Time Warner Cries Uncle

Time Warner suspends pay-by-the-drink internet pricing pending further review.

Looks like Time Warner was getting so much bad press on implementing utility pricing for internet service that it has suspended the trials for now – from TWC:

“It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing. As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met. While we continue to believe that consumption based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process.”

“Other interested parties” may now include the FCC and a number of congressmen who have jumped into the fray soundly condemning TWC’s utility pricing scheme. Underlying the imbroglio is the suspicion that this is more driven by internet users dumping CATV services for TV programming than any congestion problems with internet use. Interesting to see this chart from their Annual Report:

Pardon the rest or the world for being skeptical, but the technologies underlying broadband over cable indicate low marginal costs for delivering internet services and there is no uniform position within the CATV industry on the cost pressures TWC cites as a justification for its pricing scheme. Keep your eyes on this as it unfolds – it may be that the government will jump in on this issue and emails from the masses may really count.