Customers Failing To Fling Themselves At Limited Broadband Usage Cap, TWC CEO Admits

Back in 2012, Time Warner Cable unveiled an optional metered broadband plan: the current iteration gives customers a $5 monthly discount, but caps their usage at 30 GB. It’s not really surprising that customers aren’t exactly throwing themselves at such limited broadband access. What might be a little more surprising is that even the TWC CEO admits it’s a total dud.

As LightReading relates, this week (at the same conference where he called the Comcast/TWC merger a “dream combination“) TWC CEO Rob Marcus acknowledged the very low opt-in rate to “Internet Essentials.”

The number is “in the thousands,” Marcus said. As Time Warner Cable has roughly 11 million current subscribers, some quick math says that even at best that works out to less than 1% of their consumers taking the plan.

Marcus insisted that more consumers than have signed up would be just fine with Essentials, saying that median broadband use among their subscribers is in the “high twenties” monthly. And yet faced with the potential for fees likely outstripping the amount of discount offered for going over an optional data cap very close to their average monthly use, customers balk. Imagine that.

Despite the Essentials plan flopping magnificently, Marcus stands by the principle of the thing: the more bandwidth customers use, the more they should pay, he said.

Meanwhile, even without data caps for most customers TWC has found plenty of other ways to increase the bills their subscribers pay.

TWC started the plan early in 2012, and rolled it out nationwide later that year. At the time, it didn’t seem like a deal that made any sense for the overwhelming majority of TWC’s customers, and two years later it appears that said overwhelming majority agrees. The company’s 2009 attempt to come up with a metered broadband pricing plan also failed.

Of course, all the Time Warner Cable rate plans in the world probably won’t make a difference to consumers by year’s end anyway, if the company’s planned merger with Comcast meets with regulator approval.

TWC Subs Say No to Data Caps [LightReading via DSL Reports]

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  1. ShadyTrust says:

    Maybe because it’s a pitiful discount for an insane cap. The only way I’m in favor of caps is if they’re very lenient with a significant discount. And to be honest, I’d prefer a rate hike or an imposed cap. It’s the main reason I’m hoping the merger doesn’t go through.

  2. pguyton2 says:

    They should have taken the reverse approach: automatically give users who use less than 30GB a $5 discount, then you might have people trying to manage their use more.

    • furiousd says:

      I like this idea, in general I’m in favor of a reward-based system as opposed to a penalty-based one

  3. Terryc says:

    In theory I have to agree with Rob Marcus that the more you use the more you should pay. But the big problem is that the increase in actual cost for comcast is pennies on the dollar of what is charged to the customer. When the product cost to the company is 10 cents it’s hard to justify charging 500 times that to the consumer. If your overhead is that high you shouldn’t be in business. But the reality is the internet companies are making money hand over fist. At least in the US where they charge an ungodly amount for service.