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Despite challenging economic conditions, Time Warner Cable CEO Glenn Britt told CNBC broadband from the cable operator has remained strong during the downturn. The company reported the addition of 117,000 new Road Runner customers during the third quarter, many switching from rival telephone company-provided DSL service.
A CNBC anchor who visited a conference recently and absorbed cable industry talking points about consumption-based pricing asked Britt about whether Time Warner Cable’s network had the capacity to handle skyrocketing data consumption.
“Our physical plant is very capable and we invest in it in a steady way, so I think we’re able to keep up with demand. I think the other question you’re really raising is who pays [...] is an evolving thing. Also the history has been everybody pays the same for unlimited access. I suspect that will change going forward to some more usage based model, but that in itself is controversial so we’ll have to see what happens,” Britt said.
Britt’s comments about investments in their network are challenged by the company’s own financial reports which showed a decline in those investments and in the cost of obtaining network bandwidth.
Still, Time Warner Cable is upgrading some areas to DOCSIS 3 technology to market higher speed service to broadband enthusiasts.
The company continues to face significant challenges in its mainstay cable television business, losing 84,000 cable televison package customers in the last quarter, a result of the loss of home ownership during the economic crisis according to Britt, and a general downturn in the economy. Still, through a combination of price increases and marketing bundled services, the company grew average revenue per subscriber to $102.48 a month in the third quarter.
http://www.phillipdampier.com/video/CNBC -- Glenn Britt on Earnings 11-6-09.flvTime Warner CEO Glenn Britt is interviewed on CNBC about the company’s third quarter earnings. (11/6/09 – 4 minutes)
Stop the Cap! reader Nonya advised us about Britt’s latest appearance on CNBC. If you find news our readers might be interested in, send us your news tip under our “Contact Us” link above.
Other stories of interest:
- Pondering Glenn Britt, CEO of Time Warner Cable
- Time Warner Cable Reports Healthy Growth in Broadband in 1st Quarter 2009
- Verizon FiOS TV/Broadband Arrives in Suburban Syracuse: Incumbent Time Warner Cable Says “No Price War” Coming
- First Take: Time Warner Cable Adds Broadband Customers, Sees Higher Revenue, Costs Plummet in 2nd Quarter
- BREAKING NEWS: TW Questioned on Usage Based Pricing
CNBC hearts stenography
“I suspect that will change going forward to some more usage based model, but that in itself is controversial so we’ll have to see what happens,”
It’s not controversial… it’s a matter of keeping me and others TWC consumers which should translate into a matter of life and death for TWC.
Everytime I see a TWC truck I instantly change into enraged usurper mode and glare at the TWC logo while gently patting my flaming pitchfork, waiting for the day I’ll get to use it to oust TWC management (ARRRGH BRITT!!) and install my own picks for top management positions.
New CEO: PHILLIP DAMPIER, MIGHTY CRUSADER OF THE INTERNET (sorry, you have no choice). Our knight in shining armor is armed only with intelligence and reason, the very weapons our foes lack. He shall lead us all to a brighter future
Phil wouldn’t last – Wall Street wouldn’t let him because of the sudden diets their wallets would be on, and who likes to be on a diet, even if it is good for you?
The thing is, I don’t begrudge TWC from wanting to make a ton of money… I see nothing wrong with that. I just think there are better ways to do it, by cashing in on the broadband elites who will pay $100 a month for super fast connections, and use that money to build up the network for everyone. I don’t even mind the concept of “light” plans based on slower speeds that cost people less money.
I just believe you can build the next generation of broadband networks on the financial backs of those who are just waiting to throw money your way, and are happy as hell to spend $100 a month on 50/5 or 50/20 or whatever similar premium tiers a company comes up with.
I don’t even have a problem with telling people running Bit Torrent 24/7 maxed out to please knock it off. You can do that informally with customers and many will happily comply and run applications during off-peak usage times when they aren’t bothering anyone.
Instead, we get these overcharging schemes that hit EVERYONE from the lightest to heaviest users with allowances and overlimit fees.
I love Cablevision’s approach — no limits because they see broadband as a drug and want to keep customers addicted with as much speed and service their financial condition can handle. Everyone is happy.
Other companies like Frontier and the others testing these schemes are trying to get into the rationing business — feed people a limited amount and then sell them overpriced add-on “usage packs” and/or “insurance” to protect them from overlimit fees.
It’s like the credit card and banking industry: invent new unjustified fees and slap customers silly with them.
In the end, you just end up with less demand because people are scared to use their connections, and that keeps the upgrade requirement at bay.
Broadband is the one bright spot for the cable industry and is insanely profitable. You can make it more profitable without irritating your customers.
Very good points. I wouldn’t hate TWC right now if they’d introduced premium plans and left me alone. Angering your customers, even once, is a horrible idea. Acting like your customers were mad cause they just didn’t understand your brilliant plan (which you still intend to roll out!) is even worse. My negative opinion of TWC is now permanent, no silly commercial or cheap incentive will ever make me feel differently. I should point out that I had no negative opinions before all this.
While I was kidding about making you the CEO, after hearing you talk about how to make customers happy AND make more money at the same time, I am sure you could be the CEO of any broadband company and run it better than Britt could ever dream. What is it that makes these guys forget that they need to make customers happy to make the most money? (ARRGGH BRITT!!!) I wonder if Britt would ever let someone cap his family’s broadband..
I didn’t elaborate enough.. Phil would want to increase infrastructure spending and introduce nicely sized pipes to the home, but wall street wouldn’t like the capital investment required, even if they could charge nice prices for the nicely sized pipes.
I’m one of those 84,000 people who left Time Warner. I got the opportunity to sign up for Cincinnati Bell’s FiOptics service and it’s sweet. You can’t beat 20 MB/sec up and down (in America, anyway). Oh, and the fact that usage billing will not be implemented in the future (since Cincinnati Bell is a public utility) was a big motivator as well.
The fix for TWC’s proposed capping strategy is competition from two or more providers. For example, in San Antonio and Austin, TX TWC has competition from a cable overbuilder (Grande), AT&T U-Verse and now Clear WiMAX, though TWC currently offers higher upload speeds than anyone else. Getting more rual, U-Verse fades out and is replaced by a telephone cooperative that’s running 20 Mbps down, 3 Mbps up fiber to the home. Unless this cooperative decides to cap service, TWC can’t do so for fear of losing customers. Similarly, TWC is deploying DOCSIS 3 and isn’t thinking about caps in FiOS areas.
Wherever the competition comes from (munis, cooperatives, privately owned or publicly held companies), it’s good for the customer.
Grande is the player to watch. AT&T wants caps if they can get away with it and Clear WiMAX is so full of hype and doesn’t deliver what it promises that it’s not going to be the player I was hoping it would be. You are right that where Grande is a player, it’s mighty tough for TWC to play usage cap limbo because Grande not only doesn’t have caps, it markets that fact to their advantage!
Here in Rochester, no DOCSIS 3 in our near future because the competition is Frontier and their silly 1990s ADSL.
Frontier would be a bigger player if they started moving ADSL2+ or VDSL (like AT&T U-verse) service and start the competition battle up again. TWC locally doesn’t even bash Frontier much anymore because they are increasingly not a big player. Remember, TWC picks up most of their new Road Runner customers from people fleeing DSL.
Frontier won’t spend the $$$ to do it, however.
I agree that competition will fix things in Austin (or anywhere), but here in San Marcos I can’t even get Grande, my only choices are DSL and Earthlink which I suspect will just be forced to cap if TWC does. I will be very happy for Austin if they get enough competition to stave off caps, (assuming competition does not collude with TWC like AT&T did in Beaumont.)
My theory is that TWC’s boundless greed will lead them to price/cap by smaller regions. So in Austin you might stay uncapped but outside they might still do it. I don’t know anything about the legality of something like that but I think if ever a law stands in the way of TWC, TWC is giving lawyers and lawmakers bags of money to find a way get around it, or get it out of their way.
Britt just won’t stop talking about those caps, I am hoping its just to save face from the backlash he received when introducing it, but I doubt it.
OH yeah Glenn, basic cable suffers? I bet it does, because you are trying to install this crappy software to force people to use that does not work, and is not visually impaired friendly. For those that don’t have it EVERYONE is about to follow the Carolinas and get stuck with http://www.yourtwc.com/navigator as the whole TWC system changes to it. Aside from not having the same functionality like currently still in New York, as one of their local offices told me they still have. IT also doesn’t install correctly. Out of 52,000 customers in the Greensboro area who got this “upgrade” last night, “many” people are without digital TV services because the “upgrade” did not properly install to the convert boxes. So you think basic cable is suffering, wait till this crap gets forced on everyone and see how many people like myself drop it for having no service for 3 days waiting on a tech to come manually reprogram the boxes. All the credits to accounts for loss of digital service you will have to give over this in not only this area, but all others when this gets instated. Not to mention the people who likely drop digital tier because they can no longer use their digital tier because of the new “Navigator” as complaints have been rolling in for both North and South Carolina for 2 years, since they have been rolling out this new guide to people that don’t like it, or cannot use/read it. Not to mention like other things done by TWC, it looks like it was designed by a kindergartner, and has no intuitive design like the previous digital program guide. So people are likely to be dropping TWC cable service, for lack of quality service as well as needles changes, and adopting broadband internet, because they are not forced to use crappy software in order to interact with their service. (Unless they are stuck using Windows Vista that is). IF TWC put any effort into repairing the network that services both the TV and internet services…might as well say phone too but I don’t have that from TWC, then you might have more customers stick around rather than lose them because they cannot use those services due to faulty networks.
“The company continues to face significant challenges in its mainstay cable television business, losing 84,000 cable televison package customers in the last quarter, a result of the loss of home ownership during the economic crisis according to Britt, and a general downturn in the economy.”
Then who are the people getting broadband internet if nobody has a home left to even get TV service in?
How many of those 117,000 new Road Runner customers are business class customers that actually run businesses, that have no need for a TV service which helps to unbalance the numbers
No Britt, your company is challenged by the ineptitude of its employees. When a person calls to report an error with one of their VOD channels, and the CSR responds that “we don’t have any VOD channel”, these are the challenges you need to face and correct by hiring competent people that understand your system, as well as placing a TV in front of each CSR that takes calls on TV services so they don’t complain to the customer that they have to get up and walk to another room to check what you are calling to complain about, because not every CSR that handles calls on TV services can look at a TV while talking to the customer to verify there IS an error on TWC’s end, rather than automatically claiming a service call is needed because it is something wrong with your TV.
I just want to slap his $14 million in stock options and $1 million salary per year self around with a wet spaghetti noodle until it knocks some sense into him. (No sauce on the noodle in case he is allergic to one of the spices, of course.)