Time Warner Cable is extending an online promotion to Extreme (30/5Mbps) customers to upgrade to Ultimate (50/5Mbps) service for an extra $10 a month above your current pricing.

But you may want to call Time Warner to take advantage of the promotion because we found the cable company’s website forced the selection of a $4.99/month fee for a “Home WiFi and Internet Modem” you will not need if you own your own equipment.

You must have a DOCSIS 3 cable modem to take advantage of this offer.

The deal can be accessed by logging into Time Warner Cable’s My Services page and selecting “View or Make Changes to My Internet Service.”

Time Warner’s “Because We Can” One-Time Charge applies to new customers signing up for certain promotions.

Time Warner Cable has increased the monthly rental fee for its leased cable modem from $3.95 a month to $4.99 a month and has introduced a “one-time charge” of $19.99 applicable to certain Internet service new customer promotions.

CEO Glenn Britt earlier commented that Time Warner Cable had room to grow its modem lease fee:

“It was received with a minimum of push-back and we’re still actually charging less than Comcast ($7/month), so I think there is room to charge more going forward. People can buy their own if they want and a small percentage of customers have chosen to do that which is fine with us.”

For now, the increase only applies to new customers, but Stop the Cap! expects it will also eventually apply to current customers as part of the next round of rate increases. The Internet Modem with Free Home Wi-Fi, available to customers ordering 30/5 or 50/5Mbps service costs $14.99 a month.

Time Warner Cable has pulled back on customer promotions since the beginning of the year and has begun shifting its pricing for its most profitable service — broadband, to capture price-sensitive customers who have been unable to previously afford Internet-only service from the company.

Time Warner has introduced a new “Lite” tier offering 1Mbps service for $20 a month and has made the 3Mbps “Basic” service the staple of many of its bundled promotions.

Stop the Cap! strongly encourages Time Warner Cable customers to buy their own cable modems and avoid the rental fees. Customers can also bypass the rental fee by signing up for Earthlink service through Time Warner Cable.

Our top modem choice remains the Motorola SB6141, which can be found at the “Buy It Now” price on eBay as low as $77.99 with free shipping and no upfront sales tax for most buyers. This model does not include Wi-Fi, but most people don’t need it — a router generally provides Wi-Fi connectivity on its own.

We highly recommend purchasing DOCSIS 3-ready modems to avoid obsolescence issues.

The most recent list of “acceptable” modems that can be activated with your Time Warner Cable broadband service are:

Optimum Wi-Fi is available from thousands of “hotspots” across New York, New Jersey and Connecticut. You can find them by starting your Wi-Fi device and viewing the available networks in range. The network name will be ‘optimumwifi’.

Cablevision broadband subscribers may soon get free Optimum Wi-Fi service on New Jersey commuter trains and inside railway stations, if the NJ Transit board approves an agreement with the cable company.

On Wednesday, the board will vote on a 20-year contract with Cablevision to build and maintain a wireless network entirely at the cable company’s expense and offer NJ Transit free use of its facilities to assist in its operations.

With more than two-thirds of all rail commuters using Internet service during their travels, the network will vastly improve Wi-Fi access and offload data traffic from nearby cellular towers.

Providing Wi-Fi on trains has proved more difficult than Cablevision and the transit group originally thought.

The NJ Transit system first issued a “request for proposals” from interested Wi-Fi vendors back in 2010. Three years later, the transportation agency finally chose Cablevision over Illinois-based RAILband Group.

Cablevision has also been dragging its feet installing Wi-Fi on the Long Island Railroad and Metro North, despite agreeing to offer service by 2011.

“Wi-Fi on the trains is complicated,” explained Tad Smith, Cablevision president of local media.

On a March 2013 conference call with Wall Street analysts, he admitted the service is still not up and running, but should be sometime in the future.

“We are in active, productive, very positive conversations with the trains,” said Smith. “I am optimistic for the future.”

The project in New Jersey is not anticipated to be complete until 2016. Wi-Fi will first be made available in railway stations. Individual railway cars will then gradually get the service.

Cablevision now provides its Optimum Wi-Fi service as a benefit exclusively for subscribers. Non-subscribers are limited to three 10-minute sessions per 30-day period, with a further limit of one 10-minute session per day.

The MTA required Cablevision to provide “reasonable” access to non-Cablevision subscribers, which may include daily, weekly, or monthly access passes at an additional cost. But no pricing or further details are now available.

NJ Transit is the nation’s largest statewide public transportation system providing more than 895,000 weekday trips on 240 bus routes, three light rail lines and 12 commuter rail lines. It is the third largest transit system in the country with 165 rail stations, 60 light rail stations and more than 18,000 bus stops linking major points in New Jersey, New York and Philadelphia.

AT&T has once again followed Verizon Wireless’ lead by ending early upgrades for contract customers, making it impossible to upgrade a handset with a full device subsidy until 24 months have passed.

The changes took effect last Sunday. Customers that bought their current device after March 1, 2012 must now wait four more months before they can get a discounted upgrade. AT&T also will only allow upgrades within the same “device category,” meaning a customer with an expiring smartphone contract cannot use their upgrade discount on a tablet device.

Previously, both Verizon and AT&T offered customers loyalty discounts and early upgrades for customers not minding a two-year contract extension. Device subsidies — discounts extended to customers to cut prices on new smartphones or tablets, are anathema to many Wall Street analysts because they can drag down provider earnings. Cell companies quietly win back the subsidy discount within two years by charging artificially higher rates on service plans. But Wall Street does not like waiting for a two-year payback.

Verizon Wireless and AT&T both charge nearly the same rates and have almost identical policies and discounts. When one carrier raises prices, the other quickly follows. In the past three years, both companies have ended a number of discounts and plan features — notably loyalty upgrade credits and flat rate data plans — in moves to cut costs and increase profitability.

Both Verizon and AT&T have spoken positively about the idea of doing away with phone upgrade subsidies altogether, but neither would say current rates would be lowered in tandem with such a move. Wall Street wants carriers to consider maintaining current pricing and ending phone subsidies, which would dramatically stimulate company earnings. A device subsidy on a top of the line smartphone is worth $150 a year — money that would come from the customer’s pocket, not AT&T or Verizon.

Customers who don’t want to pay AT&T’s contract prices will not find a better deal from its prepaid division. AT&T has also announced it is discontinuing several  affordable data plan options effective June 20.

The most-affected plan is AT&T GoPhone’s $25 monthly plan, which includes unlimited texting and 250 minutes of calling. That plan allowed customers to choose between three data packages:

• 50MB for $5/month;
• 200MB for $15/month;
• 1GB for $25/month.

Effective June 20, the only available data add-on for this plan will be the 50MB option. Customers exceeding this will have to re-subscribe for an extra $5 for each renewal.

AT&T’s $50 monthly plan includes unlimited texting and calling. But customers will no longer be able to add data service. Instead, they will have to upgrade to AT&T’s premiere $65 plan, which includes the same features as the $50 plan but adds up to 1GB of data.

AT&T says it will have new options for consumers in the coming weeks, but until then, data customers will often pay an average of at least $15 more per month as the changes take effect.

Time Warner Cable has laid the foundation to eventually begin charging broadband customers usage-based pricing, raise the modem rental fee originally introduced last fall, and continue to offer customers unlimited broadband service if they are prepared to pay a new, higher price.

Time Warner Cable CEO Glenn Britt spoke at length at this week’s Bank of America/Merrill Lynch Global Telecom and Media Conference in London about how Time Warner Cable intends to price its broadband service going forward. The moderator peppered Britt with questions as investors looked on from the audience about if and when the cable company can raise prices for its broadband service or start a usage pricing plan that will generate higher revenues based on metering customer usage.

Britt

Britt repeated his earlier assertions that Time Warner Cable has no interest in capping customer usage. In fact, the company sees fatter profits from increased usage, as long as customers are willing to pay for it.

For the first time, Britt admitted customers seeking unlimited service should be ready to pay a higher cost for that option, telling the audience Time Warner would set a premium price on the unlimited tier and offer discounts to customers seeking downgrades to comparatively cheaper, usage-based pricing plans. The company hopes this new approach will limit political opposition and customer push-back.

Britt also said there is room to grow Time Warner Cable’s monthly modem rental fee ($3.95 a month), comparing it against Comcast’s current rental fee, which is $7 a month.

Britt complained that increasing usage and demand for broadband speed was requiring the company to invest more in its broadband service, something not clear on the company’s quarterly balance sheets. Real investment, except for expansion by the business/commercial services division, has been largely flat or in decline for several years. Time Warner Cable’s broadband prices have increased over the same period.

Britt also admitted that the costs to offer the service remain comparatively minor.

“In broadband there are the costs of connectivity and peering and all that sort of stuff, but they are pretty minor compared with (video) programming costs so it appears that broadband is usually profitable versus video.”

Britt also admitted the cable industry in general is increasingly dependent on broadband revenue and the profits it generates to shore up margin pressure on the industry’s formerly lucrative video service. As programming costs increase, pressure on profits increase. Yet the cable industry remains profitable, primarily because broadband earnings are making up the difference.

The meter is lurking

“I think if you look at the U.S. cable companies the EBITDA margins have been remarkably stable over a long time period,” Britt said. “The mix has [recently] changed. The video gross margin is getting squeezed, the broadband gross margin is larger and we are growing broadband so that is helping. The voice gross margin is higher than video and a little less than broadband and until recently that has been a growing part. And then we have business services which are growing rapidly and have a high gross margin.”

Additional Quotes:

Cable Modem Equipment Rental Charge: “It was received with a minimum of push-back and we’re still actually charging less than Comcast ($7/month), so I think there is room to charge more going forward. People can buy their own if they want and a small percentage of customers have chosen to do that which is fine with us.”

Usage-Based Pricing: “In order to keep up with the demand for throughput and speed which is going up every year, we are going to have to keep investing capital which we do on a regular basis, so we are going to have to figure out how to get paid for that. I think inevitably there is going to be some usage dimension, not just speed within the package, so what we have done is to put in place pretty much throughout our footprint, with a few exceptions, the idea that you can buy the standard service that [includes] unlimited usage and that costs whatever it costs, but if you want to save $5 (and that is the first thing we put in place) you can agree to a consumption limit, and we can start expanding on that.”

“I think the key to this — there has been push-back against caps in the past — I think the reason for the push-back is it was perceived in a sort of punitive, coercive fashion. The usual rhetoric is, ‘gee 20 percent of the people use 80 percent of the bandwidth or some number like that — we need to make them stop using so much.'”

“My feeling is we actually want everybody to use more, we want to invest the capital, we just want to get paid for it. So I think we should always have an unlimited offering and that should probably cost more than it costs today as the usage goes up and then people who don’t use as much should have the opportunity to save money. They don’t have to but they can, so I think that is a much more politically and consumer-acceptable way to do it than a sort of punitive thing people talk about.”