Time Warner Cable CEO Glenn Britt still isn’t saying when the cable operator might implement usage-based pricing or bandwidth caps for broadband customers.
But when he was asked about the issue on Thursday’s earnings call, Britt said the cable operator would continue to offer an unlimited-usage plan — and not implement usage caps across the board (see Time Warner Cable Drops 128,000 Video Subs, TWC To Invest In Super Headend, All-Digital Projects and Think Bandwidth Caps Are Unnecessary? Check Out This Graph).
“I would say that the right way to look at this and to our way of thinking is that there should be, there should remain an unlimited plan for those who want to buy that,” Britt said. “I think there should always be an unlimited plan.”
TWC would expect to use bandwidth limits to offer lower-priced broadband tiers, rather than use usage-based pricing as a way to generate revenue from high-volume consumers, Britt said: “We’re more focused on the affordability [of broadband] and lower-income people, who might be light users and might seek to pay less because they use less.”
Note that several of TWC’s peers in the industry — including Comcast, Cox and Charter — do impose usage thresholds of varying levels on broadband subs.
Britt also mentioned that a senior exec at one of the phone companies last week referenced bandwidth usage as “inevitable,” although in a wireless context.
That was Verizon’s Lowell McAdam, who said that wireless carriers will have adopt tiered service plans with usage limits “because there is not unlimited spectrum. When you look at the utility of the devices that we offer and the video demand that is going to be hitting the devices, it is inevitable.” McAdam added, “I wouldn’t be surprised if unlimited comes back in and out from a promotional perspective for carriers to balance growth. But in my view, it is, as I said — like it’s inevitable.”
Meanwhile, AT&T effective May 2 adopted caps for U-verse Internet and DSL customers. While the telco did lose 12,000 high-speed Internet subs in the second quarter analysts viewed that as more to do with the decline of legacy DSL; it gained a net 439,000 subs for the more advanced U-verse broadband product (see AT&T Reels In 202,000 U-verse TV Customers and Cable Likely To Follow AT&T Into Usage-Based Broadband Pricing: Analyst).
Recall that TWC burned its fingers on the hot stove of usage-based pricing two years ago (see Time Warner Cable: Three Mistakes on Usage Pricing and Time Warner Cable’s Britt: Usage-Billing Episode ‘A Bit Of A Debacle’). The episode seems to have been a tough learning experience for the MSO about how to proceed here — which is to say: cautiously.
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