Consumers won a big victory this week as Time Warner Cable backed down on a plan that would have placed a cap on bandwidth usage for broadband customers, while at the same time charging users a wildly inflated price per gigabyte.
When Time Warner announced recently that it would expand its broadband caps into New York and North Carolina, Ars Technica reports that the plan immediately ran afoul of Rep. Eric Massa (D-NY) and Sen. Chuck Schumer (D-NY). The two lawmakers helped torpedo Time Warner's scheme.
The Entertainment Consumers Association, which also lobbied vigorously against the Time-Warner plan, was delighted with the cable provider's decision to back down. ECA VP and General Counsel Jennifer Mercurio commented on the outcome:
We're pleased that Time Warner has come to their senses on this issue... Having worked against caps and tiered pricing for over a year, and being the leading consumer rights organization to aggressively defend the American public on this issue, we're glad to see our efforts pay off even as we continue to work with Senator Schumer, Congressman Massa, and others to stop this type of consumer price gauging moving forward.
When Mercurio mentions price gouging, she's not kidding. Price comparison done by Nate Anderson of Ars Technica show how blatantly Time Warner planned to rip off its customers:
As TWC expands its test markets for the data caps, it offers plans with 5GB of monthly data transfer for $30. Plans with 40GB of data go for $55... That base rate works out to a truly jaw-dropping $6 per GB per month, and it's so far out of line with competitors' plans as to shock even the most cynical heart.
Take AT&T's DSL, for comparison... AT&T DSL comes out to 9¢ per GB. Verizon's fiber-optic FiOS system... this comes out to $.11 per GB. Upgrading to the much faster 50Mbps service for $144.95 a month still means that the charge per GB is only 36¢.
The situation is similar at other cable operators. Comcast offers Internet service starting at $42.95 per month and has a 250GB cap in place; this works out to 17¢ per GB.
FULL DISCLOSURE DEPT: The ECA is the parent company of GamePolitics.