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Time Warner Cable: No Consumer Demand For Gigabit Internet
Freshly Exhumed writes "Chris Welch at The Verge tells us: 'Speaking at the Morgan Stanley Technology Conference moments ago, Time Warner Cable's Chief Financial Officer Irene Esteves seemed dismissive of the impact Google Fiber is having on consumers. "We're in the business of delivering what consumers want, and to stay a little ahead of what we think they will want," she said when asked about the breakneck internet speeds delivered by Google's young Kansas City network. "We just don't see the need of delivering that to consumers."' The article goes on to quote her: '...residential customers have thus far shown little interest in TWC's top internet tiers. "A very small fraction of our customer base" ultimately choose those options.'"
Just a play from the classic Apple playbook: Any feature that our competitor has that we don't is something customers don't want or need--until we do have it, and then it's awesome.
Actually, in all fairness, it's a play from pretty much everyone's playbook. I mean what do you expect him to say, "Well, the truth is we're jealous"?
What political party do you join when you don't like Bible-thumpers *or* hippies?
The article goes on to quote her: '...residential customers have thus far shown little interest in TWC's top internet tiers. "A very small fraction of our customer base" ultimately choose those options.'"
Um, yeah - that's because it's waaaaaaaay overpriced.
"We just don't see the need of delivering that to consumers."
That is the core problem. Thanks to TWC for stating it so well.
This is because you price it out of reach for your average customers and only those willing to pay your ridiculous fees for it purchase it....
I would absolutely pay for a Gig connection to my home if it had a sane price tag!
How about the price?
in rotterdam you can get 200 mbit for 30 euro's, 600 mbit for 37 euro's and 1Gbit for a few hundred euro's more...
I love to have 1Gbit, but I guess 600mbit is okay for now, well hell I would be happy if I could get 200 mbit at all...
It's just how much people are willing to pay for it. I think it still costs far too much....
If I had an option for GigaBit, I'd take it - but only if it was priced correctly and was free of onerous TOS. There is most certainly a demand for fast, free (as in speech) Internet connections - and a willingness to pay for them, but not $$stupid$$ amounts and not with a zillion strings attached.
I love how the cable cos were advertising things like "your speed is X which means you could download Y whole movies in Z time" but if you actually USE the bandwidth, they cap you... and maybe even send you sharing violation notices or whatever... and they tell you you can't "run any kind of server"
I pay several hundred dollars a month for a dedicated physical server at a commercial datacenter hosting a number of VPS instances for my web hosting needs... the right "business level" connectivity for my home might tempt me, but not with all the strings that local ISPs seem to have. (also, I don't have N+1 Power redundancy at home, so maybe it's not really such a good idea) /meh //but I want GigabitInternet ///just not enough to be willing to move for it
The Digital Sorceress
" The article goes on to quote her: '...residential customers have thus far shown little interest in TWC's top internet tiers"
Ya. Cause you charge too damn much for it. You priced it out of reach of most people. It's not that there isn't demand for it.
The guy who said the election was rigged won the presidency with the second-most votes.
There are two factors involved in a customer's decision. That which they get, and the price at which they get it. What's going on here is that most customers are not willing to shell out $50-$70 for Time Warner's top tiers, as the extra speed doesn't justify the cost over the lower tiers. On the surface, this would seem to back up Time Warner's assertion that customers don't want faster speeds for the most part. The analysis is missing one important factor, however: Time Warner has no real competition in most markets. As a result, they get to set the prices to dictate customer demand, not the other way around. To maximize their profit, Time Warner has chosen a price point at which most people will want to purchase the tier they're willing to provide minimizing the amount of investment in their infrastructure they would have to provide to support more people at higher tiers.
In a more competitive environment, other ISPs would compete by offering lower prices and faster tiers. Then we would see whether customers chose to pay less for the same speeds or get a faster internet for the same price.
Warning: Opinions known to be heavily biased.
"We just don't see the need of delivering that to consumers."' The article goes on to quote her: '...residential customers have thus far shown little interest in TWC's top internet tiers. "A very small fraction of our customer base" ultimately choose those options.'"
Translation: "We have a near monopoly and don't want to spend the money to do the upgrade because we don't have to"
I pay for 50Mb/s access and my ISP offers 100Mb/s. Why don't I pick 100Mb/s? Because it costs $200/month versus the $80/month I'm already paying. Huge diminishing returns. The expensive bit is running the cable to my house. After any arguments against offering the fastest possible speed for a reasonable price are pretty weak.
When they price a service out of reach of the average consumer, of course few will take it. The same will be done if they ever offer ala carte TV. You will be given a "cable connection" for a base fee and then each channel will be a certain amount more. Of course, the way it will be priced, you will quickly top the bill for regular, bundled cable TV if you add even a handful of channels. Then, when few people take them up on this "deal", they will declare that there is no demand for it and kill the project.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
Of COURSE they're going to say this.
Invest millions or billions into infrastructure? Why would they want to do something like that when they can just sit back and milk profits on what they have now?
The thing is, there IS a call for this kind of connection. But not when:
A: They want to charge $200 for a 50 megabit connections as-is.
B: They're capping data either way.
C: They're forcing you to pay even MORE by bundling their TV and phone service in. Look at the prices for their bundles. Now try to find the prices for the stand-alone internet.
D: Their customer and technical service is, even at it's most kindly-description, shit-tastic.
With the kind of pricing scheme they have now, they'd want $500-600/month MINIMUM for gig service.
At that kind of price point, yeah. There's no demand. Nobody's stupid enough to pay that.
Chas - The one, the only.
THANK GOD!!!
This is coming from a cable company. Their primary product is television. If ever there was an industry stuck in the dark ages it's television.
"We're in the business of delivering what consumers want..." - That is laughable to say the least. What they are really in the business of is extracting every last dime from consumers that they can get away with. Cable companies are in a semi-monopoly position and the service shows it. As better entertainment options continue to surface, cable cutting continues.
Google is the Steam Engine, Time Warner is the horse and buggy. TW is stubbornly clinging to yesterday's cash cow while Google continues to explore the future.
If I had the option of gigabit internet in my neighborhood I would jump on it in an instant. So would many other people I suspect.
Of course TWC customers don't need that much bandwidth. Right now the amount of bandwidth they'll give you is generally not enough to stream HD video reliably. This would be a problem for many people, but since their customers all subscribe to cable it clearly doesn't affect them. Streaming 1080p video to multiple devices simultaneously over the internet would kill their core business. Bias is expected.
As a Kansas Citian, I will say that that she is dead wrong. I already told AT&T that if they can't compete, they won't have me as a customer when Google comes to my area next year. What there isn't a market for is paying $400/month for less than gigabit speeds.
Right - if your gigabit connection is capped at something like 30GB, then you could only back up a quarter of your TB HD every month, and provided your remote backup site has the bandwidth so that TWC's connection is the limiter, it should take you far less than an hour to do it. Why would you pay $100+ a month when you could get greater capacity AND higher average throughput from mailing TB HDDs through the USPS?
Hah, captcha was "clipped"!
Who would want gigabit speeds when it just means you'll hit your bandwidth cap sooner; you'll get a six strikes warning; there's a lack of 1080p content to stream because the media companies that own the ISPs (or vice versa) will fight tooth and nail to hold onto old distribution means, etc etc.?
Yup, no point in amazing, fast internet.
The Internet King? I wonder if he could provide faster nudity.
Apple could foot that bill in cash. Their sitting on more dough than Pillsbury. Maybe we should all write a petition to Apple asking them to create a free fiber network for everyone.
Yes, Time Warner's top-tier 50Mbps is priced beyond the reach of most customers. At $100/month, it's a luxury.
But there's another issue. Right now, the biggest reason to get big bandwidth at home is to support multiple users with diverse interests. There are a lot of potential uses where the upstream bandwidth just isn't there to justify a fatter pipe. Netflix may have a content-delivery network to support higher speeds... but TWC hasn't signed on for it. For most people who work from home, their employer doesn't have enough bandwidth to make a bigger pipe useful. If your employer has only a 45Mbps connection shared by all business needs, you're going to saturate any remaining bandwidth with a 50Mbps connection at home; why would you need gigabit to work from home? In that scenario, 50Mbps is only useful so the kids can Netflix without crimping your VPN speeds... And to get the higher return-path speeds that come with it.
Netflix and its rivals don't come close to using 50Mbps bandwidth per stream. They usually stream closer to 3Mbps. If they offered hire quality streams, or if there was a lot of 4K-resolution content out there, there'd be more demand.
The uses for ultra wideband bandwidth will come, but they're not here yet for most people... And especially not at those prices.
well, capitalism without competition isn't actually capitalism, it's more like feudalism, so don't feel bad for knocking the idea of a monopoly around... the concept of cable monopolies is going to have to be reexamined eventually. They did it with the phone companies where you have "last mile" providers and backbone providers - I think eventually cable operators will be relegated to "last mile" status, and you'll be able to push other providers' services down the same pipe over time, just like you can get DSL from multiple providers over the same copper pair. Probably take 5-10 years, though.
(this is admittedly an oversimplification of the situation, but the basic idea is that the monopolies either need to be broken, or coax cable needs to be replaced with something more carrier neutral like utility fiber to the neighborhood.)
Remember that the 5Mbps I pay you $40/mo for is "up to" 5Mbps. And my neighborhood is so congested I'm usually lucky to get 200Kbps. I can't remember *ever* hitting my 5Mbps limit. Maybe once, on a Tuesday at 10:30AM.
If I pay you $200/mo for "up to" 50Mbps, why should I expect to get more than 200Kbps anyway? That's still "up to" 50Mbps. It's not like you're going to tear up the streets and upgrade your infrastructure here just to deliver more bandwidth to my house.
Of course I haven't upgraded -- the risk/reward ratio isn't there.
I recently (last year) filed a complaint (ref#12-C000422224-1) with the FCC about Google Fiber's "no server hosting allowed of any kind" terms of service. With those kinds of EVIL ToS, you just won't see the kind of innovation and utilization of gigabit fiber service that is possible and that would cause a great increase in demand. Somehow, even though I got the local vocal U.S. Navy Information Warefare Officer who posts here (Dave Shroeder) to publicly call my 53 page anti-google manifesto 'good' and agree with it's core network neutrality argument, I have been pretty much completely ignored by both Google and the FCC. Hell, there was even an AC leak from a google all hands meeting that said Google's CEO was "really annoyed with the no server hosting clause" and "repeatedly needled" the CFO about it, who said there was "no intent to enforce, except against crazy datacenter style abuse". Personally I think that's all bullshit part of a conspiracy to deny residental citizen's the ability to compete with google and other established player's servers and services... Finally a couple weeks ago on valentine's day, 2 days after pinging the FCC again, and 1 day after being pinged by another asshole google recruiter (williamwest@google.com), the FCC finally escalated my complaint. Time will tell...
http://slashdot.org/comments.pl?sid=3106555&cid=41288357
http://news.slashdot.org/comments.pl?sid=3156485&cid=41530745
http://news.slashdot.org/comments.pl?sid=3156485&cid=41516877
http://cloudsession.com/dawg/downloads/misc/kag-draft-2k121007.pdf
From what I've seen, most people use wireless connections for their computers (even some desktops..ugh), tablets, etc. Best case scenario is that the games console is wired, if they are gamers. The max speed of wireless "n" gear is easily below gigabit, and the bandwidth is shared between all users. The fact that people don't *quite* need gigabit yet shouldn't put these ISPs off upgrading their services. Gigabit is maybe overkill for now, but in a couple of years it will be the standard at the high end. They should be working their asses off upgrading the hardware in residential areas to anticipate this. Speccing the home routers for at least 300Mbit of WAN I/O. Instead they are hoping that things will not improve. If all ISPs don't do anything, then it will indeed not improve. It's good that we have Google, which will do something, and will show the ISPs what happens if they don't all play retarded. I.e. all other ISPs will look like retards (sorry about the choice of words, but I can't think of a better way to say it)
People in other countries are bragging about paying as much or less for much faster internet.
Have we shown little interest in the top tiers TWC is offering? Yes... because they're even more expensive and really not that much faster.
Part of the issue is that cable internet really doesn't give you fixed bandwidth. It's shared. Which means even if you only are supposed to get X bandwidth, one often gets more during off peak hours. And during peak hours you typically get less. If you pay more for the better service, you generally don't ACTUALLY get significantly different bandwidth. You get a little more during peak hours and about the same bandwidth during off peak hours. For the bump in price, it's just not worth it.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
I've filed this next to -
"I think there is a world market for about five computers. ... No one else, he said, would ever need machines of their own, or would be able to afford to buy them" - Thomas Watson - IBM
"There is no reason for any individual to have a computer in his home." - Ken Olsen - Digital Equipment Corp
"640K ought to be enough for anybody" - Some guy...
Place nail here >+
by Irene Esteves logic, no one wants a Bugatti either, if they did they would just go out and buy one.
Maybe if the prices were lower people would start streaming HD more from Netflix and Hulu instead of buying expensive cable packages!
A loop, by its nature, continues. If that didn't make sense, start reading this sentence again.
Not real throughput and certainly not *guaranteed* throughput.
I've had business class customers subscribe to the top tier of Comcast's service (100 down, some double-digit amount up) and throughput never met that even running Comcast's own (likely biased) speed test.
My understanding of this is that when you buy a higher speed tier, you get that tier provisioned on your modem but after that, you're competing with any number of people on your broadcast domain and ultimately on your node for upstream capacity.
Comcast may provision your *modem* to a higher speed, but it doesn't really make much difference if the node's upstream has limited headroom.
For the last 5 years, I've had 100 Mbps up & down for 275 SEK/mon. (current eq. 43 USD)
In the article Trusting Telcos With Internet Is Like Trusting Fox With Henhouse, Rick writes
The take-home from this is that telcos have a conflict of interest, while hydro companies have underused poles in your neighbourhood.
davecb@spamcop.net
Google probably puts more effort into publicizing their tiny Kansas City gigabit Internet project than actually doing it. Sonic.net, on the other hand, is quietly deploying gigabit fiber to the home in Northern California. Sonic says it costs them about $500 per house they pass to install fiber; if they sell to 1 in 3 houses, which is what they're getting, it's $1500 per house. Sonic charges $70 per month for a gigabit connection. It's only available in a few places, though - Sebastapol, CA and parts of the Sunset District in San Francisco. Elsewhere, they offer 20Mb/s down for $40/month, over lines leased from AT&T.
Sonic has no data caps. Their CEO says that their upstream bandwidth is not a significant cost, and they don't need to throttle their users.