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Time Warner Shelves Plans For Tiered Pricing
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.
Anybody who tries to screw over their customers, gets called on it, and then says that they are defering until customers can be "educated"(no doubt with an expression of injured innocence) has a one way trip to the special hell waiting for them.
It's exactly like normal hell; but your nose also itches.
They'll just find another way to screw you. Internet connectivity should be a regulated utility.
Glad to see some *real* grassroots movements working.
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?
People in cars cause accidents....accidents in cars cause people
I never knew how "good" Time Warner was until they sold out, in our area, to Comcast!
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
It's unfair to sell and offer the service as "unlimited", which they did years ago when the idea of "unlimited" was big for dial-up companies, and then turn around and tell people they're going to limit them.
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.
More likely the plans have been shelved for only long enough to let the public outcry subside and for some other thing to take hold so they can be quietly rolled out under a different name and with slightly different wording.
Back in the mid 90's, Japanese telecoms decided that they would charge for a piece of each 'type' of phone action...one rate for voice, another for data, etc., while billing was based on quantity (metered.
This was while it was trivial to find service in North America that was flat rate, but still unique per type.
It didn't take much to find ways around the J billing hassles, such as dial-back for international LD. And it only took a few years for the J telcos to wake up to what they were not getting and alter their methods to at least keep them in the game.
Metered use is just an example of the free reign that domestic telcos have - they can dig into the client's pockets....so they will. Rather than build it so they will come, they cling to business models that are increasingly going out-of-date. And with no one to stop them, the domestic phone market will once again become a killing field of grand proportion, with the victim, as usual, being the consumer.
...that the power of the internet has caused us to rise to defeat this proposal. As a TWC subscriber myself, I'm out of DSL range and would have been SCREWED if this happened. I'm paying enough already at almost $50/month for my broadband. TWC is very upset that they are becoming a utility and want to find a way to grow their $$ even while their traditional cable business is under pressure. I suspect this is not the end of ways they will try to feather their caps at our expense.
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.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
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.
The customers raised a big stink, and the company listened?
The system actually works?!?!?
Student: Is it true that the foundation of the universe is paradox?
Master: Well, yes and no.
I bet it was fun watching the Time Warner Customer Service dashboard/control panel over the past few days.
"Look, the cancellation rate is dipping....oh, no it isn't. Doh!"
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.
Mod parent up. These pricing plans need to be looked at very closely to make sure that media companies aren't illegally tying their content to their monopolistic delivery channels, in an effort to squeeze out other content providers like Netflix.
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.
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.
Or the companies could build their networks to support the increased load. It's greed and nothing less than greed.
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.
That they actually listened to public opinion.
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.
"Yes" said the Time Warner representative, The $55 Lobster dinner was subsidized by the $5 Salad eater when they both equally split the bill at $30 each.
Now, under our new pricing plan, the Lobster diner will pay $95, their fair share after we total their usage and the Salad eater will continue to pay $30. Well actually they'll pay $35 after our proposed price increase. That seems fair to us. Why would any consumer have a problem when we level the playing field so everyone is treated equally? Currently only one consumer, the Salad diner, is getting screwed. With our new pricing plan both the Lobster diner and the Salad diner will be treated equally.
That makes sense to me.
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
Student: Is it true that the foundation of the universe is paradox?
Master: Well, yes and no.
Congressman Eric Massa (D-NY): Pssst, Chuck.
Senator Chuck Schumer (D-NY): Yeah?
Congressman Eric Massa (D-NY): Sure been tough lately being a Democratic member of Congress.
Senator Chuck Schumer (D-NY): Tell me about it. Tea parties. Fox News.
Congressman Eric Massa (D-NY): I know a way you can get real popular.
Senator Chuck Schumer (D-NY): Go on...
Congressman Eric Massa (D-NY): People hate Congress and are afraid we're spending too much. I mean we're just rewarding our constituents after 8 long dry years but...
Senator Chuck Schumer (D-NY): Yeah, I know.
Congressman Eric Massa (D-NY): But there's someone even less popular than we are.
Senator Chuck Schumer (D-NY): Lawyers?
Congressman Eric Massa (D-NY): Call that one a tie. Think even worse.
Senator Chuck Schumer (D-NY): Uhhh...where's my teleprompter? Oh yeah, loaned it to Barrack. Wait, I got it!
Congressman Eric Massa (D-NY): Right, the cable television companies that we're supposed to be regulating to the benefit of the consumer.
Senator Chuck Schumer (D-NY): Ha ha ha ha ha...
Congressman Eric Massa (D-NY): Well Time-Warner just decided to screw over their customers even worse than before, and they're starting it in our own great state of New York.
Senator Chuck Schumer (D-NY): What are they doing?
Congressman Eric Massa (D-NY): Their costs are dropping and their profits are up.
Senator Chuck Schumer (D-NY): Profits are up? Aren't we taxing them enough yet?
Congressman Eric Massa (D-NY): Probably not, but that's not the point.
Senator Chuck Schumer (D-NY): But raising taxes on other people and spending the money on pork is about all I know how to do - except to blame Bush for everything, that is.
Congressman Eric Massa (D-NY): This is easy. I'm just a small member of the House and they're not listening to me, but you're the senior Senator from a powerful state. They can't ignore your voice.
Senator Chuck Schumer (D-NY): What exactly are they doing.
Congressman Eric Massa (D-NY): They imposing caps that will raise the average user's bill by at least 66% while calling them pigs for using the Internet connections they actually paid for.
Senator Chuck Schumer (D-NY): God Forbid! We can't have that - unless they need the money for more campaign contributions [wink][wink][nudge][nudge].
Congressman Eric Massa (D-NY): I think they need new private jets.
Senator Chuck Schumer (D-NY): So what do I need to do?
Congressman Eric Massa (D-NY): Tell them to cut it out, or else - and you'll be a hero to millions.
Senator Chuck Schumer (D-NY): That easy?
Congressman Eric Massa (D-NY): That easy!
Senator Chuck Schumer (D-NY): And if I don't, what's the downside?
Congressman Eric Massa (D-NY): They'll be protesting in the streets this weekend.
Senator Chuck Schumer (D-NY): We can't have any more of that. Except for NBC who is already in our pocket, I don't think we can shut down the rest of the news organizations a second time so soon. Not after the ratings Fox News got out of those tea parties!
Congressman Eric Massa (D-NY): Then we've got a deal? You'll remember who brought this to you?
Senator Chuck Schumer (D-NY): Of course, kid. The check's in the mail.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
AT&T is metering Beaumont now? OMFG! Why do I have to live in the one place in the entire motherfucking country that has metered 'bandwidth' on every ISP available? And why has no one else on Slashdot pointed out that there is a city in the United States where TWO major corporate ISPs are capping their internet services? Why isn't Beaumont the internet's net neutrality battleground instead of these other cities?
It was bad enough when Time Warner started doing it, but now AT&T has done it, and quietly for sure. I simply had no idea, and it was not announced in any way. I thought AT&T's trial was in Reno only. This is a fucking outrage, and I think I will spend my day off tomorrow contacting my representatives in federal, state, and local government. Seriously, this is BAD. I was shopping for DSL as recently as LAST WEEK to try to get away from paying Time Warner anything, even though I am (quite luckily) still grandfathered in to their unmetered plan. I thought I had no options because DSL isn't even available where I live, but now I quite literally have NO FUCKING OPTIONS, they have all been stripped away. It's only a matter of time before they start billing me the metered rate, so I have to act quickly. Does anyone else here live in Beaumont? We need to protest!
Here's another article I found on the Beaumont caps.
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.
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.
The enemies of Democracy are