* Time Warner Cable puts plans for tiered pricing on hold
In our last newsletter, we joined the chorus of outrage at Time Warner Cable’s plan to implement usage-based pricing this summer in some test markets, including Greensboro, NC. And while we won’t be so presumptuous as to think that we had a major impact, we did just learn as the newsletter was being distributed that these plans have been put on indefinite hold.
As far back as January 2006, we were writing about the need for equal prices for equal services, proposing that the time had already come for “busidential” services for the SOHO (Small Office – Home Office) market.
On Thursday, April 16, Time Warner Cable CEO Glenn Britt said in a press release, “It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing. As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met. While we continue to believe that consumption based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process.”
Today’s announcement by Time Warner Cable has two significant components. First, and not too surprisingly, Time Warner Cable has reacted to the public outcry. The pricing for Time Warner Cable’s data services are currently unregulated, but there is significant competition – notably from DSL service providers with quite competitive products.
Perhaps more significantly, the plan to move forward with deploying the tools by which the user can measure their usage will give customers a significant insight into exactly how much bandwidth they are currently consuming.
We do take exception to the implication that this was just a case of uneducated consumers. To the contrary, we believe it was a case of very educated consumers reacting to an unworkable solution to a serious problem.
While we remain opposed to metered services, especially for data services where the consumer may have little or no control over many aspects of their actual consumption, this type of service – which might be compared to a toll road – may become a “necessary evil” for some providers in the short term if these providers don’t move extremely aggressively towards the deployment of more and more bandwidth.
However, in the long term, metered service, which will result in consumers’ trying to limit usage, will not be able to stem the rising tide for more and more bandwidth. The major bottleneck in our national information infrastructure remains the access links. It is incumbent on our local, state, and national leaders to ensure that appropriate measures are being taken to build the network that we need – including Fiber-to-the-Curb and even Fiber-to-the-Home, as we noted in our Open Letter to President Obama in January.
So while we have temporarily dodged the proverbial bullet on this round, the fundamental issues remain. Consequently, this is an area that deserves constant attention to ensure that we’re not headed toward a digital access meltdown.
