Austin360 blogs > Digital Savant > Archives > 2009 > April > 01
Wednesday, April 1, 2009
(UPDATE #4: bit more detail) TWC/Road Runner tiered Internet pricing coming to Austin/San Antonio
Updated, 6:15 p.m.: One more update before I leave the office. In answer to the question about whether current contract customers will be able to get out of their contract based on this change, Time Warner Cable spokeswoman Melissa Sorola said via Twitter, “too early to tell - we’re still in the data collection phase of this.”
Updated, 5 p.m.: I just spoke to Alex Dudley, vice president of public relations for Time Warner Cable. I’m working on a story for the print edition, but here are the quick highlights of our conversation:
- No plans for rollover bandwidth from month to month. Use it or lose it.
- “86 percent of our customers at least have nothing to worry about,” Dudley said, “That’s the percentage of customers that will be left unaffected by the trial.” I asked if that’s in comparison to Beaumont and whether that’s a very different market. He replied, “Internet usage is a lot like television viewing. It doesn’t vary from geographic area to geographic area.”
- While this will affect customers in real dollars in San Antonio/Austin, this is still considered a trial in terms of whether it will continue to other TWC markets.
- The three-month grace period will begin in early summer.
- A gas-gauge-like Internet usage monitor will be on the TWC Web site. Customers will also get info on their usage in their monthly bills.
- The 100-Gigagyte “super-tier” will be “significantly more expensive” than the $55/40 GB a month tier mentioned in the BusinessWeek article. However, “We haven’t settled on a price yet,” he said.
- I’m waiting to hear back about customers under contract and how this will affect their terms.
- Dudley cited bandwidth-hogging things like HD video and BitTorrent as reasons for the change. “It’s not about trying to limit anyone from doing anything. It’s trying to provide a business model that allows them to do what they want to do for the foreseeable future,” he said.
- Final thoughts from Dudley: “We know we’re going to learn a lot in this trial. We will listen to feedback from our customers. We’ll make decisions based on what we learned.”
Thank you for all your comments. Keep them coming.
Updated, 3 p.m.: Time Warner Cable has released this statement about the tiered pricing rollout. News in there includes a 100-Gigabyte “super-tier,” but no mention of price. It also says that customers will have three months to adjust to the change before tiered billing starts and that a “Gas gauge” will tell them how much bandwidth they’ve consumed. It also says the prior pricing experiment in Beaumont was “Successful,” but does not specify if it was successful for customers or for the company. We’ll post more info as we find it.
According to an article in BusinessWeek, Time Warner Cable will begin charging customers of its Road Runner Internet service based on how much bandwidth they consume. By phone, a Time Warner Cable spokeswoman confirmed to me this afternoon that it will happen “sometime this summer.”
We knew this was a possibility back when the company tried it out in Beaumont, but it looks like it’s becoming a reality. What this means is that depending on how much you pay for Internet service, you would be held accountable for going over a predetermined download limit.
According to the article, the Internet cap would depend on the level of service, ranging from from $29.95 to $54.90 a month with caps ranging from 5 to 40 Gigabytes of data a month. Customers would be charged $1 for each additional GB of data.
Who does this hurt? Anyone who plans to download HD video from services like iTunes, Vudu or even satellite providers like DirecTV who use a customer’s Internet connection to deliver Video On Demand.
HD video takes up a big chunk of bandwidth. One HD movie might consume as much at 8 GB of data alone, the article says.
Time Warner says that the top 25 percent of downloaders in its Beaumont trial consumed 100 times more data than the bottom 25 percent. But this seems like a shortsighted view — more people will be consuming more bandwidth as online video, music and gaming services expand.
I know that in my own experience with Road Runner, I’ve never had to worry about how much media my family consumes or to stress out about downloading online content I’m already paying for. I’ve been paying about $46 a month for Road Runner for something like 10 years.
Will I stay with Road Runner if tiered pricing becomes a reality? No. Even the 40 GB cap is too little for the way my family consumes Internet content and I don’t want to have to keep checking a meter to see how we’re doing. I have enough stress in my life. The only way I’d find it palatable is if I received a discount for months when I went under the cap. It doesn’t sound like things will work that way.
But then, what are the other options?
Road Runner customers — does this kind of pricing work for you? Post in the comments.
And no, it’s not a bad April Fools’ joke. I wish.
Edited to add, 1:28 p.m.: Time Warner Cable spokeswoman Stacy Schmitt told me by phone, “We’re in the early stages,” and that the company is currently collecting data and determining what pricing will be. However, she didn’t deny any details in the BusinessWeek article and said, “We will be doing it sometime this summer.”
More links: Consumerist and DSLReports.com have more info. DSLReports notes that the cities getting tiered pricing are ones in which Verizon FIOS service is not available.
Edited to add, very late at night: If you want to see one of my spectacularly wrong predictions, read what I wrote about TWC’s tiered pricing 14 months ago. Ha. Heh. (Sigh…)
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