

Time Warner Cable to shelve new Internet pricing plan - mattyb
http://www.news-record.com/content/2009/04/16/article/report_time_warner_to_stop_new_pricing_plan_in_ny

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ShabbyDoo
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?

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.

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.

