Intellectual Property Law

TWC CEO: Broadband Will Be Consumption-Based

By Cynthia Brumfield

Time Warner Cable shook up the Internet world earlier this year when it started testing a "consumption-based" broadband service in Beaumont, TX. Although final results of that experiment have been postponed by Hurricane Ike, which hit Beaumont hard, TWC CEO Glenn Britt thinks that ultimately all broadband service will be metered or consumption-based.

Speaking at Goldman Sachs' Communacopia Conference today (webcast here), Britt said that he believes consumption-based broadband is "where we will ultimately go." Comparing broadband service to an electric utility, Britt said "with electricity we buy something called kilowatt hours and it?s a measure of both voltage and throughput and the amount you?re consuming. I think broadband is going to develop into something like that."

Cable holds the competitive upper-hand when it comes to high-speed Internet access because cable modem service is simply faster and better, Britt said. "We just have a better product as consumers do more video and use more bandwidth they notice it?s a better product."

When it comes to overall service, the cable industry is rapidly moving away from its monopoly mindset as it faces competition from both satellite and telcos. "We?re still evolving from where we used to be. We?re getting more sophisticated at marketing."

But the media tends to overhype the competitive video threat that phone companies pose to Time Warner. The company faces competition from AT&T's U-Verse service in only 8% of its footprint, while Verizon's FiOS service is available to only 4% of TWC's homes passed.

Even the threat that Verizon poses in Time Warner's most important and lucrative market, New York City, is overblown, according to Britt. Verizon is building out its New York City network to offer FiOS TV service following receipt of franchise approvals earlier this year, but it's going to take years for the telco to be fully up-and-running. "So it's not going to happen all at once," he said.

Full post as published by IP Democracy on September 18, 2008 (boomark / email).