SXSW Interactive 2010
With less than two weeks to go before this year’s Interactive, it’s time to get connected. Latest news | Full coverage | Follow Omar G. and Austin360’s Interactive coverage on Twitter | Send us tips.
Austin360 blogs > Digital Savant > Archives > 2009 > April > 03 > Entry
Time Warner Cable capping: gigabytes of fallout
It’s been two days since we first reported that Time Warner Cable would be rolling out usage-based Internet service pricing this summer and the reaction has been… what’s the word? Intense? Outraged? Apocalyptic?
It has been interesting to watch not only Time Warner’s public relation moves when word of the Austin/San Antonio “test” spread, but the swift organizing and public kvetching of customers in the face of a pricing change that is months away.
It’s the first time I’ve seen a situation like this in Austin where much of the back-and-forth is going on via Twitter as customers (rightly) freak out about the effect this will have on their monthly bills and representatives from a large company defend the move and tout what they see as their product’s superior service in real-time. (And without the need for an intermediary like, say, a reporter who covers technology for a local newspaper.)
(An e-mail address has also been set up by Time Warner to get feedback from customers about the bandwidth billing, realideas@twcable.com.)
In my view, the two most fascinating Twitter postings from much-fired-upon Time Warner rep Alex Dudley were these: “just because our product is better than the alternatives doesn’t mean we’re a monopoly.” and “Have to get off Twitter and go prepare my Austin “Man of the Year” acceptance speech…”
Would it be off base for me to refer to that pair of Tweets as “Hubris & Humanity?”
Let’s talk nuts and bolts, though. A lot has happened since my previous blog post, and I’d like to round it up for you, wasting as little of your time and bandwidth as possible (something we will all have to start thinking about in the future).
- Burnt Orange Report posted a good summary of what’s happened so far, including statements from two Austin mayoral candidates, Lee Leffingwell and Brewster McCracken taking Time Warner Cable to task for the metered pricing. Leffingwell even cites downloads of “Friday Night Lights” in his statement, a move sure to pull at the heartstrings of devoted Austin fans. A follow-up post on BOR lists a quickly growing list of grassroots campaigns targeting Time Warner’s move. It includes a Facebook group, two dedicated Web sites and an online petition.
- Tech Web sites Ars Technica and Slashdot weighed in, bringing national attention to the issue.
- Austin-based GigaOm writer Stacey Higginbotham wrote about the situation and national bandwidth usage and pointed to a November post where Austin’s average Internet usage on Road Runner was estimated to be about 6 gigabytes a month. I’d argue that by summer, I would expect that average to have increased based on the growing popularity of Hulu, Netflix and other online streaming sites, but I have no specific numbers to support that idea.
- Statesman’s A1 story that ran yesterday.
- Brian Boyko, editor of Network Performance Daily, interviewed Alex Dudley and asked much more technical questions about how this is all going to go down.
- Chip Rosenthal suggests Austinites attend a City of Austin Community Technology & Telecommunications Commission meeting on Wednesday to voice their concerns.
- An e-mail this morning suggested that everyone against the new pricing send a brick. “Basically every one mails a brick to a TWC address (the local Austin branch would be perfect) using a flat box at the post office.” I can say emphatically that I am against the mailing of bricks of any kind, as it seems antithetical to how we approach things as early adopters. Can’t people send virtual bricks, or, say, create a hologram of a brick that can be mass-produced? I know bricks represent a physical inconvenience and are meant to convey a wall of protest (I listen to Pink Floyd too, thanks). But, come on! Think innovation, people! Speaking as someone who once received a cinder block in the mail during the heady dot-com boom days, I can tell you that it made me think much less of the mailer and made it hard to take that person seriously ever again.
Other thoughts I’ve had the last few days:
What if Time Warner partnered with services like Netflix, Xbox Live, iTunes or Hulu to allow for a kind of “Bandwidth immunity” on content downloaded from these sites? As long as you were accessing legal downloads, it wouldn’t count toward your monthly quota. If the true bandit here is illegal downloaders pursuing more content than they can ever consume, why not charge them, but not people who are already paying for legal content they are downloading? An editor I work with just signed up for a Major League Baseball online video service and all that HD video has her in a panic about what’s going to happen come September/October. Why not make legitimate use cheaper/subsidized over questionable usage?
If I were Grande or AT&T, I would be aggressively pursuing angry Time Warner Cable customers right now and promising not to enact similar bandwidth caps for at least the next two years. That may not be feasible for AT&T, but if you weigh an influx of new business against bandwidth costs, I imagine there might be a magic number there where it evens out or helps the company come out ahead. Grande seems to be wooing customers amid comment complains over on Burnt Orange Report.
It’s not set in stone that the caps will be the same as they were in Beaumont and, nothing against Beaumont, but it just doesn’t seem to make sense that Internet usage there would be the same as a city like Austin that has a huge early adopter community and so many techies. Does Time Warner know something about the Austin community that the rest of us don’t? If I were a betting man (and I am certainly not, so don’t ask me), I would wager that the caps will have to be higher here to make sense. And they would have to grow over time as the average amount of data customers consumes grows with the Internet. Alex Dudley has hinted in his posts on Twitter that different caps for Austin/San Antonio are a possibility as the company researches those markets between now and summer. Prices, we have also been told, are not set in stone, but it’s hard to imagine a scenario where customers here would be paying less than those in Beaumont.
If all Internet providers go along with something like this, it pretty much puts nails in the coffin of OnLive, an innovative idea for a new gaming service. Talk about bad timing.
More thoughts and links? Post them in the comments.
Edited to add: I forgot to mention this excellent article from PC Magazine showing ways to monitor your bandwidth usage. Might want to start checking that out soon if you’re a Road Runner customer.
Permalink | Comments (20) | Post your comment Categories: Austin, Internet, Movies & DVDs, Shopping, TV
Comments
Click here to report comment abuse.
By canoehenge
April 9, 2009 6:23 PM | Link to this
Mr. Dudley's comment about not being a monopoly is interesting since that is exactly the situation is in my community. I do not consider my other choices of dial-up or dsl service, which is no better than dial-up due to my location so far from the nearest switch, as viable alternatives. My question is this: what happens to my "locked in pricing" contract with the option to renew in two years? Contractually TW is obligated to honor my locked in price for four years. If they try to changed my rate structure would that not constitute a breach of contract on their part?
By Gerald
April 8, 2009 7:38 AM | Link to this
The realideas@twc.com email address for feedback no longer works. So much for Time-Warner Cable seeking input from its customers.
By Matthew Beasley
April 6, 2009 10:31 AM | Link to this
Don't forget that according to a person in Beaumont, when they say 40GB, they are actually using the Marketing GB amount of 1,000,000,000 bytes - not the TRUE meaning of a GB - 1,073,741,824 bytes.
So, actually, you will only be getting 37.2 GB of bandwidth per month.
Crooks.
By Steve, Austin, TX
April 6, 2009 7:56 AM | Link to this
Time Warner sees the writing on the wall. In a few years, consumers will not need cable TV and will be getting all of their content from the internet in streaming video. Companies like Netflix have already developed set top boxes to allow it to be viewed on your TV. Time Warner is looking to profit off of this market shift. They also under estimate the cost of administrating this type of model. Every month huge numbers of users will be calling to debate their monthly usage. They will spend far more in customer service and maybe goodwill.
By Lindsey
April 5, 2009 8:31 PM | Link to this
Earthlink uses the same broadband pipes as Time Warner in Austin and so far has made no mention of metered service. I'm switching to them as soon as I suck as much bandwidth as I can from TW.
By Jake
April 5, 2009 12:57 AM | Link to this
To Dave C.
What happens when all the 'cost causers' switch to TW's opponents? Then all of a sudden it's not the cost of bandwidth, it's the cost of technicians. Your prices will rise anyway, trust me.
Besides, think about OnLive. OnLive employs thousands of game developers, web developers, and server techs. OnLive uses a lot of bandwidth. NO ONE is going to use it if they have to pay out the butt just to get a good use out of it. All those jobs are going to go out the window. ****, there goes the economy even farther down the hole. That's just one example of high bandwidth internet corp that'll go under due to this.
By glenn
April 4, 2009 11:13 PM | Link to this
another thing alot of people dont seemingly realize is what this new pricing thing from time warner will do to private buisnesses on the internet. namely publications that release their content online. to charge time warner customers extra to legally download these publications' content will turn people off to the idea of spending extra to get their content from these sites. and this extra that they are charging thir customers for the downloads for the ones that still go thru with it, do the publications see any of that profit...no. its like time warner is trying to make a claim that they own the internet and everything available on the internet simply because they provide access to it. and whats even worse are sites that release their produced content online for free off their site...and timewarner is taking money from the release of this content while the actually people who own it make nothing from it.
By Stan
April 4, 2009 3:31 PM | Link to this
I will second the person that said vote with your wallet.
I believe that's the only way that Time Warner will understand the mistake they are making in thinking that they can change the internet habits of Austinites.
By Stan
April 4, 2009 3:30 PM | Link to this
Time Warner probably pays $0.05 - $0.07 per GB at the most.
Charging you $1 per GB if you go over your cap, up to 20 times what they pay, is Time Warner's attempt to change how you use the internet.
Dudley even admits it at one point in the interview with Network Performance Daily that the outcome will probably cause people to change their habits.
I don't want to deal with a company that thinks it can tell me to either change my habits or pay a substantial penalty, simply by changing the way it's been billing me for around 11 years.
As of yesterday, I'm setup to be changing over to Grande in the near future. I couldn't be happier - I'm saving $20 a month on top of everything else, and still getting all of the cable TV channels I watched on Time Warner, and my cable modem speeds are still the same.
By S1apSh0es
April 3, 2009 10:15 PM | Link to this
I hope people understand what this means. The internet is a place where anyone can say anything and everyone can see it. It's a beautiful medium for freedom of speech and I'd hate to lose it to some profit mongering corporations.
I use Charter, an off shoot of Time Warner, and if they pull this stunt in upstate SC, I'll be canceling my plan.
By Josh
April 3, 2009 10:12 PM | Link to this
Dave C
You are right that bandwidth costs money, but Time Warner is going to charge for data, not bandwidth. In the middle of the night if I download my 41st GB I won't cause congestion on the line because it's not at full capacity but Time Warner will charge me extra.
That is not a "cost-causers paying what they use".
By kgilpin
April 3, 2009 9:38 PM | Link to this
> What if Time Warner partnered with services like Netflix, Xbox Live, iTunes or Hulu to allow for a kind of “Bandwidth immunity” on content downloaded from these sites?
Sure, so big rich companies can access the Austin market, while startups have to go city-to-city writing these special contracts? Horrible idea.
By Bsacul
April 3, 2009 9:09 PM | Link to this
TWC can't allow hulu or netflix "bandwidth immunity" due to net neutrality laws. Net Neutrality is a good thing though. It keeps TWC from charging EXTRA for youtube, hulu or any other high bandwidth site. The law in a nutshell as I understand it states that ISP's must treat all internet traffic without bias.
Assuming TWC has the technical capacity to accurately measure bandwidth usage, then they should adopt something similar to the electric company. Charge a monthly service fee of $X and then charge $Y per GB. The tiers is only a way for them to milk extra money out of people not wanting to worry about going over thier limit so they buy a larger plan than they need.
Also, in the 90's (and I will search for a source later tonight) major telecoms were given HUGE tax breaks to upgrade to fiber optic networks which obviously has not happened 15 years later.
By Cyberlion
April 3, 2009 7:57 PM | Link to this
The bottom line, if you can not put a meter on it so anyone can see how much is being used and giving a schedule when the start and end date of what is considered a "billing cycle" that anyone can easily, key word there, meter themselves. Then, and only then would it be possible to even begin discussing any type of tiered system.
To much opportunity for corporate malfeasance and gouging the consumer, much like the credit card companies have done.
TW is looking to increase its bottom line on the same people that have cell phones without unlimited texting and talking, they still exist and the phone companies LOVE those people!!!
By Cyberlion
April 3, 2009 7:48 PM | Link to this
Having a tiered pricing system works for cable, because they control the access, as to what channels you get for what price. Creating a tiered pricing system for something they cannot control the access, such as web-sights, downloads, etc., does not work. Here's why.
When I drive my car, I have a fuel gauge that tells me how much gas I have so I can drive accordingly. If I know I am going to Dallas and I only have a quarter of a tank of gas, I know I have to put more gas to make that trip.
There is no "gauge" on the internet to tell me how much I have used, so I have no way of knowing if I download something the size of 1MB if that is going to "put me over the top." I doubt TW wants to go to all the expense of creating "gauges" for all its customers, besides if we don't know how much we are using all the better for them! This is a classic case of hiding the real issue.
The real issue is this would be a great way to generate revenue and keep the customer in the dark so there is no way for the consumer to know if they are truly getting what they pay for or are getting royally ripped off by the company.
If they had a way to put a meter (like I can go outside right this very minute and tell you what my electricity meter reads) then we can discuss levels of usage, etc. Until then, flat fees, because the potential for corporate malfeasance is too great and unfortunately these days all too common.
By No_TWC
April 3, 2009 4:38 PM | Link to this
FYI... I made the switch to DSL. A little tricky on the set up of the modem and router (I actually had to read the instructions and enter the correct settings), but no problem at all since installation. Speed is fine.
Vote with your wallet.
By Bundled Customer
April 3, 2009 4:23 PM | Link to this
We recently switched to a TW bundled plan with phone, internet and cable (adding phone to the services we already had) and signed a two year contract...I have to look at it but it would seem TW couldn't change the terms of the deal if you're locked in a contract.
By Dave C
April 3, 2009 3:46 PM | Link to this
I find people all too often argue business issues based on emotion and fail to do the obvious, which is debate using facts.
Bandwidth costs money. I'd rather those using substantially more than me pay for it, rather than all our prices naturally going up over time to cover costs. Let's not be so naive to think that if costs go up, some magic fairy pays for it. Costs have to be covered (maybe this is lost on certain people?) and thus the real question is, "Should costs be covered by the cost-causers or averaged over all users?" I'm all for cost-causers paying what they use rather than me.
Simple.
By Carrie
April 3, 2009 3:15 PM | Link to this
What about just switching over TWC to Earthlink? They won't be metering....will they...?
By RexM
April 3, 2009 1:36 PM | Link to this
The idea of having some online services "immune" from counting towards the usage would give Time Warner the ability to decide where their customers are able to get content.