Internet Griefing

Sadly, the biggest story to hit Austin yesterday wasn’t an April Fool’s joke – Time Warner, the local cable provider, announced that tiered pricing and bandwidth caps would be coming into effect virtually immediately, for Austin/San Antonio TX, Rochester NY, and Greensboro NC. It’s no coincidence whatsoever that all of these markets are effectively Time Warner monopolies (AT&T just ran U-Verse, which is essentially DSL that can run at cablemodem-equivalent speeds, to our neighborhood last month, in what now seems spectacularly good timing). That sound you hear is everyone dumping Time Warner in Austin for anything remotely approaching internet service… U-Verse, Grande, DSL, carrier pigeon, whatever. Interestingly, J. talked to someone at Time Warner who insisted that Business Week was liars liars pants on fire. Guess they didn’t get the memo from their CEO.

By charging a premium to the heaviest broadband users, much the same way cell-phone providers collect fees from subscribers who exceed their allotted minutes, Time Warner would upend a longstanding pricing strategy among Internet service providers. Typically, phone and cable companies charge flat fees for unlimited access to the Web. “We need a viable model to be able to support the infrastructure of the broadband business,” Time Warner Cable CEO Glenn Britt says in an interview. “We made a mistake early on by not defining our business based on the consumption dimension.”

Which is more than a little ironic, given that the now parent company of Time Warner gave up “defining their business based on the consumption dimension” in 1996. Clearly, a lot changed in 13 years! What could it be?

Well, the announced bandwidth surcharges ($1 per gig over the limit) hold a clue to that. They are ridiculously punitive – the hosting company that I use for this blog charges me less than 10% of that. I guess those bits cost a lot more when you use them at home. Or, more to the point, if you use more than Time Warner’s top-end cap of 40GB a month, or the probably  ridiculously priced supersize option of 100GB a month, or the literally ridiculous budget cap of 5GB a month – Time Warner (and other ISPs) literally do not want you as a customer. You cost them money, because you actually use what you buy. One of the longest running dark jokes among MMO live teams is that MMO publishers would make money by simply banning everyone who logged in. Once you filtered out the customers that actually *played*, your support costs of the remaining people who rarely check credit card statements would drop dramatically! Except with ISPs, it’s not dark comedy – it’s a business model.

So let’s look at typical use cases.

The MMO Player – you don’t watch much online video (unless it’s raiding strategies), you don’t download games or video, you simply play – oh, just to pick a random example, World of Warcraft AND NOTHING ELSE. The good news is that most of the proposed bandwidth caps won’t affect you, because MMO networking is written in such a way that the game is theoretically playable over a dialup modem (though this becomes more and more theoretical a proposition as time passes). So, a good reasonable estimate is that, playing WoW (or Call of Duty 4, or any other online game) 20 hours a week, you’d use about 700 MB in bandwidth. Add in Ventrilo (which is also optimized for bandwidth usage) and the occasional Youtube rickroll and you’re probably at around 2 GB a month of bandwidth usage. Congratulations! Time Warner likes you. You’re well behaved. You’re also an outlier, because outside of online gaming, almost no one uses that little bandwidth any more. And truth be told, how many MMO players do YOU know that JUST play MMOs? Be honest, you have those Naruto torrents running, don’t you.

The Entertained – you play the occasional online game, but mainly your time online is spent watching yesterday’s Daily Show snippets and the occasional program on Hulu. Well, you’re in trouble, because that whole reason you got a cablemodem to begin with – the ability to watch streaming video in something approaching high definition – will break your bandwidth bank. About 7 hours a week of online video will break the 40GB limit.

The Steam Customer – oh, you’re so, so screwed. The last game I bought from Steam – Empire: Total War – weighs in at 14.8 GB. Most AAA games today are of a similar download size. Gamestop is dancing in their used tennis shoes, because online game purchases just quit being cost-effective.

Bill Harris has a piece on his blog on what this is really all about. Money. And not even yours, really.

When in doubt, look for the deep pockets, and in this case, those pockets belong to the content providers. Video-on-demand has absolutely EXPLODED in the last two years, and new services seem to get added daily. Content providers are stampeding to get all of their content online and watchable on demand.

Particularly interesting is ESPN360, which offers an incredible amount of content, both live and via replay. Well, maybe:
ESPN360.com is available at no charge to fans who receive their high-speed internet connection from an ESPN360.com affiliated internet service provider. ESPN360.com is also available to fans that access the internet from U.S. college campuses and U.S. military bases.

Hmm. So if my ISP isn’t an “affiliate,” how do I get access?
Switch to an ESPN360.com affiliated internet service provider or to contact your internet service provider and request ESPN360.com.

Oh, and guess what–Time Warner, among others, isn’t an affiliate.

Oh, yes–it’s war.

I think Time Warner has very little interest in us. What they’re interested in is getting money from content providers who are now finding that on-demand video can be very profitable.

This is, of couse, similar to Time Warner (and every other cable company) charging its broadcasters as a business model. Why should the Internet be different? Why indeed. Like Bill Harris, I look forward to the blowback as Time Warner discovers exactly how many ways Austin is a connected town (hint: it’s not just Internet cabling). Because the alternative is fairly grim: the end of the Internet as a content delivery system.

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82 Responses to Internet Griefing

  1. In Australia, this is already a business model, and has been for some time. Almost all the broadband plans you can get have enforced caps, and the “unlimited” plans you can buy have less visible caps, but they’re still there.

    You’re 100% about the content providers angle. When Pirates of the Burning Sea launched in the AU last year, they struck a deal with one of the ISPs such that traffic related to PotBS wouldn’t be metered; something unique to MMOs, at least in that region. It didn’t end up working out for a variety of reasons, and now those players are stuck playing their games metered like any other network traffic.

    I think it’s kind of disheartening to think about, but I think the tech industry in general won’t put up with it here. Whatever industry there is in Australia clearly doesn’t have the pull that we may have.

  2. geldonyetich says:

    The Viacom Dispute – an unrelated sign Time Warner is on harsh times, or the real reason Time Warner is desperate to cut corners?

    In any case, while ISPs charging based on bandwidth used is hardly new, I like unlimited access. I would probably be shopping around for alternatives to Comcast if they pulled the same move.

    The trouble is probably that there’s a lot of users who are pulling massive bandwidth off their cable modems – they might make up less than 5% of the users but they use 95% of the bandwidth. Ask people who worked in an ISP – these kinds of disparities are not uncommon in any “unlimited access” scenario, and it’s these guys TimeWarner’s likely going after.

    Still, in finding a solution to that problem, I’d prefer throttling to getting charged because I lost track of how much gigabytes I used this month.

  3. Gx1080 says:

    I disagree that cable and Internet are the same thing: You can choose how much you pay based on the chanels that you have, and here’s the kick: You arent PUNISHED for watching a lot of TV because you are still using a limited bandwith space no matter how much TV you watch.

    In the Internet, on the contrary you are punished for downloading a lot of stuff and keeping track of how many gigabytes you are using is almost impossible, not mentioning unsufferable. (I know, ive tried).

    Thats why i prefer pay a unlimited service when i can download what i want that a limited service that takes the fun of having Internet. If i were using TimeWarner i just swap to somebody that let me navegate in peace.

    Sorry for TimeWarner, but putting a ceiling for crushing your oponents are just going to make everybody migrate to your oponents. And screwing anybody that use an Internet connection for more than one computer (read: almost everybody) its /fail

  4. Daniel says:

    I have mixed feelings about this topic. On one hand, I don’t like the notion of capping Internet usage because I like the freedom to use how much I want, when I want. On the other hand, I am one of the nice people I guess TW will like. I even used to run a node on a heavy usage P2P program and even then my bandwidth rarely went over 25GB a month. So to me 40GB seems like a lot.

    I guess my real concern is the slippery slope. If the number of GB stayed rational and helped to reduce costs, I would be fine. But 1/2 a lifetime in business has taught me that the caps will get lower and lower as the executives try to squeeze greater and greater ROIs to justify greater and greater bonuses (does this sound familiar, it should).

    Maybe it’s time to regulate ISPs the way we do other public utilities like gas and water.

  5. Stropp says:

    “Because the alternative is fairly grim: the end of the Internet as a content delivery system.”

    And maybe that is what Time-Warner are really after. When you consider that their main business are in movie and music creation and distribution, and that the *IAAs have been whinging up a storm about piracy for the last few years, then maybe this is simply a way for them to charge *everyone* for downloading content. Before you tell me to put on my tinfoil hat, a number of these organisations have already proposed taxes on all internet users to compensate for piracy.

    And as Greg has already mentioned above, this is nothing new for Australian internet users, and I assume users in other countries too. I have a 25GB cap on my plan which came pretty darn close last year when Age of Conan came out. However, with some modest YouTube viewage, and game and other software downloading, I never really get that close to the cap. My ISP also doesn’t charge for overages, the bandwidth just gets shaped to 56K which should still be okay to play most MMORPGs.

  6. Stropp says:

    Daniel, the caps will only get lower if there is no competition. In Australia, the caps for the 2nd tier ISPs (Telstra, Optus being first tier) have increased over time. Prices aren’t bad either, it’s more expensive than the US — I payed about US$25 for a local provider in Baltimore when I was there, it costs me A$60ish here — but better than Telstra (better service too.)

  7. Freakazoid says:

    Which internet providers do time warner control? I get my pick of the litter out here in washington state, but I’m hard-pressed to choose anyone but Verizon (FIOS) right now.

  8. TPRJones says:

    “Because the alternative is fairly grim: the end of the Internet as a content delivery system.”

    Melodrama much? If Time Warner goes forward with this and others follow suit, other businesses will arise to meet the new demand from customers not willing to do business this way. At worst we’ll see some dark times during the intervening period, but they will be short times.

    Me, I hope they do it. I hope all the hardwired connection companies do it. Because it gives that much more incentive for the long-range fat-pipe wireless development guys to get things moving towards workability. Hell, maybe we’ll even start to see fat-pipe mesh networking start to becoming a viable alternative that much sooner.

    With really good mesh networking, you don’t even need a backbone anymore.

  9. GregC says:

    @geldonyetich: I would probably be shopping around for alternatives to Comcast if they pulled the same move.”

    They already did but in a sneaky way last October – you have 250gb / month limit – break it and you get warned – break it again they may cancel your service…. They claimed their average customer uses less than 2.5gb / month…so this should not be a “problem”. The kicker is that they do not offer an meter to let you know how much you have used – but instead their FAQ tells you to “search the web” for a bandwidth meter.

    I would not be shocked to see that limit continue to drop over time…especially if more folks like Time-Warner do this.

  10. Mercury says:

    This is a little more troubling than you guys think. The problem is that the normal market forces can’t correct this. In some localities, there is enough competition that this kind of asshattery fixes itself easily. But in a lot of other places, it’s much worse.

    I’m in Phoenix and if Cox Communications wants to pull this crap, I’m SOL. What am I going to do, switch to the crap 256k DSL that is available in my block? I can’t give Cox the middle finger and take my business elsewhere.

    That’s the root of the problem as far as these services go, because they’re not that open. Sure, maybe someday we’ll have good competition via wireless, but that day is not coming soon, at least not where I live. I don’t want to see anybody doing this crap.

  11. switch to the phone company’s DSL?

    it’s really not so bad anymore, QWEST has 20 mb fiber lines out here, although I have cable atm since its a smidge cheaper.

  12. Meatball says:

    People that think 40 GB is “More than enough” are nuts. I’m a Time Warner customer over in Charlotte, NC. When I saw the first inklings that they were testing this out last year I picked up a router that could run the Tomato firmware so I could at least have an idea of what bandwidth usage I’m using a month.

    I don’t consider myself a super high end online user, but our house is relatively connected. I work from home, so I’m online all day, we have a few PC’s doing miscellaneous on the web including occasional streaming videos, online gaming and general web surface, plus I’ll pull down a few GB torrent 2 or 3 times a month. We also have Tivo’s that are pulling down updates and a few webcasts and streaming Netflix (on the XBox as well).

    I’ve been averaging 70-80 GB a month in bandwidth every month. Pulling down just a single movie off of Netflix chews through 3-4 GB alone. I’ve already written TWC that if they put a cap in place I’m pulling all my services from them which includes Internet, TV and two phone lines. It’s not much, but it’s $180 a month they won’t be getting. I’d do it right now out of principal if I could figure out how I’m going to keep high definition going to my Tivo’s that have cable cards.

    Of course, I don’t see them stopping, why should they? It’s extra money in their pocket and there’s not really anyone to stop them. I just hope Verizon runs fiber out here before the TWC caps hit here. And mark my words, once TWC rolls it out nationwide without too much backlash, you’ll see a bunch of other companies doing the same.

  13. Sulka Haro says:

    Guess you guys won’t be using much of OnLive then? 🙂

  14. Arrakiv says:

    Heh, I play online games, I buy most of my games anymore through steam, AND I stream (well) over 7 hours of video a week. Last month my up/down was over 140GB! Heck, I’m not even pirating.

    Seriously. U-verse. Be in my area. Pronto! One way or the other, I will jump to DSL at least – 6mb instead of the 7mb I have now (hey, I’m poor at the moment). It is lower, sure, but it isn’t a huge difference.

  15. Garthilk says:

    It’s okay for developers charge people for virtual items that cost near zero to make, but it’s not okay to charge people for using more bandwidth? Interesting prospect games industry…

  16. Melf_Himself says:

    I honestly can’t understand what you’re QQ-ing about. Here’s what I think:

    http://word-of-shadow.blogspot.com/2009/04/i-dont-get-it.html

  17. Posted this in response to the above, reposted below:

    Couple of responses before I wander off to “harden up” or something. My blog post was written for people in the US (and mostly people in Austin specifically.) So I didn’t explain a couple of things that might otherwise confuse overseas readers.

    You recommended, based on your market in Australia, that people who are unhappy with this should “shop around”. That’s not an option. Thanks to deregulation of telecom/cable companies over the past couple of decades, most communities (including most of Austin) have no competition. If you want broadband in Austin, your choices are cablemodem through Time Warner, DSL at 1/4 the speed through the local phone company, or dialup at 1/50 the speed. There is no shopping around involved. While this isn’t the case everywhere in the country (yet), and luckily I live in one of the few areas of Austin that *does* have other options, Time Warner is trialing it in the markets they are specifically because for most people affected, their choices will be pay more, or significantly change their internet usage.

    $1 per gig is ridiculously punitive because it is nowhere near the going rate for bandwidth ISPs are paying. It isn’t an attempt to make up a cost (because that cost does not exist to that degree), it’s an attempt to change behavior. Thus – punitive.

    While metered internet usage is the norm in Australia and Europe, that shouldn’t mean that everyone not currently living under that should just shrug and accept it, any more than you’d accept your cell phone companies suddenly yanking 3G/4G phones simply because “the US market doesn’t have them, and they get by just fine”.

    And while Steam and other media providers have local Australian content nodes that bypass download metering, that’s because in Australia bandwidth is metered because of its relative scarcity to the rest of the world. Somehow I don’t think US cable companies are going to set up unmetered content for that reason – but more as yet more anti-competitive “encouragement” to use, say, Time Warner pay per view movies instead of Netflix.

    Will the Internet survive if every US ISP goes to metered billing? Sure. But I’d suspect you’d see a lot of what you’re currently used to (such as Steam, online video, etc.) start to wither away from lack of use, because many US consumers won’t be willing to pay double their current bill for the same (or less) service.

  18. Ars Technica has word from Time Warner: “We hear that you’re unhappy. Um, could you stop spamming our email now please?”

    http://arstechnica.com/tech-policy/news/2009/04/time-warner-cable-please-complain-about-our-usage-caps.ars

  19. Belsameth says:

    Thank god .nl gave up on this kind of idiocy years ago. 50/50 fiber without bandwidth limites. As it should be, really.

  20. mezoth says:

    Lum, while I agree that TWC’s pricing is punitive and the caps are *far* lower then they should be, there is a really good reason why cable technology needs to drop or surcharge the outlier customers on the extreme end of the scale – the fact that it is a shared medium. Those outliers can decrease service for the entire neighborhood (or node, as we refer to it), and just are not profitible to keep as customers.

    As this edge capacity increases (from physical replacement or technology upgrades), those caps should increase along with it. However, understand that the edge we are talking about (the one that is the coax in your neighborhood) is *very* expensive to upgrade on a per subscriber basis – a typical “node split” eats all the profit from a neighborhood for 3-6 months, including TV profit.

    Most people do not care about this as they believe that bandwidth is cheap or the local government supports them, but this is actually untrue. Basically every local franchise agreement that I have heard of has zero direct funding support, and normally no tax breaks for actually laying these networks into the ground or maintaining them – just a guarantee that there will be no competing cable companies in the area. Yes, this is a huge advantage – but these networks are quite expensive to lay out once you define it on a per customer basis.

    If you want to chat more about real numbers and figures that I deal with at that other cable provider, feel free to hit me up. Oh, and Disney (the owners of ESPN) are complete dicks about charging for their content to companies, which is probably more the reason why TWC is not a “member” of espn360.

  21. Flimgoblin says:

    I think I prefer the “cripple your connection” limits I get on my cable here in the UK. (If I go over a certain download limit during the daytime or another limit during the evening my speed gets quartered…)

    Paying twice to download a game from Steam doesn’t sound like a lot of fun…

  22. Caleb says:

    Those outliers can decrease service for the entire neighborhood (or node, as we refer to it), and just are not profitible to keep as customers.

    That seems like a very shoddy argument to me. If you are a low-end user, “slow” internet means nothing to you. You check your email, check weather.com and perhaps download a picture you got in an email that was probably a virus anyway. If you are on the higher end, you are the one using a great deal of bandwidth anyway so it shouldn’t come as a surprise.

    And I don’t see why it is a profitability issue at all; Are turnover rates due to a slower connection speed high enough for it to be a profit issue? I highly doubt that. And I don’t see how high traffic would increase upkeep costs whatsoever, but then again, I don’t know how upstream ISPs charge for useage either…

  23. Viz says:

    @Belsameth
    It’s dreadfully convenient for cable-layers that the Dutch are packed cheek to jowl.

  24. VPellen says:

    “Hard Bandwidth Limits”
    “$1 a month for each gig over the limit”

    WELCOME TO MY WORLD MOTHERFUCKERS.

  25. Eduin says:

    It’s funny.

    Billing Systems represent a major investment for a company providing a service like a phone or internet connection. That’s one of the reasons why Unlimited works – its, generally speaking, too cheap to meter effectively. There’s still Terabytes of unused capacity most everywhere in the world from the DotBust which means the used bandwidth in the developed world is a generic commodity with a near zero value.

    Someone at Time prolly came up with an idea to scrounge a few extra bucks, made a nice powerpoint and played it to a decision maker. Its unlikely to be an effective business model but it will be painful for anyone without choice in the interim.

    Also, I’m amazed Lum bought Empire: Total War and hasn’t posted a rant. I would be spewing bile about it if I had an outlet.

    Regards,
    Eduin

  26. dutch_gamer says:

    I really dread all of this. I really hope that this won’t happen in my country. And when it does happen, I hope the limit is not lower than 250 GB. More and more ISPs are doing this and this shows how far they are willing to go to destroy Net Neutrality. The Internet prices are already ludicrous in America in comparison with the Netherlands. Seriously, 30 dollars for 5 GB, ugh, or simply the price Americans pay for the total package. Here a total package of TV, Internet and phone is only 30 Euros per month. So yes, American ISPs charge way too much already.

  27. Longasc says:

    I think Melf_Himself is right. We can also look from it from a customer view, I rarely download a lot and basically pay the bills for those who download one pirated game and one movie after another, often not even having the time to watch 1-2 movies or to play 1 or 2 of the downloaded games, because they were busily playing WoW or going to school in the meantime.

    The real question is the price, how much per 1 GB? Where is the point where it would really hurt internet content delivery?

  28. Bonedead says:

    Where’s my free uber fast google wifi?

  29. Realist says:

    This could be a sign that people are spending too much of their time online. Maybe we all just need to unplug more often then they wouldn’t need to limit bandwidth or use punitive measures. Go out for a walk, play with the kids, do whatever. We don’t need to be plugged in 24/7.

  30. IainC says:

    @Realist
    Can you imagine what the response would be if cable TV carriers said that they were going to charge you an additional fee if you watched more than a certain amount of TV a week?

    I don’t disagree that some people do need to get out more but there are legitimate reasons for fit, healthy and active people to exceed those caps.

  31. mezoth says:

    @Caleb

    Remember that group above called “MMO player”? (more generically game player) Now go to any broadband forum and look at tech support questions from cable customers – the *most* common symptom is high ping to the first hop. This indicates congestion on the local cable segment, and is *exactly* what I am talking about. Now tell me that those customers frustration is not real?

    One customer can literally use 40-60% of one segments resources at any one time. If they sustain this 24×7, you have to look for ways to resolve this issue – and upgrading the local node is literally hundreds of thousands of dollars (to solve an issue that is caused by maybe two people?). It is very similar to the traditional “tragedy of the commons” problem, and so the most sustainable solution to single users causing these issues is to induce behavioral changes. If your overall utilization of the segment goes up, then to keep providing service you should upgrade the local segment. It does appear that TWC is trying to limit far beyond what I feel they should, but it is their backlash to suffer for this policy change.

    Also, speaking @Eduin, backhaul bandwidth *can* be cheap. But the local neighborhood segment for cable bandwidth (or the initial deployment of FIOS) is very much NOT cheap. Verizon has no new FIOS markets planned for QI/QII this year because they are in a cash crunch due to the market implosion. They have spent five BILLION dollars deploying FIOS so far – and at even $100/month it is going to take a long time to recoup that investment.

  32. dartwick says:

    Whats particularly lame about this is that its pure money grap and has nothing to do with operating costs.

    I hate to say but the Goverment could provide cheaper bandwidth than TW.

  33. Realist says:

    Even with cable TV there are different tiers and extra options. If you subscribe to all the premium channels and watch a lot of pay-per view, your bill is going to be a lot higher than most peoples. Most people are sensible enough to limit their subscriptions and viewing time to a reasonable amount.

    With the MMO scene, most of the heaviest bandwidth use would be from people playing multiple accounts and spending the majority of the time online. I just couldn’t see someone like that having a healthy lifestyle. To each their own. It’s up to them. Maybe someday that will look back and realize that they wasted a lot of their time, and money, on a game.

    I have no love for Time Warner. They are being greedy, but then most corporations are. People do need to understand that they are just modifying their business model to cope with increasing demand.

  34. UnsGub says:

    “on-demand video can be very profitable”

    It could or might be at some point. VOD is currently a money hole. This is really a move to break even. They now know a business can be supported on the internet which was an unknown one or two decades ago.

  35. wowpanda says:

    Thanks to deregulation of telecom/cable companies over the past couple of decades, most communities (including most of Austin) have no competition

    That really got my attention. I always thought deregulation is good for the market. Can you provide a link that I can check on how deregulation could reduce competition?

    Thanks

  36. Vaxhacker says:

    If only Grande or U-verse was available where I live… Ah well, time to check out DSL and satellite. If I can hold out for the next DirecTiVo box to be released, that would be ideal.

  37. Jerid says:

    “Ah well, time to check out DSL and satellite.”
    Watch out with satalite.
    Was on the phone with one of our users yesterday so I could remote into his machine to set up a printer.
    The speed was not much better then dial up and while on the phone with him he told me “It’s a good thing it’s sunny today, we had a storm yesterday and my internet kept kicking me off”.

    Not saying it’s going to be true of all satalite, but I have direct TV dish and when it first starts snowing/raining I notice a signal degredation for a few minutes on the TV.

    BTW: I live in Greensboro, NC.
    We moved from TWC TV to DirecTV a few years ago, but I kept TWC for just the internet connection. ($47 a month JUST for Intenet, not even basic cable included)
    The first bill I see with anything about metering on it and they’ll loose me for good. I punched in my Zip Code from the link Lum had up yesterday and they showed access available for me so looks like I’ll be going that route.

  38. dartwick says:

    Satellite is crap for gaming. DSL is ok. I use it. I know many people with cable who have higher/faster transmission rates, but DSL is fine for gaming, and fair for veiwing – although when I watch instant netflix it keeps the quality rather low.

  39. DoubleD says:

    I suppose the CEO’s of Time Warner want to make sure they get their multi-million dollar bonuses. Even at the expense of their customers and network infrastructure. The only way to do that is increase bandwidth costs.

  40. joe says:

    I can’t deny practicality when I see it. Sucks though.

  41. Ed says:

    This pisses me off. I’m a TWC customer in Durham, NC so we’re not metered yet, but I can see it coming. There’s *no* competition in my neighborhood. It’s TWC or buy your own damn T1. I don’t believe their argument. Shared pipe, heavy users, blah blah blah. BS. If it’s draining your corporate wallet, cut down the pipe speed. I’d rather have 512/1meg unlimited than 512/6meg capped.

  42. […] believe Scott Jennings does a good job of clearing up who is going to be affected by this new plan – and, admittedly, I […]

  43. Hatch says:

    I’d be writing the Governor and state legislators to put a 100% tax on monies earned in the state for bandwidth cap penalties, then reimbursing the people. Take that, intertubes.

  44. […] Scott’s got a new post about the matter, and several other prominent Austinites have weighed in, including mayoral […]

  45. Briancj says:

    Something ALL of you are missing:

    All open/free wi-fi will CEASE TO EXIST. Got it? Restaurants, libraries, free mesh networking, WHATEVER.

    I cannot imagine, for example, a small coffee house keeping their wi-fi open under these cap restrictions.

    Oh, and imagine a customer who has unsecured wireless (more and more rare, but still plentiful)…whose neighbors all drop their internet in favor of poaching. That’ll be a GREAT ISP bill to see, won’t it?

    It’ll get ugly, fast.

  46. Naladini says:

    Here’s another interesting competitive “twist”: I kept my Internet service with Time Warner (WI), but recently switched over to DirecTV for television. DirecTV is now offering “On-Demand” videos, provided you hook your DVR box up to the internet and then download the videos over that connection … so, if this keeps up, no more free lunch for DirecTV users pulling large files over that connection.

    U-Verse is now available by me as well, and is a pretty solid alternative, well liked by the people I know who have cut over. I think the big advantage to U-Verse is that they’re owned by AT&T, and if there’s any kind of anti-competitive backlash, the government can and will come down on them pretty hard. (Years ago, I couldn’t wait to disconnect all of AT&T’s lines from my house, my how times have changed).

  47. Iconic says:

    In this case, Time Warner is right, and the “entitled” are wrong.

    There’s no reason for those who fall into the low usage category to subsidize those who fall into the insane usage category.

  48. TPRJones says:

    It’s not entitelment. It’s paying for a service or not paying for one. With caps, I’m not going to pay for it. I’m going to go to another service that will offer me what I want at a reasonable price, or I will find a way to steal it. But entitlement has nothing to do with it.

    Buy a dictionary or something.

  49. Bleaktea says:

    Download caps have been in place for years outside the States, as mentioned already, and we still have wireless access points in our cafes and universities, just like everyone else. So the concept isn’t a disastrous one.

    The real problem is the teensy tiny caps TWC is offering. My ISP has fairly generous caps, up to 250GB/month for the best plan, and a maximum fee of $25/month for overuse. It maths out so that it’s cheaper to pick up the next tier of service rather than overuse the one you’re at, but if you do manage to blow through an extra 100GB in a single month, you don’t get hit with a truly whopping bill. You can get at your usage info online at the support website and they mail you a graph of it along with your printed bill each month.

    But if TWC’s plan is to offer teensy caps, with no maximum overuse fee, and little ability to track your usage… that’s bad. Very bad. For all the reasons Lum has described.

    Anyway, all I’m trying to get across is: this is not an end-of-the-internet scenario. It’s a terrible implementation of an otherwise successful idea.

  50. Vaxhacker says:

    @Jerid and @dartwick:

    Currently I’m using Time Warner for cable and internet. I’d be replacing them with satellite for TV and DSL for internet (and paying more, but so be it). Just clearing things up.

    And if TW didn’t have ludicrously low bandwidth caps, I probably would be ok with it. 40GB/month, at probably twice what I’m paying now? No fscking way.

  51. Vaxhacker says:

    @Iconic
    40 GB/month turns out to be 16KB/sec for 30 days straight. Insane? Hardly. Time Warner can DIAF.

  52. dartwick says:

    At first glance someone might think Iconic was the rational guy here – then they would look at the actual caps and prices TW is using and they would realize Iconic is clueless.

    The new rates have nothing to do with TW costs and everything to do with increasing profits on an already profitable business.

  53. Iconic says:

    Regardless of where the caps are, there are people who are using an insane amount of bandwidth compared to the norm. “Unlimited” plans made a lot of sense before Hulu and Steam and CBS streaming the entire NCAA Men’s College Basketball Tournament online in HD.

    If the caps are too low and you can get better value elsewhere then by all means do so. It’s your right as a consumer to seek the best value and it’s the responsibility of providers like Time Warner to try to balance the needs of the consumer with their need to compete and make money.

    The entire point I’m making is that it’s not a moral issue. Every one involved is purely looking out for their own self interests. If Time Warner is setting the caps too low and making themselves non competitive, they’ll figure it out eventually or get driven out of their market share by AT&T.

    To my way of thinking this is no different than Netflix going from free unlimited rentals to having different tiers depending on how many movies you’re actually going to rent in a month.

    It makes more sense to segment the market so that each consumer is paying more appropriately for the value they receive than to offer an umbrella plan where a few people are building an entire lifestyle around something that’s too good to be true, while other people foot the bill.

  54. Zuzax says:

    I agree with the notion that this is motivated by TW’s desire to crush the video on demand competition and have their users exclusively use TW’s movie and video on demand services just because it’s too expensive to use a competitor.

    They’re wrapping it in the camouflage of bandwidth usage issues, but it’s just good old monopolist behavior around content. The bandwidth charges are just extra gravy.

    Hopefully the Feds will have a problem with this.

  55. TPRJones says:

    Iconic, I would agree with you in general except this is NOT just any old business like Netflix. This is – in many places – a monopoly. And most of those local monopolies are the result of years of crappy regulations that left one company with all the rights to a certain area. Those regulations are mostly gone, but the effects linger.

    When the time comes that the results of years of bad regulations no longer effects the options consumers have in all areas, then I will agree with you.

  56. Scott Jennings :
    Posted this in response to the above, reposted below:
    If you want broadband in Austin, your choices are cablemodem through Time Warner, DSL at 1/4 the speed through the local phone company, or dialup at 1/50 the speed.

    You kids these days. When I was at the university, we had to share a T3. Speed didn’t matter, since we only had 10 MB of space on our network accounts, anyway! (Ow, my hip.)

    People wondered why I’ve always chosen “slower” DSL for my internet connection. I’ve realized that cable internet was heading to trouble once I understood how a whole neighborhood shares bandwidth on cable. Living in Silicon Valley woke me up to that potential problem early. I suspect the caps are (relatively) low and the charges punitive in order to stop people from saturating the local cable pipes and creating complaints. Anyway, I’ll take truly unlimited access in exchange for not being able to run more than 10 simultaneous WoW clients and preferring to set huge downloads to go when I’m not at the computer.

    Ultimately, however, you do have options. You may not like the other options as much as your cherry deal currently, but there are options. Having to go to DSL isn’t the end of the world.

  57. Mandella says:

    Looks like this is a growing trend. AT&T DSL in the southeast has pretty much given up expanding into any more rural areas and are instead pushing satellite internet. In case you are considering satellite, it is a touch above dialup, and that’s all. High latency, high cost, interruptable during rain, and with ridiculously low caps. But it’s still considered “broadband” so AT&T can list their area as covered…

    So yes, the big guys have figured out that you *can* make more money by limiting service than by expanding it.

  58. Gx1080 says:

    Lesson Learned: I needed to stop whining for having DSL. Yes i have DSL. And its bereable and i can download what i want without having watch a counter every 5 minutes. Sorry, way too stressing and punishing.

  59. hitnrun says:

    I feel bad for people in heathen lands like Austin, but there is a bandwidth issue that’s going to arrive sooner or later. The reason caps are a “growing trend” and not a dumb decision pounced on by the competition is that bandwidth usage is multiplying exponentially while available copper is decidedly not. It’s not fair that grannies and soccer families should have to suffer for your daily torrenting and youtubizating.

    I can’t help but laugh when I read the wide eyed does observe that “this could mean the end of digital downloads/cloud processing/streaming everything as the default business model of teh futures!” You don’t say. Maybe you should have listened when people were telling you that would happen for, oh, the last ten years.

    I agree that TW’s particular numbers are proof they’re trying to make a buck from actually-not-so-extreme bandwidth users. However, just because Exxon-Mobil tries to make a buck off rising gas prices doesn’t mean they’re the cause of it and we don’t have an energy crisis on hand.

  60. Knurd says:

    hitnrun :
    However, just because Exxon-Mobil tries to make a buck off rising gas prices doesn’t mean they’re the cause of it and we don’t have an energy crisis on hand.

    I think this is a poor analogy. While I might agree that something will happen [from the corporate end] as a result of increasing usage, the industry structure between telcom and petrochem is not remotely the same, not to mention a host of other political and economic issues; the quantity of copper notwithstanding.

    If I want to buy gasoline, I can choose any number of companies, because the infrastructure is not as ‘hard-wired’. The only noticeable difference is if I’m a ‘hardcore’ gas-consumer, who cares about my ratio of ethanol to gas, or some other esoteric distinction between gasoline. Chances are, there are more than four different gas stations in my neighborhood.

    In the case of internet connections, some regions in the U.S. have no competitors, as mentioned previously. With TW, which has significant presence in California, there is no Dana; only Zuul.

    I understand that the establishment and maintenance of such networks is expensive. I simply hope for developing technology and regulation to come to a point where the basic infrastructure is understood as a (inter)national resource. To monetize individual traffic in the way that TW seems to be doing strikes me as ham-fisted and out-of-touch with real internet traffic.

    Is that too socialist of me? 😛

  61. Firecrak says:

    Um…welcome to Australia. Except you don’t have to have 250+ms pings to every server in the world other than a shitty one that is still 100ms when its on your exchange.

    We get bent over backwards also, except we somehow complain way less.

  62. Delurm says:

    Well I have a couple of questions…

    First – on the cost of deployment. Why are the phone companies having problems deploying? I mean they took the money taxpayers gave them exactly for this reason – every year for the last 20 years. For example Verison has been paid in tax dollars 4-5x as much as it’s spent on FIOS – so what the fuck does the market have to do with that?

    Oh wait – I remember now – this is the reason DSL tech (which was possible in the 70’s) was not allowed – because it made more money to deploy a T1! I got it – it’s a pure money grab… telcos take the tax money and don’t have to spend it….! *sigh* I have no sympathy for the telcos – they have gotten alot of tax money to deploy infrastructure that went nowhere.

    Second question… What happens to the poor schmoe with a 5gig cap – that gets zombied by some virus and sends out like 500gig of porn?

    I pay for cable and if someone comes into my house and watches TV – I don’t get charged extra.

    If someone drives up and hacks my wi-fi now… I could? That’s just a problem waiting to happen.

  63. Andrew Crystall says:

    Ahh you Americans and your crazy internet market. At least in the UK there’s plenty of options. Sure, the cheaper ISP plans tend to have stupidly low limits but once you’re paying £25 a month – unless you’re leaving p2p on 24/7 – it’s generally not an issue. And it can be less if you’re in the bigger population centers which have LLU options…which are also quicker.

    Ironically, while the cable internet offers much higher headline speeds here (to 50MBit, rather than even the LLU ADSL’s 20MBit if you’re nextdoor to the exchange), their UBR’s are so badly overloaded in many areas you get…well…much less than advertised. I’m on cable, but in a low-subscription area so it’s great, mind you.

    BT are looking to roll out FTTC – the equivalent of U-verse – across the country in the next 4 years too.

  64. dartwick says:

    Well this may eventually spur high volatage line data transmission which could eventually put a serious dent in broadband monopolies.

    http://finance.yahoo.com/news/IBM-and-IBEC-Initiate-iw-14396782.html

  65. Klaitu says:

    I think that I would be hard pressed to generate 40GB of traffic a month at present, but as time progresses things tend to get more bandwidth intensive. I doubt that ISP’s will update their allowable caps in a timely fashion to reflect changes in technology.. especially with more media devices coming along.. Netflix-enabled DVD players, the 360 and PS3 with their video rental services, Apple TV.

    They’re right about one thing though, if they’re really serious about consumption based internet access, they made a mistake long ago. I suppose it’s better for them that they tried to pull this now, instead of years later.

    Thankfully, I don’t use Time Warner OR Comcast for my ISP. My ISP hasn’t done anything that says “I hate you”.. at least, not yet.

  66. Caleb says:

    wowpanda :

    Thanks to deregulation of telecom/cable companies over the past couple of decades, most communities (including most of Austin) have no competition

    That really got my attention. I always thought deregulation is good for the market. Can you provide a link that I can check on how deregulation could reduce competition?
    Thanks

    It’s fairly simple: The barriers to entry are extraordinarily high for ISPs. Deregulation isn’t an answer for everything, despite what some chicago and austrian schoolers would have you believe.

  67. ethereal.wolf says:

    You’re going to have rogue wireless connections becoming more of an issue. Alot of people now have an incentive to piggy back off someone else’s router, while trying to keep theirs locked to the max.

  68. DC says:

    I used to pay $10 for a record, then $15-20 for a CD.

    I used to pay the hourly charge at Compuserve.

    I used to pay $5000 for a new PC that does 1% of what a entry level PC does today.

    I used to pay hundred of dollars a month in long distance calling public BBSs.

    Settle down kids, move out of your parent’s basement, and realize how good you’ve got it now.

  69. Heartless_ says:

    I am so glad hitnrun brought up the discussion about “not enough copper for all of this bandwidth-intensive content”, because I think hitnrun falls into a very common misconception about why we’re in the situation we are now.

    The reason there isn’t a large enough “copper” in place NOW, is because these companies have, for the longest time, had monopolies in the local areas. So, they sell 20,000 people a connection on a network meant for 1,000. This is common practice, because most people still DON’T use what they are paying for. Funny how we don’t see super low-end plans being offered in conjunction with the usage caps.

    Usage caps are simply a way for TW and other companies to continue over-subscribing their equipment and keeping 20,000 subscribers operating on the equipment meant for 1,000. It actually has nothing to do with the physical copper. Ever wonder why your cable line can be instantly upgraded to 2, 5, 10, etc. Mbps by paying a bit more? Oh, maybe because the physical media in place can already handle the faster speeds, but the networking equipment behind it can’t, so they have to attempt to gate customers and protect their 20 to 1 ratio.

    And anyone that thinks DSL is immune to bandwidth caps, you should start a new line of thinking. DSL is over-subscribed 2x worse than cable on average, but since DSL is viewed as an already inferior service, it would be a marketing nightmare to institute. Sure, DSL isn’t being shared with your whole neighborhood, but there is a DSLAM meant for 100 people sitting somewhere with 2,000 people in your area configured on it.

    As DSL numbers dwindle, it wouldn’t be unreasonable to see a usage cap instituted as networking technology in the background is consolidated.

  70. mezoth says:

    @Heartless_

    You are wrong. Period. Oversubscription is *NOT* “a connection meant for (capacity of x box)”. Oversubscription runs off the same rules of any system – you will not have 100% utilization of public services at any one time.

    Funny how you get people doing traffic duty at large football/baseball games? Funny how the water system is not designed to have every single person on it use it at the exact same time?

    The reason for this is the cost would be literally absurd to have true 1:1 service ratios for any of these items. But that is what people like you insist is wrong with the consumer broadband systems – and then cry that the cost of broadband today is too high.

    Oh, and FYI? It is definitely not the “equipment behind the DSLAM” (or CMTS for cable modems) that is at capacity – it is very much the edge bandwidth that is limited. The cost of putting copper (or ANYTHING) in the ground for literally miles and miles is far more then you realize, not even including the material cost of the actual copper you are putting into the ground. The engineering problems of the backend networks are solvable for far less money then you are talking about to just double the actual edge bandwidth to every home (DSL or cable).

    Please, do not ever use this argument again, as it is just flat out misleading and wrong.

  71. Queso says:

    \o/ Another reason not to like capitalism!

  72. Boanerges says:

    I think everyone is missing the core problem: bandwidth, eventually, is a finite resource. It’s never been a big deal before because there’s never been anything that would cause people to use a glut of bandwidth. Youtube isn’t the culprit, it’s the changing nature of media and software. Steam has changed software on the PC. Carrying PC games in-store has been a losing proposition for years. Now you buy online and download directly. Adobe has done the same thing. Now movies appear headed that way. Streaming and downloads of HD content (with multiple GB of data) are looking to become a norm. As long as people were dealing with downloads of, say, 20MB, having lots of customers was no big deal. But when you have everyone downloading multiple GB at the same time those fantastic speeds slow to a trickle.

    Sooner or later there will have to be metered usage. Nothing “unlimited” ever is. And of course everyone prefers unlimited. I remember when I signed up for MCI’s “unlimited long distance” plan. Reading the fine print I found “unlimited” translated to 5000 minutes per month. Not a big deal (that’s a crazy high number to be talking on the phone) but I got worry free LD. And, in the end, Comcast (and their 250-500GB hard limits) gets this.

    Time Warner, however, has really missed the mark. Either that or they’re trying to drive their highest usage customers to competitors (not an unreasonable assumption) so there’s more bandwidth to spread (even the 5GB customers will complain loudly if their service is slow). But TW could do better if they ran the 5GB service at $19.95/mo (teaser to compete with DSL) and ran up to, say, 200GB/mo at the $54.95 price point. I can’t say $1/GB is all that bad for a residential service overage. It needs to hurt or you don’t get the desired effect of punishing excessive use. The reason server accounts get their overage for much less is that server overages (where you already get hundreds, if not thousands of GB of transfer) need only hurt if you outrun your allotment by a lot.

    @Queso
    If we were communists we’d all have a state run dialup (and no competition) with a hard cap of 20 hours/mo.

  73. Delurm says:

    Where I live we used to have insight. I signed up with insight and had a cable modem with them for around 9 years.

    This gave me unlimited internet at (roughly) 7meg down / 1 meg up as measured by a speedtest.

    Never had an issue other than normal network problems – those were always fixed promptly and if I had an issue they would credit me for the time I was down – no questions asked.

    Then comcast bought them out. Same lines… same equipment – except now I have 700ms+ ping times and I’m lucky to get 1.5 down/256k up.

    Same equipment – same lines. Same neighborhood.

    You guys are drinking the kool aid if you really think it’s a last mile problem.

    The only thing that changed at my local cable company was the upstream link and the router that connects it – guess what…. comcast sucks – they don’t know how to manage their network – and they are blaming users for the problem.

    Go figure.

  74. TPRJones says:

    “…bandwidth, eventually, is a finite resource.”

    Yes and no. At any given moment in time there are limits, but technology will keep pushing those limits forward. As long as the advancement curve stays ahead of the demand curve, we’ll be fine.

  75. Demosthenes says:

    It’s a monopoly. That’s all that this is about. It’s not about backbone limitations or the “last mile” or lower users “subsidizing” higher ones.

    It’s about natural monopolies and oligopolies that companies have acquire from the natural problem of stringing fibre and copper, and governments that are loathe to treat the like monopolies and oligopolies, because campaign funds tend to come from the guys doing the monopolizing.

    Playing the apologist because you think that bandwidth can’t be upgrading won’t help you when you’re paying twenty bucks a gig.

  76. Demosthenes says:

    (Sorry, that should be “playing the apologist.” Like, say, Boanerges there. I’m impressed that you can count, but a buck a gig is ridiculous, and only the start.)

  77. Olaf says:

    If Time Warner’s really charging an outlandish price, then there’s money to be made by entrepreneurs buying optical carrier lines and redistributing the bandwidth via ethernet. Cable and Telco monopolies have kept players like that out of the market thus far via price, but if the prices go up, then such competitors will appear. Or I should say re-appear. I remember at the dawn of the braodband era there were some apartment complexes here in town that offered just such a service as part of the rent. Crashing prices for regular broadband put an end to that business model.

  78. toddlorensinclair says:

    Look … Verizon DSL is $35 a month unlimited … Time Warner $150 unlimited … That’s crazy … Time Warner is $1380 a year more! Every Year!

    Yes, I can stream Hulu and Netflix just fine on Verizon’s 3mb DSL thank you.

    I don’t think they will get many takers at $150 … and I don’t think they expect to either … the point of their structure is to deter video downloads from the internet in order to preserve their cable television base. By having caps and overages fees to worry about most people will be wary of streaming for fear of receiving a gargantuan bill at the end of the month.

    Internet access has become a “conflict of interest” for Time Warner.

  79. Delmania says:

    In Rochester, the company has decided to not implement the tiered pricing program due the massive public outcry:
    http://www.democratandchronicle.com/article/20090416/BUSINESS/90416024/1168/RSS

  80. Not just Rochester, according to Schumer.

  81. […] with congresscritters wanting to be netizens (or just look like them) scare off Time Warner’s planned bandwidth money grab. For now. Sen. Chuck Schumer (D-NY) and I stood side by side this afternoon in front of Time Warner […]

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