[Post Updated, See Below] In response to customer feedback, Time Warner Cable has discontinued its trials of tiered Internet service. [Corporate Announcement here.] It was quite a stuff-storm, but to TWC’s credit, they put their finger up, felt the howling gale, and changed course right away.

This is in marked contrast to their larger competitor, Comcast, which did stuff at the application level that was supposed to be about simple traffic metering, did it in secret, lied about it, packed an FCC hearing with paid seat-warmers, lied about that, for months and months, until the FCC told them to cut it out. And did they? I still don’t trust them.

TWC, at least, approached the traffic problem head-on, by trying to discourage excess traffic with direct, obvious price signals. At the time, I wrote, Time Warner Cable does the right thing. Unfortunately, they did the right thing the wrong way [my blog post on that]—their price tiers were very aggressive, it gave the impression they were trying to specifically discourage “over-the-top” Internet video, and it gave the impression they were milking their infrastructure.

If I were TWC, I’d re-start from the assumption that Internet traffic is growing, and today’s bandwidth hog just might be tomorrow’s median Internet user. I’d announce a much less aggressive—and limited and temporary—tiered pricing plan. Simultaneously, I’d announce a capital improvement plan aimed squarely at expanding the TWC distribution infrastructure. Then I’d only implement tiering where my infrastructure was under threat, and I’d implement it in conjunction with a capital improvement program in the same area.

It might not be as lucrative as the tiered pricing system that TWC envisioned, but it would position TWC as a major Internet player in the future. Taking the high road and the long view worked for Verizon. TWC now has a chance to show it is not only responsive, but also visionary.

Disclosure: I have had business dealings with TWC in the past, and perhaps I’ll have more in the future, but I have no current business relationship. Nobody at TWC has asked me for my opinion recently, either. In any case, I’m more valuable to TWC if I speak my mind; they know where to hire yes-people if they want them.

UPDATE (4/21 4:56PM): Whoops, apparently they have :-(.