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Usage-Based Broadband Returns to TW Cable

Jeff Baumgartner
2/27/2012

TW Cable is giving usage-based billing another try, as the company announced on its blog Monday.

Subscribers who opt in to the Essentials Broadband plan can consume five gigabytes per month before being charged $1 per GB above that threshold, not to exceed $25 per month. They would get access to a meter that tracks their usage at granularities from hourly up to monthly. TW Cable is also providing a 60-day or two-billing-cycle grace period before charging for overages, and customers can switch back to an unlimited broadband tier at any time.

The plan is being rolled out only in parts of southern Texas and is limited to customers of TW Cable's Standard, Basic and Lite broadband tiers; customers for its faster Turbo, Extreme and Wideband/Docsis 3.0 tiers will stay on the MSO's unlimited broadband plan.

The MSO stressed that its high-speed Internet customers "will always have access to unlimited broadband at a flat monthly rate."

Why this matters
When TW Cable tried this three years ago, the program was panned as a greedy money-grab designed to keep over-the-top video competition in check. The new program uses a new tactic: It's optional and targets the lightest broadband users looking to knock a few dollars off their bills, taking after the ESPN-free, $39.99 per month TV Essentials tier that TW Cable has introduced in a set of markets. (See No-Frills Cable TV .)

TW Cable's move follows new policies recently implemented by AT&T Inc. (NYSE: T) and Suddenlink Communications . If the new policy doesn't spark a new firestorm, expect other MSOs to introduce similar usage-based programs.

For more
More about usage-based broadband and consumption caps.



— Jeff Baumgartner, Site Editor, Light Reading Cable

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AESerm
AESerm
12/5/2012 | 5:41:15 PM
re: Usage-Based Broadband Returns to TW Cable


The promise of continuing to offer unlimited at a flat monthly rate, of course, differs from offering unlimited at a flat monthly rate that will never change in the future.  

Jeff Baumgartner
Jeff Baumgartner
12/5/2012 | 5:41:15 PM
re: Usage-Based Broadband Returns to TW Cable


Sanford Bernstein's Craig Moffett likens this to a carrot and stick approach. The carrot is the potential cost savings -- Essentials Broadband is priced $5 per month below the price for the like unlimited service tiers that qualify (Standard, Basic, and Lite).  The stick is the overage charges that factor in when users go beyond 5GB per month, which really isn't that much if you're downloading or streaming almost any video during that period.  Not much of an uproar on this kinder, gentler policy so far versus the original usage based trials/deployements by TW Cable, which were "all stick," in Moffett's view. JB


 

Cooper10
Cooper10
12/5/2012 | 5:41:14 PM
re: Usage-Based Broadband Returns to TW Cable


A smart way to introduce metered usage - provide those that are lighter users a way to pay less, while maintaining an unlimited option - and yes, the price for that unlimited option will likely increase in the future, just as consumption on that unlimited option continues to increase.

Jeff Baumgartner
Jeff Baumgartner
12/5/2012 | 5:41:13 PM
re: Usage-Based Broadband Returns to TW Cable


Smart for TW Cable to commit to always offering an unlimited tier, though some will fear Moffett's prediction that rates on those plans will inevitibly rise.  I think other MSOs will be smart to  keep this optional.


BTW, Comcast's CFO reiterated for the sixteenth time today that they have no plans to introduce usage-based broadband, as they'll stick with their 250GB monthly ceiling on "excessive use."  Michael Angelakis iked the risk TW Cable is taking, but said Comcast is hesitant to "rock the boat on that product." they're still gaining HSD subs hand over fist each quarter, so can't argue that they're staying pat for now.  JB


 

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