Todd 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.