Time Warner Expands Capped Broadband Plans

from the good-luck-with-that dept

Time Warner has been testing broadband plans with traffic caps for several months, and apparently it likes what it's seen, as it plans to soon expand the caps into four more markets. The company alleges it has to switch to capped plans in order to "support the infrastructure of the broadband business," even though the supposed bandwidth crunch ISPs cite when talking about these plans is little more than a myth. As the company's CEO notes, getting the cat back in the bag by getting consumers to switch from unlimited to capped plans is going to be very difficult. Previous studies have found that even light internet users would look to take their business elsewhere if their ISP introduced caps, mainly because they have absolutely no idea how much bandwidth they're consuming. That's a good thing, because the absence of mental transaction costs helped wired broadband take off, and laid the groundwork for all sorts of innovative internet services -- not to mention lots of revenues for ISPs. Compare this to the mobile world, where per-KB or per-MB pricing helped stymie the growth of data services.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    dkp, Apr 2nd, 2009 @ 4:18pm

    pissed off customer

    yes and I am pissed as I live in the rochester area and have only 2 choices twc or frontier broadbnd.

     

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  2.  
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    ScaredofTheMan, Apr 2nd, 2009 @ 4:48pm

    A HUGE STEP BACKWARDS

    Hmmmmm, I guess TW is reading your blog and creating scarcity so it can turn around and sell it. Cause you know what what's next.... Big company X wants to promote a video online or maybe their new website or online service. Caps...what caps....Pay TW some (Lots of) money and that traffic is "out of quota" so it won't be counted towards the end users cap.

    The folks running the show at TW are not stupid, they are going to do anything and everything to avoid becoming a dumb pipe. Even if it means f$ck over the whole nature of the internet and its users. Net neutrality 2.0

     

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  3.  
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    DS, Apr 2nd, 2009 @ 5:16pm

    The second Time Warner pulls this in my market (I'm right next to rochester), I'm pulling my account. End of story.

     

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  4.  
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    demonsun, Apr 2nd, 2009 @ 5:24pm

    Re: pissed off customer

    I am also a rochester resident, and I just dumped frontier for TW, because I was only getting about 760 down and 128 up and they were still charging me 48 a month. I have no other choices in rochester. I have friends that all download waaay more than 40 GB a month, this is absolute bullshit. Why not something like 100 or so. thats much more reasonable. Hell I might even be forced to jump to business cable to get away from this bullshit cap.

     

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  5.  
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    Weird Harold, Apr 2nd, 2009 @ 5:28pm

    demonsun, way more than 40 gig a month? What the heck do you guys do online to run up that much bandwidth? Serious, I am up and download stuff all day, surfing around and whatnot and I can't barely bust 30gig (on an 80 cap).

    Perhaps you can leave the P2P program off for a while? ;)

    Seriously you have to wonder, considering this story:

    http://techdirt.com/articles/20090401/1902564346.shtml

     

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  6.  
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    Alan, Apr 2nd, 2009 @ 5:34pm

    Try Australia

    While my account (and most others) is 'unlimited' the provider sets a quota (depending on what you're willing to pay - in my case 12Gb for AU$60/month) and as soon as you exceed that your connection is limited to 64Kbit - basically dial-up speed.
    Then you get the limited plans where as soon as you hit your quota excess charges apply - normally about $0.02/Meg, so people on the 'cheap' limited plans can end up paying $200-300 per month because they exceeded their cap.

     

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  7.  
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    houndog, Apr 2nd, 2009 @ 5:42pm

    Oh no they di'ant

    No way. I'd research satellite and make that happen before I paid Time Warner to uncap my bandwidth. Urrrrr! I detest the cable companies.

     

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  8.  
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    Anonymous Coward, Apr 2nd, 2009 @ 5:43pm

    Re:

    Netflix.

     

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  9.  
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    Weird Harold, Apr 2nd, 2009 @ 5:46pm

    Re: Re:

    Damn amazing how cheap shiny plastic discs showing up in your mailbox seem by comparison.

     

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  10.  
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    Anonymous Coward, Apr 2nd, 2009 @ 5:48pm

    Eagerly awaiting the fabled broadband cap of death.

    I'm looking forward to this:

    I won't tell you how it will play out, but the ingredients are highspeed internet, Some no-name VOIP-based phone service, and a 9-1-1 call that just can't go through.

     

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  11.  
    identicon
    Anonymous Coward, Apr 2nd, 2009 @ 5:52pm

    Quality Customer Service

    After two hours on the phone with them, they suggested that I fill out the online complaint form, print it out, and mail it addressed to the hospital in which I was born.

     

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  12.  
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    skyrider (profile), Apr 2nd, 2009 @ 5:59pm

    40gb?

     

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  13.  
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    CleverNameHere, Apr 2nd, 2009 @ 6:08pm

    Subtract ad BW ?

    In these capped situations, does the ISP subtract the BW consumed by the ads served?

    If not, given that they are now looking towards targeted ads - it would make sense that they would want to increase the BW consumption of the ads they send your way.

     

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  14.  
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    skyrider (profile), Apr 2nd, 2009 @ 6:21pm

    40gb?

    sorry about that, forgot that 'enter' is equivalent to 'submit.'

    In any case, what drugs are these people on? When I bridge my DSL Lines, I can download 3 MB/s - that's MegaBytes - not Megabits per second. Theoretically, I could bust that cap, in five hours. Oh, what to do with the other 715 hours in the month?

    Let me tell you why TWC is doing this - Hulu/Boxee vs OnDemand, Netflix online (whatever they call their streaming video service) vs OnDemand. BD Live Vs OnDemand, etc, etc.

    This isn't about piracy, this isn't even about running out of bandwidth, this is about competition from the internet, plain and simple.

    I don't use Netflix, but I am sure their prices are much lower than the 3.99 TWC charges for their pay-per-view movies. They got tired of subsidizing their competition and said... Enough.

    From the article: Time Warner Cable has 8.4 million broadband customers.

    I wonder how many they will have after this plan goes into effect?

     

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  15.  
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    Demonsun, Apr 2nd, 2009 @ 6:25pm

    Re:

     

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  16.  
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    Anonymous Coward, Apr 2nd, 2009 @ 6:28pm

    Re: A HUGE STEP BACKWARDS

    That would not be net neutral, so the FCC would be up their ass.

     

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  17.  
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    Demonsun, Apr 2nd, 2009 @ 6:30pm

    Re:

    uh at the moment I pull around 49-90 a month. Mostly in images for school. When you deal with images are around 400-600 meg each, the bandwith usage really racks up with just a few of those.

    I also do a lot of data analysis for several biology projects, mainly recording data from about 300 individual sensors, those take up around 10 gig a month.

    so for me it is really easy to rack up astronomical charges on data.

     

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  18.  
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    Barry Rosenblum, Apr 2nd, 2009 @ 6:39pm

    Does Time Warner want you to Complain?

     

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  19.  
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    Weird Harold, Apr 2nd, 2009 @ 7:18pm

    Re: 40gb?

    From the article: Time Warner Cable has 8.4 million broadband customers.

    I wonder how many they will have after this plan goes into effect?


    If the numbers hold like they always do, they will lose not much more than 5% of users - the top 5% of users are the real bandwidth busters.

    So, answer: about 8 million - or probably 8.4 million with a few people bitching.

     

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  20.  
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    Anonymous Coward, Apr 2nd, 2009 @ 7:46pm

    Re: Re: 40gb?

    Yes, because there is no real competition

     

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  21.  
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    Weird Harold, Apr 2nd, 2009 @ 7:59pm

    I am a tool

     

    reply to this | link to this | view in thread ]

  22.  
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    Weird Harold, Apr 2nd, 2009 @ 8:14pm

    Re:

    I am a tool of the RIAA, I am wrong about most everything I say and think. I should just quit posting.

     

    reply to this | link to this | view in thread ]

  23.  
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    Weird Harold, Apr 2nd, 2009 @ 8:24pm

    Re: Re: 40gb?

    I am wrong again, wow!

     

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  24.  
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    Sam, Apr 2nd, 2009 @ 8:39pm

    Wireless internet

    Fellows,
    I am mad at this news to. Depending on how it effects my bill (I use 50gb per month), I will gladly give up my 7000/512 metered cable internet and go with the 512/512 poky wireless service offered by GVEC: http://gvec.net/services.asp

     

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  25.  
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    superdude, Apr 2nd, 2009 @ 8:56pm

    If all isp's cap bandwidth is that not some sort of price fixing scheme? You know antitrust and all that goodness.

     

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  26.  
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    Luci, Apr 2nd, 2009 @ 9:41pm

    Re:

    Hah. I pull a couple gig a week just in text based gaming environments. No graphics, just text.

     

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  27.  
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    Cirris, Apr 2nd, 2009 @ 11:45pm

    I switched to DSL long ago...

    Here in Buffalo Area Adelphia used to run the area. They did a good job. When Time Warner bought their cable lines in this area, the entire network went to shit inside of a year.

    Time Warner has purposely raised their max speed caps without improving the infrastructure so they could complain about the "P2P" users taking up most of the bandwidth causing "your" service to be slower. They've essentially tried to create the "they're the reason we have to do this" excuse hoping to smokescreen the real reason for these bandwidth moves.

    The reality is Media Conglomerate companies like Time Warner are slowly being replaced by smaller Internet upstarts who are giving customers the same products at a much lower cost.

    These Bandwidth Caps are desperate acts of a major Media company trying to keep control of the media consumption power it has held for 30+ years.

    When Time Warner decided to test market Beaumont Texas for the Capped service was when I decided I had enough with their crap service and made the switch to Verizon DSL. I have never been happier. Sure, it's not as fast. However, it's always running at full speed and the latency for games never wavers. You don't need huge pipelines to run Internet media effectively. 3 megabits is more than enough for what you need.

    I will not give another penny to a company that is more interested in controlling how I get information than providing me with an essential service.

     

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  28.  
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    Anonymous Coward, Apr 3rd, 2009 @ 12:26am

    Elsewhere

    Previous studies have found that even light internet users would look to take their business elsewhere if their ISP introduced caps...

    You mean the few lucky enough to have a choice.

     

    reply to this | link to this | view in thread ]

  29.  
    icon
    Killer_Tofu (profile), Apr 3rd, 2009 @ 6:15am

    Re:

    Harold, you are still an idiot.
    Take a freaking statistics class or something.
    Your precious sample sizes of one and two don't mean shit to the rest of the world. The world doesn't revolve around you. GROW UP.
    Try visiting YouTube for just an hour a night and watch your bandwidth usage soar.
    I am sorry that you have no friends other than this forum with which to communicate. Chatting a couple nights a week can up your usage too.
    Or perhaps play some video games. See the one poster who plays simply text based games? Well there are many of us internet users who play graphic video games. Like Left 4 Dead, Call of Duty (insert game version number here), Team Fortress 2. And those are just a couple first person shooters. How about the millions upon millions of WoW addicts? Their bandwidth is probably high.

    If you ask me, anything less than the 250gb "cap" that Comcast has is simply a greedy money grabbing move. And even that will be tiny as soon as more content services move online to try to reach their fans in a way the fans want. See Netflix.

    Please stop being an idiot. Please. I know its a lot to ask from somebody like you, but I really mean it.

     

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  30.  
    identicon
    pk, Apr 3rd, 2009 @ 7:06am

    it's not just TW

    Yesterday, an employee of Cogeco (Canadian cableco) revealed on dslreports.com that the company was also moving to usage based billing. (no surprise there)
    However, they stated that all Cogeco VOIP traffic would be excempt from billing !!!!!!!

    http://www.dslreports.com/shownews/Cogeco-Drops-Metered-Billing-On-Users-101682

     

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  31.  
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    Matt Polmanteer, Apr 3rd, 2009 @ 7:50am

    I'm Done

    Screw them I've already order my AT&T stuff. I can pay the same price, get the same speed, with no cap. Hopefully lots and lots of people switch to send them a message to go screw themselves.

     

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  32.  
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    hegemon13, Apr 3rd, 2009 @ 7:58am

    Ridiculous caps

    Caps are one thing. The way that Comcast handles it actually isn't too bad. But 40GB per month for the highest tier? That is ridiculous. They aren't doing it to save bandwidth. They're doing it to stop streaming video, which competes with their cable offering. Anyone who streams HD from Netflix, XBox Live, or other similar services, will go over their limit and be charged ridiculous prices every month. I love my service from Time Warner so far, but if they bring the caps here, I'm gone. I have several other options.

     

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  33.  
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    dishwatercider, Apr 3rd, 2009 @ 8:40am

    40 GB = 40,000 MB (roughly)
    Research suggests that the "average" user spends three hours a day on the internet.
    ((3 hrs*60 min*60 sec)*30 days) = 324,000 sec
    (40,000/324,000)= .1234567 MB/s
    .1234567*8 (MB->Mb) = .987654 Mb/s

    So, one can use about 1Mb/s average bandwidth during your daily three hours on the computer. Great for e-mail, not great for streaming or larger downloads, legal or otherwise. Especially with multiple users simultaneously at the same access point.

    If you move down to one hour of use a daily you can up it to 3Mb/s, which makes streaming manageable.

    My roommate and I enjoy Hulu, Steam, and Netflix (which scales quality to bandwidth, something I imagine will become more common). All are legal ways to acquire my media and games, but still bandwidth intensive.

    Time Warner Austin currently sells me 15Mb/s with 22Mb/s burst. But just for fun lets go with 10Mb/s.

    Running the same math again, keeping bandwidth available and cap constant, time becomes the only variable (and it requires us to carefully monitor our own usage). To utilize a 10Mb/s connection I can spend 20 min a day online. To utilize my current connection (which usually actually hovers at a constant 20 Mb/s) I can have a whole 10 min online daily! That is, of course, assuming maximum usage. But still, even dropping it down to 5Mb/s I get only 40 min.

    If we "remove" the data cap by me not paying attention and using three hours a day, but still utilize 10Mb/s speed watching Netflix or gaming via Steam, that comes out to 405 GB per month.

    Less the 40 GB I paid $50 for, plus $1 per GB extra: $415 bill. Lets knock off another 200GB just to make it even more reasonable usage: 5Mb/s, 3 hours a day. $212.5 bill.

    Reasonable usage, reasonable bill?

    If they didn't expect people to be using so much bandwidth or have the capacity to support it, why would they offer such high speeds? If the "average" person really does only need 1 Mbps connectivity max, why even push 5 or 6, much less 10,15,22?

    This doesn't even cover the math for the lower caps. It gets silly: 5 GB cap translates to 128 Kbps, three hour usage daily. Which, yes, is all some people may need. But those people also probably don't know about everything available online and I would imagine would constitute a smaller and smaller minority if they knew what Hulu or YouTube was. Also, that whole progression of technology thing, where we don't want to stay at the same speeds we were coaxing out of phone lines 5 years ago...

    ...I mean, I know you love your ISDN line and all...

    Feel free to point out if anything here is unreasonable. I tried to scale it more or less realistically, and would appreciate the feedback.

    I could easily point out that 20Mb/s, 3 hours a day would be $820, or 20Mb/s for 8 hours a day (if you work at home) is $2,170. Even 8 hours a day at 10Mb/s would be $1,090. At 5Mb/s it would be $550. But while some of that may be somewhat reasonable, seeking out the largest possible bill only makes my argument as weak as TW's. (22Mb/s and 24 hours/day = $7,138, but who downloads/streams 7 TB a month?)

     

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  34.  
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    Weird Harold, Apr 3rd, 2009 @ 8:58am

    Re:

    You are confusing speed with bandwidth - that isn't the same thing.

    On the highway, 50 miles an hour doesn't mean you can go 50 miles as fast as you want as long as you stop at the 50th mile.

    High speed internet is really designed so you can download something, and enjoy it locally (like a webpage) without having to wait long for it to arrive.

    If you are going to use your internet to replace or supplement your cable / sat TV, you should expect to pay a little more than someone who is just browsing the web.

    Speed has nothing to do with it - consumption is the key.

     

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  35.  
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    hegemon13, Apr 3rd, 2009 @ 9:38am

    Re: Re:

    And that is exactly his point. The only reasons for speeds that high are streaming video, gaming, and large file transfers. All of those activities are likely to put you well over 40GB per month. Therefore, the usage limits for the service are ridiculous and make the higher speed service effectively useless. And have you seen the lower speed caps? 5GB cap per month? Are you freaking kidding me?? Fortunately, competition will drive these caps up, as Comcast already offers a cap over 6 times higher than Time Warner's highest.

     

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  36.  
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    dishwatercider, Apr 3rd, 2009 @ 10:48am

    Harold,
    You are assuming that there is no link between speed and consumption when I would argue that there is a large one.

    The average consumer has a given consumption bundle that they want to achieve. Lets say that they want 100 M&M's per day.

    If I give them one M&M a day, they will never reach that point, but will unhappily learn to live with it. If I increase the speed to one M&M an hour, the same thing happens but they will get closer to that level of consumption and therefore be happier. If I increase it to one a minute, not only is that level of consumption reached very quickly but there is now an abundance of M&Ms. This allows them to then increase their consumption bundle and therefore their utility. Speed very much affects consumption.

    If TW were to reduce the speed of your connection below 128 Kbps, it would be impossible to exceed a cap of 40 GB. Lets say they lower it to a max bandwidth of 100 Kbps. If you are downloading a 40 GB file at max speed (i.e. utilizing all your bandwidth), 24 hours a day for 30 days, you could only receive 32.4 GB. The limited bandwidth limits the speed at which data can be transferred, which in turn limits consumption.

    ((30*24*60*60)*.0001)/8= 32.4 GB

    While I recognize that speed is technically dependent on not just available bandwidth but also latency, it really doesn't matter that much in this case. They can be two technically different things, but be so closely linked that for the purposes of my argument can be treated as one and the same.

    As far as the highway example, a download is like driving a set distance. The speed limit does dictate how fast you get from point A to point B. If you want to go 100 miles and the speed limit is 50, it takes as little as two hours. If it's raised to 100, you can make the drive in a minimum of one hour. If you are a law abiding citizen, 50 miles per hour is your max bandwidth, and your speed must fall within that range.

    Therefore, when assuming that you are getting the maximum speed possible allowed by bandwidth (i.e. driving 50 mph out of a maximum 50 mph), the two terms are functionally indistinguishable because they are equal.

    A better counter would have been to say that just because the speed limit is 50 mph doesn't mean you are always traveling that fast. This I agree with; which is why I pointed out in my argument that lower usage, such as 5 or 10 Mbps out of 22 Mbps max, still results in ridiculous billing.

     

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  37.  
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    dishwatercider, Apr 3rd, 2009 @ 10:56am

    Unfortunately, we don't get Comcast here. =(

    We have Grande, which is awesome, but very limited in availability as TW is so entrenched that most buildings are exclusively theirs and they fight tooth and nail to retain the sole rights. So, there really is no competition to drive the caps up, which in turn allows them to perform a "successful" trial run on a larger city.

    Sneaky.

    And with AT&T doing trial runs with U-Verse in Beaumont as well, I'm sure they will come up with similar results, negating their competitive aspect, despite what game theory may dictate.

     

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  38.  
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    Killer_Tofu (profile), Apr 3rd, 2009 @ 12:44pm

    Re: Re:

    *WHOOOOOSHHH*
    That was the sound of his point going right over your head.
    If they sell that bandwidth, they should be supporting it.
    Period.
    If they can't, don't sell it.
    The car analogy is nice, but even fails to make your point.
    Do you understand his numbers at all?
    He completely removed the burst factor.
    So what he would be left with is a 50mph highway, where he can go 50mph forever. Except the company is saying they are going to charge him for anything over 10mph on the 50mph road.
    Does that make sense for you or is it still too complicated?

     

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  39.  
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    Clueby4, Apr 3rd, 2009 @ 6:17pm

    Refund for unwanted traffic

    Sounds like a opportunity for Small Claims judgments. Should you be required to pay for unrequested network traffic.

    Sorry, but as long as they ISP can claim "its internet" as the catch-all excuse for why stuff isn't working they shouldn't be allow to cap anything.

    Perhaps they should start providing REAL COMPENSATION for right-of-way access.

     

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  40.  
    identicon
    Gene Cavanaugh, Apr 3rd, 2009 @ 10:03pm

    Broadband caps

    You've shown one side of the coin, without showing the other. I use Google WiFi (free in Mountain View, where Google has their headquarters).
    It is excellent, though occasionally (apparently some teen who doesn't even know what he/she is doing) hogs the network with some excessive downloads (in one case, the person, I am told, "just wanted to see if they could block everyone else").
    Google spends a lot of time and money keeping the network usable without caps - personally, I wish they could put caps on usage, and I could have my fair share of the network (which is never large enough to come close to a cap).
    I realize they can't, because the illiterati would think; "It are a limit - I is agin limits!"
    Wish you could be more balanced in your reporting.

     

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  41.  
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    Erock, Apr 4th, 2009 @ 9:34am

    Re: pissed off customer

    I am in rochester too. Earthlink is available here and comcast is moving in within a year or two.

     

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  42.  
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    Matty, Apr 7th, 2009 @ 6:00pm

    Why does everyone assume if you are downloading more than 40GB/month you are running P2P?!

    Gone is the day of tiny postage stamp sized videos. Many people have given up their tv viewing for watching content on the laptop and now that content is streamed in HD on many big sites, Hulu, YouTube, and so on. It doesn't take long to burn up bandwidth. Then you have gamers who like to download demos. PC, PS3, Xbox 360 all offer free game demos, some being as large as 4GB in size.

    This is 2009. Putting a cap on bandwidth is really a step backwards in evolution. Although if an ISP can make a buck off of it, do they really care? NO! Companies like TIme Warner are already making a ton of money off it's customer base. Why make our experience on the internet less enjoyable? If they want to save a bit of bandwidth, how about cutting down on their spamming?

     

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  43.  
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    brent, Apr 10th, 2009 @ 12:50pm

    Bandwidth?

    maybe irrelevant but where i come from bandwidth is only the amount of radio frequencies spanned in a given signal at any given time. the first random cable modem i found operates on the down at 6 and 8 MHz and on the up at 200 kHz, 400 kHz, 800 kHz, 1.6 MHz and 3.2 MHz. Those are just center frequencies and then there is the channel span which i couldnt find.

    Anyways, when did bandwidth all of a sudden change to total bits data downloaded or even as some people have used it to refer to the actual data rate at any given time?

    Come on people lets get our terms correct.

     

    reply to this | link to this | view in thread ]


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