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Updated: Time Warner Cable Backs Off Metered Broadband Everywhere

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Updated throughout with confirmation, comment from Time Warner: Time Warner Cable (s twc), 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 (s 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.

60 Responses to “Updated: Time Warner Cable Backs Off Metered Broadband Everywhere”

  1. Stacy – Curious to know the story behind the crossed-out section where you seem to imply that John Cornyn and Kay Baily Hutchison are paid hacks for TW.

    • Stacey Higginbotham

      I crossed it out because since TWC eliminated the cap everywhere, it was no longer useful to ask people to email the Texas Senators to ask for them to protest the caps. Both are very big supporters of large telcos and ISPs, so I doubt they would have reacted as Schumer did.

      • It’s really time for the other 95% of the users, that don’t need about 5GB/mo to start demanding they only pay their fair share of the costs — with lower monthly bills.

      • @John,
        I think that a poor argument that “the other 95% of the users, that don’t need about 5GB/mo to start demanding they only pay their fair share of the costs — with lower monthly bills.” It is a manipulated idea that makes many less critical readers and users falsely to believe that they’ll actually pay less with cap. Price is subject to change even without cap. Cap will actually allow the companies more convoluted ways of “pricing game.”

        With the ways technology and innovation grow and more activities taking place around the internet access, customers who try 5GB will soon find out that it as good as doing nothing. Worst, the scenarios $20,000 or $30,000 wireless phone bill mill occur even more often with broadband access because the freedom of access the data is taxed with the companies’ rights, existed once we allow cap happen, to bill users over the limit usage.

        The REAL LOSS to us common users, wherether using little data or a lot, is evidence if we allow cap happen. The only one who win are these technology obsolescent companies. The REAL QUESTIONS still remain, why to do we pay your outdated technology to keep you survive?? If you want to survive, then update your broadband technology and give use lower price. Verizon did it with FiOS for 20 Mbps down and less than $50 per month. And no cap of course. May be you can also reduce the top executive bonuses if you are so refusing upgrade your technology to deliver better service for lower price! DO NOT EVER TRY TO SCHEME WAYS TO MAKE US PAY MORE!!

        John, I do not address to you personally but to these companies-wide, as I do not want these hard working engineers to lose jobs either. Maybe this current business model, such as that of TWC, is no longer working as it should with the current growth and technological demand. Many of us users do not know what the working business model for your company is, unless we are your competitors, who sailing well in the current technological growth, say Verizon. But we do see already that WE WILL ACTUALLY PAY MORE WITH CAP. CAP IS A POTENTIAL RIGHT FOR COMPANY TO CHARGE OVERLIMIT USAGE. WE HAVE OUR POTENTIAL LOSS WHEN WE ALLOW THESE COMPANIES SUCH RIGHTS. OUR LOSS IS ALREADY EVIDENCE!!

        Seriously, where did you put out the “95% of the users that don’t need about 5Gb/mo”?? Critical readers would immediately question your statistical bases! Based on what criteria, from what population, users non-users, geographic areas, reference, and publically available data??

        That aside, why have we going this far into making internet access and broadband networks available as a primary medium of daily activities for an individual life only to go back to restrict that growth by taxing it, of course, with the usual company’s convoluted justifications? In one of Stacy’s responses she points out, and I couldn’t agree more, that technolgy’s the issue. Maybe TWC and the likes need to go back and recheck their business models for technological sustainability. In the meantimes we users cannot yield to these companies’ scheme to pay more for under performance services.

      • @Antony,

        The internet, electric power distribution, natural gas distribution, and our road way system all have the SAME basic resource and cost based design issues. There are two basic cost recovery strategies charge everyone the same price, or charge per use (metered).

        How do you distribute costs for what appears in the beginning as a free god given resource, that is until it’s oversubscribed and scarce. We have the electric model, where everyone pays a basic meter charge to cover burdened overheads for infrastructure and staff, plus a usage based charge for “fair share” cost recovery.

        Just like electricity, gas, open space, we have information bits, where it’s not the value of a single bit, or cluster of bits that determines their value 2,000 miles away … it’s the cost of distribution, which includes a number of other burden factors.

        Information can be free, transporting it IS expensive.

        High bandwidth fibre is relatively cheap, the cost for putting it into the ground over long distances can run between $25,000 per mile and $3M per mile. The cost to light it up at 30kbps is fairly cheap, the cost to light it up, and maintain it, at 10gbps over 500 miles can easily run well over $500M over 5 years in some markets. The cost of local loops in dense new construction high rise city areas are relatively cheap, and become VERY expensive to retrofit in older high rise inner city and urban/rural areas.

        Now to address your concern about what is normal bandwidth per household … I have ten years of that data in this coop, spanning a little over two hundred different households and small businesses that have once been a part of the cooperative. This totals about 800 household months of service.

        This data for households (including several small businesses with up to about 20 employees), includes service periods where no quota was billed for more than 6 months at a time (billing was broken, or ignored simply because there was excess bandwidth available), so that over-quota costs were not providing direct feedback to limit use. That data has a statistical “median” which starts about 500MB/mo in 1999 and grows over 10 years to about 1,500MB/mo (1.5GB) in February following a 7 month period where over-quota was not billed. Because of network saturation, caused by several households, quota’s are again being enforced and billed. This means a few households purchased additional shares, and a few more are having talks with their kids about bandwidth costs, and will be cutting back inside the 3.5GB/quota and making sure large downloads are traffic shaped under 85kbps.

        During this time, we have compared notes with other ISP’s and wireless providers, and have noticed our per household usage isn’t that different from than larger providers, with the exception that our largest user, and about 1/4 that of some other providers that have much larger and faster networks than we have.

        FYI … our Feb 2009 update to our membership:

        Hi Folks,

        Below is the distribution of Feb 2009 Bandwidth usage.
        There are a few accounts missing because of data collection
        problems that are being corrected.

        Overall use is below that of Jan for many homes, which is normal
        as the kids are back in school.

        I’ve contacted about half the heavier users that have been over
        quota, will get emails out to the other half over the weekend.

        I can prepare this for anyone interested in the future, but this
        will probably be the last one mailed to the general membership
        for a while. It’s been quite a few years since I last shared this.

        It’s really only useful for our board of directors in setting
        rate policy, and other members interested in our decision process
        for setting rates and managing infrastructure demands.

        Normally things like this are shared on the techs mailing
        list, which all members are free to join to get a view into
        the coop operation and decision processes. Just drop me a note.

        Have fun,

        The first column, is the data transfered subject to quota, and
        the last is the total amount of data for that member. Down is
        the data downloaded subject to quota, and up is the amount
        uploaded subject to quota. Non-Quota is the amount below the
        85kbps threshold.

        Quota Down Up Non-Quota Total
        0.0 MB 0.0 0.0 105.0 MB 105.0 MB
        0.0 MB 0.0 0.0 469.3 MB 469.3 MB
        15.7 MB 13.2 2.5 7.2 MB 23.0 MB
        24.3 MB 23.1 1.2 40.4 MB 64.7 MB
        32.0 MB 32.0 0.0 83.1 MB 115.1 MB
        40.8 MB 39.3 1.5 96.2 MB 137.0 MB
        42.4 MB 40.4 2.0 180.4 MB 222.8 MB
        70.5 MB 66.8 3.7 132.0 MB 202.5 MB
        84.2 MB 81.2 2.9 116.2 MB 200.4 MB
        99.5 MB 92.2 7.3 191.9 MB 291.4 MB
        121.4 MB 116.0 5.3 186.9 MB 308.2 MB
        240.1 MB 201.4 38.7 329.0 MB 569.1 MB
        254.6 MB 240.3 14.2 250.7 MB 505.3 MB
        293.7 MB 278.1 15.7 512.8 MB 806.5 MB
        295.6 MB 286.2 9.5 1553.6 MB 1849.2 MB
        345.9 MB 308.0 37.9 357.7 MB 703.6 MB
        353.0 MB 312.5 40.4 619.4 MB 972.4 MB
        437.4 MB 419.9 17.5 572.8 MB 1010.2 MB
        530.1 MB 498.3 31.8 409.2 MB 939.3 MB
        575.9 MB 575.9 0.0 831.9 MB 1407.8 MB
        614.5 MB 207.1 407.4 703.8 MB 1318.2 MB
        640.0 MB 620.5 19.5 683.5 MB 1323.4 MB
        796.1 MB 763.9 32.2 429.3 MB 1225.5 MB
        821.6 MB 735.1 86.5 878.4 MB 1700.0 MB
        821.7 MB 713.4 108.2 2080.4 MB 2902.1 MB
        831.2 MB 778.8 52.4 249.4 MB 1080.6 MB
        867.7 MB 766.7 101.0 1431.8 MB 2299.5 MB
        881.1 MB 881.1 0.0 972.8 MB 1853.9 MB
        913.5 MB 772.6 140.8 638.0 MB 1551.5 MB
        960.0 MB 915.4 44.6 1056.7 MB 2016.7 MB
        1020.8 MB 883.5 137.3 515.6 MB 1536.4 MB
        1120.4 MB 937.8 182.6 586.9 MB 1707.2 MB
        1152.7 MB 945.3 207.4 553.0 MB 1705.7 MB
        1179.5 MB 1121.4 58.1 1251.4 MB 2430.9 MB
        1294.2 MB 1214.8 79.4 1552.4 MB 2846.6 MB
        1302.2 MB 896.7 405.5 1036.1 MB 2338.3 MB
        1389.0 MB 1309.2 79.8 705.4 MB 2094.4 MB
        1430.3 MB 1380.1 50.2 875.6 MB 2305.9 MB
        1540.0 MB 1475.6 64.4 372.8 MB 1912.8 MB
        1696.0 MB 1443.9 252.1 1186.8 MB 2882.8 MB
        1712.5 MB 1350.3 362.2 1900.1 MB 3612.6 MB
        1722.5 MB 1463.8 258.8 1229.8 MB 2952.3 MB
        1725.9 MB 1641.4 84.4 1425.4 MB 3151.3 MB
        1944.9 MB 1126.9 818.0 804.9 MB 2749.8 MB
        2017.6 MB 1886.8 130.8 1390.8 MB 3408.3 MB
        2042.6 MB 1495.6 547.1 777.2 MB 2819.8 MB
        2093.5 MB 2001.0 92.5 1179.7 MB 3273.2 MB
        2458.2 MB 311.2 2147.0 1031.4 MB 3489.6 MB
        2501.8 MB 2330.7 171.1 3311.5 MB 5813.3 MB
        2562.1 MB 2483.1 79.0 628.2 MB 3190.3 MB
        3039.5 MB 2852.4 187.1 2716.2 MB 5755.7 MB
        3145.9 MB 1721.0 1424.9 711.0 MB 3857.0 MB
        3210.6 MB 2375.1 835.5 1967.7 MB 5178.3 MB
        3556.0 MB 3007.0 549.0 5700.1 MB 9256.2 MB
        3644.5 MB 3537.5 107.0 617.0 MB 4261.4 MB
        3733.1 MB 3293.4 439.7 588.9 MB 4322.0 MB
        3765.0 MB 2149.5 1615.5 2278.3 MB 6043.3 MB
        4031.7 MB 3635.7 396.0 1819.2 MB 5850.9 MB
        4188.8 MB 4032.8 156.0 1072.6 MB 5261.4 MB
        4232.1 MB 3792.6 439.5 3048.3 MB 7280.4 MB
        4851.6 MB 4458.6 393.0 2904.1 MB 7755.8 MB
        5163.7 MB 2482.7 2681.0 1707.6 MB 6871.3 MB
        5491.2 MB 5360.3 130.9 528.8 MB 6020.0 MB
        5836.9 MB 3762.4 2074.6 3670.6 MB 9507.5 MB
        6097.7 MB 5946.8 150.9 611.0 MB 6708.7 MB
        6266.3 MB 5854.4 411.9 1199.1 MB 7465.4 MB
        6920.9 MB 5530.5 1390.3 800.8 MB 7721.6 MB
        8957.8 MB 8109.0 848.7 3101.1 MB 12058.8 MB
        9479.7 MB 8599.6 880.1 1517.8 MB 10997.5 MB
        9608.9 MB 7627.6 1981.3 1857.8 MB 11466.7 MB
        13876.2 MB 11520.0 2356.2 4023.6 MB 17899.8 MB
        14667.6 MB 14098.2 569.4 2923.7 MB 17591.3 MB
        19813.5 MB 19367.9 445.7 1079.9 MB 20893.4 MB
        26258.1 MB 22400.5 3857.7 1080.9 MB 27339.0 MB

        In April, all but 3-4 of these will be under the 3.5GB/mo cap. We have several heavy developers that regularly exceed the base cap, and either pay the $5/GB overquota fee, or already purchase additional T1 shares at $25/mo each.

        Note else where online are numbers for average users of Comcast and TWC.

  2. My fiancee and I use 80 GB a month between the two of us to do the following: e-mail, play world of warcraft, and play second life, and maybe watch 10-20 videos on youtube over the course of the month that catch our interest.

    The average home user uses quite a bit of ” bandwidth “…. If they’re going to set limits it needs to be MINIMALLY 100 GB or more. A GB isn’t alot of data or space, if you make it less then 100 then you will have people who quit playing MMOs because they meet their ” Bandwidth limit ” by simply checking youtube, going to myspace, or watching a few news videos…

    It sickens me to see ISPs who are making millions think so little of the american public and label internet usage as just checking a webpage…Hell though, you can’t even do that anymore without it being a large number…so many images, java, things of that sort…

    -shrugs- All I can see any limitation once so ever doing is paving the way for a company to come along saying ” WE DON’T RESTRICT ” and then they get all the buisness.

    Any company imposing restrictions is going to ruin itself…. Hindering a developing and new technology is a bad thing to do.

    • The average home user typically uses under a few gigabytes, even on systems with high caps. On metered systems like ours with caps around 3.5GB, the average family uses under 1.5GB.

      The exception is that once a family starts using the internet for TV/Movies on demand, it does jump into the high GB range. Or when they start trading pirate music and video. For all large and small ISP’s today, they do not have enough physical bandwidth for even 30% of their customers to do this.

      Nor does the existing internet backbone Upgrading the national backbone to the level where each family has access to 100GB or more, is way off the charts cost wise … only the US Government can do this today … and only by printing a LOT of money.

      As an exercise, do the research into the Internet Exchange Points (IXP) in various major cities, and divide the external NAP bandwidth by the number of homes and businesses in that city. Only a fraction of bandwidth at an IXP actually serves that metropolitan area, the majority of it is interconnect to other IXP’s and smaller regional metropolitan areas without an IXP.

      Our nations infrastructure is about three to four orders of magnitude slower than being able to deliver 1mbps to every home and business. To get the major backbone carries to increase their networks by that much, will require some significant increases in fees from users.

      • You know, John, you are full of crap. All this nattering about “bandwith” on here, but it’s VOLUME that’s the issue. And I’m sick and tired, just because I have broadband, of being accused of doing illegal things. I probably use about 300gb a month because I am on hulu and other such sites a lot, watching tv shows or movies, downloading softare to try out, and so on. This is the reason I am paying time warners price for broadband. Some other user might do 300gb of limewire and illegal movie copies, but it’s still 300gb. All this is, the cable companies, which are monopolies in most cities, want to charge us more for the same service. Caps in and of themselves, I don’t object to, but they are talking about 50gb, on that level. If they want to cap me, give me a 1 terabyte, that’s fair. And they can’t understand the public “backlash?” What do they expect? If they would have left the internent “metered,” we’d all be used to it, but most of us could not afford to be on it. As it is, time warner is the only cable company I am allowed to use in my city, and once you get “basic” cable, some movie channels, and broadband internet you are paying about $180 a month. If you want VOIP that’s another $45 or so. They already charge us plenty, i don’t want to hear about any 50gb caps. Screw them.

      • Bruce … just because you say so, doesn’t make it true.

        The short answer is that VOLUME is bandwidth, and you completely missed the boat by failing to understand that.

        Accept that soon, your 300GB/mo will cost you more money. A lot more money.

        I’ve open to any persons sound business and technical plan that says we can upgrade our oversubscribed national and local loop infrastructure without increasing fees for the new drops, backhaul fiber, and expensive networking equipment.

  3. Brett Glass

    I’m an ISP, and the brouhaha over Time Warner’s caps has me worried as to whether I can continue in business. In the long run, I need to have pricing which is attractive, competitive, and fair, and at the same time not run afoul of any regulatory or legislative constraints.

    The problem is that the lobbyists seem to be trying to make this impossible. First, they lobby the FCC to prohibit flat rate pricing with constraints on usage (e.g. throttling, duty cycle constraints, or limits on bandwidth-hogging activities such as P2P). Now, they lobby against variable pricing (caps and overage charges). What’s left? Bandwidth costs money. A LOT of money in rural areas. And we have to cover costs.

    One wonders whether their real goal is to make it impossible to be a for-profit ISP (or even a non-profit ISP which is not taxpayer-subsidized).

    • Stacey Higginbotham

      Brett, I understand your and John’s concerns tied to bandwidth hogs and providing QoS over oversubscribed pipes. There is a debate that this country needs to have over rural access, especially given the high costs rural ISPs pay to connect back to the long haul network and there is also a realization that bandwidth isn’t unlimited, but instead of caps, technology can come into play to make sure it’s better utilized.

      • Hi Stacey,

        You need to do a story about how much bandwidth really exists in our nations backbones and how much bandwidth is required to put 1mbps into every home and business across the US.

        And at the same time, the re-engineering of last mile networks to deliver 1mbps to every subscriber CONCURRENTLY. Current last mile networks are oversubscribed typically between 12:1 to 45:1, and it’s this bandwidth that makes most ISP’s unable to carry video on demand and P2P on their internal networks, even if the nationwide backbone was upgraded today.

        As I noted elsewhere … do the math for IXP’s, and do the math for last mile technologies like DSLAM’s that are installed today, and wireless systems like Canopy that are installed today.

        When all these networks become saturated, they drop packets to flow control. When the primary load source does not flow control – IE streaming UDP video and audio, and gaming protocols, then the network becomes unusable for VoIP, VPN’s, DNS and TCP when saturated.

        We can wish the network was built to saturate at 1mbps per customer, but the real number is closer to dialup speeds per customer. And the real facts are, at saturation, the networks become nearly useless with congestive failure modes.

      • The other factor that is ignored, is obsoleting existing phone, satellite, and cable video markets/networks with lower cost access to internet replacement services … VoIP, streaming movies (NetFLix) to replace cable/satellite, and streaming TV/Radio to replace over the air radio and TV.

        This shift, increases the demand on IP networks by several orders of magnitude, without transferring a portion the revenue from the old markets/networks to the IP network transport providers and ISP’s.

        This simply isn’t going to happen for free, as the unlimited or 200GB/mo per household advocates would like. The network doesn’t exist today to do it, and somebody has to come up with some more money to actually do the upgrades … and that means fee increases, probably metered fee increases, as a number of homes are just happy with their free over the air TV and radio, and do not need high rate UDP for gaming, utube, etc.

        So the national debate will become, can you continue to force 95% of the costs on the low bandwidth users?

  4. Thanks for that post John it was interesting. (being honest not sarcastic)

    A couple of thoughts:

    1) I would guess that your broadband supplier is making more money from your cooperative than you are.
    2) I would guess that your broadband supplier is one of the duopolies.
    3) Many businesses and consumer behaviors have been built based on a number of years of unlimited last mile bandwidth. Going backwards is really not an option.

    My opinion is that the internet, sooner or later, WILL be a public utility. As in the future it will be second only to electricity as far as importance of utilities go. There has been some speculation that TWC understands this so they are trying to rape their customers and make as much money as they can while they still can.

    • Do not waste your electronic ink, on that commentary. I have the same view about him. He’ll draw you into the argument “how good the cap is and the reason why” and blah-blah with this and that. His ways of argument and analytical approach are more appropriate for someone in a certain level of that business, just like what you’ve already pointed out: Not the “real” common users.

      Thanks goodness that the users are standing up and not letting these companies screwing them around. But for such an individual, and the more like him, it’s just a waste of your time. They’re trying to be if not already are the distractors!

      • I don’t think any cap is good … what 95% of the public should be demanding is straight metered service so they don’t keep subsidizing all the bandwidth hogs. The reality is that if 95% of the customers just had to pay only their fair share, their cable/dsl internet bill would be $1-5 per month.

        Let’s just be fair here … everyone pay ONLY their fair share of the bill …. just like everyone has to pay their fair share of the electric bill.

        The other alternative, is to have the FED’s provide free broadband to EVERYONE … including us poor rural folks that will NEVER have DSL or CABLE from the for-profits that do not waste there time and resources outside the dense city areas.

    • Actually, our telephone monopoly makes more money than anyone for the T1 tariff’s to a rural area way outside of town.

      The 4.5mbps bonded T1 prices are getting cheaper, over the last 6 years, but they are not as cheap as a single oversubscribed T1 in town that a typical business would only pay about $300/mo for. That we are bonding the T’s and aggregating as our own non-profit ISP in a rural area keeps the costs up. 10 years ago, the point to point price per T1 was a little over $800/each. So it’s getting better.

      Currently we are purchasing bonded service from Megapath, that is reselling Covad T1’s. Covad would not bond above 3mbps, and we needed a growth path to 6mbps this year, and 9mbps in another year or two.

      I realize that there are folks that believe they can replace $70/mo in phone and Cable Tv with a $10/mo broadband connection, and turn off their land line and cable connection. At least in our world, the real cost of T1’s is much higher … and we have to tell our membership we are here to allow them to purchase as much bandwidth as they are willing to pay for.

      At the time, we have to tell them that Netflix/Blockbuster in the mail is MUCH cheaper than downloading movies. That free over the air TV, or cable, or satelite is cheaper than paying for a T1 to watch TV shows over the internet. Anybody that want’s to pay for half or more of the the monthly T1 costs, is certainly free to download all the movies they want, and watch all the TV over the internet they want.

      The reality, is that if more than the currnet 1-2% of the internet homes start doing this, we will need to completely replace the entire US broadband infrastructure with a 50X more powerful solution.

      That would have to be a goverment project, because the for-profits are not going to do this for free. Heck they/WE are still paying for the 2001 fibre upgrades that created the dot com bust. We are just now starting to light up that dark fibre, and there isn’t enough of it to do the 50X bandwidth increase a small group of high bandwidth users are demanding. At least if the government did it, the cost of the civil servants running it are likely to be less than the costs of for-profits being bullied to poor business decisions by a bunch of clueless bandwidth hogs.

      It’s a small rural group of families here … believe me, none of these folks are willing to pay any more than their fair share. Because we are member owned, and member operated, with volunteer technical teams and management … we are very very transparent, they are not going to let any small group of high bandwidth users rip them off by forcing extra T1’s that are not paid for by those actually using them.

      We would like a “cheaper” fiber connection to the internet … but what we would save in bandwidth, we would have to pay in high throughput routers and network gear. Even five times our size, the T1’s, even at current prices, are more cost effective because we have MUCH cheaper hardware and wireless gear to carry the smaller chunks of bandwidth. With it broken into bonded T1 chunks, it can be sourced where needed, rather than expensive backhaul radios … and the reliability problems they create.

      Certainly the Telco’s and Cable companies have it better density wise, but I don’t see where their actual costs would allow unlimited bandwidth in the 200BG/mo range to every household they service. Or even 20GB for that matter, without some serious upgrades.

      The DSL DSLAM’s are fundamentally not able to deliver that bandwidth 24X7 to every household … the gear has a built in 12:1 to 24:1 over subscription factor in it’s basic switch design. I’ve got a half dozen DSLAM’s here we haven’t deployed, but have done testing with while thinking about doing rural DSL where Qwest will never provide it. The up front cost for our coop to provide 48 lines of DSL is a little over $15K in infrastructure, plus two rural T1’s to feed the DSLAM’s. Qwest wants about $15/mo per DSL subscriber. To break even, we would have to charge a $500-600 startup fee for the DSLAM and subscriber equipment, and then $50-60/mo per member for the Qwest fees, T1 bandwidth, and minimal administrative/burden costs.

      If we were a for-profit with paid staff and need to provide an ROI for the investors, it would easily be twice that cost per month. There would be customers for it, simply because satelite can be that expensive … but it’s really hard to keep explaining why it’s not the $20/mo that Qwest is offering as a special in town.

      The idiots can kick me all they want … I’m just sharing real costs. There are a lot of ISP’s with less than 2,000 customers that are looking at the same cost structures as our small cooperative, with only a marginally better economy of scale, and real labor/investor/interest/leasing costs that we do not have.

      We were the first, and oldest wireless provider in this county. There have been nearly a dozen for-profits startup, and have to fold, because of unrealistic cost/fee structures that left them without cash. The competition’s game play is to force small players out of the market with cost/interference, and buy those that have some market share at pennies on the dollar.

      This creates artificially low prices, and real losses to society from the failures, while a few monopolies are formed. In the end, I do not see prices staying this low … sooner of later the ROI will have to be paid to the stock holders, to the investors, to the bankers, and to the leasing companies that provided the leveraged capital.

      Where we go from here, is either a government take over to provided uniform nationalized service, or we are going to see the surviving companies raise rates to recover reasonable capital operating returns, and start paying back the investors/loans.

  5. 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.

  6. @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.

    • 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.


    • 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.

      • 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.

      • 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

      • 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.

  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.

    • 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. 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.

    • 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.

    • 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.

  9. 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.