Time Warner Cable tries metering Internet use
Time Warner Cable starts customer trial with metered Internet access in Texas — NEW YORK (AP) — You're used to paying extra if you use up your cell phone minutes, but will you be willing to pay extra if your home computer goes over its Internet allowance?
Context & Ripple Effects
Time Warner Cable had already outlined broadband prices tied to customer usage in January, including capped tiers for new Beaumont, Texas customers. The Texas customer trial moves that proposal from pricing plan to an operating test.
The change matters because it makes data consumption a billable household variable, rather than an invisible component of a flat-rate broadband subscription.
First-order effects
- Time Warner Cable’s Texas trial shifts affected customers from a predictable flat broadband bill toward allowances and potential extra charges based on their data use.
- High-bandwidth activities become materially more expensive for customers on the metered plan; Time Warner Cable had indicated that an Apple TV high-definition movie could add as much as $30 under its usage pricing.
Second-order effects
- The trial gives Time Warner Cable customer-usage and price-response data that can determine whether its capped tiers are viable beyond the initial market.
- Video-download services such as Apple TV face a new adoption friction in Time Warner Cable territory: their value proposition is weighed against a customer’s monthly data allowance.
Third-order effects
- If usage billing gains traction, cable broadband competition shifts from selling connection speed alone to managing consumption through allowances, tiers, and overage prices.
- The model points toward capacity-aware pricing becoming a central lever in consumer broadband, with heavy users bearing a larger share of network costs.
The trend: Consumer broadband is moving from flat-rate access toward capacity-aware pricing that ties household bills to data consumption.