* Time Warner Cable announces tiered pricing with usage caps
A couple of months ago, we wrote what we thought was a pretty convincing case for flat-rate services. After all, flat-rate services are the model that we’ve been accustomed to in that data world forever. You want a dedicated T1/E1 circuit, and you get your dedicated bandwidth. And as frame relay evolved, flat-rate pricing based on a committed information rate formed the basis of the pricing model.
The situation we were discussing in February concerned Verizon’s cellular-based services and the fact that relatively hefty usage charges kicked in after 5GB were used. Nevertheless, we also postulated that 5GB would be, for most situations, “unlimited.”
This “unlimited” theory was put to the test, by the way, early on in “March Madness” when Steve was helping provide Webcast service for watching his alma mater (Guilford College) in the NCAA Division III Final Four. After careful calculation, he decided that the 5GB limit would not possibly be reached with one basketball game, and, indeed, 2.5 hours of streaming video only used up 482MB.
We’d like to think that occasionally we have a positive impact on the industry. But in this case, we were at best ignored by Time Warner Cable for its Roadrunner and related services. A couple of weeks ago the company announced it was introducing tiered pricing with usage caps in test markets. And as Steve lives in one of those targeted markets, this caught his attention when it hit the local press. While this is being met with stiff resistance from consumers, there’s a very serious business angle as well, especially since so many business teleworkers are using residential services.
As of this writing, we’re just starting to get pricing details, and there are a large number of unanswered questions at this point. So you’ll be hearing more from us as we learn more.
In the meantime, we’d love to hear your opinions.
