Time Warner halts metered billing tests

[Brian Warkoczeski]

Time Warner halts metered billing tests

April 16, 2009

www.cnet.com

Time Warner Cable has put the brakes on a trial that was testing its new 
"consumption-based billing" system for its broadband service, the 
company said Thursday.

Chief Executive Glenn Britt said in a statement that there has been "a 
great deal of misunderstanding" by consumers and lawmakers who have 
criticized the plan.

Britt said that the company still believes that consumption-based 
billing may be the best way to handle rising network costs among its 
heaviest bandwidth users. But he conceded the company will not proceed 
with tests until it consults further with customers and interested parties.

Sen. Chuck Schumer (D-N.Y.) and Rep. Eric Massa (D-N.Y.) announced Time 
Warner's change of heart during a rally in Rochester, N.Y., the 
Rochester Democrat and Chronicle reported earlier on Thursday.

Massa, who represents Rochester, was an early opponent of the plan and 
has promised to introduce legislation that he has said would protect 
consumers against companies introducing tiered services, such Time 
Warner's proposed billing plan.
Massa is still not giving up on his legislation that would ban metered 
billing.

Time Warner had quietly been testing its metered billing service in 
Beaumont, Texas, since last year. But last week, the nation's second 
largest cable provider said that it was planning to expand the test of 
the bandwidth caps to other cities, including Austin, San Antonio, 
Rochester, N.Y., and Greensboro, N.C.

The way the plan worked is that Time Warner would cap data downloads and 
uploads at 10 gigabytes to 60 gigabytes a month with prices ranging from 
$25 to $65 per month, depending on the region. The company also planned 
to introduce a new plan that would have offered 100GB of downloads for 
$75 a month. Additional downloads would be charged $1 a GB with a cap of 
$75 on the extra fee, essentially making an unlimited plan cost $150 per 
month.

Time Warner said that it was testing metered billing because some of its 
subscribers were using an inordinate amount of bandwidth. And as more 
video and peer-to-peer services come online, the company said that it 
needed a new business model to handle the rising cost of maintaining and 
managing its network.

But consumer advocates have argued that Time Warner is simply trying to 
protect its cable TV business by making it very expensive for users to 
watch competing video services online. Public Knowledge, one of the more 
vocal opponents to Time Warner's metering plans, was pleased with the 
company's decision to table the tests.

"The company properly listened to its subscribers, the public, and 
policymakers, all of whom were highly critical of the proposition in the 
first place," Gigi Sohn, president and co-founder of Public Knowledge, 
said in a statement. "It quickly became clear the plan had nothing to do 
with managing Time Warner's network, and everything to do with 
increasing profits at the expense of captive customers in an 
uncompetitive broadband market."