You might recall that Time Warner Cable saw a bit of a public relations disaster
when in 2009 they tried to impose caps as low as 1GB and overages up to $2 per gigabyte. As with most of these efforts, the ISP made things worse for itself by assuming its customers weren't very bright, and insisting that overpriced broadband wasn't about making money or controlling Internet video, but was more an act of altruism. Despite continued healthy profitability under the flat-rate model before and since, Time Warner Cable informed users that metered billing was financially necessary for their survival. Consumers very vocally, and collectively, told Time Warner Cable to go to hell and the ISP backed off.
While consumers might not be opposed to real
usage-based billing, that's not what Time Warner Cable introduced. As with other ISPs who pretend such a shift is about helping out the nation's grandmothers
, the real plans introduced weren't about consumer value. They were simply flat rate pricing with ultra-low caps and ridiculous per byte overages designed to cash in on (or thwart) Internet video. As we're seeing in Canada
, customers were not fooled, and the public backlash for Time Warner Cable was significant.
Lessons on this front were apparently not learned by company executives. Speaking this week at the Deutsche Bank Securities Media & Telecom conference in Palm Beach, the CEO Time Warner Cable CEO Glenn Britt proclaimed that metered billing on residential broadband remains something that's going to happen whether U.S. consumers like it or not
On the broadband front, Britt said that usage-based pricing, long a controversial issue in the Internet community, could be inevitable. "I think you will naturally see evolve a world where people who use very little broadband expect to pay less and people who use a whole lot, may complain, but in their hearts know they are going to pay more than somebody who reads email once a week," Brit said. "I think there will always be an unlimited tier, but I think you'll see the element of consumption introduced over time."
Britt hasn't learned much from 2009's events, and still oversimplifies the issue as one of fairness, when for Time Warner Cable it's one of control, pipe constriction, and price increases -- all of which would only be made possible by the lack of competition in many Time Warner Cable markets
. With the continually plummeting cost of hardware and bandwidth, and the costs of broadband delivery fixed, there remains no financial justification
for shifting away from the profitable flat-rate billing model. The idea that costly overages are "inevitable" is the wishful thinking brain chiild of executives and investors
, who believe that truth can be created out of whole cloth through obnoxious repetition.
Apparently, the incredible din of angry consumers during Time Warner Cable's failed effort to overcharge their users must not have been quite loud enough for Mr. Britt.