Time Warner's Unlimited Download Plan: $150 a Month
Time Warner Cable has modestly softened its plan to test usage limits for its broadband data customers. Landel Hobbs, the company's chief operating officer, has just published a post with the new price tiers for a test of the plan it will conduct in four cities.
Context & Ripple Effects
Time Warner Cable had been linking web prices to usage since January 2008 and was testing Internet metering by June, making the four-city trial a revision of an established pricing strategy rather than a new direction. The revised tiers retain an unlimited option, but place it at a $150 monthly price point.
The test also arrives as Time Warner CEO Jeff Bewkes promotes TV Everywhere, an approach built on verifying paid-TV subscriptions for online access. That makes broadband pricing a parallel test of how the company can manage the economics of growing online video use.
First-order effects
- Time Warner Cable customers in the four test cities face revised usage-based broadband tiers, while subscribers who want unlimited downloads must pay $150 per month.
Second-order effects
- The trial gives Time Warner Cable a way to distinguish light and heavy users in its broadband pricing, while making the cost of unrestricted online-video consumption more explicit to customers.
Third-order effects
- If usage tests spread beyond isolated markets, broadband providers may shift from flat-rate access toward capacity-aware tiers, with heavy consumption becoming a separately priced service level.
The trend: Broadband providers are testing whether rising online-media use can be managed through usage-sensitive access pricing rather than a single unlimited monthly rate.