Time Warner Cable Tiered Broadband Test Begins

from the if-only-there-were-competitors dept

Earlier this year, the story came out that Time Warner Cable wanted to experiment with capping its “unlimited” broadband, trying to force the heavy users to pay more. Even worse, it appeared to want to use exceptionally low caps that would discourage innovation. Despite all of the concerns, Time Warner Cable is moving forward with the test as planned.

The end result will be taking away value from customers — not just in limiting how much bandwidth they get, but by adding a huge mental transaction cost. Basically, what Time Warner is doing, is adding a huge overhead in terms of whether or not users are willing to actually use the bandwidth they signed up for. Just the fact that people need to think about how much they’re using will decrease usage significantly. While that may be what TWC wants, what it really does is annoy customers. This would never actually happen if there were real competition, but with very little competition out there, TWC can try out this plan. Any other broadband provider competing against TWC in areas where this test is going on should be hitting on the limits in any advertising campaign. TWC is free to do whatever it wants, of course, but it’s never a good business move to take away features from customers — especially if in doing so you add an annoying mental transaction fee.

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Companies: time warner cable

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Comments on “Time Warner Cable Tiered Broadband Test Begins”

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55 Comments
Michael Vilain (profile) says:

Doesn't TW know there are alternatives

I just got a flyer in the mail advertising AT&T’s new TV and internet service. No cap were mentioned, just a tiered transfer rate. Their rates were something like $25/month for “up to” 1.5Mbps downstream, $30/mo for “up to” 3.0Mbps downstream, and $55/mo for “up to” 10Mbps downstream. This comes over phone lines and fibre to the home rather than cable.

If this were offered in TW’s market, I wonder how many people would be switching and contesting any sort of early termination fee (which is currently being litigated as a class-action lawsuit here in California).

Why is TW shooting themselves in the foot here? Don’t they see their monoply business model is a thing of the past and that it’s only a matter of time before customers vote with their wallets?

Anonymous Coward says:

“The end result will be taking away value from customers”

It will be losing its customers to all this BS.

As customers we need to start a 0 tolerance policy with these companies and learn to drop them like hotcakes even if it means not having cable or internet. As long as we DEMAND to have these services, they will continue to RAPE us!

Ben (user link) says:

Re: And RAPE they will!

They have been pulling this stuff for the longest time. People do really need to have ZERO tolerance but it is hard when they are the only provider in your area. That is why Comcast and Qwest are able to charge so much here in SLC, UT.

Speaking of which, you’ll probably find this $3 Million Dollar Comcast bill interesting:

http://pixible.com/2008/06/3-million-dollar-comcast-bill-accused-of-rape/

Anonymous Coward says:

I am used to it

Here in Bahrain we have one major teleco that has been imposing caps for years now. Thanks to their terrible server capacity and their greed, I get the privilage of paying them over $140 a month for their advertised 2Mbps dl/500Kbps upld. I actually get closer to 1Mbps dl and 250 up, and I only get 25 GB data cap!

Point is, I have learned to live with that amount. Its too little for a group of 3 or more internet users for a month, but for 2 it works. I just have to stop going onto Youtube as much and other video websites so I can cut back on data usage.

That being said, I miss unlimited data plans..

James says:

This isn't new

This has been the only way to buy internet usage in Australia since we got it however many years ago. In fact, compared to Australian prices, what Time Warner are offering is actually a pretty good deal, especially the 15Mbps for $55 and 40GB package.

Currently I pay AU$60 for (supposedly) 24Mbps with 20GB per month. I’d hardly call it 24Mbps, the fastest I’ve ever downloaded is 1.5MB/s. Either way, I can understand why Americans are frustrated with this, but many of us already live with it.

zcat (profile) says:

same in NZ

I’m on one of the better plans available down here; on a good day I might see 2.5MBps down, upstream is limited to 128Kbps, and I have a 20G cap per month. If I go over I’m limited to 64kbps for the rest of the month. I usually spend at least a few days each month at dialup speed and that’s without doing any p2p, just a bit of youtube and the occasional Linux ISO gets to 20G in no time.

Yeah I know everyone says this says:

I can say it but nobody will listen.

Everyone send the message to these money-huggers: Pick a day, everyone go on the net at the same time and find the highest BW sucking app, website; whatever you have and nail them to a tree with it.

Show them that limiting isn’t going to work long in a web-slinging world. They need to suck it up and invest in the future growth of their networks, not just lounge around on their bottom line after promising us “the world”. Make them live up to their promises.

Brian says:

It’s definitely true that wide-spread adoption of transfer caps would significantly hurt innovation. In fact, it would be like regressing the current state of the internet as we know it. Many of the current services which we all enjoy right now will likely disappear as no one will be able to afford to use them. Businesses and investments all over the world would suffer and go to waste respectively. Jobs would be lost and children would cry. (Chill. That was a joke.)

In the end, I think a move like this would not only hurt the Telcos in terms of angry customers cutting off their service but less overall revenue because businesses and individuals who once used the internet’s various services will find other, more cost effective ways to get what they need done.

People definitely need to put their foot down and tell these greedy douchebags to lay off. I personally pay quite a lot for my connection and am already ready to draw the line. I pay nearly twice as much for my internet connection as I pay for gas and electricity combined. I even had to bitch out and threaten to go to cable some local manager when they tried to raise my rates. If my current provider told me that they were moving me to a tiered, capped system, I’d terminate the contract and go elsewhere, and if there were no elsewhere, I’d try to do without or with the absolute minimum.

I’ve done it before, and I’ll do it again. Vote with your wallet, people. Write letters. Make phone call. Be annoying and make them hate living.

John Wilson (profile) says:

Re: Re:

You’d be 100% right if the provider pulling this stunt was a telco. It’s a cableco.

As Mike says the infastructure of cable and tel are different and that does adversely effect cable.

The reality here is that cablecos jumped into the Internet game without, by and large, making the upgrades they needed to in order to provide the service.

Now they expect you to pay for something they should have done ages ago.

Fun, eh?

ttfn

John

www.custompcmax.com (user link) says:

I am glad I never got into cable internet. I have always used DSL, and I have always gotten fast and constant download speeds. Even cable television is overpriced and lacking in channels. I get a package with DirectTV that has more channels in total and in HD than the similarily priced cable package. And I get a HDDVR, that would have jacked the price of the cable up even more.

Mark Evans (user link) says:

Time-Warner

Mike,

You’re one of the few people who recognizes that without real competition, the broadband services providers can do pretty much what they want, and few consumers will complain. I don’t understand people who look at the broadband market but fail to acknowledge or realize it doesn’t operate like “normal” markets. My thoughts are here – http://tinyurl.com/6xnpmo.

Mark

Anthony says:

Just what they want

I have noticed that most people have stated that they are going to jump ship if they get capped service. Well that is exactly what they want you to do. It is a fact that about 5% of an ISP’s customer base use 95% of their resources. I know this from first hand knowledge of owning my own ISP. If you move to the competition and tax their network they get double the benefit. More available resources for the money making customers and damage to their competition.

Brian says:

Re: Just what they want

More available resources for the money making customers and damage to their competition.

I really don’t think this would be the case. If alternate providers are offering better service for a cheaper price, heavy and light users alike are liable to move. Many business are still continuing to move towards a more internet reliant structure as well, so they’ll likely be tempted by the same superior offers.

And if the Telco losing my business is happy about it, then I guess we both win. However, I don’t subscribe to the idea that the major providers will only lose their top 5% users to the competition and that the newly freed up bandwidth will destroy said competition.

John Wilson (profile) says:

Re: Re: Just what they want

Once again, this isn’t a telco, it’s a cableco.

The principle is the same, though.

Throttling bandwidth either in the background (ie Comcast and Bell Canada) or by charging for “excess” usage isn’t gonna make the customer happy.

Making the caps so low that just about everyone ends up paying isn’t the way to do it either.

This is about attempting to control the uncontrollable as it is about sharing the available bandwidth, though that is an issue that affects cable far more than it does tel.

I wonder if they’ll charge for overuse because of the spam!

ttfn

John

Charles Consaul (profile) says:

First Get The Bugs Out!

I was a Time Warner Customer for almost 14 years. Their failure rate lately has been exceeded only by their poor customer service. I finally left them when AT&T promised a 6Mb DSL line. So, I switched to Dish, which we like, but then when the internet came back up it was only running at 1.5Mb. My wife called to find out what the deal was and they said that we were more than 1500 feet away from the office so that was the best they could do. I feel the term bait and switch applies here. I do enjoy the increased reliability, but really feel cheated on the significant difference in speed.

SkepticBlue says:

Broadband Competition

As Mike said, they need competition. I pay Verizon $55 (as part of the triple play) to get 20/5 FIOS. In May, my bit torrent numbers were 175/222 in GBs. In addition, I back up via FIOS to a remote site (~25GB/m) and add about 2GB/week on podcasts alone. All told, I think I run about 275GB down and 250GB up each month. $55. Done.

YouCompaniesWillNeverLearn says:

This is the price of stupid:

As soon as my bandwidth is limited, I’m dropping the service. No questions asked.

I’ll also be doing my part to make sure to switch services of friends and family so TWC learns a lesson from this.

If the recent customer outcry against EA’s SecuROM feature can change a massive game company’s decision, then I hope a public stand against Time Warner Cable will have a similar effect.

Dan (profile) says:

Anthony read my mind

Voting with your wallets is what they’re going for. A lot of people with high-speed internet access hardly use it, so they won’t hit the cap and so won’t notice the difference. If we the tech-savvy downloaders switch providers, that’s fine with them. It will make everyone else on their network slightly happier, and lower their costs and increase those of their competition. It’s horrible for us, but I bet this plan will work out for them. At least until movie download services replace movie rental stores, that is.

Yourlogicsucks says:

Dan, wtf?

So, you and Anthony are basically saying it’s a GOOD business plan to drop customers who use more bandwidth? Sure it saves money and congestion in the short term, but since when is regressing against the flow of technology ever a good idea?

So instead of gaining customers as demand for more bandwidth increases, TWC is willingly giving up more and more as time goes on.

That’s like saying 8 years ago that rather than provide an unlimited plan for heavy cell phone users, we’re going to just get rid of them and solve the problem. Now look at what would happen? They’d have practically no customers.

hegemon says:

Re: Idiots Vs Engineers.. BIG gap...

Wrong. I just read the /. article and the comments on it. While there are a few cable company shills there, just like you, the vast majority have the same reaction as the Techdirt readers. So, take your elitist attitude elsewhere.

I hope Time Warner gets killed by the competition now. Hopefully, it will encourage a competitive local startup like it did in Kansas City. Amazing what a little competition does to throttle Time Warner’s monopolistic behavior here.

Shohat says:

Re: Re: Idiots Vs Engineers.. BIG gap...

Cable company shills ? I’m on the other side of the world, mate. I don’t need the money, or care about Time Warner or tiered Internet access.
Internet access measured only in bandwith is stupid. If we had to stick to that model (which we did up until now, and then ISPs suddenly realised some people download *nix distros and HD media and started disconnecting people), It’d logical to cap access at around 20 Kbs, and not 1.5 Mbps.
Here’s math :
20Kbs = 72 MB/hour
1.7GB/day
=~50GB a month.
This is what happens when a user uses just 20Kbps.

Now let’s assume the same user goes from dial-up to low-end broadband with 1Mbps.
20*50=~1Mbps
= 2.5TBit a month

So, instead of sending the users back to 20Kbps dial-up speed due to inability to deliver 2.5TB/user, they do this.

As I see it, it would actually create more competition because ISPs have a lot of flexibility with deifining tier/caps for their programs (unlike bandwidth), and users will finally get full disclosure, instead of super-fine print .

Chronno S. Trigger says:

Re: Re: Re: Idiots Vs Engineers.. BIG gap...

I see where your coming from but you need to see where we are coming from. We aren’t talking about the upper 1% here. 40G max download is just far to little in the web 2.0 generation between YouTube, iTunes, Napster, Revision3, Xbox Live, Wiiware, Playstation Network, and probably a thousand others. This is just the start. More and more sites are going to do this. VoIP takes up a lot of bandwidth alone.

People use the Internet for a hell of a lot more than they realise.

withersteen says:

C’mon… they sell these tiers as a way to let those who use more – pay more, and the “average joe” gets to keep his comparatively cheap and reliable service. But, as Joe’s usage goes up, through downloaded movies and such, he will find himself in a more expensive tier. This is a rate increase for Average Joe over time. I bet you find over time that more and more subscribers are in the upper tiers.

Clueby4 says:

Monopoly has it's privileges.

This is no different then what AOL did in the 90’s, other then the government isn’t slapping an injunction on them. They have oversold their capacity and this is the obtuse and deceptive solution. Capacity should be going up, since hardware is cheaper and more powerful, and price should be going down, but with paid-to-sleep government and monopolies is most areas they can do this.

The most disturbing part are the chuckleheads saying “No big deal” or even worst “in our country that’s cheap”. Hate to inform you but you are what people with reasonable, or any in some cases, expectations consider; the lowest common denominator.

edd says:

How come they all the sudden don’t have the ability to offer unlimited bandwidth? Maybe because they been wasting all the money they’ve been getting that they could have reinvested into their company/cable lines.. They should have been working to make their systems better all these years that they have already been way over charging. Does it really cost a cable company anywhere near $150+ a month per subscriber just to pay their terrible tech support staffs? Maybe companies should spend their own money to make the product better.. what they are doing is what is commonly known as passing the buck. They failed to run a good business, and who has to pay for it? The consumer. The sad thing is we’ve all been paying for it for years anyway the way they overcharge.

T. M. Warner says:

Re: Mental Transaction Cost?

> Here in Canada we have bandwidth caps and it really doesn’t
> effect me. I don’t even think about it, primarily because so
> far I seem to be under the limit.

You won’t be so smug when software providers move to a SaaS model and you are moving data and files between your desktop and their servers.

Sailor Ripley says:

Sort of an off the wall thought, but let’s say ISPs start capping…

which means that “my” internet resource has gone from an infinite good (ie marginal cost to me 0) to a scarce one, i.e., every bit transfered does has a non-zero cost (to me)…

…so should I then not be able to sue any software/application/device manufacturer who “forces” me to let their product phone home (or wherever) for compensation or have them arrested for theft?

greg (user link) says:

I Hate Time Warner Cable

Hello everyone,

Fuck time warner cable. I just bought 2 web-sites about time warner, because of all the hype on the web. it will be free for all. I bought
screwtimewarner.com and screwtimewarnercable.com

It will have forums and everything you need to get the word out all over the web about time warner cable. its time to stop the monopoly and take back our freedom.

What I hate the most is that they will remove channels that you have been paying on from the beginning, but will not reduce your bill and not even tell you that they removed these channels. Now we cant even get the NFL network, because they hate time warner and think they are scam artist.

When you call time warner, your on hold for fucking 1 hour and then they don’t even speak any fucking english. (( I’m not racist in any matter )), but if you live in America, you better learn how to speak some fucking English, don’t come here and not learn our language. Also, I shouldn’t have to go to my own banks ATM and choose a language, get the fuck out of here with that crap, ( this is fucking America ) Now on DVD you have a setup for other language, this is getting out of hand. Just had to vent some.

Take Care,
screwtimewarnercable.com
screwtimewarner.com

networking guy says:

stop complaining already

Dear complainers,

Please stop complaining about time warner cable and the rest of these ISP’s that are really just a business trying to make a buck….

I work for a fortune 500 company in the network engineering dept. The bottom line is there is not infinite bandwidth or capacity

(in fact the network is really just a best effort facility, kind of like a highway, too many cars and you have gridlock, you can’t just quickly build another highway cause more cars are on the road, you have to come up with ways to manage the cars, carpool hov lanes, charge tolls,etc.)

but employees think there should be until we tell them how much it costs per month to upgrade thier bandwidth at thier location. Then they start to look at thier income that would be derived from the additional bandwidth and make a cost benefit decision. Do they really need it? Is it worth the cost. Are some of the things currently being done on the network not really important…. (e.g people browsing the internet on company time, listening to music,etc. etc.). In other words do the most important things first (in the case of a business run it, then if there is any bandwidth left – just be happy and use it for unimportant stuff…)

Additionally all ISP networks are shared environments. Expecting there to be infinite capacity at a fixed cost simply demonstrates how naive you are. Is there anything else you purchase for a fixed price that comes in infinite supply….? We all pay for water by the gallon, electricity by the kilowatt, gas by the gallon. etc. etc.

The only solution to this problem is for people to simply pay as they go for bytes transmitted and a premium for higher transmission speed. Those who use more pay more. Isn’t that fair? There is an incredible amount of money spent to keep the network healty, swapping out old gear for new gear, dealing with new hardware and software testing. Support new protocols on the network, upgrading vendor equipment. It costs a lot of money.

The flip side is the ISP’s should really reduce thier costs so that users who use very little pay very little…. that helps people to be self policing (more conservative people just pay less).

anyway go ahead and flame away with your responses….

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