Time Warner Cable Tiered Broadband Test Begins

from the if-only-there-were-competitors dept

Earlier this year, the story came out that Time Warner Cable wanted to experiment with capping its "unlimited" broadband, trying to force the heavy users to pay more. Even worse, it appeared to want to use exceptionally low caps that would discourage innovation. Despite all of the concerns, Time Warner Cable is moving forward with the test as planned.

The end result will be taking away value from customers -- not just in limiting how much bandwidth they get, but by adding a huge mental transaction cost. Basically, what Time Warner is doing, is adding a huge overhead in terms of whether or not users are willing to actually use the bandwidth they signed up for. Just the fact that people need to think about how much they're using will decrease usage significantly. While that may be what TWC wants, what it really does is annoy customers. This would never actually happen if there were real competition, but with very little competition out there, TWC can try out this plan. Any other broadband provider competing against TWC in areas where this test is going on should be hitting on the limits in any advertising campaign. TWC is free to do whatever it wants, of course, but it's never a good business move to take away features from customers -- especially if in doing so you add an annoying mental transaction fee.

Filed Under: broadband, broadband caps, cable, tiered service
Companies: time warner cable


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  1. identicon
    Yourlogicsucks, 3 Jun 2008 @ 6:02am

    Dan, wtf?

    So, you and Anthony are basically saying it's a GOOD business plan to drop customers who use more bandwidth? Sure it saves money and congestion in the short term, but since when is regressing against the flow of technology ever a good idea?

    So instead of gaining customers as demand for more bandwidth increases, TWC is willingly giving up more and more as time goes on.

    That's like saying 8 years ago that rather than provide an unlimited plan for heavy cell phone users, we're going to just get rid of them and solve the problem. Now look at what would happen? They'd have practically no customers.

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