Faced with
consumer backlash and pressure from lawmakers, Time Warner is retreating from a controversial plan to roll out a new pay-per-download pricing system.
"It is clear from the public
response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing," Time Warner Cable CEO Glenn Britt said
Thursday in a statement. "As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties."
Two weeks ago, Time
Warner said it would test a new metered billing plan in four cities -- Austin and San Antonio (Texas), Greensboro, N.C. and Rochester, N.Y. In those markets, the company would charge consumers based
on bandwidth consumed. Subscriptions would have ranged from $15 a month for 1 GB to $150 a month for unlimited bandwidth. Currently, many Time Warner customers pay between $40 and $50 a month for
unlimited bandwidth. A user can consume around 5GB by downloading just one high-def movie.
Critics of the new pricing plan cheered Time Warner's decision, but also warned that similar proposals
might emerge in the future.
"It's a great victory for the grassroots and the netroots," said Rep. Eric Massa (D-N.Y.). "We are going to maintain our vigilance and maintain our position and move
forward to make sure that no monopoly can dictate access to the Internet."
The freshman Congress member said last week that he intended to introduce the Massa Broadband Internet Fairness Act.
Massa said Thursday that he still intends to press for legislation to rein in Time Warner, but might take a "strategic pause" to consult with other lawmakers rather than introduce a bill immediately.
Sen. Chuck Schumer (D-N.Y.) said Thursday that he spoken with Time Warner's Britt about the opposition to the new pricing plan. Schumer also said in a statement that he intends to work with Time
Warner Cable "to make sure that any future changes in Internet pricing are in line with what the community wants and needs."
In Rochester, Phillip Dampier, who founded the site Stopthecap.com,
called Time Warner's retreat a "temporary victory."
"We have no illusions whatsoever. The Time Warner statement makes it clear that they think their only mistake here was that they didn't educate
people enough," he said. "There's no education here that they need to do. It's very simple: Consumers here don't want caps."
Stopthecap.com has received 35,000 visitors in the two weeks since
Time Warner said it would test the new pricing in the city, Dampier said. Prior to April 1, the site drew around 300 visitors a day.
Broadband advocacy group Free Press said Thursday that more
than 15,000 members had written to Congress to oppose Time Warner's plan.
Before suspending its plan, Time Warner had argued that the new tiered pricing was the fairest way to deal with increased
demands on its system. The company said that consumption among high-speed Internet subscribers was increasing by about 40% a year. But critics argued that the plan was aimed at discouraging people
from watching online video for free rather than via pricey cable subscriptions.