TWC – In Rochester NY, Local Company Tells Time Warner Cable to METER THIS MOFO!
NEW YORK (AP) — Time Warner Cable Inc. is testing a new way of charging for Internet use — by the amount of traffic rather than solely based on download speed.
But now that it’s expanding its trial into Rochester, N.Y., it’s run into a problem: The local phone company refuses to play ball.
Frontier Communications Co., whose DSL broadband service competes with Time Warner Cable’s modems, has shelved its own plans to introduce metered billing.
With Time Warner Cable facing the fury of consumers and threats of legislation, Frontier said this week that it won’t sell Internet service with “tiers” of usage, much like the minute allowance of a cell phone plan.
“We have gotten hundreds of calls from Time Warner customers into our call centers,” said Ann Burr, the head of Frontier’s Rochester unit, in an interview with The Associated Press. “I guess it’s been a public relations crisis for Time Warner.”
That move bodes poorly for the future of metered Internet billing. Because the idea is unpopular with consumers, cable and phone companies need to match each other’s moves in introducing it, or one of them gains a competitive advantage by offering the standard all-you-can-eat service.
Stamford, Conn.-based Frontier had 579,900 Internet subscribers at the end of the year. New York-based Time Warner Cable had 8.7 million, making it the third-largest Internet service provider in the country.
The cable company started testing metered billing in Beaumont, Texas, last year, offering plans with 5 gigabytes to 40 gigabytes of monthly traffic, then charging $1 extra for each gigabyte over that.
Many ISPs cap their subscribers’ monthly traffic usage, but the thresholds are usually much higher — at Comcast Corp., it’s 250 gigabytes. It’s also very unusual for ISPs to charge extra when customers go over their limits.
By charging by the gigabyte, the cable company said it hoped to shift the cost of providing Internet service, and the cost of upgrading the network, from those who use the Internet the least to those who use it the most. All ISPs find a small percentage of Internet users consuming most of the bandwidth, usually by downloading or watching movies.
[Comment: what they are wanting to do is keep us from turning off our Cable subscription in favor of HULU and NETFLIX. Can you say conflict of interest?]
Frontier Chief Executive Maggie Wilderotter outlined an approach very similar to Time Warner Cable’s last fall, saying the company would provide tiered usage and charge $1 to $2 per gigabyte above 5 gigabytes per month.
Consumer advocates point to a few problems with the metered approach.
Read the entire post at Google.
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