Rep. Eric Massa (D-NY) remains vigilant as we begin Time Warner Cap Watch, our effort to keep an eye on Time Warner, which shelved its broadband usage cap plan last week (temporarily in our view.)

Congressman Massa gets the issue, and spoke out at a recent Town Hall meeting on the absurdity of Time Warner’s Internet rationing plan. Courtesy: Rochester Turning

Last week, when Time Warner brought forth their “new and improved” tier system, North Carolina elected not to drink the Time Warner Kool-Aid, and said, emphatically, “no thank you” to the proposal. Time after time, customers told this company it had no interest in metered broadband or ludicrous rate increases for the same level of service. For more than two weeks, the company ignored its customers. Now that the plan is temporarily on hold, customers are catching their breath across the Triad, but they aren’t fooled. They know Time Warner will be back for more, sooner or later.

“That’s ridiculous.  I’m not going to pay for that.”

Another home run story for WXII which gave viewers the fact Time Warner is doing very well financially with the existing service they provide.  Too often, media outlets just accept the statements being made by company officials at face value and just repeat them.  As we’ve come to learn with this story, that’s a very dangerous thing to do if you are interested in informing viewers about the truth.

[Editor’s Note: The fast-changing news on the Time Warner metered usage plan and its temporary demise did not allow sufficient time to present a full history of media coverage of this issue across all of the affected areas. For historical documentation, and in case of any potential resumption of this type of plan, I feel it is important to have this material archived here for future reference. Some of the information in this news report may no longer be applicable.]

Although Time Warner has temporarily shelved the caps they were intending to dump on us this summer, there is every indication the caps will be back by the fall, if company officials have any say in the matter.  But usage caps to solve network bandwidth issues have plenty of unintended consequences.  In Rochester, the enormous deaf community is at significant risk of losing access to a vital, affordable way of communicating.  What the hearing community may take for granted as a convenient extra is, for those who need to communicate in other ways, a fundamental rights issue.

Sometimes the unintended consequences of a public us vs. them campaign, pitting active vs. casual broadband users, have unintended casualties.

WHAM-TV in Rochester picked up this important story before the cap plan was shelved, for now.

A very important angle to this story, particularly for the enormous deaf community in Rochester.  It sheds light on videophone technology, which allows members of the deaf population to sign, using a broadband connection.

The Rochester Business Journal polled its subscribers about Time Warner’s plan to create tiered pricing for broadband with usage caps.  Predictably, the results were largely the same as other polls taken on this question.  The majority of people asked do not want metered broadband.  The one option company officials refused to entertain was leaving the existing service plans in place, until heavy protests about the metered tiers forced them to withdraw.

Roughly 860 readers participated in this week’s poll, which was conducted April 13 and 14. Here are the questions asked:

In general, which approach to broadband Internet service billing do you favor?

Flat-fee billing for unlimited: 78%
Tiered usage-based billing: 22%

Do you think legislation is needed to regulate or prohibit tiered pricing for broadband Internet service?

Yes: 62%
No: 38%

Comments generally expressed skepticism about the prospect of their broadband bills declining.  Most expected they’d be forced to pay more for a reduced level of service. [Thanks to Colin for bringing the poll results to our attention.]

Despite the propaganda campaign underway in the domestic broadband marketplace, especially among cable operators, the NY Times reported today that profits remain high for broadband service while costs for bandwidth, and the level of investment by those companies to provide it, is on the decline.

This comes in marked contrast to the public relations campaigns underway at some broadband companies, which seek to impose punitive caps, limited tiers, steep overlimit fees, and increase prices on residential broadband service.  As late as last week, Time Warner Cable sought to effectively triple the rate for their broadband customers in five cities for an equivalent level of service.  Road Runner subscribers paying $39.95 per month for service would now, under last week’s proposal, have to pay $150 a month for the same service.

The resulting firestorm of customer protest, and the involvement by Congress, temporarily sidelined Time Warner’s tiered pricing scheme, but company officials in the Triad region of North Carolina hinted strongly tiered pricing was coming back after a “customer education campaign” had been completed.

These plans to charge for above-average Internet use “are unjustifiable for almost everywhere in the country except for rural America,” Richard F. Doherty, the research director of the Envisioneering Group, a consulting firm that studies cable technology.

The Times report by Saul Hansell found that network engineers plan their networks based on peak potential traffic loads.

“All of our economics are based on engineering for the peak hour,” said Tony Werner, the chief technical officer of Comcast. “Just because someone consumes more data doesn’t mean they drive more cost.”

This belies Time Warner’s claims that light use customers might be effectively subsidizing heavier users.  In fact, the Times reports that the actual costs for Time Warner are identical whether a consumer watches 50 movies or doesn’t even use their connection that day.

The costs for upgrading networks is declining at an even steeper rate than StoptheCap! realized.  Comcast’s own reports to its shareholders now reveals the upgrade cost to manage the Internet growth Time Warner officials have been worrying about is an average of $6.85 per home to provide double the speed of existing service.  That’s a far cry from a 300% rate increase, per month, that Time Warner was seeking in lieu of punitive caps with substantial overlimit fees.

Costs are dropping even more rapidly with the implementation of DOCSIS 3, a new technology that increases capacity, dramatically raises speeds, and actually reduces expenses for cable systems, who currently have to face sub-dividing traffic congested neighborhoods.  In fact, Comcast told investors it will actually cost them less to provide 50 megabits per second connections than to continue the current level of service, at around 6 megabits per second.

This raises an even larger number of questions about why Time Warner, among other providers, needs to overcharge customers and penalize them for using their Internet connections with enormous overlimit fees that are possible with a tiered rate system, when their own bottom line would benefit from completing the upgrades without making any changes to customer’s bills or level of service.

Hansell also hints domestic broadband providers may be charging too much now.

Comcast has introduced a new 50-megabit-per-second service at $139 a month, compared with its existing service that costs about $45 a month for 8 megabits per second. Time Warner just announced it will charge $99 for 50 megabits per second [Editor’s Note: This service was to be capped at 150GB per month minimum, as per TWAlex].  By contrast, JCom, the largest cable company in Japan, sells service as fast as 160 megabits per second for $60 a month, only $5 a month more than its slower service.