For any Batavians who thought maybe Time-Warner Cable wouldn't test its new tiered broadband pricing plan in Genesee County, we have some bad news. We just received this message from Lara Pritchard, public affairs manager for Time Warner Cable, WNY Division:
Our trial for monitoring internet usage will rollout across our entire Rochester footprint. Batavia customers will also be enrolled to work with us and provide feedback on their usage /plans.
For those who haven't heard, TW is planning to switch Rochester-area customers from a flat-price service for broadband (cable modem, in this case) Internet service to one which offers different pricing plans, based on anticipated usage. Heavier users would be faced with potential monthly overage charges, or plan on spending up to $150 per month for unlimited usage.
WHAM 13 explains the tiered plan here:
The "trial" is expected to begin in August.
For it's part, this is what TW says about the need for the pricing scheme:
Time Warner Cable said that steady increase in use, along with massive bandwidth consumption by a small percentage of customers, is the reason it's testing the new pricing policy. The company said it needs to pay for infrastructure upgrades.
Commenting on the criticism of the plan, company spokesman Alex Dudley said, "Customer feedback is a critical part of the trial."
But not so fast. As others have noted, there isn't really a cost justification for TW's plan.
Ars Technica:
Britt's rationale for the change—infrastructure is expensive—is tough to understand. Cable's physical plant has been in the ground for years; even hybrid fiber-coax systems have been widely deployed for some time. Internet access simply runs across the existing network, and one of cable's big advantages over DSL is that speeds can be upgraded cheaply by swapping in new DOCSIS headend gear, with DOCSIS 3.0 the current standard. Compared to what Verizon is doing with fiber and AT&T with its quasi-fiber U-Verse, cable Internet is a bargain (well, for the operators).
But perhaps consumers are insatiable bandwidth hounds who are simply overloading TWC's system—or perhaps not. The BusinessWeek article notes that only 14 percent of users in TWC's trial city of Beaumont, Texas even exceeded their caps at all. My own recent conversations with other major ISPs suggest that the average broadband user only pulls down 2-6GB of data per month as it is.
A site called Stop the Cap dug through some of TW's communications for shareholders and found that TW is telling its investors its costs are actually decreasing. (via Fighting 29th)
High-speed data costs decreased for the three and nine months ended September 30, 2008 primarily due to a decrease in per-subscriber connectivity costs, partially offset by subscriber growth.