Metered Broadband A Necessity? TWC's Financial Statements Don't Think So

Consumers Union, publisher of Consumer Reports and parent company to Consumerist, took a look at TWC’s most recent financial statements and couldn’t find any evidence that they “needed” to switch to metered broadband. In fact, TWC’s costs have dropped even as they added subscribers.

Here’s what Consumers Union found:

• TWC’s revenues from broadband during the first three months of this year rose 11% percent over the first quarter of 2008, climbing from $994 million to $1.1 billion.

• At the same time, TWC’s costs to provide broadband service to its customers dropped 18%, from $40 million to $33 million. That dramatic drop in costs came even though its number of subscribers grew from 7.9 million to 8.6 million.

• Overall, TWC’s profits were down for the quarter, falling from $242 million to $164 million. But the company says the drop in profits was due mostly to restructuring costs rung up when it was spun off in March from its parent company, Time Warner.

Although consumer outrage forced TWC to shelve their metered broadband plans, it seems unlikely that they’ve given up. The company still argues that charging by use is more equitable — and that the current pricing structure is unfair to light users. When they shelved the plan, they claimed that they were just taking more time to “educate” consumers.

Consumers Union is having none of it.

If we may, we would like to offer TWC a little bit of advice: Stop trying to put one over on your broadband customers. There’s no amount of “consumer education” that can change the fact that TWC is making a whole lot of money selling broadband service — without metered pricing.

Now Hear This Newsletter, April 30, 2009[Hear Us Now]