TWC to Customers: You Don't Want Tiers, You Don't Get Super-fast Broadband
Well, I hope all of you who complained about Time Warner Cable's plans for metered broadband are happy. Shortly after the cable company pulled its metered broadband trials, it's also rethinking its deployment …
Context & Ripple Effects
Time Warner Cable's push into usage-based billing began with the January 2008 metering trial in Beaumont, Texas — where downloading an HD movie through Apple TV could cost as much as $30 — and collapsed last week when the company pulled its data-cap trials after a public outcry that reached members of Congress.
GigaOM now reports — though TWC has not confirmed it — that the operator is tying its super-fast broadband deployment plans to whether customers will accept tiered, metered pricing: no tiers, no speed upgrades. If accurate, the backlash hasn't just killed the trial; it has made the business case for network investment itself contingent on winning back the right to bill by usage.
First-order effects
- Customers in Time Warner Cable's footprint stay on flat-rate plans for now, but the company's roadmap for faster speed tiers is being held hostage to their earlier rejection of metering — a direct trade-off between price predictability and performance upgrades.
Second-order effects
- Competing ISPs get a marketing opening: with metered billing now politically radioactive after drawing Congressional attention, rivals can differentiate on unlimited flat-rate service while letting TWC absorb the reputational cost of pushing usage-based pricing again.
Third-order effects
- The episode hardens a pattern where broadband operators justify or defer capital spending on faster networks based on their ability to monetize usage — pushing the debate over metering from product pricing toward regulatory and Congressional territory if TWC revives it.
The trend: US broadband is entering a fight over whether capacity-aware pricing survives consumer and political backlash, with operators increasingly linking network upgrade decisions to their ability to bill for usage.