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Time Warner Cable CEO Still Loves Cap ‘n Tier Approach to Internet Billing

Phillip Dampier May 29, 2009 Issues 18 Comments

greedyguy50Time Warner Cable CEO Glenn Britt, attending a conference sponsored by Sanford “He Who Loves Cable & Fat Profits” Bernstein, made it be known he still loves the concept of consumption based billing for the Internet, and what he sees as potentially fat profits that come from it.

“Clearly, we didn’t handle the public relations very well and had a bit of debacle to be honest,” said Britt.  “I still think the use-less-pay-less and use-more-pay-more model can work.”

At their prices?  Wasn’t one backlash enough for them?

Britt also repeated that their experiment in Beaumont, Texas, which they have apparently considered an appropriate test for the entire Time Warner Cable service area nationwide, was “successful.”

Meanwhile, investors don’t think the company performance has been all that successful.

Shares of TWC are declining after company Britt admitted that the company is seeing a continued slowdown in subscriber growth.

Perhaps their antagonistic policies and abusive behavior against their customers might be part of the reason.

Britt is convinced that 40GB per month, as delivered in Beaumont, was more than enough for the average user, and those who consume more should pay more.  Indeed, up to 300% more for the exact same level of service customers get today.

He dismissed notions that speed-based pricing is appropriate, claiming most customers find speeds meaningless.  Britt feels all the action, and the big profits, will come from turning a meter loose on customers and billing them for consumption of online video and other high bandwidth applications.

While Britt continues to claim that heavy users should bear the expense of upgrading Time Warner’s network, he also announced they would not be making any significant upgrades to that network, because what they have now is good enough for the next 10 years.

“I’m very comfortable with our plant,” he said. “I don’t see a need for a massive upgrade.”

In fact, the company is seeking ways to reduce their infrastructure spending further.  They plan to explore utilizing less powerful set top boxes to cut their costs, for example.

Time Warner Cable is finding the broadband component of their service offerings more and more important to customers as time passes.  For a growing number, it is the key component.  Leveraging that value, particularly in markets that aren’t as competitive, could bring massive new profits to the company.  Time Warner Cable acknowledges it has just two big competitors for broadband – Verizon FiOS and AT&T U-Verse.  Everyone else, wireless or copper wire DSL, just don’t have that great of an impact.  Cities that have or will have fiber or AT&T’s hybrid network, will force the company to keep service levels high and prices competitive.  In markets where those competitors don’t exist, it could become a profit free-for-all, as customers will find few, if any alternatives.

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me
me
12 years ago

http://people.forbes.com/profile/glenn-a-britt/79981 If I pulled in 15mil a year I guess a couple hundred extra a month on my cable bill would be meaningless too. In my best yoda voice ‘Out of touch with his customer base he has become’. Here is a clue Glenn if you just happen to read this, here is a free piece of micro economics advice. Your products are overpriced for your market that is why people are dropping your products. It is why I dropped your tv product. When I first started getting cable it was 25 a month. It slowwwwwwwly went up to 70… Read more »

ralfvin
ralfvin (@rick)
12 years ago

I am SOOOOO tired of feeling like a helpless victim waiting to get mugged by Time Warner. Go ahead Time Warner make my day and institute Caps and Tiers so I can join a very organized effort to send a strong message by CANCELLING ALL OF MY TW SERVICES!

preventCAPS
preventCAPS
12 years ago
Reply to  ralfvin

I think TWC must have some sort of connection with the health market and that’s why they are being quiet and holding out so we all get massive ulcers due to our prolonged frustration and anxiety waiting to see if TWC is really as dumb as we think they might be.

After a while, the pepto of reading Stop the Cap! kinda wears off.

Michael Hightower
12 years ago
Reply to  ralfvin

Why go through all this whining? The refrain, “Oooo, I’m so mad, I’m going to cancel my services!” is repeated frequently… and yet you folks still have TWC. I don’t get it. What’s keeping you on? I was fed up with ComCast’s service and dropped them for AT&T voice/DSL and satellite for video. I’ve got 5 statics with AT&T and enough speed to run a web server as well as doing my normal internet schtuff. My upstream isn’t as fast, but I don’t have to deal with ComCast’s absolutely atrocious service anymore, and the price is lower. So…. Quitcherbitchin’, as… Read more »

Rick
Rick (@rick)
12 years ago

I’m not opposed to the current system and willing pay my bill each month. It is the threat of Cap & Tier that I am concerned about. The day they institute Cap & Tier is the day I cancel all of my service. Until then, we’re good. No need to cancel if they maintain the status quo. OK?

Brion
Editor
Brion (@brions)
12 years ago
Reply to  Rick

But if you’re a Road Runner Turbo customer you could probably save yourself $10/month without any noticeable drop in service to “send a message”.

That’s what I plan on doing when I can remember to call during their 9-5 business hours (usually I’m working or driving to/from work then).

Ron Dafoe
Ron Dafoe (@ron-dafoe)
12 years ago

This guy should talk to Bill Gates about statements like (insert amount of data here) is enough for anyone.

Tim
Tim (@tim)
12 years ago

“claims most customers find speeds meaningless”

LOL, ok and could I have some of that stuff you are smoking? Must be some good stuff!

Mazakman
Mazakman (@mazakman)
12 years ago
Reply to  Tim

Well yes, most customers in fact probably are not concerned about speeds. Time Warner and other ISP’s have a lot of customers who do not concern themselves with how fast they are downloading something. With my Frontier connection I don’t test much better than 6.5-6.8 megs on the download, but my browsing is fast and the connection is reliable, etc. I think that the hard core speed testers on the net are still probably in the minority rather than the other way around.

Jay Ovittore
Editor
Jay Ovittore (@jay-ovittore)
12 years ago
Reply to  Tim

I think speeds are important. They are important for watching video, which is the fear of big cable. The more we watch Netflix on our computers or other ready devices, the more we catch TV on HULU.com, the more they try and force our hand to be slaves to their cable TV packages. Bottom line for big cable…adapt and adjust to your consumers needs or, like newspapers, you too will be struggling to survive. I believe that cap and tier will be the beginning of the end for big cable. They are getting too greedy for their own good and… Read more »

Mazakman
Mazakman (@mazakman)
12 years ago
Reply to  Jay Ovittore

Unfortunately I think that the cap and tier system is going to become part of the general landscape here in this country. Other providers may say that they are not considering it, but in the back rooms they are.

As far as speed…with my DSL connection running between 6 and 7 megs, I am watching strreaming video just fine. Everything works the same way as it did before when I did have Roadrunner a few weeks ago. Except I don’t have the Speedboost gimmick and 9 megs regular download speed that I had with them.

Tim
Tim (@tim)
12 years ago
Reply to  Mazakman

Speed will become ever more important in the coming years as online video services take off. I think most customers are concerned with speed. Almost everyone I know has the top of the line speed. A lot of gamers want the extra boost to help keep up with the competition plus they can run their own servers.

Michael Hightower
12 years ago
Reply to  Jay Ovittore

The idea that cable companies don’t want people to watch videos online because it [insert your argument here] isn’t quite right. While there may be a few bozos who don’t get it, those aren’t the bozos that make business decisions. They realize that they make money by distributing content, and they want to distribute it by any means possible. If they were so darned worried about internet content disrupting their “core” video business, then they’d just not offer internet. More importantly, they wouldn’t be trying to figure out ways to stream network broadcasts live online. They see the potential in… Read more »

Brion
Editor
Brion (@brions)
12 years ago

“If they were so darned worried about internet content disrupting their “core” video business, then they’d just not offer internet.” I don’t think that’s realistic. As you’ve said elsewhere, Internet is their highest margin product (possibly on the order of 70%) and is increasingly the most important part of the all-in-one bundles of TV / Internet / Phone. Dropping offering Internet service to save the video product would be supremely stupid. The complex reality of their situation is that they have an expensive albatross of a video product that they’d probably love to see succeed but rather see a trend… Read more »

Scott
Scott
12 years ago

Off-topic, but folks should know that Time Warner Cable is currently blocking access to The Pirate Bay. I’m in Austin and have not been able to reach the site in about a week (page load error) without the use of a proxy. Not sure why this info isn’t already out there.

artsal
artsal
12 years ago
Reply to  Scott

Not blocked in Greeensboro.

That said, TWC will lose customers anyone that there is competition, and enough that it will make a difference.

I know this will pass if it happens, but I don’t want it to happen. The longer we can hold this stuff out, the more young voters happen, and the easier it will be to legislate these guys to hell so they can’t.

MK8
MK8
12 years ago

I am getting really frustrated with TWC lately. Obviously with a CEO so stupid they aren’t going to let up. I’ve officially started looking for realistic alternatives. I am outside Austin, and I can find Earthlink cable and CenturyTel DSL. I’m not crazy about DSL as I expect it to be slower, and I am afraid Earthlink will cave in to TWC’s pressure to cap as well. I’ve asked Earthlink and while they say they aren’t capping I don’t know if I should believe them. Everyone seems to think Earthlink would comply with TWC and do the same. Does anyone… Read more »

jr
jr
12 years ago

Time Warner poormouths while Glenn’s being paid 300k a week

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