NEW YORK, NY — Public outcry and threatened legislation have convinced Time Warner Cable to back away from plans to test metered broadband internet access in four new markets this summer.For now, the company will confine its market testing to the Beaumont, TX, area, TWC officials said Thursday.
The second-largest internet service provider in the U.S. became the object of protests after it announced plans to test per-gigabyte-of-transfer pricing in Rochester, NY; Austin and San Antonio, TX, and Greensboro, NC. Price-gouging and greed were among the accusations consumer watchdogs and at least two New York congressman leveled at the company.
Last week, U.S. Rep. Eric Massa [D-NY] threatened to float legislation outlawing download caps and metered pricing. On Thursday, U.S. Sen. Chuck Schumer [D-NY] spoke with TWC executives about what Schumer called “overwhelming opposition” to the company’s tiered pricing plans, and later both Schumer and TWC released statements saying the plans had been put on hold.
“It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption-based billing,” TWC Chief Executive Officer Glen Britt noted in his statement.
The change of heart, which may represent nothing more than a delay of plans, did not prevent TWC from rolling out software that lets users determine how much bandwidth they use.
In addition to price-gouging and greed, watchdogs and legislators have voiced concern that plans by many ISPs to begin charging consumers for the bandwidth they use may stifle innovation on the Web. One gigabyte equals roughly three hours of digital video, and TWC’s base rate in the new pricing scheme would have capped the lowest service level at one gigabyte for $15 monthly. Each gigabyte of transfer over the cap would have drawn a additional charge of $1 or $2. At the high end of TWC’s plan, $150 monthly would buy unlimited data transfer.
“We’re glad to see Time Warner Cable’s price-gouging scheme collapse in the face of consumer opposition,” Timothy Karr, campaign director for Free Press, a consumer advocacy group, noted in a statement the group released on Friday. “Let this be a lesson to other internet service providers looking to head down a similar path. Consumers are not going to stand idly by as companies try to squeeze their use of the internet.”
AT&T remains the lone large broadband provider to continue with bandwidth-cap testing. The company has rolled out a tiered service model in Reno, NV, and Beaumont, TX, but its usage caps are much higher than the ones TWC planned.
Comcast currently charges customers based on the speed of their connection, but the company has considered per-gigabyte pricing.
