Time Warner = pay for bandwidth ARGH

I've been meaning to post this, since it basically concerns what we're doing using our mac mini's as home theaters. I started following this late last week and now its hit on national news, so I will post it as I followed it.

First, I ran across this on Engadget (click here for the official link post)

In a move seemingly designed to further our frustrations with broadband providers, Time Warner Cable has soft-announced an "unlimited" package once its new data caps go into place... for an affordable $150 monthly charge. Responding to criticism over the company's plans to start capping usage and charging for overages, Landel Hobbs clarified the provider's stance, letting users know that the capping would be limited to a $75 ceiling, thus (when paired with its top tier plan) would provide "virtually unlimited" usage. Virtually unlimited. Here's a rundown of what the COO proposes:

• A limited package for "light users" at 1GB/month, 768KB down / 128KB up, with overage charges of $2/GB/month.
• Road Runner Lite, Basic, Standard, and Turbo packages at 10GB / 20GB / 40GB / and 60GB caps, respectively, and overage charges at $1/GB/month.
• A big daddy, 100GB Turbo package at $75/month with overage fees of $1/GB, which, when coupled with that magic threshold of $75 in charges, becomes the "unlimited" plan.

We only have two questions, guys. First, how will you let end users know they're hitting caps? Right now there's no centralized solution for monitoring bandwidth. Even cell phones show minutes used, so will you give us the infrastructure for broadband monitoring? Secondly -- instead of giving users a "virtually" unlimited package, why not just sell an unlimited package at $150 a month? The impression we get is that you want to leave the door open for aggressive users, and that your capping of capping charges might be a moving target in the right situation.

That prompted me to email Time Warner about it:

Inquiry:I just read this news report and would like to know if this is true, or if it is being discussed, or if it is being rolled out or any other information you can provide.
I am a Time Warner Customer with Road Runner. Thank you
______________
http://www.engadget.com/2009/04/10/time-warner-cable-lays-out-broadband-capping-plans-says-150-fo/



Here is the official Time Warner response back to me:

Response:
Thank you for contacting us. Time Warner Cable understands and embraces the current evolution in the way people are using the Internet for things like video, music, and more. We continue to manage our network to ensure that our all of our subscribers have a terrific user experience. We also recognize that the Internet was not designed to handle the mass amounts of video that are now being consumed, therefore there is a risk that service speeds could slow to a complete crawl unless proper investments are made. We are taking a multi-pronged approach that we feel will be to the benefit of our customers. As we are in the early stages of planning, we want to keep you informed of what we are doing to ensure our subscribers continue to enjoy all of the content available on the Internet today.

Our goal is to provide the best possible Internet experience for ALL of our customers, not to let the minority affect the majority. The vast majority of our customers will see no difference in their monthly bill. The challenge is to find an equitable way to charge customers so that we can pay for necessary infrastructure upgrades. We are looking to create a business model that will allow customers to choose the speed and consumption package that makes sense for their household Internet usage. With a consumption based billing plan, all customers will have access to a ''gas gauge'' that will enable them to track their consumption against their plan. A customer will have three months to get comfortable with the gauge before the bill hits. We don't want our customers to have any unpleasant surprises. Some of our customers may actually save money by ''right-sizing'' to a plan that meets their needs. We are happy to help them do that. Included in the extended trial is Greensboro, NC. Preliminary communications regarding specifics will begin in August 2009 in Greensboro, NC. Billing will follow these communications after a three month grace period. If you would like to speak with a live agent regarding this matter, please either visit your local Time Warner Cable office, or call your local Time Warner Cable Customer Care Center at 1-800-892-2253 or 1-866-874-2389.

Please let us know if we can be of any additional assistance.

Thank you for using Time Warner Cable.
Elena
Time Warner Cable Support
Raleigh, NC
919-595-4892
1-866-489-2669

Naturally, I sent them back an email:

To: TWCable@nc.rr.com
Sent: Friday, April 10, 2009 11:58:23 AM
Subject: Re: Time Warner Cable Response to inquiry 180330

RESPONSE:
Thank you for your response.

Especially given the current ongoing REASON for the economic situation, I find it unbelievable that Time Warner now wants to find another way to squeeze the customer for every last dime. Please forward to management that:

1. Pay for hours of internet during the dial up era of 1995-2000 is over and dead and people will leave Time Warner for other places like Verizon VIOS or AT&T IPTV if you start charging for bandwidth. You have basically stated you want the customers to pay for your infrastructure so you can make more money.

2. Cell phones have already started going to one price for unlimited minutes and bandwidth. Sprint has eliminated minute charges by going to $50/mo unlimited or $100 for unlimited internet bandwidth and cell phone. At&T is going to have 7MBPS later this year. My iphone , with 3.0 software this june is going to have tethering available. Don't be surprised when people start dropping Time Warner and using itunes to purchase TV shows over the internet connected by a tethered cellphone - all through AT&T and not Time Warner.

3. Blockbuster filed this week with the SEC that they can't pay back their last $250 million loan. On top of the $750 million they had picked up last time, this is basically saying they're going to follow suit with Circuit City. Do you think it is coincidence that the peak of Blockbuster stock was the same time Netflix's IPO went out - Netflix has destroyed Blockbuster and Hollywood video with having NO LATE FEES and unlimited rentals and ever increasing watch it now capability. Netflix tried regulating watch it now 2 years ago to 10 hours or 20 hours per month depending on your membership - that lasted for about a year and they finally went unlimited. Smart move - now Blue Ray players are coming Netflix Ready, Philips has a Netflix ready TV, Tivo has Netflix, XboX has Netflix.

You are going to drive customers away when you start charging for internet. They will go to AT&T in this area. IPTV will be rolled out by the time you put this in place. They are going to offer 24MBPS with TV, Phone, Internet. If not AT&T, there will be something else. If someone wants internet, cable and regular HDTV, it is already about $130/month.That's just insane, and now you want to charge more...

Then yesterday this news item came out: (click here for link to post)

Public rejects Time Warner metered-bandwidth tests

Time Warner Cable is reportedly having trouble finding submissive test subjects for its proposed scheme of charging US customers by the gigabyte for their internet service.

Additional trials for the company's new "consumption based billing" regime were slated to begin in several markets this summer, but public outcry has made the cable giant retreat from some of its attempts to stuff the all-you-can-eat internet genie back in the bottle - for now.

The company originally intended to expand tests of metered billing on April 13 to Rochester, New York, Greensboro, South Carolina, and San Antonio and Austin, Texas. But all has not gone according to plan.

After facing a surge of complaints from customers, Time Warner has decided to delay the rollout in both Texas cities until October. Presumably, a few months will make bandwidth caps easier to swallow.

"What happened as we're continuing to listen was we worked in some of the comments and ideas that got sent to us," Time Warner's South Texas veep of communications told the San Antonio Express News.

Pricing would have started at 1GB per month for $15, and go up to 100GB per month for $75. Each gigabyte over the limit would cost $1, except for the $15/month plan, which charges $2 per GB.

Time Warner and other providers trying to push metered internet on customers argue that internet demand is rising at a rate that could outpace capacity within a few years. The companies say they need to raise money to fix the infrastructure problem, and the fairest approach is to move to a tiered model where customers who use more bandwidth foot the largest bill.

Opponents have claimed firms like Time Warner want tiered pricing to discourage usage of bandwidth-heavy internet video, which could threaten cable TV packages the companies also offer. Time Warner, of course, denies this claim.

Testing the markets in Rochester and Greensboro will apparently continue as planned. Interestingly enough, Rochester's leading DSL provider, Frontier Communications, has already abandoned its plans for metered billing because of - you guessed it - public outrage.

"We have gotten hundreds of calls from Time Warner customers into our call centers," Frontier's local honcho told the Associated Press. "I guess it's been a public relations crisis for Time Warner."

Frontier claims it's grabbing internet market share because of objections to Time Warner's metered pricing plans. ®

And now today it is on MSNBC which you can read about by clicking here.

I know its not specific to the general purpose of the blog, but, I think its important enough that people are aware.

UPDATE:
Macworld just posted this , click here to read.

Important part:

Except—and you may have noticed this in financial circles—this whole unfettered free-market thing hasn’t worked out so well. Riddle me this: How many cable operators do you have in your town? I’ll start.

One.

Go ahead, you count now.

Anyone? Two? Three?

Time Warner shrinks from the word “monopoly,” but let’s face it, it and other cable operators drove the little guys out of business over a decade ago. They own their respective spaces. And the fact that they control both cable TV and broadband and are willing to manipulate one to affect another in the vast markets they control should make someone start paying attention.

Thankfully, someone is paying attention—New York Congressman Eric Massa. Massa is drafting legislation to prevent tiered pricing structures such as those being tested by Time Warner Cable. Massa had this to say on his website:

“Time Warner’s decision has the potential to more than triple customers’ current rates and I think most families will find this to be too taxing to afford. Time Warner believes they can do this in Rochester NY, Greensboro NC, Austin TX and San Antonio TX, and it’s almost certainly just a matter of time before they attempt to overcharge all of their customers. And while I favor a business’s right to maximize their profit potential, I believe safeguards must be put in place when a business has a monopoly on a specific region.”

I’m an entire country away from this guy’s district, but I like the way he thinks. If you do too and would like to express the power of you, send him an encouraging e-mail message. The unfettered broadband you save may be your own.

UPDATE:

Time Warner Cable scraps broadband capping plan in Rochester, NY

It's already delayed its controversial broadband capping plan in a number of markets, and it looks like Time Warner Cable has now gone one big step further in Rochester, New York (one of the initial test markets), where it has reportedly scrapped the new tiered pricing plan altogether. As you no doubt recall, the plan was more or less modeled on cellphone pricing plans, and had intended to cap customers' data usage at a certain level and charge upwards of $1 per GB for any overages (eventually maxing out at $150 per month). That, naturally, didn't go over so well with folks, and even New York Senator Charles Schumer eventually got in on the act and complained directly to Time Warner Cable. Of course, this still doesn't officially mark the end of the pricing plan in other markets, but it certainly seems to be getting increasingly difficult for Time Warner Cable to move ahead with it.