Time Warner Transfer Caps May Inspire Fair-Price Legislation

Time Warner's recently announced plan to expand their broadband transfer caps to new markets drew heavy criticism, which prompted their attempt to smooth things over with a ridiculously expensive "unlimited" plan. That wasn't enough for New York Representative Eric Massa, who now says he will draft legislation to "curb tiers, particularly in areas where a broadband provider owns a monopoly on service." Massa said, "Time Warner believes they can do this in Rochester, NY; Greensboro, NC; and Austin and San Antonio, Texas, and it's almost certainly just a matter of time before they attempt to overcharge all of their customers," adding, "I believe safeguards must be put in place when a business has a monopoly on a specific region."

Comments

Up next

[Anonymous Coward]

Unlimited water and electricity for flat rates plus a pony.

Re:Up next

[sinrakin]

Since the subscriber has no control over the amount of data sent to him from a site (ads, flash videos and music that play automatically, etc) it's hard to see how people would be willing to accept a pricing model that charged them for data they hadn't asked for and didn't want to receive.

The real solution

[halivar]

The real solution is to get rid of government-enforced monopolies on utilities.

Re:The real solution

[marco.antonio.costa]

Nonsense. If that was true, then why don't we have a state-sanctioned monopoly on all foodstuffs so we don't run the risk of 'unreliable' supply? I mean, food is so crucial.

The reason for any enforced monopoly is to artificially raise prices.

If you honestly think that competition to lower prices is only achieved through skimping on quality or reliability then I'm sure you used a room-sized, vacuum-tube, multi-million dollar computer from the 60s to type your comment instead of a US$ 400 MSI Wind netbook, but then again, what do I know. :-)

When something is left to the marketplace and free competition ( i.e. "unregulated" ), consumers will choose the best and cheapest alternative. When it is left to regulation, consumers are deprived of choice on that characteristic by force of law, and if the regulation is poorly crafted ( not unusual, to use an euphemism ) then we're all screwed with nowhere to run.

Limiting competition is regulation's very goal, with several companies lobbying to make sure the final text benefits them individually as much as possible.

Re:The real solution

[vadim_t]

Nonsense. If that was true, then why don't we have a state-sanctioned monopoly on all foodstuffs so we don't run the risk of 'unreliable' supply? I mean, food is so crucial.

Because it's not needed? There's no problem with 50 producers competing for who can deliver the cheapest rice, because there's no problem with all of them making their products available for sale, and it still must pass government quality standards.

That doesn't work with things like water though. Would you want to have 10 sets of water pipes, with all the street digging that implies, and 10x more frequent pipe breakage? The space available for piping is very limited as well.

In this situation the way to go is not having 10 sets of pipes, but have one, highly regulated delivery network (water, power, fiber), and competition in the supply of that network (powerstations, water filtering plants, ISPs).

Done correctly, the delivery network lacks any reason to prefer or favor one provider over another, and the providers lack the ability to deny access to each other, since they don't own the delivery network. The consumer can then freely choice which they want, and the entry barrier for a new provider is low because it doesn't require digging up streets.

Caps are about broadband video

[sdo1]

These ridiculous caps are all about cable companies protecting their becoming-outdated business model. Right now, they charge for content (HBO, various extra channel packages, etc.). Customers getting high quality video (for some definitions of high quality) from places like Hulu is eventually going to eat up the cable monopoly cash cow that Time Warner Cable currently enjoys. So how do they stop it and protect their outdated business model? Caps. Insanely low transfer caps that all but eliminate high amounts of streaming video and that protect their cable company business.

If there's a reason the gov't should step in and put a stop to low transfer caps, it's this.

-S

Re:Caps are about broadband video

[daVinci1980]

I think you're right on the money. A friend of mine also pointed out that this is also a kindof backdoor to a tiered internet.

Imagine that if everyone had caps, TWC and others could go to netflix and say "you know, for only 1% of every customer's signup fee, we'll avoid counting bandwidth you send against our customers", and then announce the partnerships and how you can watch Netflix streaming on their service "for free".

I can't wait to replace TWC. As soon as I find a provider in my area who isn't TWC and isn't AT&T, I'm so there.

Re:America against Bandwidth Caps

[japhering]

It is not so much the caps.. it is the fact the the rates are 3-5x what people are paying now which is, antidotally, 2-3x times what most people around the world pay. Caps wouldn't be so bad if everyone got some benefit.. as it is it is just an excuse for the ISPs to grab a 3-5x price increase.

Re:Complaining when you got what you asked for

[Jewfro_Macabbi]

From Time Warners' financial filings:

"High-speed data costs decreased for the three and nine months ended September 30, 2008 primarily due to a decrease in per-subscriber connectivity costs, partially offset by subscriber growth.

"In 2007, TW made $3,730 Million, on high speed data alone, and then had to turn around and spend $164 Million to support the cost of the network. 2007 total profit on high speed data: $3.566 Billion"

"In 2008, TW made $4,159 Million, on high speed data alone, and then had to turn around and spend $146 Million to support the cost of the network. 2008 total profit on high speed data: $4.013 Billion"

Stop shilling for corporations. Clearly the unlimited broadband model has been extremely profitable.

Wake up and smell the non-corporate content suppression.

CEO Says one Thing Their SEC Statements Say Otherw

[Bruha]

CEO of time warner said that broadband costs are spiraling out of control.

Their SEC Statements for 2008 said YOY operating costs for their broadband service decreased 11%. It also netted them nearly 4 billion dollars in revenues.

In 2007 they also reported decreased operating costs and massive profits.

I'd love for that asshole to testify to congress the same thing, cause I'm sending my congressmen their 10K statements. Maybe a CEO going to jail for blatantly doing nearly the same shit bank CEO's and other officers have been doing will finally wake these people up.

http://stopthecap.com/2009/04/10/why-is-time-warner-saying-costs-increasing-to-consumers-but-decreasing-to-stockholders/

freemarkets

[falconwolf]

Free market capitalism becomes corrupt when a few people (or pseudopeople(Corps)) buy up the market.

That is not a freemarket. A freemarket is a "free market". If I wanted to and had the money in a free market I could have cable or fiber optics lain down to provide any and all services it could handle. But there is no free market. Instead the telecos and cablecos try to block competition by blocking access. The radio and TV broadcasters do the same with the airwaves.

Seems like corruption is the natural consequence of capitalism.

Corruption doesn't apply to capitalism any more than it applies to communism and socialism. Anything and everything, including churches, mosques, and temples are susceptible to corruption.

Falcon