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TWC scrambles to quell bandwidth cap furor

Fri, 04/10/2009 - 8:35am
Brian Santo

Time Warner Cable, in response to customers and other critics angered by what they consider the penuriousness of the MSO’s bandwidth caps, said it will add yet another tier with a significantly larger monthly consumption cap of 100 gigabytes (GB).

TWC COO Landel Hobbs wrote in an undated open message (letter here), “We are developing a ‘super – tier’ now that allows for up to 100 GB of broadband usage per month in all of our test markets.”

Road Runner Turbo, running at 10 Mbps downstream/1 Mbps upstream, will be $75 per month, with a 100 GB cap and overage charges of $1 per GB per month. The company will retain the original Turbo option – priced at about $55 in its Beaumont, Texas, market – that has the same speed but a lower consumption limit, at 60 GB per month, according to a TWC spokesman.

Just as there will now be two options in the Turbo tier, identical except for the consumption limit and the monthly fee, there now will be two options in the light tier. The company is also proposing a new barebones tier, at 768 kbps/128 kbps with a 1GB per month cap, for $15 per month. This will be in addition to the current Light tier, which has a 5 GB bandwidth limit.

TWC believes the low tier could be appropriate for almost one-third of its users. The MSO says about 30 percent of its customers use less than 1 GB per month. On the other hand, that speed is many times faster than dial-up service, but is far slower than almost all available DSL.

The company has been testing the tiering system in its Beaumont system. Trial market caps being tested included 10-, 20-, 40- and 60 GB for Road Runner Lite, Basic, Standard and Turbo packages, respectively. Package prices will remain the same.

The MSO reiterated that overage charges will likewise be capped; TWC set the overage charge maximum at $75 per month.

Consumer anger over the company’s plan to introduce tiers was reignited a couple of weeks ago when the company announced it would introduce the caps in two more trial markets – Rochester, N.Y., and Greensboro, N.C. – in August. Subsequent trials will be in San Antonio and Austin, Texas, in October. The company said it guarantees “at least the same level of usage capacity in these trials.”

Consumer discontent has yet to abate, even though TWC has been trying to explain its actions almost non-stop since then, including Hobbs’ open letter and CEO Glenn Britt’s justifications offered during The Cable Show last week. 

The essentials of the TWC argument is that bandwidth has associated costs, that consumption billing is both necessary and fair, and that TWC has analyzed subscriber behavior and has crafted tiers to match the actual usage patterns of their customers. Britt said last week that giving consumers a choice of tiers is what they actually want.

The devil may be in the details.

Shaw Communications has instituted tiered bandwidth caps, while Comcast announced a blanket cap at 250 GB per month, and neither has faced anywhere near the uproar that Time Warner Cable has.

The differences among them appear to be different pricing and the relative generosity of the announced bandwidth caps. The TWC spokesman said that the company received a lot of calls from customers concerned about the size of the consumption limits, rather than their mere existence. 

TWC also said, “As we launch DOCSIS 3.0 in the trial markets, we plan to offer a 50/5 MB speed tier for $99 per month.”

TWC is soliciting consumer feedback at realideas@twcable.com.

More Broadband Direct 04/10/09:
•  TWC scrambles to quell bandwidth cap furor
•  Groups call for FCC action on number porting interval
•  Motorola calls former CFO "treacherous officer"
•  Alabama Senate votes to deregulate landline phones
•  Phone, Internet service restored in Silicon Valley
•  Portugal operation drags down Cogeco's Q2 results
•  SCTE lists board candidates for '09
•  On2 Technologies updates HD video decoder

 

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