Time Warner Cable shelves broadband usage billing

A worker sets up a display of laptop computers at the Intel booth as exhibitors prepare for the Consumer Electronics Show (CES) in Las Vegas, Nevada January 6, 2008.

NEW YORK (Reuters) - Time Warner Cable Inc said on Thursday it would shelve plans to test a system that bills customers for the amount of broadband bandwidth they use instead of at a flat fee to access the Internet from home after an uproar from consumer groups and politicians.

"It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans," Time Warner Cable Chief Executive Glenn Britt said in a statement.

The company said it would alter plans to test consumption-based billing while continuing customer education about it. Time Warner Cable has been testing the billing system in Beaumont, Texas.

Most major Internet service providers in the United States use flat-fee billing.

Britt said the company would not go ahead with its plans for additional tests of the billing system until it has consulted more with customers and other parties.

Time Warner Cable said it was working to make measurement tools available "as quickly as possible" to help customers understand how much bandwidth they use.

Politicians including New York Senator Charles Schumer objected to Time Warner Cable's plans after the company said two weeks ago that it would expand its trial to four more cities.

"We look forward to continuing to work with Senator Schumer, our customers and all of the other interested parties as the process moves forward," Britt said.

Time Warner Cable's shares were up 2.9 percent at $29.64 in late trading on Thursday.

(Reporting by Yinka Adegoke; Editing by Toni Reinhold)