Time Warner Cable (TWC) is putting aside unpopular plans to test metered Internet service. The company says it is “shelving” the trials while it educates consumers and rolls out tools to help its subscribers measure how much bandwidth they consume per month.
Time Warner Cable Chief Executive Officer Glenn Britt said, “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. As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met. While we continue to believe that consumption based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process.”
Will U.S. ISPs ever be able to charge for Internet based on consumption? Perhaps — it could be a nice revenue booster, even if consumer-unfriendly. But probably not soon. Consumers are far too used to paying for an “all-you-can-eat” subscription and not worrying about overage charges.
As long as these trials stay off the ground, this is good news for the online video industry, which has the most to lose if Internet companies start charging on a metered basis. Beyond using a lot of bandwidth, online video competes directly with TWC’s highly profitable cable business. (That’s one easy reason the company might be trying to make Web video more expensive to watch.)
Since Time Warner Cable detailed its plans to expand testing earlier this month, consumers and lawmakers have lined up against it. The biggest risk to TWC is that consumers might flee for rivals like Verizon (VZ). Or that the government might decide Time Warner’s proposed overage rates — $1/GB — are a rip off.
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