

Time Warner Cable is pulling the plug on its plan to charge its broadband customers by the byte in four U.S. cities, ending a controversial experiment that critics said would harm internet innovation and customer pocketbooks.

The announcement came, fittingly enough, Thursday at a rally in Rochester, New York, one of the test cities, and was made by the state's senior U.S. Senator, Chuck Schumer.

The news is a win for consumer groups like FreePress, who contended that the plan from New York-based TWC would stifle online innovation and that the company was imposing download limits to protect its lucrative cable television business from disruptive online video services.

Congressman Eric Massa (D), who represents Rochester, was an early opponent of the plan and claimed victory Thursday.

"We're delighted that commonsense prevailed," Massa said, calling the cancellation a "true grassroots victory."

But Massa said he's not giving up on his proposed legal ban on charging customers by how much data they use, a billing model common outside of the United States.

"We will move forward with our legislation to ensure that any future plans to charge customers based on how much they download do not spring up anywhere else," he said.

TWC's plan was met with customer rebellion and skeptical press coverage since it was announced earlier this month. TWC said it needed to ditch the current-all-you-can-eat plans because data usage was growing so fast that internet outages would be imminent.

Instead, under the proposed consumption model, consumers would have to choose from an array of plans with usage limits ranging from 1GB to

75GB, much in the way that mobile carriers sell plans by the minute.

The company has 8.4 million subscribers to its Roadrunner broadband service.

The company's rationales never made sense to customers — or us, for that matter. For one thing the company's balance sheet shows that in

2008 its cost for bandwidth fell by more than 10 percent, even as it gained customers and increased revenue.

In a statement, TWC made clear isn't giving up on the idea – it just lost a public relations battle, saying that it was "shelving the trials while the customer education process continues."

"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," CEO Glenn Britt said.

The news of the cancellation was first reported by the Rochester Democrat and Chronicle. The announcement marks the first time Schumer (D-NY) stepped into the public debate over the plan, but Massa's office says it had been working with him behind the scenes for some time.

See Also: