband

said by bakorican:

Am I glad that I live in Germany, where I can chose between Telekom DSL, Telekom VDSL, Municipal Broadband, Vodafone DSL, O2 DSL, Kabeldeutschland Cable, Alice Cable and a sleuth of smaller providers. Americans like to label Europeans socialist. If socialism gives me a choice, than I like living in socialism. Other than Mobile Broadband nobody meters anything.
It's the same in big cities in America.

For example in NYC you can choose between Verizon DSL and several other DSL providers like Speakeasy, RCN Cable, Time Warner Cable, Verizon FiOS (fiber optic broadband to the home) and a couple of Wireless ISPs in some parts of the city.

In the suburbs like New Jersey the choice is between several DSL providers (CLECs and the local ILEC), Verizon FiOS, the local cable provider (Cablevision Optimum online or Comcast) or wireless ISPs.

Out in the countryside where I live, we have a choice between Embarq DSL, the cable company and a wireless ISP.

I'm not counting cellular broadband such as EvDO because of their low caps and the fact that they are a mobile solution not fixed.

But don't let that stop you elitist Europeans from thinking life is better over there. Try some free speech and see if you don't end up in the Clink.

bakorican

join:2004-02-28
germany

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Am I glad that I live in Germany, where I can chose between Telekom DSL, Telekom VDSL, Municipal Broadband, Vodafone DSL, O2 DSL, Kabeldeutschland Cable, Alice Cable and a sleuth of smaller providers. Americans like to label Europeans socialist. If socialism gives me a choice, than I like living in socialism. Other than Mobile Broadband nobody meters anything.