Austin City Council member and mayoral hopeful Lee Leffingwell issued a statement Thursday admonishing Time Warner Cable for its plan to introduce a new tiered pricing system for Internet customers that he says could stifle the economic recovery of Austin.
Time Warner, the region’s dominant cable provider and one of the largest Internet providers, says it will change its Internet pricing structure later this year and begin charging customers for the bandwidth they use. Customers would sign up for a particular plan based on their expected usage and would be charged money if they go over their allotment.
“This approach, and Time Warner’s specific plan, should be of grave concern to Austin,” Leffingwell said in his statement. “Right now we need to be encouraging, rather than stifling, economic recovery and growth in Austin. This plan moves us in the wrong direction.”
Leffingwell said not only will the plan have a significant effect on families who use the Internet to watch videos, download music or other activities that take up significant bandwidth, he’s also worried about the potential impact it would have on business owners, particularly those who work in the high-tech and creative services industries who need continued access to broadband Internet.
“Introducing an economic disincentive for Austin businesses to use the Internet to communicate, collaborate, innovate, and deliver services is very worrisome at best, and catastrophic at worst,” Leffingwell said. “It potentially puts Austin at a disadvantage as we compete against other communities to attract, retain, and grow prosperous businesses.”
However, Time Warner said the change is only for residential customers and will not affect business class customers who are already charged based on their usage.
Stil, Leffingwell said Time Warner’s proposed usage caps are unreasonable and he’s asking the company to work with city officials and the community and reconsider the plan.
But Alex Dudley, Time Warner's vice president of public relations, said the company is certain that this will not have a dramatic effect on Austin customers’ bills.
Dudley said when Time Warner instituted the tiered system in Beaumont last spring, 86 percent of customers bills did not go up. He said Time Warner expects a similar situation in Austin.
“We’re asking customers to take a look at their usage and see what it is and then pick the plan that’s best for them,” Dudley said. “I think customers will find they’re really not using as much as they think they are.”
Dudley said that Time Warner will start monitoring customer Internet usage in Austin later this month and begin showing individual customers their usage later this summer, with a rollout of the new pricing structure in the fall.