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!

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.”

“Customers could save money…” – Alex Dudley, Time Warner

Road Runner High Speed Internet Cost Review
Tier $/Included Traffic Allowance = Your Cost vs. Theirs

Your Monthly Price      Per GB     Time Warner Pays Per GB¹
$29.99 (5 GB Tier)      $ 6.00            less than 10¢
$39.99 (10GB Tier)      $ 4.00            less than 10¢
$49.99 (20GB Tier)      $ 2.50            less than 10¢
$54.90 (40GB Tier)      $ 1.37            less than 10¢
IYHTAYCAI² (100GB Tier)   N/A             less than 10¢
each additional GB      $ 1.00            less than 10¢

¹New York Times, January 17, 2008 – ²IYHTAYCAI = “If You Have to Ask, You Can’t Afford It”/Time Warner has not released pricing details.

Your Money = Their Money - Turbocharged Right Out of Your Wallet At Blazing Fast Speeds!

The current price for Road Runner service is $39.99 per month for unlimited access (slightly higher if you do not have a cable package) in most areas.  The equivalent service level under the new plan tiers would be 10GB per month, based on the chart in the Rochester Democrat & Chronicle.  The “standard service” plan (20GB), which is expected to be marketed to most existing customers, represents a $10.00 per month rate increase.  Are you soaking in the savings yet?

Now a breakdown of what it will cost you to use the Internet for several popular applications (low amount represents $1/GB overage charge, high amount represents cost on economy/lite plan):

• Typical High Quality DVD quality movie streamed online (4GB) – $4-24 each
• High Definition quality movie download (Blu-ray)  (13GB) – $13-78 each¹
• High Definition quality movie download (Blu-ray) (25GB) – $25-150 each²
• High Definition quality movie (Akamai Platform) (9GB) – $9-54 each³
• Netflix TV Show/Movie streaming (1-4GB) – $1-24 each
• Hulu/Joost/Amazon/Megavideo TV Show stream (<1GB) – $0.30-2.00 each
• …to be continued with your input!  Help us inform subscribers of the true costs of Time Warner’s Internet Rationing Plan!

¹Constantine, Resident Evil: Apocalypse, Ultraviolet (+/- 1GB) ²The Fifth Element, Transformers, Casino (+/- 1GB) ³Akamai-distributed on demand movie streaming/“Akamai White Paper – Highly Distributed Computing is Key to Quality on The HD Web”

From Our Readers:

“A RoadRunner Turbo customer downloading at the advertised 15Mbps speed can download 40GB of data in 6 hours. 6 HOURS! That leaves a user paying overage fees for nearly an entire month.” – Nathan

” To take the further, in one month (at full capacity) one could theoretically download 4.8TB of data. Assuming TW’s highest unannounced tier (100GB/mo) is priced at $75 with $1/GB over, 4.8TB would cost approximately $4,835 for that month. Let’s take a much more realistic scenario for a “heavy” Internet user (i.e. lots of Hulu, Netflix streaming, online gaming, working from home, Facebook, uploading and downloading pictures and music, etc.) — we’ll assume 250GB of usage in a single month.

Again with TW’s highest unannounced tier priced at $75/mo, this person would pay $225 per month for usage at that rate [$75 + ((250-100)*$1 = $225].” – Brion

“To update World of Warcraft on a fresh install is almost 3GB.” – Shawn808

“You can kiss off online backup services with Road Runner.  You’ll blow through your cap if you use these.” – BillInSanAntonio

“So what third party IS keeping a watch on the “gas meters” that TWC will place for us to watch our usage? How do we really know that this is correct?” – jsmith

“I not only pay for standard RR, but also Turbo as I want the download speed. Again, sold on this plan by RR and already pay more for it. Our video security is done via the Internet, our phone, our research, our entertainment. We already pay over $100 a month for TW services. Hey TW, is that a banner ad I just had seen on another site trying to sell me cable service? Hummm…Hello…It would have just cost me to download YOUR AD. (Thanks for that.)” – David

“Of course, this pricing plan change only affects residential users, while business accounts will not be bothered by it at all. Which is another sting in the matter, where businesses are probably using it more from all the internet cafes, and wi-fi access points that use TWC. So why are they exempt from being included, and only home users in this time of economic crisis?” – L Smith (Greensboro)

Road Runner customers in Texas who feel for whatever reason compelled to remain with Time Warner after the company implements their Internet rationing plan need to immediately take steps to secure a price protection agreement or term contract with Time Warner for as long of a period as possible.  The reason:  Time Warner has announced their contract customers will be exempt from all usage caps for the length of their contract signed prior to the implementation of the usage capped tiers.  That window may be as short as a matter of days or weeks, so it is critical to be on a term contract or price protection agreement before the existing unlimited service plan is deleted.

A special alert to all Texans impacted by the Time Warner Internet Rationing Plan

Time Warner has also told several reporters that those on promotional new customer or customer retention discount offers will not be exemp from the usage caps, so you should contact Time Warner about whether you need to convert your promotional or retention offer into a term contract.  Contact your local Time Warner customer service center for additional information on how to do this.  You may or may not lose your discounted price.  Please note this will apply to customers in San Antonio and Austin only.

Beaumont customers who signed up as new customers after the company began its usage cap experiment are already bound to those usage caps.  However, pre-existing customers in Beaumont are not, and should inquire about price protection plans or term contracts to preserve their non-capped status.

I am compiling a list of alternative providers for both Austin and San Antonio first, and will then work on Greensboro and Beaumont.  If you live in any of these cities, and would like to assist me in compiling this information, either drop me a note in the comment section or use the Contact button to send me a private message with your contact information.