SubscribeTodd Spangler, who we seem to spar with on a semi-regular basis here, has another blog entry up expanding on his views of why Time Warner Cable’s metered pricing experiment failed. Of course, completely missing from the list is the fact most customers do not want it. That’s dangerous to say in a cable industry trade publication like Multichannel News, however.
Todd still thinks it’s all about how they did it, not the fact they did it in the first place that created what even he admits was a “category five” storm of backlash.
Clearly, the company’s idea — given that these were trials — was to have the flexibility to tweak pricing, adjust specific cap levels, etc., and not have these things set in stone. But the ad-hoc communications on the usage trials was perhaps the biggest reason this blew up.
The only “trial” here was on the customer, and the jury was stacked with Time Warner Cable executives who already found themselves innocent of extortionist pricing and market abuse. The “tweak” most customers wanted was none at all. What was set in stone, until the groundswell finally achieved temporary results, was that the caps were coming no matter what customers had to say. Just ask people in Beaumont, Texas.
Keep it simple! At most there should be three: low, medium and high (unlimited) usage plans.
Low usage plans with credit card like overlimit fees, medium usage plans that demand customers ration their Internet allotment for the month or face those same outrageous overlimit fees, or the “high” unlimited usage plan that everyone now has for around $40-50 a month that was soon to be priced at $150 a month. A 300% rate increase. What’s not to love there?
Customers haven’t had to care before, and suddenly they’re being asked to pick from a (complicated) menu of options lacking this critical information. The cable operator has promised to release a bandwidth “gas gauge” to subscribers but it still isn’t available.
This industry’s out of touch-ness is complete when they miss the fact that the very presence of the “gas gauge” is the problem, not that there isn’t one there now. It’s the equivalent of ExxonMobil complaining that consumers don’t yet have an ATM machine in their home to withdraw all of the cash they need to give to them when they feel a massive increase in gas prices is justified.
As I’ve written before, TWC — as the first major U.S. mover on this front — is bearing the brunt of the challenges in moving to consumption-based billing, which, again, is the only fair and reasonable option as Internet bandwidth consumption continues to skyrocket.
It wasn’t any more accurate the first time you said it. Time Warner Cable deserves everything they got, and will get, from attempting to generate massive new profits for a product that is already a major profit producer for them under the current price formula. Fair and reasonable is making a healthy profit, as they are doing right now. Unfair and unreasonable is to claim that “exafloods” and their costs demand consumers face up to a 300% rate increase for the exact same product, as the same company tells investors it is making a very healthy profit as-is, doesn’t have a capacity problem that requires any fast deployment of DOCSIS 3 upgrades, and reports their bandwidth costs are declining (along with the percentage of investment they are willing to spend to naturally grow their own network).
I don’t necessarily buy into the theory that Time Warner’s trial was all about stopping Internet video — it’s always more about maximizing their profits, using any excuse they can find to justify it, factual or not. But this industry has a history of underestimating consumer anger about monopolistic or market abusive pricing, and legislators’ willingness to move to the regulatory route to rein it in. Cable does so at their peril. I’ve seen this before back in the early 1990s just prior to the 1992 reregulation legislation that would become the only bill to overcome President George H.W. Bush’s veto pen and become law. We’re headed down the exact same road all over again.
Other stories of interest:
- BREAKING NEWS: DOCSIS 3.0 Coming to Time Warner Cable in NYC By End of 2009
- Time Warner: No Tiers, No DOCSIS 3 — Customers: Shucky Darn
- Rochester Democrat & Chronicle Blisters Time Warner Over Internet Caps
- Another Statement from Time Warner – Sit Down For This One
- Panic in San Antonio: Local Paper Says Time Warner Gas Gauge Is Coming
The “big cable” industry has already made their bed, a bed of money. They just didn’t expect consumers to take a photo and call them on it! I have no personal problem with paying a little more for service, just not the same service that is technologically 10 years old. Upgrade the system or move to FTTH(Fiber to the Home) and we can talk about my bill increasing. But, in all reality, they have to be out of their minds to think they will offer me the same service and charge me more just because they can.
It is a slippery slope for the industry to go down the regulatory path, but if they want to play with a slip ‘n slide then I guess it is their picnic to do it at.
I would stop publishing articles about Spangler. Everyone knows he’s a cable shill without an objective bone in his body. In fact I think he’s intentionally writing this crap now to boost hits to his “column/cable PR” which, until stopthecap mentioned him, got barely any any traffic or comments. He must be clicking his heels all the way to his editor’s office to share his traffic numbers.
Spangler does other writing work for Multichannel News so he doesn’t live or die based on his blog. I actually do this mostly to help our own readers recognize the weakness of the arguments, and learn how to push back on this stuff themselves. It’s part of our training and “education” campaign we have going to counter cable’s arguments.
But as Multichannel has always been a pro-cable publication anything Spangler writes will always be slanted to that section of the broadcast media.
The public will never change his view and all traffic from this site does is justify his column. To the point where writing more and more incendiary articles related to the TWC cap situation is just beneficial to him. Even if it’s not a topical subject for Multichannel that week.
He has no intention of considering the other side. Especially if it comes in the form of comments on his article from readers outside the industry.
I know it’s a nitpick, but it’s a pet peeve of mine when people say “reign in”; the term is”rein in”.
Thanks… I’ll change this. I do make grammar errors now and then that breeze right past my proofreading. Sometimes I wish I had a third party editor to review and correct my own boo-boos.
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Phillip, I put in my two cents.
I just had this chat session with a TWC represenative today and find the information very interesting and possibly shows promise that TWC may be learning from their mistake:
user preventCAPS has entered room
analyst Sally Smith has entered room
Sally Smith(Mon May 11 11:01:22 EDT 2009)>Thank you for choosing Time Warner Cable Online Chat Support. My name is Sally. Please give me a moment, while I access your account information.
Sally Smith(Mon May 11 11:01:29 EDT 2009)>Can you please elaborate on the issue?
preventCAPS(Mon May 11 11:02:11 EDT 2009)>Good Mornign Sally! I have not received my paper bill and worked with another represenative to get the mailing address corrected, however, I was interested in seeing what my bandwith useage was. Do you have that information?
Sally Smith(Mon May 11 11:02:25 EDT 2009)>morning
Sally Smith(Mon May 11 11:03:11 EDT 2009)>I understand that you would like to know the bandwidth usage. Is that correct?
preventCAPS(Mon May 11 11:03:18 EDT 2009)>That is correct
Sally Smith(Mon May 11 11:03:37 EDT 2009)>Thank you for the confirmation.
Sally Smith(Mon May 11 11:03:39 EDT 2009)>Please contact us at 800-756-7956 and we will do our best to assist you in any way possible.
Sally Smith(Mon May 11 11:03:57 EDT 2009)>I would have been glad to do this online, however, I am not equipped to do so.
Sally Smith(Mon May 11 11:03:57 EDT 2009)>I apologize for the inconvenience.
Sally Smith(Mon May 11 11:04:23 EDT 2009)>I am extremely sorry that I have to guide you to the phone support for the bandwidth usage information.
preventCAPS(Mon May 11 11:04:33 EDT 2009)>Oh, that’s not a problem if you can confirm that there are no plans to put bandwith caps into place
Sally Smith(Mon May 11 11:04:52 EDT 2009)>Yes, you are correct.
Sally Smith(Mon May 11 11:05:06 EDT 2009)>There are no current plans to do so.
Sally Smith(Mon May 11 11:05:09 EDT 2009)>Is there anything else I can help you with today?
preventCAPS(Mon May 11 11:06:04 EDT 2009)>Can this chat conversation be attached to my account for future reference?
Sally Smith(Mon May 11 11:06:33 EDT 2009)>Yes, I will make a note on your account and also I will email the copy of this chat at xxxxxxxx@rochester.rr.com.
preventCAPS(Mon May 11 11:06:46 EDT 2009)>Wonderful. Thank you so much for your time.
Right… “At this time…..” I don’t call this TWC learning from their mistake. At this time could mean today and then tomorrow they start talking about caps again.
i just read a news story and in it there was a question asked
that may be of some intrest to us all.
” Program host Peter Slen asked Leibowitz whether it was fair for broadband providers to charge customers more for higher speeds or charge more for high-bandwidth users. Leibowitz said those were fair practices, as long as providers gave customers notice”
this is why we have to step up and contact those in congress to come to bat for us..
source – http://www.thestandard.com/news/2009/05/11/ftc-chairman-agency-may-enforce-net-neutrality
Listen to this customer phone call to TWC San Antonio , its slightly telling. Skip forward to the 8 min mark. we dont do that (NOW) and willing to sell the poor paranoid guy three internet accounts at a single residence
The_5_GIG_Rally.mp3