Time Warner: No Metered Broadband... But We'll Kick You Offline If We Think You Used Too Much

from the that'll-be-good-for-PR dept

So Time Warner Cable has supposedly backed off its metered broadband until it can figure out how to do a better job presenting it (though, it's also threatening to delay upgrades if people don't accept caps or meters). Yet, as reader Matthew Henry alerts us, it appears that Time Warner Cable has instead just started kicking "unlimited" users offline without much warning. Apparently, when the user called to ask what was up, he was told he shouldn't have used so much of his unlimited broadband account. This is the sort of stuff Comcast used to do years ago and which helped contribute to its awful reputation. Nice of Time Warner Cable to try to fix its own reputation by going down the same bad path.

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Is Time Warner Telling Customers No Caps, No Broadband Upgrades?

from the there's-usually-a-word-for-this-sort-of-thing dept

Time Warner Cable last week backed off its plans to implement metered broadband plans in several cities, at least until it could figure out how to pitch the plans without attracting so much bad press. But now an interesting post over at GigaOM says that Time Warner is now also rethinking rolling out network upgrades in the cities where it wanted to install the broadband caps. The implication seems to be that the company is saying it's fine if consumers in those places want to complain about the caps, but then they shouldn't expect TWC to upgrade their broadband networks and offer higher speeds. Time Warner and other ISPs like to trot out the line that the cost of providing broadband is surging alongside traffic growth, but it seems that just the opposite is actually happening. So here's some horse-trading for Time Warner: if you don't want to upgrade your networks, or if you want to implement caps, that's fine. But don't expect your customers to hang around.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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No Evidence To Support The Need For Broadband Tiers Or Caps

from the oops dept

Just as the various broadband providers are ramping up their bogus astroturf attempts to convince the world that broadband caps are necessary and good for customers, Saul Hansell has been digging deep into the numbers and can't find any justification at all for the caps. All those stories about overwhelmed networks and exponential traffic growth? Not happening. If anything, the evidence is that the opposite is happening: advances in technology means that it's become cheaper for broadband providers to meet the needs of their customers. And those needs are growing, but that growth rate has been slowing, and is quite manageable. So, basically, the broadband companies are hyping up a problem that just isn't there. There is no crunch. There aren't bandwidth shortages that require cutting off heavy users. The only reason to set up such tiers is to squeeze more money out of customers without providing any improvements in service (actually, while providing less service). And it's all possible thanks to the lack of competition in the marketplace.

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Time Warner Expands Capped Broadband Plans

from the good-luck-with-that dept

Time Warner has been testing broadband plans with traffic caps for several months, and apparently it likes what it's seen, as it plans to soon expand the caps into four more markets. The company alleges it has to switch to capped plans in order to "support the infrastructure of the broadband business," even though the supposed bandwidth crunch ISPs cite when talking about these plans is little more than a myth. As the company's CEO notes, getting the cat back in the bag by getting consumers to switch from unlimited to capped plans is going to be very difficult. Previous studies have found that even light internet users would look to take their business elsewhere if their ISP introduced caps, mainly because they have absolutely no idea how much bandwidth they're consuming. That's a good thing, because the absence of mental transaction costs helped wired broadband take off, and laid the groundwork for all sorts of innovative internet services -- not to mention lots of revenues for ISPs. Compare this to the mobile world, where per-KB or per-MB pricing helped stymie the growth of data services.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Comcast Thinking About Overage Fees And Tiered Usage

from the please-don't-use-our-broadband dept

Following Time Warner's recent plans to test broadband caps and overage fees, Broadband Reports has the scoop that Comcast is very strongly considering the same thing. Unlike Time Warner Cable's plans to test super low caps, Comcast is looking at 250GB/month -- which it claims will only impact 0.1% of users. Overage fees will be pretty high, however: $15 charge for each 10 GB over the cap. Comcast will also give users one free "slip up" month per year, for those who go over just for that one month.

There are some good and bad things to this news. On the good side, it would represent a big step up for Comcast in terms of actually being transparent. The company has always had caps, but they've been totally secret "fuzzy caps." Users would have no idea if they had gone over until Comcast sent them a nasty letter telling them to cut down on usage -- or they would lose their account. That said, the problem with tiered broadband is that it can serve to hold back innovation. It puts a limit on what people can do online, just as ISPs should be encouraging more innovative uses. As higher bandwidth applications are coming, limiting the value of an internet connection doesn't seem particularly wise. Providers who embrace innovation and supply the bandwidth to support it will be rewarded with happy customers.

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Time Warner's Overage Caps May Be Set Very Low

from the that's-not-overage----that's-normal-usage dept

Last week Broadband Reports broke the story of Time Warner's decision to test overage charges for their biggest users. I don't think it really makes sense for ISPs to charge in a way that makes their own services less valuable, but that's a different story. As long as the caps are clearly stated, it's worth seeing what happens. However, most of the talk about the caps seemed to suggest they would focus only on the off-the-charts extreme users of bandwidth in the "top 5%." However, Broadband Reports has another report now, suggesting that Time Warner will be testing a few different cap levels, including as low as 5GBs/month, which seems excessively low. If you're doing perfectly normal things, such as watching (authorized!) online videos or doing remote backups, 5GB can disappear mighty quickly. That doesn't seem like a way to stop "excessive" use. It seems like a way to squeeze more money out of a large percentage of users. On top of that, this gives less and less incentive for Time Warner to improve their network. The more they can claim the need for these congestion charges, the more money they can make. That seems backwards. Of course, this wouldn't be an issue if there were serious broadband competition, but that's still a long way away apparently.

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Time Warner Cable Experimenting With Overage Charges For Top Users

from the bait-and-switch dept

Broadband Reports notes that internal memos from Time Warner Cable suggest the company is experimenting with overage fees for their highest bandwidth users in Beaumont, Texas. If those overage charges work, the idea, of course, would be to then roll them out nationwide. On the whole, overage charges are a lot more palatable than unpublished traffic shaping rules or "fuzzy caps" where the top users are cut off without any explanation of what line they crossed. The key, of course, is that with both of those latter "solutions," the subscriber is told they're getting unlimited service, but the reality is different. Assuming that the overage charges and the rules surrounding them are clearly communicated, such charges are more reasonable. However, there are still questions about how consumers will react to such a change, especially after being sold on an "unlimited" service. The bigger issue is that capping bandwidth usage is a way to slow down internet-based innovation. If there had been overage charges a few years back, services like YouTube might never have caught on, as people would be too worried about how much bandwidth it would suck up. If the cable companies can't provide enough bandwidth, that's clearly an issue -- but most reports suggest that claims of a bandwidth crunch are overblown. Update: Just saw Adam Thierer's amusing pre-emptive reply to me on the topic. I'm not as against the idea as he suggests, though I do think, in the long run, it's not a very good solution.

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