Time Warner Cable (TWC) seems to be getting some backlash for its attempt to flip the Internet service pricing model upside down, aiming to charge customers for how much Internet they use each month versus all-you-can-eat access. At least it’s bad enough that the cable company’s executives have devolved to food analogies to plead their case.
In a post linked off a TWC Twitter account, COO Landel Hobbs asks, “When you go to lunch with a friend, do you split the bill in half if he gets the steak and you have a salad?”
Perhaps that’s easier than saying, “Hey! Do you watch Hulu a lot? We want you to pay more than your grandma to use the Web.” (Also, what if it’s a lobster salad?)
The good news: The company seems to have an open mind. For example, in addition to the 100 GB-cap plan we reported last week, it’s also thinking about other pricing options that could allow people to download more data at lower speeds for a lower price, etc. (Next up: Allow customers to upgrade to a more expensive, higher-cap plan after the fact — for a few years, at least — instead of punishing them with overage fees.)
Hobbs’ plight is easy to understand. Time Warner Cable is getting attacked from all sides. Verizon (VZ) and AT&T (T) are increasingly chasing after its customers with fibre optic TV service; free or cheap Web video offerings are convincing some people (including us) to ditch $80/month digital cable; and shareholders want more profits from a slow-growing, capital-intensive business.
In the end, this is a plan to make more money for Time Warner Cable. That’s OK! That’s capitalism.
But the cable company has a long way to go before it’s going to convince people that they are better off letting their service provider kill today’s comfortable, all-you-can-eat Internet subscription model — in favour of what Time Warner Cable calls a “positive development,” and what one industry exec likens to the AOL model of the 1990s.
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