Time Warner Cable Suddenly Forced To Compete In Kansas City; Complains Google Has 'Unfair Advantage'

from the i-don't-hear-any-consumers-complaining dept

That didn't take long. Google's move into the fiber business has already irritated the incumbents (Time Warner Cable and AT&T). Faced with a faster, cheaper rival, the two companies (at this point, mainly Time Warner) are complaining that the incentives provided to Google are “unfair.”

In order to create the infrastructure for the cable and gigabit internet service, Google was given everything from free fiber, government employees, buildings, and discounted services; an agreement that a Time Warner Cable spokesman feels puts them “at a competitive advantage compared with not just us but also the other competitors in the field.”

Time Warner's spokesman seems to misunderstand what the word “incentive” means. When cities attempt to lure businesses they want, they offer concessions, grants, tax breaks, etc. It's assumed that the incumbent businesses have grabbed substantial marketshare and, therefore, don't need to be given incentives to do anything more than stay. If Time Warner is upset that its new competition was given this in exchange for selecting Kansas City, it can't blame anyone else for its failure to offer better services. It certainly was in the position to do so, but it never occurred to the incumbent(s) to make any great leaps in service and speed until it was “unfairly” forced to do so.

This complaining about being forced to offer a competitive service is nauseating enough. But this sentence tops it:

He continued by stating, “We're happy to compete with Google, but we'd just like an even playing field.”

No, TWC. That is absolutely the last thing you want. TWC has never been interested in “level playing fields” or “competition.” In fact, it loathes competition (and innovation) so much that it's currently the target of an anti-trust investigation for its attempts to neutralize Netflix and Hulu by obtaining programming at lower prices than online providers are charged (among other things).

Hell, TWC has a long and storied history of doing whatever possible to block a level playing field even to the point of writing legislation to keep out competitors.

Time Warner is only interested in a “level playing field” if it means that everyone else has to come down to its level, rather than improving or innovating. In fact, TWC is so worried about Google's offerings actually leveling the playing field and providing real competition that it's offering rewards to city employees for information on Google's fiber rollout.

Time Warner has set up a phone hotline and an email address that will award three gift cards a week for employees that “[share] tips, rumors, and rumblings about Google Construction or launch activity…”

Still, TWC wants its undeserved place on the “gravy train,” and has reached a “parity agreement” with Kansas City, MO.

In exchange for the incentives, the cities are requesting that the companies improve their community services to be on par with Google's efforts, which have resulted in free internet connections in hundreds of locations chosen by the government… The WSJ cites an unnamed source that claims Time Warner Cable has improved its service's speed and performance in the area in return for discounts that mirror Google's, as well as a partial refund of city fees that the company paid earlier this year.

“Improved speed and performance,” eh? One wonders (loudly and angrily) what the hell was keeping TWC from improving speed and performance over the last several years? Perhaps it was the lack of a serious competitor and one of those famous “level” playing fields that tilts at a 45-degree tilt toward the incumbent provider. As it stands now, Google's fastest offering (up to 1 Gbps) is 950 Mbps faster than TWC's fastest offering.

Google's entrance into the broadband market should be a wake-up call for providers all over the US. Once this service is available, they'll no longer be able to get away with minimal, incremental improvements and never ending price increases. As soon as consumers have a chance to switch, they will, especially when the old school clings to things like binding arbitration agreements (a bad company's best friend) and metered broadband, rather than meeting customer expectations or improving infrastructure. 

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Companies: google, time warner cable

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Comments on “Time Warner Cable Suddenly Forced To Compete In Kansas City; Complains Google Has 'Unfair Advantage'”

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91 Comments
aethercowboy (profile) says:

Competitive Disadvantage?

What would TWC do with free fiber, government employees, buildings, and discounted services? Would they make service better and cheaper for their users?

I think not. I have a feeling that if TWC/AT&T got these perks, they might use them to develop faster services, but would charge the users a premium to get access to them; or do nothing with them, since TWC does cable, and AT&T does DSL, letting the users wait for Verizon to come in with fiber, so they can continue to have tiered services that technically (but don’t actually) compete with one another.

out_of_the_blue says:

'seems to misunderstand what the word "incentive" means'

When gov’t directly subsidizes industry, that’s fascism. When it’s a PARTICULAR company, that’s crony capitalism. When it’s GOOGLE, that’s national intelligence services.

I don’t see how even large private companies are going to compete with BETTER THAN FREE. Gov’t simply shouldn’t be doing this: it’s not necessary. Let Google COMPETE, as all you “capitalists” claim to want, yet when Mikes sees this clear example of outright fascism, he spins it into a positive GOOD! Tells ya where his education is from: the Ivy League 1 percent where creeping and creeping fascism is just “business as usual”, directing gov’t to benefit The Rich.

JWW (profile) says:

So....

So customers are getting good service that provides what they want at a reasonable price?

I can see why Time Warner is pissed. That’s not fair, they need to get the message across to google that they are doing it wrong.

Note to wireless providers, internet providers, movie industry, and music industry: When your customers HATE you but still have to deal with you because they have no other options, the moment a new competitor that is fair and equitable that provides good service appears, they will tell you to fuck off and die.

MrWilson says:

'seems to misunderstand what the word "incentive" means'

Wait, what?

Fascism?

Where’s the terrible law that Google paid for that’s undermining democracy?

Oh wait… The laws that do that were paid for by the entertainment companies that you defend.

Google isn’t a saint. It’s a large corporation. But it’s one of the lesser of many such evils.

Google is causing an entrenched legacy player that price gouges and provides arguably terrible service to shake in its boots and you think that’s a bad thing?

Anonymous Coward says:

“As it stands now, Google’s fastest offering (up to 1 Gbps) is 950 Mbps faster than TWC’s fastest offering.”

-Devils advocate- If you need more than a 50mps connection, you might want something other than home internet. Make your own freaking data center. -End Devils Advocate-

I wasn’t aware KC already had such awesome offerings, though I’m fairly sure you have to pay double what you would if the market had competition instead of monopolies handed out like candy.

Frankly, since the incumbents are unwilling to use their massive profits for capex, fuck them. KC feels that the service is worth bringing to town, therefore it’s their duty to do what they feel they must to attract it. If the Incumbents actually spent money on capex, such a thing wouldn’t happen. State sponsored monopolies have failed, so it’s time to let people in the market.

That Anonymous Coward (profile) says:

'seems to misunderstand what the word "incentive" means'

How did Google not compete?

Google said we want to do X, who is interested.
To obtain X the cities offered various perks and deals.

TWC has not said they are going to roll out fiber to compete.
But TWC didn’t have to pay for every pole they are connected to, or rights to use right-of-ways… its like they got perks and deals when they rolled in.

To compete means to offer the same thing, not demand everyone else get held back to your level.

Anonymous Coward says:

Well

Not to side with TWC, but the Goog did get at least one concession that no other cable/telco has ever recieved, and probably never will: Allow demand to drive the rollout. Google was free to ignore neighborhoods that didn’t reach some level of pre-rollout signups, which is something that was specifically forbidden for everyone else. That part does seem a bit unfair to me.

Agreed says:

Re: Well

I agree 100% this is where Google has the advantage that no others have, but as is shown again and again the other service providers have received billions in funding to create there networks. And hopefully if Google are clever they will start expanding once the first two phases of the plan are completed. Initially to give them the most concentrated areas will hopefully help them fund the other areas. If Google was receiving billions a year to improve there network i would say they should then follow the same rules.

That Anonymous Coward (profile) says:

Re:

Several small under-served communities have tried to create their own local services, only to discover TWC and the others getting bills past the legislature to outlaw them.
They complain about unfair competition, but they don’t have to compete and don’t bother to.

How is it a city can cut a deal for content and bandwidth and get a much better rate on it? They bill at a rate that makes sure they pay their bills, fix issues with the system, and expand in the future… all without needing a billion dollar slush fund to make sure people get coverage.

Bengie says:

Incumbants

AT&T/TW/Comcast/etc have gotten about 1.2tril in grants and tax-breaks over the past 15 years with the intent of actually upgrading the USA’s infrastructure.

I say even the playing field, but retroactively give Google a fair slice of all that stimulus. I figure a cool 100bil of free money should be enough for Google to “fairly” compete.

That Anonymous Coward (profile) says:

Re:

Part of Google doing this is to shame the legacy providers.

It is one thing to bemoan the lack of fiber in the country, it is another to have someone do it without all of the handouts the Government has given the legacy providers for years just accepting that the legacy providers are doing what they can.

This will help prove it can be done, at a price lower than the current players charge for much lower speeds.

Anonymous Coward says:

Re:

If they deem KC a success they will start moving into other cities. The incumbents will get their ass in gear upgrading their networks or face the 99% marketshare lose they are going to get in KC.

By the time Google says, “We are looking for 2 new cities to rollout fiber to,” ATT et al had better be moving already so they don’t get caught with their pants down again.

The eejit (profile) says:

Re:

I get currently get up to 60MBps broadband (actually around 4MBps once it gets tot hat last crappy copper cabling), nearly 400 channels and weekend calls included in my packasge at ?40/month+line rental.

Now, according to TWC’s official site, to get that in Kansas, you’re talking more than triple that, given current exchange rates. Comcast is actually worse, although their “service” is cheaper by around $10.

Anonymous Coward says:

this “fairness” arguement is bullshit, both in physical goods/services and intelectual “property”.

You do not have a moral right to make money, even if you have done so in the past or worked really hard on something stupid like investing money and labor in creating goods that can be duplicated without having a way to earn income from it when the copying happens.(and it will happen)

Pjerky (profile) says:

'seems to misunderstand what the word

I live in the KC area and have all my life. Everyone I know, myself included, has nightmare stories dealing with AT&T, Comcast, Time Warner, and SureWest (the four major incumbents). I have found that everyone’s internet has significantly slowed down over the last decade along with getting broadband caps, port and content filtering (Comcast I am looking at you and your torrent problem), and huge rate increases.

Personally, if Google is the fascist empire coming in and taking over then what does that make all the incumbents mentioned above? I would say it makes them evil Nazi dictators that rape and pillage and oppress everyone and are hell bent on national domination.

If Google is fascism I welcome it. It would be a damn sight better than the constant anal raping we are taking from the big four. At least the Google prison is cleaner, cheaper, and has far more wide open spaces to exercise in. It will be a huge trade up.

My rental agreement at my apartment complex is up in March and I intend to move into a Google Fiber hood if at all possible. Actually this article has reminded me to write a letter to Time Warner to put them on notice that, come March, I will no longer be doing business with them again. In that letter I will list all of their crimes against consumers.

Anonymous Coward says:

'seems to misunderstand what the word "incentive" means'

Really? All these other companies got MASSIVE incentives for decades from the taxpayers through US government in the form of cash money and monopoly protections to build up their infrastructure. That they used them to line their pockets and give their customers the shaft is not Google’s fault. This is what the US government should have done in the first place, increase competition in the market for the benefit of US–the tax payers. Too bad, so sad, TWC AT&T et al can go suck it.

Ninja (profile) says:

Incumbants

Just noticed most of the comment was cut. Weird.

So the complement:

The problem of concessions is that new entrants either have a hell like experience to get into the market or can’t enter at all. And when they enter they are already at a disadvantage because the legacy players received tons of subsidies and incentives to build their network.

In the end they should just be allowed to offer their services wherever at heir own risk by following specific rules (serve more remote areas if they want to get the beefy ones). No tax deductions, no Govt sponsoring. Don’t like the terms? Don’t do business.

gorehound (profile) says:

Slime Warner has had a long History of going against the Consumer.They have Lobbied Government, Wrote the Bills Lawmaker’s Used, Charged Expensive Fees from homeowners whose Homes were destroyed, tried to bring on Metered Broadband, and now they complain about Google Internet Service.
BOO HOO !!! I think we in Portland, Maine would love Google Highspeed Internet or any Competition so we had a choice in good fast Service.

We really need good Competition and nearly everyone on this website will agree that this fact is true.

Anonymous Coward says:

Again, devils advocate here, but if you can ‘bog down’ a 50mps connection (Assuming you get the full advertised speed), you *MIGHT* want to invest in something other than a straight residential internet connection. That you have insufficient bandwidth for 30 people to watch seperate movies on netflix while simultaneously hosting a new MMO out of your basement doesn’t quite strike me as a sob story worth listening to. Google Fiber is plain stupid because it’s vast overkill. Of course, it’s completely FUCKING AWESOME and gives me a hell of a stiffy for the same exact reason, but you may have unrealistic expectations if you’re bitching about a 50mps residential connection (Assuming, once again, you get the full advertised speed). I’m excited because in the end, it can only drive prices down and end this stranglehold that has been keeping US infrastructure from being improved.

There really isn’t ‘reasonable’ home use of the internet that can bog down a 50mps connection. It’s getting bogged down because you’re wasting your bandwidth downloading the entire freaking internet. If 50mps isn’t enough for a home connection, I doubt 1gps is going to be enough. You’ll find a way to waste all that bandwidth too. “ZOMG! I can seed 5000 torrents now!” followed by “Google fiber sucks so much ass, I wish they’d upgrade so I can download 5000 torrents and watch netflix at the same time!” followed by “It’s all googles fault I had to upgrade to an SSD! My old mechanical harddrive couldn’t write fast enough! Now I can’t afford my car payment! FU GOOGLE!”

This article is slowly making me hate google for rolling out this service in an area that doesn’t really need faster speeds. Why? Because I’m selfish and can’t find anyone in KC hiring for my career field 🙁

Lowestofthekeys (profile) says:

'seems to misunderstand what the word "incentive" means'

“Google isn’t a saint. It’s a large corporation. But it’s one of the lesser of many such evils. “

Words of insight, though I disagree that any business is inherently “evil.” They do what they must do to survive, and some companies like Google tend to do it smarter instead of sitting on their hands like TWC.

Lowestofthekeys (profile) says:

Re:

“but if you can ‘bog down’ a 50mps connection …”

Correct me if I’m wrong, but I believe they’re using dark fiber, which is pretty sturdy for data transmission. It’s also interesting that the wikipedia article – http://en.wikipedia.org/wiki/Dark_fibre – mentions how economic fiber optics is with the transmission of data doubling every nine months, which in turn leads ot lower costs for actually doing the transmitting.

http://www.voip-news.com/articles/voip-blog/whats-google-doing-with-all-that-dark-fiber-51966/

This has some interesting theoretical tidbits to Google’s plans which may involve SaaS (software as a service) and would package nicely with a massive cloud computing network.

I think we can all agree, Skynet should be up and running in the next decade or so.

C. Crosse says:

Well

The argument that demand driving the rollout is a poorly constructed one at best. I live in the Kansas City metropolitan area, which consists of fifty communities spanning two states. It would not be feasible for every nook and cranny in town to get the fiber network built on day one. For Google to find out where the demand is to begin construction of the network is smart business. Why waste time, money, and resources building a network where there is no demand?

art guerrilla (profile) says:

Re:

?que?
in what WORLD is 50 mps ‘common’ ? ? ?

in our little backwater, there is only ONE carrier who even has that service available, BUT it is for -literally- a couple block radius in town, NOWHERE else gets 50mbs, and you are LUCKY if you can get 3mbs…

your charming defense of a 50 mps WHICH DOES NOT EXIST for 90%+ of us is stupid… please smarten up…

yeah, stupid me, why would i want to pull unlimited electricity from the utilities… 10Kw Hours per month should be plenty for anyone…

*why* would anyone want virtually unlimited water supply coming into their house; 1000 gallons per month should be enough for anyone…

why would anyone want freedom, when they just stay within 5 miles of their home 99% of the time anyway…

dog damn, i hates me some telecommunications shills almost as much as i hate the telecommunications companies themselves…

art guerrilla
aka ann archy
eof

Anonymous Coward says:

Re: Re:

“your charming defense of a 50 mps WHICH DOES NOT EXIST for 90%+ of us is stupid… please smarten up…

Do you honestly think that Google is suddenly going to show up and wire you up with a fiber? NOPE. Not going to happen.

Google is tweaking noses, that is for sure, but they are no closer to addressing the issue of a lack of population density in the US, and extreme distances and small service areas. You cannot expect service levels or competition in areas where your population density does not make it worth it.

Remember, even wireless has limits. GSM towers are only good for 20 miles or less (depending on terrain). If you live 30 miles outside of a populated area, you are likely to have little or no service. While phone wires can carry a call a long distance without much of a boost, broadband internet requires a good signal and relatively short distances. I cannot imagine a phone company being willing to build what is effectively 1 central per rural customer just to give you 50meg connectivity.

You made a choice to live in BF nowhere… this is the price you pay.

Bengie says:

Incumbants

Thought I would add, the 1.2tril that I stated was because back in 1995, they got about $200b in free grants to build out infrastructure, then the turned around and fired their engineers after they got the money.

Then some time during the Clinton era, there was something around $800b in tax-breaks/etc.

Adjust for inflation and 1.2tril isn’t far off the mark.

Agreed says:

Re: Sacrifices

Wait. i suspect that there will be a few businesses that develop the same game plan as Google. Providing the same deals for cities. There is just too much money involved for startups not to take advantage of Googles business plan. And for an initial outlay of only a few million i am sure we will soon be seeing crowd-funded networks like this pop up everywhere. When a demand is not met, as the big isps have not met the demand, then others will come in and take over, maybe the big four will suddenly realize that they need to improve there networks very very fast or the future outlook is going to look very bad for there shareholders.
And forget about them getting bills passed to prevent this, this , local state officials will be doing everything they can to get super fast and cheaper Internet for there taxpayers.

Ruben says:

Re:

If I could get a business class internet package, I would. Even as a business owner who runs a small IT consultancy, I could not get comcast to install business class internet at my home residence.

And you’d never be able to host an MMO on a 50 meg line. Minecraft, maybe, but not WOW.

Besides that, I’m not really sure what the point of your post is.

The Groove Tiger (profile) says:

'seems to misunderstand what the word "incentive" means'

Interesting, there seems to be a hidden message in out_of_the_blue’s crazed mutterings (at this point, it’s far more probable it’s a faux-Shill than the real ootb).

Let’s see… PARTICULAR… GOOGLE… BETTER THAN FREE… COMPETE… GOOD!

Particular Google better than free compete good!

Nice, I think we can all agree that it’s a good thing that Google forces competition by making his service better than free.

Sammy Moshe says:

Reason to buy

As it stands now, TimeWarner and AT&t are the only big providers in the area. As a resident of Kansas City, I HATE my options. When I heard Google was coming to town, I was so happy I cried! No, seriously. That’s how bad the service is in this town. Even though I’m not actually getting service until next year, I’m very much looking forward to dumping TimeWarner as hard as I possibly can. If they cared at all about my business, I would not feel this way. When the entire city leaves them, it’s their own damned fault.

Casey says:

Reason to buy

The entire city won’t leave them. Google hand picked only the neighborhoods with the best return. The rest were flipped the bird.

Google is coming out looking like a saint in this and in reality, they are not. They have been more selective in choosing who to serve and who not to serve than either of their competitors. It will literally change the value of neighborhoods even more. If you don’t have Google Fiber in your neighborhood in KC, your house will be a lot harder to sell.

Anonymous Coward says:

'seems to misunderstand what the word "incentive" means'

“When gov’t directly subsidizes industry, that’s fascism.”

From Wikipedia: “Fascism is a radical authoritarian nationalist political ideology. Fascists seek to unify their nation based on commitment to an organic national community where its individuals are united together as one people through national identity. The unity of the nation is to be based upon suprapersonal connections of ancestry and culture through a totalitarian state that seeks the mass mobilization of the national community through discipline, indoctrination, physical training, and eugenics.”

Sorry OotB. You very much DO NOT know the meaning of the word “fascism”.

Also, you fail to realize, or more likely, intentionally overlook, the fact that the government has been subsidizing and providing federal grants to telco companies, like TWC and AT&T for decades now. As well as local forms of government (in cities and states) granting them monopoly privileges in numerous areas, denying any form of competition whatsoever. As such, these two companies in particular have had no need to compete, until now. And have been taking government grants and (ab)using their monopoly privileges.

What Google has done is a positive and good for the Kansas City area. Namely in that it is now providing incentive for the other competitors in the area to actually step up and compete with Google’s offerings, both price wise and bandwidth wise. All of which in the short and long run gives more options to the citizenry of the area.

There is literally no bad thing in this for the public. Now, they have another choice, one which many obviously took.

The only thing going on is TWC and AT&T now have to compete. Something they have adamantly refused to do for decades. And as such, they are complaining about doing so.

Leave it to OotB to try spinning this into anything else but what it really is.

Rikuo (profile) says:

Reason to buy

Can I ask, what’s wrong with Google only choosing which neighbourhoods to service? Was Google under some sort of obligation or contract to service the entire city? As far as I’ve heard, Google are pretty much doing this for mutual benefit.
A business choosing to serve markets with the best return is, you know, normal business practice. Normally, an ISP wouldn’t bother providing decent/any service to rural or remote areas, since the costs would outweigh income, but legacy ISPs were given government grants to do so. To date, they are infamous for having failed to invest in their infrastructure and allow for competition.

Anonymous Coward says:

Incumbants

“AT&T/TW/Comcast/etc have gotten about 1.2tril in grants and tax-breaks over the past 15 years with the intent of actually upgrading the USA’s infrastructure.”

Wow, talk about playing with numbers.

First off, how many companies involved?

Second, how big a percentage is Kansas City of their total business?

… so take the tax break, divide by the companies, and then take a single company, and figure out what percentage of the business is ONLY Kansas City… and suddenly Google has a huge, unfair advantage.

Google is doing what every dominant, profitable company tries to do, they try to take over other profitable market places by buying their way into the market. In the case of Google, they are going to spend an ungodly amount of money to overwhelm and probably wipe out incumbents in the marketplace.

What do you think Google is putting on the table per subscriber? What do you think the other companies have put on the table per subscriber?

Bengie says:

Re: Incumbants

There have been many stories as of late of small start-ups rolling out 30/30 and 50/50 fiber, charging less, and offering better quality than incumbents. Then paying off the debt within 3-5 years.

If a start-up that has had no government support can waltz in and supply a better service for less price than these companies that have gotten hundreds of billions over the past many decades, I don’t know what to say.

Casey says:

Reason to buy

The problem with picking only certain neighborhoods is that Google is making their product look economically feasible, when it simply isn’t. It is only possible in neighborhoods where Google has perfect conditions for deployment and unusually high uptake. That is not practical for incumbents. If they picked which markets to offer service to the extreme Google is, and divided markets to this extreme, our digital divide would literally divide our economy. Plus the uptake Google wants is not practical when you have multiple companies in the same market.

I am not saying our existing ISPs are good. I dislike them as much as anyone. Heck I can only get 1mbps where I live. But Google is giving people dreams and trying to sell it as reality. The reality is, what Google is doing is not practical. Giving service away for free and selling 1gbps service for $70 is not practical in the overwhelming majority of the US. Only in hand-picked cities with hand-picked neighborhoods with significant perks from the city is this possible.

Unagreed says:

Re: Reason to buy

What you miss is that Google is providing a completely different service to people.

I can ask you how did the telcos of past get copper wire to every house? how did they provide phones to the most isolated farms?

Yup it was investment, which they have been given by the government but which they have misused.

All Google has to do is take the larger areas and the remote areas will eventually be covered as they expand, that is if the Government gives them 1.2 trillion to install fiber to every neighborhood.

I think what Google has done here is prove that the technology is here and it is not that expensive, and that the other monopolies have no excuse for not improving at least the networks in the big cities, the outlying suburbs can come at a later stage, but not too much of a later stage.

Anonymous Coward says:

I’d love for Google to go somewhere really big, like the DC area next. I was so pissed about the disservice I got from Comcast during the *installation* appointment that I called and told them I’d drop them like a bad habit at first chance. Nothing in the year and a half since I signed up has done anything to change my mind. But, sadly, there’s nobody else where I live.

jayc (profile) says:

time warner

time warner is NOT customer friendly at all! Plus they employee workers in Pakistan, Caribbean and the phillipines. I am trying to speak to a live person and have now spoken to a worker in those countries and had to listen to 2 different automated computers. No one can get me to a local rep. It is not about the all mighty dollar TWC it is about CUSTOMER SERVICE AND you HAVE FORGOTTEN HOW to be a friendly provider!

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