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Time Warner Pulls Plug On Metered Billing Tests
fudreporter is one of many who writes to tell us that Time Warner is not planning to continue their tiered consumption tests at this time. The company is not completely admitting defeat, stating that they "may return to the idea in the future," but for now the test has been shut down. "The plan would have established several tiers based on how much consumers use the Internet. Time Warner Cable had said at the time that it believed that consumers who download the most content need to pay more to cover infrastructure upgrades. The plan was first announced two weeks ago, then modified with higher download caps last week. In a news release yesterday, Glenn Britt, the chief executive of Time Warner Cable, said, 'We will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met.'"
http://tech.slashdot.org/article.pl?sid=09/04/16/2047220&art_pos=27
If they'd just started with a simple price per gig and kept it to the reasonable electric/water model, they'd have been fine. The Cell phone model was a lot of the reason they had backlash I suspect.
We will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met.
Translation: We like having customers and don't want the government taking away our freedom to implement usage caps quite yet.
It doesn't make sense to bill transfer like you do water or gas. Water you don't use is still there tomorrow. Transfer you don't use is lost forever.
Since the cost to run the system is fixed, price per gig is lowest when you're maximally utilizing the system. Since a per gig charge encourages people to use less, it's encouraging less economical behavior.
As in any other industry, if your customers want too much of your product you should make more. Punishing your customers for using your product is just backwards.
Give me Classic Slashdot or give me death!
Some bloggers also speculated that the plan was part of a scheme to discourage people from watching streaming videos online rather than watching Time Warner Cable on television, which Time Warner officials denied.
I wouldn't actually be all that upset if Time Warner was able to kill video streamed over the Internet. I like the way the Internet is now. Maybe I'm being too conservative, but moving video over from the sunk cost that is the cable network we already have in place is going to be too costly and to me seems dangerous to the Internet as we know it.
I personally think tiered pricing is a move in the right direction, though. As it stands now, heavy transfer people are being subsidized by those who are light users. This does not exempt communications companies from being held responsible for the universal service funds they most likely squandered, but consumption based billing only makes sense. It always surprises me how this remains a perpetual issue.
I got a catholic block.
The problem is that the ISPs don't pay by the GB for what they use, they pay for bandwidth.
I get what TW is trying to do here. With hulu, youtube, netflix, p2p, bittorrent and the plethora of other options for downloading entertaining content users are going to slowly start canceling their cable services. Especially the premium content that TW get's so much revenue from (HBO, Sports packages etc.)
Now you can pretty much stream any sporting event live, so even that isn't going to keep viewers subscribed.
But they are missing one critical piece. Most users don't know anything about how the software on their computers work. They automatically assume that their A/V product will protect them from every botnet and worm out there. Is some 66 year-old woman who is infected with a botnet and sending out gigs of SPAM per day really using the bandwidth she would pay for. She has been diligent in trying to protect he computer by installing A/V software, but she is by no means and expert and shouldn't be expected to know that a botnet has infected her computer. The botnet software is designed to hide itself from her knowledge.
So who is TW going to charge for that bandwidth usage. Because as far as she is concerned all she did was download a few pics of the grandkids, send a few emails, and do some genealogy research. Then she gets hit with a Tier1 usage bill. She won't be able to sufficiently explain the extra usage, and I'm pretty certain the person answering phones at TW won't be able to explain it either.
Those who can do... Those who can't get a certification from Cisco or Microsoft.
I am assuming that the other interested parties were US Congressmen...
From arstechnica.com:
That "misunderstanding" went all the way to the top. Congressman Eric Massa (D-NY) last week announced his plan to introduce a bill placing limits on the ability of companies like TWC to cap its connections, especially in areas where it was a virtual monopoly. But it took a heavier hitterâ"in this case, Senator Chuck Schumer (D-NY)â"to make TWC change its ways.
People don't measure the internet the way machines do. Machines tend to measure byte counts. People can't do that. We can count numbers of pages but even that gets a bit questionable with frames and auto-refreshing pages and the like. We can count how many hours we sit in our chair, but are we really in the chair or did we start something and then walk away?
If they want to charge based on usage, it had better be presented in a way that makes human sense. People downloading P2P and people streaming video are still all downloading content.
It all doesn't make any sense. The best solution is to control the speed of the connection and be done with it. How hard could it be? And while we are fixing problems, let's get ISPs regulated like any other utility? You know, like phone, power or water?
I've been saying for years that any system wherein you can use as much as you want of a shared resource as you want for a single, fixed price inherently suffers from "The Tragedy of the Commons" problems, and that the internet must inevitably adopt some sort of "pay per byte" business model. I even think the multi-tier model makes more sense than counting every byte. My only objection is that as a consumer I would like to know in advance how much my bill will be every month (makes it a lot easier to stay on budget), and thus the consumer should have the option of choosing either reduced access or getting bumped into a higher cost tier when they exceed a bandwidth limit. Hughes Net satellite internet only gives you the first option, it automatically degrades your connection to less than dial-up bandwidth for 24 hours every time you download too many bytes. Yeah, I'd prefer to know how many bytes the limit is, and get some sort of warning when I'm approaching it, but the truth remains it is a shared resource, which justifies "punishing" those that use more than others.
I've abandoned my search for truth; now I'm just looking for some useful delusions.
"may return to the idea in the future"
So they'll keep that in their back pocket and every time they need to actually put some money into infrastructure improvements, they'll trot this out. Oh, if we could only meter billing for the really big users. Everything that's wrong with telecomm and the internet will hang on this issue. If we could just do this, then everything would be better. They'll pay for PR press hits in industry rags, try to make it look like an inevitable development. They'll wait for the political climate to change, the regulatory environment, like a stubborn infection they'll be ready to strike the moment defenses are weak.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Support his bill to "encourage" what Time Warner can do with the $200 billion in infrastructure that was paid for by taxpayers.
http://blog.wired.com/business/2009/04/congressman
Write your congressman to support this bill
https://writerep.house.gov/writerep/welcome.shtml
Get it passed.
Wrong. The internet backbone is fundamentally limited and, thanks to bittorent, it's finally being congested. Think about it this way: if everyone maxed out their connections all the time, everyone's connection speed would be a small fraction of what they currently take for granted. As media streaming -- bittorent, netflix, hulu, or whatever -- becomes increasingly popular, connection speeds WILL hit a wall. When people do realize that internet bandwidth is a limited commodity, something is going to have to give. I, for one, am not going to pay the same monthly fee for 1GB/month (to use basic sites like slashdot) that 100GB/month users use to download illegal media. Sure, I'm opposed to RIAA, as is everyone on slashdot. But there comes a point where I'm fed up with these bandwidth leeches.
Wrong. The internet backbone is fundamentally limited and, thanks to bittorent, it's finally being congested. Think about it this way: if everyone maxed out their connections all the time, everyone's connection speed would be a small fraction of what they currently take for granted. As media streaming -- bittorent, netflix, hulu, or whatever -- becomes increasingly popular, connection speeds WILL hit a wall. When people do realize that internet bandwidth is a limited commodity, something is going to have to give. I, for one, am not going to pay the same monthly fee for 1GB/month (to use basic sites like slashdot) that 100GB/month users use to download illegal media. Sure, I'm opposed to RIAA, as is everyone on slashdot. But there comes a point where I'm fed up with these bandwidth leeches.
See here's the problem...with unlimited bandwidth TW still made money. As a matter of fact their OPS cost went down and their profit went up. So the argument that more bandwidth cost them more $$$ doesn't hold any water.
As I said in one of the other TWC threads:
What should happen is that they should stop overselling their pipes. If Comcast has 100Mbps of bandwidth for the 100 users on my node, then they shouldn't sell me a 6Mbps plan; it should be a 2Mbps plan at most. If I have a download running at 4AM and noone else is online, then there will be more empty bandwidth on the node, and I might get 6Mbps on my download as a "free bonus".
Then at least if everyone on the node is using the network at once, I'll have 50% of what Comcast sold me, instead of ~15%.
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Here's why this was a colossally stupid idea on Time Warner's part: they were destined to piss off their savviest users who know the most about how to switch. Even though TWC is the "default" high-bandwidth option in Austin, there are alternatives in most places. While Suzy homemaker reading emails and doing light web surfing probably doesn't know much about those other options, the heavy users do. There was a huge revolt among the tech-savvy in Austin - local tech mailing lists became a TWC bitchfest, with pretty much everyone saying they weren't only going to cancel their own service if this went through, but they were going to actively help their friends and family members quit as well.
As we've learned in economics 101 if the price is too low for a scarce commodity, you get a shortage
Economics 101 also says that if you're short of resources you increase them. Broadband providers were given hundreds of billions of taxpayer dollars to buildout broadband but all they did with it was pad their bottomline.
Falcon
Should there be a Law?
The water analogy is priceless...
Even where there is potentially plenty of water, drinkable water is NOT an unlimited resource. And it's not 'there' if you don't use it. Water evaporates and leaks. But the reality is that water, like bandwidth, is a finite resource. It costs to find water, transport and store it, make it drinkable, and then dispose of it. If you use more, it gets scarcer.
Bandwidth is also finite. It costs money to provision for it, actually maintain it, solve problems.
Some of you may remember when you were responsible for the Internet link at work - when the DDS2 circuit didn't cut it any more, the ISDN line was maxed out (thank God!) and then the T-1 wasn't enough, and 4 T-1s bonded couldn't handle it. With every increase in bandwidth came more costs, for a new or more DSU/CSU, new router, firewall. You used an external mail server to filter the spam, saving 90% of your POP/SMTP traffic. You blocked WebShots, and your CEO drove you c-r-a-z-y with the constantly-updating cnnmoney.com Now it's Flash that eats bandwidth, and you want to block YouTube, Facebook, and Hulu to keep from cranking up another link just to satisfy non-business browsing.
I understand the cable cos dilemma - Only a few users can hammer bandwidth, and affect everyone. The cost is spread, but not enough.
But that's the business. If you don't want to be held to account for selling an 'unlimited' service you need to limit, maybe you need to re-think your marketing and product. If I were managing the Internet service at a business, and the boss told me that fast response and reliability were mission-critical, I'd just tell him the cost. It's the reliable-fast-cheap thing again. Any two of the three, sir.
So Time-Warner, maybe you should reconsider the unlimited thing altogether. When the price gets high enough, someone will come in and compete. Until then, keep looking over your shoulder.
ps- Former co-workers of mine who are at Time-Warner working in the networking group tell me it's a constant tug of war, keeping the system responsive and costs low. They understand, but of course they have no real power. And then the consultants come in....
deleting the extra space after periods so i can stay relevant, yeah.
Pricing should be based on usage, until you've worked for an ISP you won't realize that 5% of your users use a majority of the resources. People who download all day should pay more than a couple hour rec user after work who reads email and surfs.
Where do you want to be, What are you doing to get there.
I pretty much agree with you, with a couple of caveats. I don't think the water analogy is really all that good for two reasons:
So if the ISPs want to charge $2 per gigabyte across the board and not charge a base fee, that's their prerogative, but I guarantee they'll make a heck of a lot less money that way. I think they should have to choose flat rate or metered---not both.
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""Time Warner Cable had said at the time that it believed that consumers who download the most content need to pay more to cover infrastructure upgrades.""
-----And by 'Infrastructure Upgrades" they mean 'Advertising Campaigns'. Honestly, does ANYONE out there believe that the extra money would go towards upgrading infrastructure. The idea of throttling is more rooted in the fact that ISPs oversell their bandwidth far in excess of their capacity, and now want to 'upgrade' so they can accommodate traffic they should have accommodated long ago instead of spending those dollars on ad campaigns. I am by no means fooled about the true intentions of the money they hoped to generate. They *will* simply continue to advertise services (which they lack sufficient capacity to offer), recruit new customers, and spend the money internally on executive pay. They have been doing this for YEARS and there is nothing in the forseable future that will stop them.
A good rule the FCC could lay down would be:
1. Advertising must stop when the ISP is unable to accomodate the load of 90% of customers on at the same time, and revenue (profit, not gross) generated during that period must be spent increasing capacity, or refunded to the customer base, but cannot be saved for later use, allocated for advertising, or spent on executive pay.
This would have the effect of making sure they retain customers, and upgrade their capacity, since they would not be allowed to stockpile funds for times when they would be allowed to spend them advertising. No company would want to refund massive amounts of money to their customers.
Knowing Google's lust for data collection, the Soviet Union is still alive and well inside the psyche of Sergey Brin....