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More on Time Warner Cable and Metered Billing

Metered Billing
Image by Mike Licht, NotionsCapital.com via Flickr

I’ll have to admit that there’s a lot to contemplate and definitely more strategies than one can fathom when it comes to why Time Warner is really chasing down this business strategy. But the below are more opinions and observations of how Time Warner metering service could effect your broadband as of current and how more information is better than buying into just straight sales pitches. If in the end, you still want tiered billing, it’s your right as a consumer to choose.

Is it truly infrastructure costs that are driving metered billing? I sincerely doubt it but benefit of the doubt should be applied. I mean, heck, in 2006, TWC SVP spoke of the fiber acquisitions into markets they didn’t have and at five hundred million here and there, that adds up. In the same year, they were touting that their fiber backbone was a 10Gbps IP network. Note that this is purely for data and not anything else. While I have spoken to TWC personnel in the past and they should be if conversations did not elude me, be past those limitations these days, especially when they are taking on FiOS markets with DOCSIS 3.0 deployments.

What exactly is this? DOCSIS is the standard at which your data is transferred over a cable modem. Currently, you pay for something like a 6Mbp downstream and probably 768kps upstream. The potential of a DOCSIS 2.0 at maximum is 42.88Mbps downstream and 30.72Mbps upstream. Notice the difference? Now, no one really “needs” the maximum potential of DOCSIS 2.0 unless you’re running a business with extraordinary data traffic. Even DOCSIS 3.0 is out in left field for your average consumer since it basically binds 4 or 8 channels together to give you maximums (171Mbps/343Mbps) downstream and 122Mbps upstream. Yes, geeks can start drooling now for no reason.

But if you’re thinking that no one else uses this “supposed” high end technology, think again. The infrastructure stays the same, but the modems have to be changed out. That costs around a hundred USD per household. And if you do some price comparisons internationally, you’ll find that Liberty Global and NTT Communications basically sell DOCSIS 3.0 service at almost similar pricing monthly as what current US consumers pay. Except, we’re getting the data caps too.

Does Anyone Really Bite on Infrastructure Costs?
I doubt it. I’m really not sure why they hold to that story. From a public relations perspective, it doesn’t hold much water and just makes it look bad. Let me put it in another perspective. So far, there have been price comparisons between Roadrunner Lite with the 5Gb plan and basically what you gain is…. (drumroll) more limitations! Introducing a 100Gb plan doesn’t change anything except further the anger of the customers. And no, the fee cap at seventy five dollars doesn’t begin to make it an “unlimited” plan. Basically, the bottom line for potential unlimited is going from fifty dollars a month to one hundred and fifty. That’s a 3 times inflation in a recession. I mean seriously. You’re going to tell me that my upper limit is now 100Gb for seventy five dollars a month that is more than I pay as of current? Please. Don’t insult my intelligence.

Now if they wanted to set an upper data cap like Comcast and be done with it there, then I would almost say that it’s quasi-acceptable since 250Gb is more difficult to reach unless you do some seriously naughty things (or transfer some major linux cd/dvd images). It is actually possible to scrape up 4TB of data in a single month, but if that’s the case those people can also be flagged and throttled. There are plenty of ways to stop abusive consumers without trying to throw out a weak PR push on how it’s about the infrastructure.

More Tiered Levels That Do Nothing
You thought that you’d get insulted by the 100Gb side? Wait one minute. There’s actually MORE. For the so-called light e-mailers, there’s the fifteen dollar a month plan with the data cap at 1Gb. With spam at all time highs and botnets taking over systems left and right, I’m surprised anyone would even think that 1Gb is a “lower” limit. Don’t forget that people will still surf here.

On top of this, they introduce DOCSIS 3.0 pricing at a mere $99 a month with no said cap? Why would you keep insulting your customers. It’s basically a neener-neener, we’re rolling this out in competition with FiOS markets but because you don’t have competition in your market, we want to charge you more because “WE CAN”.

Businesses Will Not Be Effected? Think Again.
Right now, the word from their spokespersons is that businesses will not be effected by this data cap. But do not forget that if this “test” actually does work, that businesses will rightly get charged. Why? Let’s take a quick look at current differences between data plans. Business class service is still bandwidth capped and in fact more strictly than residential. The difference is that the amount of money you pay per month is uptime costs. That means that if this tiered billing system does go somewhere, then businesses will eventually become “equal” with residential with the only difference being different data caps and uptime guarantees.

Corporations WILL Push Back
We haven’t seen it yet, but Time Warner and other internet service providers are playing with fire in this scenario. Much like the Net Neutrality arguments where ISPs lined up on one end and major tech corporations (Google, Microsoft, Amazon, etc) lined up on the other side, we have yet to see push back from these giants. But believe me, they will stand on the side of the consumers. Very simplistic reasoning. If you take away consumers from the content, then it hurts the margins of these giants. And whether you like it or not, these corporations along with content providers such as Hulu, Netflix, and the like combined are a force to be reckoned with when it comes to their legal war chests. Don’t forget that this maneuver would also get those not involved in Net Neutrality such as Sony, Blizzard, and other gaming industry people involved due to the fact that data caps actually do hurt online gaming.

Bottom line? Maybe I’m crazy but stacking the deck against yourself doesn’t help you survive for long. And when you hurt the bottom line of multiple industries and international conglomerates? Unless there’s some sort of huge legal cash reserve that we don’t know about, it’s probably not a good idea to bite off more than you can chew. Incurring the wrath of MS and the big G isn’t a great way to make friends either.

Outside of the legislation to stop this inane billing behavior, let’s take a look at what else this would deter. The Obama administration has included stimulus money to provide broadband into every household. Now, maybe I’m incorrect in this, but tiered billing should make any internet service operator ineligible for this government funding. Why? Based on current pricing of Roadrunner Lite with the data caps, the justification is obvious. As an infrastructure operator, it’s actually making it more difficult to get service since you’re putting more limitations on service. If I were any Congressperson, I would be investigating if we should even be providing these corporations monies to “build out” when they’re trying to push more cost onto their own customer base in bad economic times.

It’s Not about Internet Content?
Strange. If the technology isn’t going towards IP generated traffic and Time Warner Cable isn’t trying to protect its own primary business then you would think that they wouldn’t be trying to deploy television on these ip networks. But they are. It’s called over-the-top television. Basically, it’s the television shows delivered over the Internet. Now you would think that this is actually cutting off the nose to spite the face, but with some strange logic it actually does make sense. They [TWC] want to decrease their cost of delivery and increase the last-mile end without doing anything. And hoping to pull the wool over the consumers’ eyes in the process.

Just think about it in this fashion. This tiered billing news follows the one where some of the online shows will be going to full-subscription based. So guess what? The consumer gets to pay out potentially three ends. Once for the show, and once for the monthly data cap, and once for overages. All for the same content. So if you’re a television junkie? Here’s a royal screw you from TWC.

What I find absolutely discouraging is that Time Warner is leading this charge and other service providers are meekly doing this in the background thinking that the consumer will stand by and do nothing. Now if TWC had implemented the 250Gb shift, then I think there would be some grumbling but most people would have set it aside even with the comparisons. But data caps set up to make you go over or pay more overall when the majority of infrastructure costs are fixed costs not only adds insult to injury, but it basically gives no reasoning for consumers to have any sort of customer loyalty to their business. In essence? You never tell your customers to pay more for the same service unless there is justification (upgrades, more features, etc).

In the end, this drives two different problems for Time Warner. The first are the first adopters. Those that are driven by Internet business will probably get direct fiber lines to their business which will drive the cost of fiber even lower. They would have to look at T1s or shared/partial T3s as an increased cost but without limitations of which cable providers want to limit themselves in their own businesses. The second would be the younger generation gap. In providing data caps, you not only stifle the adoption of Internet services but younger generations will find other things to do instead of watching either shows online or television. Which in turn will hurt their profit margins instead of help. If you don’t believe that this is how things work, just take a look how text messaging became the next generation of communication for young people in Europe in the last decade. Why? Because the cost of phone service from country to country was too expensive but text messaging was dirt cheap. So eventually, everyone shifted towards texting. In the same fashion, if you alienate your younger generations from their current loves, then they’ll shift their habits to other means. And that’s just not very profitable.

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General Site Update

Just in case you were wondering why your link to LUX happens to fail, over the last few days I got sick of dealing with Movable Type. So I was toying with a migration to WordPress MU but finally decided that WordPress would be the best maneuver. It seems a lot smoother, and faster, and the server memory isn’t as much out of whack now. Still in the process of tweaking the template back into the original form, but things should run a lot more smoothly now that it’s not on the fritz anymore. And if you didn’t notice any changes? No harm, no foul. Back to your regularly scheduled programming.

Insight Into Time Warner Metering

emarketer_chart_10022008 This chart really does tell you something. But let’s hold off on that thought for now. Let’s visit Time Warner’s data cap and what they’re not telling you. First off, regardless of how Time Warner is operating the business, the entire tiered system is a huge failure on the business end. Now there’s talk that the tiered system high end will not only have just the 40GB (previously said by TWC’s spokepeople as the higher limit) but there will also be a 100GB limit. The original limit was very obviously set by someone that hardly uses their Internet or has never actually had to care since they don’t pay for it being a senior management type for Time Warner. So to make a call for the high end at 40Gb when the rest of the world is running at more than that? Definitely a serious “TWC Fail”.

Layman Terminology
Don’t understand the technical terms? No problem. Here’s what Time Warner is currently doing:

Water = bandwidth
garden hose = bandwidth cap
limiting of actual water from source = data cap (new tiered system)

If you view your water out of your garden hose, that’s your bandwidth. The hose itself is your bandwidth cap. So since the beginning of broadband, consumers have only been purchasing the size of hose. Regardless of how much water you use, be it a trickle or full blast, you were always limited by the size of your hose that you “rented” on a monthly basis. What Time Warner’s inconclusive logic is now saying that due to the fact that you use less water, let’s limit the amount of water you can get and let you rent the same hose for the same price. More limitations, more money essentially. Don’t think it’s fair? It probably isn’t. Oh, and let’s not forget that you’re paying for this because “certain users” use more water. Wait, what does that have to do with you when you’re limited by the hose? It doesn’t. Essentially the logic is flawed. And the fact that you’re paying the same amount for essentially the potential of less.

Another analogy would be if you bought a Ferrari. So you buy the Ferrari and you’re paying some price for it. Whether or not you want to drive it at 5mph or 120mph is your call because that’s what you paid for. But now, the dealership (Time Warner) has decided that while you are paying that same price for the Ferrari, you can only drive it at 30mph unless you pay them more money on top. You might not have been driving it fast, but you are sure limited to what you had with what you pay.

Why is Time Warner REALLY Chasing This Issue
Now’s the time to take a look at that graph. If you’ll notice, it’s not really P2P traffic (even though any internet service provider wants you to think that it is). If it was, then you would think that P2P traffic would actually increase over the last few years as the word about Pirate Bay, and other types of services for P2P got out. In fact, studies show that if you trace the increases in traffic and the projected traffic patterns, it seems obvious that the issue lies in content provision by the Internet versus what is provided by Time Warner’s current business…. cable television. Are they deathly afraid of content being managed over the Internet instead of through the likes of cable television? I would think so. And if you manage to have access to a younger generation and ask them what they watch, you’ll realize that this maneuver is really a preemptive strike towards Internet content. If you think it’s a biased study, take a look at the source. It’s Cisco systems, whom pretty much runs the networking for …. well… everything. And believe me, Cisco doesn’t really care if it’s P2P or not.

And to top it off, if you get sucked into the entire pro-business model perspective, then you sort of wonder why Time Warner doesn’t implement a-la-carte pricing for their cable services if they’re trying to do this for their data model. How about your usual fifty to eighty dollars depending on if you pay for premium channels, but if you watch more than 14.84 hours a month, you have to pay one dollar for every hour. Where did I get 14.84 hours? At their maximum residential 6Mbps download speed, you can burn through 40Gbps potentially in that amount of time. Does this raise some eyebrows?

Flawed Mathematics
Okay. It’s not really flawed, but more like potentially faulty advertisement. First let’s take a look at how Time Warner does their mathematics here. Is that data cap a “marketing” gigabyte or an actual technical gigabyte? WE DON’T KNOW. Somehow, I doubt that they do either until they read this. But indeed this makes a big difference. Especially if you take into account that Beaumont, TX individuals have already seen some seriously messed up mathematics because of the failure of communicating the differences. The technical standard of a gigabyte is 1024 Mb (actually has to do with bits to bytes conversion). But in marketing terminology, a gigabyte is equivalent to 1000Mb. And notice that with this failure of communication, there are already reports of people getting miscalculated bills due to the Gb being different on different line items. You can seriously get nickel and dimed here since it’s not termed correctly.

What You’re Paying For In A Tiered Billing System
Less I forget, with a tiered system you would also be paying for “spam” and “advertising”. Yes, those flashy Flash ads and any junk mail you actually download for email? You’re paying for that in a tiered system. Don’t mind the fact that spam constitutes a major portion of Internet traffic. Is your Internet Service Provider helping you stop this? They can’t. Privacy regulations. It’s like if they actually did something about your computer being infected by viruses. And in case you just happen to be a technophobe and don’t know how to update your virus/malware protection and think that just buying Norton or McAfee will cut it? Yes, you too are now paying for your PC being infected. Great stuff.

Next off is their digital phone service. Do you pay Time Warner for digital phone? Think again when this tiered billing goes into place. You’ll be paying twice. Oh yes, you didn’t read that wrong. Why? You pay once for the phone service, but then again as part of your Internet. And as a transport provider, they can’t just commit to a free digital phone service, unless they wish to set themselves up for a potential legal battle not only on providing an unfair advantage in a marketplace, but one that would have the likes of Vonage, Lingo, Packet8, ViaTalk and others breathing down their necks. Don’t believe me? Just wait for it to happen. And if they actually do pull it out, then from a technical perspective, they’re actually traffic shaping by figuring out what packets are for what. That rolls them down a nice slippery slope of privacy issues since it doesn’t take much more to actually determine what exactly you’re surfing, watching, reading, and so on. Believe me, the technology has been there for ages and any computer science student that knows about the transport layer can write a program to do it.

Competition is NOT the Answer
And those of you that are thinking that TWC is the only company that’s out there trialing this, think again. Both Comcast and AT&T have been testing this tiered billing system for quite a while now. So allowing competition isn’t the issue as much as not allowing this type of billing practice.

Will Politicians Please Stand Up
Is this practice legal? No clue. But are there things that are questions arising from it? You betcha. Even Representative Eric Massa (D-NY) is stepping up to draft legislation against this type of data capping. Unsure if those representing North Carolina or even Texas will be actually following suit but it would be interesting to see if legislation would pass in this sense when there are major corporations that pay some serious lobby dollars in Washington.

The math stands. If you’re paying for 6Mbps download then let’s do the math.

Maximum downloadable = bandwidth x seconds x minutes x hours x 30 days.
.006Gbps x 60 seconds x 60 minutes x 24 hours x 30 days = 15552Gb. Or 15.552Tbps / 8 (bit to byte conversion) = 1.94Tb of downloadable stored data.

The actual chance of anyone downloading that much data all at once? Well, never have I heard of it on a 6Mbps line and I’ve known some seriously heavy users in my day. In fact, how many users do you know actually know download half of that, even with P2P traffic? Internet service providers need to realize something in bad economic times. We’re willing to give you our fifty dollars a month because the Internet is a tool in today’s world and without it, things would move a lot slower. Snail mail versus email scenario. But, we won’t stand for you to stand on the backs of consumers when it’s an obvious play against our common sense.

Caveat Emptor.

Bandwidth Monitoring If Time Warner Succeeds

Picture of my backlit G15 LCD Panal, taken at ...

Image via Wikipedia

With the recent news from Time Warner Cable, Greensboro residents are up in arms about being a test site for tiered Internet services. Believe me when I say there’s a movement out there.
Don’t believe me? Take a look. Stop Time Warner Cable is already up garnering in over 1000+ diggs at the time of writing. It seems that the unfair practice has actually been sent in as complaints to the NY Attorney General as harboring anti-competitive means.
But just in case none of the complaints by these irate customers work and you’re one of the few people that just like to be bludgeoned by corporations that don’t care what you have to say? I recommend you implement this in your daily lives immediately.
I personally wouldn’t trust a corporation that tags you with a 40G high limit. Sorry, TWC, but you ruined any hope that you had any inkling of technical knowledge there by implementing something that some finance person probably put into place. And so if they tell you how much bandwidth you’re using, I would corroborate the story with something that runs on your system itself.
I recommend using some open source bandwidth monitoring like FreeMeter. This basically sits in your tray and you can monitor how much you use up and down and have something to show for it in case you have to go complain to customer service that their network is tracking something outside of what you use.
SurplusMeter is another open source goody that allows you to track your monthly usage by volume and can give you all sorts of useful statistics.
Do I really have to go over this, if you run a linux box? There are plenty of bandwidth monitors out there and most of them sit on the desktop along with monitoring your cpu/memory/etc.
In any case, good luck with this if you need to track it. Even with the three month grace period, you know that there will always be some issues that will stem from this tiered internet fiasco that grew from some bean counter’s mind (probably doesn’t use the Internet either to implement the 40G limit).

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The Last Straw with Time Warner Cable

Time Warner Cable Truck

Image by The Consumerist via Flickr

You can’t help but sigh when your locality is being hit by enormous stupid business plans like tiered Internet. What’s interesting is that the rest of the world is going to a non-tiered service arena (take a look at wireless telecommunications) while Time Warner decides to go backwards instead of forwards.
My serious annoyance here? Everything I do is Internet driven. Voip, high definition streaming, and to top it off, TWC has raised their rates for seven years straight since I’ve moved to the South thinking that I wouldn’t notice the pennies to dollars change each year and calling it “this fee” or “that fee”.
And if the Greensboro market is truly being tacked with this stupid plan and they city doesn’t have some sort of backlash effect, then you can be sure that the rest of the Triad will be hit by the same thing. In fact, I’d be curious if this test market doesn’t actually include “triad.rr.com” instead of just Greensboro.
I had hoped that Beaumont, TX test would have failed miserably and I wouldn’t have to get up in arms about this ever in this area. But it seems like this ridiculousness is about to unfold here and Roch puts out some action plans for city leadership. I definitely believe that Winston-Salem should be up and fighting this alongside their regional neighbors. So should High Point.
While I disagree that MuniWiFi should even be on the table, I think that this gives opportunity for other corporate players that should be sought out to level the playing field. Roch points out that Verizon FiOS [Fiber Optic service] is a contender and I agree. FiOS, or originally FTTP (Fiber To The Premises), is basically fiber optic line to your home or business. This allows you to have high speed internet and other data transmission send over fiber optic cable. Guess what? It’s a subscription unlimited service.
This also paves the way for Clear’s WiMax service. While it is currently in Greensboro, there is a lot of service connection issues that need to be bolstered. But I believe that if they run a good marketing campaign and reinforce their technologies, Craig McCaw’s company can definitely be in the running.
It takes very little to have city leadership question why we should even be bothering with paying “more” when technology keeps innovating towards higher bandwidth environments and in these bad economic times, we really shouldn’t be paying more for the same services.
Let’s be frank here. TWC claims that the top 25% of their users use 100x more than their bottom 75%. But do they take into account perhaps that these are the same individuals that use say… Internet for their jobs? Perhaps actually first adopt technologies like streaming technologies which eventually actually become mainstream? Let’s not forget that TWC actually jumped on the entire VoIP bandwagon AFTER Vonage made it more worthwhile and cheaper to take on the phone companies. Not before.
This entire thing stinks to high heaven, and something needs to be done.

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