Remember how Time Warner claimed they needed to impose usage caps because they were short of bandwidth? If that was true, they’d need to fix it by spending $50 per customer to roll out DOCSIS 3.0 modems and up the network speed by a factor of 10.

But today, according to gigaom, Time Warner has decided to cancel DOCSIS 3 rollout in Austin.

Either this is a petty act of retaliation with the aim of letting service degrade badly, or the claims of bandwidth shortages were a complete lie. Either way, it doesn’t look good for Time Warner.

Looks like the market’s wide open for Verizon to come in with FiOS, or for Grande Communications to start upgrading their network and poaching Time Warner’s customers.