Time Warner Cable this week announced it signed up its’ nine-millionth Road Runner customer, making the company the third largest Internet Service Provider in the United States.

Broadband service continues to grab an increasing share of business for the nation’s cable operators, even as they continue to lose video subscribers.  During the last quarter of 2009, Time Warner lost 105,000 video subscribers  but added 120,000 residential high-speed Internet subscriptions.

Nine million subscribers paying even a promotional rate of $30 a month earns the company $270 million dollars a month — $3.24 billion dollars a year.

Hobbs

“This is a great milestone for Time Warner Cable, and it further proves that our customers enjoy the speed and content our HSD products deliver, as well as the value seen when bundling this service with our video and phone offerings,” said Landel Hobbs, COO of Time Warner Cable. “High Speed Data continues to be a growing part of our business and we look to keep adding new features and further enhance speeds as we move through 2010.”

The company claims it has not lost a significant amount of business to its most-feared potential competitor, Verizon’s fiber to the home network FiOS.  But the company is installing DOCSIS 3 upgrades to increase speeds in markets where FiOS competes for broadband customers.  Cable industry experts suggest broadband is becoming a mature industry, and growth from customers new to the high speed experience are fewer in number.  A strong percentage of new Time Warner Cable broadband customers come from landline customers defecting from relatively slower DSL service from phone companies.

As interest in high bandwidth applications like streaming video increase, DSL service can prove a frustrating experience for those stuck with lower speeds.  Despite claims by some phone companies that consumers don’t care about broadband speed, Time Warner Cable will offer increased speed tiers and upgrades in most of its competitive markets in 2010 based on the assumption many customers do.

Suddenlink broadband customers in Lubbock and Midland, Texas will soon have a new option to boost their broadband speed to 36Mbps.  Dubbed MAX36, the new tier leaps over the cable company’s former top broadband speed of 20Mbps.  Upload speeds get a boost as well — to 2Mbps.

Multichannel News reports pricing for the new tier depends on how many other Suddenlink services you have.  Standalone pricing is $75 per month.  Bundle it with television or telephone service and the price drops to $65.  Take all three services and MAX36 costs $60 a month.

Suddenlink serves portions of these Texas communities

If that is too rich for your blood, Suddenlink next week will be providing existing broadband customers in Lubbock and Midland free speed upgrades:

• 1Mbps service increases to 1.5Mbps
• 8Mbps upgrades to 10Mbps service
• 10Mbps service becomes 15Mbps

The new speeds are possible because of DOCSIS 3 upgrades underway at the nation’s ninth largest cable operator.  Suddenlink has focused on DOCSIS 3 upgrades for many of its Texas systems, including Abilene, Bryan/College Station, Georgetown, Lubbock, Midland, San Angelo and Terrell.  The operator also deployed the technology in Beckley, Charleston and Parkersburg, West Virginia, as well as Jonesboro, Arkansas, Humboldt County, California, and Nixa, Missouri.  The company hopes to upgrade 90 percent of its cable systems within the next two years.  Nationwide, Suddenlink reaches 1.3 million subscribers.

Last summer Suddenlink introduced a usage meter for subscribers in Clovis, New Mexico and included a chart of what constituted average usage for its customers.

Suddenlink's national service area

The company openly admits it limits customer use of its broadband service is several communities where bandwidth upgrades have yet to occur, but at least drops communities from the usage limit list after expansion is complete.  As of February 4th, communities impacted by usage limits include:

• Arkansas: Charleston, Hazen, Mt. Ida, Nashville
• Kansas: Anthony, Fort Scott
• Louisiana: Ville Platte
• Missouri: Jefferson City, Maryville
• Oklahoma: Fort Sill, Healdton, Heavener, Hughes, Idabel
• Texas: Albany, Anson, Brenham, Burkburnett, Caldwell, Canadian, Center, Claredon, Crane, Dimmitt, Eastland, Electra, Hamlin, Henrietta, Junction, Kermit, Monahans, Nocona, Olney, Paducah, Rotan, San Saba, Seymour, Sonora, Trinity, Vernon, Wellington

Suddenlink also admits it engages in “network management” techniques which may spark controversy with the ongoing Net Neutrality debate, despite its declaration it “allows customers to access and use any legal Web content they prefer, thus honoring the principles of network neutrality.”

In addition to “mitigating network congestion, which can interfere with customers’ preferred online activities,” Suddenlink also discloses it “prioritizes certain latency-sensitive traffic such as voice traffic.”

Still, performing system upgrades to put a stop to usage limits and allowances is a move in the right direction, one that other providers seeking to monetize broadband traffic with Internet Overcharging schemes are loathe to take.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Suddenlink Ads.flv[/flv]

Watch some of Suddenlink’s more creative and amusing advertising. (2 minutes)

Denver residents are discovering that when Comcast says they’re getting a “free speed upgrade,” what they really mean is that upgrade is going to cost you an additional $2 more per month.

Comcast recently increased broadband speeds in Denver “for free,” but now Mile-High City residents are discovering free comes at a price with Comcast.

The price of renting your cable modem is increasing by $2 a month, which means the majority of Comcast customers locally will now spend $5 per month just for the modem.

Denver, Colorado (Courtesy: Yassie)

Comcast blamed the increase on costs associated with upgrading their network facilities to support DOCSIS 3, the latest cable modem standard which supports vastly faster Internet speeds.

Comcast spokeswoman Cindy Parsons said in a statement that the company continually invests in providing customers with next-generation equipment and technology that delivers advanced Internet services with enhanced capabilities.

“Our costs for this new equipment will increase by 167 percent over the next two years,” Parsons said.

Comcast has been increasing the modem rental price on a city-by-city basis across the country, often after speed upgrades like that completed in Denver which doubled speeds from 6 to 12Mbps late last year.

If just two-thirds of Comcast customers nationwide continue to simply pay the monthly rental fee, the company will earn more than $250 million in annual revenue just on the two dollar rate hike.  Is that enough to pay for service upgrades so we can dispense with talk about Internet Overcharging schemes like usage caps and consumption billing?

Stop the Cap! reminds readers Comcast subscribers can purchase their own cable modem from electronics retailers, often for $100 or less, and never pay a rental fee again.

At $60 a year, customers will more than pay for their modem purchase after less than two years.

Comcast's new usage gauge

Broadband Reports noticed Comcast’s usage meter has broken out of its limited trial in Portland, Oregon and customers are receiving notices across the Pacific Northwest noting the company’s usage meter is now available for their ‘convenience.’  But remarkably, Comcast has told 99 percent of their customers they “do not need to check the usage meter” because they won’t be close to the company’s 250GB limit:

We are pleased to announce the pilot launch of the Comcast Usage Meter in your area. This new feature is available to Comcast High-Speed Internet customers and provides an easy way to check total monthly household high-speed Internet data usage at any time. Monthly data usage is the amount of data, such as images, movies, photos, videos, and other files that customers send, receive, download or upload each month.

Comcast measures total data usage and does not monitor specific customer activities to determine data usage. The current data usage allowance for the Comcast High-Speed Internet service is 250GB per month. This means that the vast majority of our customers – around 99% currently – will not come close to using 250GB of data in a month, and do not need to check the usage meter.

That leads to two questions: Why would a company make an effort to produce a meter that is irrelevant to the vast majority of customers, and why institute a usage cap at all if only one percent of customers come close to exceeding it?

The answer, of course, is that most customers won’t need to worry about the limit today, but tomorrow is another matter.

As more broadband users begin watching video over Comcast’s broadband service, they will come perilously closer to the fixed limit Comcast offers — a limit that protects Comcast’s cable television package from customers switching to broadband-based viewing.

Bandwidth Hog? One customer consumed 897GB last November... using a backup method Comcast itself recommends to customers

Once Internet Overcharging schemes get their foot in your door, it’s usually only a matter of time before they force their way in and start looking for your checkbook.

Would Comcast seek to eventually lower today’s 250GB limit?  Perhaps, but there is no evidence of anything imminent.  It has been done before in Canada and sold as a “money-saver,” offered with an “insurance policy” Bell had the chutzpah to suggest “protected” customers from overlimit fees.  Monetizing broadband use is a hot topic for providers seeking enhanced revenue from their broadband divisions.  Time Warner Cable tried to convince customers it would tie revenue earned from its own Internet Overcharging experiment into expansion of their local broadband networks.  That was proven blatantly false when upgrades commenced in areas never part of “the experiment,” while those that were have been bypassed for DOCSIS 3 upgrades.

Some might believe such limits protect providers from dreaded hordes of malicious “bandwidth abusers,” a broadband urban legend comparable to the Cadillac-driving welfare queens we heard about in the 1980s.  In truth, the handful of so-called “abusers” have quietly been dealt with under the terms of existing Acceptable Use Policies for years without inconveniencing the vast majority of customers with arbitrary usage limits.  But the industry-sponsored narrative persists, usually in the form of some neighborhood hacking teenager sucking your bandwidth dry and costing you money.

What constitutes “excessive” or “fair” use ludicrously ranges from Frontier’s infamous 5GB usage allowance to Comcast’s 250GB limit.  Every company insists their limit is the fairest and that 99 percent of customers won’t exceed it, no matter what it is.

Are there consumers moving a lot of data across Comcast’s network?  Yes.  One Broadband Reports reader in Spokane posted a usage report showing a whopping 897GB of consumption in November.  Was he running a torrent client swapping an illicit copy of Avatar with people all over the world?  Was he downloading lots of illegally obtained music and movies?  Was he running a commercial business on a residential connection?  No.  It turns out he was retrieving a backup to restore data from a failed hard drive.  In fact, Comcast recommends customers use online backup services, and even provides customers with a free, limited version of Mozy, which includes an easy path to upgrade to much larger storage plans.

Even Comcast doesn’t believe in the usage-limits-solve-congestion meme. In response to a query from IP Democracy back in February, 2008:

“Most [ISPs] recognize that a metered approach doesn’t solve peak-hour usage pressures.”

But it will do wonders for a provider’s bottom line.

Phillip "No, I won't take your word for it" Dampier

Did you realize if you are pro-Net Neutrality, you’re probably pro-piracy and a broadband hog?  That’s the new low achieved this past week by Net Neutrality opponents who are spending millions trying to protect their broadband fiefdoms from any regulation.  But even if they lose their fight to stop Net Neutrality when they find consumers won’t accept a throttled “network managed” broadband future, providers will be “forced” to control those dirty pirates and broadband hogs with usage limits and overlimit fees to help “pay for network expansion.”

It’s why Net Neutrality and Internet Overcharging schemes like usage caps and “consumption billing” go hand in hand.  What providers can’t profit from on one end they’ll try from another.

Longtime readers of Stop the Cap! already know how this scam works.  Canadian broadband users got stuck with both: speed throttles -and- usage caps and overlimit fees.  Assuming purposely throttled speeds are banned by Net Neutrality policies, simply under-investing in network expansion, despite the rampant profit-earning capacity broadband delivers, gets us to the same place — throttled speeds from overcongested networks and a convenient excuse to impose usage limits and other control measures to more “fairly” provide service to every customer.  Best of all, providers can pocket the overlimit fees charged to customers who exceed their allowance and train them to use less broadband with fears of more stinging penalty fees on their next bill.

Back in 2008, when Stop the Cap! launched, we challenged providers to provide the raw data to prove their assertions that they needed to impose formal limits and so-called “consumption-based billing” and abandon the lucrative flat rate pricing model that earns them billions in profits every year.  Of course, they have always refused, citing “competitive reasons,” “customer privacy,” or some combination of laws that supposedly prohibits any third party analysis.  Of course, they’re only too happy to characterize usage themselves, and we’re supposed to trust them — the same people that want to use that data to justify Internet Overcharging schemes.  Independent analysis?  When broadband pigs fly!

Now, telecom analyst Benoit Felten from the Yankee Group is asking the same questions on his Fiberevolution blog and issuing a challenge:

So here’s a challenge for them: in the next few days, I will specify on this blog a standard dataset that would enable me to do an in-depth data analysis into network usage by individual users. Any telco willing to actually understand what’s happening there and to answer the question on the existence of hogs once and for all can extract that data and send it over to me, I will analyse it for free, on my spare time. All I ask is that they let me publish the results of said research (even though their names need not be mentioned if they don’t wish it to be). Of course, if I find myself to be wrong and if indeed I manage to identify users that systematically degrade the experience for other users, I will say so publicly. If, as I suspect, there are no such users, I will also say so publicly. The data will back either of these assertions.

Felton’s co-author Herman offers his assessment:

Unfortunately, to the best of our knowledge, the way that telcos identify the Bandwidth Hogs is not by monitoring if they cause unfair traffic congestion for other users. No, they just measure the total data downloaded per user, list the top 5% and call them hogs.

For those service providers with data caps, these are usually set around 50 Gbyte and go up to 150 Gbyte a month. This is therefore a good indication of the level of bandwidth at which you start being considered a “hog”.  But wait: 50 Gbyte a month is… 150 kbps average (0,15 Mbps), 150 Gbyte a month is 450 kbps on average. If you have a 10 Mbps link, that’s only 1,5 % or 4,5 % of its maximum advertised speed!

And that would be “hogging”?

The fact is that what most telcos call hogs are simply people who overall and on average download more than others. Blaming them for network congestion is actually an admission that telcos are uncomfortable with the ‘all you can eat’ broadband schemes that they themselves introduced on the market to get people to subscribe. In other words, the marketing push to get people to subscribe to broadband worked, but now the telcos see a missed opportunity at price discrimination…

TCP/IP is by definition an egalitarian protocol. Implemented well, it should result in an equal distribution of available bandwidth in the operator’s network between end-users; so the concept of a bandwidth hog is by definition an impossibility. An end-user can download all his access line will sustain when the network is comparatively empty, but as soon as it fills up from other users’ traffic, his own download (or upload) rate will diminish until it’s no bigger than what anyone else gets.

Rep. Eric Massa (D-NY) has a better idea to stop Internet Overcharging: the Broadband Internet Fairness Act (HR 2902), which would ban unjustified billing schemes for broadband

The arbitrary nature of what constitutes a “hog” invalidates providers’ arguments at the outset.  Frontier defines a hog as someone who consumes more than 5GB.  Comcast sets their definition of a broadband piggy at 250GB.  The gap between the two is wide enough to allow a small planet to slip through unencumbered.

If a consumer does all of their downloading from midnight to six the following morning, are they as much of a hog on a shared cable modem network as the user watching Hulu during prime broadband usage time?  Probably not.  If a cable provider tries to force too many homes to share the same finite amount of bandwidth available in a designated area, service will slow for everyone during peak usage times.  But nobody will notice or care if customers are maxing out their connection in the middle of the night.  The appropriate answer, especially for an industry that enjoys enormous profits, is to expand their network to maintain basic quality of service at peak times.  DOCSIS 3 upgrades for cable are cost efficient, flexible and often profitable, because providers can market new, premium-priced speed tiers to those who want cutting edge service.

Instead, some providers see delaying upgrades as a better answer, enjoying the cost savings that follow implementation of usage caps, limits and other overcharging schemes which artificially limit demand and further monetize their broadband service offerings.

Unfortunately, even if Felten got responses from providers, he’ll be forced to trust the integrity of data he didn’t collect himself.  Rep. Eric Massa has a better idea.  His proposed Broadband Internet Fairness Act would ban such overcharging schemes unless providers could prove to the satisfaction of a federal agency that such pricing was warranted.  The big difference is that providing “massaged” data to Mr. Felton might be naughty, but would be downright criminal if tried with the federal government.

Shouldn’t the central lesson here be to “trust but verify?”