Time Warner Cable Offers Weak Concessions

What the heck is Time Warner just thinkng? Seriously. How dumb do you have to be to set that kind of a cap on a 100MB/sec connection here you know that the average user will hit that cap in matter of a few days with that kind of speed...

Even if I had a 50mb/sec connection, I'd hit the cap in matter of a few days too. This whole metered blling is the dumbest idea ever.

No, they are thinking. They are trying to protect their cable television revenue plain and simple.

This is a preemptive strike on internet video services.

I see this as the same concept as the music companies raising CD prices to offset the "loss of sales revenue" due to piracy. And I see it being just as successful.

Adapt to the new world, deliver a product that people want. Raising prices and screwing over the people who ARE still paying you money is just bad business.

If this is the best they can do to protect a dwindinling revenue resource, then they're dooming themselves to bankruptcy or a hostile takeover from a competitor with more consumer-friendly policies.

The bandwidth crisis Hobbs is talking about is their own problem because they won't upgrade to DOCSIS 3. TW could upgrade to DOCSIS 3 at the rock bottom price of $20-50 per subscriber, that cost would be immediately recouped by the profit they make off their RR service. The real problem is that TW doesn't want to spend a dime of the $4 billion in profit they are already making each year on RR customers... they want to create a new profit stream that will support their upgrades to DOCSIS 3, so it doesn't hurt their current financial profit margins. For a little more on that, continue reading...

So I looked at TW's 10-K form and noticed something interesting... their cost to provide broadband service has decreased about 11% since the year before. Yes, you heard that right.

In 2007, TW made $3,730 Million, on high speed data alone, and then had to turn around and spend $164 Million to support the cost of the network. 2007 total profit on high speed data: $3.566 Billion

In 2008, TW made $4,159 Million, on high speed data alone, and then had to turn around and spend $146 Million to support the cost of the network. 2008 total profit on high speed data: $4.013 Billion

It cost TW 11% less money in 2008, to keep their network running, than in 2007. Their cost to deliver network connectivity to each user has dropped as they highlight here:

"High-speed data costs consist of the direct costs associated with the delivery of high-speed data services, including network connectivity costs. High-speed data costs decreased primarily due to a decrease in per-subscriber connectivity costs, partially offset by growth in subscribers and usage per subscriber."

TW had 7,620 Million customers in 2007, and now 8,444 Million customers in 2008. An 11% growth with an 11% decrease in network and support operating expenses. Not too shabby TW! Anyone with half a brain can easily tell from those numbers that TW is not only doing well, but they are doing better than ever.

So... tell me TW, how is flat rate (unmetered) service no longer financially viable if you're making more profit now than ever before, as your cost to provide service continues to decline?

TW can't deliver hard numbers because there aren't any that support their BS plan to meter and bill overages. Simple as that.

Think of all those users out there that have been downloading files and streaming movies off netflix in 2008 and using "more bandwidth than ever before" according to TW. Yet all the while TW's bottom line cost to support the network has dropped 11% while profits are up 11%. They should be overjoyed, not crying poverty. Why not use some of that healthy profit and actually upgrade the network for your subscribers needs, instead of forcing us to take 10 steps back and live in the virtual stone age.

Even bankrupt Charter has an upgrade plan in place for DOCSIS 3... and they aren't in anywhere near the financial standing that TW is.

Thanks for posting these numbers. Very helpful in shedding light on the lies spewing from Time Warner Cable.

TK, where is your spin on this?

I hope that since you haven't responded yet that means we are going to get a delightful and entertaining reply.

I'm wet with anticipation!!!!!!

I'm not TK, but I suspect the answers would be...

Stocks are lower »www.google.com/finance?c ··· NYSE:TWC
Customer adds are decreasing (recession, anyone)
Wall Street still wants adds

And I thought it was just their implementation supervisors and field techs and CSRs who are kind of useless. Turns out upper management is pretty damn stupid, too.

The cost per customer of $20 - $50 for the upgrade is just plain wrong.

It would cost that much for the DOCSIS 3.0 modem for each customer alone.

But they would also need to upgrade to new CMTS's in most cases where they are not deployed. And even if they don't have to upgrade the whole CMTS, they still have to upgrade the DOCSIS linecards in the CMTS, which DOCSIS 3.0 linecards aren't even yet available for the majority of CMTS's they use, VXR7246.

And on top of that, they would need to free up more analog channels for the DOCSIS 3.0 bonding to get the full bandwidth out of DOCSIS 3.0, which is the reason for upgrading in the first place.

That all ends up being more than $20 - $50 per customer.

Well the cable companies here in the US are saying it's closer to $100, but it's somehow being done in many other countries for much less.

Sure if you, Joe the consumer go out to the store to buy a modem, it will easily cost you $50 for that modem, because you have to pay retail mark up. TW however, does not and I'm sure they get a reasonable discount since they can easily order a very large volume of modems at any given time. Things always cost much less in volume, so who's going to save more? Joe purchasing 1 modem, or TW ordering > 100,000?

I'm not asking for TW to drop everything they are doing and deploy DOCSIS 3.0 to 100% of their footprint in one month. I understand network upgrades take time and that it could take years for TW to deploy DOCSIS 3 across most of their network. All I'm say is they could at least get started.

I sure wouldn't build a next generation network tomorrow, and then 10 years down the line when customer demand outpaces my network capacity simply throw up my arms and say "I give up" and tell everyone to slash their usage or pay fines because I'm to cheap to give a damn about upgrading the network. That's just irresponsible.

I have no problem with TW making a profit, but how much is too much? They already have a 2700% profit margin on their RR service, and that's with the current flat rate model. Are they aiming for 5000%? How do you feel about paying 27 or even 50X more for your internet service than it's really worth? Maybe a few years from now we can look forward to paying $200-300 a month, just for our internet usage which actually only costs a few dollars a month to deliver, and by then it wouldn't even cost that much since bandwidth costs continue to drop. We've now entered the era of never ending price increases and profit margins.

I have no problems paying $40-50 a month like I do now, and TW's financial data shows that the cost of keeping their network online is in decline, not increasing as they claim. I don't know what kind of BS they are trying to feed us, but I know the truth.

I would support metered billing as long as it was fair. And by that I mean charging $30 a month for say a 10 Mbps pipe, and then bill all usage at 5 cents per GB. No caps, no limits, just bill usage starting with the first gigabyte at 5 cents a gig. That way, grandma would likely only pay $30.05, while Joe across the street may watch Netflix movies all month, and end up paying $40. That's how metered billing is suppose to work. Everyone pays for their fair share of network resources. If such a system existed, then all you would simply do is offer a few different baseline packages, where the only difference is the speed at which you connect and everyone pays the same, reasonable per GB rate for their bandwidth use.

I did a more in-depth analysis here, projecting out for future, based on past performance.

»www.verizonfiber.com/Blo ··· oks.aspx

They are??? more like trying to rape consumer out of their hard earned cash?

If was son necessary for metered billing why are they not doing in places that have competition with fios. They already had to bump up speeds to try to compete. Seems these folks would be burning up the bandwidth more than anyone else.

If they truly needed metered billing charge the $1. So anyone that uses less than 1 gig bill is $1. Those that use 45gig bill is $45. Also they should remove speed limits run the network wide open for everyone. Why should be pay more for less.

Its all lies.

it will cost you 5 $ for "noise packets"

Yea thats another point. If we are paying for what we are using they had damn well make sure that every byte is something I am sending or receiving. Hell for all we know tw could pad the line with extra BS to push people over the cap.

I completely agree. If you want to offer metered billing then let me pay as I go. Obviously they don't want that. They want their cake and eat it too.

A 10-15 dollar maintenance fee plus .25 cents per gig would seem fair.

Most moderate users 40 GB would be looking at bills of 25 bucks.

Agreed, a money grab by a big corp, thinking customers won't leave. After a month or two of outrageous bills, there's always an option. Key word here is "stupid", defeats the whole idea of faster broadband.

Except that after a month or two people are likely beyond the period they can cancel their double/triple pay contracts without having to pay various ETF. So they get screwed even if they do decide to leave.

But if they leave they will never come back. Metered billing itself along with a cap is an admission that they as a company can't handle the volume on their network, and they have no intention of raising capacity (via upgrading their infrastructure) to accomodate for their oversold services.
TW is begging to be regulated with this broadband "extortion". Its stupid companies like this that command the presence of politicians!
(Thats not a compliment either way!)

They will not be able to add this to existing contracts. That is a major change and you can get out of it. I think when cell companies bumped up the texting fees people could get out of contracts. When Sprint changed the fee structure they admitted you could get out of plan without penalty.

It's not a contract on the length of service, though - Time Warner does month to month stuff, at least on internet-only service.

Unfortunately, my only options are Time Warner, Windstream ADSL, and 3G wireless. I've had friends get horribly ripped off by Windstream (and they don't appear to offer DSL without the phone service anyway,) and I have a somewhat weak cell signal in my apartment (that kills my bandwidth unless I'm near my window.) So, I'm on Time Warner (but with Earthlink as the ISP instead of RoadRunner.)

I guess the other option is just leeching wifi off of all of my neighbors, or moving to somewhere that has more choice...

All the pissed off people now behind him trying to kill him now. Death to the roadrunner.

Tw still doesnt have a F&^^ING CLUE do they?

Edit the pic is also correct road runner flat on his ass Great pic there KARL.

see subject

I think trying to project what the caps will be in 2012 is a waste of time. Who says the 100GB will still be the cap then? It is much more likely the cap will be higher, just like speeds will be. Time marches on.

Who says the cap WON'T still be 100GB by then? If it generates a favorable revenue stream for RR with controllable customer complaints, they have no reason to increase it at all. Sorry, not buying the argument that they could raise it by 2012 if they're making such stupid decisions right now. If you want to be an optimist they'll do something consumer-friendly, be my guest, but they're not demonstrating that behavior right now and I don't expect it to change.

It also greatly reduces the need for increased speeds. It is very difficult to tell the difference between 5Mbps and 20Mbps when just doing "normal" web browsing. While faster is always better when downloading large things, for small stuff there is no real difference.

That makes perfect sense.
Companies routinely take extra upfront heat introducing new, stingy cap policies that thin their client base, piss off those who have no alternative, just to relax the cap vs cost ratio a few years down the road.
Makes perfect sense to me, great observation!

You don't think TWC will be monitoring their churn rate monthly as they run these trials in test markets? If these trials are costing them customers they will modify their caps and price tiers and it won't be years down the road.

You missed the point, but pointed out a truth.
The truth you pointed out is that whatever structure the cap vs cost ends up as will be TW's minimum value they can offer their customers without shooting themselves in the foot.
That's a fact we agree on.
The point you missed, or so it seems your saying is once this minimum threshold of public acceptance is identified it will be implemented only so that TW can relax it down the road?

Who is a customer supposed to churn to? Most of us live in a duopoly at best. If TW is your only option how do you leave them?

Actually, it's slightly more than a duopoly - most markets also have Sprint, Verizon, and AT&T as options, in addition to TW and the local phone company. Although those aren't the best options either.

(And, there is always satellite, and some areas may have WISPs.)

I'll have to disagree with you there TK, the fact that they're even testing this speaks volumes about their attitude towards keeping up with the pace of technologies and services. They in fact are circumventing that consumer obligation in this insulting attempt at lowering services for their customers.

100 GB isn't good enough now let alone in 3 years. Yeah Charter has caps but at least for my $65 I get 250 GB. $10 less and 150 GB more data

Charter > TW and that's really fucking sad.

Fear and paranoia.
- My current 10/1Mbps connection would be capped at 40GB/month, which is ~1.33GB/day (depending on the month).

While I do expect that companies have the right to 'protect' their networks, and implement caps, I do think that REASONABLE caps should be implemented in a 1Mbps:10GB ratio at a minimum, and the option to upgrade cap limits to the next tier for $5.

eg.
1.5Mbps: 15GB
6Mbps:60GB
10Mbps: 100GB

These Idiots just DON'T get it !
Talk in a language they can understand....MONEY
Let it walk.

Exactly.
There's a few levels of management...but in general its like this:
1 level of management looks after the 'service' (lower levels - basically a 'cost' of doing business)
1 level of management looks after the selling the business (sales)

Top level of management only cares about profit margins, and ways to increase ARPU, increase profit margins, eliminate competition, deregulate... basically $$$$.
Money is all they understand - speak with your wallet.

The day Time Warner Cable starts those caps where I live will be the day I leave Time Warner Cable for good. After reading their statement, it's worse than I thought.

As if it justifies their plan, they claim that 30% of their users use less than 1 gb per month. The only way I can think of users using so little bandwidth, are users that either have no PCs, or for some reason are paying for service they no longer use (e.g. switched to FiOS but forgot to tell Time Warner to cancel). Either that, or Time Warner should as a public service call the police about these customers, because they may be deceased in their homes with nobody knowing.

I'm getting free unlimited (true unlimited, too, not 5 GiB/mo - grandfathered plans are awesome) EvDO. If push really comes to shove, I'll make a really long sync cable, and run my cell phone into my server, with the phone taped to my window. Hell, I can get a second phone to actually use as a phone for an additional $10/mo, and I wouldn't mind if that's capped.

F*@&ing morons

Grandma could clobber that with an automatic Windows Service Pack download and daily virus updates.

AT&T and Verizon have been able to offer the very same speeds and price without the limits. Somehow they're still in business. So no, that's not a concession either.

TWC needs to add a zero to those GB caps.

And they are taking a page out of the very old AOL playbook when the 'net was billed either by the hour or by byte.

Now I am not one who likes AOL, but they did wake up and did finally offer unlimited internet access (dial-up speeds) which gave us the the means to get on-line today.

Time Warner in all their glee and glory do not and will not care what the end consumer has to say or complain about. We are nothing to them except their piggy-banks because we want internet service and they think they are the only players in town.

Well guess what TW, you're not the only player in town, and if that means I down grade my on-line connection to just 3.0 or 6.0mb down on a DSL service, then I and my money are gone.

Further, your "Customer Service" folks have tried repeatedly to up-sell on your Digital Cable service, meaning i have to shell out more money to because I have 5 TV's that would need boxes. Thanks but No Thanks. My Basic/Standard is fine, and no one really watches more than 5 or 6 different channels anyway.

So Time Warner, keep drinking the Kool-Aid and reading that very old AOL playbook, for in the end it will be you who will change your tune and beg for the customers who left you to "Please come back, we're sorry".

So a gigabyte now can cost 1 dollar or 2 dollars or 15 dollars. Why would they release a tier that proves they are just making up numbers?

DAMN. lol

Here I thought Comcast was greedy..Time Warner takes the whole damn cake and THEN some.

I know damn well, if I was a user that got caught up in their caps, I would be telling them where to go with that shit.

You are correct and the people who say it doesn't matter know not one bit about the history of the internet. I watched ISDN die because of metering the internet. I watched Prodigy die from AOL due to their trying to meter the internet. I will laugh my blank off as someone provides a all you can eat alternative to metering. You need to fight metering and anyone who tells you differently is stupid and I can prove it.

802.11s anyone? Screw the ISP, we're moving to hacked wifi routers, and everyone is an ISP?

That's almost what I'm thinking would be smart.

Landel Hobbs: Stop bullsh!tting people and just admit you have no good reason for these caps other than to make your investors giddy with anticipation and bump up your exec compensation.

Is it coincidence that RR has recently added the new ultra-light tier and the alleged 100GB super-tier? No, it's a direct response to people's angst at your obvious money grab and an attempt to "give people what they want".

What people want is either the continuation of no caps or the implementation of REASONABLE caps such as those employed by other companies (hint: Comcast is 250GB without ridiculous overage markups).

You need to fire the idiot in your marketing department who thought it would be a good idea to base a broadband business model after cellular billing structures and do something innovative and competitive to put RoadRunner above the other companies in the same market (Another hint: adding caps and saying they're for 'fairness and equality' is not a good example).

Lastly, how do you expect anyone with any tech saavy to believe that caps and overages will help pay for DOCSIS 3.0 rollout when DOCSIS 3.0 will be utterly useless with the caps and overages you're promoting.

For the second time, pull your head out of your a$$, admit you screwed up, stop testing your ridiculous caps and find something else to set RoadRunner apart from others in the industry. Nothing good will come of this as you have pissed of customers, politicians, and journalists and you can't spin your way out of it.

They have a VERY good Reason.
Here's your answer...

»www.multichannel.com/art ··· 2008.php

Hobbs and the other execs at RR have a very good reason--increasing their personal income. Increasing his bottom line by taking the measures he's supporting is in conflict with my interest in paying increased costs without additional benefit.

Nevertheless, thanks for pointing out the article. It sheds a fair bit of light on why they seem to be doing everything they can to make this new revenue stream viable.

...ads, whether in pic or Flash form, won't count towards my cap since it's not actually content and in fact someone else's revenue stream that I would be footing the bill for, right?

...Right? *wipes brow* Is it hot in here?

Of course they count! If the packets can reach your modem, it counts. Just because the packets are pulled from an ad server meant for a particular web page doesn't mean jack.

Big question, do you want TWC to have the power to filter packets because they are ads and do it to the pages YOU visit? Do you want TWC to be a arbiter of what is allowed? To 'munge' a web page that is not theirs? Right now TWC is concerned with quantity of bits, not what those bits are.

You can control a lot of the ad flow by using ad-blockers. Often just disabling javascript will keep the page script from summoning ad content from those third party servers.

its fear mongering all over again. "Oh no! Our Internets are going to crash if we dont get more Money"

Extortion pure and simple.

We know they are only doing it because many worthwhile alternatives to their VOD and Television offerings are becoming available online. Hulu, Netflix, Amazon Unboxed, and plenty of startups out there. Figure they can make back their lost revenue by essentially double dipping into competitors products (Ok, you watch an HD movie on Netflix online and it runs 4GB of download. Say TWC charges you $1/GB. You've just paid $4 for that movie in addition to what you paid to Netflix.).

There's no other way around it. Wash off all the sugarcoating of their excuses and you get this.

And this.....

»www.multichannel.com/art ··· 2008.php

They say "If we don't act, consumers' Internet experience will suffer. Sitting still is not an option." If this were true, then they are admitting that the goal of this is to slow down usage of broadband. But if this was true, then why make diversions with all the other statements. This is now the case, but they are grasping for straws now. I guess it is time to get ready and leave them and move on (or back) to something else.

Sorta funny that Cablevision recently came out and said that they want their customers using more data.

If they cap my usage, my Internet experience will suffer.

A 1GB cap? Wow.

That is really really bad.

I dont mind the idea of monthly caps if they are reasonable but this is getting ridiculous.

Weak is an understatement. These concessions are a complete joke. Take the ultralight tier proposed: $15 a month is a good start, but then they slap a 1 gig cap on it? One step forward two steps back.

Here's a clue to the TW execs: the caps are simply too low. Especially when you do a side by side comparison with the largest cable provider in the country, Comcast. Drop the caps altogether or create reasonable caps that will catch only the top 0.5% to 1% of heavy users. Then, adjust the caps upward annually as even the dumbest consumers know that people are using the internet for more and more things.

Vista SP1 was almost 1GB. Not to mention other security updates. Most households these days have more than one PC....you see where this is headed?

Also what about ads and such that I'm not interested in? Why should that count towards the cap? i didnt specifically request it.

Rollover GBs. You simply can't justify charging for overages and not crediting for underages. It stinks of hypocrisy.

Truly unlimited tier at a reasonable premium.