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Premium Speed Tiers = Bragging Rights, Higher Returns, Happy Customers

Phillip Dampier June 2, 2009 Cablevision (see Altice USA), Comcast/Xfinity 18 Comments

Although Time Warner Cable has downplayed the impact of deploying DOCSIS 3 upgrades to their broadband network outside of New York City, other cable operators making the switch are now enjoying the benefits of bragging rights, higher returns from “heavy users,” and a whole lot of happy customers.

Cablevision delighted the cutting edge crowd when it announced the launch of the fastest residential broadband service in the country — 101Mbps for $99 a month, and absolutely no cap on usage.  Now other players are maneuvering to follow their speed lead.  Broadband Reports noted this morning it had a source claiming that the nation’s largest cable operator, Comcast, was cutting prices on its 50Mbps tier by $40 a month to $99.95 for customers taking a product bundle.    The website earlier noted the company may have a 100Mbps plan in place shortly as well.  Comcast’s cap at 250GB per month does seem to apply.

Even bankrupt Charter Cable is enjoying the benefits of their super premium 60Mbps broadband service in the St. Louis area.

Heavy broadband users, as these companies have learned, often turn out to also be the “early adopters” that will readily respond to marketing for higher priced tiers of service offering higher speeds, as long as those companies don’t also bring along draconian usage caps which completely devalue the deal.  Cable operators enjoy the extra revenue they earn from these customers, retain customer loyalty, and earn praise from customers.

When Time Warner Cable proposed a 50Mbps/5Mbps service for $99 a month, we heard from several readers who were interested in the offer, right up until they learned it would come with a usage cap starting at 150GB per month, which meant customers would pay a whopping 67c per gigabyte, which represents an enormous markup.  Interest evaporated immediately.

The contrast could not be more clear — Cablevision gets industry and customer praise for offering an uncapped premium plan at twice the speed proposed by Time Warner Cable for $100 a month, while Time Warner Cable  dangled a 50/5 tier for the same price, but only after customers supported a consumption billing system and a vague, non-specific timeline for the eventual deployment of DOCSIS 3 which would make that possible.

Currently there are 18 comments on this Article:

  1. Ric says:

    Once again the coax clutzes dont get it. We will pay a premium FOR a premium service. We wont be interested in these services until you quit trying to gouge the consumer. PERIOD. Comcast already rapes me up the *** every month as it is making me pay for ‘basic’ cable when I dont even own a TV. They better thank the gods that be for their unchallenged monopolistic practices for making me do business with them with no alternatives to be found. Otherwise I would kick them to the curb for their 250GB cap in a second though I never even use it all. They keep it up and eventually theyre going to end up scrambling to keep customers like music industry does. As a renter I literally contemplate a move JUST to get AWAY from them. Perhaps that tells you something.

    • preventCAPS says:

      TWC, I’ll pay more for 50 or 100mbs service w/o caps and all you have to do is provide me a $35 DIOSIS 3.0 modem, or let me provide my own!

  2. David says:

    Of course the ‘heavy users’ are waiting in line to sign up for higher speed tiers (with no caps) as they are the same users that lined up to get the high speed internet in the first place. TWC and their ilk are really biting the hands that fed them and got services like RR going in the first place…Think about how many of us here were among the first in our areas to get high speed internet when it arrived in our towns…I know I called TWC every day for 2 months to set up my install when they were bringing RR to where I lived. I would also glady sign up for a higher speed tier provided that it was resonably priced and not capped.

    • I agree 100%. We were part of the original beta test team in 1998 when RR came to Rochester, and our group literally hosted Time Warner Cable at a local ballroom at an area hotel to introduce Road Runner to Rochester and to be enthusiastic boosters of it.

      When Turbo came around, I added it to my account one hour after the price was dropped to $9.95 a month.

      I would gladly pay more for a higher speed service, especially on the upload side, but not if it is capped.

      • David says:

        I did the same thing with the Turbo tier, as soon as I heard that the price dropped to $9.95/month I was on the phone with TWC setting it up. As I said that any higher speed tiers need to come resonably priced and with no caps and if someone can provide that (TWC or otherwise) I will be on the phone with that company to sign up for a higher speed tier in a NY minute.

  3. waiting and watching says:

    The newest neat thing TWC has done is make their bills simpler for custoemrs. They removed all that nonsense about what you are paying for and just have a fee. If you have both tV and internet services it just lists them as “Digital Cable and Roadrunner”. You don’t get to see how much each is costing, but get to see a total for both.

    Also they changed the way their subscription services work. Your bill will now show “Movie Tier” for any subscription movie channel to make it more eaily understandable for the customer. WHAT? So if you want to cancel one of the subscription channels which “Movie Tier” do you cancel if multiples have the same price?

    Likewise how do you know how much you would be paying for internet since that is combined into a lump sum with TV and/or phone services?

    I guess if/when they try to roll out metered internet billing, TWC will just give the combined price for all for ease of customer use, and not really tell you waht you are paying for.

    On top of that don’t forget to guy your local newspaper so you can get information on the other service changes, because those things are not included in the bill.

    I would post a cop of my bill online, but too much confidential information on it even with what little it shows. Maybe someone else could look into it, or confirm if it is in their area other than the Greensboro, NC area. that this is being done.

    With FCC having problem with cell phone providers and changing services without warning to customers, I wonder what they would say about this new billing procedure in light of the attempts to get some metered billing system in place?

    Every time you turn around TWC keeps shooting itself in the knees. (It already has shot to lower portions off.)

    I say congrats to Comcast, and Charter (hehe a bankrupt company no less), to showing TWC how its done.

    Caps are for mushroom and ball players.

  4. Rob says:

    “When Time Warner Cable proposed a 50Mbps/5Mbps service for $99 a month, we heard from several readers who were interested in the offer, right up until they learned it would come with a usage cap starting at 150GB per month, which meant customers would pay a whopping 67c per gigabyte, which represents an enormous markup. Interest evaporated immediately”.

    Is Time Warner listening? Doubtful. I would gladly pay $99 for 50Mbps/5Mbps if it comes without a usage cap.

  5. Tim says:

    I know a lot of people that have top of the line for, gaming, downloading video, running servers, doing a FTP sites, ect.. Speed is important and I would say the majority of customers prefer it since a lot of people do online gaming now. Personally, I don’t do too much online gaming but I do download a lot from Usenet. I use to have a 10Mb connection and had to downgrade to 3Mb due to the economy and other stuff and I hate it. Back in the day, I could download 60GB in one day on 10Mb easily. However, $60/mo for that type of connection is too taxing on an already skinny wallet.

  6. Uncle Ken says:

    OK if you do not have a choice caps/providers what are you going to do then? I guess gaming and video go down the tubes with it. I would think the gaming and video you buy are going to be very unhappy when you tell them you can no longer use their products and you tell them why.

  7. waiting and watching says:

    What many people are forgetting with TWC, is that residential customers will be paying about the same thing as current business customers do, but get none of the benefits, and businesses will not be capped. Businesses will still get 24 hour service, no caps, no tiers, etc; while residential customers will get caps, tiers, metered billing, and you will still have to wait for maybe a week for service calls. Why are none of these things going to affect business class customers? If residential customers are going to have to pay for near business class prices, why won’t they get that same quality of service?

    • artsal says:

      People should start demanding business service then.

      I’d start a phony business to get one if I had to, if that’s the best of crappy options.

  8. Uncle Ken says:

    Artsal: It is very easy to get a business name. You hop on down to the cities county clerks’ office. First you have to stop at the official papers printers’ office and buy the form. Everybody has to have a piece of the pie then you look through a bunch of books to make sure no one else is using that name fill out the form submit it pay another fee and bang you have a DBA. You do not have to state what the business does or will do as it only logs the name and I find it very useful to buy from wholesalers that only sell to other businesses or dealers or to avoid the middle man that only doubles the price. I have a DBA myself so I would not have any problems becoming a business user of TW. As I remember the whole process is about $35 and takes an hour.

  9. Uncle Ken says:

    Rob I only hope people would understand just because you have a 50/5 connection does not mean you going to see anywhere near those speeds. Maybe within the provider’s loop you may get close but once your out in the big bad world you’re only going to move as fast as the rest of the world does. Good luck trying to get a 50dl over an ocean connection to Taiwan.

    • Tim says:

      I know people that have that kind of connection and get that speed off of Usenet servers. Servers can and will in the future support those speeds out of necessity as the internet grows into something more than mere browsing. I remember back in the day, they said we would never use more than 1MB of system memory or would need no more than a 20MB HDD. It amazes me, that given the way technology has progressed, there are still people out there that lack foresight or can’t learn from the past. Technology will always improve, grow, and innovate as time moves on. It will never be stagnant.

  10. Uncle Ken says:

    Tim: Im glad you made that comment and thank you for it. TW ditched usenet a while back so one now needs a third party to use it (I think). Im older I remember when Bill Gates stood in front of the world and said no one would even need more then 256 K of memory. Can you picture that today? At that time they even thought a search engine was a bad idea. Microsoft is always playing catch up taking other peoples ideas. Many do not have a clue how to use usenet and glue all the pieces back together again so I was trying to keep my comment in a more real internet experience. The common things most people use. Your thoughts are understood. Usenet is a method upon itself very fast but not well understood by the general public. Nobody unless they have friends above the clouds is going to crack 50 or 100 gig out of the common internet connection for DL. Inside yes the system will notice you’re paying $150 a month outside the pipes will treat you the same way it treats everyone else. Thank you again for your comment.

    • Tim says:

      Usenet predates the internet but nowadays, it isn’t the mysterious beast it once was. It is rather simple now to use. There are numerous search engines for Usenet: Newsleech, Binsearch, Alt.bin, ect.. All you do is browse for what you want, then have the site create what is called a NZB file that contains every post that is required for that particular file. Fire up the NZB file in a news client like Newsbin Pro and it downloads, repairs, and extracts the file all for you. You don’t have to do much but find what you want now. It is rather simple.

      Basically you need to have two things now:

      1. A premium Usenet provider. Some have plans as low as $5/month. I use Astraweb. They are really cheap and your account comes with SSL 256 bit encryption/

      2. A client to download the posts like Newsbin Pro.

      TWC did have good Usenet service back in the day. I must of downloaded probably 500GB or more back in the day from them. Most ISP canceled access to the binary groups but still carry the regular text groups. It is better to get a premium Usenet server anyways. They offer encryption, so no one knows what you are downloading, and excellent retention and near 100% completion rates.

  11. Uncle Ken says:

    Tim thanks again for the comment. I understand usenet but the minute NZB files are brought up most people ar going to say what? They do not know NZB files are much like a self rebuilding hard drive at first its can be a hard thing to grasp and does take some study to understand. I do not think TW even has text news groups anymore. I liked to read them. Thanks again for the comment.

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