Distribution

TW Cable Tweaks Usage-Based Internet Options

Revises Original 5 GB ‘Essentials Internet’ Tier While Adding One That Caps Monthly Usage at 30 GB 7/26/2013 10:42 AM Eastern

Time Warner Cable confirmed Friday that it will soon tweak its original usage-based Essentials Internet tier targeted to lighter users, while adding a new one that raises the monthly usage threshold before customers face per-gigabyte overage fees.

A TW Cable spokesman said the MSO will offer two optional Essentials Internet plans to customers who subscribe to the MSO's lower end speed tiers: 

  • A 5 Gigabyte per month plan that offers $8 off the retail price
  • A 30 GB per month plan that offers $5 off the retail price

Under both plans, customers who exceed their monthly limit are charged $1 per GB, though overage charges are not to exceed $25 per billing cycle. Essentials Internet customers can access a meter on the MSO’s customer portal that tracks their monthly broadband usage.

The Democrat and Chronicle reported of the coming, revised usage-based plans on Thursday, noting that they are entering play as the MSO raises rates on its Internet service by an average of $3 per month.

A spokesman said TWC will introduce the new Essentials Internet options in August in most systems, but has not yet revealed an exact start date. The new tiers and plans will not be offered initially in TWC systems formerly owned by Insight Communications and NewWave Communications.

TWC launched its original, usage-based Essentials Broadband tier in February 2012, offering a $5 discount to customers who stay under the 5 GB ceiling.

TWC is offering Essentials Broadband only to customers who subscribe to three specific high-speed Internet  tiers: Lite (symmetrical 1 Mbps); Basic (3 Mbps down by 1 Mbps up); and Standard (15 Mbps down by 1 Mbps up).  The option does not apply to its Turbo, Extreme and Ultimate tiers.

The MSO believes its optional, usage-based tiers will appeal to lighter Internet users, while still offering unlimited data options to customers for all its tiers.

Time Warner Cable has not disclosed how many of its 11.06 million residential high-speed Internet customers have opted for the Essentials option so far, but “it’s a small number,” the MSO spokesman said.

TWC launched its opt-in Essentials Broadband tier about three years after it came under fire for trying to roll out non-optional usage-based billing policies in four markets.

Other U.S. cable MSOs, however, have rolled out non-optional metered, fee-based usage policies.

Suddenlink, for example, recently reactivated a plan that charges extra when cable modem subs exceed their monthly usage allotments three times.  Mediacom has rolled out similar usage-based plans. Comcast has conducted usage-based broadband trials in Tucson, Ariz.; and Nashville, Tenn.  

The FCC’s Open Internet order expressly allows usage-based pricing. Broadcasting & Cable reported last June that the Justice Department had been contacting MSOs as part of an investigation into whether cable operators are trying to suppress over-the-top video competition via the use of data caps, TV Everywhere services and most favored nation clauses, among other policies.

March