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Time Warner Cable Returns to (Optional, For Now) Metered Billing
Save $5 on Slower Tiers if You Agree to 5 GB Cap
by Karl Bode 12:21PM Tuesday Feb 28 2012
Time Warner Cable suffered a PR disaster back in 2009 when they tried to impose incredibly low caps and high overages on their customers, arguing at the time that flat rate pricing simply wasn't economically viable -- and that they simply had to starting metering usage or the Internet would see brown outs. Several years later and the Internet has survived just fine -- as have Time Warner Cable earnings, which have consistently shown flat rate broadband to be increasingly profitable. In more blunt terms, Time Warner Cable was completely and utterly full of crap.

Click for full size
As I noted at the time, it seemed likely the effort would return eventually with a new coat of PR paint, given the lust investors have for the idea of imposing overages on usage in the age of Internet video. On cue, Time Warner Cable has announced over at their blog that they're giving metered billing another shot -- albeit this time on a voluntary basis to begin with.

According to Time Warner Cable's Jeff Simmermon, the company is introducing a new optional usage-based pricing plan called "Internet Essentials" in several markets in Southern Texas, including San Antonio, Laredo, Corpus Christi, the Rio Grande Valley and the Border Corridor. In his post, Simmermon acknowledges Time Warner Cable's first attempt on this front didn't go so well, and promises that users will always have the option of an unlimited tier:
quote:
Yes, we did try this before, a few years ago. And yes, pretty much everyone agrees that it didn’t go so well. So we listened to customer complaints. A lot. Consequently, Time Warner Cable customers will always have access to unlimited broadband at a flat monthly rate. Usage-based consumption is optional, and it’s designed to save light users money. Customers can switch back and forth as often as they like, but if they choose not to switch, nobody’s switching anything for them.
Time Warner Cable customers will always have access to unlimited broadband at a flat monthly rate.
-Time Warner Cable
As for pricing, the company says that users on the company's Standard, Basic and Lite tiers are all eligible to switch to the plan at any time. Prices for these tiers vary by market and local competition, but usually start at $30 if bundled with TV. Users on Turbo, Extreme and Wideband customers can't switch to metered billing and continue as usual. Should you switch, the company claims users can see up to a $5 monthly savings, depending on usage. In their own words, the company says the option provides users:
quote:
1) Up to 5GB/month of data transmission for a $5/month discount from one’s current monthly bill. All Standard, Basic and Lite broadband customers will be eligible. Turbo, Extreme and Wideband customers will continue as always, with access to unlimited broadband and no optional tiered plan or discounts.

2) The ability to opt-in and opt-out of a tiered package at any time.

3) A “meter” that tracks usage on a daily, monthly, weekly or even hourly basis, enabling customers to accurately gauge usage. Below is an example of the hourly meter:

3) (sic) A 60 day/2 billing-cycle grace period to allow customers to adjust usage patterns. During this time we will notify customers of overages but won’t charge for them.

4) Overages will cost $1 per GB, not to exceed a maximum of $25/month.
The company has been working on a new usage meter these customers can use to track consumption. There's no word yet on when the company hopes to expand the offer into additional markets. Obviously we'll have to see how this measures up when put into actual use and users start seeing real bills, so keep an eye on our Time Warner Cable user forum. Being able to save $5 off of a slow-speed tier if you agree to a 5GB cap is not a revolutionary value proposition. While the optional part is certainly nice, and it's warming that Time Warner Cable actually listened to users this time, there's still obviously some concerns here.

Usage-Based Billing in the U.S. is Never, Ever About Saving you Money or Congestion

A lot of Time Warner Cable's website rhetoric still suggests that Time Warner Cable's motivation here is simply to save users money and "enhance the value of the subscription." Wanting users to spend less has simply never been a goal of any publicly traded cable company, and in fact most cable operators go out of their way to avoid actually competing on price. As such, the argument that this is about cost savings remains disingenuous. On the TV front, while Time Warner Cable has been paying a lot of lip service to less affluent customers lately, their TV essentials product aimed at this segment has a ridiculous number of caveats and lacks any real value.

Click for full size
While real usage-based billing might save a user money (a $5 a month tier with reasonable overages), what Time Warner Cable is proposing again isn't real usage-based billing -- it's flat-rate pricing with overages layered on top. Real per-byte pricing would be welcome by consumers, but it would lose ISPs money -- as every grandmother in the country -- with their diet of just e-mail and occasional weather forecasts -- would wind up paying virtually no money.

If usage-based billing isn't about saving you money as carriers claim, it's about managing congestion, right? Nope. You'll recall Time Warner Cable originally tried to insist that they needed to meter because if they didn't, the Internet would grind to a halt and suffer "brownouts." You'll note that nowhere in the blog post or their website does the company mention congestion as a reason for the service this go round, so we'll assume they've finally given up on that argument.

So what is this really about? Despite the flowery language, trying to impose this kind of pricing comes from executives and the investment community, who simply can't give up this dream. These folks are solely interested in imposing usage surcharges and creating artificial scarcity on a product that's getting increasingly less expensive to provide. It's about ramping up profits in the face of Internet video and imposing control out of fear of becoming a "dumb pipe" -- it always has been.

ISP Meters Aren't Accurate and Regulators Don't Care

Every single company that has imposed meters and overages across North America is having trouble metering and billing users accurately. That's not hyperbole. Every carrier that's imposing overage fees -- from AT&T in the United States to Cogeco in Canada -- is having trouble accurately monitoring your usage. Worse, despite these ISPs claiming they should be able to bill like a utility, there's no regulatory agency overseeing any of this -- meaning it's up to you to make sure you're not overpaying. We've seen absolutely no interest from any regulatory agency in North America when it comes to making sure you're not being ripped off -- and as a result, many broadband users are.

I am Altering the Deal. Pray I Don't Alter it any Further.

While it's nice that Time Warner Cable has promised to always keep an unlimited option available, there's obviously nothing holding them to such a promise. In their first attempt at metered billing Time Warner Cable failed to heed the old boiling frog anecdote, and threw users into the pot at full boil. This time you can be sure that they'll turn up the heat more slowly. Why? There's absolutely nothing stopping them. Regulators don't care -- they think this kind of pricing experimentation is "creative." That leaves the free market to keep this pricing experiment in check, but most users live in monopoly or duopoly markets.

Click for full size
In more than half of their markets, Time Warner Cable's most intense competition comes from sluggish DSL -- where speeds often top out at just 3 Mbps. Real competition drives real price competition, and Time Warner Cable simply doesn't face the kind of competitive pressures that would drive real price competition. Both Verizon and AT&T have halted their next-gen upgrades, and Time Warner Cable's looking at a decade of easy phone company pickings.

With such tepid competition, there's really nothing stopping them from making this a mandatory affair over time. Don't believe us? Ask Canadians, who thanks to limited competition now enjoy some of the lowest caps and overages in the world. Meanwhile, while it's nice that Time Warner Cable created a $25 monthly overage ceiling, we've watched Canadian ISPs constantly nudge these ceilings upward over time, resulting in some ridiculous user bills.

Getting the picture yet? This is a soft sell with a hard landing. Is it possible for an ISP to creatively offer usage-based pricing that really works and saves consumers money? Sure. Is it likely that a U.S. ISP with limited competition in their footprint and a track record of utter disdain for price competition is going to? Not so much.

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Duramax08
To The Moon
Premium
join:2008-08-03
San Antonio, TX

1 recommendation

...

I dont like where this is taking us.

Tee Dubya

@151.190.0.x

It's designed to save light users money

Ha, ha, ha. That's the funniest thing I've read all day. Note they say this plan can save you $5/month or cost you $20/month extra.

If they really wanted to save users money, once the overage charges added up to the unlimited pricing, they would switch you to the unlimited rate. But they don't want you to save money, so they won't do that.

djrobx
Premium
join:2000-05-31
Valencia, CA
kudos:2
Reviews:
·Time Warner Cable
·VOIPO

Re: It's designed to save light users money

As structured now, someone will get a "warning" if they exceed the cap, and they can just switch back to unlimited. Someone would have to be totally asleep at the wheel to pay an overage.

That means, as Karl noted, that TWC is going to try and boil this frog slowly. Maybe TWC doesn't realize that the fable is a lie.
--
AT&T U-Hearse - RIP Unlimited Internet 1995-2011
Rethink Billable.
gorehound

join:2009-06-19
Portland, ME
We all know these Caps are utter bullshit and only hurt Consumers.
Expect a big grassroots Campaign to set these assholes straight.
Mr Matt

join:2008-01-29
Eustis, FL
kudos:1
Reviews:
·Millenicom
·Embarq Now Centu..
·Comcast
·CenturyLink

1 recommendation

Time Warner should disclose how usage is determined.

Its the same old bull feces. An ISP wants to establish usage sensitive billing but refuses to disclose how usage is calculated. Will subscribers have to pay for system overhead? How about encapsulation overhead for PPPOE subscribers? What about usage generated by VoIP? What about service packs from Microsoft? Virus signature updates? How about advertising from the ISP making a sales pitch for some crap that they are selling?

28619103
Premium
join:2009-03-01
21435

Re: Time Warner should disclose how usage is determined.

said by Mr Matt:

Its the same old bull feces. An ISP wants to establish usage sensitive billing but refuses to disclose how usage is calculated. Will subscribers have to pay for system overhead? How about encapsulation overhead for PPPOE subscribers? What about usage generated by VoIP? What about service packs from Microsoft? Virus signature updates? How about advertising from the ISP making a sales pitch for some crap that they are selling?

I think the calculators are including ALL of that together... and if you add ALL of that together it adds up less than a few Gig.

There will be a few corner case examples, but the big terabyte traffic generation shtuff is video sharing. A select few users that download content they will never have enough time to watch and share it with people they don't even know. It's not the average Netflix user that is going over the caps...

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

5GB/mo not enough for almost all landline users

This might work for my 90 yr old Uncle who gets on Facebook 1x/day to check on the doings of his children & grandchildren & great-grandchildren. And that is because he never has his PC updated with software fixes.

At an absolute minimum for a landline connection, it has to be at least 10GB/mo which could work for a limited number of users. I am on the internet daily and have had months as low as 12GB with some video streaming from Netflix and all the monthly software updates from MS, Adobe, etc. But more typical usage is in the 20-30GB/mo range with a few hours a week of Netflix usage.

If TWC offered this discount for 10 or 15 GB/mo usage, it could satisfy quite a few light users.
--
The nine most terrifying words in the English language are, I'm from the government and I'm here to help.
»www.politico.com/2012-election/


delusion ftl

@comcast.net

Re: 5GB/mo not enough for almost all landline users

Don't think for a second that they haven't done all the calculations regarding usage, costs and the allowance just like ATT and VZW have done.

ATT's plans are such that most users fall in between the tiers, so most users use more than 250MB of data, but not 3GB, so they either pay the 30 dollars for data they never use, or pay the 20 dollar and incur overages. Voice plans are the same way, either you pick a minutes tier where you go over constantly, OR you pick a minutes tier where you amass thousands of never going to be used rollover minutes. Wouldn't it be nice if you could simply pick a plan closer to your usage minutes and save money?

So TWC has come up with a plan where most users will break the allowance keeping ARPU even while slowly introducing the frog to the warming water.
praetoralpha

join:2005-08-06
Pittsburgh, PA
said by FFH:

This might work for my 90 yr old Uncle who gets on Facebook 1x/day to check on the doings of his children & grandchildren & great-grandchildren. And that is because he never has his PC updated with software fixes.

Metered billing would be terrible for this. Once you get a rootkit/virus or two in that insecure system, you can get 100+ gigs/month, easy.
praetoralpha

join:2005-08-06
Pittsburgh, PA

Not about congestion

Data caps do not prevent congestion. Being limited to 10 gb/month does not stop anyone from using it when everyone else does. Makes about as much sense as putting 300 miles/month limits on cars to clear the freeways. It does not stop anyone from driving home at 5 when everyone else does.

roc5955
Premium
join:2005-11-26
Rosendale, NY

The real design of this

Is to take money from those who can least afford it. Someone who doesn't have a lot will choose the less expensive Internet service. When they find out how much they will have to pay after they go over their useless limit, they will be paying through the nose, and getting nothing. The same people who only have basic cable, because it is all that they can afford, will more than likely get this service, because they need Internet, and this is what they can afford....
Smooth move, ex-lax!
--
"Understanding is a three-edged sword."

Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL

Save Customers Money? - Lies!

said by AOLtimeWarner :
Usage-based consumption is optional, and it’s designed to save light users money
That makes no sense. Regardless if you are a light or heavy user the connection and equipment costs the same if you use it or not.

So they want us to believe they will sell users light use connections for less money that does not cover all the costs?????
If the light user calls customer service just once, they they cost more than any heavy user for the entire year.

If they really want to save customers money they would offer lower cost unlimited plans where you have to pay each time you want to call customer service.

skeechan
Ai Otsukaholic
Premium
join:2012-01-26
AA169|170
kudos:2
Reviews:
·Clear Wireless
·Cox HSI
·Verizon FiOS

Funny

Here in SoCal TWC is raving about how Time Warner makes the Internet better, touting 3rd party services like Netflix. Meanwhile they'll then turn around and use Netflix as the reason the world will end if TWC doesn't throttle their subs for more money.

You gotta love these MSOs, and telcos like AT&T for that matter, always whining about Netflix traffic when it is one reason subs bother subscribing to their overpriced tiers in the first place (and they know it).

Without compelling content, we don't need TWC. I can get my email on dial-up.

djrobx
Premium
join:2000-05-31
Valencia, CA
kudos:2

Re: Funny

I caught that also. I was pretty shocked to see Time Warner proudly display the Netflix logo on their Road Runner commercial!
--
AT&T U-Hearse - RIP Unlimited Internet 1995-2011
Rethink Billable.

28619103
Premium
join:2009-03-01
21435
said by skeechan:

You gotta love these MSOs, and telcos like AT&T for that matter, always whining about Netflix traffic when it is one reason subs bother subscribing to their overpriced tiers in the first place (and they know it).

Why would someone buy a higher tier to get Netflix? Most base cable tiers are plenty fast enough.
brianiscool

join:2000-08-16
Tampa, FL
kudos:1

50%

I bet they will just cut your data usage bill down 50% to make it fair.
PoppaC1

join:2010-11-01
High Point, NC

5.00 a month savings??? WOW..

I am so happy I live in an area that TW has serious competition from our local phone company that provides DSL speeds up to 80/30. TW offers their "turbo" package which tops out at 15/768K.

BTW: I live just a few miles away from one of the the "test" markets they tried to push this crap on back in 09. (Greensboro, NC)

Every time I see their local ads mentioning their superiority to "slow DSL" I have to resist the urge to throw something at the TV screen.

The Limit
Premium
join:2007-09-25
Greensboro, NC
kudos:2

Re: 5.00 a month savings??? WOW..

OT, but what ISP is this, and is it available in Greensboro? I live in Greensboro.
--
Do or do not, there is no try! - Yoda
PoppaC1

join:2010-11-01
High Point, NC

Re: 5.00 a month savings??? WOW..

It is Northstate Communications, and I do not think they have a presence in Greensboro.

asdfdfdfdfdf

@myvzw.com

Do something simple...

If a customer uses less than 5GB in a month they get an automatic $5 or $10 credit to their account. They don't have to change plans or be on a special plan or any of this complicated nonsense.

rcdailey
Dragoonfly
Premium
join:2005-03-29
Rialto, CA
Reviews:
·Time Warner Cable

Re: Do something simple...

This TWC plan offers $5.00 per month savings, but that's just not worth the trouble, it seems to me. I guess that would buy a gallon of gas, with some left over, depending, or a burger and fries. It's simpler to have the flat-rate plan and not think about a cap.
--
It is easier for a camel to put on a bikini than an old man to thread a needle.
BiggA

join:2005-11-23
EARTH

Terrible plan

The idea of light users having caps is fine, but the implementation of this is just DUMB.

I could see having caps on the sub $50 tiers, and then unlimited at the $60 price point or something like that, but this optional system just makes no sense.

antdude
A Ninja Ant
Premium,VIP
join:2001-03-25
United State
kudos:4

No thanks!

Maybe if it was 99% saving. :P

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

A 5GB cap on a wired connection. It's disgusting

You can see where they want this to go.

They want the CableTV tiered system where you pay way too much as a base rate and then have tiers, and by-the-byte on top when you go over your tier.

This pricing system is set up to make sure you way overpay under all circumstances; You pay way too much for your tier, getting far too small an allotment for the "base" prices in the first place, and then you way overpay if you go over your allotment as well.

They don't even want real metered billing, where an extremely low use customer could pay a fair rate of only a few dollars a month. No, they want to start with profiteering and ramp it up from there.

Really, it's just getting disgusting. At this point, it's voluntary, but I strongly suspect that down the road it won't be.
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini

StupidWarner

@verizon.net

When you're overpriced to begin with...

of course you're going to see more and more profits quarter over quarter. What I wonder though, are they really that stupid (believe what they're saying) or do they think everyone else is?

IowaCowboy
Iowa native
Premium
join:2010-10-16
Springfield, MA
kudos:1
Reviews:
·Verizon Broadban..
·Comcast

They should keep in mind

They are overhead and customers are profit. If Judge Greene were still around, there would be broadband competition as he had the courage to break up the phone monopoly in 1984 and would do the same for broadband.

There will hopefully be a day where a judge will break up the internet monopoly/duopoly. The breakup of the phone company gave us choice of Internet in the 90's because the phone company acted as the pipes and ISPs delivered the content. Now that dial up is no longer usable and the phone lines can't support broadband and now the ISPs own the lines is what created the broadband monopoly. Now if we could subject cable/fiber to the same common carrier regulations as the phone, then we could have some competition. The problem is not that nobody is wanting to build new network infrastructure, it's that the incumbent carriers use their influence and power to snuff out competitors, just like AT&T did before Judge Greene broke them up.
--
All of my CPE (including my EMTA) is customer owned. The only Comcast owned equipment in my house is the CableCards in the two TiVO boxes I own.

polska9orzel

@opera-mini.net

Re: They should keep in mind

What I noticed here is that AT&T must have built national network with taxpayers money. Did it begin in its first year of history with its own capital

If taxpayers paid for most of telecom infrastructure in this country, there should be no debate in congress whether to allow more or less regation. The problem is our system is corrupt, most politicians are just after quick bucks, take bribe and let the things the way they are.

In Poland, telecom lines were built by government owned tpsa. (TP), which later in 90's was privatized and sold to France Telekom. The prices went up, for everything but few years later, consumer protection agency broke tp's monopoly by mandating to share its pipes with other dsl providers at reasonable price. Within year or so over 50 dsl providers appeared in the market, prices went down. And dsl in this country was adsl2+ from beginning so it can support higher speeds up to 20 mb. Now they are in phase of deploying vdsl with speeds of 40 and 80 mb.

In larger cities cable providers like UPC offer high speeds already above 100, the highest now being 150 mb/s for less than Comcast's highest tier here in States.
tmc8080

join:2004-04-24
Brooklyn, NY

if they could get away with it..

they would.. however Verizon has not put caps or throttled FIOS fttp.. so as that gains a toehold in Manhattan (TWC's bread & butter) even a 250gb softcap isn't a good idea.

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

The real deal

protecting OVERPRICED legacy video!
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

Re: The real deal

said by dvd536:

protecting OVERPRICED legacy video!

Thanks for reminding me.. gotta check my RSS video feeds!
jumpinjustin

join:2011-05-09
Hazel Park, MI

Metered billing of internet don't need internet that bad

We lived without internet and survived just well, so when they impose metered billing we will just cancel internet, thats all.
clarknova156

join:2011-06-04
Poughkeepsie, NY

Yea right ... you get to bend over 6 months later.

I laugh from my completely cappless Verizon 150/65 connection.

FUCK you time warner.

djrobx
Premium
join:2000-05-31
Valencia, CA
kudos:2
Reviews:
·Time Warner Cable
·VOIPO

Re: Yea right ... you get to bend over 6 months later.

said by clarknova156:

I laugh from my completely cappless Verizon 150/65 connection.

FUCK you time warner.

Don't laugh too hard. The fewer unlimited choices we have, the less pressure your darling Verizon has to keep offering you unlimited bandwidth. This is purely about making money, not last mile capacity.

--
AT&T U-Hearse - RIP Unlimited Internet 1995-2011
Rethink Billable.

norbert26
Premium
join:2010-08-10
Warwick, RI

Re: Yea right ... you get to bend over 6 months later.

said by djrobx:

said by clarknova156:

I laugh from my completely cappless Verizon 150/65 connection.

FUCK you time warner.

Don't laugh too hard. The fewer unlimited choices we have, the less pressure your darling Verizon has to keep offering you unlimited bandwidth. This is purely about making money, not last mile capacity.

the CAPS will come but not yet. Right now they are trying to force this into every home they can. Uptake in markets where it is available now is not that good so the last thing they want to do right now is to CAP and make it even less pleasing. When uptake gets to a level where shareholders are happy OR legacy video is being dropped by too many subscribers CAPS will come into place. In the mean while let the cable co's do it first so we can grab all their defectors .