Imagine the following…

You are sitting down to watch your favorite show (if you have good taste perhaps it’s something like Battlestar Galactica or Fringe). Thirty minutes in at the mid-way point of the show a message box pops up on the screen, saying:

“Your monthly allocation of 150 hours of television viewing has almost expired. Additional blocks of 10 hours are available for the low price of $1 / 10 hours which will be reflected on your next bill.”

There are two buttons you can push at the bottom, one to turn off your TV and the other to accept the additional charges and continue watching your show.

For most people the above example would be absurd to the point of idiocy. Any provider trying to enforce such a policy would be laughed out of town and their competitors would be literally falling over themselves to sell you “unlimited TV viewing” at a similar price point.

Now, change your television usage in the above example to your Internet bandwidth usage and you have what is beginning to take shape in today’s broadband Internet market.

Several companies, including AT&T, Comcast and Time Warner Cable are either actively trialling so-called “metered broadband” in test markets or have rolled it out to all of their customers already. So what can you do about it if you are “lucky” enough to be in one of these test markets or instead use an ISP who has already enacted bandwidth caps on their users? Simple – tell them to take a hike.

Accepting smaller caps now in the hope that they will lead to higher caps later is something that the companies want you to do. By doing so you have already bought into their thinking that “caps = good” or, at the very least, “caps = bad”. The only way to ensure that this is a not a victory of degrees is to simply switch to another provider in your area, one that does not have any bandwidth caps. And when you call your original provider to cancel your service, make sure that you tell them that the bandwidth caps on their Internet service are the specific reason you are canceling.

Once enough people start doing this they will begin to get the message. At that point they will have a choice – they can either continue with their policy and have customers leave to go to other providers – OR they can draw a line in the sand, abandon the idea that they need to nickel and dime people and fall back into the good graces of the individuals who pay their wages, their customers.

The years 2008 and 2009 have seen many advances in the area of high-bandwidth HD content. Hulu offers literally hundreds of hours of television available online for free, most of it accessible with HD streams. YouTube is now also beginning to promote HD video on its site, and they are certainly not the only two providers doing this. HD high-bandwidth content is becoming more and more prevalent, but there’s no use in the content being out there if you cannot access it without incurring additional charges from your ISP. And as for digital distribution of software, games and applications purchasable on services like Stardock and Steam, they become much less attractive when you figure out that the $20 game is going to end up costing you closer to $30 by the time you have factored in your overage bandwidth charges for downloading your content.

The future will rest upon your shoulders. If you look the other way and think to yourself, “This isn’t so bad, I will never be close to the caps so it won’t affect me” and then a couple of years down the line find yourself paying overages to your cable or DSL provider then you can have no complaints. Instead, write now to your local municipal councilperson, your state representative or state senator and tell them why caps are a bad idea. Tell your friends and family, and have them tell their friends and their family, and so on.

Remember…

Only you can prevent forest fires, and only you can reject metered broadband.

Just say no!

[Editor’s Note: Ironheart is our first contributing author here on StoptheCap! This project is a joint effort, and we welcome those who would like to contribute their own articles for the site.  Please consider registering for an account and using the contact form to request more information about writing articles here and join the team!]

Another day, a new story.

It’s always nice when a vice president of public relations for Time Warner decides to speak for Earthlink. Of course, Earthlink itself has not been doing any speaking themselves on the corporate level despite several attempts to reach them.

Earthlink forced to cap its service because Time Warner said so?

Brad, one of our regular readers, has been engaged in an e-mail back and forth with the Time Warner crowd trying to sell the “benefits” of their Internet rationing plan, and finally got a one sentence answer to a question he had to raise repeatedly.

Q. Are the caps going to apply to Earthlink service riding your infrastructure?

A. “Earthlink customers will be included.”

Earthlink customer service agents have insisted Earthlink was not going to cap their service, but as we indicated last week, customer service representatives are only reading from instructions handed down by their bosses.  We wanted to receive direct confirmation from Earthlink before we could definitively assure our readers on the question of caps with this alternative provider.

If Earthlink has their own contract for a provisioned level of service from Time Warner, it will be interesting to see if there is any push back from Earthlink.  The presence of Earthlink on Time Warner’s network came about from a settlement with the federal government in 2000.  Under the terms of the settlement, Earthlink was supposed to be granted the freedom to set its own pricing tiers.  The New York Times reported on the agreement and its parameters.

After the AOL and Time Warner merger deal, the companies said they would allow competition on Time Warner’s cable systems. But rivals complained that the terms they offered in initial discussions were unusually harsh. For example, the companies demanded that other companies not price high-speed access lower than AOL Time Warner’s own service.

Mr. Betty of Earthlink said that Time Warner had eliminated many of those restrictions.

Under the proposed agreement, he said, Earthlink can buy high-speed access from Time Warner and resell it to Earthlink customers at any price it chooses on its own bill. In reality, he said, that Earthlink’s service will probably cost about the $40 a month that Time Warner now charges for Road Runner.

Interestingly, with Mr. Dudley now apparently speaking on behalf of Earthlink, this may open a new question that the Federal Trade Commission may want to answer.  If Earthlink is allowed to set its own pricing, why is Time Warner now telling customers Earthlink will be capping?

While this news is not an absolute confirmation of Earthlink’s policy going forward, I’d say it rings warning bells for customers who absolutely need cap-free Internet access.  Frontier under a Price Protection Agreement is looking more and more like the safest bet in Rochester, and we’re still compiling a list of alternate providers in other affected cities.

Meanwhile, customers of Earthlink might want to go to Earthlink’s website and conduct a “support chat session” and ask them again about caps, capture the text from representatives insisting there isn’t any, and hang on to them.  It may provide some useful leverage later on, and StoptheCap! would like to document this whole sordid affair.  Earthlink themselves may have a case before the FTC if their original agreement is now being shown to be worthless in practice.

As the usage cap is many months away from being implemented, you can still drop Road Runner and hop onto Earthlink for the next six months and pay $29.95 a month for service, which will save you at least $10 a month, and feel the satisfaction of not supporting Road Runner or Time Warner’s price gouging.

We will continue to ask Earthlink corporate officials to comment.

Talking Points

One of the grand mysteries of the entire “broadband can no longer be unlimited” argument is the incredible range of usage caps cable operators and telephone companies suggest are required to keep them from going the way of the U.S. auto industry.  Broadband providers doing capping will swear that their cap model is the only one that is “fair” and “protects consumers” and “allows us to make required upgrades.”  Once those arguments are recited in a unified chorus, corporate spokesfolks zig zag their way all over the place explaining why their 5/40/150/250GB cap is fairest of them all, while trying to ignore those providers who are quite happy and profitable with no cap at all.  The customer is the last person they ask, because they know the answer from most will be, “no cap at all.”

This bring several questions to the table:

• Can you provide us with the raw data that illustrates there is a major problem with the current unlimited broadband model and that it cannot sustain profitability except with usage caps?
• Can we obtain independent analysis of that data by a third party and/or put together a conference of business, public, and educational groups to consider new possibilities to deal with what is rapidly becoming a utility-type service?

The answers to those questions have been, by all major industry players, an emphatic “no.”  You are required to take their word there is a problem and their solution is the only one that works.  And, for that matter, take their word they have an infallible way to measure and bill for usage under a consumption based model.  You can independently verify your usage all you want, as long as you pay the bill they send you with their own usage measurement.

It’s not that we’ve been the only ones asking.  Broadband Reports has the same questions we do, and asked for the hard data to prove that flat-rate pricing is simply untenable going forward.  And here was their response:

“We’ve shared our analysis of our data. We’re not going to share raw data…just not going to happen.”

Okay then, I guess that settles that!

That provokes us to first ponder whether there actually -is- a crisis in the flat rate broadband industry at all?  A press release or a claim by a company official isn’t evidence of anything.

Assuming we will never get a satisfactory answer to that question, how about these:

• Why can a company like Time Warner be unable to survive with flat rate pricing in Rochester, Austin, San Antonio, and Beaumont, but can deliver faster speeds with no cap in cities where they face strong competition from uncapped providers?
• If the company was interested in an honest assessment of marketplace reaction to usage caps, why not test in communities with the most robust and challenging competition?
• Why should customers not be deeply offended for being involuntarily turned into guinea pigs and be expected to pay more for a dramatically reduced level of service?
• Why is the nation’s largest cable operator Comcast able to deliver service with a 250GB limit at their current pricing, Verizon FIOS is able to deliver a product line twice as fast as Time Warner with no usage cap at all, and the nation’s second largest cable operator Time Warner needs consumers choosing a meager 20GB tier to not only pay $10/month more than their current unlimited service, but also pay a penalty of $1 for every extra GB?

That old axiom about pricing what the market will bear comes to mind, particularly considering the fact Time Warner is only interested in “gathering facts” from cities where the competition is limited.

The fact the Internet of the last few years is becoming an increasing threat to the video side of the cable industry may also have something to do with it.  That will be the subject of an upcoming Talking Point.

Usage Caps on Selected Broadband Service Providers

Charter Cable – Cap starts at 150GB for “light user” plan, removed entirely for deluxe plan (60Mbps service) – Violators are asked to select higher tier service or face account suspension – No meter yet

Comcast Corporation – Residential accounts limited to 250GB usage per month – Violators face account suspension – Tracking meter provided

Time Warner Cable – Residential accounts limited to 5-40GB currently, Violators face $1 per GB overage fee – Tracking meter to be provided

Verizon FIOS – Residential accounts are unlimited.  No violation, no tracking meter required

Here’s a project everyone can work on tonight.  Place your rebuttals in the Comments section and I’ll compile them along with my own thoughts later this evening and we’ll have something everyone can fire off to Mr. Simmermon.  By the way, in case you were wondering, color me unconvinced.  Hat tip to a friendly Time Warner employee who passed this along to StoptheCap!

Statement From Time Warner Cable’s Chief Operations Officer on Tiered Broadband Trials

Time Warner Cable customers,

We have heard a lot of feedback and commentary about our upcoming expanded consumption-based billing trials in Texas, North Carolina and New York state. Some accounts have even characterized our plans as punitive. Nothing could be further from the truth.

We continue to make improvements to the infrastructure which will allow us to offer the following new services in the tiered broadband test markets:

1) Wideband service (DOCSIS 3.0) — speeds up to 100mbps, as available

2) Higher speeds for existing standard and turbo services

3) Powerboost to all standard customers

With regard to consumption-based billing, we have determined that as broadband usage and penetration grow, there are increasing differences in the amount of bandwidth our customers consume. Our current pricing plans require all users to pay the same amount, whether they check email once a month or download six movies a day. As the amount of usage has dramatically diverged among users, this is becoming inherently unfair and not the way most consumers want to pay for goods they consume.

When you go to lunch with a friend, do you split the bill in half if he gets the steak and you have a salad?

However, we are not conducting these tests in a vacuum. We have heard customer feedback, and understand that a 40 GB tier seems low to heavy Internet users.

We are developing a “super – tier” now that allows for up to 100 GB of broadband usage per month in all of our test markets. We haven’t confirmed pricing details as of this moment, but you have my word as Chief Operating Officer of Time Warner Cable that we will make this tier available to our customers.

We’re also providing a “gas gauge” tool to our customers so they can see how much bandwidth they’re using as they go along, and to make it easier for them to move to the tiers that best serve their needs.

Please bear in mind that this is still a test. We are approaching this as a test because broadband consumption and the internet itself continue to evolve rapidly and in ways no one can foresee. As we continue to hear from our customers — and as broadband consumption continues to change — we will adjust our tiers to make sure that we offer something for every family. We want to allow households to pick the data plan that works the best for them.

Furthermore, I am convening a series of meetings this week to develop plans that will allow customers to choose among tiers that provide tradeoffs between speed and consumption. If one family prefers to have lower download speeds but a higher data tier, or vice-versa, we want them to be able to make that choice.

We’d like to make enough speed and data tiers available so that it’s possible for customers to reduce their monthly Internet bill based on the choices they make. Obviously this is still in the planning stages and details are fuzzy, but this is a priority for me this week.

I think that such pricing options are not only fair, but also will actually encourage more use of broadband overall.

Your feedback is important to us during these tests, too. We encourage you to email your reactions and comments to us at [[email protected] ].

We can’t respond to everyone individually, but we will review your thoughts and comments internally and use them to try to improve our services and options going forward.

Again, thank you for your comments and input. We hope this helps to explain why we think testing new pricing models that give people greater choices and control over how much they pay for internet service is a positive development for our customers.

Landel Hobbs
Chief Operating Officer
Time Warner Cable

For questions, contact:

Jeff Simmermon
Director, Digital Communications
Time Warner Cable
[email protected]
Twitter: jeffTWC

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.”