Time Warner Cable Broadband Tiers Lead to Fears

60 Comments

Is Time Warner Cable crazy? As I review the pricing plans unveiled today for the broadband and cable provider’s tiered levels of service, I can’t help but wonder that. Earlier this year, the company said it would experiment with tiered pricing in Beaumont, Texas, and now has set up a pricing plan that ranges from $29.95 a month for something I’d call “barely broadband” at 768 kilobits per second with a 5-gigabyte monthly cap to $54.90 per month for 15 megabits per second and a 40-gigabyte cap. Overage fees will be $1 per gigabyte, and customers will be able to monitor their bandwidth consumption via the company’s web site.

The pricing takes effect Thursday in Beaumont but Time Warner Cable says it doesn’t know if and when it will try this elsewhere. I’ve got a personal stake in this story as Time Warner Cable is my current ISP. I pay about $35 a month for my connection, which is between 1 and 1.5 Mbps, and stream a lot of content from sites such as Hulu and iTunes. Plus, I’m constantly downloading software from the web in the form of fat updates or just to try things out.

On the other hand, it would be worth it to pay more to get a 15 Mbps connection if that’s indeed what I would get, but the bandwidth cap would limit me to watching about 40 hours of standard video content from my PC a month, plus my regular surfing habits and email use. (I suppose this is more transparent than P2P throttling, though).

But here’s where I question Time Warner Cable’s sanity: By offering tiered service at 15 Mbps it’s promising me faster speeds that I will have limited opportunity to use, potentially driving me into the arms of another provider. Additionally, the cable guys are in a fight to the death with the telephone companies, who are unlikely to resort to such plans because they don’t have the same limitations when delivering last-mile services.

For people who get or send a lot of media online, neither of Time Warner Cable’s tiers are a good option, which means they’ll have to turn to other providers. For me, that means DSL from AT&T, as U-verse or FiOS isn’t available in my area. And for a technology teleworker, that’s the equivalent of giving an engineer a slide rule. I don’t think Time Warner Cable will win by trying to hold back changes wrought by ubiquitous broadband with a pricing plan, but it seems hell-bent on trying.

60 Comments

anon

You will now have to pay extra for:
* Banner ads being forced on you
* People putting mp3 and wav backgrounds music on their pages (myspace, facebook, etc…)
* Large resolution images (which may be uploaded at a higher resolution then necessary by an inexperienced developer)
* Windows updates & Software updates in general (FireFox, Safari, Opera, Flash, Java, Acrobat, etc…)
* Antivirus updates
* Netflix
* Television episodes posted by their respective networks
* YouTube
* Email Attachments
* Comet chat clients (requiring high bandwidth to maintain connection)
* Online games
* iTunes & Amazon downloads
* File transfers between office/home/school (Access to online school library resources)
* Remote desktop bandwidth
* Unwanted traffic (port scans, automated exploits, DoS)
* Internet radio

Tim

Not that anyone will listen but read carefully if you really want to learn something. I run an ISP. I have been in this business since the days of the DOS based BBS system.

Currently on the ISP that I operate 1.2 percent of the users use 50% of all the bandwidth. This is NOT a typo! So if we kick off the 1.2 percent we would lose hundreds of dollars and save thousands in bandwidth alone. Then you have all the other network upgrades that have to be made to support this extensive usage. So for each dollar we lose we save ..maybe 10! Do the math!

1) Time Warner is not crazy. Those customers that would be hit with the surcharge are NOT profitable. If a customer pays you $50 per month and costs you $250 to $1000 per month in bandwidth, who cares if they quit. I actually encourage them to go to a competitor.

2) Usage limits are coming. get used to it. With all the streaming video etc on the way if ISPS don’t start limiting high usage users they will lose money. If they get forced to allow anyone to do whatever they want on their own network than expect your monthly fees to at least double.

Most of the people who have no clue about this business complain about limits, Peer to Peer blocks, slow downs etc. If these ISPS did not take these steps your voip phone would die, your online games would suck and you would not be happy with the service. So get over it.

For all those uneducated people who have always worked for someone else and never run a business I have a simple question. Would you like to run/own or operate a business that loses money? No?

If some of you know it all people think you know somehting and can do a better job of running an ISP I’ll set you up as an ISP for $50k approximately and you can sell accounts with unlimited use..i’ll give you 6 months tops and you will looking for another 50K just to keep running.

So those who threaten to quit and go to another ISP…go for it. TW will be happy and rightfully so while the competitor will choke and die from the influx of bandwidth hogs jumping off Time Warner.

Tim
Someone who actually knows a bit about reality here!

christi

Tim….are you crazy! I think you are. Listen ,in this time and day, more and more people are able to create competition. Very few people are going to put up with this bullying by Time Warner Cable, and they will go to another competition when they find one. Do you really think that most of us are going to put up with that? You must be out of touch with all of the smart chaps now jumping at the chance of inventing competition to Time Warner. Technology is so advanced now,and large corporations are so mistrusted by the public, that someone is going to create a competition that is going to make them a lot of money and basically let Time Warner know that they can not win on this one. Yahoo.com thought that they were the only top dog until Google came around….Myspace thought they were head honcho until Facebook, and so on…. We live in a society where if you can’t please the customer, and they see you as ripping them off, there is always another group of people waiting to take your spot and invent the next big thing….so Time Warner cable is not different….there will be a replacement to go along with what we currently have. Get with it, you obviously not on the up and up with current technology advances.

Chris

Tim, I do run my own business, and understand your point. Profitability is a good thing. If the business model is broken, it needs to change. Will consumers accept it, is the question?

Let’s view this from the consumer’s side for a minute. Just one example…let’s say I’m a cable subscriber, and use their internet service. Oh, and they’ve just instituted a tiered usage plan with overage fees. And I download HD movies, or watch my favorite TV programs online. In the example of an HD movie, that could cost me about $30 (see (http://bits.blogs.nytimes.com/2008/01/17/time-warner-download-too-much-and-you-might-pay-30-a-movie/). Who’s going to pay that? (more than once) Anybody?

I agree with the referenced article…I think these folks are trying to get in front of the growing demand for downloaded video. What would cable companies do if we could download all of our video (TV) content from the internet?

And if “extremely high users” are the villains here, why not punish them via published policies? In the TW case, I think more people will bump against that 40Gb download than you might think at first. And more will going forward with on-demand video….which is *exactly* what I’m sure TW is counting on.

Otto

I read that today and immediately started looking into DSL. If they decide to make my connection “limited”, then I’m dropping them and switching. There’s no need to put up with that sort of nonsense when other options are available.

Peter Radizeski

Reading this article and the comments is killing me. (Mike, you would go back to dial-up???!) Stacy when you write “they don’t have the same limitations when delivering last-mile services”, you are not accurate. The DSLAM has to backhaul to the telco Internet POP. In many cases, it is by an NxT1 service not fiber, especially when the DSLAM is in a subdivision. Telco DSL does indeed have bottlenecks. And I don’t know about the rest of you, but Bright House has always treated me way better than Verizon. And DSL has had more outages than RR by a long shot, plus not nearly as fast. Telcos already cap cellular data. You don’t think they will follow suit eventually? For many of you, broadband is like airlines — all the choices suck, so you go what works best from your airport.

Mike

To the good people of Beaumont Texas: Please help out the rest of the USA and yourselves by not purchasing a subscription from TW Cable. If either DSL or FIOS was not available I would go back to a phone dial up service such as Net Zero before I would pay for the metered broadband.

Dean Collins

I’m off to another carrier the moment that pricing arrives here in New York – thats insane.

Hope you are reading this Verizon etc etc, I’d be planning my next rollout to every location that Time Warner announces this new pricing scheme to – lol like shooting fish in a barrel sometimes.

Cheers,
Dean Collins
http://www.Cognation.net

willy

Time Warner service absolutely stinks !!!
Don’t see how they can get away with this.

Ryan

40 GB per month for $55? That’s insane!!!!

Media Temple will sell you a shared hosting account with 100GB of transit per month for $20. I’m sure you can get at least 100 Mbps through this connection (if not GigE).

Granted, there is an additional expense related to having the cable in your home but that doesn’t come close to justifying such high bandwidth prices.

If they want to rid themselves of P2P traffic clogging their networks then price the bandwidth based on uploaded or pushed data.

Verizon: When will FiOS be available in the East Village?

john

hey FCC, wake up! …that is, unless no one in government cares that telecoms are raping us for higher margins while letting our one uncontrolled link to the international community languish.

Ravenwood

Heh. Isn’t the industry moving the other way? I remember when AOL capped you to 10 hours. Then it was 100, now it’s unlimited always-on access. In today’s world with broadband, I’ve go my Tivo and several computers with always on connections. When I’m home, my cell phone connects via wifi, and I use vonage for VOIP.

In a day and age where connectivity is king, Time Warner seems to be going the other way.

gregory

this has to be treated like roads and highways very soon .. the private sector simply is unable to see the bigger picture about life on earth in this century …

Paul

I also am a TW subscriber, mostly happy. I would gladly pay bigger bucks for a 15MBs connection, but would find that completely useless with a 40GB cap. Just my work takes at least a quarter of that, and then like you I am constantly trying out software, streaming video, audio, etc.

I would be gone in a flash. They really need to revisit their “power user” tier. It is all out of whack.

Switching carriers is really a pain. If I bail on them, they would have a hard time getting me back, just as it has been hard for ATT & another local choice in Austin to pull me away from TW. But this kind of plan would be my marching order. And I also get my phone and TV from them. They would lose all of that, over $150/month. Pretty stupid idea.

Framboulatos

The only reason they can even dream (of testing) such a pricing structure is the lack of competition. Which is the same reason they can get away with throttling.

Chris

I use Time Warner in NC pay $44.95 for 1.5Mbs, if they increase the rate I would rather use something else, but unfortunately we don’t have much of a choice, all of them charge the same. It is collusion at best but nobody cares.

Andrew

If Time Warner introduces this in my city, I’ll switch to DSL.

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