Would you pay Time Warner Cable $6.99 a month to guarantee they will update your equipment on a regular basis to provide you with reliable service?

An unspecified number of customers participating in a Time Warner Cable focus group are being asked that question this month as the cable company ponders charging the new fee in the future.

“As technology, Internet speeds, and entertainment options keep getting better, you want, and need, your equipment to keep up. That’s why we’re introducing Time Warner Cable’s Future Proof Guarantee. Starting next month you will see a $6.99 equipment lease fee on your bill, which will guarantee you have the right equipment for all your TWC services. That means we will keep your Modem, and DVR set-top box up-to-date so you can enjoy a seamless, reliable experience and the service you expect.”

To be clear, Time Warner is only considering this new fee and is testing the concept with its focus group to gauge potential customer reaction.

The Stop the Cap! reader and focus group member who shared the news with us was not impressed.

“This feels like another money grab from an already very-profitable company,” our tipster told both us and the cable company.

The new fee would double-down on Time Warner’s already lucrative new cable modem rental fee, now $3.95 a month. The new $7 fee would cover “upgrades” that most subscribers might assume they were already entitled to as paying customers. We have no word if this fee would replace existing equipment rental fees or would apply in addition to those rental fees.

Any customer renting equipment can generally be assured of getting a free “technology upgrade” just by swapping existing equipment at any Time Warner Cable store — no additional fee required.

Moffett

I spend my days listening to Big Telecom company earnings conference calls so you don’t have to. On this morning’s call with Time Warner Cable investors, Sanford Bernstein’s Craig Moffett raised his hand yet again for another round of questioning Time Warner Cable executives for news on when the company will begin gouging their customers with Internet Overcharging schemes like usage-based billing. It is rare when Moffett does not ask Time Warner about when it plans to get the Money Party started with even higher prices for the company’s broadband customers.

Both Rob Marcus (chief operating officer) and Irene Esteves (chief financial officer) do their best to assuage Moffett his dreams of usage pricing may still someday come true (we’ve underlined some important points):

Craig Moffett – Sanford C. Bernstein & Co., LLC., Research Division: Rob or Irene, maybe you could just update us a little bit on your latest thinking with usage-based pricing, what’s been happening in Texas? And with the cable modem fee, which is obviously not a step in usage-based pricing, does that put off anything that you would otherwise do in moving toward usage-based pricing over the next couple of months? How should we think about that?

Robert D. Marcus – president and chief operating officer: So we’re now in Texas, the Carolinas and the Midwest with usage-based pricing. [We’re planning to introduce it] in the Northeast [in] the next month or so. And I think by year-end, we’ll be 100% across the footprint with [usage pricing] available [on] Internet Essentials, as we call it. I think that although the customer uptake of Internet Essentials is still small, it’s a very important principle that we’ve established, one that usage and price relate to one another. And secondly, we think it’s very important that we give customers who use less a choice to pay less. And whether or not there is a significant uptake of the service, we think those are very important principles to have established. So we’re in no way reducing the emphasis on that product because the numbers are still relatively small.

Irene M. Esteves – chief financial officer and executive vice president: And as far as the modem fee, we’re looking at that as part of our overall pricing strategy on [High Speed Internet]. We shouldn’t think about it as separate and apart from what our customers are paying us for the overall service. We think  it makes sense given what the competition is charging.

Time Warner Cable customers irritated by the cable operator’s new $3.95 monthly modem rental fee who do not want to pay premium prices for a purchased modem can enjoy the benefits of a loophole by ordering broadband service from Earthlink, which offers nearly identical performance over Time Warner’s cable broadband network and currently charges no modem rental fees.

Earthlink has maintained a third party agreement to provide its service over Time Warner Cable for more than a decade, and the company’s service operates transparently over your existing Time Warner Cable connection and equipment. In our own tests, we found Earthlink’s service identical to Time Warner Cable with two exceptions:

1. Earthlink does not provide Time Warner’s “Speedboost” technology which delivers slightly faster service for the first few seconds of a large file transfer;
2. You will receive an Earthlink e-mail address and forfeit your existing Time Warner Cable e-mail account.

The current promotional offers:

• Up to 768 Kbps service: $29.95/month
• Up to 6.0-10.0 Mbps service: $29.95/month for first 6 months; $41.95/month thereafter
• Up to 10.0-15.0 Mbps service: $39.90/month for first 6 months; $51.90/month thereafter
• Standard installation fee varies by region.
• Term Commitment (contract): None (no contract required)

Despite information on Earthlink’s website, the upload/download speeds on offer are identical to what Time Warner Cable or Bright House sells for their Standard or Turbo services in your area. After six months, you can purchase your own modem and return to Bright House or Time Warner Cable on a New Customer promotion and further extend your savings.

We found Earthlink’s online service qualifier not always accurate. For example, we found service at Stop the Cap! HQ “unavailable,” even though an address a few doors down qualified for service. We also discovered Earthlink heavily promotes its more expensive 15Mbps option, ignoring the less expensive 10Mbps service, even though both are available.

No matter. You can skip the hassle and just call your local Time Warner Cable office, which will process your order for Earthlink instantly over the phone. You do not need a new modem — a simple billing change on Time Warner Cable’s computer system is all that is required to switch providers. Earthlink will be billed on your Time Warner Cable bill.

Be aware that switching to Earthlink could effect any double-play or triple-play packages you signed up for earlier. Ask your TWC representative if there are any unintended pricing consequences for changing Internet providers. If there are, let them know you are switching to save money and ask if TWC can offer any competing retention offers to match the price. You may find Time Warner amenable to keeping your business and lowering your price.

There is no long term guarantee Time Warner won’t force Earthlink to charge an identical modem rental fee in the near future, but at least you can avoid paying it now until the authorized modems on Time Warner’s list come down in price.

Time Warner Cable will increase the broadband speed for its most popular Standard service to 15/1Mbps across the country over the next 60 days.

With increased competition from Verizon’s FiOS fiber to the home network and AT&T U-verse, Time Warner is boosting Internet speeds to stay competitive with aggressive promotions on offer from phone companies throughout its service area.

Rob Marcus, chief operating officer for Time Warner, today told investors U-verse was available in about a quarter of the company’s footprint, with Verizon FiOS offering service in 12% of the areas where the cable company provides service.

“Last quarter, U-verse featured fairly aggressive double play promotions, especially in Texas and the midwest, while FiOS continued to aggressively enter new buildings in New York City,” Marcus said.

Marcus

Time Warner Cable failed to meet investor expectations for broadband growth during the third quarter, and some are questioning the company’s wisdom narrowly-targeting promotions to specific segments of its customer base. Bloomerg Industries analyst Paul Sweeney suggested the company was struggling to market the correct bundles of services to its customers.

Marcus reported Time Warner has seen the largest growth in DOCSIS 3.0 enhanced broadband so far, with 73,000 new customers signing up for the company’s 30/5Mbps Extreme tier or 50/5Mbps Ultimate tier during the last quarter. Combined with Turbo customers, this represents over 22% of all Time Warner’s residential broadband customers.

But while the company celebrated its new revenue from cable modem rental fees, the new charge has alienated a number of customers, some now shopping around for a better deal from competitors.

“In essence, this is a rate increase on [broadband] service, but the key is our customers have a choice,” Marcus said. “If customers prefer to buy their own modem from a qualified list of options, we’re all for it. After all, if the modem is on the customer’s balance sheet, that is less capital expense for us and fewer truck rolls.”

Marcus’ statement conflicts with one made earlier by Joli Plucknette-Farmen, communications manager for Time Warner Cable in western New York. She told WGRZ-TV last month the new fee was not  a “rate hike dressed up as a fee”, as some critics have suggested.

The company made no announcements about increasing the speeds of its higher-speed tiers to maintain their value in light of the forthcoming speed increase for Standard service.

This will cost you $10/month in Milwaukee

Stop the Cap! has learned Time Warner Cable is back with another equipment rate increase, this time for television set top boxes that will now cost $10 a month each, beginning in Wisconsin.

Time Warner Cable customers in the Milwaukee area are first getting the notice of the $1.05 rate increase on their latest bill. The new rate takes effect in November.

“Many businesses, including ours, are facing rising costs and have to adjust prices in order to maintain their operations,” explains Time Warner Cable Wisconsin spokeswoman Stacy Zaja. “We also understand that some of our customers are struggling in this economy, and are doing the best to hold the line on our prices.”

The rate increase comes at the same time Time Warner is introducing a $3.95 monthly modem rental fee for its broadband service. Unlike cable modems, however, Time Warner will not allow customers to purchase their own set top boxes, so it represents a rate increase customers can only avoid by canceling service or negotiating a lower rate.

At this time, Time Warner will not increase its prices for cable television service, just the equipment needed to view it.

The Business Journal notes Time Warner may be taking a chance on its latest rate increase, because AT&T’s U-verse service is increasingly available as an alternative choice for Milwaukee residents. Time Warner last raised the set top box rental fee by $1 in 2011, along with a $5 monthly rate hike for its cable television service.