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Summary:

Updated: Well, I hope all of you who complained about Time Warner Cable’s plans for metered broadband are happy. Shortly after the cable company pulled its metered broadband trials, it’s also rethinking its deployment of super-fast broadband in San Antonio and Austin, Texas; Greensboro, N.C., and […]

Updated: Well, I hope all of you who complained about Time Warner Cable’s plans for metered broadband are happy. Shortly after the cable company pulled its metered broadband trials, it’s also rethinking its deployment of super-fast broadband in San Antonio and Austin, Texas; Greensboro, N.C., and Rochester N.Y. Whiny citizens in those communities (including me) apparently don’t deserve super-fast broadband speeds of 50 Mbps unless it’s accompanies by tiers.

A Time Warner Cable spokesman says the cable company was planning to roll out DOCSIS 3.0 upgrades as part of its consumption-based broadband trials, but it’s now “reevaluating whether or not the trial cities are among those places” scheduled for DOCSIS 3.0 rollouts. As for rolling out next its next-generation cable network, Time Warner has been making vague statements but so far hasn’t laid out any definitive plans.

Update: A few people have questioned if this information is based solely on the tweets linked to above. It is not. I emailed Time Warner Cable to clarify the tweets and received the partial quote offered in the story.

  1. Yes, because a hugely profitable company can’t afford the fairly meager costs of DOCSIS 3.0 upgrades unless they’re allowed to impose per gigabyte overages up to 2500% over cost.

    Time Warner Cable can only afford to play this pouting game for so long, or FiOS will eat them for lunch.

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  2. They’ll have to roll out with that super fast broadband anyway, regardless of no-cap. If not, Verizon is going to eat it and other competitors, with super fast FiOS… AND NO CAP!!

    Verizon has anticipated the future of broadband access and demands, while these companies were still criticizing it for expensive fiber implementation. The problem is that these companies are too slow to catch on. Maybe they should continue to offer slow broadband until Verizon FiOS stops by and grab all the customers away with faster speed for same price.

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    1. My only problem with verizon is that they refused to give me a dry line. I don’t want their bleeping phone service I just want high speed internet

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  3. Time Warner is right to do this. If they cannot recover their costs for doing so, why should they roll out faster networks? Bandwidth costs money, and if users won’t pay for more bandwidth there’s no point in installing the facilities to provide it.

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    1. The cost are not as great as you think.

      This is all just a scheme to hinder video over the internet because it competes with their core business.

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      1. I believe Brett here is a small ISP as far as I know. He likes those huge markups and would like to be able to do the same himself, so those corporate maneuvers are of great interest.

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      2. Brett Glass wrote: “If they cannot recover their costs for doing so, why should they roll out faster networks?”

        Chuck replied: “This is all just a scheme to hinder video over the internet because it competes with their core business.”

        I think Chuck just identified the true cost of unmetered high-speed Internet to Time-Warner.

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      3. Actually, Mr “Storm Chicken,” I have spoken publicly against caps and metering. See my testimony before the FCC at http://www.brettglass.com/FCC/remarks.html. However, if it is not possible to keep costs in line via other means (and the FCC seems intent on banning that), one MUST cap and meter. Internet providers are not charities; we cannot sell service below cost.

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      4. Davidwr: If Time Warner is able to make a reasonable profit delivering video via ordinary cable transmission (which is a technologically superior and much more cost-effective way of doing it, by the way), why do you begrudge it a profit when it delivers it digitally? Also, remember that it’s much more expensive to deliver video via streaming, for many reasons. Firstly, each user who “tunes in” imposes an additional burden on the network and an additional cost to the provider– something that’s not true with conventional cable video. Secondly, each stream is individual, so streaming is massively inefficient. Thirdly, IP was not designed to deliver video, so the network has to be overdesigned to do it. All told, it SHOULD cost substantially more to receive the same programming via streaming than via a video delivery system that’s designed for it.

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    2. Yes, at a 2500% markup, Mr. SuperWisp, no ? How about you tell us who you are and why you are supporting this point of view ?

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      1. Sturmvogel, for Brett’s information, stands for the Me-262 plane and its engineering merits.

        Not a chicken.

        http://greyfalcon.us/restored/Messerschmitt%20Me.htm

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      2. Oh, I see: you’re naming yourself after a weapon created by the Nazis.

        I could comment, but none seems necessary.

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      3. Yes, Mr. Glass, I am quite proud of the plane, my grandfather designed it and we still have an operational one in Bremerhaven. Was quite instrumental in the design of some the planes used against the Soviet Union by the US.

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      4. And I imagine that if your grandfather invented a more efficient, er, shower, you would be proud of that too.

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      5. And my grandmother was Jewish. Are you sure you wish to talk about efficient showers ?

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      6. it doesn’t really matter what the markup is on a grain of sand for the silicon in your high end gaming silicon … or for any things

        None of these guys have a 2500% markup on their entire operation … most are barely 10% above operating costs … including investment capital returns, loans, leases, salaries, etc.

        http://gigaom.com/2009/04/16/time-warner-cable-backs-off-metered-broadband-trials-in-rochester/

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    3. Stacey Higginbotham Tuesday, April 21, 2009

      Brett, but Time Warner hasn’t convinced anyone that it isn’t recovering the costs of providing broadband. You and I have talked in depth about the costs of your T1 line and the challenges of providing broadband over unlicensed wireless, and I understand the technical hurdles and limitations you face when offering broadband to your subscribers. Time Warner has costs, but they’re also recouping them enough to post a profit. Good for them. I’m actually in favor of high profit margins if a they are won for a good product in a competitive environment. But TWC doesn’t have true competition and customers have so far been rightly outraged at the attempt to take higher profits and charge them more for the same service when Time Warner can’t reasonably explain why that service is now costing them more to provide.

      Believe me, I’ve asked Time Warner to talk on this issue, and so far, they’ve offered me generic statements rather than an understanding of how their costs are changing as a small percentage of users are hogging more bandwidth. I know that has implications on the network, but the tiered pricing plan seemed to go farther than merely addressing that issue.

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      1. Stacey, we don’t have just “a T1 line.” And Time Warner is not doing all that well with broadband; they are shifting revenues from their other businesses (mainly TV).

        As for your claim that Time Warner does not have true competition — that’s simply not true. No cable company serves an area that does not also have a phone company. Cellular broadband is virtually ubiquitous. And what are we wireless ISPs: chopped liver? We serve at least 2 million households (likely quite a few more; that’s just the number that WISPA can verify) in a country with a population of 300 million. (Average household size 3.5; HSSI adoption rate 54%; you do the math. That’s substantial market share. And we’re growing like topsy.)

        It appears that you’re simply bashing Time Warner because you don’t like cable companies. Unfortunately, you’re proposing regulations that would destroy all competition for the cable companies and telcos. Prevent us from either (a) constraining service so that users don’t cost us more than they are paying us, or (b) charging users more if they cost us more and you are guaranteeing that no Internet provider can survive without bundling and cross-subsidization. And that way lies duopoly, because only cable companies and telcos can cross-subsidize. Is that what you want? It’s what you will get if you continue on this tack.

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      2. Work there and then see how much they communicate to their employees.

        The employees in the call centers know as much or less than the customers.

        4 years as an employee. quit last year.

        Worst 4 years of my life.

        Glenn Britt is a jerk. Maybe if him and the others in Virginia (main headquarters) and NYC would take a pay cut then they could afford some upgrades.

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      3. Brett, if Time Warner Cable ” is not doing all that well with broadband; they are shifting revenues from their other businesses (mainly TV),” then they’re falsifying their 10-Q and 10-K reports to their shareholders and the SEC.

        In their 1Q 2009 filings, Time Warner cited it’s high-speed internet division (prior to the spin-off) as one of their divisions with the highest profit margins and that they foresaw nothing but increasing profits, due to the falling cost of bandwidth and a steadily growing customer base. (And they noted that the profit margin had been growing for at least three straight quarters.)

        Furthermore, recent internal figures from Time Warner Cable estimate the annual cost per houshold of their DOCSIS 3.0 would be $6.95, given the significantly lower operating costs.

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      4. Time Warner is cross-subsidizing its Internet business from its cable TV business. They don’t charge rollouts of cable service to new areas to their Internet service; they charge it to their “bread and butter” TV business. Which makes their Internet business look better on the balance sheet.

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      5. So why do you continue to fan the flames that ISP’s are ripping off america … these forums and blogs, are totally unrealistic about costs and prices ….

        I continue to say, just like demanding that electricity become flat rate, and marginally priced at a loss … some $13/household and business

        so that the conversion to “green electric cars” will become a social good.

        An ISP can no more provide unlimited bandwidth for $20/mo than your electric company can.

        http://gigaom.com/2009/04/16/time-warner-cable-backs-off-metered-broadband-trials-in-rochester/

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    4. hey brett –

      no one begged twc to get into the broadband business – they saw it was lucrative. How about they abandon it and a more efficient isp can pay them for their lines?

      This is just the first step in driving everyone’s rates up, not just the big users. If you want competition, it should be another cable company, not dsl, not wireless.

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      1. yeah … but nobody told them that the customers would demand service at a loss either

        http://gigaom.com/2009/04/16/time-warner-cable-backs-off-metered-broadband-trials-in-rochester/

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    5. Ugh. I take it SuperWISP won’t tell anyone how big his network pipe is.

      Anyone wanna bet he’s using a couple of T1’s?

      Oh ya, check out his prices for his service. http://www.lariat.net. No wonder Bresnan is running him over.

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      1. Defamatory nonsense. We take customers from Bresnan every day; in fact, we can’t fill orders for new service fast enough. The reason: we actually guarantee a minimum throughput and don’t inflate our claims.However, if we are regulated so that we cannot make a profit, having more customers just means more losses.

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  4. [...] 4/21 Addition: It seems that Time Warner is in tears, is taking it’s ball and going home. News is coming in that they’re not going to roll out DOCSIS 3, or offer higher speed connections. Sounds like punishment to me. TWC to Customers: You Don’t Want Tiers, You Don’t Get Super-fast Broadband [...]

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  5. I don’t think Time Warner understands the can of worms they are opening. Lawmakers will eat them up if it looks like they are taking retaliatory action against their customers. They have local monopolies in the areas they wanted to impose caps, and are now saying they will deny those customers the natural improvement to performance because they cannot impose ridiculous overage fees?

    Of course they could easily recoup those costs by providing faster bandwidth then the current max at a higher rate (like what Comcast is doing). Of course, the not so secret real reason for all of these actions has nothing to do with the profitability of their high-speed internet service. It has to do with trying to use their cable high-speed monopoly to maintain their monopoly on providing video services to the home.

    I really want to see TWC execs explain their actions in from of a Senate hearing.

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    1. Keep in mind that TWC hasn’t *done* anything. The service in those areas is the same as it was 6 months ago. They haven’t denied anyone anything.

      A Senate hearing — say, by an Internet Truth and Virtue Commission? — would force companies to conclude that they should not be open about their experiments or future plans. If those plans don’t come to fruition, if the numbers don’t turn out or if they conclude it was a bad idea in the first place — well, they’ll get hauled in front of Congress.

      Next time, they won’t make the mistake of sharing any plans or perhaps conceiving them in the first place. Better to stay at DOCSIS 2 if openly considering DOCSIS 3 will get you arrested!

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  6. Yeah, cuz there’s no other explanation for why Time Warner might be delaying spending money in a gigantic recession…

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  7. No, thanks, TW, keep it. At the caps level you want, a THREE megabit connection is just fine. High speed broadbans is not useful if you cannot use it (caps). So no need to stress yourselves out, someone else will eventually deliver high speed without caps at a reasonable price while you try to “reinvent” yourselves while in bankruptcy court.

    Pissing off your customers with an inferior product works quite well, take a look at the auto industry.

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  8. I just dumped TWC and moved to AT&T DSL…even though they are not trying out caps in my market. Just tired of supporting this kind of behavior. I found out that I was also eligible to order U-Verse DSL without TV service, and will probably upgrade to that eventually.

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  9. Robert A. Rosenberg Tuesday, April 21, 2009

    Given that they only support 5/.768 in the area just north of my Rockland County (NY) location (I’m serviced by CableVision/Optonline at 15/2 and 30/5 [with faster DOCSIS3 tiers "RSN"] I’d think that DOCSIS3 is not on their game plan any time soon. I think their NYC speeds are just as pathetic since NYC has FIOS and CV (the city is split between CV and TWC/RR).

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  10. [...] Read – TWC to Customers: You Don’t Want Tiers, You Don’t Get Super-fast Broadband Read – Alex Dudley’s tweet [...]

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