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Time Warner Cable to shelve new Internet pricing plan

2 pointsby mattybabout 16 years ago

1 comment

ShabbyDooabout 16 years ago
Let's presume that the 80/20 rule holds for bandwidth usage. 20% of customers use 80% of the total bandwidth. According to Time Warner, Comcast, etc. it's more like 98/2. So, much like voters approving a taxation scheme where the top 1% of taxpayers get tax increases, wouldn't most consumers be in favor of a scheme where they'd pay less on average?<p>So, what's wrong with the TW plan? They don't provide any evidence that the net effect of their changes would not be a significant increase in revenue. Is $15/mo + $1/gig better for them than $40/mo for everybody? Why was the marginal cost set at $1 vs. ten cents like Amazon? TW's marginal cost of delivery is negligible once coax is run into a house.<p>Please note that I'm trying to analyze this from a political perspective.. They're a regulated entity, so the economics of what they're doing are only an input into the political reality.