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TWC Is Feeding Broadband Meters

7/09/2012 12:01 AM Eastern

Time Warner Cable evidently has found
success in wielding usage-based broadband pricing
as a carrot, not a stick.

The MSO late last month extended its offer of a
$5-per-month price break to light Internet users in additional
markets in Texas, including Austin and Dallas,
after launching the Essentials offer in February in
San Antonio, Laredo, Corpus Christi, the Rio Grande
Valley and the state’s Border Corridor.

Under the operator’s 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.

The new approach
is markedly different
from TWC’s first
crack at usagebased
pricing. 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.

Time Warner Cable’s primary telco competitor in
Texas is AT&T, which shifted to a mandatory usagebased
pricing model for Internet customers in May
2011. AT&T met with considerably less outcry than
Time Warner Cable did two years earlier.

The MSO’s option is available to all Lite, Basic and
Standard Internet customers, but not to those who
take Turbo (up to 20 Megabits per second downstream)
or faster tiers. Unlimited Internet plans will
still be available at current flat monthly rates.

“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 scaleddown
TV Essentials service, we will now be offering
an Internet service to meet the needs of consumers
who want more price flexibility.”

Among other Internet-service providers, Suddenlink
Communications also has instituted monthly usage
caps with overage fees.

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

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 kick in.

Fitting under the cap

With a 5-Gigabyte allowance,
a user could access one of
the following:

About 17,000 Web pages
16.3 hours of HD video
1,250 four-minute songs

Source: AT&T data-usage calculator

September