Time Warner Broadband Cap Plan Faces Texas Delay

A Time Warner official said April 13 the company plans to delay implementing its controversial broadband pricing plan in San Antonio and Austin, Texas, until at least October, with actual billing being pushed into 2010. The cable broadband provider still plans to launch the new pricing scheme in August in Rochester, N.Y., and Greensboro, N.C., however.

Prompted by harsh criticism of the plan from both consumers and Congress, Gavino Ramos, Time Warner's vice president of communications for South Texas, told the San Antonio Express-News, "What happened as we're continuing to listen was we worked in some of the comments and ideas that got sent to us. We came to the realization, let's do this in October."

Time Warner had a lot to listen to when it came to comments about the company's consumption-based pricing plan. After initially announcing a three-tiered program with prices ranging from $29.95 to $75.00 a month plus an additional $1 for every gigabyte consumed over a user's tiered plan, Time Warner was swamped with complaints from consumers who fear their broadband costs will rise under the plan.

Time Warner responded with an unlimited tier that would top out at $150. That did noting to appease critics and even prompted Rep. Eric Massa, who represents the Rochester area, to threaten legislation to curb tiered broadband pricing, particularly in areas where a broadband provider owns a monopoly on service.

"Time Warner has announced an ill-conceived plan to charge residential and business broadband fees based on the amount of data they download," Massa said in an April 10 statement. "They have yet to explain how increased Internet usage increases their costs."

Time Warner Chief Operating Officer Landel Hobbs released a statement on April 9 expressing regret for not adequately communicating to customers the company's plan to initiate consumption-based billing trials for its broadband Internet services. "We realize our communication to customers about these trials has been inadequate, and we apologize for any frustration we caused," Hobbs said in the statement. "We've heard the passionate feedback, and we've taken action to address our customers' concerns."

Time Warner's reaction to the public outcry over the tiered pricing did little to gain traction with Massa, who pointed out that consumers who currently receive unlimited Internet for around $40 per month would be billed $150 per month under the new plan.

"Time Warner's decision has the potential to more than triple customers' current rates, and I think most families will find this to be too taxing to afford," Massa said. "Time Warner believes they can do this in Rochester, N.Y., Greensboro, N.C., and Austin and San Antonio, Texas, and it's almost certainly just a matter of time before they attempt to overcharge all of their customers."