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They’re Back: Time Warner Cable Adds Cap ‘n Tier Language to Subscriber Agreements

Phillip Dampier May 28, 2009 Issues 144 Comments

meterHere we go again.  Stop the Cap! reader Oscar noticed a tiny message on his most recent bill from Time Warner Cable stating the company had ‘updated’ their Subscriber Agreement.  Oh yes they did:

6. Special Provisions Regarding HSD Service

(ii) I agree that TWC or ISP may change the Maximum Throughput Rate of any tier by amending the price list or Terms of Use. My continued use of the HSD Service following such a change will constitute my acceptance of any new Maximum Throughput Rate. If the level or tier of HSD Service to which I subscribe has a specified limit on the amount of bytes that I can use in a given billing cycle, I also agree that TWC may use technical means, including but not limited to suspending or reducing the speed of my HSD Service, to ensure compliance with these limits, and that TWC or ISP may move me to a higher tier of HSD Service (which may result in higher monthly charges) or impose other charges and fees if my use exceeds these limits.

(iii) I agree that TWC may use Network Management Tools as it determines appropriate and/or that it may use technical means, including but not limited to suspending or reducing the Throughput Rate of my HSD Service, to ensure compliance with its Terms of Use and to ensure that its service operates efficiently. I further agree that TWC and ISP have the right to monitor my bandwidth usage patterns to facilitate the provision of the HSD Service and to ensure my compliance with the Terms of Use and to efficiently manage their networks and their provision of services. TWC or ISP may take such steps as each may determine appropriate in the event my usage of the HSD Service does not comply with the Terms of Use.  I acknowledge that HSD Service does not include other services managed by TWC and delivered over TWC’s shared infrastructure, including Video Service and Digital Phone Service.

This language, for the first time, creates the foundation for TWC to introduce usage caps, tiered usage rate plans, overlimit fees, disconnecting and/or throttling the speeds of those the company determines exceed their internal limits, and exempts their Digital Phone Service from any usage/metered billing.

The impact of this legalese is profound, because it now also closes the window for new customers to avoid Cap ‘n Tier plans by signing on to a price protection agreement.  Since the terms and conditions have now fundamentally changed, new customers must now agree to these new terms, allowing the company to force you into any metered billing scheme even if your current level of service doesn’t provide for that.  Formerly, price protection contracts would protect you from being forced into such plans until your contract expired.

It compels subscribers to retroactively agree to whatever overlimit fees the company may choose to impose.  It permits the company to suspend or reduce your speed, at their discretion, if you exceed any given cap.  It permits the company to automatically bill you for a higher tier of broadband service at their discretion, and is silent about your right to downgrade back to a lower level.

It specifically exempts their phone service from any metered billing, which now gives the company’s voice-over-IP phone service an automatic competitive advantage, because using one of their competitors may be counted against your usage allowance.

As Stop the Cap! has predicted since TWC temporarily shelved their scheme, they’d be back with more, and here is another piece of evidence to prove that contention.

(image courtesy: B Tal)

[Update: June 7 2009 — The Los Angeles Times’ Business columnist David Lazarus covered the Time Warner Cable cap issue suggesting Stop the Cap!’s reports about their contract language changes represented a “bum rap” for TWC.  Lazarus contends that the “Time Warner tips, tweets and blog posts illustrate how easily bogus information can be passed off as legitimate online — and how quickly the brush fire can spread across the electronic ether.”  He then pointed to several additional reports about the Subscriber Agreement changes and decided: “Problem was, nobody had it right.”  Lazarus then printed TWC’s position, which claims Cap ‘n Tier language has been a part of TWC’s Subscriber Agreement for “several years,” a premise he seems to accept at face value. His piece then moved into how online companies deal with “brush fires” once they get started online by quoting a “leader in corporate crisis management.”

Lazarus ignores the fact it was Time Warner Cable in San Antonio that specifically notified customers that “Your Subscriber Agreement with Time Warner Cable has been amended.  The new version is available at http://help.twcable.com/html/policies.html” Nobody here made this up.

Although he tells readers the story of the premise of our article, namely Stop the Cap! reader Oscar finding the aforementioned notification on the bottom of his May 2009 bill, he never bothers to challenge TWC’s representative about why that notice would appear on customers’ bills, and essentially dismisses the impact and scope of those changes.  If my bill had language like that on it, I’d certainly explore the “amended” Agreement.  Why tell subscribers in at least one city that a “new” Agreement is up and available for consideration they now claim isn’t new at all?

The opinion piece also edited the one line from our original report detailing what this contract language introduces for the first time.  That seems unwarranted, particularly when his piece seeks to dismiss those changes as “bogus.”

His edited version: “…warned that “for the first time” the company had laid the groundwork “to introduce usage caps, tiered usage rate plans, overlimit fees” and other customer-unfriendly moves.”

Our original: “This language, for the first time, creates the foundation for TWC to introduce usage caps, tiered usage rate plans, overlimit fees, disconnecting and/or throttling the speeds of those the company determines exceed their internal limits, and exempts their Digital Phone Service from any usage/metered billing.

Readers can decide for themselves whether or not this kind of language has been part of past Subscriber Agreements for “several years.”  The prior one is still linked at the bottom of the page on the Oceanic division of TWC’s Around Hawaii website.  Another version prior to the transition to the centralized Road Runner website is also available for review in PDF format.

The scope of the changes in the latest TWC Subscriber Agreement is unprecedented.  No earlier Agreement I am aware of addresses all of these important issues: usage caps, tiered usage rate plans and the implications for exceeding them (including their right to move you into a new tier automatically), the specific exemption of their digital phone product from them, and throttling speeds for consumers who exceed the company’s internal limits.

Although he acknowledges our willingness to amend original stories as new information comes to light (several updates in reverse order appear below), the premise of an accompanying poll, entitled, “Is there any way to separate fact from fiction online?” is part of the traditional media’s challenge to the web they rarely impose on themselves.

My view is that honest online sites are prepared to allow updated information, even if it challenges an assertion within a piece, to be included. Nobody here has any fear or second thought about amending the record, adding the findings of others, including Lazarus’ own piece.  We trust readers to be intelligent enough, looking at the entire record, to decide for themselves who has really gotten the “bum rap.”  In our view, none of this changes the fact it will be the consumer that ultimately gets it in the end.

[Update: June 3 2009 — Alex Dudley (a/k/a our old friend, TWCAlex) told Information Week today that the Terms & Conditions on TWC’s website were last changed in “August 2008” and that customers are notified when they are changed.  I don’t recall seeing any notice last summer/fall on my TWC bill.  Another Time Warner Cable spokesperson in the same article said that “that the company’s terms are always changing and they are updated regularly.”  The confusion continues. Also, why are customers in San Antonio being notified they have been amended on a bill for May 2009?  Regardless of all of this, the real issue remains the wording and its implications.]

[Update: June 1 2009 — It’s always the policy of Stop the Cap! to bring you as much information and detail as we can find, as well as issue clarifications, corrections, and any additional details we receive, even if it might call into question one of the facts originally published in an article.  Earlier today, I began to receive word that there was a dispute regarding the exact timing of the introduction of the revised language on TWC’s website.  Time Warner Cable representatives told another reporter that the language we reported on was published earlier than “implied” in this article.  In their eyes, this represented “nothing new.”  Our emphasis has always been about the language itself, and it certainly was new to our readers.  The timing issue, while not unimportant, was not the primary focus of this article.  What was the focus?  More evidence the company is marching full speed ahead to consumption based billing, and have made sure to lay the legal groundwork to implement it.

To help readers understand how this piece was assembled, I am going to walk you through the “process,” as well as bring you the latest information, including TWC’s positions, so you may have a clearer picture and draw your own conclusions.

Stop the Cap! Reader Oscar finds this notification that his Subscriber Agreement had been amended on his latest bill. (Click to enlarge)

Stop the Cap! Reader Oscar finds this notification that his Subscriber Agreement had been amended on his latest bill. (Click to enlarge)

The original idea for this article came from our reader Oscar in San Antonio who was prompted to visit TWC’s website because of a message printed on his May 2009 bill:

Your Subscriber Agreement with Time Warner Cable has been amended.  The new version is available at http://help.twcable.com/html/policies.html

To our readers, the new language which we reprinted above, was hardly a shocking surprise. The old language it replaces is still online. Our position has always been that TWC has a very clear agenda, which they have been public about, to “educate” customers about usage and move back towards a consumption billing system.  It’s something CEO Glenn Britt vocalized just last week in his preference for this kind of billing.

Our focus, therefore, was on the language of the Subscriber Agreement.  Our assumption has never been that this was introduced just a week ago on the website.  The lead time alone for a revision announcement to appear on a bill precludes that.  Our assertion was that TWC changed the Agreement, and Oscar was among the first to notice the changes and report them.

After our report, several other blogs and websites picked up this story.  Some of them emphasized the timing of the changes, not the wording of the changes.  That planted the seeds for a side dispute about the exact date these revisions went online.  It has been a matter of debate apparently within the company as well, because there were three different contentions shared with me today:

  • “the changes were made ‘months ago’ and there is nothing new here”;
  • “the changes were made awhile ago at an undetermined time;”
  • the changes were made and here is why…

When we called TWC about the Subscriber Agreement for our area, we were told what was online was written by the national corporate office and accurate after the termination of the “experiment.”  Earlier today, Chloe Albanesius writing for AppScout got a confirmation the Subscriber Agreement was changed as well, and why:

Time Warner said the update was simply a means of keeping its customers in the loop.

“Time Warner Cable believes that our terms of service should be a document that allows a customer to decide whether or not they’d like to purchase our service based on full disclosure of the techniques we are or may use to manage our network and improve service,” the company said in a statement. “In a dynamic and constantly changing business like high speed internet access, we believe that, while we are not legally obligated to provide such detailed terms before we implement a new technique or product structure, it is the best way to ensure that customers have all of the facts before they purchase the product.”

Do those facts include consumption-based billing in the future? “We have announced no change to our plans surrounding consumption based billing at this time,” the company said.

Bottom line, there is an open question about the exact date the changes were made, but not about the substance of those changes and their implications.  TWC doesn’t time stamp their Subscriber Agreement revisions either.  Although the latest developments today illustrate we have some room for improvement in trying to tie down these side issues with more clarity, we stand by our report regarding the language itself, its implications for metered billing, competition, and net neutrality issues.]

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Lou
Guest
Lou

Everyone who is surprised by this will now sprout wings and fly to the moon.

What a lovely world where consumers have to play by the rules and the monopolists and wannabe monopolists get to write those rules.

Time to start contacting our representatives in the House and Senate….

lh
Guest
lh

Ah the real reason for the deferment of the ‘trial’. Their legalese was not up to snuff.

Oscar@SA
Member

Thanks for posting this info Phillip. I missed section (iii) when I first read it… I was too upset when I got to (ii) that I stopped reading… I am glad you contacted the Congressman about this.. Thank You

MMiller
Guest
MMiller

I just tried to call the local TW office in San Antonio. When I told the person on the line (I wouldn’t say customer service rep, I didn’t get any customer service) I wanted to talk about the changes to my Service Agreement, specificly about Section 6, she said “Let me transfer you to the appropriate line.” No follow up questions, she just transferred me right away. After listening to about 5 minutes of commercials, I was transferred to a FAX line. I am so tired of dealing with this company and the lack of any competition here doesn’t leave… Read more »

LTS
Guest
LTS

Government regulation is not the answer, I don’t want my government wasting time on this issue. The actions of TWC impact its customers and it is up to its customers to send the message. I would suggest that a campaign targeting local businesses be started. Areas, like Rochester, where variety in service providers is limited will become less attractive to potential job applicants. As more people begin to work from home to save money this becomes an ever increasing issue. Depressing an already depressed job market will further deteriorate the area. Perhaps local business can be encouraged to begin aggressive… Read more »

Tim
Member
Tim

Way to stay on top of it Phillip. It is sad but I am not at all surprised about it.

Jim
Guest
Jim

Just because they say their Digital Phone service is excluded doesn’t mean its legal to exclude it. That seems pretty clearly to be a violation of anti-trust laws.

Don’t stop at complaining to congress/senate and local officials. Contact the Attorney General and the Department of Justice’s anti-trust department. Time Warner is clearly planning to use their monopoly as an internet service provider to prevent competition to their digital phone product.

preventCAPS
Guest
preventCAPS

When discussing this with a TWC rep, I was told that their Digital Phone is not a competetor to Vonage or other VOIP solutions because TWC’s Digital Phone is not a VOIP solution. It is just simply digital and that the modem uses other digital pathways on the physical cable line and is not IP data traffic. How true that is, I do not know as I am not a Digital Phone subscriber, nor have been able to really research how it works. [edit] I just found the following on Time Warners Web Page : Question: Is Digital Phone a… Read more »

Jim
Guest
Jim

Time Warner can claim all they want that they’re not a competitor, but they are. They don’t use the standard phone lines that Verizon’s home phone service uses, but they’re still a competitor. They are in competition with Verizon/AT&T/other home phone services, and all VOIP services. You don’t have to make an identical product to compete. Time Warner is (planning on) using their monopoly position as an ISP to prevent competition in digital phone and internet video services. I’m recommending sending complaints to the Attorney General and Department of Justice and let real experienced lawyers and judges decide what is… Read more »

JBSil
Member

Do all current TWC RoadRunner customers retroactively agree to these changes? And if so, is it possible to call and specifically not agree to the changes without having your service disconnected?

Michael Chaney
Member

Usually the way you “accept” the changes to a TOS agreement is by your continued use of the service. Doing nothing constitutes acceptance, and t’s an all or nothing agreement….you can’t cherry pick. The only way to not accept the new changes in the TOS is to cancel your service entirely. One thing that I want to point out (and that the new TOS agreement points out as well) is that all three services, VoIP, broadband, and CATV, are considered separate businesses beholden to separate TOS. In the City of Austin, one thing that we’re looking into is the fact… Read more »

Vis
Guest
Vis

Tomorrow is my last day with Time Warner here in San Antonio. Switching over to UVerse and looking forward to it. To top it off, AT&T will pay me $200 if I keep the service after 30 days, which we will. No guarantee that the future will be without tiers for AT&T (I know they have a test market somewhere) but I’ll take that chance. I’m actually breaking my “price lock” guarantee with Time Warner and it will be worth every penny I pay.

Oscar@SA
Member

How much is it for breaking the contract?

MMiller
Guest
MMiller

[email protected], when I talked to a Time Warner rep at the local office, she said the cancellation fee started at $200 and went down so much (don’t remember the exact amount, I want to say $25) every 3 months.

Vis
Guest
Vis

If I recall decreases like $x something every 3 months or so, starting at $200 and going down from there. In my case, the fee is about $70.00

Michael Chaney
Member

The first thing you need to do when you call is claim that this changes in the TOS represents a materially adverse change in your contract and therefore you are not liable for an early termination fee. If they try to claim that this change doesn’t necessarily mean they will be increasing your fees, tell them that by accepting this agreement you are agreeing to inevitable changes that haven’t happened yet and so by the same token you should be able to claim a materially adverse change now rather than later.

Time Warner
Guest

Check out the mood of Time Warner users at https://mobile.twitter.com/account/suspended

jr
Guest
jr

Time Warner will buy more airtime on local tv and magically brownout reports will be on the newscasts

Smith6612
Member
Smith6612

It was only a matter of time until this would have shown up, and it turns out that my gut feeling was right again on this case . Let’s see how long it takes until Time Warner starts to whack people with this, but I’m sure this site would stop the capping again 🙂

Mazakman
Guest
Mazakman

Lets hope that this site can stop the capping again, but it seems as if Time Warner is determined to make this happen. I will stay with Frontier for my one year and take my chances with them I guess.

Uncle Ken
Guest
Uncle Ken

One would have to wonder just how relevant Schumer will be. He came to Rochester and told TW that Rochester will not be a test tube and TW agreed so TW held up their part of the bargain. Now no longer a test tube they are just going to do it and skip the test phase. As I recall nothing was ever said about that. The other providers are no doubt starting to think this metering thing just might be a good idea. If they all do it where are you going to run then? I think its even being… Read more »

Uncle Ken
Guest
Uncle Ken

Mr. Smith: Sure it came back because it never went away in the first place except now nobody has to play with a usage meter. They will roll it out over their entire network and even loose a few people along the way until the rest of the providers catch up and start doing the same things. There is no provider on earth that ever wrote our TOS will never change. They are all in it for the money nothing more.

Jeff
Guest
Jeff

This site is a great start but if you (the reader) plan to do nothing but read the site, we will never stop TWC. Phil is doing a great job but he can’t do it alone. This site is a place to organize OUR efforts. There is not one thing preventing each of us from contacting: 1: Our US Senators 2: Our US Congressman 3: Our State Senator 4: Our State Assemblyman/Congressman 5: Our County Legislators 6: FTC (anti-trust) 7: FCC (VOIP access, Internet neutrality) 8: State Atty. General (anti-trust) 9: PSC (OK – maybe you can skip that one… Read more »

MK8
Guest
MK8

I’ve already contacted my house rep again (who said nothing in his reply to me before except “all is well, they’ve shelved their plan!”) but I only knew who he was cause FreePress autoforwarded my message to him. If someone who knows how to get the contact info off all these organizations on your list easily, and were to put links or directions on this site, I think it would be much easier for us to take action. The “take action!” link on this site doesn’t have directions to contact important people for those of us who haven’t done this… Read more »

SF100
Guest
SF100

So what do we do? What should we be saying when calling politicians?

Jeff
Guest
Jeff

Good question: you don’t have to be a computer expert or a lawyer. And try not to use a form letter as I think those are discounted.
One approach: “how would I explain this ripoff to a friend of mine over a beer?” Keep it polite and brief and you are done.

Wycked Knight
Guest
Wycked Knight

Ok this is sad, as someone who works on repairing computers from home these caps will hurt me. I charge less money to do the repairs as most can not afford to take it to the shops or stores, plus it helps me to earn a little extra income. Correct me if i am wrong but it sounds like this is now a national issue, and so far i have not received a notice from TWC/RR about these caps. I’m in Van Nuys, Ca. it’s in the city of Los Angeles, San Fernando Valley area. These caps are really going… Read more »

MMiller
Guest
MMiller

Check your latest monthly statement, it’s a one sentence notice somewhere in the middle.

Wycked Knight
Guest
Wycked Knight

California requires a list of the changes to be supplied with the notice, with atleast a 30 day notice of said changes. i know of a few companies that didn’t do this and were fined.

techzen
Guest
techzen

I want an alternative to TWC.

Smith6612
Member
Smith6612

No DSL available there?

Michael Hightower
Guest

It’s ironic that the stock photo used here is of power meters. Amongst all of the grousing about bandwidth caps, where are the people who follow their own logic and grouse about caps provided by their electrical company? What about the fact that your electrical company charges you by the kilowatt hour? Let’s face it, you don’t have a problem paying usage fees for electrical service because that is what you’re accustomed to. On the other hand, the broadband providers offered HSD as unlimited until they started to realize significantly increased costs associated with the service. Imagine if you opened… Read more »

preventCAPS
Guest
preventCAPS

Mike, You obviously have not studied the rest of the content on this page. You will see that even as we are consuming more bandwith as individuals, we are still costing TWC less then before because of the significant drops in wholse sale bits and bytes.

For your all you can eat resteraunt, it would be okay if people ate 10x as much food because your cost of your food dropped 20x!

Michael Hightower
Guest

There are plenty of misconceptions out there regarding the cost of service, one of which you pointed out. The cost per byte does decrease, but equipment costs do not. Disregard the supposed gotcha that people have found with regard to the SEC filing (there’s a lot more complexity to that then can be explained here). Instead, think logically about equipment costs. The routers and switches used to port data are becoming faster and more capable of handling increased bandwidth. On top of this, TWC is re-engineering their entire network with fiber loops to be able to handle significantly increased bandwidth.… Read more »

Ron Dafoe
Guest
Ron Dafoe

Are you saying that when they claim that the cost of their network has decreased while usage has increased is false?

Are you claiming that TWC CEO is lying when he talks to shareholders?

“Think about how much a computer cost in the late ’90s versus how much they cost today–the price point is nearly the same, yet the capacity is far greater.”

This is false – My computer is far superior to what I had in the 90s and it cost 1/2 the amount of money.

Michael Hightower
Guest

I didn’t want to talk about this point, but I guess I might as well. It’s not because I’m scared to discuss it, but rather because this is a very complex topic that has been simplified a bit too much by people, including Glenn Britt. Bear in mind, your referring to a sound byte that Britt made to a non-tech audience. So, when someone like Britt says that the cost of their network has decreased, this is slightly more nuanced than just saying, “The cost of broadband is cheaper now, and we can charge more, yay!” The cost per byte… Read more »

Ron Dafoe
Guest
Ron Dafoe

If their costs are are truly increasing, then why are they not increasing the prices of the tiers they already have? TWC are not shy about raising their prices on the cable side. Why are they spending MORE money on trying to limit the amount of data people can consume? A price hike of $10 a month on each tier, while unpopular, would have only been a blip on the radar and not what we have here. Why can other providers do what TWC cannot? I understand your costs to a point. The problem being is TWC ARE NOT on… Read more »

Michael Hightower
Guest

A few points: 1. I imagine that your evidence that TWC are not on the bleeding edge of technology is that they haven’t rolled out DOCSIS 3.0. While I agree that they should deploy that, it doesn’t mean that TWC doesn’t have any advanced tech. As far as I know, TWC were the first to deploy regional optical rings in all of their divisions. I.e., the state of New York is served by a huge regional ring. Also, on the B2B side of things (where I worked), we were deploying fiber to the door long before any of other cable… Read more »

Ron Dafoe
Guest
Ron Dafoe

I am not talking about revenue and I am not saying that they don’t have advanced tech. I am sure they do. However, I am also sure that they don’t go around replacing everything anytime the newest stuff comes out at the premium price. I don’t care personally how much they make. Tell me again why a cap system is better than rasing the prices of all the tiers or just the top tier to pay for their upgrades? The fact is, they have done all that you have said, without raising their prices and without arbitrarily limiting data cunsumption.… Read more »

Jay Ovittore
Guest
Jay Ovittore

The best analogy of what the cable industry wants to do is with a water hose. You pay a flat fee for a hose. That hose delivers water which you pay for from your local water company. The hose company you bought the hose from doesn’t charge you more if you use more water. The water company does. The cable industry is providing a service as an ISP, they simply provide the hose. What I get out of the hose I pay for depending on what it is, or I don’t pay anything if it is provided for free, like… Read more »

Michael Hightower
Guest

Sorry Jay, but that analogy is pretty far off. I see why you are making the argument that the providers are simply offering you a hose, but the problem is that you have disregarded the dynamics of the environment. I’ll try to rework your analogy so that it’s slightly more accurate: You aren’t simply buying a garden hose (pipe) from the hardware store and hooking it up to your water supply (content). You are renting the garden hose from a company with a reservoir. In other words, you are getting water from the water company. The water company doesn’t -produce-… Read more »

Jay Ovittore
Guest
Jay Ovittore

What you are trying to argue, is that they control the content and they don’t. They provide the way the content gets to you and if that is getting clogged then it is up to them to upgrade their systems, which they are not looking at doing for 5 to 10 years according to Glen Britt. DOCSIS 3.0 is the answer to the problem they face, not jacking our bills through the roof for the same service. If they upgrade and offer me faster up/download speeds, we can talk about me paying more. Time Warner made $1.1 billion in the… Read more »

Michael Hightower
Guest

I agree about rolling out DOCSIS 3.0. It’s been on the table for the past 5 years and there’s no good argument I’ve heard against rolling it out. The best argument is that it makes sense for their business customers who are demanding QoS. I’ve already discussed the cost, but I do want to point out something in the SEC filing that’s important for people to know. That $1.1B figure you point out is revenue and does not illustrate operating or non-operating expenses. Unfortunately, the SEC filing doesn’t break out OIBDA data by service. So, to compare apples to apples,… Read more »

Michael Hightower
Guest

I forgot to add, though, that I 100% agree with you regarding the monopoly. That, to me, is the real problem here. Cable companies and telcos enjoy special regional monopoly privileges that block any form of competition. Things would be a lot better if I could choose between ComCast, Cox, TWC, etc. Right now my choice is between one cable provider, one phone service, and… that’s it. And I’m in Chicago. Those high margins would start to fall if they had to compete against each other. Isn’t it odd that these monopolies are derivations of systems created by the Government… Read more »

jaycee
Guest
jaycee

There is another aspect to think about. Some on this forum probably know that all the big broadband providers connect at really large network access points(NAPs). For example I use ATT dsl and when I connect to a site that is running on the Time Warner network at some point the packets move from the ATT network to the Time Warner network. From my experience in networking ATT would want to get my packets onto the Time Warner network as fast as possible using the smallest number of ATT routers. ATT would be thinking why utilize our network when the… Read more »

Michael Hightower
Guest

That’s a really astute observation, JayCee (sp?). And you are definitely correct that a lot of content is served by TWC servers. As an example, at one point all of HostGator’s content was provided via the TWC network, and they host a buncha sites. (I don’t think this is the case anymore, but I could be wrong.) That’s a very intriguing idea, though, doing metering at the handoff. My understanding is that that happens to an extent right now. The ISPs are consumption billed at the handoff to the backbone (e.g., TWC to Level 3). So even though they have,… Read more »

Smith6612
Member
Smith6612

I’ve noticed the same thing take place with a lot of my non-in network routing with both Verizon and Frontier. Basically, within 4 hops I’d typically would be on another provider’s network such as Level3, where I’ll take that network until I hit the datacenter or the datacenter’s network, or until I need to take another network. I do notice though that with many of the sites I visit, I do in fact remain on my ISP’s network (Alter.net) even though my ISP’s network is verizon-gni.net . With Frontier, typically once the data has gone through Rochester to New Jersey… Read more »

Oscar@SA
Member

There is noting ironic about the picture.. you must work for TWC… Electricity is billed by the kilowatt hour ( you said something that makes sense)… and no, I don’t have a problem paying for it that way… not because I am used to it… It costs money to generate electricity… “Let’s face it”.. on the other hand, I have never heard of the TWC bandwidth generating plant… Show me one. TWC pays the same amount whether we all use 400GB a month or 30gb a month… They don’t go around turning off routers and switches because there are less… Read more »

Michael Hightower
Guest

I used to work for TWC, yup. And before that I worked for a large bank. After TWC I worked for an educational firm. And now I’m a partner in a small business and am broke as hell because I’m trying to make this business work. The point of that is that I’ve got a sense of perspective on what TWC does, not just as a former insider, but having been in a number of disparate fields. You make a good point that the energy company is producing the energy whereas the cable co’s do not produce the content. Perhaps… Read more »

Oscar@SA
Member

Dude… you used to be a trainer at TW.. and here you are trying to “educate” us… I think you are still working for TW since you can’t make any $$ on your business as you stated before…. I have never heard of Kaplan financial.. maybe big in Chicago.. You should write a song about TW and their BS since you have a music degree; then, maybe then I can watch it on YouTube and pay TW extra for doing it…… better yet, make a short film and once again I can pay TW extra for watching it on YouTube…… Read more »

Michael Hightower
Guest

Heh! I wish I were still working for TW, it was a really nice company to work for. (Honestly.) Kaplan Financial is a part of Washington Post, and they’re a lot more dysfunctional than Time Warner. My little new company has some terrific ideas, but is severely undercapitalized. But, yes, I was a trainer at TWC and my job was to train our sales folks on the TWC products. When you get down to it, instructional designers are investigators (and analogy-makers). We try to find the actual breakdowns in knowledge and attempt to supplement them in a way that people… Read more »

BrionS
Editor

One of the biggest problems facing consumption-based billing, despite what people may feel entitled to or the analogies they come up with, is there simply is no way at this point to only pay for what you *intentionally use*. Ads, malware, automated attacks from bots, random pinging, and various other forms of involuntary bandwidth consumption erodes away at a user’s paid-for content allocation. This is unfair on its face. To go with the utility analogy the industry loves to toss around, that would be like other people (and automated systems) taking my electric, water, and phone in small but constant… Read more »

Michael Hightower
Guest

Hey Brion, “One of the biggest problems facing consumption-based billing, despite what people may feel entitled to or the analogies they come up with, there simply is no way at this point to only pay for what you *intentionally use*.” This is absolutely a problem, and something that needs to be factored in. It’s not like that amount of data is going to decrease. This, perhaps, should be added to the list of givens. As far as spammers and hackers are concerned, it’s certainly a recognized problem. Folks are dealing with that around the clock. “As you can see, this… Read more »

Rick
Guest
Rick

Discussing the merits and methods for C&T is a total misdirection of the underlying issue. HSD consumption is a hoax. There is nothing being consumed in the delivery of HSD that has any real marginal cost. We pay our monthly fees for access to the infrastructure, which includes maintenance, service, support and upgrades to the network. The current billing model provides sufficient revenue and margin to pay all the costs of delivering HSD, DOCSIS 3.0 upgrades, maintenance, support and administrative overhead…with plenty of profit left over. We have been over this again and again. There is NO justification for Caps… Read more »

Michael Hightower
Guest

“HSD consumption is a hoax.” This is what I find frustrating, because there is a combination of illogic and short-sightedness here. If HSD consumption is a hoax, why did the cable companies recently upgrade their network? You can say that it’s to handle voice (which is data), but they upgraded it beyond the capacity required to handle voice. Why would they say that their network is viable for the next 10 years, but not say, “Our network will be viable forever!! Wee! Thanks, technology… Thechnology.” Why aren’t you using the same computer from 10 years ago? I mean, by this… Read more »

Rick
Guest
Rick

I will try and be very clear about this. TWCs CURRENT HSD BUSINESS MODEL PRODUCES SUFFICIENT REVENUE, EARNINGS, MARGIN AND PROFIT TO SUPPORT THE ONGOING COSTS OF MAINTAINING THE HSD INFRASTRUCTURE, INCLUDING FUTURE UPGRADES (e.g. DOCSIS 3.0). Consumption costs are not a material (excuse the pun) factor or prime variable in the equation. Do you not understand that there is no discernible per bit cost to transfer data, because nothing is being consumed, produced or depleted; unlike water, electricity and gas. SUMMARY: Caps & Tiers are simply a money play; they are not required, as demonstrated by the current business… Read more »

Michael Hightower
Guest

Well, okay. Let’s give it a try. DOCSIS 3.0 Rollout Upfront Costs: These are, of course, severely ballparked. But let’s see what happens: CPE costs: Upgrades to existing CPE – $82.25M (Est. 50% will require replacement – 8.6M subscribers, minus 3.9M voice customers, so 2.35M modems will need replacing. Approx. cost is $35/modem.) Truck rolls to deploy new CPE: $47M (@ $10/hr/tech, 2 hours per customer [including driving time, breaks, etc.]) Customer support during transition: $4.98M (Assume 20% of customers will experience problems resulting in CSR times of 30 min./customer @ $8/hr [$1.88M], 33% will require truck rolls at same… Read more »

Rick
Guest
Rick

OK. Let’s take another look at the 2009 10-Q. HSD revenues for 2009 show a quarterly increase of 11% from $0.994B to $1.101B. Based on this trend, projected HSD revenues for 2009 would be $5.19B. So, with the assumption that if TWC implemented DOCSIS 3.0 on a nationwide basis, their revenue growth would be impacted positively. More people would be willing to pay more for more speed. The cost of delivering HSD decreased by 18% in the 1Q09 from $0.040B to $0.030B. That represents an annual reduction of at least $0.040B ($0.12B down from $0.16B) Let’s take your DOCSIS 3.0… Read more »

Michael Chaney
Member

Here…..I’ll save TWC the $80k for deployment training:

1) turn off old cable modem
2) unplug cable
3) remove old cable modem
4) place in new cable modem
5) plug in cable
6) turn on new cable modem

Man….I wish I could have got a cut of that $80k. Oh, and any tech that takes two hours to perform these steps should be fired.

Also, what are the cost SAVINGS to TWC by significantly reducing or preventing node splits by upgrading to DOCSIS 3.0?

Michael Hightower
Guest

Huh, we reached the end of being able to reply. Wow. Since it just came in: The 2 hours assumes that the techs don’t teleport to their service calls. The training costs are for training the divisions on new procedures and policies. Okay, so back to Rick: To double-check your figure, I looked at the 10-K. ’08 HSD revenue was $4.16B. That comes out to $4.61B assuming an 11% increase. So, we’re both doing goofy math somewhere, but we can safely say that $4.61B is the bottom end. It’s close enough to the $5.19B you cite, for these rough numbers… Read more »

BrionS
Editor

500 GB/mo it pretty darn high. I understand it’s possible to hit if you try, but barring people leaving their home movie collections on BitTorrent all day, every day that’s a limit that’s unlikely to be hit by the vast majority of users today (and probably for the next year or two depending on the Next Big Thing Online). I’ve been monitoring my bandwidth for almost 2 months now and it works out to somewhere between 32 GB/mo and 40 GB/mo for what I consider “normal” usage. This includes web surfing, some streaming video (not every day and not more… Read more »

Michael Hightower
Guest

You kinda expressed my point, actually, Brion. Although 500GB/mo is pretty high right now, it’s not unimaginably high. Some people are hitting it, but most aren’t. You said you’re around 40GB/mo, which is less than a 10th of this theoretical break-even point. It’s plausible to me that 5 years ago you were probably at 4GB/mo. And 10 years ago at 1GB/mo. (Actually, that sounds optimistic). 2 1/2 years to 400GB for you? That doesn’t seem implausible to me at all. Here’s a reasonable case in point: As more content is being developed by the consumer they’re going to be exchanging… Read more »

BrionS
Editor

Not to be nit-picky but speed = bandwidth. Increased speed will allow for increased content demand and content will require greater speeds (bandwidth) to access in a reasonable time frame because of its size. Put another way, you can download you 68 GB over a 10 Mpbs connection but you wouldn’t want to — it would take a very long time. You’d prefer to download it over a 50 or 100 Mbps connection to reduce the wait. Streaming HD, video game downloads from Steam, and collaborative projects with large files are a few examples of extremely large content that begs… Read more »

ralfvin
Guest
ralfvin

We pay TWC to provide the pipe, not the content. TWC does not create, manage or modify the content that is delivered via their pipe. The money we pay TWC is used to maintain the pipe, which includes system management and upgrades (i.e. DOCSIS 3.0). TWCs client base and revenue continue to grow year after year, as do their profits. Cap and Tier is simply a money grab. TWC will rue the day they institute caps, because their client base is well informed and will drop service like a hot rock. All the “re-education” plans, spin-meisters and dis-information campaigns will… Read more »

Michael Hightower
Guest

Actually, if you’ve noticed, I haven’t painted cap and tier in any particular way. Rather, I’ve argued against some of the points that are used against cap and tier. You say that my arguments fall flat when confronted with knowledge and logic. Is this the same knowledge and logic that uses revenue as a talking point? Or perhaps the same knowledge and logic that implies pulling one bit through the pipe is inherently the same cost as pulling one Gb through the pipe? If that’s the case, I’m very pleased to be on the side of ignorance and irrationality…. By… Read more »

Rick
Member

Absolutely amazing! You are a true spinmeister. I’m completely fascinated by the abject arrogance of TWC and its minions to assume the public requires “re-education” and is incapable of disputing the plethora of mis-information continually spewed to justify its money play. FACTS? OK..lets do it! Actually it is not a 10-K for Q1′09 it is a 10-Q, which is a quarterly filing. 10-K’s are filed annually at the end of the year. Regardless, let’s dig in. Time Warner’s 10-Q is was filed on 04/29/09 for the Period Ending 03/31/09. My reference is to year on year increase in revenue and… Read more »

Michael Hightower
Guest

First, to be a spinmeister one needs to have a vested interest in the thing in which they are spinning. Barring the well-being of some friends who work for TWC, I honestly don’t care what happens to the company. If everyone canceled their service because of this… I’d hope my friends could get other work. But, mistakes were made: Yes, it was a 10-Q, not a 10-K. Sorry about that, had 10-K on my mind since that kept being thrown around. Revenue increase: Whoops, 11% not .7% as I said. I mistyped “1001” and not “1101” when I did my… Read more »

Rick
Member

No need to get back on…it can be dizzying. I completely agree that a 10-Q does not provide sufficient data to accurately assess the magnitude of margin or profit associated with HSD revenues. Suffice to say that the current HSD business model without Caps & Tiers, produces financials that are very positive and would easily support a sustainable standalone business. The need or desire to subsidize failing business units is understood, but will not be tolerated nor paid for by a money play on HSD. TWC needs to recognize that the world is changing and that cash cows die and… Read more »

preventCAPS
Guest
preventCAPS

And the people say “amen”

Michael Hightower
Guest

Phew, because I was getting barfy on the merry-go-round…. Regardless, you said, “Any attempt by TWC to prop up losing business propositions by extorting monies from HSD customers with C&T will back fire and end up killing their golden goose (HSD customer base).” Which got an amen, and I’ll partially second that. So there’s an opportunity here to try to puzzle over something. I’m going to give a set of givens and let’s see if we can find an answer. They might not listen, but it’s better to try to come up with a solution for their business than to… Read more »

Rick
Member

My responses are imbeded… Givens (these are as basic as possible): 1. Today’s technology will be inadequate for tomorrow’s content >>RICK: If history predicts the future, this is hard to argue with. 2. Online content will increasingly become the predominant medium >>RICK: Online is but one method, whether it predominates in the future is yet to be seen. 3. New methods of content delivery will evolve >>RICK: If history predicts the future, this is hard to argue with. 4. Individuals will become increasingly important in the creation of new content (e.g. YouTube) >>RICK: Safe bet from my perspective And here… Read more »

Michael Chaney
Member

1. Customers don’t care about services (e.g., speed) as long as they get the level of service they are expected (e.g., no blackouts, no massive slowdowns)……. at a reasonable price!

Uncle Ken
Guest
Uncle Ken

“Cap and Tier is simply a money grab. TWC will rue the day they institute caps, because their client base is well informed and will drop service like a hot rock.”

And run to where?

Uncle Ken
Guest
Uncle Ken

Naturally I think and comment in small sections. The minute I hit the submit button I think of something else I wanted to say. STC tried DSL and did not like what they saw. Huge cost, slow speed, and a couple of years of agreements and no guarantee on data amounts allowed. We have no place to run and it is looking like we will never have a place to run to until we get the politicians out of bed and out of our pockets. Mostly only 4 states/ cities/ areas are showcased here but in reality it is going… Read more »

Rick
Member

Anywhere but TWC.

Uncle Ken
Guest
Uncle Ken

Rick: That is easy to do if we had other options to go to. We do not. This morning the first comment I read was from Mr. Hightower. Im seldom lacking for words but I was stunned did not know what to think or say and thought about it all day. The newer comments made for an interesting day of reading. Peaceful arguments made back and forth on the subject from people way over my league. Most everybody here saw this coming. Streaming video is the killer followed by gaming and audio the least offensive. You’re in and out in… Read more »

Rick
Member

Hi Ken: I agree we need other options. If TWC goes the Cap & Tier route I will go to Frontier, dial-up or satellite to send a message. I will also cancel all of my other TWC services, which total >$125/mo. Money was the original issue, but since TWC has demonstrated such arrogance and total disregard for its customer base, it is now about principle. I for one, will not be be manipulated, used and abused by monopolistic practices. I know I am only one voice, but I am beginning to hear a very loud din from the community. We… Read more »

Michael Hightower
Guest

Well, Rick… I’ve got a secret for you as well. Actually, this is quite genuinely a secret. I heard from a little mouse back at your favorite company: DOCSIS 3.0 is being rolled out. I don’t have more information than that, but I do have something that might upset you: It’s being rolled out to handle the more advanced data functionality. This is good and bad. That means QoS (yay!). That could also mean packet prioritization (yay! and boo!). It also makes capping a lot easier (boo.). No idea on a deployment schedule or anything like that. Also, no idea… Read more »

Michael Hightower
Guest

Nice thoughts, Uncle Ken. And also very astute bringing up the bogus “hey, no ads on cable!” nonsense they pulled. I whole-heartedly support being suspect… just so long as we also stay reasonable and remember that businesses are not inherently evil. (In general, I think stupidity happens way more often than wrong-doing.) As far as there being concerns from the cable industry about the amount of data usage: They are concerned, and reasonably so. But, the consumers get mixed messages as evidenced on this board. Britt says to the shareholders, “Hey, nothing’s wrong!” And then says to the customers, “Dude,… Read more »

Michael Chaney
Member

Well here’s how I see it as a consumer……if you call all your “divisions” by the name “Time Warner Cable”, then ANY action taken by ANY one of them is seen by the consumer as the unified voice of TWC.

Michael Hightower
Guest

You’re right, and that’s why it’s, in my opinion, a bad idea to be as decentralized as they are.

Brion
Guest

“Notice how LA and the Ohios have been curiously absent from all of this stuff.”

Perhaps it has something to do with competition? A quick search for “broadband access Los Angeles” (and Ohio) turned up Comcast and TWC in LA and Verizon and TWC in (parts of) Ohio. Ohio’s a big state, so that’s sort of like saying TWC competes with Verizon and Cablevision in NY, but we all know that’s only NYC – not Rochester.

Michael Hightower
Guest

The cable companies don’t compete with each other, though. The only way to choose your service provider is to choose where you live.

As an example, here in Chicago we’ve got Comcast and RCN. I can’t get RCN where I live, but when I first moved here I had RCN and couldn’t get Comcast.

BrionS
Editor

There is some competition, most notably in NYC. Even in San Antonio consumers can (generally) choose between AT&T’s U-Verse and TWC’s RoadRunner. However it is most common that cable companies don’t “overbuild” leaving effective monopolies everywhere.

Uncle Ken
Guest
Uncle Ken

Hi Rick: I understand your feelings. Im the same way I will not be pushed around. I have and interesting situation. I live in a single house with two people. One has cable TV and no computer I have a computer and no desire for cable TV so I just tap into the line. I pay my 39.95 a month and am happy as a clam at the moment. Downstairs is paying something like $150 a month for the TV I do not use. I have a TV tuner card but seldom use it besides it really is less then… Read more »

Wycked Knight
Guest
Wycked Knight

Uncle Ken, I’m in the Los Angeles area the San Fernando valley to be more accurate. Some buildings here do not allow for dishes, so that leaves 2 options for t.v. Uverse which is not widely available here or TWC. As for internet Dsl or Cable through TWC/RR. That’s it. When TWC bought out adelphia here they never upgraded a damn thing, and claimed they did. Charter a few years ago in my old area of Burbank, whent and ran fiber from the pole to the back my my old apartment building. This while they were losing money do to… Read more »

Uncle Ken
Guest
Uncle Ken

@ Mr. Knight. I can see the problems of not allowing dishes on buildings I assume you mean rental or commercial buildings. I am so surprised LA is not considered a city of importance to the internet market. It may be wide but it has lots of population and should make for a huge potential customer base. I also understand California is going through some rough times economically right now but that holds true for the entire country. Personally I would go with the densely populated areas first. There is a lot of money in LA even at times when… Read more »

Wycked Knight
Guest
Wycked Knight

Yes i did mean residential. with only AT$T and TWC those are the only options here. L.A. has been ignored for about 10 years now maybe longer. There is no compation as people in my building have told me they can barely get 1Mb on the downloads speeds with AT$T there is some of the other providers for DSL but you still need to get the phone line through AT$T and there is not much of a saving if you go that way. for faster speeds above the 1Mb mark your only choice is TWC/RR. only good realiable DSL out… Read more »

sometimes insighful
Guest
sometimes insighful

the problem as i see with people who argue for tiered pricing is that they dont understand the network as a whole. as i was reading all the posts here, mike hightowers stick out as a perfect example. He has alot of pretty numbers but skirts the most basic facts. yes new hardware costs money, but trying to rationalize that expense as a reason to goto a tierd pricing system is idiotic at best. a 1 time cost to improve their business as a whole is not a reason to penalize the consumers. the cost difference between max usage of… Read more »

Oscar@SA
Member

Amen…

Uncle Ken
Guest
Uncle Ken

@ insightful “its amazing how stupid these companies think we as consumers are” I would not call them stupid but TW is playing on the backs of people that are unaware, do not understand, or do not care. They will when there bill doubles. I can not put a percentage on the number of people that go out and buy a fully loaded Dell or Gateway and have no clue what is going on inside or outside…. They just expect it to work. They are unaware of the issues being played out as we speak and the results of those… Read more »

Brendon VA
Guest
Brendon VA

Its time we started an organized protest. I’m in Rochester and I would be more than happy to march out front of Time Warner’s offices with signs educating people. We need to strike when it comes down to it. We are passively complaining and doing nothing, expect maybe calling up and saying, “this is icky and i dont like it.” I myself have called and complained but they are not going to get the message. We need to have a mass cancellation as protest to show them that we, the consumers, are serious. You know they will be shaking in… Read more »

Michael Hightower
Guest

Hey Brendon, you might want to edit the text on your Facebook page: Starting soon, Time Warner Cable will start to place bandwidth usage caps on their service. In today’s online media, games, music, and especially VIDEO gobble up the majority of bandwidth usage.

You’re kinda arguing their point. Just FYI.

(Also, “In today’s online media…” is confusingly worded. Perhaps just, “Today’s online media…”)

Brendon VA
Guest
Brendon VA

haha oops. I can’t say I ever even realized that. Thanks for posting that.

Anyways, what does everyone think of making a national “Drop Time Warner” day? I think its a great idea…

Diane
Guest
Diane

I received no message on my bill and even went backwards looking for one. There has been nothing. I just went to Time Warner’s website,
http://help.twcable.com/twc_sub_agreement.html

Sure enough under section 6..there it is. I don’t know when that happened but I am assuming because I have already paid my bills, I have unknowingly agreed to this Bull!

Diane
Guest
Diane

If it is already on Rochester’s webpage under user agreements…does that mean I have already “agreed” to their ridiculous Terms????

Section 1 says TWC will notify me of any significant change(s) in this Agreement, the Terms of Use, the Subscriber Privacy Notice or any applicable Tariff(s).

Who determines what “Significant” is?

Uncle Ken
Guest
Uncle Ken

Diane: That is easy TW decides what “Significant” is. To them this is just a drop in the bucket and suppored by past TOS’s that said we can change anything we want to anytime we want to. I dont even know why they bothered to tell anybody because most people have two choices caps or no internet. A use meter nice way to smell better to the public. Unless something big happens they will stick everybody with 5 gig and you will pay more for more. Im not paying $20 a gig to anybody for a basic month.

Michael Hightower
Guest

Did TWC ever quote $20/GB/mo.?

If so, that’s absolutely insane. If my calculations are in the right neighborhood (http://bit.ly/tWVUZ) then that would be a totally bonkers 20,000% markup!!

Wait a second, if they’re implying 5GB/mo., and you’re saying $20/GB, is your broadband bill $100/mo. for HSD?

Uncle Ken
Guest
Uncle Ken

Mr. Hightower: I was thinking more in theory. Some say they are thinking of $150 per month for a limitless connection I was thinking a more a conservative line where 5 gig basic would be $100. It is crazy but I see it coming. There is no end to what they may be thinking. Reminds me of a restaurant that is about to go out of business and decides the free pickles have to go like it would save them. I pay $40 right now but an extra $60 is not out of the realm of possibility given the options… Read more »

Uncle Ken
Guest
Uncle Ken

And Mr. Hightower I do not think there is anything wrong with you math. Some may disagree with how you use it but that is the beauty of this site. Everybody has an equal say and their own ideas, nothing wrong with that. I read everybody’s comments so that I can be informed. Most of you people are way over me so I depend on you all. Im getting older now so technology not only sneaks by me it jumps over me.

Uncle Ken
Guest
Uncle Ken

proposals are like wet cement…. until it drys it can be moved around and I think they add alot of water. What they said last month and what they do a month from now are not going to be the same. You can count on that. They have no reason to lock themselfs into anything in these cities.

Bob F
Guest
Bob F

I think its time we have municipal fiber to the home. You only have 1 water company to hook your house up to. You only have 1 sewer company to hook your house up to. You only have 1 electric power line to hook your house up to. Why not have 1 fiber optic communications line to hook your house up to? Then companies can provide ISP service over those lines. How it should all exactly work? Who owns/manages the switches? I don’t know. But it is dumb, redundant, expensive, and wasteful to have multiple companies running lines on the… Read more »

Uncle Ken
Guest
Uncle Ken

Bob I think you would love fiber. I know I would. With fiber you could run your house from the moon. Trouble is copper was there first but it is beat up and showing its age. Then somebody came along and spent a bundle to run coax line and is also showing its age. Case in point the last time they ran a new line to the house here last year it was so brittle the insulation just cracked away from the shield braid. Now another company will have to run fiber. The big mystery is why a 2 horse… Read more »

Uncle Ken
Guest
Uncle Ken

So what Bagdad bob is back after an extended vacation in Japan. I said today’s terms are not tomorrows. Conventional warfare is not going to work…. It is going to have to get messy as no one is going to back down unless regulation takes over. I think they should get remote starters.

Uncle Ken
Guest
Uncle Ken

Prevent: There are not that many heavy users. They just want more money from everybody and this is getting boring. The lobby bucket is filling up faster then subscribers.

Al
Guest
Al

Get the media involved?

Just who the heck do you think Time Warner is?

Here’s a hint. The Media is not on your side, The Media IS the other side…

Privacy is dead. Get over it. You live in a Socialist Republic. Don’t blame me, you voted for him.

JM
Guest
JM

Such an outrage, obviously a prelude to going through with what they said they had shelved … this is the behavior of a monopolist.

Still catching up on the latest. 🙁

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