SubscribeAnother remarkable admission from Time Warner CEO Glenn Britt came at the end of today’s investor conference call. In response to claims by some cable companies of incremental bandwidth costs running 40-50 cents per gigabyte (a number we strongly dispute at Stop the Cap! for being at least ten times too high), Britt made the debate over bandwidth costs moot by saying they really don’t have anything to do with how Time Warner Cable prices its broadband service.
“I think that the conversation about usage based pricing should not be tied to a conversation about costs,” Britt said. “This is not a rate of return regulated monopoly industry like AT&T was before 1984. We have a lot of different products, a lot of different offerings and we’re aiming at different segments and different combinations and the pricing will relate to that. This is not a strict cost-base thing so those facts are interesting but not terribly relevant to pricing.”
That clears that up quite nicely. We’ll be sure to remember that should the cable company revisit its customers with another Internet Overcharging scheme blamed on bandwidth hogs.
Time Warner Cable CEO Glenn Britt is asked what Time Warner Cable is paying for bandwidth costs. Britt said the question is largely irrelevant, because those costs have almost nothing to do with how the company prices its broadband service. July 28, 2011. (1 minute)
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Wat? So…he’s basically saying “We just make up whatever we price we want to and it has nothing to do with what bandwidth /actually/ costs us.” Nice.
Monopolies and Oligopolies do that. Pricing is going to be related to where they can maximize profit. There is too little competition so you end up with prices that just max out their profits and hit the % increase they want to show to the shareholders.