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IN PERSPECTIVE: Too clever by half

Thu, 04/30/2009 - 8:30pm
Brian Santo, Editor

Is there a point to offering excellent speeds
at a price that maybe 10 customers might pay?

By The Cable Show, Time Warner Cable was already coming under fire for its intent to expand its usage billing tests. CEO Glenn Britt explained that bandwidth is not free, and so it’s reasonable for cable to charge for usage.

Brian SantoCellular companies have been practicing usage billing from the get-go. Rogers is demonstrating in Canada that usage billing can be made acceptable in cable.

But U.S. consumers revolted, and TWC is halting its tests.

Rogers was operating in a vacuum, but TWC was operating in an environment in which Comcast had set a 250 GB consumption cap, so capacious that only someone stealing movies would complain. Surprise! Pirates aren’t that stupid.

In contrast, TWC’s caps seemed so penurious that the public blew right past what the appropriate caps might be and straight to no caps at all.

“But it’s only a test!” “But we keep increasing your speeds!” “But we gave you PowerBoost/Start Over/whatever!”

Exactly when did you forget that this is a “what have you done for me lately” society? When did you forget that cable is loved less than the airlines?

One hundred Mbps for $250 per month is a joke (hi, Shaw). Is there a point to offering excellent speeds at a price that maybe 10 customers might pay? TWC’s tiers weren’t that ridiculous, but they were close enough.

If J:Com can provide 160 Mbps for about $65 per month (see “Cable spanning the globe” on page 16), you’d have to be on drugs to think consumers in the U.S. won’t notice. Not to mention U.S. regulators.

That was TWC’s enormous mistake: Offering choices is pointless if all of the choices appear bad. Assuming TWC’s screw-up (on the heels of Comcast’s net neutrality stumble – also a usage issue) hasn’t utterly blown consumption billing for the cable industry forever, the next company to try will have to offer vastly better perceived value.

brian.santo@advantagemedia.com

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