Time Warner Axes Tiered Bandwidth Plans
After weeks of public outcry and criticism from politicians and consumer watchdogs, Time Warner Cable put the kibosh on plans to charge its Internet customers according to their bandwidth consumption.
According to Reuters, TWC has decided to shelve a nationwide implementation of the tiered bandwidth program. Despite the tier program expansion being put on hold, Time Warner plans on "continuing consumer education" on the matter, leaving the cancellation of the plan somewhat open-ended.
“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," said Time Warner Cable CEO Glenn Britt. "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.” Part of the consumer education TWC plans on offering includes free software that will allow customers to see how much bandwidth they use on a daily, weekly, and monthly basis. While there are already bandwidth reading programs out there (like the aptly named Bandwidth Monitor), getting such software straight from an Internet provider could smooth things over with some wary customers.
U.S. Senator Charles Schumer chalked the move by TWC up as a win, stating, “By responding to public outrage and opposition from community and elected officials, Time Warner Cable made the right decision today. I will make sure that any changes going forward are in line with what...families and small businesses need.” Sen. Schumer became an outspoken critic against the tier program after his constituents in Rochester, N.Y. began complaining about being "guinea pigs" in the expanded testing.
“We look forward to continuing to work with Senator Schumer, our customers and all of the other interested parties as the process moves forward," said TWC's Britt.
Time Warner Cable recently revised the different tiers of Internet bandwidth it planned on offering. If customers went over their allotted bandwidth for the billing cycle, each extra gigabyte would cost $1. The "Super-Lite" package, which would give subscribers only one gigabyte of bandwidth to start with, has overage fees of $2/GB. The 10Mbps Turbo package, which comes with 100 GB of bandwidth for $75, would see overage fees stop after an additional $75, allowing for "unlimited" Internet that would cost consumers a cool $150 per month. Compare that to Verizon FiOS, which charges $65 for its 20Mbps (both up and down) service with no bandwidth caps, and you have to wonder what the logic is behind Time Warner's desire to tier its customers. Other bandwidth tiers include 10, 20, 40, and 60 GB, with prices ranging from $30 to $60 a month.
While it's doubtful that we have seen the last of tiered bandwidth programs, you can be sure that the next tier strategy from TWC will be more consumer-friendly. After the seven page response we got from our recent bandwidth-related Question of the Day, it doesn't look like THG readers are too crazy about tiered offerings. What kind of bandwidth plans would it take for you to hop on the tier wagon?
[TWC's claim that consumers are frustrated because of the lack of education into the tiered program is entirely a bogus notion. When a mass of people across the country are up in arms and even Congress gets involved, it's clearly an indication that's something's wrong with the corporate bigwigs that make these decisions, and not the consumer.--Ed./Tuan Nguyen]