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Summary:

Updated throughout with confirmation, comment from Time Warner: Time Warner Cable, which last month announced plans to expand its metered broadband trials to four more cities, today backed away from its controversial efforts to price broadband based on consumption, including in the city of Rochester, N.Y., […]

Updated throughout with confirmation, comment from Time Warner: Time Warner Cable, which last month announced plans to expand its metered broadband trials to four more cities, today backed away from its controversial efforts to price broadband based on consumption, including in the city of Rochester, N.Y., according to a local television station. Rochester’s ABC affiliate reports that Sen. Charles Schumer of New York spoke with Time Warner Cable and convinced the company to stop using Rochester as a test market. Austin, Beaumont and San Antonio, Texas, as well as Greensboro, N.C. will also be spared metering. The story also says — and the company has confirmed — that Time Warner Cable “will shelve plans for a tiered pricing system for Internet use.”

I’ve reached out to Time Warner for its side of the story, in particular to see if it’s backing off on consumption-based broadband everywhere. Time Warner Cable Chief Executive Officer Glenn Britt said in a statement:

“It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing. As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met. While we continue to believe that consumption based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process.”

If federal political pressure is what it takes to get the cable company to back off, maybe my fellow Texans in San Antonio and Austin, who are also facing the tiered broadband trials, need to get on the horn with Sens. John Cornyn and Kay Baily Hutchison. Although given that both of them have raised campaign funds from AT&T and Time Warner Cable, they’re less likely to stand in the way of any sort of metered broadband plan.

Time Warner says they will also offer customers a meter so they can understand their broadband consumption. If, as Time Warner says, a full 30 percent of their customers use a mere 1 GB per month, then showing them that information would help the cable company gain some allies before its next attempt to push consumption-based pricing. Without any individual consumption information, and a lack of clear argument from Time Warner as to why this plan was about more than  boosting its bottom line, it was hard to find people who supported Time Warner’s tiers.

The Internet, and it’s ability to bring people together and share information, was so integral to building the level of outrage needed to attract federal attention and get Time Warner to halt its plans. Ironically, it was that same Internet that Time Warner was attempting to choke with pricing plans that would make it much more expensive to access it.

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  1. Wow! I love how their PR group says there were “misunderstandings” about the plans.

  2. I thought the earlier reports of TWC shelving their cap plans were too good to be true. TWC’s arrogance knows no bounds.

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  4. So now, not only are we lowly customers expected to step into line to pay our masters, but we are not smart enough to understand TWC’s usage caps either? If TWC keeps showing their true feelings like this they are not likely to have a company for long.

  5. Thanks to all users who voiced out against the unfair practice.

    1. You asked below: How did Verizon manage the FiOS with 20 Mbps down for under $50, or is there something behind the scene that we don’t know?

      It’s called “over subscription”. Both the pricing and network is not designed to provide 20mbps to EVERY user 24×7.

      If there is a Service Level Agreement (SLA) for FiOS that says EVERY customer will get 20mbps continuously all day and all night, for $50/mo, I would sure like to see it. I’m sure a bunch of other engineers would like to know what’s behind it on their network to deliver that service level 24×7 to more than a few customers at that cost.

  6. Somebody needs to get real here … bandwidth just ain’t free. They might as well outlaw metered electric service as well … it makes just as much sense. After all coal is free, natural gas is free, wind is free, and solar is free … they are just in the ground or air, and available everywhere.

    We have been running a small internet cooperative with several T1’s that cost $450/mo …. over subscribed to bring the members share of the costs down to something affordable. Any law that say’s we have to allow bandwidth hogs to saturate our network back to slower than dialup is just socialist crap.

    When you oversubscribe your network to get customer costs down to market, each customers “fair share” is that over subscription fraction … in our case we over subscribe a T1 30:1 … each share is 50-64kbps … more or less. Any jerk that fires up a P2P server with 100 connections, sends all the other customer available bandwidth down into dialup speeds …. and bye bye customers.

    When the government goes back into building and providing the internet backbone and local last mile service, then we can have “free internet” after paying for it with our increased taxes.

    1. I don’t think people would mind quite as much if the ISPs were up front about it. All you hear about when they’re trying to get you to sign up is the wonderful high download rates…. which you can have just as long as you don’t actually use them.

  7. Maybe Time Warner needs to replace it’s board of directors and executives with people that have an education and understand the internet and the future. Because the people running Time Warner are clearly oblivious. Not only that but their atique corroded copper infrastructure they knowing refused to properly maintain and upgrade is obsolete. So what if Time Warner goes out of business? People just need to remember to not hire any former Time Warner execs or allow any of their former board to be involved with anything since they are obviously quite stupid and unfit to be employed for any purpose beyond toilet swabbing.

    1. Ann … what we need are for the clueless arm chair internet (non)providers to simply be told just how inexperienced children they are.

      If you have the experience, and the vision, then I’m certain the TWC board of directors would like your resume.

      If you are anything less than that, you are, well, totally clueless about their market, cost structures, and technologies.

      I dare you to take their SEC filings, a propose how to run their existing network at a reasnable profit, that will allow unlimited bandwidth to all their users with at minimum 768kbps service to every existing customer. Secondly, I dare you to propose a replacement and re-engineering of their entire markets infrastructure to provide 768kbps to every existing customer inside 5 years, limited only to their existing income (IE the current internet service revenue).

      Please … get your friends together, write up the business plan and technology plan, and show everyone how to do what you carelessly assert as fact.

      until then, you are the clueless idiot that nobody should ever consider hiring.

      You want to diss a bunch of hard working TWC engineers and employees … well, step up and show us exactly how they should be doing their job. or shut the f**k up.

      Please tell us where you have posted your magic business plan and technical plan, because I’m sure there are many VERY GOOD business folks and engineers willing to learn from your insight … or have a great time ROTFL from your cluelessness.

      so … are you a genius? or clueless idiot? … show everyone ;)

  8. @John

    1) You obviously have nothing to lose if TWC impletments it’s caps
    2) You are in the ISP business and therefore have a biased opinion.
    3) You have not kept up with TWC issues – in their SEC filing they explained to their shareholders that their profit was up (to $4 billion) and their bandwidth costs have DECREASED. They went on to say that their future is quite rosey. This is exactly opposite what they are telling their customers. Of course they offer facts to their shareholders but not their customers.
    4) You probably (hopefully) don’t advertise your services to your customers as Unlimited when you know there is no way you could service everyone should they actually use unlimited bandwidth.

    1. 80 familes sharing some T1’s as a non-profit cooperative is hardly an “ISP business”.

      I was just sharing real costs, and real problems … that are really not that different that the REAL for-profit ISP’s have.

      If you don’t like the bargin that TWC provides … order your own broadband connection and start your own non-profit cooperative to provide YOURSELF better service than the “greedy for-profit ISP’s”.

      Till you do, you are completely clueless about reality here. More like listening to all the arm chair quarter backs that have never played ball, but are experts about absolutely nothing in the game.

      Enjoy

    2. 1) you are right
      2) no I am not, but I am working in related technology industries, with direct experience in both the technology and market issues.
      3) yes I have. And your stated highly selected “facts” do not support your position at all. yes, they are profitable. yes, costs have decreased. But neither of those “facts” support the assertion they will remain profitable with prices capped at today’s prices, and have their bandwidth exponentially increase by forcing removal of caps and usage based pricing.
      4) The cooperative, after having some first party shooter gamers totally trash the network in the first 6 months, has had clearly stated restrictions on certain uses that disrupt every members access to a fair share of the network … which includes certain games, high volume servers, non-flow controlled high rate UDP streaming protocols, and anything else that saturates the network, producing heavy packet loss or high latencies.

      We engineer the network with members bandwidth capped to 1/6th of the bonded T1’s, so that no single member can drive the network into saturation based packet loss with “normal” TCP sessions. Since high rate streaming UDP does not flow control, and will backup packets outside our network and ability to discard, this use is banned. Since certain online games flood the network with high rate UDP packets to minimize “lag” in the game play, those games are banned. We do not ban P2P, and allow the member to serve as much free bandwidth to the internet that they are personally willing to pay for.

      All of this is clearly stated to our membership. We also periodically provide the core technical volunteers with detailed usage data (with members names removed), and also provide that to our general members from time to time. So our membership can see where their usage ranks with other members, and how/why our volunteer management sets the rates fairly and openly, inside the “fair share” guidelines.

      I have been part of this management (coop board member) process for 10 years in this cooperative, several years before that as a board member in another internet cooperative, and for a couple decades as senior technical and infrastructure management in various computer companies.

      I’ve been using the “internet” since “arpanet” days, starting in 1976. I was also a systems programmer on timesharing systems before that. And also an IBM systems programmer on large mainframe systems before that with RJE and terminal access before that. I’ve been working at this level, aware of, designing to, and writing requirements for, advanced computer and communications systems for 40 years.

      So, let’s have a real discussion about the technology limits for the existing cable and DSL industries, and why unlimited bandwidth with flat rate pricing is not compatible with current over subscribed network infrastructures and what the real costs are to fix that, and what the resulting rates will be if TWC, Comcast, and DSL providers are forced to provide unlimited bandwidth to support high rate streaming services like video on demand from Netflix, and P2P services.

      I do have the experience … both designing these systems, and managing them, to listen to your ideas on how to re-implement these systems to provide flat-rate unlimited bandwidth above 200GB per month as many users are trying to demand.

      The current technology, doesn’t even get close … so please explain EXACTLY your business and technical plan to move forward, so we can learn from you.

      1. Hi John,

        I am a simple internet user and have no knowledge of how this bandwidth pricing ratio. However looking at your long explained details and a comment just below it by another John that top 10% uses 97% of the bandwidth per month, I did some calculation as below. I am sure that I am missing something and you can correct that.

        Since download speed that ISPs claim about is peak speed and not gauranteed. So I am taking an assumption that ISP can downgrade server for those 10% who consume 97% of bandwidth. Assuming that ISP downgrade their service to get 1 Mbps only and they consume bandwidth 24x7x365 their usage per month is

        30x24x60x60x1 = 2592000 Megabits = 324000 MegaBytes = 316GB

        This using 24x7x365 is definetly not realistic. Realisticlly taking 18 hours usage it turns out to be 237GB. and if downgraded to 768 Kbps it will be 177GB.

        Is it too much to afford for only 10% of customer? And if you downgrade speed I am sure that either they will move out from service (which is good) or will be much restricted to do any harm to other users.

        I believe it may not be as simple as that otherwise you big experience guys would have done it by now.

      2. I forgot to add that if such strategy is implemented by all ISPs those 10% will be forced to change their habits and 90% users will get fair share

      3. Hi Vipin,

        The problem is how to provide this bandwidth in the service window from 3pm to 11pm, where each family can have one or more independent video on demand sessions.

        As we have learned, when high rate users have their netflix and utube breakup, they start complaining about throttling. So if this level of bandwidth for video on demand must be supported inside the basic $30/mo service plan, then the network must be designed to handle it concurrently for a high percentage of the customers off a local last mile node. Current networks are designed for 3% to 6% of customers to stream video or game at this rate, realistically with the market shift, the network would need to handle 80% to 90% of the homes at this rate.

        The reasons are simply cost based. If cable video and satellite video at $20-50/mo can be had for free over the internet, or at a lower cost, then there will be a migration of customers off cable video and satellite video to IP based internet services. More than 25% migration, will seriously impact the profit margins of cable video and satellite video providers, causing fee increases, that will accelerate the transition rate, and ultimately the failure of cable video and satellite video services.

        The two factors here that need to be examined are can the internet completely replace the cable video and satellite video markets at a lower cost, and is this the best use of technology. The short answer to both is no.

        The longer answer is that current high demand users are being subsidized by flat rate pricing that overcharges the majority of customers that only need lower bandwidth. To increase the high demand customer base above 3% to 6%, will require replacement, or upgrade, of last mile networks with a technology that supports 80% or better of the local connections to homes at 1mbps or better. That upgrade is expensive, and will increase fees significantly.

        The second part of the longer answer is that current video distribution by cable and satellite is much more efficient, but requires viewers to accept some number of standard channels to view from. This system which uses satellites to redistribute several hundred channels of programming is MUCH cheaper than upgrading our national IP infrastructure to allow each home to choose it’s own video on demand source, from anywhere in the world. The upgrade to the national IP infrastructure to provide arbitrary video on demand and gaming over the internet is also expensive, and will increase fees signficantly.

        When you combine both of these factors, we clearly have a mutually exclusive solution domain. Either the system goes metered, or fees go up to pay for re-engineering both the national infrastructure and local loop delivery.

        With well better than 90% of the households not needing this 100GB/mo level of service today, the outcome is pretty clear … metered service, or caps. Everyone pays their fair share.

        If we start today, and start installing additional fiber for the backbone and local loops, in about 20 years, about 50% of the homes can have this level of service. At the same time, the digital divide that is created will leave rural areas, inner cites and smaller communities under 50,000 homes left in the dust. That is because most of the infrastructure improvements will be tied to new construction.

  9. In our cooperative, 1/3 use less than 700MB/mo, and the top 10% use 97% of the bandwidth per month.

    There are valid arguments, given the “everyone pays their fair share” policy of the coop to bill only a pure metered service … in which case 80% of our coop would get service for under $5/mo and the few heavy users paying “their fair share” would see bills rise from $45/mo to between $200-800/mo. The reality is that they would soon leave, and the “fair share costs” would balance back out as they are currently +/- a factor of 2 until we could shed one or two T1’s, and purchase just enough bandwidth to service the bottom 90% of the membership.

    The reality, is that even the light customers are willing to pay a fixed $45/mo, rather than deal with the emotional impacts of a cheaper metered service. So, we run the coop with bandwidth caps, and multiple fixed service tiers to balance out “fair share”. These bandwidth quota points are 3.5GB/mo, and can be increased by purchasing additional T1 shares. Our quota system doesn’t include transfers below the members share of a T1 … 64kbps. So a member that purchases one share, can transfer at 50kbps all month … some 20BG, and not trigger the 3.5GB overquota charges for high bandwidth transfers. Each share increases the quota to N*2.5BG/mo and quota threshold to N*50kbps … so a 4 share member has a quota threshold of 200kbps that allows about 80GB/mo without overquota fees.

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