February 27, 2012

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Launching An Optional Usage-Based Broadband Pricing Plan In Southern Texas

Today, we are launching an optional usage-based pricing program for customers who want to save money on their broadband bills in southern Texas. This includes San Antonio, Laredo, Corpus Christi, the Rio Grande Valley and the Border Corridor.

Details are explained in this post, but if you find that you want more information, you can find that here: ‘Essentials’ Broadband Information.

Yes, we did try this before, a few years ago. And yes, pretty much everyone agrees that it didn’t go so well. So we listened to customer complaints. A lot.

Consequently, Time Warner Cable customers will always have access to unlimited broadband at a flat monthly rate. Usage-based consumption is optional, and it’s designed to save light users money. Customers can switch back and forth as often as they like, but if they choose not to switch, nobody’s switching anything for them.

We profit from unlimited consumption, and a free, open Internet is the sort of Internet that has gotten us this far.

But now, if our customers in southern Texas choose a tiered plan, then they’ve got a chance to knock a few dollars off their monthly bill. Having a usage-based pricing plan isn’t going to be for everyone, and that’s fine, too. A tiered plan might not be right for me, but my Mom’s not going to be passing Final Cut projects through DropBox to her friends at church anytime soon — she may benefit by saving a few dollars on Web capacity she’s never going to need.

Ultimately, we want to give our customers that maybe use less data a price break. Heavy data users are a smaller portion of our customer base.

Customers who don’t think they need unlimited broadband can try this Essentials plan, which offers:

1) Up to 5GB/month of data transmission for a $5/month discount from one’s current monthly bill. All Standard, Basic and Lite broadband customers will be eligible. Turbo, Extreme and Wideband customers will continue as always, with access to unlimited broadband and no optional tiered plan or discounts.

2) The ability to opt-in and opt-out of a tiered package at any time.

3) A “meter” that tracks usage on a daily, monthly, weekly or even hourly basis, enabling customers to accurately gauge usage. Below is an example of the hourly meter:

3) A 60 day/2 billing-cycle grace period to allow customers to adjust usage patterns. During this time we will notify customers of overages but won’t charge for them.

4) Overages will cost $1 per GB, not to exceed a maximum of $25/month.

This presents the opportunity to save $5/month from a monthly broadband bill.

We already have the TV Essentials plan for $39.99/month that offers low-income households to have access to cable, in a stripped down package. This is meant to be the broadband equivalent.

There is an ever-growing segment of the American population that has to make some hard choices about which bills to pay and which services to cut. We’re hoping that by introducing this plan, we’ll be able to stay in more families’ lives when the hard cuts have to happen.

Although our Internet service is terrific, it’s a competitive world out there, so we’re trying some new stuff to not only retain the customers we have today, but get new customers tomorrow.

By offering broadband pricing based on usage, we’re hoping to enhance the value of the subscription to the lighter users that represent a large number of our customers. And we’re hoping that attracts more customers from our competition – people that are drawn by the flexibility, choice, and opportunity to save.

Again: we know that when we attempted a usage-based billing plan before, it didn’t go well. All participation in the Essentials plan is opt-in, with the opportunity to save a few dollars each month. It’s not going to be for everybody, and that’s fine — all Time Warner Cable customers will still have the option of selection an unlimited broadband plan.

+- 14 Comments

  1. Steven Demanett's reply

    While I am an extremely happy Wideband customer, I am glad to see Time Warner taking all the customer complaints from the past into consideration for this new tier of service.

    This is even a plan I can get behind, knowing Time Warner will always offer unlimited plans for me, everyone wins!

    Glad Time Warner isn’t following other cable companies with hard caps and threats of, as well as out right banning customers from their services for overages.

  2. Tom Wellman's reply

    As a Time Warner Cable customer, this plan isn’t for me since I do stream a lot of Netflix, Slingbox, and mlb.tv on their Standard Internet plan (which for me is plenty fast enough) it is nice to see that Time Warner Cable is getting it right when it comes to people giving the option of a lower priced usage based billing plan while giving the people like myself unlimited internet while not doing away with the unlimited plan or making unlimited internet prohibitively expensive like our Canadian neighbors. With plans like this, I intend to stay with Time Warner Cable, especially when it comes to their internet.

  3. Starstuff's reply

    Sound interesting but… the devil is in the details.

    First I don’t know about Laredo but the RGV, border corridor and the Corpus Christi divisions don’t even have wideband available to them. You are proposing something TWC subscribers widely REJECTED a couple of years ago and not only that you are proposing these plans in markets that haven’t been upgraded. First upgrade those markets to the latest technology.

  4. Phillip Dampier (@stopthecap)'s reply

    Stop the Cap! got started in 2008 battling unjustified usage caps and throttling of home broadband accounts. In 2009, we were in the front lines here in Rochester doing battle with Time Warner for their ridiculous cap experiment that offered unlimited Internet, for those who wanted it, for a whopping $150 a month.

    We raised a ruckus then and we’ll raise one again if Time Warner ever returns to those kinds of Internet Overcharging schemes.

    While our group has never been opposed to optional usage based billing, the historical trend is that once established, providers (with Wall Street’s encouragement) start whittling away at the remaining unlimited plans until they are gone.

    I appreciate your admission Time Warner makes buckets of money on unlimited service — they do, and unlimited access is one of the reasons for the runaway success of TW broadband. We also appreciate your understanding that consumers overwhelmingly do not want flat rate broadband taken away.

    But we still have some concerns that need answers before we consider this no threat to the unlimited broadband Time Warner has sold us for well over a decade:

    1) Can you assure us the unlimited option will continue at the same basic price point it has since inception? Time Warner’s earlier experiment would have dramatically hiked the price for unlimited service.

    2) Can you assure us unlimited users will enjoy the same priority access to Time Warner’s broadband network metered customers do? Traffic prioritization and throttled speeds are increasingly concerning AT&T wireless users grandfathered on unlimited plans the company is clearly trying to make as unattractive as possible.

    3) While your attitude about unlimited access is refreshing, CEO Glenn Britt and CFO Irene Esteves have repeatedly called usage based billing ‘inevitable’ and Esteves alluded it was the perfect weapon against cord cutting in statements as late as December. That weapon isn’t much of a threat if UBB is optional. Do Mr. Britt and Ms. Esteves now share your sentiment about unlimited access, or are you stating your own personal views. We’d like to know the top management of TWC has modified their positions away from ramming this kind of pricing down customers’ throats the way AT&T and certain other cable operators are now attempting.

    There is simply no justification for limiting access at today’s prices, especially with Time Warner’s upgrade to DOCSIS 3 technology. That being said, we have no problem if the company wants to market a lower cost alternative to those who want it and can switch plans at any time.

    Our best wishes,
    Phillip M. Dampier
    Editor, Stopthecap.com

  5. Roc Rizzo's reply

    Isn’t this designed to limit the amount of time, and the number of times that one uses online video services like Netflix? WTG Time-Warner, let’s put Netflix out of business, so that people are forced to subscribe to cable, and Time Warner Cable becomes the sole source of our film viewing!

  6. Jeff Simmermon's reply

    @Roc – It’s completely optional, and aimed at people who likely wouldn’t be using Netflix. We know it’s not going to be for everyone.

  7. Kevin's reply

    “Time Warner Cable customers will always have access to unlimited broadband.”

    Don’t believe this for a second people. It may be optional now, but it won’t be later on. Cable companies are looking to keep people from cutting the cord and save their old business models instead of adapting to newer technology.

    A 5 GB cap is insane and that $5/month savings is practically nothing.

  8. consorts's reply

    great for grandma
    i use about 5gb per week, so this won’t help me,
    but my grandparents who mostly browse and email
    definitely stay under 5gb and would enjoy the discount.

    if twcable was smart, once the metering option worked,
    they should discount on a sliding scale, like $1 off for
    every 5gb you don’t consume, so discount would be;

    $5 under 5gb/mo
    $4 5-10gb

    $0 over 25gb

    of course keep this program opt out by default.
    but advertise it’s existence to your customers.

  9. SO_CAL_RETAIL_SLUT's reply

    Concurring to Mr. Dampier at stopthecap.com, my hunch is that once this “test” in Time Warner Cable’s San Antonio and southern Texas markets completes, Time Warner Cable will roll this out to more markets, most likely it’s entire footprint including Bright House Networks.

    With the “RoadRunner” “Time Warner Cable” brand names going away during 2012, the newly branded named company fka Time Warner Cable can very easily introduce this “savings” tier as well as introduce caps, all under the ruse of the “new” company name…how convenient.

    As Time Warner Cable has publicly stated in various publications, blogs, media interviews, analyst presentations, etc., caps and/or blocking certain types of traffic, such as non-Time Warner Cable/renamed company VOIP calls for it’s residential and business customers is not the most wise business decision, but in markets with little or no competition (or those competitors that already have caps), Time Warner Cable can basically implement caps and nobody will blink an eye.

    Of course, in these Texas markets (as in the first test), Time Warner Cable does not face stiff and intense marketing competition from the likes of Verizon’s Fios offering.

    Two markets that come to mind are the New York City and greater Los Angeles areas where Verizon Fios is available in many areas (not all), and in the case of southern California, AT&T has a large footprint, so no worry on Time Warner Cable’s part to have to compete with AT&T DSL or U-verse on caps. Southern California is a large market, and Verizon’s own legacy wire line footprint covers a wide and diverse (from very high-income, to lower income) areas of southern California, so, I do not see Time Warner Cable and the newly renamed company implementing caps anytime soon in those markets, if at all.

    But for these named Texas markets, and other markets where Time Warner Cable has little or no competition…look out!

    Also, a comment for Mr. Simmermon. You may want re-phrase your choice of words when referring to the Time Warner Cable TV Essentials service as a “stripped-down” service. I don’t think your marketing professionals think of it that way!

    For whatever it’s worth, in my area of the city of Los Angeles, CA (a legacy Adelphia market), I am subscribed to the Broadcast level of service, and the monthly fee is $17.00, plus tax and franchise fee.

    In addition to the local over-the-air Broadcast channels and sub-digital channels, I also receive CSPAN, CNN, Discovery Channel and National Geographic included in the Broadcast channel line-up. Granted, Los Angeles has the largest number of over-the-air channels, and when you take out the foreign/ethnic stations from the mix, you are still left with a great number of viewing options. Plus, I still receive CNN, Discovery and National Geographic, and supplant that with Hulu Plus and Amazon Prime with three Roku boxes throughout my home, and occasional RedBox rentals.

    Ironically, I just pulled the plug yesterday, February 29, 2012 on the Netflix streaming service, as Starz Play and Disney content is no longer available.

    Yes, today, consumers do have choices, unfortunately, in markets (usually small to mid-size) competition does not really exist to the degree that it does in large markets such as Los Angeles and New York, and the number of choices in those small to mid-size markets is pales by comparison.

    SO_CAL_RETAIL_SLUT

  10. Blaine Grant's reply

    I think the only way I will subscribe to your service for internet is if the usage based billing is optional. If you make usage based billing and its under 250GB and you charge a $1.00 for every gig used then I will not subscribe. Now if you do the 250GB then throttal the service like if I have a 30.0 down and 3.0 up and you slow it down to 3.0 down and 384kps up and not charge for every gig used then I would concider subscribeing.All though I would prefer an unlimited useage to still be an option. So to the CEO of Time Warnner please take what I am saying in to concideration. I depend on the internet for so I can live independedly. I am leagly blind. I need unlimeted data or some thing to that equivalent like if you do go the useage rout then at least slow it down like what I am talking about. I cant offored your service if you charge a dallor for every gig over the 250 cap.

  11. imrubicon's reply

    I know Im very happy with my Broadband with Time Warner right now but if they pull that cap bull ( like didnt our tax dollars pay for it in the first place ) then I will be looking for a different way to get information downloaded from the internet. My wife works from home and Im in IT so work from home sometimes. Thsi would be like giving the oil companies money to sell us gas at higher rates .. errr wait we do that .
    Bottom I hope the little bit of savings of $5 is not really any savings and they have us hooked and now want to clean us out. Its juast greed and really no way to show they need ths to break even or even make a huge profit . It will become censorship of a sort as we couldnt use netflix but we still could use our cable TV . Hmmmmmm wonder who that helps ?

  12. Jarkko Frösén's reply

    $5 per month that is really the cheapest broadband for all specially to those who think they don’t need unlimited broadband..

  13. DJ's reply

    I am glad to see that usage based billing is only and will remain only optional. However, If it was going to be the status quo, then I would have rethink pioneering the idea to the masses and my local congressman that now you are a public utility. My thoughts, once you demand to meter a land connection to my home or any home for that matter, based on usage, the PUC should be your boss. Lastly, thank you for listening to your customers.

    Best Regards

  14. Virgilio's reply

    Great blog! Is your theme custom made or did you download it from somewhere?
    A theme like yours with a few simple tweeks would really make
    my blog jump out. Please let me know where you got
    your design. With thanks

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