TWC moves consumption-based internet billing to more markets
By Darren Murph 
posted Apr 1st 2009 2:53PM
posted Apr 1st 2009 2:53PM
No, folks -- this is no prank. Time Warner Cable really is throwing caution (and public opinion) to the wind and moving forward with its evil consumption-based internet billing. If you'll recall, we heard that the operator was trialing the method -- which imposes premium rates on big broadband users -- back in early 2008, but now it seems it's quietly hoping to roll it out into more major markets. Starting this month, TWC will start gathering information on its customers' internet use in Austin, TX, San Antonio, TX, Rochester, NY and Greensboro, NC; if all goes "well," consumption billing will hit those markets this summer or sooner. We'll point you to the read link if you're interested in just how outrageous these capped plans look (particularly for internet TV viewers), but we'd be remiss of our duties if we didn't share this gem of a quote from TWC CEO Glenn Britt: "We made a mistake early on by not defining our business based on the consumption dimension." Thanks for clarifying, Glenn-o.[Thanks Kevin, image courtesy of Corbis]
Hah! April fools... I hope :/
If this isn't a joke and they do go through with this then I too will be leaving Time Warner Cable for the greener grass...no joke. I already have my phones through Vonage and while my TV is through TWC it is only there because I still utilize them for the Turbo RoadRunner. But I'm still not impressed with RoadRunner now as I've been waiting forever for them to increase their upload speeds beyond 1 mbps so I can properly utilize both my SlingBox and the Orb app. Perhaps at this point I should even consider getting my hands on a couple of those digital conversion boxes since I wouldn't be opposed to going back to an OTA solution since I don't watch much TV anyways.
this is not a joke. Comcast did give me an unpleasant call cause i dl too much. i was forced to pay more or get terminated. so i dumped the service and went with Verizon. sure DSL is a lot slower than cable, but at least i can dl all i want. im in philly by the way. and that was over 3 years ago.
if you are in a contract with TW and they change service plans it will void any previous contracts. TW wont tell you about the change and if you send in a payment after the change they consider that an agreement to the changes. Read the small print on those inserts included with your bill, it will spell out that you have 30 days (may vary on where you live) to cancel your contract with no charge simply because they changed the contract. Then you are free to chose a better ISP provider
do you know in queens, we get speeds like 200kbps during evenings and TWC knows about this and openly says they cant do anything about it?? It's been that way for almost a year now...
Regardless of anything, we're moving off of roadrunner as soon as fios is available, the fact that its not available is ridiculous.. TWC needs to get their act together.
They're blaming it on torrent downloaders. But what they're really doing is making a move now so they can charge all internet users (especially those that don't pay for their combo tv packages to lower competition) more in the future. They just want more money. All I can say is, you have to admire a company a little with Big Brass Ones that don't give a F*** what their customers want. I guess they are taking lessons for Jobs
HA! I have TWC and I'm glad I signed up with NO contract. Sure, I pay a little more per month, compared with other services, but they can't shovel shit like this down my throat.
Looks like SOMEone did something wrong...
Yes, they used the string "trialing" in an article.
I'm denialing that this is a word.
Just call Time Warner and switch your ISP from Road Runner to Earthlink and you won't be capped.
seriously? lol that's awesome i'll tell my dad to try that.
Yes. Seriously. Road Runner caps. Earthlink doesn't. Just call and have them switch you. They don't even have to come to your premis.
That won't work, I called Earthlink and since they go over TW cable lines they will be forced to cap also in that area.
If it's not a joke, they will lose a lot of customers.
BOOOOOOOOOOOOOOOOOOOOOOO
This is one of the biggest reasons on live won't work...also we already got this in Canada.
Streaming anything is going to get costly for the downloader. Plus the B.O. administration is going to tax away whatever is left. Change you can believe in.
If this is not a joke, this is such bullshit.
what are we back in the days when we had to pay by the hour? We pay 42bucks a month for 7mbit. For that i had better get unlimited downloads.
Such bullshit
I'm from San Antonio. If TW rolls this out here, AT&T DSL might have a new customer.
I'm just about to rent an apartment in San Antonio, and AT&T can bank on having me as a broadband customer as well if this is the case
Same here. I'm currently a TW customer in Austin. I can't really complain on the service, 20megs for $40 bucks and only been down once since September.
But if they start doing this I'll definitely be moving to AT&T.
I don't get it. TWC actually has competition down here in SA, how could they make a move like this? I'm going over to Grande Communications. It's cheaper and faster. Also, if Guadelupe Valley covers your area (it's mostly for the hill country) they'll run fiber to your house for about $60~ a month.
@xenoterranos
I wish I could get some of those competitors at my house. I would certainly take GVTC FIOS over DSL anyday.
I tried to post this but it didn't show up:
Link to GVTC.com internet prices.
http://www.gvtc.com/residential/broadband/residential-product.php
Same here. TWC in San Antonio has been a great deal for me, but if this goes through then I'm jumping ship for sure. Uverse couldn't compete with TWC prices before, but after this even my parent's will be sucking down more than 40gb a month just watching shows on Hulu. Grande seems to have the best deals for me, but sadly haven't made it to my subdivision yet.
This will make those in the Verizon FiOS markets leave TW in droves.
How ironic that just after TWC starts pushing customers hard on their two-year contract agreements, they come out with plans to expand their rate restructuring. This is ridiculous. When can we get some competition in the NYC cable provider market?
Why do you think that this is evil? ISP like TWC have to pay for capacity. Why shouldn't this cost be passed along to the consumer? It's the same as any other commodity - electricity, fuel, etc. Think about it this way - with consumption based pricing, they will have an incentive to give everyone the fastest internet connection. 18+ Mb/s for everyone. Yea, if you are a heavy user - torrenting videos and whatnot then this is going to raise your rates. But as it is, all of the folks who don't consume as much data are paying too much. This is a very fair system (as long as they have competition from DSL or other networks to keep their prices reasonable).
not really true. ISP's pay for maintenance and such but they don't have to pay for bandwidth used or anything. If more bandwidth is used, it doesn't really cost them any more money, it just slows down the network. If their network is being slowed down too much, they should try to upgrade their equipment to handle the added bandwidth. When there's consumer demand(such as there is now for increased bandwidth to handle video and music streaming), companies should respond by trying to be the best at meeting that demand, not try to change society to fit their existing model.
That, and IT DOESN'T COST ANYWHERE NEAR $1/GB. If this were a system where you would pay less if you used less capacity, but only paid a maximum instead of getting charged per gig, eg 0-50GB = $20, .... 250GB - inf = $60. Then you could be certain that you would never exceed $60/mo on internet service.
Should we centrally plan the US economy as well - its 'only fair' that everyone makes the same.
As Mark has already said, that comparison is incorrect. They set the pipe (bandwidth) size and run the server farms that route you, but it is irrelevant how much data you transmit. It is more costly to them to give you bandwidth.
This is nothing more than a way to get more cash out of you.
its extremely naive to think this will make it less expensive on anyone.
Nothing is free. They have to build a network that supports the bandwidth needs of their customers. They have to pay for a connection to the backbone. The more data their customers use the greater their expenses. Maybe one could argue that the marginal costs were 0 if they had a fixed network that never needed to be upgraded, but that's not the case. Yea, they might cram a few too many connections on a pipe and let performance suffer for a while. But eventually they will need to make the pipe fatter. It's much better to let people pay for what they need than to charge everyone the same . This way, they are aligned with their customers. Here's another reason that this is a good thing - they can offer decent performance internet for really low fixed monthly prices. This is huge for lower income families - they don't have to suffer with dial up or the 512kb/sec option any more. They can get a fast connection. They just need to not use it to download a bunch of videos.
You're absolutely correct in saying that they have to upgrade their network to meet increasing demand. The problem is that this is a move to prevent them from having to do so anymore. Since they can effectively limit the amount of bandwidth used, they can keep it at a level where it fits their own pricing tiers. Their other option is to do exactly what you suggested and upgrade their network to handle increasing demand. It would be more costly up front, but would greatly increase speeds for everyone without imposing any limits and likely lead to greater revenues in the long run.
I'd love to agree with you Matt but there is no way this is a truly a pay to play type deal.
I am all for paying for your usage but the floor better be really low. I'll stipulate to pay $70/month for unlimited if TW promises to deliver broadband for as little as $10/month to low usage customers. A model like that, while hurting me, would lower many people's bill and bring new customers into the fold - a clear benefit for many.
However, you won't see anything like that. TW isn't interested in giving low usage customers a break. They only want to rape high usage customers.
"Here's another reason that this is a good thing - they can offer decent performance internet for really low fixed monthly prices."
That's always the lie when new rip-offs are introduced: "It allows us to bring you lower prices." A year later, prices are right back where they started, the original service is irretrievably lost, and the service provider already starts to deny that things were ever any different.
That's how apologists abet the companies that are ripping us off, by not only failing to stand up for themselves and demand better, but also to heap scorn on those of us who DO stand up for ourselves.
Grow a nut.
Matt, your an idiot.
A 40 GB monthly cap at the TOP tier?? Hope you don't use steam to download games or download HD movies because you'll use that up before you know it.
hurry up fios
i was thinking of going to time warner's road runner but opted to upgrade to AT&Ts 6mbps elite connection. i amVERY glad i didnt move to time warner now and i do recommend at&t dsl. in the 4 years ive had their dsl service it always has worked flawlessly.
how is 6Mbs an elite connection?
DSL
That is pretty elite for a DSL connection. I have friends on Comcast that only get 6 Mbps
Ha, and i was thinking of switching from att to time warner. They may not have the fastest internet but they don't charge for what i use.
$hit... it's almost in my backyard now. It looks like I'll be switching from Time Warner. Also, gee, will the put a cap on my phone calls, as they handle them as well?
Looks like this isn't an april fools joke, the read link story was written at 2:36PM yesterday. The only odd thing to me is the $1 per gigabyte charge. The difference in price between the 5GB and 10GB tiers better be less than $5 or there's no reason for anyone to ever get the 10GB one. All this said, if they actually do this they won't last long as a company. Hey Time Warner Cable: Instead of trying to make people use less data, how 'bout trying to upgrade your network?
Your forgetting that our nice american laws keep cable companies like TWC alive in local markets by monopoly. Crap like this wouldnt happen if they let more than one "cable company" in each area. But i can see ATT and Verizon swooping up customers. TWC here is terrible, but most ppl have no other option.
The problem with this is that it has nothing to do with preserving their bandwidth. Its a Cable TV company manipulating pricing to favor their content over web content. More and more people are dumping $70/month cable packages in favor of $45/month internet packages and getting all of their video from the web. That's what this is about.
If twc would update their markets to fiber, they wouldn't even care how much people used and they'd be able to offer more services. I hope every single customer leaves them over this crap. The cost of bandwidth has decreased way too much to pull this crap.
So long as there's a sufficiently high cap I don't see the problem
I'm sick of only getting 175k downloads in manhattan because everyone on my block is running 25 torrents of porno each all day every day.
Those people SHOULD pay more
The cap is 40 gig on the highest plan.... That is not sufficient. RTFA
Sounds like something's wrong with your cable modem service. Call them and tell them to come check it you for you. There's no way you should be getting such dismal speeds.
Or at least ask your neighbors to share the porn.
@ traknod What are you downloading that requires more than 40GB per month? I don't see 40GB as an unreasonable limit but enlighten me...
@XiozTzu
Over the past 3 days I used over 9 GB of bandwidth downloading two Steam games. I used about another 3 GB downloading expansions and demos on XBox Live just a couple days before that. It's not hard to hit such caps legitimately.
I have Vonage, and I work from home. I routinely use a half a gig a day just on my work VPN, then there's the phone. Add a few downloads and there you go.
Time Warner just lost a customer here.
TWC is really, really stupid for doing this. What's next? Airlines going to charge people based on their weight? THAT seems more reasonable than this sorry excuse for a "policy change". Why Does Glenn Britt think it's even feasible to charge people based on consumption? Kiss your company goodbye, and I hope you enjoy the tumbleweed Mr. Britt.
Stupid? No. They are really being very smart. They are going to rape the customers without any choice for as much as possible for as long as possible before a competitive fiber service arrives.
Who can stop them? Nobody.
What's more, they will get the ignorant low-bandwidth customers to fight in their corner against the high-bandwidth users, even though the only ones benefiting will be TWC.
I call that a very smart move, short-term. And if no competition materializes, probably a smart move long-term.
Corporations are psychopaths.
Economics 101: When a resource is mis-priced, it is mis-used.
Bandwidth costs money, folks. Eventually everyone will pay for data services based on their consumption, probably of various service classes: time-critical packets for things like telephone conversations, less time-critical for things like musing and video downloads, even less critical packets for file downloads, and the cheapest rate for email and other messages that can be delayed by minutes or more.
Be ready. It is inevitable.
+1 for Econ 101.
What do you mean eventually? Thats how it "used" to be when there was no competition in the market. When more competition entered the market it went to a flat fee service. Competition was again removed and they are trying to strangle the market. Also consider the tax deductions and whatnot they have gotten to upgrade their infrastructure to support the increased demand and all this amounts to is a cash grab.
This might be the dumbest thing I have ever read. every indicator of the internet revolution up to this point totally contradicts your argument. The natural progression of technology to is advance in speed and performance as it lowers in price. The internet is becoming every bit as critical to mainstream america as the interstate system. Do I pay my interstate driving by the mile? No.
Whats the real message here? Local monopolies for utilities and communications have to go. There is no motivation for TWC to improve peformance while decreasing cost if they have no viable competitors. The entire system is F'ed up.
@atnettleman
Actually... many Thruways and toll roads DO charge by the mile... but I think we all know what you were trying to say.
I don't see why this is evil, especially if they are transparent about it.
Probably because rather than changing their business practices to keep up with society's pressures(by improving their network and adding fiber connections/etc to meet the higher demand), they are trying to force society to accommodate them. This move clearly shows that they will make no efforts to improve their network to handle things like streaming video, but will rather try to make consumers stop using it so it will never be a problem for them.
@Mark
Exactly. A well run company use its profit to improve its product, which will in turn produce more profit. A badly run company will maintain high profits by down-grading its product. This can only happen when there is no competition, or very little competition:
http://en.wikipedia.org/wiki/Oligopoly
I'm amazed when people fail to understand this.
NOOOOO. What happened to unlimited, uncapped, broadband for $20/month?
I live in austin and have been with time warner for 6 years. During that time, I've spent about $15k on cable & internet ($180 \ month). If they go to consumption based pricing, I'm done with those guys.
Even if I don't hit the limit...it isn't something I want to stress myself out on. I don't want to have to monitor my internet usage like I used to with my cell minutes (that's why I'm on Simply Everything now....sheer lazyness)
If they roll this into Charlotte I'm gonna have to give Bell a call.
Didn't the airlines already try that and get shot down? (figuratively speaking of course)?
What's especially great is that all of these markets have one thing in common: The competitive provider is considering, or has already implemented, bandwidth caps. Here in Rochester, the only alternative to TWC is Frontier (the local telco) - and they have a bandwidth cap of 5 (five) GB. My understanding is that AT&T's DSL offerings in Texas are investigating bandwidth caps as well.
Meanwhile, 50 miles away in Buffalo, Verizon FiOS is rolling out and you don't hear a peep of TWC considering bandwidth caps there...
Fuck that shit.
Where are my free 6 month trial CDs?
TWC has just converted the system in my area (just north of Charlotte, NC) to a hybrid fibre network (whatever the heck that means) - it seems they *are* upgrading the network *and* will be charging extra - oh how nice...Since getting the flyer in the mail regarding the system upgrade, I have seen zero increase in speed or sustained throughput - I consistently get 800K/sec and it's not changed since day 1.
They should be ashamed of themselves for charging based on usage - does that mean that if I watch TV all day I should pay more than the next person? What's next - dictating how long I can watch TV per day/month?
Unfortunately as far as I know, there are no alternatives in my area. Monopolies suck - wait...Didn't Microsoft get put through the wringer regarding monopolistic practices - why are cable companies exempt?
This is total BS! How can we petition the Government (FCC?) to do something about this???
It's actually a smart move for TWC in term of profitability.
1) It's a way to increase the fee for service. The illusion that this may decrease the consumer prices is just an illusion. It will if you only read your email and watch a little youtube low definition here and there.
2) It's a way to compete against Netflix and other streaming companies. Indeed with pay-per-gb, a streamed movie will cost more than their own TV service. Honestly isn't Netflix more used than the 'evil' Bittorrent?
Also in areas where they dominate the market, it's a way to maximize the cash flow out a given population (in addition to their 2 years contracts... like cellphone companies).
I don't know to what extend this will be accepted by the current administration. Indeed this goes against the idea of 'internet to everyone'... Maybe they should put some rules against the greediness of companies, because internet is a public service rather than a luxury good.
this is such BS. Now I can see why the U.S. is NOT leading the world in information technology and infastructure anymore. And why are they doing it? Greed. The pipes can handle that amount of traffic fine... greedy SOBs!
I have several friends and colleagues in Canada who are all on networks that charge by consumption. Moreover, they all seem to complain about exactly the same stuff every month..... Cell phone service is too expensive and crap I've downloaded all I can this month!
I'd really hate to see US companies going down that path! And if they do, I guarantee breakthrough companies will be popping up all around offering unlimited downloads at a slightly slower bandwidth. Either way you go competition should keep this battle in check!
I will also be getting an apartment in SA, TX later this year, and this is quite scary. I stream a LOT of video from Hulu, etc. and I'm pretty sure I use over 40GB a month. I also stream from Netflix pretty frequently. So, I got into a chat with TWC, and their sales team doesn't really know much. All I know is that if this is instituted, I will DEFINITELY not subscribe to TWC when I get my apartment.
user ****** has entered room
analyst Justin has entered room
Justin(Wed Apr 1 15:39:14 CDT 2009)>Good afternoon, how may I assist you
ME(Wed Apr 1 14:40:05 CDT 2009)>I'm getting an apartment in San Antonio, TX later this year, and will of course be looking for an internet provider.. However, I just read that TWC will be moving to a consumption based billing plan - is this true? I stream TV shows from broadcast websites and Hulu frequently, and feel like if you did this, my rates would be too high to justify your service. Can you confirm these plans?
Justin(Wed Apr 1 15:40:57 CDT 2009)>I apologize, consumption based billing plan?
ME(Wed Apr 1 14:40:50 CDT 2009)>http://www.businessweek.com/technology/content/mar2009/tc20090331_726397.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis
ME(Wed Apr 1 14:41:02 CDT 2009)>Billing the customer based on the amount of data used in a given month
Justin(Wed Apr 1 15:42:38 CDT 2009)>no word has been given confirming this, last I heard it was only a test in Texas. Other than that there are no plans to do so at this time
Malone(Wed Apr 1 14:43:04 CDT 2009)>Ok, thats my only question right now. Thanks!
Justin(Wed Apr 1 15:43:33 CDT 2009)>your welcome, have a good afternoon
Justin(Wed Apr 1 15:43:34 CDT 2009)>bye
cendien - I'm in Rochester, and called TW as soon as I read this on businessweek today. While they confirmed that the plan is in fact being carried out, the guy I spoke with said it was "very new to them" and he couldn't really answer any questions that I had. *sigh*
I'll drop it and go back to the "Death Star" DSL in a heart beat.
This wouldn't be a problem if:
1) There was adequate competition in the ISP market. Right now there's some competition for the 3Mpbs market, but cable rules the higher speed market and the higher speeds are necessary for the third party on-demand internet television market that is growing.
2) The competition does not quietly cooperate to squash the third party internet television market by creating caps and pay-per-use tiers which their own television content is exempt from.
The reason why this is evil is that the amount of applications that require more bandwidth to use is constantly growing and it is a "standard" now to have a high speed connection so most software leverages that for updating and are designed to move more data over a connection. On top of all of that there are new products like steaming Netflix or Hulu and things that you can use to get the most out of your home resources like Slingboxs and other devices. With this there have been increases to the price of internet service as it improved and they have even offered slightly more expensive options (like RR Turbo) that would let people use even more high bandwidth content. To suddenly change the entire way that billing is done to make it a more favorable setup for the provider after pitching using the connection for video and other high data transfer activities in the commercials that they currently run is very wrong.
A long time ago you used to pay per the amount of connection time you used, and that gave way to the newer companies (the ones still usually providing service today) offering unlimited plans. This doomed the "pay per" style of plan and is something that will happen again if there is a market with a company that changes for the amount for usage versus and unlimited usage. It is amazing to see this change in a time when the standard move for other services like cell phones and land lines is moving toward having unlimited options.
Back to the ol 56k ISP logic. I thought we left consumption based billing back with the Pentium MMX chip and 2x CD ROM drives.
TimeWarner can eat my poo.
40 GB cap?! I download about 20GB per day. Yeah, I don't think so. I will be switching to DSL, FiOS or worst case scenario: a TW cable business line. If/when this comes to Syracuse.
Another brilliant move from the leader in customer complaints and dissatisfaction. I know that their bandwidth doesn't go to HD channels for cable subscribers; a quick comparison between the number of HD channels between TWC and satellite providers will confirm.
A usage based model works for fixed or limited commodities which internet access most certainly is not. Bandwidth is not grown, mined, refined or even actually "made". Unlike everything else in the "free market", they want you to pay MORE when you use more. On most other commodities, the more purchased, the cheaper the individual unit. See membership warehouses for example. This is simply a scheme to defer or eliminate upgrade costs to TWC as needed based on customer demand.
I already pay a premium charge for "Turbocharged" Road Runner that MIGHT hit it's advertised speed at 2 am on a moonless night. What are they gonna do, give me a discount? Most likely, my speed will be reduced to standard as "turbocharged" will no longer be offered, but my bill will increase magically over the old price of standard unlimited usage.
In other words, much like social security, we will all pay more for less.
@Matt
Unlike Electricity,Gas, and so forth you have to pay to create/mine or whatever to supply this energy to the consumer over and over again, with a network infrastructure you may create a new branch for each new area you cover or upgrade depending on the number of users but when you lay that down you sit there and answer calls,troubleshoot, and collect money monthly. The point of charging for data usage is implying that it matters how much you use will cost them to supply what? more data? They are the relay points not the data providers, they let traffic through and direct it. Also, if they add more people to the network that users will pay more then their share of the cost for those routers and lines that will stay in the ground for years to come. If they do upgrade they are upgrading the main hub rather then each individual hub for each neighborhood.
Though if they want to try to do it then thats fine its their choice, but they will fail due to the tyranny of consumers.
Darren, thanks for posting this for me!
The sad thing is...we've been with Frontier DSL for probably a decade now, and just last week we set up an appointment to have TW come and install RoadRunner tomorrow. I've already let them know how I feel, and have started looking into alternatives.
Wow.. That sucks.
Waiting for news stories about peeps in court with $1,000+ cable bills because one of their neighbors hacked their wireless for netflix. Or what if grandma's computer gets a virus and starts spewing spam?
Also surprised to see Microsoft and Sony not intervening since this will hurt their console streaming movie services.
And what happens to ad supported sites when everyone runs firefox with ad block plus to save quota?
No wait.. even better.. let's all send random TCP traffic to TWC's IP block and push them all over quota.
Jackasses. If this comes to Ohio, I'm going to plead Verizon FiOs to get moving or I'm going to AT&T.
I'd rather have slower performance over a long period of time than fast performance and get a surprise on my bill every month for going "over."
Netflix ought to be right pissed.
I see a lot of talk, I want to see the action.
If people were actually disconnecting the cable, TWC would be reversing course, so I don't think that many people are concerned.
I disconnected my Comcast nearly 1 1/2 years ago. When's the next person gonna follow suit?
Can they really reverse this if it hasn't been enacted yet? I can tell you right now I'd switch to AT&T DSL or Grande in a second if this was put into effect in Austin.
I think the best we can do right now is to let TWC know that this is a bad idea and that we intend to defect if they attempt to implement it.
jeff.simmermon@twccable.com - corporate communications director, the guy who made the "announcement".
Let him know how you feel.
If they ever move this to my city, my neighbor is going to be in for quite a surprise when she gets her first bill!
I suspect most people, like our parents, don't download much if any. If that's the case, they should pay ONLY $3 a month.
Unfortunately with this those people won't be charged less since even the lowest tier costs as much as they're already paying.
OOOOH
I thought The Weather Channel was screwing with folks again.
New avatar, why?
I actually think that metered usage is the way to go. It will make Internet access cheaper for the overwhelming majority of users, and it will secure net neutrality. The only thing is that the metering has to be fair, and the price can't be ludicrous.