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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.
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.
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.
Heh, your nick is funny given the content of your post.
The problem, though, is that this isn't just a typical shared resource. If we were talking about food, or oil, or water, of course a flat-rate, all-you-can-eat model wouldn't work. All of those are commodities that can be used up.
Internet access is different. You can't "use up" your connection, in the sense of permanently depleting it, requiring that more be made or acquired. All you can do is saturate it. Obviously if too many people seek to saturate a finite connection at one time, there won't be enough to go around, but there's no permanent depletion. That's not exactly the same as the traditional tragedy of the commons.
To make an analogy, think of a buffet that serves chicken wings. Let's assume they can serve 1000 wings per hour, and that the wings have a marginal cost of $0.
So, if we only serve 100 customers at a time and assume that they will eat 10 wings / hr., we should be alright. Now, maybe we decide to oversell our capacity, and serve 200 people at a time, banking that the average customer only eats 5 wings / hr. Sure, they may be a few who gorge themselves and eat 25 wings an hour, but they'll be balanced out.
Now, we notice that the average person is eating 20 wings an hour. So, we have several options. We could only admit 50 people at a given time. We could serve 2000 wings an hour, and still take 100 people. We could limit everyone to 10 wings an hour. Or, we could ditch the buffet idea, and start changing everyone $1 / wing.
Notice which one of those doesn't actually solve the capacity problem: charging per wing. Sure, maybe it discourages people from gorging themselves on 100 wings, but if the average consumption is rising, charging by wing doesn't fix the capacity problem.
"Anyone who [rips a CD] is probably engaging in copyright infringement." - David O. Carson
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.
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.