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Thursday, April 16, 2009
Time Warner Cable shelves tiered billing; what just happened?
In news, the quickest way to ensure that something big happens is to leave the newsroom for a while (same principle as car washes and rain). As I returned from a training session where I spent most of the day, I started seeing the first posts roll in on Twitter announcing the news from Time Warner Cable.
In a statement posted online around 2 p.m., the company said it is “shelving” its controversial consumption-based billing, which was scheduled to roll out in four cities later this year, including Austin and San Antonio in October.
This comes, of course, after two weeks of public outcry including Web sites devoted to fighting the so-called “bandwidth capping,” a City of Austin meeting in which residents voiced their concerns and a previous statement admitting that the company’s communication about the issue had been “Inadequate.”
Indeed, today’s statement does not call the pricing plan unwise or unwanted, and places the problem squarely on customers “and other interested parties,” suggesting that “misunderstanding” about it is the reason for changing course.
Company CEO Glenn Britt is quoted in the release as saying, “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 said it will offer tools for its customers to measure their bandwidth use “as quickly as possible,” presumably the Web-based gas gauge the company had spoken about earlier.
The company didn’t close the door on the possibility of revisiting this kind of billing, but it’s hard to imagine a situation where it wouldn’t again meet such a backlash, especially now that customers and those who fought on Twitter and the Web against it will know that their efforts seemed to have turned the tide.
So, let’s take a moment and try to figure out what happened and what we learned:
- Introducing something that could affect people’s wallets in a tanking economy will provoke an outcy: For customers who’ve been using Road Runner for years, learning that a major change in billing is coming was cause for concern, especially in this penny-pinching, layoff-rich era. Even if you accept Time Warner’s argument that only 14 percent of its customers might be adversely affected by the new billing, that’s still a lot of people. Many of the other 86 percent (these are Beaumont numbers, remember) were probably worried, too.
- Online mobilization is fast and, apparently, it works: Whether it was on Twitter, Facebook or dedicated Web sites, the response to Time Warner’s plan was almost uniformly negative and swift. On this blog alone, we received about 300 comments on blog entries related to the plan. Believe me, I never get 300 comments about anything. This blog’s not super-popular.
- The caps as they were initially introduced were far too low for the Austin market, a fact even Time Warner acknowledged in a revision to what was in the plan in its first Beaumont test.
- Early adopters, the ones who would have been most affected by TWC’s plan, are also the most vocal online: they spread the word quickly on gadget blogs and that news spread to regional and national media outlets.
What now? I think it’s going to be very difficult for AT&T to entertain the idea of continuing its own metered billing tests in the face of today’s news. What at one time seemed like an inevitability for anyone who has broadband Internet service now is only a possibility and one that seems like an uphill battle for these companies.
We learned that there should be more broadband service options for customers of all economic brackets and that smaller companies providing this kind of service don’t reach all the customers who may want it.
And perhaps the most valuable lesson we learned from Time Warner and this situation is that Internet traffic isn’t free. Even if it’s pennies on the dollar, someone down the line pays for the videos we view online, the e-mails we send and the Tweets we post. We pay for it in part, surely, but it won’t be the last time we’ll be reminded that somebody out there has to mind the Internet pipes that we’d come to take for granted.
Whether it’s Google losing millions of dollars a day because it doesn’t monetize YouTube videos well enough or companies like Time Warner struggling to find ways to deal with customers who use a very high amount of data every month, it’s far from the last time we’ll be asked to think about these costs and be expected to help foot those bills.
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