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Time Warner Cable: No Consumer Demand For Gigabit Internet

Posted by Soulskill on from the give-the-people-what-we-have dept.

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.'"

45 of 573 comments (clear)

  1. Translation: We Don't Have Gigabit Fiber by crazyjj · · Score: 4, Interesting

    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?
    1. Re:Translation: We Don't Have Gigabit Fiber by Anonymous Coward · · Score: 5, Insightful

      If it was capped at 10GB per month, I wouldn't see a need either tbh. Thank Christ I live in a country where capping is unheard of. That's what actual free markets do for you.

    2. Re:Translation: We Don't Have Gigabit Fiber by gl4ss · · Score: 5, Funny

      yeah.. I could think of lots of people who would like a gigabit internet connection.

      however if it comes with rules I'd think TWC to put on it then whats the point. you get like 5 minutes of service per month so what's the point?

      --
      world was created 5 seconds before this post as it is.
    3. Re:Translation: We Don't Have Gigabit Fiber by MachineShedFred · · Score: 5, Insightful

      Time Warner is doing a variation on it though. What the guy really said was:

      "We offer high-bandwidth service in some markets, but people don't subscribe to it"

      What he's not expanding on, is the reason why they don't subscribe. Is it because people don't want it, or is it because they've made is so damn expensive that people don't see value in it compared to the lower-bandwidth service?

      --
      Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
    4. Re:Translation: We Don't Have Gigabit Fiber by Anonymous Coward · · Score: 5, Funny

      They don't need it. HTML5 is better.

    5. Re:Translation: We Don't Have Gigabit Fiber by characterZer0 · · Score: 5, Informative

      In my case, it is because although down speed is higher, up speed and latency are no better.

      --
      Go green: turn off your refrigerator.
    6. Re:Translation: We Don't Have Gigabit Fiber by Beardo+the+Bearded · · Score: 5, Insightful

      It's not that.

      It's that if they offered gigabit Internet, then they'd have to upgrade all that other stuff to handle the bandwidth. That's why they put caps on, that's why they overcharge. It's because they can make tons of money now for the shareholders.

      They're a US utility. They don't upgrade. They wait until it falls apart and then they replace as little as possible.

      --

      ---
      ECHELON is a government program to find words like bomb, jihad, plutonium, assassinate, and anarchy.
    7. Re:Translation: We Don't Have Gigabit Fiber by kenh · · Score: 4, Insightful

      Precisely. If I recall correctly, Comcasst offers 100 MB connectivity in my area for around $300 per month.

      Because they didn't build out thier physical plant for every household to subscribe to that level of service - they scaled their network for lower bandwidth.

      Google's 1 GB fiber connectivity is somewhere between $70 and $80 per month.

      And is being offered below the cost of providing the service (subsidised) - that is not a sustainable business model for a for-profit company.

      Do I want 100 MB, or even 1 GB? Oh, hell yeah. But can I pay more than around $100 per month for an überfast connection? Unfortunately, no. It's not lack of desire.

      Offering a service people want is a no-brainer, offering a service people want but are unwilling to pay for is a non-starter. Motorola learned this with their "Iridium" Satellite phone service...

      --
      Ken
    8. Re:Translation: We Don't Have Gigabit Fiber by hedwards · · Score: 4, Insightful

      Yes, but that's likely to always be true and meanwhile it's 10 years and you haven't done any meaningful upgrades. I'm not sure if it's still true, but as of when Qwest was bought by CenturyLink, there were parts of Seattle with 1.5mbps as the maximum connection speed and no plans to do anything about it. Even in my neighborhood the speeds had increased from 4mbps to a whopping 7mbps as the fastest option in a decade.

      If you keep putting these things off, it just stifles innovation.

    9. Re:Translation: We Don't Have Gigabit Fiber by dkleinsc · · Score: 5, Insightful

      Alternate translation: "We don't care. We don't have to. We're the Cable Company."

      --
      I am officially gone from /. Long live http://www.soylentnews.com/
    10. Re:Translation: We Don't Have Gigabit Fiber by NatasRevol · · Score: 5, Insightful

      I think it's more a matter of price:

      TWC top tier cost - 50 Mbps @ $80/mo (introductory price!)
      Google Fiber - 1 Gbps @ $70/mo

      Now, which one would any reasonable person want?

      --
      There are two types of people in the world: Those who crave closure
    11. Re:Translation: We Don't Have Gigabit Fiber by DCFusor · · Score: 5, Insightful

      Mod parents up. Gee, no one wants a ride in space either, if it costs the GDP of a small country.

      --
      Why guess when you can know? Measure!
    12. Re:Translation: We Don't Have Gigabit Fiber by DJRumpy · · Score: 5, Insightful

      I don't think it's the capping that is the only issue, but rather the pricing. It's hard to justify 100+ bucks for top tier service. We used to pay 20-30 bucks for 5, 7, or 10 Mb. In my area, bumping the 'stock' 10Mbps to 18 is $60. Going higher than that gets exorbitant.

      If there was competition, this would no doubt change, but they have a virtual monopoly around here.

    13. Re:Translation: We Don't Have Gigabit Fiber by hairyfeet · · Score: 5, Insightful

      Bullshit its because we have ZERO competition in a good chunk of the USA. If we had actual free markets, not this backdoor bribery, cherry picking duopoly horseshit we have now I have NO doubt that we'd have faster speeds and at competitive prices, but because they know they have most customers by the short hairs the money that would be spent on infrastructure goes to bonuses. After all what are you gonna do, go dialup? Go DSL which at least here in the south is several times WORSE (average 3-4Mbps in my area with lows as bad as 700Kbps) than the 8Mbps-20Mbps the average cableco offers?

      My city has grown by over a third in the last decade and its a college town to boot...know how many new lines have been laid? ZERO. They know AT&T ain't gonna lay shit for new DSL around here so they just gouge their existing customers and keep the money. it really distorts the whole area because you can have two apt buildings side by side and one will be three times as much and have a waiting list while the other is never more than half full, why? Because you can get high speed at the first one, all you get across the street is the shitty local WISP.

      The worst part is if a city gets tired of the bullshit and decides to lay their own lines they can look forward to spending the next decade in court, can't be having competition now can we? I've never been one of those "the free market can fix anything" types but what we have now is so far from a free market it ain't even funny so frankly anything that opened up the country to competition would be good in my book.

      --
      ACs don't waste your time replying, your posts are never seen by me.
    14. Re:Translation: We Don't Have Gigabit Fiber by Blaisun · · Score: 5, Insightful

      agree, i want gigabit, but i am not willing to sell my kidneys for it. make it reasonable like google is, and i would snap it up....

    15. Re:Translation: We Don't Have Gigabit Fiber by postbigbang · · Score: 4, Insightful

      You're wrong in all directions you go.

      The demand for fast service is huge, and the US is a third world country because the telco model is to depreciate their asset investment as long as is possible, so as to maximize profits.

      The US used to be a leader, and now, it's fallen mightily because it's all about shareholder return and buying off government regulation whilst monopolizing as much as possible.

      Your "timing" BS is crack. 10G hardware is not the problem. Capital investment in a bought-off monopolistic era is the problem. The cure is to harrass the monopolists into acting like real capitalists.

      --
      ---- Teach Peace. It's Cheaper Than War.
    16. Re:Translation: We Don't Have Gigabit Fiber by Anonymous Coward · · Score: 5, Insightful

      I don't think it's the capping that is the only issue, but rather the pricing.

      I don't think there is any real question here, it most definitely is the pricing. If you tacked a zero on the end of everyone's current speed and charged the same price, I strongly doubt most users would be bumping themselves down to a slower data plan.

    17. Re:Translation: We Don't Have Gigabit Fiber by elwin_windleaf · · Score: 5, Informative

      It seems to vary widely by region; in Upstate NY, our basic service is 5mb down, 1mb up and costs $55 monthly after all of the first year deals fall away.

      I'd love gigabit service, but at their current pricing model up here, $11,000 a month is a bit steep.

    18. Re:Translation: We Don't Have Gigabit Fiber by ndege · · Score: 5, Interesting

      Well, I have 1,000Mbps in my area; the fastest internet service in the US. See this news article published in 2010 about EPBfi.

      All 100,000 customers have EPB power (this is the local electric power company in Chattanooga, TN, USA). Because of EPB's electric smartgrid, they also provide fiber to 100% of their coverage area. This means that every home/business/apartment has access to Gbit Internet and TV/phone.

      The slowest speed they currently offer is 50Mbps (for $57.99 per month), the fastest is 1000Mbps($299.99). I am on 100Mbps because it is only $12 more per month than 50Mbps.

      Oh, and there are no max bandwidth/transfer caps. You can do 1000Mbps all day long...EPBfi has the upstream bandwidth.

      I was on Comcast for 8 years. I telecommute most days; Comcast would go down for hours at a time for no apparent reason. When I would phone Comcast to report the outages, the customer service rep would say that they are upgrading the services in my area. The service person would say it as if that was the script on their screen as why the internet went down for 2 hours at 11am and again at 4pm. It got so bad over the course of a year, that I had to purchase a Sprint broadband card/account to continue to get work done as I came to just expect outages. I could not tell a client that I was having internet connectivity issues when I am doing remote-based network consulting.) ;)

      After switching to EPBfi 2 years ago, I haven't had a SINGLE service-affecting outage. They appear to have built their Internet infrastructure as solidly as they build their power distribution network.

      Feel free to read more here: https://epbfi.com/internet/

      Oh, BTW, I don't own stock in EPB or work for them....I am a customer that likes to pay for internet that works reliably.

      Here is a news article published in 2012 about Chattanooga's upgrade of all customers from 30Mbps to 50Mbps.

      It is interesting how none of the big media giants want to provide the additional speed/reliability; I guess if you can feed your customers sewage and tell them it's honey...and the customers believe it, more money goes in your pocket.

      --
      Sig Return: 204 No Content
    19. Re:Translation: We Don't Have Gigabit Fiber by postbigbang · · Score: 4, Insightful

      Taxes aren't evil, they're civilization. Generousity is also a virtue, and often civilized, too. When generous people aren't available, taxes are necessary to keep civilization. Soon, you'll see the feedback loop.

      --
      ---- Teach Peace. It's Cheaper Than War.
    20. Re:Translation: We Don't Have Gigabit Fiber by jedidiah · · Score: 4, Insightful

      People see the name Kansas and they imagine some farm village with two traffic lights.

      It's just their total ignorance and complete unwillingness to remedy that ignorance.

      --
      A Pirate and a Puritan look the same on a balance sheet.
    21. Re:Translation: We Don't Have Gigabit Fiber by Yobgod+Ababua · · Score: 5, Insightful

      "but they have a virtual monopoly around here."
      I envy you... where I live, in Los Angeles, they have an *actual* monopoly on high speed service.

      Can I get Verizon here? No. (Not in a Verizon area.)
      Can I get AT&T U-Verse service here? No. (Not available in my area.)
      Can I get any other cable company service? No. (Local monopoly.)

      It's TWC or nothing.

      For the record I'm not "demanding" their top tiers because their pricing is ridiculous, not because I don't want it.

  2. I can think of a few rea$on$ by radiumsoup · · Score: 5, Insightful

    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.

    1. Re:I can think of a few rea$on$ by Farmer+Pete · · Score: 4, Funny

      You think that $100 a month for 50mbps is overpriced? Well sir, you must not be part of their target audience, and thus are irrelevant. Your criticism has been disregarded. Thank you, and have a nice day.

    2. Re:I can think of a few rea$on$ by Farmer+Pete · · Score: 5, Insightful

      35mb its faster than any consumer will ever need!

      Can I quote you on that in 10 years? I remember when 756 kbps was faster than any consumer would ever need. It didn't last long.

    3. Re:I can think of a few rea$on$ by AikonMGB · · Score: 5, Insightful

      Precisely; her comments have absolutely nothing to do with the demand of higher speeds and quality service, but rather the supply. Her argument is circular -- we don't offer good options, so customers don't choose good options, therefore customers don't want good options, thus there's no need for us to offer good options. That's an awesome flow chart you got there, TWC.

    4. Re:I can think of a few rea$on$ by Marcus+Erroneous · · Score: 5, Interesting

      That's my take on it as well. You can kill the demand for any product by pricing it high enough.

      Most of these providers are run by folks with the old time telephone company mind set: if it's more than tip and ring, charge for it. The less it's like tip and ring, the more you charge for it. To them, that much bandwidth must be for business use, so charge'em business rates.

      In the 90s, GTE was thinking about offering the ability to check your account and pay your bill online. They had the ability but were stumped about how much to charge the customer to do so. They were thinking about charging the customer $8.95 a month for the privilege of checking and paying for their account online. They finally dropped the idea as their studies showed no interest in accessing accounts online for that price. It never occurred to them to offer it as a benefit of being a GTE customer.

      Most of those folks are still running the industry in that manner: everything not basic should be offered as a premier option.

      --
      You must be the change you wish to see in the world - Ghandi
    5. Re:I can think of a few rea$on$ by NettiWelho · · Score: 4, Informative

      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.

      I think $20 more per month is a fair price for any extra 1mb, and with the top tier at 35mb its faster than any consumer will ever need! I love my triple lock-in play!

      Meh, here in Finland I pay 29e/month for this (uncapped) and I live in a town of 10k people. If they tried to raise their prices they'd lose my business to any of the 4 competing ISP's.

    6. Re:I can think of a few rea$on$ by crazyjj · · Score: 4, Funny

      I can remember telling a friend about ISDN and having him respond with "My god, what would you even *DO* with 128 kbit/s?"

      --
      What political party do you join when you don't like Bible-thumpers *or* hippies?
    7. Re:I can think of a few rea$on$ by radiumsoup · · Score: 4, Informative

      my sarcasometer is out for repair, so I'm unsure if serious... but I *am* a TWC customer, and I pay for their top residential tier, because I require it for my home business (IT consulting). It's stupid expensive for the upload speeds that I'm offered, which is really what I need the top tier for. I most certainly *am* their target audience, I get no less than two pieces of physical mail per month asking me to go for their TV and phone bundle. They LOVE the fact that they can charge me as much as they do, because I have no viable alternative right now, at least not until I can move to the next town over (Verizon FiOS) or into an office with a fiber provider. The woes of living in the 'burbs.

    8. Re:I can think of a few rea$on$ by Anonymous Coward · · Score: 5, Funny

      My now-ex-wife and I picked places to move based on where the service was available.

      That's how I picked my ex-wife!

  3. Stating the obvious by Sponge+Bath · · Score: 4, Insightful

    "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.

  4. Well maybe... by DnemoniX · · Score: 4, Interesting

    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!

  5. How about the price? by Anonymous Coward · · Score: 5, Informative

    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....

  6. No competition = slow speeds by sjbe · · Score: 4, Informative

    "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.

  7. Same reasoning will be used for ala carte TV by Jason+Levine · · Score: 4, Insightful

    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.
  8. Cable Replacement by pellik · · Score: 5, Insightful

    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.

  9. As a Kansas Citian by gameboyhippo · · Score: 5, Interesting

    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.

  10. Is TWC still capping bandwidth? by Anonymous Coward · · Score: 5, Insightful

    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"!

    1. Re:Is TWC still capping bandwidth? by rnturn · · Score: 5, Insightful

      ``if your gigabit connection is capped at something like 30GB, then you could only back up a quarter of your TB HD every month''

      Seagate and Western Digital will just love internet providers like this. Think of all the external disk drives they're going to sell to handle backups. I doubt you'd need to spend more than $100 for an external USB dock and a 1TB or 2TB disk. Simple and it doesn't eat up your bandwidth limit.

      The fact that nobody's buying TWC's highest priced access plans is obvious: their customers know they're a ripoff.

      --
      CUR ALLOC 20195.....5804M
    2. Re:Is TWC still capping bandwidth? by akboss · · Score: 5, Insightful

      The fact that nobody's buying TWC's highest priced access plans is obvious: their customers know they're a ripoff.

      Mod this guy up.

      --
      "Remember, politicians and diapers should be changed often and for the same reason."
  11. no innovation without server hosting allowed by jdogalt · · Score: 5, Interesting

    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

    1. Re:no innovation without server hosting allowed by jdogalt · · Score: 4, Interesting

      So, you're the asshole keeping google from expanding to other cities. Do the cable companies and phone companies allow server hosting on their residential lines? No, you need a higher cost business line.
      Would you just let google expand before you go about this BS.

      Yup, I'm that asshole. And no, I don't want Google to be the new national ISP, or their wet dream that they have already more or less achieved, the national telco. Google is not our friend. Google is the new Microsoft, same as the old boss. If Google had the kind of righteousness still that it started with, the same fire that drove it's successful rise against Microsoft, I'd be very happy with them being my ISP. This whole excercise, starting with my initial proxied direct discussions with Milo Medin last year where he requested I rewrite their ToS to allow server hosting, but somehow "protect google's potential cloud profits", has proved to me that Google is as f***ing evil as they come these days. I'll even admit here that I've been enough of an asshole to intentionally avoid bringing up how I blame Milo for starting this evil bulls#it when we was running things in the cable modem arena at his prior job with @Home.

  12. Filed next to... by MasterOfGoingFaster · · Score: 4, Insightful

    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 >+
  13. Re:they have a point of sorts by Nikker · · Score: 4, Insightful

    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.