Time Warner Cable Adds Tier-Friendly Terms to Its Contracts

24 Comments

[qi:004] Updated: Time Warner Cable (s twc) has modified the language of its consumer subscriber agreement that is directed at legitimizing the cable company’s ability to throttle and measure a consumer’s bandwidth. The new additions to the agreement also sanction tiered pricing. After Time Warner Cable’s failed attempt to expand tiered billing trials, which created different pricing plans for consumers based on the amount of data they downloaded, the company promised it would shelve the plans while it educated consumers. It looks like that education campaign may come now that the legal bases are theoretically covered. Here’s the new language:

6. Special Provisions Regarding HSD Service

(ii) I agree that TWC or ISP may change the Maximum Throughput Rate of any tier by amending the price list or Terms of Use. My continued use of the HSD Service following such a change will constitute my acceptance of any new Maximum Throughput Rate. If the level or tier of HSD Service to which I subscribe has a specified limit on the amount of bytes that I can use in a given billing cycle, I also agree that TWC may use technical means, including but not limited to suspending or reducing the speed of my HSD Service, to ensure compliance with these limits, and that TWC or ISP may move me to a higher tier of HSD Service (which may result in higher monthly charges) or impose other charges and fees if my use exceeds these limits.

(iii) I agree that TWC may use Network Management Tools as it determines appropriate and/or that it may use technical means, including but not limited to suspending or reducing the Throughput Rate of my HSD Service, to ensure compliance with its Terms of Use and to ensure that its service operates efficiently. I further agree that TWC and ISP have the right to monitor my bandwidth usage patterns to facilitate the provision of the HSD Service and to ensure my compliance with the Terms of Use and to efficiently manage their networks and their provision of services. TWC or ISP may take such steps as each may determine appropriate in the event my usage of the HSD Service does not comply with the Terms of Use. I acknowledge that HSD Service does not include other services managed by TWC and delivered over TWC’s shared infrastructure, including Video Service and Digital Phone Service.

The language means that a subscriber can’t sign up for a contract plan hoping to avoid tiered pricing by getting in before a new tiered plan is implemented. It also specifically threatens throttling of a person’s service for violating the terms of use (hopefully it makes those terms of use a little clearer, though). It also separates out its voice and video service from the data plans, and it appears that those won’t count against any cap, and they may not be subject to throttling. Time Warner could not be reached for comment, but allowing its own products to bypass a cap would give its services an advantage over other VoIP providers and online video. That may draw the FCC’s ire. The agency earlier this year was asking Comcast (s CMCSA) whether it prioritizes its own VoIP services over competitors’ also running on the cable network. We can’t get a new FCC chief soon enough.

UPDATE: Stop the Cap, which first reported that Time Warner had modified its subscriber agreements, has updated its original story to note that there is a dispute over when Time Warner actually made the changes to its subscriber agreement. “Time Warner Cable representatives told another reporter that the language we reported on was published earlier than ‘implied’ in this article,” wrote Phillip Dampier, founder and editor-in-chief of STC, in an update published yesterday evening (we heard from the same reporter). “In their eyes, this represented ‘nothing new.'”

Exact timing aside, what is clear is that Time Warner did recently notify a subscriber in San Antonio, Texas, of a change to the subscriber agreement on that subscriber’s May bill, which is what prompted both Dampier’s story and my own. Time Warner still has not returned my repeated calls and emails seeking comment, while calls to the company’s customer services reps resulted in an array of responses, including one representative telling me that Time Warner was still practicing tiered billing in North and South Carolina and another who said that the subscriber agreement is accurate and that the company is not charging overage fees.

One way or another Time Warner still needs to address the concerns generated by the modified language. Yesterday Public Knowledge, a public interest group, called on the FCC and Congress to investigate the language included in the terms, specifically those that appear to exempt Time Warner’s own services from a bandwidth cap and any throttling. If Time Warner provides me with information as to when the changes were made, or answers any of the other questions I sent, I’ll update you.

24 Comments

dwhit

Stacey… TW no doubt isn’t returning your calls because they probably fully understand who you are – an individual blogger with a well known (limited) perspective and an axe to grind and not a reporter seeking to understand facts. Granted – TW has done a HORRIBLE job at going about this but even if they hadn’t, it wouldn’t make any difference to you.

The way I see it… the new GigaOM paid for research service is no different than tiered internet. Why should I have to pay more to access ANY Om content? Isn’t information and bandwidth free?

And why do I have to put up with ads on your site… why just not content?

All rhetorical questions of course…. its okay to drum up conspiracy and ‘the man’ theories/accusations when it is someone else that wants to charge but when it comes to your livelihood… go figure.

Phillip Dampier

I want to thank Stacey for posting the update and to also dialogue with GigaOM readers about the timing issue. When a reporter contacted me with information different than what we had, that triggers a thorough review of our content.

The entire “process” story about what we did yesterday on this is now attached to the original article. I believe it’s more important to keep readers updated with as much information as possible, regardless of whether it ends up conflicting with something in our original piece. If something we write turns out to conflict with facts we receive later, readers should always be told, even if it doesn’t exactly flatter us.

In this case, the timing issue for us was secondary to the implications of the language, regardless of the exact date it was inserted. But at the same time, the timing issue is not unimportant, and when we felt no longer confident of the original information we had received, readers deserved to know that too.

In the last 24 hours, we heard at least three different explanations on this point ourselves from Time Warner Cable and from those talking with the company. One said the language was changed “months ago.” Another stated the language was changed at an “undetermined” time awhile ago. Another said it was changed and by the way, here’s why. The media is also getting varied responses. Alex Dudley refused to say when the changes were made in a piece for the San Jose Mercury News: http://www.mercurynews.com/businessheadlines/ci_12497966.

Regardless, we feel the language and its implications are critically important, so we stood by our original report on these questions.

Thanks for everyone’s attention, and I appreciate your understanding.

JoanSmith

Odd how we can “download” from antennae on our roofs, watch cable tv (mostly provided by satellite, in case you are wondering), even use digital phone – all with no reference to or issues with bandwidth. This is because the term bandwidth is propaganda aimed towards stretching the painful process of a company with technological and consumer preferences grossly outdated.
Why should we pay for Time Warner Cables retroactive performance, where the consumer foots the bill from a company with a reputation for pathetic customer service, aged infrastructure, over paid management and, of course, a penchant for misleading the public.

Brett Glass

Joan, your question is a good one because it reflects a common misunderstanding of how the Internet works. When you receive an over-the-air TV broadcast (or a cable or satellite broadcast, for that matter), you are not “downloading.” You’re receiving a one-way transmission over a broadcast medium. The same transmission can be received by thousands, millions, even billions of other people and it doesn’t cost a penny more to send.

This is not true of an Internet download. Every download is individualized. Every one involves two-way communication, not just reception. And every one takes up more resources. A LOT of resources if it’s a big file or a video stream.

This is why ISPs need to meter bandwidth. And because receiving a file or video program via the Internet is thousands of times more costly than receiving it via a broadcast, they also need to charge you more for it. It isn’t some deep, dark conspiracy. There is no magical “bandwidth fairy” out there; bandwidth costs money. Especially when you get even a few miles outside of a major urban center.

If the cable company is your ISP, it needs to cover its costs whether you get your video via conventional broadcast or via an Internet download. And so, you should expect to pay more for the luxury of using a much less efficient and more expensive way of receiving the video. This isn’t anticompetitive; it’s simply aligning prices with costs.

Ron

I switched to Earthlink when Time Warner first tried this, though honestly I think Earthlink is a puppet of Time Warner. They use all the same equipment. The bill comes from Time Warner, etc.

I currently have digital phone and told Time Warner that I would go back to Road Runner completely if they where reasonable and not trying to rip of their own customers.

1 – Had Road Runner, Digital Cable and Digital Phone
2 – Got rid of cable, prices where getting insane. Kept Road Runner and Digital phone.
3 – Left Road Runner for Earthlink because I can see the prices becoming outrageous like cable. Talk about running a business into the ground. Still have digital Phone.
4 – When they do this metered bandwidth then this is where I say goodbye to Time Warner completely. With a few colorful words. I will move everything back to our local phone company. Who for now, hopefully they keep it this way, is not doing this insane bandwidth capping.

It is only a matter of time that they will start to “Meter” Digital Phone. They say no now, they will never do that. But they have said no before, they have said one thing and then done another. They can’t be trusted. They care only about lying to people and getting as much money as they can at our expense.

This government had better NOT give Time Warner and companies like them any money AT ALL. These companies deserve nothing and I will fight to make sure the get no stimulus or grants of any kind.

Time Warner should not have all that they have. They have too many things to run and ruin at our expense. The paying customer and tax payer.

JAy.

Your concern about the exclusion of voice and television in the data cap is actually a good thing in my book. If I am paying extra for TWC’s phone service, and it is sold as unlimited nationwide phone service, it better (1) not be counted against my data cap, and (2) not be controlled for bandwidth, thereby limiting call quality.

The difference between this and Skype or Vonage is that those services do not sell me the “backbone” which enables the service. According to their ToS’s, I have to provide that myself. The TWC phone service includes the “unlimited” backbone, so it needs to be included in an unlimited fashion. Same goes for the TV service. If Hulu wants to be judged in an equivalent manner in terms of bandwidth caps and limits, they need to sell the data connection to me as well providing content.

Now, if TWC starts providing internet-based video (viewable through a browser and not through my set-top box), that is a different discussion.

Ed G

“and/or that it may use technical means … to ensure compliance with its Terms of Use”

Hello legal bittorrent/Skype filtering, because YOU agreed to it in the TOS!

Tony

Actually, if they limited the number of IP flows per minutes then running BitTorrent would kill your ability to connect to almost anything else. This would not violate Net Neutrality as limiting flows is completely protocol neutral. Similarly, it would limit your ability to run your own servers and several other things ISP’s hate you doing. You would not be able to proxy Skype calls and Skype would have to start paying for their own bandwidth to proxy calls. NO FILTERING REQUIRED!

GiantCrazy

You can guarantee that bandwidth caps are coming to Time Warner on a broad basis. Not to offset the cost or to ensure that everyone has a fair crack at bandwidth, but because they’re trying to protect their cable franchise, which is faltering and getting worse with each passing day.

You can also guarantee that if they do start capping, people will start to defect to other options and Time Warner will have killed a profitable business. It’s not the first time they’d have done so, but I’m not sure they can lose too many more of these fights.

Once Verizon FIOS is near me, Time Warner is history.

Tony

Well, if Verizon FIOS is EVER near you. They are selling line services including FIOS to Frountier Communications in 12 states for $8.6 billion dollars, if the state PUC’s agree. I don’t think you will see FIOS or anything like it in the near future because the money to build it doesn’t exist.

Linoth

I live in Ithaca, NY area which isn’t far from the proposed Rochester bandwidth cap testing area. We recently got a promotional flier that TimeWarner wanted to provide us with a new modem that would better utilize the service we were being provided. Call me a skeptic, but that sounds more like “your older cable modem isn’t compatible with the bandwidth tiering we want to enforce in the next 18 months, so we’re trying to make it sound beneficial to you to get rid of it.”

Coincidentally, I kept my SB4100. I’m familiar with the antics of the local TimeWarner group, and my modemis pretty rock solid, so I’m not giving it up so that TWC can stick me with a junk Terayon or worse.

Michael

It actually sounds like they might be paving the way for an eventual DOCSIS 3.0 rollout there…..hence the new modem

Tristan Phillips

Linoth:

My brother works for Comcast in the Pittsburgh area, but worked for TW before that. Those new modems are for DOCSIS v3, which makes bandwidth metering a lot easier for the cable company. It also provides a lot more features for the home office (Eg: turning off the modem remotely), but from a consumer POV you don’t gain anything.

Time to contact Ed Massa and Chuckles Scummer….er….I mean Charles Schumer.

unhappycablecustomer

An interesting idea James: If they want to charge for bandwidth, then I agree that we should know where it is being spent. Although this may raise privacy issues when you get your bill and note the 700MB video that your son downloaded from spankmonkey.com

1technologist

One wonders how TWC’s business model would be affected if an offsetting credit were issued monthly to all subscribers who did not reach the TOS limits, i.e. they underutilized their service. I’d be interested in reviewing their subscriber bandwidth stats with that as a baseline.

Stacey Higginbotham

If they do this, then we’re talking about a pay per GB pricing plan that would look more like a utility’s offering. If that’s the case, then ISPs would need to be regulated like utilities so folks could trust their data bills. Personally, I think it would serve the ISPs right, but I think having PUC oversight would act as a roadblock for innovation and upgrades.

1technologist

I agree with your observation about blocking innovation and upgrades but don’t share your confidence that regulation equals trust. The majority of the various gov’t entities that impact our daily lives can scarcely manage themselves let alone dynamic for profit enterprises. And I don’t think cost + models of PUC regulated entities have any place in modern markets, telecom or otherwise.

Michael’s rollover bits may just be the right approach!

Tony

As an ISP, I’m not sure how it would “server me right” as I would not be opposed to the idea. Like a utility, there would be a charge for infrastructure and above that would be a metered charge for bandwidth. Measuring the daily use by a customer of bandwidth is actually quite trivial – we have done it for many years; it is something our subscriber management units supply for free. If this were the limit of the PUC’s involvement, I don’t see a problem.

The “good” part for an ISP comes from the fact that it would require all ISP’s to convert to a metered rate at the same time and silence consumer groups as they would simply be told to “take it up with the PUC; it is out of our hands.”

Cy

No, the usual TWC tactic is that you have to ASK for the credit. Otherwise they just bill you and they smile all the way to the bank. I just wish there was a way to get people to band together and drop TWC like a hot brick and see what they do when the subscriber base goes away.

They don’t care about your wallet, but they sure do care about theirs.

james

Would it be unreasonable that if the cable cos (or just this one) are going to start monitoring and charging for bandwidth, that we, the consumers get connectivity bills that are more like phone bills. Granted I don’t want a list of all connections, but is it unreasonable to ask (legally require) of them in a bill daily totals of bandwidth (hourly would be better) as well as the maximum allowed per month for our tier? Also, like phone minutes, I would want to be able to log in and see how much I have left for my billing period.

I’m not particularly keen on any of this happening, but if it does, TW/other operators should have a pretty big responsibility ensuring that the consumer is fully aware of their situation. (I giggled after I wrote that).

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