Sue Polinski just happened to be Road Runner’s very first customer in Greensboro, N.C., and according to the Greensboro News & Record, she’s hopping mad at Time Warner over their plan to start rationing her neighbors’  Internet.

“Greed,” Polinsky said. “That’s all it is.”

A new bumper sticker from Thayer Design - thayerdesign.myshopify.com/ (Hat Tip: Dan)

Polinski started a long term customer relationship with Time Warner in the 1990s, when Road Runner was introduced to the city of Greensboro.  She runs a home based Internet business and has a Road Runner business account, which means she’ll not have to deal with the cap.  But her anger remains the same.

“Even the highest cap of 40 gigs is just ridiculous,” Polinsky said. “They’re designed so that customers will go over.”

To prove her point, Polinsky downloaded a free program called Freemeter on Thursday night. The program allowed her to monitor her data usage on what she thought of as a light night — watching some “ER” online, a few YouTube clips, sending a couple of e-mails before bed. That activity took about 45 minutes, she said. It cost her almost a gig in data usage.

“I’m one person who just did those simple things,” Polinsky said. “Can you imagine how many gigs a family of people who all get on the Net are going to use in a month? Can you imagine what it’s going to cost them?”

Polinski has been something of an Internet broadband evangelist in Greensboro, advocating for wi-fi access in downtown Greensboro. And she’s wholly unconvinced anyone will ever save a penny on their cable bill from this new usage cap scheme.

“The cheaper we make good Internet access, the fewer poor people have to go without it, the more grandmas and grandpas are going to get online,” Polinsky said. “And Time Warner’s saying that by offering lower-cost plans with very low data caps, they’re allowing more people to get Internet. That’s just not true.”

As Polinsky and other angry customers have pointed out, Time Warner already offers Road Runner Lite for about the same price as its new five-gigabyte plan. The new plan would offer no economic incentive to people hesitant about paying for cable Internet. The only thing new is the data cap.

“That’s not a move to enfranchise people, to bring them into getting quality Internet service,” Polinsky said. “That’s setting deliberately low caps that will end up costing almost everyone more money in extra charges.”

I wanted to take a moment and give everyone some updates on what’s been happening behind the scenes here at StoptheCap! as the rain continues to fall and a winter storm watch is up for snow here in what was supposed to be spring.  It’s sunny and well into the 50s in Texas, and 76 in Greensboro, and we hate you for it.

First, after an incredibly exhausting week of writing, writing some more, and then writing even more than that, I’ve been working on developing some of the important resources you’ll need to take action.  You will find a new link at the top of the page for that, and that section will be expanded greatly to include links to various resources, contact information for all of the important players, petitions, social groups, politicians and company officials.  It’s a labor intensive project, so there will be fewer new articles posted here until that section is expanded.  Some of the other links along the top of the page will also be modified and expanded.

Along the left side of your screen, you will find the most recent comments posted, some of the articles that have left the front page but are still important, a new links section which I’ve just started, and towards the bottom, under Meta, a link to sign up for your own account here so you can leave comments without having to retype your name and e-mail address over and over.  You can also change your avatar and become more personable in the comments section.  Another update now lets you reply to individual comments and have them display just below the original.

Second, a hat tip to Kate Perry at the Rochester Democrat & Chronicle who is continuing to provide more depth on the Time Warner cap issue than any other newspaper reporter in all of the affected communities.  A major story in the Sunday edition gave additional perspective on this issue from some of the national players.  A follow-up piece coming shortly will cover additional local reaction.  When I saw the first report on this cap issue, which was a pretty basic piece reflecting Time Warner’s position and little more, I had feared we were in for shallow coverage of this important story.  I am happy to withdraw that concern and thank the D&C and Ms. Perry for their reporting!

Third, thanks to SoundBytes, the long-running computer users group of the airwaves (Sunday 12-1pm ET on WHAM-AM 1180 Rochester), listeners had a place to vent about the cap issue and also learn about StoptheCap! The program can be streamed online anywhere, and when the archive show is posted, we’ll have a link to it here.  Meanwhile go and vote in their poll.  Fifty-three percent of respondents thus far say they will cancel Road Runner if they impose usage caps.

I have been doing a number of press interviews since Friday on this story.  What has become apparent is that no newspaper, much less a television newscast, has the time to explore a lot of the underlying issues regarding usage caps.  And it’s very easy to get far out into the weeds on a story like this.  Most media outlets have to keep it simple because of space/time constraints.  Thankfully, we don’t have those limitations here.  I will continue to devote a lot of time and attention to helping you understand this issue as fully as possible, because knowledge is power and it will help you fight back.  I will do that through industry news items, talking points, and background stories.  It’s clear I have a lot of work to do based on Letters to the Editor like this.

Fourth, our story on Frontier was picked up by Broadband Reports, which also does excellent coverage on the usage cap question and other broadband-related stories.  It’s a must-read for anyone intensely interested in broadband issues.  Bookmark it.

Fifth (whew), I’m not the only one who has not received a call back from Earthlink’s Corporate Communications department.  We are still trying to confirm through official corporate channels whether Earthlink will remain cap-free come fall.  Right now the answer is “there are no caps.”  But our question is, “will there be caps if/when Time Warner imposes them on Road Runner, which uses one of the same delivery platforms that Earthlink uses.”  We’re still waiting on an answer.

Finally, I’ve received some e-mail from interested volunteers and I will be in touch shortly.  But we need more, especially from Texas and North Carolina.  Please use the contact form (link at the top of the page) to contact me.  I need people on the ground in these areas who can point to news articles, TV news coverage, alternative providers, pricing, etc.

I’ll be back later with more coverage.

I really need to get us stepped up on representing the interests of other Time Warner targeted cities, and am looking for guest bloggers who could pen and/or help us gather and get out information. If you are already running a blog focused on this issue, we can help syndicate and distribute summaries of that content. If you are interested and live in any of these areas, please use the contact form and volunteer!

StoptheCap! has learned that Frontier Communications will officially pull the rug out from under Time Warner and announce it will not be imposing any usage caps or rationing plans in the metropolitan Rochester (area code 585) service area, giving the DSL provider a potential competitive advantage in the area.  The company still reserves the right to revisit the matter should their network be completely overwhelmed, but company officials also stated that they are fully equipped to handle the traffic they are getting now.

A well informed source within Frontier told StoptheCap! a company memo is being circulated to educate customer service representatives about the decision and answer questions from potential customers switching from Road Runner. This may have come in response to a bonanza of new subscribers Frontier is picking up this week from customers canceling Road Runner service. Company officials are internally considering a new marketing campaign to blitz Rochester area residents with information about Road Runner’s punitive caps, and that Frontier will not be imposing those caps on its customers.

There has been speculation that one of the reasons Rochester was chosen as a “test city” for the Road Runner rationing plan was because of last summer’s attempt by Frontier to impose its own usage cap, of just 5GB per month. Rochester is the only major city in New York that is not being wired by Verizon for its FIOS – fiber to the home broadband service, which does not have any usage caps. Time Warner officials may have presumed that with their draconian usage caps, Frontier would be free to reintroduce their own still leaving Time Warner with a market advantage. Frontier’s decision to the contrary is a potential game changer in the Flower City.

But in a move that StoptheCap! applauds, Frontier Communications has decided this opens a unique opportunity for the company to not only regain a stronger position in the local broadband market, but also bring back its important traditional telephone line business. Frontier has reported a growing number of people disconnecting traditional telephone service in favor of voice-over-IP services like Vonage or Time Warner’s Digital Phone service. Most customers who sign up with Frontier for multiple services choose a bundled package including telephone and broadband. The company will also continue to promote its Price Protection Agreement, which guarantees no usage caps or price increases for a term of two or three years, at the customer’s choice.

Frontier has also distributed a memo to employees that the company no longer feels their network is being challenged by ‘overuse,’ but continues to express concern about the potential for deteriorating customer broadband experience in the future. We understand that, and suggest Frontier educate their customers about the impact certain applications might have on their network, such as running torrent servers 24/7, trying to run commercial web servers on a residential account, etc. However, company officials must also be aware that with a flood of new customers will naturally come increasing demand, so they need to prepare now for the potential exodus from Time Warner. It also remains the responsibility of every ISP to recognize the revolutionary growth of the Internet, and continue to make investments in new technology which can deliver more bandwidth.  The cost for that bandwidth continues to decline, so punitive rate hikes and caps are simply not justified. Hopefully, Frontier will make their customers partners in their decision-making, and treat us with the respect Time Warner can’t be bothered with.

Some pertinent FAQ information Frontier has now released to their customer service representatives:

Q: Does Frontier charge for internet consumption?
A: No, Frontier does not charge for usage. Customers pay a flat fee per month that provides them a true High-Speed Internet Connection, up to 10 MB in Rochester.

Q: When does the Time Warner Network Consumption Pricing begin?
A: Like you, we only have knowledge based upon the recent press.

Q: Does this apply to Residential Only, or does it include Commercial?
A: We have not heard them say that anyone was excluded.

Q: What is a “bandwidth cap” and what does it mean for me?
A: Caps are thresholds placed by Time Warner so their Customers will be charged at different levels of usage on their network. Bandwidth caps generally track the total amount of GigaByte usage that is downloaded and uploaded to the Internet by a household during a specific period of time, like a billing cycle. Press reports indicate that Time Warner will charge $1 for every GB above their cap.

Q: Has Frontier changed its Acceptable Usage Policy this year?
A: No.

Q: If I buy my Internet service from Frontier, will the Price Protection include consumption pricing?
A: At this time, Frontier has no plan to provide consumption pricing.

Some answers to questions Frontier doesn’t know the answers to: The official start date for the Time Warner Rationing Plan is November 1, 2009 in Rochester, N.Y.  Prior to that date, you will not be charged for excessive use.  This plan only impacts residential customers.  Business customers are not being metered.  Frontier is legally hedging their bets in the wording of their statements here.  So a few words here and there might appear to be “weasel words” that leave the door open, but that will be for legal reasons.  We will continue to monitor Frontier and keep them honest.  They have had a track record of changing their minds on things.  But if caps are your primary concern, the current best protection you have against them is a Frontier DSL account with a Price Protection Agreement in place.  Please review our article on choosing an alternative provider for more specifics.

The New York Times (hat tip: Shawn808) just exposed the argument from cable companies like Time Warner, who argue for punitive rate hikes and Internet rationing plans, as little more than a naked profit grab in an insufficiently competitive marketplace.

Competition, or the lack of it, goes a long way to explaining why the fees are higher in the United States. There is less competition in the United States than in many other countries. Broadband already has the highest profit margins of any product cable companies offer. Like any profit-maximizing business would do, they set prices in relation to other providers and market demand rather than based on costs.

Pretty much the fastest consumer broadband in the world is the 160-megabit-per-second service offered by J:Com, the largest cable company in Japan. Here’s how much the company had to invest to upgrade its network to provide that speed: $20 per home passed.

The cable modem needed for that speed costs about $60, compared with about $30 for the current generation.

Meanwhile, Time Warner made dubious claims that it required a punitive rationing plan and rate hike to increase profits to “invest in technology to keep up with demand.”  Other cable operators are deploying DOCSIS 3.0, an upgrade to the current cable broadband delivery platform, as a normal cost of doing business.  The upgrade actually benefits cable operators in meeting demand and reducing neighborhood congestion, by “bonding” multiple channels of data together to “fatten the pipeline.”  Time Warner has dragged its feet on doing this upgrade, according to the Times.

Most systems can be upgraded for no more than about $100 per home, including a new modem. Moreover, the monthly cost of bandwidth to connect a home to the Internet is minimal, executives say.

Yet Time Warner’s rationing plan, announced last week, would dramatically increase the price of Road Runner service, in some cases by hundreds of dollars per month, well above the costs the company claims it must pay to upgrade its network.  Even more moderate users will be paying far above the amortized cost of the network upgrade, month after month, indefinitely.  Some other operators are not imposing Time Warner’s ludicrously low usage caps and demanding more money for them.  They just charge considerably more for faster service.

So what’s wrong with this picture in the United States? The cable companies, like Comcast and Cablevision, that are moving quickly to install the fast broadband technology, called Docsis 3, are charging as much as $140 a month for 50 Mbps service.

Let’s compare and contrast what is entirely profitable in Japan vs. what Time Warner whines they need to just eke by:

Liberty Global – 160Mbps unlimited access – $60 per month¹

NTT Communications – 100Mbps unlimited download/930GB upload cap per month + free phone line – $42 per month²

Time Warner – 10Mbps 40GB usage cap – $55 per month ($1 each additional gigabyte)³

¹New York Times April 3, 2009   ²Broadband Reports June 25, 2008  ³Rochester Democrat & Chronicle April 3, 2009

So why does Time Warner really need to ration your Internet service and punitively limit your use of the net? Michael T. Fries, the chief executive of Liberty Global is candid:

Fear. Other cable operators, he said, are concerned that not only will prices fall, but that the super-fast service will encourage customers to watch video on the Web and drop their cable service.

The industry is worried that by offering 100 Mbps, they are opening Pandora’s box, he said. Everyone will be able to get video on the Internet, and then competition will bring the price for the broadband down from $80 to $60 to $40.

Aren’t you worried that the prices will fall too? I asked.

“Maybe,” he said very slowly. “We’ll see how it happens. We want to keep it up there for now. It is a premium service.”