Time Warner Cable’s Fee-for-All

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By Miriam Gottfried


Time Warner Cable customers in New York, Dallas and Los Angeles may get a little grumpy if CBS goes off the air Friday evening amid a contract dispute between the two companies. But that isn’t the only thing the cable operator is doing that may irk subscribers.
Last November, Time Warner Cable instituted a $3.95 monthly modem-lease fee. This week, it said it was raising that by 52% to $5.99. The hike could boost annual revenue by $150 million, according to ISI.  Indeed, last year’s move to create the fee seems to be paying off:  The company said Thursday that average revenue per broadband user rose 9.9% year-over-year in the second quarter.
That pleased investors. But consumers don’t seem to be cheering. Time Warner Cable added only 21,000 broadband subscribers in the quarter, compared with analyst forecasts for 56,000. The latest fee increase risks further eroding subscriber additions in what has arguably become Time Warner Cable’s core offering.
Nickel-and-diming customers may not lead to much of a payoff down the line.

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