Time Warner Cable in Rochester, NY (as well as in Austin and San Antonio, TX and Greensboro, NC) announced that it will change it’s billing system to a “consumption-based” system. What does this mean? Get ready to pay more to get less…

ETG’s own, Pablo Diablo, contacted Time Warner Cable in Rochester:

To Whom It May Concern -

I have been informed via various news outlets in the Rochester, New York area that Time Warner Cable plans to test out a tiered usage pricing structure with a proposed cap of 40GB/month at the current subscription fee level. As a loyal customer of Time Warner Cable services including digital cable, DVR and RoadRunner for the past 5 years (via a shared account under my roommate’s name), I am incredibly disappointed at this prospect.

Ours is an account that can be classified within the 85% of customers who (according to your VP of PR - Alex Dudley) will not see an increase to their bill. I should be happy that the tiered plan makes it more “equitable” for a person like me in your customer base. So why am I disappointed?

A. I know this is a veiled attempt at a power move to protect your cable TV and movie-on-demand services. Setting caps has the effect of preventing your customers from using bandwidth intensive services like AppleTV/Roku/Vudu or just streaming HD video over the web via services like Hulu and Netflix. As these services become more widely adopted in the future, usage will increase and this metered plan will potentially force someone to pay for service by putting them into a higher tier or prevent them from utilizing these services as they will be cost prohibited due to overage charges. I know you are trying to protect your Digital Cable service from competition but in reality, you are just delaying the inevitable and you run the risk of alienating your customer base in the process. If you succeed in alienating your customer base with this plan, I suspect that many will suspend their Digital Cable subscriptions out of spite. You can bet that I’ll advocate this action amongst my friends who are currently Time Warner Cable subscribers should you decide to carry out your test trial.

B. Your CEO states: “We need a viable model to be able to support the infrastructure of the broadband business.” OK, fair enough if it’s true (although, I suspect it is dubious). By supporting your infrastructure, the implication is that you plan to invest in technologies that will improve the speed and quality and increase the capacity of your service. That would be nice, except you haven’t announced DOCSIS 3.0 upgrades or plans to roll out residential fiber in a single market, have you? Why do I have any reason to believe it is more likely with this new pricing model?

C. Verizon customers pay about $60 for Verizon FiOS which is blazing fast at 20MBps (down) and no bandwidth caps compared to the prospective $55 for 10MBps and a cap of 40GB/month. And then you’re charging $1 for every GB over your cap? Isn’t the wholesale price of bandwidth in the order of .07 to .08 cents a gig? I thought your ad slogan was “Get More, Pay Less” - any discerning customer can clearly see that it’s the exact opposite.

D. You clearly picked Rochester as a test area because it is well known that the broadband internet market in Rochester is an oligopoly and you’re the price leader - so there’s no competition. You wouldn’t dare try this in a market with an equitable competitor, that would be tantamount to seppuku. I caution you to not underestimate the scorn you will invoke from this area if you go through with this plan. For it’s size, Rochester is almost unparalled as a home to some of the most innovative companies and educational institutions in the country. Any threat to this innovative spirit will be met with organized resistance and it will not bode well for your future revenue potential.

If you do decide to go through with your plan, I have a couple recommendations which may aid it’s acceptance:
1. Increase the cap. I know that in places where Comcast has introduced usage caps, the current threshold is 250GB. This is not ideal but it is at least reasonable. 40GB or less is just not enough for casual-power users.
2. Announce what infrastructure upgrades you plan to implement based on the additional revenue you will receive under this new metered plan. If we’re sacrificing unlimited bandwidth, what are we getting in return?

I know you don’t actually care about what I think. Due to the market factors, Rochester is ripe for the picking (or raping), so you’re going to follow through with your plans because you perceive that you have little to lose and even more to gain. You’ll probably send me off some canned response to me with along the lines of “we encourage current innovations” or “we’re just trying to make it equitable for all of our users” - sorry, I just don’t buy it.

Keep in mind that the success of your plan hinges on the willful submission of your customer base here in Rochester to accept less service for the same or more money. Just know that if the metered usage plan is implemented as it is currently designed, I will cancel all of my services with Time Warner Cable and I will make use of any and all communication media at my disposal to inform other to do the same. It’s not too late to change course - your reputation and bottom line depend on it.

Another example of how TWC is trying to slip folks this steaming shit sandwich:

ETG’s own Pancakes shares his monthly internet usage graph. Pancakes enjoys Netflix online and watching mad lawlz on YouTube and Hulu; with TWC current billing system, Pancakes enjoys paying a “low” monthly fee of $55.00/month.

With Time Warner Cable’s NEW (and totally fucked up) billing system Pancakes would pay $55.00/month PLUS $140.00 IN OVERAGES! WTF?! I’m seriously considering adding an entire section to ETG just to address this issue.

STAND UP ROCHESTER! DO NOT TOLERATE THIS ABUSE!

Tags: Austin TX, consumption based billing, douchebags, Greensboro NC, high-speed internet, marketing, monopoly, overages, ROC, Rochester, Rochester NY, San Antonio TX, tiered usage, Time Warner Cable, TWC

This entry was posted on Friday, April 3rd, 2009 at 2:36 pm by Chance Daryx and is filed under Advertising / Marketing, Benefits / Causes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.