Time Warner Backs Off Bandwidth Caps... For NowTime Warner Backs Off Bandwidth Caps... For Now

Time Warner cable backed off its controversial plan to gouge hapless consumers after vigorous opposition from consumer groups and local New York politicians.TWC had started pilots in four U.S. cities to test the idea of charging higher prices to customers who download more than others, including Rochester, NY, where U.S. Congressman Eric Massa mounted a vigorous campaign to thwart the plan.

Time Warner had defended tiered pricing as a way for "customers to choose among usage-based tiers of Internet service" common in Canada, the United Kingdom and elsewhere.

The way monopolists talk about choice is one the richest ironies available to modern man.

But the fight is far from over, as TWC certainly made clear it's merely making a tactical retreat. In a statement, TWC says it's "shelving the trials while the customer education process continues."

Massa, who says he has been working behind the scenes with New York Senator Chuck Schumer, had called TWC's plan an "attempt to overcharge all of their customers... I believe safeguards must be put in place when a business has a monopoly on a specific region."

He added that TWC has "yet to explain how increased internet usage increases their costs."

Indeed, Wired magazine accused TWC of "pushing some fuzzy math to justify" its plan.

Massa introduced the Massa Broadband Internet Fairness Act to "prohibit unfair tiered price structures."

The question is what happens next. In an email, Al Lee, a business strategist at Motorola's Home and Networks Mobility unit, noted that "politicians like to poke companies in the ribs when it makes them look good to their constituents. This does not mean politicians will refuse campaign donations from those they criticize. The primary job of those in power is to remain in power."

That said, Massa's main campaign contributions come almost exclusively from labor unions.

In addition to Rochester, TWC had rolled out a pilot in Austin, San Anmtonio, and Greensboro, NC.

The pricing would have been as follows:

1 GB per month tier at speeds of 768 KB/128 KB for $15 per month. Overage charges would have $2 per GB per month. TWC said its usage data show that about 30% of its customers use less than 1 GB per month; TWC planned to increase the bandwidth tier sizes included in all existing packages in the trial markets to 10, 20, 40 and 60 GB for Road Runner Lite, Basic, Standard and Turbo packages, respectively, with overage charges at $1 per GB per month; TWC was going to introduce a 100 GB Road Runner Turbo package for $75 per month (offering speeds of 10 MB/1 MB), with overage charges at $1 per GB per month.