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Time Warners Timing is Everything

Eric Massa held a town hall meeting in Pittsford NY today which some Time Warner representatitves attended.

We couldn’t have a better representative than Eric Massa gunning for us against Time Warner.  He really understand the issue and he seems well informed.  He brought several new pieces of information to light, for example, the federal government subsidizes a large portion of any internet infrastructure enhancement work, also billions of dollars in the economic stimulus plan have been dedicated to projects just like that.

Ironically enough about 20 minutes after the meeting began Time Warner released a new press release containing new/different tier information.  The following is a breakdown of the new plans.

Plan Name Cap Price Speed Overage Charges Current Equivalent
Lowest Tier 1Gb $15 768Kbps Down, 128Kbps Up $2/Gb NONE
Lite 10Gb $30 ?? $1/Gb NONE
Basic 20Gb $40 ?? $1/Gb NONE
Standard 40Gb $50 ?? $1/Gb NONE
Turbo 60Gb $55 ?? $1/Gb NONE
Turbo XL 100Gb $75 10Mbps Down, 1Mbps Up $1/Gb RoadRunner – $40/Month, Unlimited, 10Mbps Down 380Kbps Up
?? ?? ?? ?? ?? RoadRunner TURBO – $50/Month, Unlimited, 15Mbps Down 1Mbps Up

Their new plan does offer unlimited service but for a hefty price.

Overage charges will be capped at $75 per month. That means that for $150 per month customers could have virtually unlimited usage at Turbo speeds.

This means that for the Low Low Price of $150/month you can have exactly the same as what you get for $40/month right now.  That’s right, their TURBO speed is slower AND you’ll be paying almost 4x as much as you do right now.

My friend Dean threw together a great graph illustrating the Monthly Cost vs Bandwidth used per plan.

graph

From the graph it would appear that the lowest tier would always be the best, but we know that the lowest tier is crippled (most experts agree that 768Kbps shouldn’t be considered broadband at all).  We really need to get speed information regarding these plans but they have yet to release those figures.  Given that TURBO appears to be crippled according to their current speeds, don’t hold your breath for good numbers.

massaThe feeling couldn’t be scrubbed that the new press released was perfectly timed with the town hall meeting and Time Warner did it this way in order to claim during the meeting that “We just recently released a new press release which has a drastically different pricing scheme and which you may be happy with.”  They did say this and I suspect they timed it this way to quiet some of the more vocal people in the town hall.  Luckily, some of those who had mobile devices had already read the new proposal by the time they announced it in the meeting and they were quite vocal that the new plan did nothing for anyone (I also spoke up to that effect).

Eric Massa suggested we convene at a latter date to discuss the Time Warner issue specifically.  It was interesting to see because it felt like Massa was throwing down and challenging Time Warner to just try to cross his line in the sand.  The Time Warner representatives seemed to agree to this on the spot (whether they have the authority to do so is still to be determined so time will tell) so I suspect we’ll be seeing another event soon.

In summary, it’s great to have Eric Massa with us but Time Warner’s new proposal is laughable at best.

Your move TWC!

Time Warner Has a Problem

time warner chokes

The Problem

Time Warner has a few problems.

The first and most important is their bandwidth capabilities.  As my good friend Brion mentioned recently, Bandwidth is a measurement of speed, it is NOT a measurement of consumption.  It’s a simple fact that the speed you get from Time Warner is shared and therefore even though you pay a premium price for 10Mbps DOWN and 384kbps UP you’ll be lucky if you get half that at prime time.

The plain and simple truth is that Time Warner has oversold the bandwidth they can provide.  At the same time they’ve been slow to react to the increasing market demand.  Rather than concentrating on decreasing the number of users per node, they’ve concentrated on improving their end user speed ratings, which is nothing more than a marketing gimmick.  This has resulted in increasing the demand and a false representation of their bandwidth capabilities. This comes at a time when they should be decreasing the burdon on their network in order prepare for the future.

And that’s only the first problem.

The second problem is that Time Warners’ primary source of revenue is dying.  Mainstream media is slowly but steadily moving online.  Hulu now provides most of the same content you can get from network television, Netflix now allows you to stream movies and television shows directly to your PC or TV and over the air HDTV is of superior quality and easy to get.  Time Warner, and cable TV companies in general, are behind.  They’ve chosen to hold on to their old business plan instead of moving into the 21st century.  The lack of progress Time Warner has shown in adapting to their new environment reminds me of Kodak’s slow progress in moving into the Digital era.  It almost killed their business entirely and it will destroy Time Warner unless they do something.

The Descision

Time Warner has made their move.  They’ve decided to put the burdon on us, the consumer, and carry on business as usual. Everyone is probably aware of their tiered bandwidth plan by now and that’s only the first step.

Time Warner is capitalizing on the direction the world is headed in.  They recognize that everything is becoming digital.  They recognize that their current business model is dying.  Getting their pricing plan in place now puts them in a perfect position to drastically increase their profit margin in the future.

In a time when bandwidth and overall networking costs are shrinking, and the cost of running the fastest network on the planet is only $20 for each household passed…Time Warner is failing to produce.  They haven’t announced Docsis 3 for any of their markets and they haven’t decreased the households per node to a reasonable level.

Time Warner Cable’s chairman and chief executive recently stated:

the Internet as it exists today – even our networks … will require an enormous investment … a tiered approach is one way to raise that additional money

It seems to me since Time Warner is posting record profits of $1.07 billion they could already be investing in improving their network, without pushing the cost on the consumer for something they should already be providing.

The Effects

The effects on your pocketbook WILL be drastic and Time Warner WILL make more money. Lots more. They’ve reported that 14% of the customers in their first test (in Beaumont Texas) went over their limit and were charged overage fees. What they’re NOT telling everyone is that the trial in Beaumont was for new customers only. So, of new customers approximately 14% received overage charges. Of those that received overage charges Time Warner has stated that the average overage was approximately 19 Gig which equates to $19/month (Business Week Article). Remember that this was Beaumont Texas which has a total 44,361 households according to the 2000 Census. Compare that community with the Communities they’re rolling the tests out to now and you’ll have a much different picture. In Rochester NY the numbers will be far higher. The High Tech community is booming here and with the number of Technology School graduates in the area the cost for consumers will go through the roof.

Innovation will be stiffled.  Once the usage of bandwidth is being tracked and billed people will think twice about networking every device in their home.  They’ll think twice about using services that keep their computers synchronized with other computers outside their network.  They’ll think twice about running new bandwidth intensive applications such as new video streaming systems.  Whether Time warner likes it or not this IS the direction the rest of the world is going.

Families with kids (especially teenagers) and small business owners will be hit the hardest.  These days some teenagers spend more than half of their life online.  Sites like Facebook & Youtube consume enormous amounts of their time and their parents bandwidth.  Lots of teenagers have turned into minor stars as a result of these sites.  If the amount of time they are allowed to spend on these sites is rationed it’s likely some of these emmergent stars would never get started.

Small business owners, specifically those who work from home, such as photographers and videographers need to download and upload hundreds of gigs of data on a monthly basis.  Will Time Warner require these people to limit the number of clients they can help in a given month, limiting the amount of income they can generate?

Other Options

Time Warner has other options they just don’t like them. 

To immediately solve the problems they could drop the speed of their average customer.  They obviously wouldn’t like this idea because it’s a marketing and public relations nightmare.  They’ll get complaints left and right and they’ll be seen as the underdog in a market they currently dominate (fictitiously).  What this would do however; is put less stress on their network and give their customers a more consistent speed rather than the rollercoaster they have now.

Rather than tiered bandwidth usage caps they could implement more bandwidth (speed) tiers.  Currently they have 2 levels in the Rochester area.  Standard (10Mbps) and Turbo (15Mbps).  Since the average customer probably wouldn’t even notice, why not place them in a lower tier, say 5Mbps or even another optional 1Mbps?  This could temporarily solve their current problems while they take the time to improve their network.

To fix the problem in the long term they need to improve their network.  They need to begin the process of rolling out DOCSIS 3.  Upgrading is a one time cost.  If their billion dollar (net) business isn’t profitable enough to do this, then give the consumers an option to foot the bill themselves.  I’d gladly spend a small amount of money to upgrade the connection to my house to the 150Mbps that japan is getting, especially if it’ll only cost me $20.   They’re already profitable now, even if they foot the bill themselves they’ll be profitable after.

What to do Now

We need compitition.

Fortunately Frontier is taking the recent announcment of tiered broadband usage caps as an opportunity to push their own unlimited connection.  This is good news.  It means there’s a chance.  The unfortunate part is they are the only competition and they have a few large downfalls.  One, you must have a landline.  Two, your speed can vary greatly, depending on your distance to the closest node.

To really give Time Warner a run for it’s money we need FIOS.  Unfortunately Verizon does not have a connection to the main Internet Pipe in Rochester.  Rochester’s telephone network is owned and operated by Frontier and in order for Verizon to setup shop they’d need to spend an extreme amount of money to setup a main hook into the Internet backbone.  Essentially Verizon has no reason to set up shop in Rochester at the moment.

One of the best ways we can combat the plan Time Warner has put into place is to get government involvement.  Write to the leaders in Rochester, call the Mayors Office ((585) 428-7045).  Tell them to sponsor infrastructure improvements, give tax breaks to new providers that come into the area, give breaks to companies that improve their abilities etc.  Anything the local government can do to improve the Internet infrastructure will be a long lasting and visible improvement which we can see a real Return on investment, unlike the Renaissance Square (which likely won’t make any more money for the city).

Call and write to Time Warner.  Tell them how you feel and that you understand that they need to improve their network, but placing a residual burdon on their customers is not a good way to go and will only hurt them and us in the long run.

Whatever you do, don’t stand for it.  If it comes to it, vote with your pocketbook and switch from Time Warner, even if you’re not hitting their highest cap you will eventually and let them know you won’t stand for it by no longer doing business with them.

Visit sites like StopTheCap and get involved!

DO IT!

Whether you think so right now or not, this is important.  Internet usage is only getting started.

Time Warner Resources

Local (Rochester NY) Government Resources

UPDATE: Stop the Cap just posted a letter from Time Warners Chief Operations Officer with a lot of useful information.  I’ve harvested the contact information from this letter and added it to my list of Time Warner Rescources.

Clearwire

Cleawire LogoWhile in BestBuy returning a game today, I noticed a new Kiosk for Clearwire. It claimed to offer cheap wireless Broadband access. I was intrigued so I grabbed a pamphlet. After further review their broadband access isn’t that great.

  • ClearValue (standard tier)
    • 768Kbps down
    • 256Kbps up
    • $29.99/month
  • ClearPremium (premium tier)
    • 1.5Mbps down
    • 256Kbps up
    • $36.99/month

While their speeds arn’t that great they’re still a big step up from dial up. The idea is interesting and I knew that companies were begining to offer it in other cities but I wasn’t aware Rochester was on the map yet.

Don’t fret, Rochester is on the map!

Clearwire Rochester Coverage

One concern I have however is that it appears to be using a proprietary wireless protocol rather than the existing 802.11b/g protocols. What this means is people are forced into utilizing their provided modems rather than being free to roam the coverage area with their mobile devices. Too bad, If the speed was a little faster, I’d completely be willing to switch if I could connect using my existing wireless devices.

GENI can't be pushed back in the bottle

Friday some friends from work and I went to RIT‘s first Dean’s Lecture Series talk of the year by Peter Freeman. This talk, about GENI (Global Environment for Network Innovation), was informative but a lot less interesting than I imagined. I thought there would be discussion about their thoughts for the next internet and where we might be going. Instead we were inundated with boring generic statements of how GENI will be a testing bed for experiments dealing with the next internet. All of this is available at their website but to summarize, GENI’s primary objectives are:

  • To develop and evaluate ideas for future network design
  • To encourage related research

Some things that struck me during the talk:

  1. The importance of a comprehensive coordinated effort in order to avoid the same defects existing in today’s solution was one of their key points. In almost in the same breath they mentioned the different approaches by Japan, The European Union and The United States.
  2. Their basic architecture included devices named super routers. If these are like today’s routers they’re already building some very blatant similarities into what’s supposed to be a test bed for a new architecture. One of the things they mentioned was changing the TCP/IP stack. Routers are level 3 devices and as such currently utilize the TCP/IP stack. If these new devices are different than today’s routers they should have a different name.
  3. It seemed to me they were concentrating purely on the hardware networking part of things. Isn’t our hardware pretty solid? Can’t we already have 5×1028 addresses for each of the estimated 6.5 billion people alive today with IPv6 (wikipedia)? Can’t we already handle that bandwidth with the existing broadband technology? I would think the bigger concern is archaic protocols such as FTP and HTTP and their underlying stacks like TCP/IP, which have been hacked together over the years. DZone recently posted an article about why FTP Must Die and its definitely worth a read.
  4. If the hardware is redefined but the software and protocols are not, won’t we just end up with one giant hack which fits all of today’s technology into tomorrows architecture? This just seems like adding an extra layer to me.

GENI has a good idea with their general principle. We do need to be looking to the future, some of our current internet practices simply wont be able to hold up when

Every Light switch has an IP address.

However; they’re going down the wrong path and it seems like they’re creating too much (hardware) infrastructure to really inspire the creation of a new and unique solution.