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Old 04-16-2009, 07:23 PM   #1
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Time Warner shelves plan to cap Internet use

http://www.msnbc.msn.com/id/30252543/

Time Warner shelves plan to cap Internet use

Capitulation doesn't bode well for the future of metered billing
updated 5:13 p.m. ET, Thurs., April 16, 2009

Time Warner Cable Inc. is shelving its plan to bill customers based on how much Internet traffic they generate, following mounting public and political outcry.

Time Warner Cable's capitulation doesn't bode well for the future of metered billing of the Internet, in which people who use more bandwidth pay more.

Frontier Communications Corp., a Time Warner Cable rival in one key test market, Rochester, N.Y., also has dropped its plans for metering Internet use.

"We have gotten hundreds of calls from Time Warner customers into our call centers," said Ann Burr, the head of Frontier's Rochester unit, in an interview with The Associated Press. "I guess it's been a public relations crisis for Time Warner."

Stamford, Conn.-based Frontier had 579,900 Internet subscribers at the end of the year. New York-based Time Warner Cable had 8.7 million, making it the third-largest Internet service provider in the country.

The cable company started testing metered billing in Beaumont, Texas, last year, offering plans with 5 gigabytes to 40 gigabytes of monthly traffic, then charging $1 extra for each gigabyte over that.

Many ISPs cap their subscribers' monthly traffic usage, but the thresholds are usually much higher at Comcast Corp., it's 250 gigabytes. It's also very unusual for ISPs to charge extra when customers go over their limits.

By charging by the gigabyte, the cable company said it hoped to shift the cost of providing Internet service, and the cost of upgrading the network, from those who use the Internet the least to those who use it the most. All ISPs find a small percentage of Internet users consuming most of the bandwidth, usually by downloading or watching movies.

But Lauren Rich Fine, research director for ContentNext Media, called consumption-based broadband billing "a huge step backwards."

She added, "Inner-city youth's ability to go online is the best way to give them broad access societally. Consumption-based models will end up being a bigger burden on less affluent people."
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Old 04-16-2009, 07:56 PM   #2
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VICTORY!! (...for now.)

This subject was VERY active in other forums I frequent, but surprisingly not active here at all.

I mean, it's freakin internet rationing, people. It's wrong on so many levels.

But TWC has gotten the message and they've removed the pistol from their mouth. Let's hope they don't get any more bright ideas like this for a while.
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Old 04-16-2009, 09:49 PM   #3
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I've used 685MB of bandwidth in two days.... and that's not downloading much of anything but webpages and a few youtube videos. This wouldn't work for me.
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Old 04-17-2009, 02:15 AM   #4
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Quote:
She added, "Inner-city youth's ability to go online is the best way to give them broad access societally. Consumption-based models will end up being a bigger burden on less affluent people."
While as a roadrunner customer I dont support caps on it, I think statements like that serve no one any good. Its like saying inner city youth spend all day online eating up huge amounts of bandwidth reading or watching news.

What would be fair is to say that you get X Gb a month of the fastest speeds that your plan offers, and as you go over that amount you choose slower speeds or to pay for additional usage. Your net is never cut off and speeds never reduced too much, but if you want your 15/2 or 10/1 speeds while you move 250+ GB of data you can choose to pay extra or get your speeds cut back to 5/512 or 3/386. Still a bit faster than dialup, but it helps keep speeds up for the "light" users.
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Old 04-17-2009, 02:21 PM   #5
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I can see both sides of this, I don't like paying a lot for internet anymore than anyone else but bandwidth costs. could we charge a flat rate for electric? water? I do work in the broadband industry and no I haven't drank the cool aid (not offered yet), and our company hasn't mentioned any capping... but didn't it mention in that story that very, very, light users could pay less than $20 month? if the "cap" is set high enough and the overages are reasonable enough this type of solution could mean keeping prices down for the lighter users. sort of like a SERO 500/$30 vs and SEP $100, the guy who uses 200 minutes a month doesn't want to, or have to subsidize the motormouth who yaps 6000 minutes a month. I use a lot of data myself, but I use about half as much electric and water as my neighbor, so using that comparison helps me to understand TW/comcasts point. as a fat man I love a buffet....if your skinny you might see me at the next table covered in BBQ sauce and think maybe you helped buy my lunch.
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Old 04-17-2009, 05:57 PM   #6
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Quote:
Originally Posted by chilidogtampa View Post
I can see both sides of this, I don't like paying a lot for internet anymore than anyone else but bandwidth costs. could we charge a flat rate for electric? water? I do work in the broadband industry and no I haven't drank the cool aid (not offered yet), and our company hasn't mentioned any capping... but didn't it mention in that story that very, very, light users could pay less than $20 month? if the "cap" is set high enough and the overages are reasonable enough this type of solution could mean keeping prices down for the lighter users. sort of like a SERO 500/$30 vs and SEP $100, the guy who uses 200 minutes a month doesn't want to, or have to subsidize the motormouth who yaps 6000 minutes a month. I use a lot of data myself, but I use about half as much electric and water as my neighbor, so using that comparison helps me to understand TW/comcasts point. as a fat man I love a buffet....if your skinny you might see me at the next table covered in BBQ sauce and think maybe you helped buy my lunch.
Simply put, they can inform their customers of an increase in the plan cost for "unlimited" service and offer solutions that are not "unlimited" if they choose to. I doubt I use many GB's of data a month, and dont mind paying my monthly rate to allow the kid down the street to stream videos all day if he wants to. Then again, they already offer different speed options, and increasing speed doesn't really cost more once the network is built so that is just another way of charging people for how much they *can* consume in a month.

So, come up with a reasonable cap and throttle services after that point, or offer to keep the higher speeds with fee of say $10 for the next 100Gb at the highest speeds. No provider ever promised you a connection that would always connect you to the net at the speeds they advertise and they do a good job of making disclaimers that you may not achieve those speeds.

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Old 04-17-2009, 06:41 PM   #7
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Quote:
Originally Posted by chilidogtampa View Post
I can see both sides of this, I don't like paying a lot for internet anymore than anyone else but bandwidth costs. could we charge a flat rate for electric? water? I do work in the broadband industry and no I haven't drank the cool aid (not offered yet), and our company hasn't mentioned any capping... but didn't it mention in that story that very, very, light users could pay less than $20 month? if the "cap" is set high enough and the overages are reasonable enough this type of solution could mean keeping prices down for the lighter users. sort of like a SERO 500/$30 vs and SEP $100, the guy who uses 200 minutes a month doesn't want to, or have to subsidize the motormouth who yaps 6000 minutes a month. I use a lot of data myself, but I use about half as much electric and water as my neighbor, so using that comparison helps me to understand TW/comcasts point. as a fat man I love a buffet....if your skinny you might see me at the next table covered in BBQ sauce and think maybe you helped buy my lunch.
I already addressed the "but we bill electricity and water based on consumption" argument in another forum. What I said (it's a straight copy/paste so it might not flow in this context, but there's other good info):
$0.10/GB is an overestimate of basically everything. The cost to maintain the infrastructure is really closer to $0.04/GB.

Also, a "dirty secret" in the broadband industry is that upgrades to the system are relatively cheap (varying from $20 to $100 a household, including new modems on the upper end). ISP's have artificially limited their networks to create this illusion that bandwidth is "expensive" and "rare" so they can jack prices and get favorable legislation.

The comparison to electricity and water use really doesn't hold well. Generating power consumes an extensive amount of resources and water truly is an ever increasingly rare resource. Bandwidth, however, is cheap and, in all practical terms, limitless.

The issue of a competitive market (or lack thereof) is really key here. Without proper competition, these ISP's can charge whatever they want as long as their marketing misinformation is successful. Why do you think TWC chose these 4 specific markets - Rochester, Greensboro, Austin, and San Antonio? They don't have much in common except one thing: lack of substantial competition. All we have in Austin is a patchy network of AT&T DSL and limited service from Grande. The poor folks over in Rochester only have a really crappy DSL provider as their alternative. Competition is key, and TWC knows jacking their prices with "internet rationing" would lead to a mass exodus if they did it in a market with Verizon FIOS, for example.

This really is a classic example of a company abusing its position as part of an oligopoly. And it will be devastating to the internet market if consumers just sit back and let it happen.
Any neutral industry expert will tell you that what TWC was proposing was simple price gouging. Instate reasonable caps if heavy users are creating a burden on the network that is negatively affecting other paying customers. But charging over $1/GB is ridiculous. At that point everybody is subsidizing...the executive bonuses.

Bandwidth is cheap and virtually unlimited - there's no arguing that. And it's amazing that TWC tried to use these flat out lies to jack their prices and [try to] protect their video income sources.

And it's funny that you brought up cell phone companies. As some ISP's are trying to move to this "consumption-based billing" and imposing caps on bandwidth usage, guess where cell phone providers are heading? In the opposite direction. It won't be long when most people have unlimited minutes. And many already have unlimited text and data (some with reasonable caps).

And $20/month internet is already available for light users (actually prices as low as $10/mo are available).
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Old 04-17-2009, 06:42 PM   #8
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I'm glad they have decided to stop the capping for now..I mean as long as I have been using the internet, it was always one of those services that either you paid for it and you got it, or you don't pay for it and don't have it.

Aren't we capped, and told how much we can do/use in our lives, without having to monitor one more thing we do. We have So. Cal. Edision, and our adverage winter bill is about $50 a month. Yet, when I look at my bill I see no matter what, we go over what is allowed, and get penalized, not once but twice (they have different amounts and you get penalized for every section you over). One mnth two yrs ago we went to sweden for 3 weeks, unplugged everything (including clocks, cable boxes and so forth), the only thing left plugged in was our fridge. So being home only 1 week out of that mnth, they still said we went over.

So thinking of this and how companies want to cap internet usage (or any services/products you pay for) that aren't currently capped, just think about how far they can take it. They probably would take this far if they decide to do it in the future. They should stick to how it is now, you pay for the regular speed they offer or premium speed. Even landlines have moved forward, and instead of always getting charged for every call, you can get unlimited local/long distance.
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Old 04-17-2009, 06:51 PM   #9
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Here's a brief but good article on another aspect of how TWC's plans for internet rationing was absolutely awful:

Why Metered Broadband Wouldn't Work
David Coursey, PC World | Friday, April 17, 2009 10:23 AM PDT

Maybe nobody else is sad that Time Warner Cable has (for now) abandoned its foray into consumption-based Internet service pricing, but I am. I was all set for the company to become the poster child net neutrality--a topic that is hard for many people to understand--and why it really matters.

The idea behind net neutrality is that the owner of the plumbing should not care what the plumbing is used for or who uses it. This means that just because you are the local cable company, you cannot discriminate in how your Internet service is priced to benefit your other businesses. This is exactly what it looked like Time Warner was planning to do.

I strongly believe that Internet companies should provide either access or content, but not both. AT&T should not discriminate against Google because it has a deal with Yahoo. The Internet carrier should handle traffic for both companies equally.

Cable TV Protectionism
Downloading a 4GB movie should not, for example, be more expensive than downloading the same amount of business files, just because the Internet provider would prefer that you watch cable TV system instead.

In proposing what looked like Internet pricing intended to ward off competition to its cable TV business, Time Warner set off the sort of firestorm we have previously come to associate only with Facebook.

This time, however, congress was starting to get involved, and where congress goes the FCC soon follows. A Democrat-controlled FCC will probably not roll over for cable companies quite as easily as the Bush Administration's FCC used to.

Seeing the forces lining up against it, Time Warner bailed on the new pricing, at least for now. I expect it to show up again in somewhat different form sometime in the next few months.

There simply was no reasonable justification for the per-gigabyte pricing that Time Warning Cable was proposing. I cannot imagine a situation in which a gigabyte of Internet data should cost $1 from the cable company, yet that is what Time Warner was planning to charge. Unlimited use for $150-a-month would have been an outrage.

Consumers have won the first round of this battle, but Time Warner is crafty. Heck, the whole cable TV industry seems to have no shame whatsoever when it comes to raising prices.

Carriers: No Stipulations, Please
The carriers very much want the FCC to stay as far away as possible from the network neutrality debate. They especially do not want the $7.2 billion in stimulus money earmarked for broadband expansion to come with stipulations attached.

That is reason enough for me to make sure our money is properly looked after. Uncle Sam will be an investor in our broadband build-out and he is a socially conscious investor, too. If we are spending public money to improve Internet access, that money needs to have conditions attached. And these conditions need to insure net neutrality.

Additionally, Internet providers should be required to separate their content business from their carrier business. There should be a Chinese wall between the two, assuring that the content business pays the same about to have its data carried on the company's Internet as any other user.

Anything that hinders Internet neutrality hinders the development of new technologies and new business models. In a major recession, that is the last thing we need.
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Old 04-23-2009, 02:54 AM   #10
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In other news..

http://www.pcmag.com/article2/0,2817...069TX1K0001121

TWC: No Bandwidth Caps? Fine, No Wideband

04.22.09

by Chloe Albanesius

Time Warner Cable put its plans for consumption-based billing on hold recently pending a consumer education phase, but it appears that it will also put ultra-fast "wideband" Internet service on the back burner as well.

"That [wideband] rollout was scheduled with the trial, and now all of it is on hold," Alex Dudley, vice president of public relations for Time Warner, wrote on his Twitter feed.

Dudley acknowledged that wideband service, also known as DOCSIS 3.0, is not implicitly tied to tiered pricing. Time Warner had simply planned to roll out both services at the same time, so now they are both on hold.

"It was scheduled as part of CBB [consumption-based billing] trial, but we all know how you feel about that," Dudley wrote.

He did suggest, however, that the biggest cost associated with wideband roll-out is bandwidth allocation.

Time Warner started testing a tiered system last year in Texas, and expanded to New York and North Carolina last month. Though rival Comcast successfully imposed a 250-Gbyte cap for residential customers in October, and AT&T is testing a 150-GB cap for its customers, Time Warner took some heat for considering relatively low caps between 5 GB and 40 GB per month.

Time Warner eventually said it would offer a 100-GB "super tier" (and unlimited service for $150 a month), but the company's plans drew fire from Congress and interest groups, and they were eventually scrapped.

Time Warner starting talking up its wideband service last year and promised a phased roll-out of the service in 2009.

Comcast started rolling out DOCSIS 3.0 last year, announcing Tuesday that it had expanded into the San Francisco Peninsula.
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Old 04-29-2009, 03:16 AM   #11
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In other news..

http://www.engadget.com/2009/04/28/s...red-broadband/

Surprise! The American Cable Association favors tiered broadband pricing

by Joshua Topolsky, posted Apr 28th 2009 at 5:25PM

Guess what everybody? Time Warner Cable isn't the only one who thinks tiered broadband is the future -- so does the American Cable Association (ACA).

The group claims that a stepped set of packages is the only way in which the high-speed industry can survive the coming hellstorm of your online TV viewing and rampant MP3 downloads. According to ACA president Matt Polka, "the outcome is certain," that metered pricing is on the way -- even if there aren't standardized plans in place yet. The ACA's ex officio chair Patrick Knorr adds that current billing models are "not a sustainable business model," and that "a la carte for the net is consumption-based billing."

Though some of the arguments are compelling, the ACA also dramatically suggest that grandmothers shouldn't subsidize those with HD downloading habits, and can't seem to get a fix on just how they want to meter users or what kind of overages should be charged -- both of which seem to be common points of debate.

While we're not sold that there's only this single option for pricing broadband (one which heavily favors the provider's bottom lines), the group does bring a tiny bit of thoughtfulness to the discussion, with a member noting that Time Warner Cable's approach hadn't made a very good case for the practice. We suggest a page from Cablevision's playbook, guys.
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