Time-Warner Cable issued a new statement today:
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.
The good news is that the metered Internet trials are called off for now.
The bad news is that TWC is casting this as a consumer education problem that they’ll go back and fix, and not the retraction of a fundamentally flawed business plan.
As the statement notes:
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.
I suspect TWC is betting that once the bulk of their users see bandwidth consumption that falls into the 2-6 GB range, they’ll be accepting of 20GB or 40GB caps.
Except, I don’t think they will.
A dashboard meter and an education campaign don’t address the critical flaws of the TWC metered Internet proposal. The flaws include things such as:
- The plans don’t account for the falling costs of broadband, which when coupled with increasing demand sets up a gigantic windfall opportunity that harms customers.
- Customers will now be paying to receive junk they don’t want, such as the ever-present background Internet noise, spam, ads, and–worst of all–remote attacks that can bust through a cap in a few days time.
- Attempts to monetize high-but-reasonable bandwidth consumption that harm innovation and early adopters. That impacts not just those on the bleeding edge, but all of us.
- The economic harm to innovative businesses that lose their early adopter pool, and thus their opportunity to bring these innovative products and services to market.
- Pricing that sets the stage for anti-competitive behavior and content partnership deals that create a non-neutral Internet.
These are not things you fix with an educational campaign. They demand a complete retooling of your product approach.
So, yes, breathe a sigh of relief, but don’t think this is over. The statement issued by TWC today is not a capitulation, but another shot across the bow.
Read the full statement here: Time Warner Cable Charts a New Course on Consumption Based Billing