Subscribe
Moffett
On the heels of Time Warner Cable’s recently announced return to usage-based billing, some Wall Street analysts are sending signals they expect the cable operator not to dabble in usage-based pricing for long, but rather jump right in, charging all of their customers usage fees to boost revenue and profits.
Time Warner Cable’s careful effort to position usage pricing as an “option” does not seem to impress Sanford Bernstein’s Craig Moffett, who expects the cable company to roll out Internet Overcharging schemes to all of their customers.
“Over a period of years, as the market becomes more accustomed to (usage-based pricing), we expect these plans to become the rule rather than the exception,” Moffett wrote in a research note to his investor clients.
The concept of usage pricing is also provoking Netflix, dubbed one of the net’s biggest usage offenders by some providers, to become more vocal in its support for flat rate broadband.
With some Netflix movies coming in at nearly 3GB in high definition, Time Warner’s usage-limited Internet Essentials customers will rapidly erode their usage cap into the overlimit territory.
Netflix executives dismiss provider claims that broadband traffic explosions are undermining profits, especially considering the cost of delivering broadband traffic to consumers continues to plummet.
One Wall Street analyst looking to maximize those provider profits chastised Reed Hastings, founder of Netflix, for putting service providers under “financial pressure.”
“Yeah, that 92% Comcast operating margin is really under a lot of pressure,” Hastings responded at the Morgan Stanley Technology, Media and Telecom conference in San Francisco. “There is no financial pressure on ISPs.”
Variety reports Time Warner has said nothing about keeping flat rate broadband at its current $40-50 price point.
Moffett points out there is plenty of room for Time Warner Cable to accustom subscribers to a metered future.
The analyst believes Time Warner will eventually move flat rate Internet to an “ultra premium” price point that will be far more expensive than customers today are accustomed to paying.
In 2009, Time Warner offered customers scheduled to participate in its failed usage pricing experiment flat rate service for $150 a month.
What a douche
This is the time to raise hell. It’s not too late. Don’t let the US become Canada. http://www.worldbroadbandfoundation.org/content/special-report-att-led-data-capping-trend-its-not-too-late
If they even try to do this in Maine I will do all I can to discredit their BS.Greedy Frakkin ISP’s…………I am so sick of this Country and its Corrupted Ways.
This is how these cats play nowadays. Make money anyway you can. If that means squashing the little guy, then so be it. Ars Technica had a good article, about how if you had more money, you were less moral. Really didn’t need a study to figure that out. Wall Street pretty much is immoral. They don’t give a crap about us. If you do a little research on the real reasons the economy nearly collapsed in 2008, you will see that.
Note: I posted this same comment over at the Time Warner Cable Untangled blog. The comment awaits moderation. We’ll see if it’s posted…. Concurring to Mr. Dampier at stopthecap.com, my hunch is that once this “test” in Time Warner Cable’s San Antonio and southern Texas markets completes, Time Warner Cable will roll this out to more markets, most likely it’s entire footprint including Bright House Networks. With the “RoadRunner” “Time Warner Cable” brand names going away during 2012, the newly branded named company fka Time Warner Cable can very easily introduce this “savings” tier as well as introduce caps, all… Read more »
I’m sick of this Steve Moffet guy and other “wall street analysts” like him are the reason why so many investors are duped into thinking maximizing profits is the same thing as growing and maintaning a viable business model. Companies that put customers and the quality of the product they offer first will allways succeed and do well and stay arround for the long haul. Companies that seek to please wall street analysts (assuming incorrectly that investors care about what analysts have to say, I am an investor.. and I find most analysts to be full of nothing but hot… Read more »
Wall St. doesn’t care about the long term view for these companies, it does simply come down to as much profit as quickly as possible, if it can be squeezed, slashed, burned, then that’s what will be done. Why should Wall St. care? They’re no better then the Mafia was getting leverage over small business people, leveraging their credit to the hilt, then burning their business down for the insurance money while leaving the owner facing the blowback. The lesson is there’s always another sucker, another business out there to take advantage of, it’s all just a game. The only… Read more »