Time Warner Cable customer hate usage caps and usage-based pricing.

Time Warner Cable admits customers don’t want usage-based pricing of their broadband service, with only a fraction of one percent of their nationwide customer base choosing to enroll in usage-limited plans in return for a discount.

Time Warner began offering customers a usage-based plan more than two years ago, with discounts starting at $5 a month for light users. Sources at the cable company have repeatedly told Stop the Cap! usage-based pricing has never been popular with customers with only a handful enrolling every month. That was confirmed this week by Time Warner Cable CEO Rob Marcus, noting despite offers of discounts for 5GB and 30GB usage-allowance plans, neither are popular. In fact, Marcus admitted customers strongly want to keep their unlimited use plans.

Speaking at the Deutsche Bank Media, Internet, and Telecom Conference, Marcus added that regardless of the plans’ unpopularity, he intends to keep them around to sell the idea that customers should get acquainted with paying based on usage.

“If you take the 30GB a month and compare it to what median usage is, let’s say high 20s — 27GB a month, that would suggest a whole lot of customers would do well by taking the 30GB service,” Marcus said. “Notwithstanding that, very few customers — in the thousands — have taken the usage based tiers and I think that speaks to the value they place on unlimited — not bad because we plan to continue to offer unlimited for as far out as we can possibly see.”

Despite the low enrollment, Marcus has no plans to jettison usage pricing anytime soon.

“I think that the concept of ‘use more-pay more – use less-pay less’ is an important principle to have established, so notwithstanding the low uptake of the usage-based tiers I think it is a very important component of our overall pricing philosophy.”

Time Warner Cable CEO Rob Marcus admits usage based pricing plans for broadband are exceptionally unpopular with customers, with only a few thousand enrolled. Mar. 12, 2014 (2:03)
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Plusnet offers DSL and fiber broadband plans (in some areas) that offer budget-priced capped or unlimited use plans.

While North American cable and phone broadband providers are among the most-hated companies on the continent, in the United Kingdom, customers gave generally high scores to their Internet providers.

PC Advisor partnered with Broadband Genie, an impartial, independent, and consumer-focused commercial broadband comparison service. Together they engaged an independent survey company (OnPoll) to survey 3,000 broadband users, chosen at random, in late 2013 and early 2014. They asked those users how happy they were with their ISP, tested the speed and reliability of their connections, and found out other valuable tidbits, such as how much they were paying, and for what exactly. Altogether, more than 10,000 U.K. broadband users contributed to the data that made an in-depth assessment of British broadband possible.

The results might stun those on the other side of the Atlantic. Unlike in Canada and the U.S., British broadband users are satisfied overall with their providers, and are enthusiastic about recommending many of them to others. Even the worst-performing provider – BE – still had a 46% recommendation rating, and the company was sold to BSkyB well over a year ago and is in the process of being merged with Sky’s broadband service.

Around 68 percent of British broadband users responding still rely primarily on various flavors of DSL for Internet service. But BT, the national telephone company, is in the process of upgrading facilities and dramatically increasing the amount of fiber optics in its network. The result is what the Brits call “Super Fast Broadband.” Back here, we call it fiber to the neighborhood service similar to AT&T’s U-verse or Bell’s Fibe. In many cases, improved service is providing speeds much closer to 25Mbps vs. the 1-6Mbps many customers used to receive. The upgrade is an important development, especially in rural Britain, often left without Internet access.

Cable broadband is much more common in North American than in the United Kingdom. While cable television became dominant here, the British favored small satellite dishes like those used by DirecTV or Dish customers. With BT dominating wired infrastructure, the government required the company to open its landline network to third-party providers. Some cable companies do exist in England, but they hold only a 12% broadband market share, even lower than fiber to the home service now at nearly 20%.

Great Britain treats broadband as a national priority, and although the current government has controversially settled for a hybrid fiber-copper network instead of delivering fiber straight to every British home, it’s a considerable improvement over what came before, especially in rural areas. Usage caps that used to dominate British broadband plans are now an option for the budget-minded. Unlimited use plans are becoming more mainstream.

With all the upgrade activity and improved service, the Brits have gotten optimistic about their broadband future. Only 12% of those surveyed loathe their broadband supplier. Another 20% were neutral about recommending their ISP, but 51% considered themselves satisfied and another 17% considered their provider top rate. Many in Britain even expect their Internet bill will decrease in 2014, and compared with North American prices, it’s often very low already.

The average price paid by customers of various British ISPs (excluding line rental)

Average speed received by customers varies depending on the technology. Virgin operates cable broadband, Plusnet uses a mix of DSL and fiber, while the slower performers are primarily ADSL.

Average speed test results per ISP (kbps)

• Virgin: 27,266
  

  Was top-rated for broadband reliability.

• Plusnet: 24,529
• BT: 13,164
• TalkTalk: 6,910
• EE: 6,818
• Demon: 6,586
• Sky: 5,942
• Eclipse: 5,786
• O2: 5,642
• Be: 5,458
• AOL: 3,809
• Post Office: 3,255

Overall ratings and reviews from PC Advisor found Virgin Media (cable) and Plusnet (DSL/Fiber) near tied for top ratings.

[flv]http://www.phillipdampier.com/video/PC Advisor Best cheapest fastest broadband UK ISPs rated 2-19-14.mp4[/flv]

PC Advisor talks about this year’s British ISP review, which reveals Brits are generally satisfied with their broadband speeds and pricing. (3:51)

AT&T wants customers to pay attention to their broadband account’s monthly usage limits: 150GB for DSL or 250GB for U-verse. Customers who exceed their allowance are more likely than ever to get a warning letter from AT&T threatening overlimit fees if they continue to ‘use too much’ Internet.

AT&T customers in Texas, Ohio, Oklahoma, and Florida have shared identical warnings with Stop the Cap! received during the last 10 days — in each case it was the first warning notice received about exceeding AT&T’s arbitrary allowance:

Dear AT&T High Speed Internet Service Customer,

We want to remind you that your AT&T High Speed Internet service includes 150 gigabytes (GB) of data for each billing period.

You have exceeded 150 GB this billing period.

We’ll waive the charges for additional data this month and notify you as your usage approaches 150 GB in future months.

The next time you exceed 150 GB you’ll be notified, but not billed. However if you go over your data plan in any subsequent billing period, we’ll provide you with an additional 50 GB of data for $10. You’ll be charged $10 for every incremental 50 GB of usage beyond your plan.

AT&T imposed usage caps a few years ago but has generally not enforced them, even when usage meters show an excess of 500GB in Internet traffic. Some AT&T customers still have no access to a working usage meter, making compliance even more difficult. Stop the Cap! has yet to receive a verified copy of a billing statement actually showing overages billed to customers, but the increasing number of warning letters may indicate overlimit fees are forthcoming for persistent ‘violators.’

We recommend that customers receiving these warning letters send a warning of their own by calling AT&T and threatening to cancel service over the issue of unacceptable usage caps. Let AT&T know that you consider usage-based billing a deal-breaker and you will begin exploring your options with other providers. Remind AT&T that they already earn a lot of money from you and that any overlimit fees that appear on your bill will mean the immediate termination of your account.

Canadians are demanding a better deal from their cable and phone companies and they are forced to respond.

As the United States battles back against the introduction of usage caps and rising prices for broadband service, increased competition and regulated open wholesale access to some of Canada’s largest broadband providers have given Canadians an advantage in forcing providers to cut prices and improve service.

Canadians can now easily get unlimited broadband access from one of several independent ISPs that piggyback service on cable and phone networks. Some large ISPs have even introduced all-you-can eat broadband options for customers long-capped by the handful of big players. As customers consider switching providers, cable and phone companies have been forced to cut prices, especially for their best customers. Even cell service is now up for negotiation.

The more services a customer bundles with their provider, the bigger the discount they can negotiate, say analysts who track customer retention. Bell, Rogers, Telus, and others have a major interest keeping your business, even if it means reducing your price.

“It’s far more lucrative for the telecom company to keep you there for the third or fourth service,” telecom analyst Troy Crandall told AP. It cuts down on marketing, service and installation calls, he added.

Getting the best deal often depends on your services, payment history, and how long you have been a customer. Cellphone discounts are the hardest to win, but customers are getting them if they have been loyal, carry a large balance and almost never pay late.

Bigger discounts can be had for television and Internet service — cable television remains immensely profitable in Canada and broadband is cheap to offer, especially in cities. Americans often pay $80 or more for digital cable television packages, Canadians pay an average of $60.

Internet service in Canada now averages $45 a month, but many plans include usage caps. It costs more to take to the cap off.

Because of Canada’s past usage cap pervasiveness, online video is not as plentiful in Canada as it is in the United States. There has been considerably less cord-cutting in the north. Despite that, Canadians are ravenous online viewers of what they can find to watch (either legally or otherwise). As usage allowances disappear or become more generous, online video and the Internet will continue to grow in importance for service providers.

Customers should negotiate with their provider for a better deal, particularly if Bell’s Fibe TV is in town. Bell has been among the most aggressive in price cutting its fiber to the neighborhood television service for new customers ready to say goodbye to Rogers or Vidéotron.

Shaw and Telus battle for market share in the west and also have room to cut customer bills and still make a handsome profit.

Behind the 8 ball.

Intel has sold its never-launched Intel Media OnCue system, which planned to compete for cable TV viewers using online video, for a deeply discounted $200 million to Verizon Communications, according to media reports.

The would-be virtual cable competitor had initially put its technology up for sale for $1 billion but dramatically reduced its asking price to make a quick sale.

Intel proposed to launch its online competing cable system sometime this year, but pulled back after determining its business plan was untenable. The problem was programming costs — entrenched satellite, cable and phone company competitors receive substantial volume discounts off cable programming but an upstart like Intel would face much higher pricing.

The ongoing effort to establish usage caps or metering Internet usage has also been cited by other would-be competitors as a major deterrent to launch competing video ventures online which can chew up usage allowances.

Variety reports Verizon will use the Intel platform to launch a new TV Everywhere concept for its customers that will deliver the FiOS TV lineup online.

Intel also gets to solidify its working relationship with Verizon’s wireless unit.