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Time Warner Cable to shelve new Internet pricing plan

Friday, April 17, 2009

(Updated 3:20 pm)

Staff Reports

Time Warner Cable backed down Thursday and agreed to postpone its test of tier pricing for Internet service in the Triad and other markets after encountering an uproar that caught the attention of Congress.

The company said it was postponing tiered pricing until it could better educate customers on the new fee structure.

“That has to be one of the top failures in U.S. marketing and pricing history,” said local tech firm owner Sue Polinsky. “That’s up there with new Coke.”

Polinsky said the issue has brought what were once considered “geek issues” to the attention of everybody. The issue isn’t dead, she said, and local people need to stay informed.

Currently, Time Warner offers flat-rate pricing for unlimited Internet usage.

Earlier this month, Time Warner announced it would test metered usage plans in the Triad; Rochester, N.Y.; and the Texas cities of Austin and San Antonio. Under the new system, customers would choose Internet usage plans that cap uploads and downloads at 10, 20, 40, and 60 gigabytes. Customers would pay $1 per GB in overage fees if they went over their caps.

For the Triad and Rochester, the company offered two additional tiers, including a “budget” tier allowing 1 GB of data use per month for $15 and a “super-tier” allowing up to 100 GB of data use for $75. The company also said it would limit overage fees to no more than $75, essentially creating an “unlimited” plan for those willing to pay the fees.

Company spokeswoman Melissa Buscher said Time Warner still believes tiered pricing is the best option for customers.

“It’s clear from the response we’ve gotten from Greensboro and other areas that there’s a lot of misinformation out there,” Buscher said. “What we heard is no one knows what their usage is.”

To solve that issue, Time Warner is developing ways to help explain the fee structure and educate customers on their usage. Buscher said the company is working on a Web site that customers could go to that would monitor their Internet usage, similar to some utility company sites.

Customers will also have access to “real-life” examples of Internet usage to get an idea of how much they consume.

Customers have been outraged since learning of the tiered pricing test. They contacted local and state officials an congressmen.

Eli Abrams owns a computer repair shop in Greensboro and has advised clients for years to use Time Warner’s Internet service because of its speed and lack of bandwidth caps. He said he hopes the company will reconsider the new fee structure altogether.

“What they’re trying to do with a data cap is essentially eliminate any competition they have with their cable TV and phone services” while alienating their Internet customers, Abrams said.

Customers typically rack up gigabytes by downloading movies, watching TV shows online and playing online games.

But they also eat up bandwidth with routine matters, including periodic updates of software such as Windows and Adobe Reader , Abrams said.

Some people are still planning to protest the fee structure Saturday.

The protest, from 11 a.m. to 5 p.m. at 1813 Spring Garden St., is planned for the same time as a demonstration in the also-affected market of Rochester, N.Y.

Buscher said the company has no timeline for reintroducing the fee structure in the Triad.

Contact J. Brian Ewing at 373-7351 or brian.ewing@news-record.com

Time Warner Cable Statement

Time Warner Cable (NYSE:TWC) today announced it would alter plans to test Consumption Based Billing, shelving the trials while the customer education process continues.

Time Warner Cable Chief Executive Officer Glenn Britt said, “It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing. As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met. While we continue to believe that consumption based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process.”

Time Warner Cable also announced that it is working to make measurement tools available as quickly as possible. These tools will help customers understand how much bandwidth they consume and aid in the dialog going forward.

Britt added, “We look forward to continuing to work with Senator Schumer, our customers and all of the other interested parties as the process moves forward, to ensure that informed decisions are made about the best way to continue to provide our customers with the level of service that they expect and deserve from Time Warner Cable.”

MORE ONLINE

U.S. Sen. Charles Schumer: Time Warner will shelve plan

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jrp1

April 16, 2009 - 2:50 pm EDT

I'm not a Democratic supporter, but hats off to Chuckie!. I only wonder what he gave them in exchange for that. Maybe the Senate is now going to back off on their net neutrality discussions.

Illiterati

April 16, 2009 - 2:52 pm EDT

Finally, some truly good news for a change! It took New York politicians to stand up to TW while our own so-called leaders only had the nerve to "look into it" and "see about the possibility" of bringing in competition. We owe a big thanks to the Yanks on this one.

weatherwithyou33

April 16, 2009 - 3:16 pm EDT

This doesn't change the need for competition one bit. We still must demand competition to TWC!!! As you can see by their response they are simply delaying the usage caps. They are hoping they can continue to brainwash customers into thinking they need consumption based pricing. While it is clearly a temporary victory the only real change will come from added competition. TWC is still in the drivers seat with a monopoly in our market and they can reinstate their cap policy at any time. Please continue to demand other service providers bring their cable and fiber service to us. Competition lowers prices and we all benefit by having a choice.

poe_diddley

April 16, 2009 - 3:49 pm EDT

i agree totally. we need more competition in this area, or it will just happen again in the future when they get their attack plan better formulated.
Verizon FIOS we need you in Greensboro!

poe_diddley

April 16, 2009 - 3:48 pm EDT

Melissa just doesn't know what she's talking about. Everyone who opposed this plan was fully educated on it as much as we could be. TWC posted the pricing scheme, and no one thought it was fair. How were we uneducated? Oh, we hadn't been TRICKED into thinking it's a good idea, I see.... How would educating anyone on this wild concept make us like it? I have a pretty good idea what my usage is, and i know that I would probably be one of those who had to pay $150 a month, which is DOUBLE what i pay now. There would be absolutely no improvement in my service, I would just have to pay more for it. I'm thinking maybe TWC is the one who just got EDUCATED by their customers.......

Tigger

April 16, 2009 - 3:49 pm EDT

Sounds like TW is still determined to do the tiered pricing but for now it's a small victory. I can honestly say that if they do succeed with this, I will cancel any and eveything with TW. It comes down to nothing but greed........

laserguidedloogie

April 16, 2009 - 4:53 pm EDT

Having metered service on a cable, designed for high data throughputs, is stupid AT BEST, if not downright greedy. The real story here is that TW feels like it is losing customers for it's cable TV offerings to the internet (Hulu, etc) and so are looking to keep people from ditching the cable TV for the internet. Interesting that none of the lap dog media goons report on that. Instead what we get is credulous regurgitation of TW's press releases by the NR and others.

As the PR flack said, its not over. They simply decided they need more time to propagandize the public. Looks like you NR people still have work to do.

Ken
www.LaserGuidedLoogie.com

conturax

April 16, 2009 - 5:02 pm EDT

I would have love to have been a fly on the wall in the corporate headquarters at Time Warner. For someone who's core business is providing internet, they still have no clue as to the power of the people who use it. I want to give kudos to everyone here on this site and sites like broadbandreports, dslprime, etc which brought a lot of exposure to this terrible plan.

What is insulting is these dumba** exec's still are insulting us all saying we didn't understand what they wanted to implement and they want to reeducate us... Last time I heard the term 'reeducation', its what nazi germany would call concentration camps. Keep up with the media spin, Time Warner... We can see right through your BS.

bigpaws2

April 16, 2009 - 5:41 pm EDT

"Time Warner Cable (NYSE:TWC) today announced it would alter plans to test Consumption Based Billing, shelving the trials while the customer education process continues."

Excuse me??????? I AM an EDUCATED customer, thank you very much, and I resent the inference that I am misinformed or ignorant about this issue. For that snotty attitude alone I would change companies, if I had another company to change over to. Alas, Time Warner has a virtual monopoly in our area. Yes, Time Warner, I have done my homework on this issue---it's not that I don't understand what you are trying to do; the problem for YOU is that I understand too well. I say: bring on the competition! It's time for our area to have a choice and the power to exercise it.

iamconcerned

April 16, 2009 - 6:17 pm EDT

While I agree with everyone who posted about how this is unfair, what can we do about it? I'm all for getting on a soap box and expressing my feelings but, does anyone have a action plan on what we can do?

How do we get competition into this marketplace?

How do we keep TWC from imposing this?

How do we know if TWC isn't going to bribe or at least show lawmakers how much more money they could generate in taxes on these added fees that will benefit the state? Don't you think this [the added money in taxes] will change some minds in the Capitol?

Also, what they really mean by educating the consumer is Time Warner Cable will attempt to inform everyone this plan will discourage those that use the internet to download media using bit-torrents and such --- basically saying most people are using the internet for illegal purposes. Then, this will garner sympathy from customers who might begin to think,,,,, hey, maybe TWC is right, I'm getting punished by those who download more than me, I don't need to pay for a lot of those gigabytes, I don't use that much.

It's all a game folks that we will be caught up in and will never be able to do anything about it. Money talks and TWC will be the one talking with the government to keep competition out and them more in.

saveus

April 19, 2009 - 6:14 am EDT

Best thing that you can do is contact other companies who provide high-speed access in NC and ask them to come to Greensboro. If they get enough people who say that they'll sign up, someone else will settle here.

Secondly, stay on your elected reps about this issue. It will seem futile, of course, but again, with enough people contacting them they will be forced to do something.

If this issue is just forgotten, it will be back - and probably within six months. Corporate types are vengeful types. They aren't going to be happy that they had to "alter their plans" and, eventually, they will try to force this through.

ncb

April 16, 2009 - 6:11 pm EDT

So to sum it up, TWC believes they need to educate their customers because we are all essentially dumba$$es who dont understand what the plan wouldve meant for us.

Unbelievable. We need to break their monopoly here GSO. Screw these people

Norm*

April 16, 2009 - 9:15 pm EDT

Yep, you're right. It's all about competition. Yoo hoo, Government folks. Sign internet access up for the same treatment as other public utilities like the insurance commission, electicity and natural gas. Just as important and right now they think they can pull any crap their greedy little hearts and wallets desire. Get off your A!!es local legislators! Control the thieves. It isn't like they are adding anything to the local economy, they're just taking money out of pockets for more profits without returning value to the state or local economy.

mikesus

April 16, 2009 - 6:57 pm EDT

The problem is that TWC wants us to pay for their incompetence.

Let me give you an example.

I added a channel pack and as soon as it was added, my DVR service stopped working. (this is not the first time they have done this) I spent 30 minutes on hold to be told to reboot the DVR. That of course did not work as it was a programming problem on their end. So their solution is to send a guy out. Wanna know what the contract guy did the last 2 times? He called a phone number and spent 40 minutes arguing with someone that it really wasn't working and they didn't do it right. Wanna know what he did with the box? Nothing, zero zilch.

They feel its more cost effective to send someone out rather than fix a problem that was obviously started by their own incompetence.

Who do you think pays for this incompetence? The customers!!

As of today, they can count on one less to support this mess.

conturax

April 16, 2009 - 8:36 pm EDT

When they first announced this a few weeks ago, I immediately turned in my HD DVR as retaliation. I kept internet to see if they would follow through with this plan. Anyway- I got Dish Network and their HD DVR along kicks Time Warner's butt. No rental fee, 1 DVR controls 2 rooms separately with 2 wireless remotes, the DVR is a 500GB hard drive compared to the crappy TW DVR, and my service is better and cheaper. Tons more HD channels too.... No Brainer.

Norm*

April 17, 2009 - 11:25 am EDT

This has repeatedly been my experience. Something on their end, intermittent, blame the customer's equipment, schedule a tech person, it's a bunch of crap to hide their infrastructure issues. The only thing that allows them to exist is the lack of credible competition.

coolhifi

April 16, 2009 - 9:14 pm EDT

Only a couple of posters have made mention of the debt of gratitude we owe the Hon. New York Sen. Schumer. The Rochester Democrat and Chronicle newspaper also made major efforts to expose Time Warner's scam, including a meeting with TW officials which they attempted to stream live. (Even at the risk of going over their cap...) Of course, TW refused this meeting at the last minute, since the video of the meeting would have given the local NY consumers a fair and unvarnished look at the travesty TW planned. Thankfully, the N-R of Greensboro also made similar efforts.

I'll bet that if this fleecing were to have occurred in the Raleigh market, we would have heard from our NC politicians, who, excepting Mayor Johnson were suspiciously silent.

Is there a lesson to be learned here? Our unfettered internet truly does give the individual power to influence events. In eras past, this same influence required ownership of printing presses. The combination of presses and internet this time proved fatal to TW's plans. I do, however, suspect they will be back. Keep one hand on your wallet, as this is not over.

A heartfelt thank you to all who gave their time and energies to this effort.

owDAWG

April 16, 2009 - 9:56 pm EDT

One thing that kind of confuses me is how a company like Verizon and ATT can spend up to $23b on their network upgrades while TWC spends a fraction of that and claims they don't have the capacity and need to charge customers to reduce their usage. At the same time they post record profits, increased user base, and cost savings on their network infrastructure. It seems to me like they are either trying to increase profit off their internet service or refuse to upgrade their internet services in the face of increased demand.

Wingsy

April 17, 2009 - 6:11 am EDT

"The company said it was postponing tiered pricing until it could better educate customers on the new fee structure."

Education can be a two-way street...

"Time Warner Cable customers today announced they would alter plans to continue using TWC, shelving future plans to upgrade their service agreements while the vendor education process continues."

atticusfinch

April 17, 2009 - 9:01 am EDT

Where were Kay Hagan and Howard Coble during this controversy? Why did it take a Congressman and Senator from New York to take on Time Warner for us? We elected and United States Senator and a Member of Congress from Greensboro in the Time Warner monopoly. Why did they both keep silent when we needed their help? Did they receive any campaign money from Time Warner? Howard Coble should have made the announcement about Time Warner in Greensboro.

saveus

April 19, 2009 - 6:19 am EDT

This is a great question. I messaged and called Hagan's office twice with no response. As someone who voted for Hagan - not because I believe in everything that she does, I was just done with Dole - I won't forget being ignored.

I do not expect reps to say "how high?" when I say "jump", but, you have to at least recognize that we are sentient beings (most of us anyway).

I think that Senator Hagan may be in over her head, and let's hope that there'll be some competition again for that seat the next time it comes up for grabs.

eyesnot

April 17, 2009 - 1:47 pm EDT

Don't be fooled folks. The only education the public needs is to memorize that it didn't cost you by the Gb for television shows you have been watching your entire lifetimes. Yep, the same broadband technology works the same for cable tv as it does the internet and digital phones. It just costs less to deliver things digitally, especially if you do it on a system of cable wiring in place and not upgraded now for over 30 years.