Time Warner Expanding Internet Transfer Caps To New Markets

Akido37 writes "Time Warner Cable is expanding its transfer capping program to new markets in Rochester, NY, Austin, TX, San Antonio, TX, and Greensboro, NC. It seems they have been testing plans with 5, 10, 20, or 40GB of data transfer per month, with prices ranging from $30 to $55 a month. BusinessWeek quotes Time Warner Cable CEO Glenn Britt saying, 'We need a viable model to be able to support the infrastructure of the broadband business ... We made a mistake early on by not defining our business based on the consumption dimension.' Ars Technica adds, 'The BusinessWeek article notes that only 14 percent of users in TWC's trial city of Beaumont, Texas even exceeded their caps at all. My own recent conversations with other major ISPs suggest that the average broadband user only pulls down 2-6GB of data per month as it is. One the one hand, this suggests that caps don't really bother most people; on the other, it indicates that low cap levels aren't needed to keep traffic 'reasonable' since it's actually quite low to begin with.'"

Only 40Gb/month?

Only 40Gb/month on the top plan? Here in the UK, TalkTalk's "free with any reasonably expensive phone package" ADSL is 40Gb/month... though it's not really enough these days, thanks to stuff like iPlayer.

Re:Only 40Gb/month?

Maybe this is redundant but I think it needs to be said.

If you're on Time Warner, call and complain. Tell them that as a result of this new policy you are researching alternatives and as soon as you find one you will be canceling service. Let them know that you will be telling you family and friends who are less technically minded to start looking for alternatives too. Remind them that even if their profits on heavy users are slimmer, it is those same users who the rest of their customers go to for advice.

Then follow through, and make sure that everyone you get to switch tells the operator that "A friend who is very knowledgeable recently canceled your service because... and recommended I do the same."

Re:Only 40Gb/month?

The problem with this is that only people who hit the cap are going to be negatively affected enough to switch to a different ISP.

Guess what? Time Warner wants those people to switch, since they are the ones breaking their overselling calculations. The quicker TW can unload the high-volume users, the better it is for TW. That is, of course, unless high-volume users pay additional charges for their excess volume over the cap. Then, those users are profitable again for TW.

Personally, I think tiered pricing by volume is a good idea, since it more fairly distributes the cost of providing service.

Plus, I was able to download some 8 TB of porn before there were caps, so I'm good for a while.

Re:Only 40Gb/month?

Plus, I was able to download some 8 TB of porn before there were caps, so I'm good for a while.

But what about next week?

Re:Only 40Gb/month?

I cannot see why we get electricity, gas, water, garbage service and other things measured and pay for the amount we use should not also apply to Internet bandwidth.

With the exception of water, all of those other things you mention have very real marginal costs. The more you use, the more the company has to spend. Electricity costs the company proportionally because they have to use more fuel to produce it. With gas, after you exceed a certain amount, somebody has to go out and drill another oil well to capture more. Similarly, with water, if you exceed the natural capacity of the aquifer, the wells eventually dry up and you have to spend money to drill new ones and/or truck in water until the aquifer replenishes itself. Garbage service costs more because you have to hire more people to work more hours if people use it more heavily. There are very real, tangible marginal costs involved with all of those things.

Internet bandwidth is not like that at all. Initial infrastructure costs notwithstanding, the cost of moving a terabyte of data is approximately the same as the cost of moving a gigabyte. Adding lines to increase capacity costs money, but within the limits of the available bandwidth, the wires have to still be maintained and equipment periodically replaced whether you transfer a terabyte or a byte.

Also, all of the things you mention can be conserved and used later. By not using water, you are increasing the levels in the aquifer (to a point) that can be used later when you have a dry spell. By not using electricity, you are causing generators to be taken offline, saving fuel that can be used to produce power later. By not using as much gas, you are leaving gas in an oil field that can be retrieved later or stored in tanks for future consumption. Internet bandwidth, however, cannot be conserved. Once a second has passed, the gigabit you could have transferred in that time was either transferred or it wasn't. If it wasn't, you can't transfer two gigabits in the next second to make up for it.

The marginal cost of providing Internet bandwidth is zero, so the marginal cost to customers should also be zero. Customers should pay for the infrastructure costs amortized over the life of the hardware plus some percentage for profits. Any other scheme is a scam.

The problem is that these companies have lied to consumers for years saying that they can provide X Mbps (for some value of X) to customers in hopes that they would never really use that much, knowing full well that they were massively overselling their capacity to turn a substantial profit. Now, as customers start to do more with that bandwidth, instead of turning around those huge profits to expand the infrastructure, they are looking desperately for ways to continue to turn huge profits without actually improving the infrastructure. After all, it's not enough to break even. They have to make more profit than the year before to add value for their shareholders. At some point, such an economic model breaks down and they have to pay the piper. I think we're to that point, and no amount of tiered bandwidth is going to fix that. If they continue down this path instead of spending the money they need to spend to improve their infrastructure, they will soon be supplanted by disruptive technologies [slashdot.org]. Maybe that's good, but it certainly won't be good for companies like Time Warner.

Re:Only 40Gb/month?

"stuff like iPlayer" is exactly what they are afraid of. This isn't so much about bandwidth costs, though that is somewhat important, as it is about protecting their legacy video model.

Re:Only 40Gb/month?

'We need a viable model to be able to support the infrastructure of the broadband business... We made a mistake early on by not defining our business based on the consumption dimension.'

Lol what? Does he think we're fucking stupid?
Time Warner (aka Road Runner) started experimenting with cable modems in 1995, but didn't go big until 1997ish.
Is CEO Glenn Britt really saying that their business model hasn't been viable for over a decade?

More likely they've been overpromising for over a decade and it's only been recently that demand has caught up with the promises.

Re:Only 40Gb/month?

Here in San Diego, I have one of their RoadRunner packages. I get up to 8Mbps (and often the full 8Mbps), but I see it's also common to have up to 50Mbps. On a 5Mbps line you can download about 50GB in 24 hours. On an 8Mbps line just over 80GB. TW reps have announced a 100GB "super-tier" via Twitter. Even so, you can exhaust that in under 2 days at only 5Mbps.

Sounds like a lot of bandwidth? 720p H.264 will run 5-6Mbps for decent quality (my opinion). If you watch 24 hours of it you'll blow through their 40GB plan in around 19 hours of viewing (based on 5Mbps avg for the video). 1080p? Let's call it 8Mbps average for the video bitrate (favorable for the ISP in my opinion) and you'll exceed your $55 plan (according to the summary) after watching only 12 hours worth of content.

Tier based pricing such as this will kill innovative new services. If this becomes commonplace I doubt you'll see some of the video sites emerging today serving a lot of HD. We're even less likely to see online music stores adopting lossless formats. Because end users will only be able to download a limited amount per month there will be less pressure to lower bandwidth prices for backbone/CDN - "demand" (and I use that term loosely in this context) will outstrip supply.

I see it like this: Thanks to things like YouTube HD, Hulu, Netflix online, Veoh, and so forth, we're *all* downloading more, no matter what the ISPs try to tell us "the majority of their customers" use. Their margins will be getting squeezed. You aren't benefiting from this new tiered model because "you aren't subsidizing high use users" - you're going to be paying about the same, if not more, and your plan will give you less downloads and greater risk (if you exceed it).

I also cannot help but wonder for ISPs that are linked to media giants whether there is some line of thinking that says "We're bleeding due to piracy, people are dropping their cable packages, motions against BitTorrent haven't worked, let's find another way to stem the bleeding". If this were a factor it would be putting self protectionism against national infrastructure interests.

Anyway - the main thing to keep in mind is that this is not just an issue for your net access and wallet today, it will limit the kind of services and media that are developed tomorrow.

Re:Only 40Gb/month?

Someone could think it is the exact opposite, as in you're not using what you paid for. But I don't think either is true. In reality, you chose to pay for a connection that had a certain capacity even though you knew you didn't need it. But you thought it was a fair deal, the seller thought it was a fair deal, you both agreed, you're both happy. The GP went to the same seller, thought it was a good deal, the seller thought it was a good deal, both agreed, and both are happy.

I don't get angry because someone else spends longer at the gym than I do, even though we're both spending the same monthly amount. If I really thought it was unfair, I could spend more time there, or ask to pay less, or go somewhere else where they limit the time you can spend in a gym.

Re:Only 40Gb/month?

This just means that you are an abusive user who should pay a hell of a lot more than I do for Internet access. I only use 1 to 2GB per month, since I rarely do bulk downloading. I think every plan should include 10GB of throughput and each additional GB should be an additional charge. Then assholes like yourself can pay your own way rather than sponging off my payments.

WTF? I live in Finland, so it's most unlikely that you're subsidizing my internet access.

You're talking through your ass with the "abusive user" allegation, too. My ISP has two 10Gb switches as uplink for the local fiber network I'm attached to, and there are just a few hundred fiber subscribers. The optical switch they installed in my house can serve 8 cat6 ports at full speed (and 800Mb is only a fraction of the fiber's bandwidth) - they have clearly planned for us using far more bandwidth than we do today. Even if I used 1TB per month, that would only average 3Mb per second, or about 3% of the capacity of one cat6 port. The current pair of 10Gb switches can handle 700 houses with throughput like that. As I said, our monthly usage is generally less than 400GB, so the switches could handle 1700 houses like ours. In fact, every other fiber customer they have could be using MORE bandwidth than us, and it still would not affect my bandwidth.

Our ISP has done it right: they have adequately provisioned the infrastructure. We don't need to care how much bandwidth our neighbours are using, and they don't need to care how much we're using. The ISP has also overprovisioned the so-called "last mile" segments to each house. The bottleneck, when it arrives, will be the pair of 10Gb switches, which are the easiest to upgrade (much faster switches are already available).

FYI, I pay euro55 per month for the internet access, and also get IP TV and a package of pay channels. The ISP must consider it profitable, as they offer the same package to others, too. Here (Hiltulanlahti in rural Finland, actually), ISPs do not persecute their customers with miserly third-world usage caps. In Helsinki, of course, a similar package starts at about euro45 per month.

Just out of interest, how much are you paying for the few GB you use monthly? And which city/state/region is it, just for the record.

Here's my thoughts

According to 77Punker,

Conflict of interest

Time Warner has an interest in keeping media businesses under control, therefore it cannot allow streaming services to gain traction. Video streaming in HDTV quality will easily reach these limits, but almost no other internet usage will.

Re:Conflict of interest

I can't emphasize how important a point you've just made.

The cable and telecom providers have collectively decided to create in peoples minds the idea that a "reasonable" cap is a few dozen GB, give or take: a level set so as to discourage the small but growing number of users who download much of their video and don't bother spending $1000/year on broadcast cable / satellite. From the cableco's perspective, the worst of it is that the users downloading video are exactly the technically literate sort that want, and under other circumstances might be willing to pay for, high-end cable packages with HD channels.

Bandwidth is just not that expensive, nor is it anywhere near as scarce as the cable companies are suggesting. This issue is being framed in terms of cost and scarcity to hide the fact that this is just protecting an old business model and its rather generous revenue stream.

Re:Conflict of interest

Bandwidth is just not that expensive, nor is it anywhere near as scarce as the cable companies are suggesting.

This is exactly right. How is it that it's prohibitively expensive for the average Joe to get decent connectivity, yet I can maintain a colocated server in a very nice data center at a constant 70 degrees F, with a UPS system that will keep my server up for two weeks after the mains goes away, with a terabyte of data transfer each month on a dedicated 100 megabit switch port (and I've yet to see my transfer rate drop below 10Mb/sec), and a /27 netblock, *and* a SLA, all for $100/month? Also, when I submit a service ticket, they respond in less than two minutes and can discuss the issue intelligently without stepping through an inane script. And, in the unlikely event I overrun my bandwidth allocation for the month, they'll just charge me a reasonable fee for the overage and never utter a word about cancelling my account.

Hmmm

According to Ars Technica,

What, did Soulskill hit his cap or something? DAMN YOU TIME WARNER CABLE FOR KEEPING ME IN SUSPENSE!

Isn't this really pre-emption of competition?

As people start to get movies and TV shows via the Internet, they're moving away from cable TV content. Cable wants to maintain their monopoly. It's time to get the Justice Department looking at this.

5GB/ MONTH?

FUCK. THAT. Thankfully I don't have Time Warner. Unfortunately I do have Concast. I already got warned once for being over my 250GB limit. Since they want to charge me $7/mo more for an HD converter box (that I can't buy anywhere, only rent from them) that my tv does natively (and at a higher resolution over the air than what they send compressed) and I actually pay for. The basic subscription I pay for includes HD channels but I can't watch them unless I pay for the converter box or plug the cable straight into my tv and lose the ability to watch On Demand programs. So I download the programs I do want to watch in high def.

Want a good comparison? Take the amount of time the average customer spends per month watching tv. Calculate the relative bitrate for a tv program (including commercials) adjusting for resolution, multiply it by the average viewing time, and I guarantee you it will be greater than the any of the current bandwidth caps. Bandwidth caps are bullshit. They're just another way to milk more money out of the consumer. The system can handle it. If they need more bandwidth for the whole network, light up the dark fiber and/or upgrade the infrastructure we already paid for years ago.

Price fixing practically...

They're attempting to force "heavy users" to pony up for bandwidth that already exists in abundance in their network.

My own ISP started bandwidth capping in the last year and a half and cut me down to 60GB without notice and I was pissed. Personally I wouldn't be surprised if the *IAA's of the world are influencing these decisions.

Bait & Switch

This is so clearly Bait & Switch that TW should be proscuted within an inch of their corporate lives. Their top officers should be in jail, to wit:

1: Promise unrealistic, unlimited downloads and speeds that discourage all competition.
2: Once you have the monopoly and the consumer has nowhere else to go, bring in onerous download caps that actually reflect the basic capabilities of your pitiful system.
3: Buy off Washington so that you won't be punished for #1 and #2.
4: PROFIT!

The really Big Lie in all of this is that the argument for caps is that the system only has a very limited capability. Yet WITHOUT CHANGING OUT A SINGLE PIECE OF HARDWARE you can get a much higher cap simply by paying a much higher amount of money. Where did all that extra bandwidth come from? Clearly cable companies lie like rugs, and the public and regulatory agencies continue to buy into those lies as we're all being screwed over!

Austin's a tech town. Let's fight this!

Let's fight this, Austinites. My gf and I are engineers, and we VNC into work on weekends and for late nights, and we use more than 2GB/month just on that.

Here's the letter I'm sending to my senators and representatives. I need to figure out who to send it to at Time Warner and the Statesman. (The big newspaper, for out-of-towners.) I'm looking for advice and critique and sources for some of the arguments I've heard here. (Look for the [brackets])

Dear ________,

I am an electrical engineer with *company*, and like many engineers in the emerging high-tech center of Austin, I rely on high-speed Internet connections to my home. In these times of economic hardship, it is more important than ever for working professionals to be able to access work computers and other information quickly and economically.

Time Warner Cable has announced that they are implementing tight limits on the amount of information that they will provide to users of their cable modem services. While Austin's workers attempt to reach a compromise between work and family life by accessing critical business operations over the Internet, Time Warner plans to restrict their networks for these heavy users. They are instituting these caps in spite of the fact that a vast capacity of their fiber-optic lines remain unused, and in [year], Congress gave [millions] of dollars to cable companies to improve our nation's digital infrastructure.

For Time Warner to pocket this investment and make no improvements, then attempt to extort outrageous fees that infrastructure from Austin area workers, is outrageous. Only the fact that there is no significant competition for broadband access allows cable companies to unilaterally impose these restrictions on those of us who depend on the Internet for our livelihood. As Congress has given heavily to cable companies and has seen no improvements, I would urge you to closely examine the stranglehold this company has upon Austin's digital infrastructure and the abuse of monopoly power that this upcoming cap represents.

I look forward to your quick action in this matter, [and I anticipate supporting you in [your next election] (for elected officials) ].

*OpenGLFan*

Re:According to Ars Technica,

The poster fell into a comma.

Re:5gb is just ridiculous

No you don't. Unless you're attaching huge files to the emails or transferring huge files over AIM, you would wear your fingers to bloody stumps before you could approach generating 1GB of data over a text channel carrying natural language.

Re:This is amazing...

I only wonder why they are expanding the test to larger markets where they don't have significant competition from other ISPs

That's the whole point. Here in Rochester, NY, we have no other option but DSL. In Buffalo, NY (about an hour away), they have Verizon FiOS.

We are getting screwed, they are not. We have no other option for broadband, and they do.

Re:14% is a lot

Comcast... Maybe this will be just the thing to spark some competition!

You must be new here...

Re:Online gaming usage?

How about digital delivery? Steam, XBox Live Marketplace, and PSN? You can legally download original XBox and PS1 games through those networks, and plenty of games through Steam can top 5 GB by themselves.