Congressman Massa is holding his second town hall meeting in the district tonight.  WROC-TV is rumored to be there, so if you are passionate on this issue, and you can go, please do so.  I cannot be there tonight, but by now you guys know what needs to be said.  This may also be the first opportunity to learn about the new legislation he is proposing.  Feel free to report back on the meeting and any links to any uploaded video and we’ll get them up over the weekend.

Friday, 4/10/09 7:30-9:00 pm
Henrietta Fire Dept Training Center
60 Erie Station Road Extension (corner of E. River Road)
Henrietta, NY 14586

Congressman Eric Massa to introduce legislation designed to prevent Job Killing Broadband Internet Caps; Freshman Congressman will fight to prevent high priced burden on families

Rep. Eric Massa (D-NY)

CORNING, NY – Today Congressman Eric Massa (D-NY) announced officially that he is drafting legislation designed to prevent job killing broadband internet downloading caps. The Massa Broadband Internet Fairness Act would prohibit unfair tiered price structures from internet providers. The bill will also address the importance of helping broadband providers create jobs and increase their bandwidth while increasing competition in areas currently served by only one provider.

“I am taking a leadership position on this issue because of all the phone calls, emails and faxes I’ve received from my district and all over the country,” said Congressman Eric Massa. “Time Warner has announced an ill-conceived plan to charge residential and business broadband fees based on the amount of data they download. They have yet to explain how increased internet usage increases their costs.”

Regarding Time Warner’s 4/9/09 statement, Rep. Massa had this to say:

“Time Warner’s decision has the potential to more than triple customers’ current rates and I think most families will find this to be too taxing to afford. Time Warner believes they can do this in Rochester NY, Greensboro NC, Austin TX and San Antonio TX, and it’s almost certainly just a matter of time before they attempt to overcharge all of their customers. And while I favor a business’s right to maximize their profit potential, I believe safeguards must be put in place when a business has a monopoly on a specific region.”

“At a time when millions of Americans have lost their jobs and businesses are struggling, I am compelled to fight against additional, unnecessary burdens placed on my constituents.”

In the past week, there has been a significant uproar in the Rochester, NY area regarding Time Warner’s announcement that they will “test market” a plan to charge customers based on how much they download. The initial proposal was to introduce a 5, 10, 20, or 40 gb/month downloading cap. If customers went over the cap, they would start mounting additional fees.

Then today Time Warner announced a new tiered plan similar to the previous one. However, for a consumer to receive the same unlimited internet that they currently do for around $40 per month, they would be billed $150 per month under the new plan.

In addition to this excessive and disproportionate charge, as internet usage increases by an average of 50% per year, companies setting caps sets a horrible, long-term, precedent. At a time when Americans need to utilize all available assets to improve the economy, limiting internet usage, which this plan would do, handicaps our ability to compete on the global stage. Furthermore, it will have significant stifling effects on start ups and small businesses.

This would also have significant impacts on the agricultural, medical, and educational communities. Farmers are increasingly dependent upon constant exchanges of GPS information to control all aspects of their operations. Medical professionals are increasing their data transfer rates, and patients rely on their ability to continue doing so unimpeded. Finally, educational institutions use more bandwidth every year. In Western New York, students at RIT’s School for the Deaf, who use video transfer software to communicate, would be greatly disadvantaged by Time Warner’s proposal.

As soon as the drafting of the Broadband Internet Fairness Act is completed, it will become available.

Good Friday to everyone. Thanks for the tremendous amount of tips and guest blogging requests we’re receiving. I am going to be running several errands today and into early this evening. I will hope to get caught up with everyone’s email and access requests on Saturday, so please don’t think if you have not heard back from me I wasn’t interested in what you had to say.

I have been working this issue nonstop since April 1st and need to take a break for the afternoon, but don’t worry, I’ll be recharged and ready to ago again this evening.

Remember, if you are so inclined, to let the good folks at Time Warner know their “new and improved” plan is insulting and until they come up with a plan to get rid of the caps, nothing has changed.

Another night spent tossing and turning….  It’s amazing how irritated one can get when they just feel deep down inside they are being played as a sucker.

So I fire up the laptop looking for something that will bore me to sleep in short order.  Since I already had waded through the Bank of America “change in terms” legalese mailing they sent me explaining why they needed to raise everyone’s credit card interest rates, the only other surefire snoozefest was reading Securities & Exchange Commission 10-Q filings.

I consider the fact Time Warner has been on my mind as of late for some reason, so why not start there?

As I scroll through a whole lot of excuses about why AOL has fallen from grace, I finally find my way down to a peculiar passage.

High-speed data costs decreased for the three and nine months ended September 30, 2008 primarily due to a decrease in per-subscriber connectivity costs, partially offset by subscriber growth.

Wait.

High-speed data costs decreased for the three and nine months ended September 30, 2008 primarily due to a decrease in per-subscriber connectivity costs, partially offset by subscriber growth.

Oh no.  I am fully awake now!

I fire up Google.  How can this be?  Did we not read less than 24 hours ago the sob story from company officials complaining their costs were spiraling and they needed more revenue from customers in order to pay for required upgrades?

Thank goodness someone else had braved the even more ponderous 10-K filing and mined these goodies (quoting their findings):

“In 2007, TW made $3,730 Million, on high speed data alone, and then had to turn around and spend $164 Million to support the cost of the network. 2007 total profit on high speed data: $3.566 Billion”

“In 2008, TW made $4,159 Million, on high speed data alone, and then had to turn around and spend $146 Million to support the cost of the network. 2008 total profit on high speed data: $4.013 Billion”

“It cost TW 11% less money in 2008, to keep their network running, than in 2007.”

If you actually spent less on your infrastructure in 2008 (during the incoming tidal wave of those pesky “heavy users” sucking down all those files and videos) than 2007, earned even more last year than you did the year before on broadband, then why are you coming to the consumer in 2009 begging for a bailout?

So is this entire tier “experiment” nothing more than a PR snowjob for a money party, exposed by filings made with the SEC, an agency that presumably would take a dim view of snowflakes falling in their offices. Maybe I’m all wrong.  Or maybe they’ve been wrong all along with this crazy cap scheme.

While Mr. Hobbs was telling consumers about the trials and tribulations of delivering broadband to consumers, he was responding to Saul Hansell in the New York Times (and to investors): ‘He said it was “absolutely not” true that Time Warner’s profits were being squeezed by the cost of heavy broadband users.’

So just how much money does Time Warner need to upgrade their cable systems to DOCSIS 3.0 to fix all this?  The New York Times reports:

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.

The experience in Japan suggests that the major cable systems in the United States might be able to increase the speed of their broadband service by five to 10 times right away. They might not need to charge much more for it than they do now and they’d still make as much money.

The cable industry here uses the same technology as J:Com. And several vendors said that while the prices Mr. Fries quoted were on the low side, 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.

$100!  Yet Time Warner was asking for up to $110 more per month from the “heaviest users” they blame this problem on. And for everyone else, capped access and higher prices for paltry tiers. Math has never been my strongest subject, but even I know this only adds up to one thing: MoNeY PaRtY!

The Rochester Democrat & Chronicle published an editorial this morning decrying Time Warner’s bungled proposal to introduce what they call a “tiered pricing system.”

The Rochester region has questions, Time Warner. Lots of them.

Your plans to create a tiered pricing system for Internet usage has come out of the cyber-blue, accompanied by a dismissive attitude that consumer complaints are OK, but, hey, a little late in the game. You’ve decided, you control the local market for high-speed Internet service and we’re just going to have to adjust.

Time Warner executives agreed to meet this week with the Editorial Board but canceled after learning of plans here to cover the event with live video to be streamed onto DemocratandChronicle.com. This was no gotcha condition. The company’s announcement to establish a usage pricing system has provoked a near firestorm of complaint and opposition. Putting the company on camera makes sense.

Time Warner said no, that video coverage was over the top. That’s a missed opportunity. But the questions remain.

Of course, the irony is that video coverage would have been over the top for another reason: it risked helping to blow through the ludicrous usage caps Time Warner wants to impose on its customers.

Several questions also raised in the editorial deserve answers, and those answers must come from the raw data, not from internal company “analysis” that requires people to simply take their word for it.