TW Cable Plays With Fire in Texas
June 3, 2008 11:59 AM
Time Warner Cable confirmed to the Washington Post today that it is conducting a test in Beaumont, Texas, to measure cable users’ uploads and downloads of Internet data, and to charge more to those subscribers who are heavy Internet users via cable modem.
TW Cable acknowledges that, like most multiple system operators, 5% of its subscriber base takes up half of the cable line capacity. The test will be watched widely, as most MSOs would love to do the very same thing.
On the surface, this sounds fair. Wireless telephone providers charge more if subscribers go over their monthly phone minutes. We’ve all been hit there.
But TW Cable is playing with fire here, because its telco competitors, which also provide high-speed Internet service through DSL, do not have those technology concerns and have no plans to charge more to broadband hogs.
This new log on the campfire could heat up competitive wars between cable and telco providers, but cable doesn’t have much choice, given its technical limitations.
I predict TW Cable’s test in Texas will be a litmus test and one that could lead to widespread changes for cable modem users, as well as subsequent brushfires in the competitive wars.