Time Warner Caps: Behind The NumbersPrices company propose 'don't pass the smell test.' 10:09AM Thursday Jun 05 2008 by Karl Bodetags: competition · business · bandwidth · cable · RoadRunner CableWhile the debate over caps rages on for some, I still believe that Time Warner Cable's efforts to impose metered pricing are primarily a way to take a pre-emptive swipe at competing video operations. I also continue to believe that the shift toward low caps and per-byte billing opens the door to anti-competitive (VoIP or content) abuse and price gouging in this, a marginally competitive and poorly regulated market. My friend Om Malik, a long time industry journalist, would seem to agree. This morning he e-mailed me his piece dissecting the numbers behind the caps TWC is considering, which range from 5GB per month for their 768kbps tier, and 40GB per month for their 15Mbps tier. If you bought the monthly 15 mbps/40 GB transfer option for about $56 a month, you’d get about 40 hours of standard definition video along with enough bandwidth for your normal browsing and surfing habits. That’s just over 75 minutes of SD Internet video every day - two or three shows at best - which means you might need to continue buying the “video connection” in order to watch more television. Sure you can slice and dice the data transfers with other online activities, but this is all about video. What better way to ensure that AppleTV doesn't eat your lunch down the road, while pleasing your investors. And pleased they should be, given the profits on the proposed caps, should they be deployed nationally, would be stunning. I think Dave Burstein probably put it best in an e-mail after I first broke the story last January: There is nothing inherently wrong in charging for bandwidth, if the charge is reasonably proportional to the costs. Time Warner's numbers don't pass the smell test, however. The markup over cost on that bandwidth is between 1000% and 1500%. . . 40 gigabytes at seven cents is less than three dollars per month. Time Warner charges over $40. That's like Starbucks drastically raising the price if you put sugar in your coffee. Any large carrier with a cap below 100 gigabytes and a price above $30 is abusing market power. Their bandwidth costs are less than the marketing budget, and the customer is profitable.  The markup over cost on that bandwidth is between 1000% and 1500% |
Of course the caps set forth in the Time Warner Cable trial aren't set in stone. They may be set intentionally low to trigger and test per-byte billing and tracking mechanisms. They may ultimately find that consumer backlash and FiOS pressure doesn't make the plan worthwhile. They could also bump the caps closer to Comcast's more reasonable 250GB mark. I personally think the caps as set are market seppuku, but time will tell. I still don't see any real, documented evidence that the shift from flat-rate pricing to metered pricing is necessary. ISP execs have done a good job convincing us that a bandwidth apocalypse looms -- one that cannot be fixed by capacity and throttling alone. Yet they do not release actual network data that supports their argument. This, combined with healthy profits under the flat-rate model (made consistently more healthy by new revenue streams like the sale of clickstream data, behavioral advertising and DNS redirection advertising) suggests to me a manufactured crisis. A crisis tasked with getting you to pay more for less, while keeping video competitors at bay.
Related:- Time Warner: 20Mbps, New Speeds in NYC
- Time Warner Cable Pretends Cable Is Fiber
- Time Warner Cable To Launch DOCSIS 3.0 In New York
- Time Warner Cable Says They're Ready For FiOS Rumble
- Time Warner Cable Using Fine Print To Foist Caps On Customers
- DSL Takes A Beating
- Time Warner Cable Powerboost Hits L.A.
- U-Verse Hitting Jacksonville This Week?
|
page: 1 · 2  |
 
anony
@mindspring.com
| market seppuku? Only if there is competition. Where I live the cable companies have divided the city. You are either in a Cox area or a Comcast. The only option you have if you want another provider is to move.
As long as monopolistic cable contracts are allowed by cities, you will never see competition. | |
|  | 
gaforces
United We Stand, Divided We Fall
join:2002-04-07
Santa Cruz, CA
 ·Cruzio Internet
| Re: market seppuku? Yep, around here comcast and charter have the county divided, only choice is dish or to move.
Looks like TW is jealous of the oil industry's gouging and want to do some of their own.
It's my party and I can gouge if I want to, gouge if I want to ...
--
There is no greater sign of a general decay of virtue in a nation, than a want of zeal in its inhabitants for the good of their country. ~ Joseph Addison | |
| | | 
maartena
Obama 2008
join:2002-05-10
Orange, CA
| Re: market seppuku? said by gaforces  :Yep, around here comcast and charter have the county divided, only choice is dish or to move. Your TV won't be capped. This is about internet.... You could move to DSL for instance. I would much rather have a 6/768 (the maximum DSL I can get) with no limitations then my current 10/1 line if they decide to cap it. | |
| | | | richardak
join:2001-07-08
Seguin, TX
moderated:
June 5th, @02:13PM
| Re: market seppuku? said by maartena :said by gaforces :Yep, around here comcast and charter have the county divided, only choice is dish or to move. Your TV won't be capped. This is about internet.... You could move to DSL for instance. I would much rather have a 6/768 (the maximum DSL I can get) with no limitations then my current 10/1 line if they decide to cap it. I'm tired of you people that think DSL is always an option. DSL is only an option if you live close to a CO. As the OP said, it's either COX or TW for them (or the crap offered via satellite, which can't really be considered an option). | |
| | | | 
insomniac84
join:2002-01-03
Schererville, IN | The hell it won't. Comcast is already lowering the bandwidth(CAPPING!) of HD channels to cram more channels in. | |
| | |
RR User
@rr.com
| There are only 2 reasons for TWC's plan for caps:
1. eliminate any competing video competition online.
2. profit, profit, profit!
As was stated in the article above... 40 gigs of bandwidth is 2-3 dollars *at most*, in actual cost. Comcast's proposed number (250GB) is *MUCH* more reasonable, and just goes to show that bandwidth, while a variable cost, is still quite cheap.
How else can you explain the explosion of video content sites now on the internet. The whole reason Youtube, and all the other video sites out there now exist is because bandwidth costs dropped to the point where it's profitable to stream video online.
If there is any issue with bandwidth overload it has more to do with local node congestion rather than the capacity and cost of service back at the headend. Docsis 3.0 is going to fix some of the current throughput limitations of the current Docsis spec, so local node congestion should be eased, and that's right around the corner, assuming cable companies are willing to upgrade (and I don't just mean competitive areas!)
In the end, it's really hard to feel bad for TWC, as with most broadband ISP's, they are making very comfortable profits. Just look at the front page... TWC is cutting off newsgroup access, they are just cutting off all their arms and legs to save a penny here and a dime there. It's all a mad run for money, but of course they aren't going to tell you that.
I'm certainly not endorsing reckless bandwidth consumption or anything of the like... but if you really knew how much TWC stands to gain in profit on your behalf of using bandwidth, you would probably be upset too. It would be the same as me telling you that gasoline only costs 20 cents a gallon to refine, transport, market and sell... so why are you paying $4.00 a gallon for it? | |
| | | | 
JamesPC
join:2005-10-12
Orange, CA | Re: market seppuku? Fix your network if you cant give what you promise. Or just give us what you can actually deliver. I have a 10mbps D but if you cant do that then give me 7mbps and don't cap it. This is ALL about "eliminating video competition". | |
| | nydwarf1
join:2008-04-11
St Catharines, ON | Maybe the people should decide to enact a law that if you own a cable company you cannot run the internet side. You will have to sell this to another operator. | |
| 
odog
Cable Centric Vendor Biased
Premium
join:2001-08-05
Norcross, GA
clubs: | they aren't going after the legal stuff by a large for every appleTV user or Hulu user.... you've probably got 100+ hardcore BT users eating 100+GB per month. | |
| | | | 
Phil
Rojo Sol
Premium
join:2001-06-11
Camarillo, CA
·DSL EXTREME
edit:
June 5th, @10:36AM
| Only because these technologies are just emerging and with limited scope. As I've said elsewhere, if Netflix made their entire movie library available online I would stream ALL my movies versus getting the physical DVD via snail-mail. Time Warner's caps would not allow me this freedom. | |
| | | 
TK Junk Mail
Go ahead, make my day
Premium
join:2002-03-03
Margate City, NJ
clubs:
 ·Comcast
| Re: they aren't going after the legal stuff said by Phil :Only because these technologies are just emerging and with limited scope. As I've said elsewhere, if Netflix made their entire movie library available online I would stream ALL my movies versus getting the physical DVD via snail-mail. Time Warner's caps would not allow me this freedom. Yes it would. You would just have to pay more for the content is all.
--
My BLOG .. .. Internet News .. .. My Web Page | |
| | | | NOCMan
Verizon Fios User
Premium
join:2004-09-30
Flower Mound, TX | Re: they aren't going after the legal stuff What would be the point? Just buy it from the cable company. No need for pesky companies like Netflix.
Once they drive out the competition we'll all get what they want us to have. AOL all over again. | |
| | | | | SilverSurfer
join:2007-08-19
| Re: they aren't going after the legal stuff said by NOCMan :Once they drive out the competition we'll all get what they want us to have. AOL all over again. +4 - Exactly. AOhell all over again and a zillion IPs on the Net with the same content of TV programming. | |
| | | | | espaeth
Misanthrope
Premium
join:2001-04-21
Minneapolis, MN
·Comcast
·Embarq
| said by NOCMan :Once they drive out the competition we'll all get what they want us to have. AOL all over again. What? When did AOL *ever* take over the Internet? | |
| | | |
Phil
Rojo Sol
Premium
join:2001-06-11
Camarillo, CA | Having to pay more is financial limitation, not a freedom in this sense. No bargain. | |
| | | | nasadude
join:2001-10-05
Rockville, MD
·Comcast
edit:
June 5th, @06:32PM
| said by TK Junk Mail :Yes it would. You would just have to pay more for the content is all. EXACTLY!
let me see...download the netflix movie...wait, crap I'm close to the cap.
...may as well get it from TW on pay-per-view. | |
| | | | | openbox9
join:2004-01-26
Navarre, FL | Re: they aren't going after the legal stuff Or continue your Netflix delivery via the USPS. | |
| | 
danclan
join:2005-11-01
Midlothian, VA
 ·Verizon FIOS
| said by odog :by a large for every appleTV user or Hulu user.... you've probably got 100+ hardcore BT users eating 100+GB per month. no they arent going after the illegal stuff thats a straw man arguement, a ruse, a ploy, an EXCUSE
ITS ALL ABOUT THE CONTENT and what they can charge for it. Since any number you hear about torrenting traffic is pulled at random from the air these caps are all about keeping video revenue local. Its about having you use their PPV or VOIP and not Apple or netflix or any other VOIP/Video provider.
Thats it. Period. Anything else is just hot air. | |
| | | 
halfband
Premium
join:2002-06-01
Huntsville, AL
edit:
June 5th, @01:26PM
| Re: they aren't going after the legal stuff..NO they aren't If the primary purpose is to limit competition for video content it will be time to split the pipe from the content providers.
--
Registered Bandwidth Offender #40812 | |
| | | | | |
maartena
Obama 2008
join:2002-05-10
Orange, CA
| said by odog :by a large for every appleTV user or Hulu user.... you've probably got 100+ hardcore BT users eating 100+GB per month. You're right on that. But you should also look at the bigger picture. These days, an average American family has 2 to 3 PC's, sometimes even more. With the way the web has been developing over the last few years with online gaming, youtubing, iTunes, and newer services such as the Netflix download service so that you can download you movies instead of waiting for them by mail.... and the fact that simple OS updates are getting bigger and bigger, not only on Windows. The amounts of data that an average family transfers, without even touching on the more shady side of internet, is ever increasing, and with the TV networks now placing full episodes online on their websites, HDTV finally breaking through, 12 Megapixel DSLR camera's (6 Mb per picture) becoming more affordable, VOIP services getting more popular, I don't see only an upwards curve in the amount of LEGAL data we transmit.
Add to that IT professionals such as myself. Last week alone I downloaded three Linux distros on DVD because I wanted to decide which would be best on my laptop. That is 12+ GB right there, and since I used torrents because they are often much faster, I also upload, so say 15 Gb of traffic. Then I downloaded Exchange Server 2007 SP1 from my MSDN subscription, a 5.5 Gb download. I also downloaded OS disks for Server 2008, another 3 Gb right there. Just in 1 week time, because I want to do some testing (I plan to bring online my first Exchange 2007 server, until now I have only done 2003's and I needed to test it first before I order the production software for my client), I have transmitted 25+ Gb of data.
And the rest of this month? Well, OpenSUSE 11 is about to be released, that's 4 Gb right there. But I think I also want the x64 edition, so make that 8 Gb. Oh, and to save everyone's bandwidth I always use torrents on Linux distros, so say 10 Gb because of uploading.
And that's just business, I haven't even started on pleasure yet.....
And did I mention I often have a Dutch TV station streaming into my office?
Time Warner Cable is wanting to cap at 40 Gb. I think that is total bull and that many, many users using 2008's internet will surpass that without a sweat and doing anything illegal.... 100 Gb would be more realistic. | |
| | | espaeth
Misanthrope
Premium
join:2001-04-21
Minneapolis, MN
·Comcast
·Embarq
edit:
June 5th, @04:23PM
| Re: they aren't going after the legal stuff said by maartena :But you should also look at the bigger picture. These days, an average American family has 2 to 3 PC's, sometimes even more. According to Census bureau in August 2000 only 51% of US households had one or more computers, and only 41% of households had Internet access. Granted it's been 8 years, but do you think the other half of the country went out and bought not just 1, but multiple computers *AND* high speed Internet in the last 8 years? (In an economy that has been struggling with the costs of a war and lackluster economic growth)
Source: »www.census.gov/prod/2001pubs/p23-207.pdf | |
| | | | 
MattE
Obama '08
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..
 ·Corporate Colocation
| Re: they aren't going after the legal stuff said by espaeth :said by maartena :But you should also look at the bigger picture. These days, an average American family has 2 to 3 PC's, sometimes even more. According to Census bureau in August 2000 only 51% of US households had one or more computers, and only 41% of households had Internet access. Granted it's been 8 years, but do you think the other half of the country went out and bought not just 1, but multiple computers *AND* high speed Internet in the last 8 years? (In an economy that has been struggling with the costs of a war and lackluster economic growth) Source: » www.census.gov/prod/2001pubs/p23-207.pdf Actually, yes. Dell, HP, IBM, Lenovo and Apple have all reported record growth and minus the past couple years, record sales. | |
| | | | | espaeth
Misanthrope
Premium
join:2001-04-21
Minneapolis, MN
·Comcast
·Embarq
| Re: they aren't going after the legal stuff said by MattE :Actually, yes. Dell, HP, IBM, Lenovo and Apple have all reported record growth and minus the past couple years, record sales. Many of those sales were to both business and personal customers that already had a computer to begin with. You don't honestly believe we went from an average of 0.5 computers per household to 2+ computers per household in 7 years, do you? | |
| | | | | |
MattE
Obama '08
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..
·Corporate Colocation
| Re: they aren't going after the legal stuff said by espaeth :said by MattE :Actually, yes. Dell, HP, IBM, Lenovo and Apple have all reported record growth and minus the past couple years, record sales. Many of those sales were to both business and personal customers that already had a computer to begin with. You don't honestly believe we went from an average of 0.5 computers per household to 2+ computers per household in 7 years, do you? I personally know 4 households that did. Mine went from 1 to 3, so yes. | |
| | | | | | | espaeth
Misanthrope
Premium
join:2001-04-21
Minneapolis, MN
·Comcast
·Embarq
| Re: they aren't going after the legal stuff said by MattE :I personally know 4 households that did. Mine went from 1 to 3, so yes. Again, I'm not saying things aren't improving, but we're not to a household average of 1+ computers yet in the US. Heck, according to a study done this year about 20% of US head of households have never sent an email.
Source: »newsroom.parksassociates.com/art···_id=5067 | |
| | | | | | | |
MattE
Obama '08
Premium
join:2003-07-20
Jamestown, NC
·North State Commun..
·Corporate Colocation
| Re: they aren't going after the legal stuff said by espaeth :said by MattE :I personally know 4 households that did. Mine went from 1 to 3, so yes. Again, I'm not saying things aren't improving, but we're not to a household average of 1+ computers yet in the US. Heck, according to a study done this year about 20% of US head of households have never sent an email. Source: » newsroom.parksassociates.com/art···_id=5067 What does 20% of households never sending an email have to do with whether the average number of households with more than 1 computer has increased? | |
| | | | dentman42
join:2001-10-02
Columbus, OH
·AT&T Midwest
| said by espaeth :said by maartena :But you should also look at the bigger picture. These days, an average American family has 2 to 3 PC's, sometimes even more. According to Census bureau in August 2000 only 51% of US households had one or more computers, and only 41% of households had Internet access. Granted it's been 8 years, but do you think the other half of the country went out and bought not just 1, but multiple computers *AND* high speed Internet in the last 8 years? Source: » www.census.gov/prod/2001pubs/p23-207.pdf Bought? Not necesarilly. Some did, prices have come way down since 2000. But what do you think has happened to all of the computers that have been replaced during that time? Many have been given to friends or relatives who didn't have a computer. I know plenty of people on welfare that have 3 or 4 computers (including laptops) and broadband internet. (And we'll leave the issue of whether welfare should pay for brodband for another topic). And in most cases, those 3 or 4 computers are all better than what I had in 2000 (after all, a 1 GHz machine is pretty well considered obsolete now, but was the top end in 2000). | |
| | | | BF69
join:2004-07-28
Camden, TN
| said by odog :by a large for every appleTV user or Hulu user.... you've probably got 100+ hardcore BT users eating 100+GB per month. MLB.TV allows you to watch basbeall games live on your comuter. If you use their highest settings( and why wouldn't I on a 15 Mbps conenction ) they stream at 1.4 Mbps. The average MLB team plays 26 games a month. If you watch all 26 games that 48 GB a month. This is LEGITIMATE use. And I'm paying $120 for this. Why should I have to pay more? | |
| |
JamesPC
join:2005-10-12
Orange, CA | In the future 20 AVERAGE houses are going to demand more bandwidth than the entire internet does today. This is a cash grab fueled by IGNORANCE. | |
| | | 
fireflier
Coffee. . .Need Coffee
Premium
join:2001-05-25
Limbo
·RoadRunner Cable
| Re: Right On! said by Phil : If Time Warner had proposed something reasonable, similar to Comcast's cap of 250GB people wouldn't be making such a stink about it. Agreed, on the condition that they also include a clause that doesn't preclude the possibility of upping the cap as the internet matures. 250GB seems good now. In 10 years, it may not be. I would hope providers will recognize that.
--
Wishes: When you wish upon a falling star, your dreams can come true. Unless it's really a meteorite hurtling to the Earth which will destroy all life. Then you're pretty much hosed no matter what you wish for. Unless it's death by meteor. --despair.com | |
| 
Julio
Bachatero y Que?
Premium
join:2003-03-19
Brooklyn, NY
clubs: | I'll drop TWC the instant they do this in NYC. | |
| |
fireflier
Coffee. . .Need Coffee
Premium
join:2001-05-25
Limbo
·RoadRunner Cable
| Re: I'll drop TWC Same in my area. My alternatives aren't as good as Fios but at least one alternative doesn't have such a ridiculously low cap.
Combine that with their recently implemented DNS re-direction, the fact that my speeds keep declining, their upload remains at a paltry 384 kb/s and it's really starting to p!ss me off. Don't even get me started on their draconian POP3 retrieval if you're off their network or the fact they still haven't gotten many their Adelphia "acquirees" integrated into their system so we'd at least have dial-up backup for broadband outages.
A money-grab low cap rollout and I'm walking too.
In retrospect, I'd rather have Adelphia back. . .
--
Wishes: When you wish upon a falling star, your dreams can come true. Unless it's really a meteorite hurtling to the Earth which will destroy all life. Then you're pretty much hosed no matter what you wish for. Unless it's death by meteor. --despair.com | |
| | 
BetaTron
Sinz
Premium
join:2002-08-18
Brooklyn, NY | said by Julio :the instant they do this in NYC. QTF | |
| | 
kamm
join:2001-02-14
Brooklyn, NY | M2, m8!  | |
| 
Davebo_
join:2002-11-19
Canada | Wow What a bunch of Time Warner news lately....
What's up with that?  | |
| | 
Skeedatl
Ah, push it - push it real good
Premium
join:2007-12-26
The Cloud | Re: Wow That's what happens when you screw up what was a great service...you make news. | |
| | hottboiinnc
Kyle
join:2003-10-15
Toledo, OH | Thats because Comcast doesnt have anything to say recently. | |
| K Patterson
Premium,MVM
join:2006-03-12
Columbus, OH
·RoadRunner Cable
edit:
June 5th, @10:26AM
| There's more than transit I agree that seven cents is a reasonable price to purchase transit, but there are other costs to maintain the bandwidth to the peering point.
The pricing model which electric companies use for commercial and industrial customers is a way this has traditionally been handled. The meter measures two things - demand and consumption. The demand is averaged over a 30 minute interval, and in Columbus is $6.80 per kilowatt The electricity used is billed at $.0936. As you become a larger customer, the demand charge goes up and the KWH charge goes down.
Maybe this is the model that cable companies should use. Actually, it kinda is. One could view the monthly fee as the demand charge, and the new fees as the KWH charge. That doesn't make the present number reasonable, however. | |
| |
See 7 replies to this post | |
gimme5
join:2002-12-23
Kissimmee, FL
| Way too low Yes, those caps are way too low. Someone using 5 gigs a month is hardly hurting the network.
40 gigs is also too low. I don't download a lot of stuff, but the way the web is today, it does add up and I think I might be getting kinda close to that every month. I think, ultimately, if those caps went in effect at my provider, I'd have to switch to *gasp* Embarq DSL.
My guess is that it won't happen. They'll run their trial and will not implement the caps nationwide. At least not these caps. Perhaps fair caps, like what Comcast is doing. | |
| 
banditws6
Shrinking Time and Distance
join:2001-08-18
Naples, FL
·Comcast
| I think this is why people in the U.S. fear usage caps... While the concept of paying for what you use does make sense, I think people (in the U.S., at least) resist this model because they fear the ISPs will impose caps that are too low and overage charges that are inflated. And the limited competition in most markets means that if your ISP's charges are unreasonable, you may have no choice but to pay them, if you want or need broadband service -- that's why they're unreasonable in the first place, because you're stuck with them.
According to this, Time Warner isn't doing much to soothe those fears. In fact, they are just fueling them, setting caps that protect their own business interests first and foremost.
By contrast, Comcast's proposed 250GB usage cap is much more reasonable, and one I would not have any complaints about in the present environment.
--
"I'll follow the law until it's just stupid." -Ted Nugent | |
| | hottboiinnc
Kyle
join:2003-10-15
Toledo, OH
·buckeye cable
 ·Time Warner VOIP
·1and1
| Re: I think this is why people in the U.S. fear usage caps... well everyone on here has been wanting usage caps from the providers. they start to say what they'd be and now everyone on here bitches because their too low. People on here need to make up their damn mind. If the want them they want them. If they don't then they need to keep their mouth shut.
People even bitched about Comcast's 250gig per month cap. Which people said was toooo low. cry cry cry. The only ones that bitch about this is the ones that post on this website. generally most people have no clue whats going on. | |
| JSRoman
Premium
join:2005-03-10
Callahan, FL | T R I A L 5. a tentative or experimental action in order to ascertain results; experiment.
Wait until the trial is over before you go cuttting your wrists.
--
»www.seabee.navy.mil | |
| |
fireflier
Coffee. . .Need Coffee
Premium
join:2001-05-25
Limbo
·RoadRunner Cable
| Re: T R I A L I think most people are taking a wait-and-see approach. I and others have commented if they implement it in our areas we're outta there.
But that also doesn't preclude people making it known that they don't agree with the parameters being imposed in the trial. Wait and see is one thing. But I wouldn't expect people to sit silently by while a trial runs with numbers that they feel would be unreasonable if implemented outside of the trial area.
In fact, I think it NEEDS to be discussed before, during, and after the trial. There are a lot of parties interested besides those involved in the trial.
--
Wishes: When you wish upon a falling star, your dreams can come true. Unless it's really a meteorite hurtling to the Earth which will destroy all life. Then you're pretty much hosed no matter what you wish for. Unless it's death by meteor. --despair.com | |
| | | | | | | 
punker
deleted by moderator
Premium
join:2004-06-21
Palmdale, CA
clubs: | Re: T R I A L i will also be gone
soon it will be worth moving to an Verizon area
*willing to move 4 better interweb* | |
| |
|
|
·
Right On!