Austin360 blogs > Digital Savant > Archives > 2009 > April > 06 > Entry
Two from Time Warner talk more bandwidth cap details
Time Warner Cable is saying a lot today about its pot-stirring news of upcoming bandwidth caps.
First, let’s look at a new post on GigaOm in which Time Warner Cable spokesperson Jeff Simmermon says the following:
“Austin is a passionate and tech-savvy city, and the spirit that we’re approaching this (metered broadband) test with is that if it’s going to work, it has to work in a tech-savvy market where the use patterns are different.”
Interesting.
But if you REALLY want to get some insight into what’s going on in those Time Warner Cable brains, you need to read what TWC Chief Operating Officer Landel Hobbs says in this message.
There is some very good information about the higher-speed options that will be introduced with new infrastructure, but the thing we’re more interested in is whether Austin will be subject to the same kind of pricing/cap structure as Beaumont. To this, Hobbs says, “We have heard customer feedback, and understand that a 40 GB tier seems low to heavy Internet users. “
But in the next paragraph, he says that the company is working on a 100 GB “super-tier,” something we already heard. Rather than assure customers that the 100 GB tier won’t cost “significantly more” than the current top tier, Hobbs says only, “you have my word as Chief Operating Officer of Time Warner Cable that we will make this tier available to our customers.”
Yes. We already knew that. Thanks.
One question I raised before was whether the size of bandwidth caps and speed tiers would be tied to each other. On this, the news is more promising:
“Furthermore, I am convening a series of meetings this week to develop plans that will allow customers to choose among tiers that provide tradeoffs between speed and consumption. If one family prefers to have lower download speeds but a higher data tier, or vice-versa, we want them to be able to make that choice.”“We’d like to make enough speed and data tiers available so that it’s possible for customers to reduce their monthly Internet bill based on the choices they make. Obviously this is still in the planning stages and details are fuzzy, but this is a priority for me this week.”
So, there’s that.
Less successful, from a PR perspective, is a bit in the message comparing the current Internet pricing to going Dutch on a steak/salad lunch:
“As the amount of usage has dramatically diverged among users, this is becoming inherently unfair and not the way most consumers want to pay for goods they consume. When you go to lunch with a friend, do you split the bill in half if he gets the steak and you have a salad?”
All right, let’s talk about that for a second.
WHAT!?
Rather than trying to compare its pricing and services to the way cell phone companies sell minutes or the way that restaurants price their food, why not stick to comparing apples to apples? Why not talk about Internet pricing trends, the cost that Time Warner Cable pays to build out its network and what wholesale bandwidth costs it has to pass on.
Salad? Steak? Really?
Just when you think Time Warner Cable is grasping the almost uniformly negative reaction to tiered pricing, it trivializes the issue with a frankly lame comparison.
Not the way to go.
There’s also this bit, further up in the message:
“Our current pricing plans require all users to pay the same amount, whether they check email once a month or download six movies a day.
If someone is using Road Runner to check e-mail once a month, they’re paying too much for broadband, no matter what tier they’re on. Might I suggest a nice dial-up plan or a public library terminal?
If Time Warner Cable wants its customers to give this ongoing “test” a chance, they’re going to have to stop making weird, specious comparisons and choose their words more carefully.
Thoughts? You know where to post a comment.
Permalink | Comments (19) | Post your comment Categories: Austin, Internet
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By GreatWight
April 8, 2009 12:44 PM | Link to this
If they want to charge based on usage then Time Warner needs to go all the way and charge us only for TV channels we want (ala carte). Instead of charging people for channels that they never watch. They can't have it both ways.
By Kenneth
April 8, 2009 9:54 AM | Link to this
Seething.....What stirs me most is that in Cedar Park I don't really have a lot of options. I would be a lot more acceptant to this if they were speaking the truth of why (VOD competition) rather than usage. Let's call it what it is. Lying does not help make your case.
By Jason
April 7, 2009 2:15 PM | Link to this
If Austin wants to send a strong message to TWC about the caps, then let them run their test. While they're doing that....let's download EVERYTHING. Netflix every night. Twice. Use Hulu and Youtube extensively. Set up a download of a few Linux distros at night, and seed them via bittorrent while you're at work. Sign up for Gametap and download every game you've ever been interested in for the next couple of months. Take home videos, and post them on various sites. Use every /legal/ possibility to increase your bandwidth consumption to completely skew the results. Entice all of your friends to do so. Have LAN parties and have everyone watch something different on Hulu at the same time. Make the bandwidth scream for the next few months.
Then, the day that they start actually charging? Cancel.
By dart27
April 7, 2009 11:57 AM | Link to this
I'm a system administrator who uses my home 'Net connection a lot for work and entertainment. I would say 100GB per month would be a low usage for me since I also use Netflix On-demand via my Tivo a lot. I've been with Roadrunner since the second group of DIY installs was allowed in 1999. Over the last few months I've been looking more and more at Grande's pricing structure to see if it would save me some money (luckily I live in their part of town). The only reason I haven't switched yet is the PITA of changing email addresses. If TW goes through with capping my bandwidth and charging for over cap usage my PITA to cost ratio shifts dramatically. Hasta la vista Time-Warner, Hola Grande!
By Carrie
April 7, 2009 9:24 AM | Link to this
@ Bryan: You asked what we could do. There's a meeting at City Hall tomorrow night at 6:30pm. Austin Community Technology and Telecommunications Commission: City Hall, Rm 1101, Bds & Commissions, 301 W. 2nd Street, Austin, TX 78701. I'm making plans to attend to see what they talk about...I don't know if they can do anything, but maybe it'll spark some ideas about what to do for the future.
By john
April 7, 2009 8:10 AM | Link to this
If it were possible to get beyond the shear rage I feel about all this, I would say that TWC & their peers need to find a new business model. ISPs need to get their money from content providers (Google, Hulu, ESPN, eBay, Flickr, craigslist, etc.). The consumer is the goose that laid the golden eggs. Strangle the consumer and the whole thing collapses. Feed the consumer cheap, fast bandwidth and everybody can be rich.
By brian
April 7, 2009 7:45 AM | Link to this
Their cable service is horrible and overpriced, thats why I dropped it and never looked back. Have they ever upgraded their infrastructure to accomodate for the future, no! Once this hits the Austin market (if it does) I will switch just for principle.
By Bryan
April 7, 2009 7:38 AM | Link to this
One other question: How will this impact Earthlink's offering over TWCs lines?
By Bryan
April 7, 2009 7:31 AM | Link to this
I'll be frank. I'm enraged about this. Even more worrisome is the rumors that ATT is considering the same thing. Perhaps that's why ATT hasn't been aggressively advertising for you to switch to them. In my area of town my only option is TWC or ATT. Unfortunately Grande doesn't offer service. So what am I to do? Sure I consider myself a heavy user, but I WORK in technology. I have to VPN into my workstation at the office in addition to my LEGAL personal activities on Xbox Live. I have no idea of how much bandwidth I consume nor have I see TWC offer any reasonable way to even check. A friend of mine from Rochester contacted me about this. He said that they are rolling it out there as well and he wanted to know what can be done to STOP this from happening. So I ask this Mr. Gallaga: What can we do to block this? What can be done to prevent this precedent from being set? Mr. Leffingwell has already said he's against it. Can council stop it? Can we keep the pressure up?
By Lenster
April 6, 2009 10:27 PM | Link to this
This has very little to do with an stressed network that needs to charge heavy users more. This is about losing cable tv subs to hulu.com, itunes, netflix, etc. TW should be scared about the impact to their cable tv business but just like the music industry a decade ago, they are going about this in the wrong way.
By LWicker
April 6, 2009 9:51 PM | Link to this
Hey, now...did Simmermon just contradict the TWC party line saying that there's no substantive difference in broadband consumption between Beaumont and Austin? Why, I think he did!
By Stan
April 6, 2009 9:09 PM | Link to this
Monty, If you go to Grande's site, you'll see that they are making it clear they don't plan on offering caps. They have a couple of ads on their main page saying they won't offer caps.
I'm lined up to be switching over to Grande, and I'm pleased and thankful that I have an alternative to Time Warner (and a cheaper one at that).
I'm not going to let Time Warner dictate my internet habits. If I want to watch video from Hulu or Netflix or Skype with my kids in other parts of the country (and one overseas in the military), I'm not going to worry about extra fees for going over any cap.
By Omar Gallaga
April 6, 2009 8:12 PM | Link to this
Josh -- this is what I (Gallaga) said in the post as to what I'd like them to compare:
"Why not talk about Internet pricing trends, the cost that Time Warner Cable pays to build out its network and what wholesale bandwidth costs it has to pass on."
I think ISPs have been around long enough that they can compare this to historical pricing data within their industry, not go reaching for analogies to other industries (or lunch platters).
The 6 GB average data figure is dubious for two reasons -- it says that the average usage is already higher than the lowest cap. And everything we know about the services that are emerging and likely to become more popular (HD video downloads/streaming, online backup, more photo/bandwidth-intensive social networking) is that bandwidth use will continue to rise, not stay flat or decrease.
Unless people are too scared to use their Internet service without incurring huge service charges, in which case the trend could reverse.
By Modlang
April 6, 2009 8:09 PM | Link to this
Excellent points robogeek!
I just read in that PC Magazine article that Comcast has their limit at 250 GB, and then they just de-prioritize you if you hit the limit. That makes much more sense to me.
Considering Time Warner basically has a monopoly in parts of Austin, this seems very unfair. I'll end up having to move to a part of town that has Grande or AT&T. (I hope Grande starts to eat up their marketshare because of this. What happened to the Time Warner "price lock guarantee"?)
So now Time Warner wants us regular folk to pay for their bad investments on Wall Street? Shameful. (I'm really kidding as I don't know that they made bad investments, but it wouldn't surprise me.)
By Fool the World
April 6, 2009 8:06 PM | Link to this
I'm not sure why Gallaga thinks the comparison is "lame" -- it seems reasonably on point, unless this is something about style. What does Gallaga think is the appropriate comparison? He doesn't say.
TWC is saying that, to a certain extent, it's inequitable for two people to pay the same amount when one uses X amount of bandwidth and one uses X^10 bandwidth. That makes sense.
(I would agree that it's a puzzling argument given the fact that it's a personal choice by the user -- certainly the low-usage user isn't being artificially limited, he's just choosing to waste the available service. He's certainly not being ripped off, as in the steak/salad example.)
If this is about where to draw the "reasonable" bandwidth transfer line, that's an argument worth having. What was the average cited by a study recently? 4 GB? 6 GB? It seems (assuming the numbers are accurate) that if 15% of users are using 85% of the bandwidth, it's reasonable to ask them to pay more.
But maybe I'm missing something.
By Monty
April 6, 2009 6:55 PM | Link to this
I'm using TWC for home and business. I'm appalled at the idea of a cap. I'm already looking for an alternative. Is there any statement from AT&T or Grande pledging not to use caps?
By Michael Funk
April 6, 2009 6:19 PM | Link to this
I have no problem if TWC wants to offer an "economy" package that is capped for those people who don't transfer much data, but if they cap normal packages, I will be buying my "steak" from another ISP. Furthermore, the fact that Hobbs thinks it is a good idea to create plans that pair high caps with low bandwidth and low caps with high bandwidth shows he is doing more talking than thinking, which is unfortunate since TWC really needs to think capping through for its own sake.
By Carrie
April 6, 2009 6:08 PM | Link to this
I read that long reply and laughed out loud at the 'steak, salad' comment. Couldn't believe he was serious.
FYI, been keeping up with this TWC testing in Rochester, SA and Greensboro, and just over the weekend, Frontier, a DSL company in Rochester, decided caps were a bad thing. Now, there's at least some competition in that city. WTG Rochester :)
By Robogeek
April 6, 2009 5:56 PM | Link to this
I'm trying to figure out which definition of [mildly naughty word] most accurately describes TWC COO Landel Hobbs - "jerk" or "idiot". I'm thinking both.
First off, his statement appears to claim that TWC has some broadband customers who merely "check email once a month". Really? How many is that, Landel? I'm guessing none. (And btw, you aren't helping your case by blatantly lying through your teeth.)
Secondly, I'd like to ask why TWC should care how much broadband I use if they don't care how much cable TV I watch? Or are you also going to start billing your cable customers based on how many hours of cable TV they view?
The bottom line is that TWC is preparing to charge its customers more money for less service then they're getting now. That's as wrong as it is stupid as it is perverse - especially in this market, and the current economic climate.
(And don't even get me started on their previous assertion that Beaumont is a comparable market to Austin in terms of broadband use. That's beyond ignorant, it's _insane_.)