Specifically, the company says it will offer six tiers ranging from 1 GB per month ($15) to 100 GB per month ($75), with overage charges for all but the smallest plan at $1/GB. (The 1 GB per month plan will have $2/GB overage fees.)
The company also doubled the amount of allotted bandwidth for most of its middle-of-the-road tiers — to 10 GB, 20 GB, 40 GB, and 60 GB per month — a sign it’s willing to be flexible after receiving criticism for surprisingly low monthly caps.
In a blog post, Time Warner Cable COO Landel Hobbs says 30% of the company’s customers currently use less than 1 GB per month, which means they could save a substantial amount over the $30-$45 they’re currently paying. This is good news, as it shows the company is actually trying to be fair and not just squeeze people for using the Internet service they pay for.
However, that 30% figure will probably be a lot lower in a year as Web sites continue to get more complex and online video proliferates further. Using 1 GB per month — or about 34 MB per day — is barely enough to check Web and email, let along play YouTube videos, games, music, or even download important security updates for your operating system.
More good news: Hobbs says the company will cap overage charges at $75 per month. So the highest bill you could ever expect to see is $150. But that is still a lot more than heavy bandwidth users are used to spending, many of whom could be better off jumping to a competitor like Verizon (VZ) that doesn’t yet meter bandwidth.
Will this end the complaints from politicians and consumers? No.
While we’re happy to see the company try new business models — this is capitalism, after all — taking all-you-can-eat Internet away from people is going to be very hard. It’s a clumsy, confusing, customer-unfriendly way of doing business. People do not like the idea of their Internet usage being monitored or used as the basis for their bill — that’s the strategy AOL had to drop last decade to sign up customers.
So there’s still the risk that whatever Time Warner Cable gains in revenue from some customers, it will lose from others — or lose those customers completely. But that’s why this is a test, and not something the company is rolling out broadly. And at very least, credit the company for being open-minded and making smart changes.