After a public outcry and the attention of several members of Congress, Time Warner Cable has stopped its trial of Internet data caps, but not before making "metered billing" a tough sell for all other American ISPs. [vai arstechnica]
Time Warner Cable said repeatedly that it wanted to hear from the public as it expanded its Internet data caps, and the public has roared back its response: metered billing should exist in some non-obscene ratio to cost and to competitors' pricing. In response, TWC will shelve the trials "while the customer education process continues."
The plan to expand the test into North Carolina and New York survived in public for two weeks, and not even TWC's decision to dramatically boost the caps a week into the fracas could stop the anger. Not that the company believes anything about the plan was fundamentally misguided; as CEO Glenn Britt put it today, "There is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing."
The whole fiasco looks like a textbook example of overreach.
That "misunderstanding" went all the way to the top. Congressman Eric Massa (D-NY) last week announced his plan to introduce a bill placing limits on the ability of companies like TWC to cap its connections, especially in areas where it was a virtual monopoly. But it took a heavier hitter—in this case, Senator Chuck Schumer (D-NY)—to make TWC change its ways.
Schumer announced his own opposition to the plan, then spoke with Britt about the "overwhelming opposition" to the caps. Citizens of Rochester, New York were furious about the caps about to be imposed on them, with Schumer's office describing the reaction as "outrage." The company relented.
Massa and Schumer were thrilled with the decision to cancel the trial program. "We're delighted that commonsense prevailed," said Massa today. "The people of Western New York spoke and I heard them loud and clear. Together we have won and I am glad that I was able to play a small part in bringing about this change. This is a true grassroots victory, but we will move forward with our legislation to ensure that any future plans to charge customers based on how much they download do not spring up anywhere else."
Massa's legislation may stand little chance of success on its own, but Schumer's office says that the senator will continue keeping an eye on the issue of caps, too, in order to make sure that "any future changes in Internet pricing are in line with what the community wants and needs." Translation: we have our eye on you.
Glenn Britt rather diplomatically noted that TWC "look[s] forward to continuing to work with Senator Schumer, our customers and all of the other interested parties as the process moves forward."
Textbook overreach
The whole fiasco looks like a textbook example of overreach. Even groups like Free Press accept metered billing as a fair system (so long as the connection remains "neutral"), so all the American ISPs had to do in order to reframe user expectations was roll out a pricing structure that wouldn't utterly outrage the public.
(Hint: when Comcast currently offers a 250GB/month cap for around $42.95, and the price of Internet backbone traffic is dropping by 50 percent a year, and DOCSIS 3.0 updates cost only $20-$100 per customer, and TWC's finances showed big upticks in broadband revenue even as costs plunged—well, selling a 100GB/month cap for $75 was hardly going to go down well, especially when your industry is one of the least-popular in the US.)
So, failing in that simple mission, TWC may have just scotched other interesting experiments in metered billing being done by big ISPs, who can't be at all thrilled by the way that TWC handled the situation. In addition to backing away from its own caps, Congress will now consider a bill on the subject, Chuck Schumer will keep an eye on ISPs, and metered billing is now associated with "price gouging" in the public mind.
As for Beaumont, Texas, the town with the dubious honor of being capped by both AT&T and TWC, the long nightmare may soon be over.
Free Press had already rallied its troops to petition Congress over the matter, and campaign director Timothy Karr was enthusiastic about TWC's decision. "We're glad to see Time Warner Cable's price-gouging scheme collapse in the face of consumer opposition," he said. "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 them off the Internet. This is a major victory, but the fight for a fast, open and affordable Internet is far from over."
Kyle McSlarrow, who heads the National Cable & Telecommunications Association, insists that TWC did everything right, and he thanks them for being open and transparent throughout the process.
"None of us knows with certainty what works best for consumers," he noted today in a blog post. "As broadband providers, we face daunting and ever-changing challenges in ensuring that we do our level best to provide consumers with what they want, when they want it. But our goal has been, is, and will be to communicate with our customers in an open and transparent manner; to try new models that can be used to attract new broadband users and more equitably spread costs among high and low volume users, and—at the end of the day—to let the consumer make the ultimate choice of whether new models survive and thrive or are thrown into the dustbin of history."
Well, consumers have spoken, and they're giving the cable industry a hand hoisting that dustbin lid.
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