Following criticism of a plan to bill Internet customers by usage, Time Warner Cable CEO Landel Hobbs released an expanded version Thursday that includes a top price of $150 a month for “virtually unlimited usage.”
Hobbs said “some recent press reports” were “premature and did not tell the full story.” But, he added, “bandwidth consumption is growing exponentially,” about 40 percent annually among Time Warner Cable’s subscribers, and the company must address the costs.
‘Fairest Approach’
In fact, Hobbs said, industry analysts project that the Internet’s infrastructure may not be able to handle this explosion by 2012, and the company believes the “fairest approach” is not to raise all prices but to use a tiered model.
That approach has been meeting with significant opposition, including from Congress, newspaper editorials, and such consumer groups as Stop the Cap.
The revised cable plan has a 100GB monthly tier at the top end for $75 monthly, plus $1 per gigabyte above that. But the over-the-limit charge is capped at $75, so a user could pay $150 and get what the company described as “virtually unlimited” bandwidth.
The tiers now begin at 1GB per month at 768KB/128KB for $15, with an overage charge of $2 per gigabyte. Time Warner said about a third of its customers use less than 1GB.
Other packages are available at 10GB, 20GB, 40GB and 60GB with overages at $1 per gigabyte. There will also be an initial ramp-up period of two months while the company collects usage data, and then a one-month period of noting overages on bills but not charging. The trial is being rolled out in Rochester, N.Y.; Greensboro, N.C.; and, in October, in San Antonio and Austin, Texas.
‘$150 a Month Is High’
Bruce McGregor, an analyst with industry research firm Current Analysis, said that “$150 a month is high for a broadband service.”
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