For those of you that have been following tech news for the last year or so it is not news that Time Warner is experimenting with and pushing metered billing. What they want to do is set data usage caps and offer customers different tiers of capping and pricing so that they can choose a plan that “fits” their internet usage. More recently the Chief Operations Officer, Landel Hobbs, has been biting back against the overwhelming number of critics to this plan. He was quoted as saying:
“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. 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.”
This sounds all well and good except when you look at the facts they don’t support this statement at all. With streaming media services such as YouTube, Hulu, and Pandora becoming ever more common and online gaming and social communities sprouting up everywhere the average internet usage by individuals has increased considerably over the past few years. As such, internet usage hasn’t so much as diverged but jointly skyrocketed. Now the statement above, pulled from http://a.longreply.com/101892, suggests that users don’t want to continue to have unlimited access for one common price. It, and the plans of Time Warner, suggest that people want limits on how much they can download. In the letter linked to above it suggests that people would not only want these limits, but also several options for these limits.
Now first of all I have yet to meet ANYONE who would, after years use a service for a flat rate that offered unlimited usage, WANT to move to a pricing scheme that not only stops being unlimited, but will also (more than likely) increase the monthly fees they will be paying to use that service in the same way as before. For years cable internet providers have provided unlimited access to the internet for a flat rate. Now some of them have decided that they want to squeeze more money out of us (during a world-wide recession no less) by severely limiting usage caps, charging higher rates, and charging excessive overage fees.
I understand that ISPs have to pay for the amount of bandwidth that their systems use on a daily basis and that the usage rates have increased immensely in recent years. They are now complaining that they will have to pay for equipment upgrades to maintain their network capacities. So it would seem fair that they pass those charges on to their customers right? Your first reaction may be to agree with this until you find out what they are not telling you.
First of all they are not even close to hitting the capacity that they are capable of. The United States has the largest groupings of what is called “dark” fiber optic cable backbone cabling in the world. This cabling crosses the entire country stopping in every major city and its capacity is mostly unused, hence the “dark fiber” label. The last estimates I heard were below 10% capacity. The next thing they are not telling anyone is that the “equipment upgrades” they are complaining about are part of the standard upgrade cycle that they have kept for years. The new equipment they are installing actually costs significantly less than the older equipment and provides immense speed improvements for wide area networks (not using the backbone cabling) without any significant changes to the current infrastructure.
There is, of course, more that Time Warner and other cable companies are not telling the public. They are working on creating their own online video and audio delivery services that won’t deduct data usage from these new data caps. Which means they are trying to monopolize online video and audio services by forcing you to pay for them one way or the other.
Now most reasonable people would think that it is fine for them to change their plans, give usage limitations to prevent abuse, and offer better price schedules. The problem is most people don’t have a clue how much data they consume every month and the cable internet providers are not telling anyone who calls and asks. So people won’t know what plan would fit them. Even if they did, if they watch more than 3 or 4 videos online per month they would easily exceed the 40GB limit that they have imposed for the highest capped tier. There goes that Netflix watch instantly subscription. That plan goes for around $55 per month my last recollections. Oh, but they are offering an “unlimited” plan… for $150 per month. That is almost triple the current monthly plans (I know because I have their Road Runner Turbo service).
What is more is that in most areas they have a monopoly on service. Many cities and counties years ago limited the number of cable TV providers in a given area to one. Due, of course, to inept politicians looking to line their pockets. So consumers don’t have much of a choice, either cable TV or satellite and the latter doesn’t work at all in bad weather and have been known for their cost prohibative internet plans. Of course you can crawl under a rock and go without an internet connection. But don’t think that many people would be willing to do that.
So to think that consumers “want” to go through the kind of hell this would create is just lunacy and a great imagination. Now I have already called and emailed Time Warner about this and expressed, in no uncertain terms, that if they roll out this scheme in my area I will take ALL of my business elsewhere. I am lucky enough to live in an area that offers one cable TV alternative. I would recommend that you do the same if you are a customer of theirs.
Oh and ignore those ads from the cable companies about Net Neutrality. Despite what Comcast says (my parents have them) it is not all “mumbo jumbo” and “big words meant to fool you”. Net Neutrality is about preventing internet providers from filtering websites that offer competitive services. It is about not allowing them to dictate to the consumer what they can and can’t browse on the internet. They are fighting Net Neutrality because without it they strong-arm you into getting all your content from them or strong-arm websites into paying them for access to that ISPs customer base.
-Pjerky
References:
http://techdirt.com/articles/20090408/2349524449.shtml
http://www.dslreports.com/shownews/Time-Warner-COO-Metered-Billing-Is-What-Consumers-Want-101769
http://en.wikipedia.org/wiki/DOCSIS
Tags: Cable Internet, Consumer Rights, Laws, Net Neutrality, Politicians, TechDirt, Time Warner, Usage Caps
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