Cable Operators

TWC Widens Usage-Based Internet Tiers In Texas

Operator Pitches Optional Plans as Providing More Choices for Customers 7/05/2012 2:22 PM Eastern

Time Warner Cable -- wielding usage-based broadband pricing as a carrot, not a stick -- has extended its offer of a $5 monthly price-break to light Internet users to additional markets in Texas, including Austin and Dallas.

The operator in February launched the Essentials service in San Antonio, Laredo, Corpus Christi, the Rio Grande Valley and Texas's Border Corridor. The option is now available to all Lite, Basic and Standard Internet customers in Austin and Dallas, as well as El Paso, Waco, Temple, Killeen, Kerrville and the Golden Triangle.

Under the broadband Essentials plan, customers who use less than 5 Gigabytes of data per month get a $5 discount on their bill. However, usage over that limit is billed at $1 per Gigabyte, with a maximum of $25 in surcharges.

TWC's primary telco competitor in Texas is AT&T, which shifted to a mandatory usage-based pricing model for Internet service last year. Among other ISPs, Suddenlink Communications also has instituted monthly usage caps with overage fees.

In 2009, Time Warner Cable announced plans to experiment with forced usage-based pricing for broadband users in four markets -- and quickly shelved those trials after a firestorm of criticism and complaints from consumers and political officials. AT&T's 2011 nationwide adoption of usage-based billing met with considerably less outcry.

In the Texas markets, Time Warner Cable offers the Essentials option to customers with Lite (up to 1 Megabit per second downstream), Basic (up to 3 Mbps down) or Standard (up to 10 Mbps down) service. The unlimited Internet plans will still be available at the current flat monthly rate, and customers who take no action will remain in their current plans. Essentials is not available to customers on Turbo (up to 20 Mbps), Extreme (up to 30 Mbps) and Wideband (up to 50 Mbps) tiers.

A 5 GB allotment would allow users to download about two HD movies over the Internet; download about 2,000 MP3 audio files; or download or upload 1,000 photos, according to AT&T's high-speed Internet data-usage calculator.

"It's clear that one-size-fits-all pricing is not working for many consumers, particularly in a challenging economy," Gordon Harp, TWC's regional vice president of operations in Texas, said in a statement. "As we've done on our video product with our scaled-down TV Essentials service, we will now be offering an Internet service to meet the needs of consumers who want more price flexibility. Now, our customers can choose among tiers of Internet service based on how much bandwidth they use, or stay with one of our existing unlimited plans."

ISPs that have explicit data-usage limits but don't charge overage fees include Cox Communications and Charter Communications.

Meanwhile, Comcast in May officially eliminated its 250-GB cap and instead is planning to test out two different usage-based pricing models in unspecified markets with a minimum of 300 GB before fees would kick in. The cable operator announced the change after it was criticized by competitors and public-interest groups for allowing unlimited usage of its IP video-on-demand service on Xbox 360, while applying usage of other Internet-video services to the 250-GB cap.

According Time Warner Cable, Texas customers can switch between metered and unlimited plans as often as they like. Essentials Broadband users will have access to an online meter that displays usage on a monthly, weekly, daily or hourly basis.

Customers will have a 60-day grace period (two billing cycles) to adjust usage patterns, during which the MSO will notify customers of overages but won't charge for them. Time Warner Cable provides a data-usage tracker at https://myservices.timewarnercable.com so customers can gauge their monthly consumption.

TWC provides more information on the broadband Essentials plans at twcconversations.com/essentials-internet-plans-faqs.

September