Time Warner Cable has had quite a bumpy ride for the past couple weeks. Having announced earlier a plan to conduct trials of a consumption-based billing policy, in which users would be charged based on the amount of data they download and upload, by week’s end the company was obliged to suspend the trials altogether.
What happened in between were the protests of some customers and bloggers, the usual mischief of some of the “public interest” lobbies (they’re from Washington and they know what you want), and most importantly, the intervention, as critics, of a congressman (Massa) and a U.S. senator (Schumer).
Aside from the fact that broadband users who consume unusually large amounts of bandwidth, downloading movies and the like, would have to pay more, it’s not immediately clear what’s wrong with consumption-based billing. That is, after all, the way we pay for most things, and it protects those who use less from having to subsidize the payments of those who use much more.
No matter. In an age when information “wants to be free,” and everyone is entitled to everything, arguments based on marketplace economics are probably not going to persuade a lot of people, and certainly not grandstanding members of Congress.
Which is why, at the end of last week, Glenn Britt, Time Warner Cable’s CEO, announced a suspension of the trials scheduled for later this year in Rochester, N.Y., Austin and San Antonio, Texas, and Greensboro, N.C.
In a display of their usual savoir-faire, several of the “public interest” moguls were full of gloating, like that of Timothy Karr of Free Press: “We’re glad to see Time Warner Cable’s price-gouging scheme collapse in the face of consumer opposition. Let this be a lesson to other Internet service providers looking to head down a similar path.”
Only slightly less tiresome was the statement of Gigi Sohn of Public Knowledge: “The company properly listened to its subscribers, the public and policymakers, all of whom (emphasis added) were highly critical of the proposition in the first place.”
The celebrations, however, may be a bit premature. What Time Warner Cable said was that it was suspending the trials, not abandoning consumption-based billing, and that in the meantime it was going to deploy measurement tools, a kind of “gas gauge,” that would allow users to see how much bandwidth they were using each month.
Assume that some months from now it transpires that the vast majority of users consume bandwidth in amounts that would qualify them for the lowest and cheapest tiers, while only a small minority would have to pay at the highest rates. Now that would be awkward, wouldn’t it?