TWC Shift upgrade costs to customers

Those of you like me who’ve not been able to get a decent alternative Internet provider might want to check your bills.

Starting November, TWC added a $3.95 Internet modem rental charge. They did this even though many of us have had the same modem since the service was installed, in my case 6-years ago.

There is a class action lawsuit about this, they feel its unjustified price gouging; TWC claim its for maintenance and support, and they are now doing what the other companies have always done. This is of course total BS and exactly the behavior you’d expect from a monopolist, or at best a duopolist and is one of the reasons why even in urban America we are slipping further and further behind, the focus is on financial engineering rather than product engineering.

TWC do offer you the ability to purchase your own modem online from a very limited set of approved modems, then you register with them and they will remove the $3.95 fee. However, this is likely to come with its own problems, when you have problems with their service. In an age where everything is going integrated for simplicity and reliability, it makes no sense for TWC to do this as it will almost certainly increase their costs.

On reflection though, I’ve realized this isn’t a modem rental fee at all. It’s a surcharge on people who don’t read their bills, don’t buy to buy their own modems, and ultimately it is a back handed way for TWC to pass the cost of upgrading modems to the customer rather than absorb it themselves. In the future, rather than have to upgrade their modems, they’ll just tell you to get this feature, you need to buy a new modem. It gets them out of the purchase and support of the modem, it also gets them out of sending someone out to upgrade/replace the modem.

A cheap Internet Modem can be bought for as little as $29.99; the TWC approved modems are surprising all $59.99 and more expensive. Given TWC’s enormous purchasing power, and the very cheap, limited functions modems they supply, they can probably get modems for less than $10 each. Assuming you pay the $3.95 for 3-years, you’ll be paying circa $150 for that same modem. TWC will be raking in another $500 million, to $1-billion per year, for little or nothing.

But that’s still not the point. The point is that in the future, when TWC is dragged screaming and shouting to provide the kind of bandwidth that is common, cheap, and comes with a free modem in most western countries, TWC will just tell you, you have to upgrade your modem if you are an existing customer.

I’ve kept a spreadsheet of charges I’ve paid for utilities since I moved to Austin. Yeah my property taxes have gone up, by otherwise all my other charges have increased only marginally. My monthly TWC bill bill though has gone up on average $40 per month for no discernible improvement in service. In total since I’ve been in Austin, with a total of less than $200 spent on movies, over 6-years I’ve paid Time Warner Cable nearly $14,000 US Dollars. That’s huge, it’s expensive, and it’s increased significantly in the last 12-months.

I got on their support chat system last night to find out why. It tooks me two full hours to get the answers, you can read the full transcript here. The summary follows, written by me and agreed by a TWC Supervisor, Melva F.

  • TWC feel I have an excellent deal on Internet speed; I feel its overpriced for what I get;
  • TWC suggest the only way to reduce the bill is for me to buy my own modem; I feel this is a penalty on a loyal customer who has paid over $10,000[closer to $14,000] in fees, on time, for not buying my own modem;
  • TWC are unable to remove the basic cable channels I don’t use; [and allow me to keep HBO which I do watch.]
  • TWC confirmed that the modem will still be used for phone service if I cancel Internet, but I won’t pay the $3.95 rental fee for that [same] modem;
  • I’ve spent 75-minutes on chat, got pretty much nowhere it terms of understanding how to reduce my monthly bill without cancelling my service

Melva F.>That is correct. Everything that you’ve mentioned above is correct.

So there you have it, legalized highway robbery. If you read the full transcript you’ll learn that sometime last year, I was put on a promotional rate that apparently included Showtime in additional my regular HBO, that expired after 12-months and now I’m paying an additional $10 for that; $3.95 Modem surcharge, and then a rate hike of some $15, add other random fee increases and taxes, and bingo, that covers my $40 increase per month.

Now the question is, what to do about it. My immediate reaction is to cancel my contract entirely but that has practical issues.

Author: Mark Cathcart

Formerly an Executive Director of Systems Engineering and a Senior Distinguished Engineer at Dell. Prior to that, an IBM Distinguished Engineer working for the Systems Group in NY and Austin. I'm currently "retired until further notice".

1 thought on “TWC Shift upgrade costs to customers”

  1. my bad. (gosh, the older I get, the flakier my memory gets).I thought I read something along the lines of, no more (as in additional, as in if you’re beginning service) customer supplied modems, but if you have one already, you could continue to use it. Ergo, not in so many words, but phasing out of allowing customer modems. I’m thinking, you must have at least written no more credit, that it’s no longer a line item and modem is included in the price. And admittedly it’s been a few months since I looked closely at my bill (usually I just look at “the bottom line,” and it hasn’t increased), but at least I used to see a -$3.00 line item.The credit (or lack of charge, when it WAS a separate line item) for supplying my own modem is the primary motivator for me buying one. Without it, the reasons would be technical, as in for example I like the performance of some model.I apologize for any misunderstanding. just sayin’ that’s my recollection, and I did not research the TW (RR) forum before writing. And as for support, yeah, it’s been pretty good. I was commenting on it more from a cost basis, that it doesn’t seem to me like it should be much different, renting/leasing or customer supplied.I just heard a news story on WHAM-AM about this. Part of their stated reason of needing to charge the modem fee is that some people never return theirs. That seems kind of silly, at least for a reason. Like some other services, just state up front if you don’t give it back, you’ll be charged $X, and if you don’t pay up, it goes to collections, just like any other unpaid bills.

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