Time Warner CEO Admits Customers Hate Data Caps - Plans More Data Caps Anyway

Time Warner Cable CEO Rob Marcus just told an investor conference that his own customers have resoundingly rejected the company's plan to cap the amount of data they consume on the Web each month in return for a $5 discount on their subscriptions.

That's a slight problem because Time Warner is hoping to make data-caps a standard offering for the broadband business.

Comcast has proposed buying TWC for $45 billion. Some Comcast customers have been horrified at Time Warner's recent experiments with data caps, and Comcast has trialled the idea also. But Internet users generally like the idea that the Web is limitless and free - no matter what it costs to download movies.

Telecom trade news site Light Reading reported that customer take-up of TWC's data cap offer - $5 off for reduced data - has been negligible:

Speaking at the Deutsche Bank Media, Internet and Telecom Conference in Palm Beach, Fla., Wednesday morning, Time Warner Cable Inc. (NYSE: TWC) Chairman and CEO Rob Marcus said very few broadband subscribers have opted for its Internet plan that caps data use at 30 gigabytes per month. In fact, the number of subscribers taking the use-based service tier is running only "in the thousands" -- a very tiny slice of the MSO's roughly 11 million US broadband customers.

Yet Marcus is taking a "damn-the-torpedoes!" attitude:

Despite the extremely low uptake rate, Marcus said he thinks there's an important principle for the company to establish: The more data customers use, the more money they should pay.

Separately, Marcus is still working to close the Comcast deal, which is opposed by various politicians and people like DirecTV and Fox TV, who fear the reduced competition will reduce service.