Time Warner Shelves Plans For Tiered Pricing 210
The FNP writes "Time Warner has postponed their plans to test tiered data caps in Greensboro NC, Rochester NY, San Antonio TX, and Austin TX. This announcement comes shortly after the media started reporting on Eric Massa's opposition and protests planned for this Saturday outside of Time Warner's offices in Greensboro and Rochester." There's also a good piece at Ars on the fall of the current tiered-pricing plans.
It will be back (Score:5, Insightful)
Good riddance (Score:5, Insightful)
The ISP's usual quote of "Its only 5% of our customers using 40% of traffic" argument flew in the face of the "So we're going to cap things so low everybody will hit it" response they kept trying to ram through.
If it's only 5%, set the cap just below where they are and only punish the *actual* problem children...or better yet, don't 'cap' but rate limit. Doesn't DirecTV's internet access do this already?
Don't pick on Time Warner! (Score:5, Insightful)
I never knew how "good" Time Warner was until they sold out, in our area, to Comcast!
It's unfair (Score:5, Insightful)
I would be more understanding of the situation of metered billing and usage if I was under the impression that they were doing all they could with the money they had and physically couldn't do anymore, but that's not the case here.
It's not a problem with any technology, it's not prohibitively expensive, it's greed and nothing else. And until they can prove to me and the rest of the people that it really isn't about greed then we aren't going to stand for them ripping us off.
Re:Good riddance (Score:4, Insightful)
Well not to mention the "we would have to spend some of our $billions of profit on infrastructure if everyone uses their connection fully wah wah!" argument only applies to prime-time, yet the plan they put forward in no way targeted peak usage hours. Download from 2am - 6am, you'd still hit the cap even though the cost to them for providing that bandwidth is marginal enough to be effectively zero.
Not quite gone. (Score:5, Insightful)
It doesn't have to be gov't owned (Score:5, Insightful)
However, the wires should be owned by a regulated entity that doesn't play favorites with interconnection carriers and data providers.
If ACME Wire Company owned all the wires and local switching stations, and they invited all comers to install Internet, telephone, and cable switches in their switching centers, and they invited all data providers who could afford to do so to colocate at those centers, and they charged everyone - consumers, transport providers, and data providers - reasonable and presumably regulated rates, this would leave the telcos, cable companies, ISP providers, and data providers an opportunity to compete based on price, product, service, etc.
Pay-for-use makes sense only if you lower prices (Score:5, Insightful)
In the NPR piece about this, one TW representative compared the current scheme to someone buying a salad and someone else buying an expensive lobster dinner, and the two of them splitting the cost 50-50. In other words, the heavy user is subsidized by the light user. But if this is their rationale, then making the heavy user pay for his/her fair share would mean that the light users would no longer have to subsidize the heavy users and that the light users should see lower prices.
But that was nowhere in TW's plan, which is why this all seemed disingenuous. I, for one, think it's fair for people who use more to pay more. But not when that is used as an excuse for price gouging. It seems much more likely that TW is just trying to protect their content delivery services from people getting movies digital competitors like Netflix's download service, which would been an abuse of market powers.
Re:I don't understandall the hoopla surrounding th (Score:3, Insightful)
Sure. Sounds great. Like my other utilities, let's go ahead and heavily regulate them and reduce profits (or deregulate them and let Time Warner's lines be a free-for-all). I'd be happy to pay about $0.07/GB. which is approximately what my hosting provider charges me for bandwidth. This was part of the problem. $5/GB is a tad high for me. $150/GB for what I currently get for $50 is ludicrous.
So sure, let them charge like utilities, and we'll regulate them like utilities. That will lead to massive price drops for consumers.
What I won't support is Time Warner's Consumption Priced Billing. They were planning on using their near monopoly to raise prices for the majority of their consumers, while touting the "price drops" for consumers using less than 1GB per month. What they charge for bandwidth is still way over market rate, and their SEC filings show that they're paying less for bandwidth and getting more income for consumers, so they have no reason to charge more.
This was also an anti-competitive move to stifle companies like Netflix, YouTube, and iTunes. A move they should still be investigated for.
In short, this is a consumer rebellion to keep from being price gouged, not a revolt against consumption billing per se.
Re:It will be back (Score:4, Insightful)
Yeah, but screwing your customers because you can't (or won't) adapt has never been a good business model.
Re:Pay-for-use makes sense only if you lower price (Score:2, Insightful)
I think its equally unfair for the price to jump when the customer exceeds an invisible threshold, requiring customers to constantly check -- using more bandwidth -- what their current usage is to make sure they don't go over. This is the problem with cell phones. The companies should be required to inform you when your paid-for minutes or text messages are used up and you will be forced to pay extra -- WHEN you make the phone call or BEFORE you send that next text message. The practice of waiting until the end of the billing cycle to inform the consumer is not consumer-friendly, and should be banned.
Good idea, bad implementation (Score:5, Insightful)
I'm torn on this one. Personally I think that metered bandwidth is the most equitable way charge customers, but I think that the way TWC went about it was a shameless money-grab.
We're already accustomed to consumption-based pricing. We see it all the time: electicity, water, gas, food, etc. Same should go for internet access. And in fact, metered bandwidth is the pricing model that many ISP's use for hosting companies and other ISP's.
But here's the catch, if TWC went to a per-GB model with the aim to keep their revenues the same as when they had per-month pricing, 95% of their customers would pay less. A LOT LESS.
But that's not what they were proposing. They wanted that 95% of customers' costs to stay the same, and have 5% of high-usage customers to pay more. Under that scenario, TWC would make TONS MORE MONEY. Essentially they wanted to have their cake and eat it too.
If somebody wants to do metered pricing right, here's what they gotta do. Send each of your customers a letter saying "based on your monthly usage, we predict that your bill would be $AMOUNT under our new pricing model". However, seeing as how the cable companies have totally pissed away consumer trust, I doubt anyone would believe them.
Re:Pay-for-use makes sense only if you lower price (Score:5, Insightful)
Let's break down this salad dinner analogy a bit more.
The analogy REALLY works like this.
Two people walk into a restaurant and buy dinners. One buys a lobster dinner, and one buys the salad dinner. Though all the dinner prices are advertised at the same price, in this case, it's advertised at the price of the lobster dinner.
Eventually, everyone starts coming in to the restaurant and starts buying the lobster dinner. The owner of the restaurant realizes that the cost of feeding everyone the lobster dinner is too high because they assumed that very few people actually wanted lobster and most would stand for the salad. Eventually, they start running out of lobster to feed everyone and start telling people you all can't have your lobster dinner. We assumed that most people just wanted salad and offered lobster as a bonus, we didn't expect everyone to jump on to the bandwagon and start buying the best thing we offered.
Rather than find another supplier of lobster and expanding their business, rather than overhauling their operation realizing that people really don't care for salad as much and want the lobster--they start placing the blame on the people that eat lobster. They tell the people eating salad that the people eating lobster are keeping all of their dinner costs high, and that the business owner isn't to blame for the high prices but the people eating the lobster that they offered are.
Meanwhile, the owner is walking away complaining about money when he's got a few million bucks in his bank account ripping off the people buying salad by charging them for lobster, and telling the people eating lobster that they can't have as much of it and need to start eating salad.
If my entire analogy sounds completely absurd, because it does to me, then you get an idea of how absurd this entire fucking scheme is from these cable companies.
Re:Wha? (Score:5, Insightful)
More like they tried to pull a fast one on their service areas and got caught with their hand in the cookie jar. If anything, this should make you more alert to sudden changes in their pricing structure - not more confident in them.
Re:It will be back (Score:3, Insightful)
Utilities are regulated monopolies because of logisitical and physical limits. Imagine a world where you have 6 water companies all burying 16" mains in the right-of-way infront of your house. Or 12 power companies stringing lines all over the place. There's only so much room for water lines, gas lines, power lines, phone lines, sewers, etc. The more stuff hung from the poles or stuffed in the ground, the harder it is to keep track of it all to prevent them interfering with each other -- and eventually, something breaks and has to be repaired.
The internet is as much a commodity as gasoline. As NetZero says, they all take you to the same internet. What they leave out is how each gets you there. Bottom line, you have 3 ways of getting there... the phone wiring, the cable tv wiring, or an antenna of some kind. That limits you to DSL through the local telco -- or one of very few ISPs that maintain equipment in various COs, which is extremely rare these days -- a cable modem through the local cable company, or some radio based setup (cellular, WISP, HughsNet(tm), WiMax, ...) that's generally very slow and expensive.
The choice of dozens of different dialup ISPs died over a decade ago. Dialup is wholesale these days -- just like DSL and cable. It's very uncommon for the ISP to actually own/operate the modem you're calling.
Equitable? (Score:2, Insightful)
How is metered bandwidth equitable? We are charged per unit for electricity, water, etc. because they are resources that get consumed. But if no one is using the Internet, those wires just sit there.
Bandwidth isn't a scarce resource except at peak hours -- and then, bandwidth caps don't do jack to solve the problem. Quality-of-service pricing would. Metered pricing with off-peak discounts would. But just plain metering would not.
-- 77IM
Re:It will be back (Score:4, Insightful)
It usually is when you have a monopoly. Until/unless a good substitute for Cable/DSL for the last mile comes along, they can get away with screwing us over because we don't have any real choice in the matter.
Re:It will be back (Score:4, Insightful)
>>>it's evident that SOMEONE is going to end up regulating the market
You forgot the third option of giving customers 3 or 4 internet companies to choose from, and let the customer have the power to choose.
Re:Mealy-mouthed bastards. (Score:3, Insightful)
Re:Rational cost estimates (Score:3, Insightful)
These are good points. And you'll notice that people think current prices are expensive, but the $50/month is something they're willing to pay. Based on your formula that would be $50/100GB. Which actually seems like a somewhat decent price.
The problem is that me watching an extra 2 hours of TV is not an extra $20 on my electrical bill. Me watching an extra 2 hours of TV using Time Warner would be. I think ultimately what's freaking people out is that this makes cable broadband unaffordable. Perhaps the solution is to have the government provide the cable lines, just like we have with the phone lines. Broadband internet is no longer something for the wealthy. I need it to conduct government business, and work from home. Perhaps we need to start talking seriously about how we get broadband into homes in a cost-effective manner without the possibility for anti-competitive shenanigans. AT&T has strong motivation to crush VOIP. Time Warner has a strong motivation to crush online music, tv, videogame and music delivery. Let's talk about cost again once AT&T and Time Warner divest themselves of their broadband divisions. Until then I don't think we can talk about this without suspecting they are trying to cap bandwidth to protect other divisions.
Re:Don't pick on Time Warner! (Score:3, Insightful)
You'd also need to come up with a good plan to hook up all the homes to the on-ramp though.
Just negotiate with the power company for the right to string wires on their poles..... oh wait, you mean the community gave an exclusive right to the cable company to do that and will use the power of the government to prevent you from doing so as well? Hmm.... "free market" indeed.
Pay-per-bit is not equitable (or sensible) (Score:5, Insightful)
You pay for water by volume and electricity by Watt-hour because when you use either of them, the utility has to treat/create and provide more. They have a bunch of static equipment and pipes/wires that are capable of providing a fixed maximum flow/power, but they also have real incremental costs for every unit consumed.
Bits aren't like that. The ISP buys a bunch of routers and switches and fiber capable of providing some amount of bandwidth, but if that bandwidth isn't capped then whether you use the pipe or not makes very little difference. The next bit costs the same amount to send regardless of whether or not you used the bit before. At the link level, bits are being sent back and forth regardless of whether or not any valid application data packets are contained therein. Peering arrangements are based on outbound traffic, so your downloads don't cost them anything that way. So outside of the tiny amount of extra electricity needed to process a packet which wouldn't even be worth charging for, the number of bits you consume has no effect on their costs.
In short, bandwidth costs lots of money, but once you have it, each bit of data costs virtually nothing. Therefore charging for bits makes no sense.
The only way in which your usage of the existing bandwidth costs them more money is if that bandwidth is saturated such that they cannot provide their customers with decent service, or accept new customers, and they have to buy more equipment/pipes etc. The only time that's going to come close to happening is during Internet Prime Time. Outside of that, and you can peg your bandwidth all you want and it's not going to saturate your ISP's link.
A person who downloads 2 TB of data a month, but does it all in the middle of the night, is much less likely to cause any problems than a person who downloads 20GB a month, but does it all at 8pm. It's the latter one who is going to force the ISP to go buy more equipment.
That's part of why this scheme was so transparent -- it didn't even attempt to address the peak usage issue.
You want equitable? Here's equitable: You pay for bandwidth, however you want, at a per-month rate. You can use your bandwidth as much as you want. However, during peak hours if the ISP is saturated they throttle everyone's connection speeds proportionally to their purchased bandwidth. Then, heavy users have an incentive to download off-peak for better download speeds, and light users who are under-utilizing their bandwidth don't even notice except that their ISP is no longer gagging.
Oh and if this happens too much, the ISP goes out and uses some of their profits to buy more equipment like any business trying to serve expanding customer needs. :P
But instead we get some BS about how it's the number of bits you download that is the problem. Which it is, of course, from their scheming perspective. If you download lots of large files, and those large files happen to be TV shows and movies, then you might not need your $60-100/mo cable TV. That is the "cost" that they're worried about wrt large downloaders.