PSound
04-19-09, 08:19 PM
Time WarnerCable’s hasty retreat from a plan to charge broadband customers by the byte will delay but likely won't kill efforts to replace all-you-can-eat plans with so-called metered billing arrangements. In the end, the company's greedy rates, unpersuasive congestion arguments and relatively low threshold caps may have played a bigger role in derailing the plan than adamant consumer opposition to pay-as-you-go broadband at any price.
Still it’s unlikely that any large ISP will try to switch to cell phone-style billing again anytime soon.
"Time Warner Cable has raised the government and consumer flags too high for anyone else to do this anytime in the near future," Pali Research analyst Richard Greenfield said. "They created a PR nightmare for no reason."
Jim Blackley, a vice president at the nation’s fifth largest cable company Cablevision had it right when he dismissed tiered plans early this month, saying “we think [broadband] is a pretty powerful drug and we want people to consume more of it."
Large network operators protest that traffic on their networks keep going up at 30 percent a year, and they needs to stop bandwidth hogs, lest the internet experience "brown-outs" in the future.
Unfortunately, TWC was ill-prepared to explain exactly why the solution was to charge by the GB, given that its cost to send its customers’ data across the net's backbone fell in 2008, and most of its expenses aren’t closely tied to the amount of data any particular user downloads.
Like nearly all ISPs, TWC doesn't make public any usage information about its network.
That lack of data made it impossible for outside observers to judge whether the company was actually trying to fix an inherently broken billing model, experimenting with confusing billing options that cost subscribers extra, or trying to make it too expensive for users to watch video online, rather than through a cable television subscription.
Those suspicions got New York lawmakers Rep. Eric Massa and Senator Chuck Schumer to pressure TWC into abandoning its proposal.
"If the motivation was to change user behavior and user psyches, they will come back to it," said Derek Turner, the research director at the consumer-advocacy group Free Press.
Even when the company bowed to pressure and added a low and top tier to its plans, the point seemed clear -- discourage internet video.
TWC's lowest proposed tier ($15 a month for 1 GB with a $2/GB overage fee) effectively told subscribers never to watch a movie online, Turner argues, and even its $75/month top tier plan is only unlimited once users have paid another $75 a month in overage fees.
Not surprisingly, Art Brodsky, a spokesman for Public Knowledge - an interest group that opposed TWC's plan, agrees.
"Something will come back," Brodsky said. "We have infinite faith in the cable industry."
Still, he hopes that ISPs start becoming transparent and find fair solutions to network congestion.
"Every company manages their network," Brodsky said. "Now the goal is have them do so in a non-discriminatory manner, in as open a manner as possible, and with as much control to the consumer as possible."
http://blog.wired.com/business/2009/04/isp-download-ca.html
Still it’s unlikely that any large ISP will try to switch to cell phone-style billing again anytime soon.
"Time Warner Cable has raised the government and consumer flags too high for anyone else to do this anytime in the near future," Pali Research analyst Richard Greenfield said. "They created a PR nightmare for no reason."
Jim Blackley, a vice president at the nation’s fifth largest cable company Cablevision had it right when he dismissed tiered plans early this month, saying “we think [broadband] is a pretty powerful drug and we want people to consume more of it."
Large network operators protest that traffic on their networks keep going up at 30 percent a year, and they needs to stop bandwidth hogs, lest the internet experience "brown-outs" in the future.
Unfortunately, TWC was ill-prepared to explain exactly why the solution was to charge by the GB, given that its cost to send its customers’ data across the net's backbone fell in 2008, and most of its expenses aren’t closely tied to the amount of data any particular user downloads.
Like nearly all ISPs, TWC doesn't make public any usage information about its network.
That lack of data made it impossible for outside observers to judge whether the company was actually trying to fix an inherently broken billing model, experimenting with confusing billing options that cost subscribers extra, or trying to make it too expensive for users to watch video online, rather than through a cable television subscription.
Those suspicions got New York lawmakers Rep. Eric Massa and Senator Chuck Schumer to pressure TWC into abandoning its proposal.
"If the motivation was to change user behavior and user psyches, they will come back to it," said Derek Turner, the research director at the consumer-advocacy group Free Press.
Even when the company bowed to pressure and added a low and top tier to its plans, the point seemed clear -- discourage internet video.
TWC's lowest proposed tier ($15 a month for 1 GB with a $2/GB overage fee) effectively told subscribers never to watch a movie online, Turner argues, and even its $75/month top tier plan is only unlimited once users have paid another $75 a month in overage fees.
Not surprisingly, Art Brodsky, a spokesman for Public Knowledge - an interest group that opposed TWC's plan, agrees.
"Something will come back," Brodsky said. "We have infinite faith in the cable industry."
Still, he hopes that ISPs start becoming transparent and find fair solutions to network congestion.
"Every company manages their network," Brodsky said. "Now the goal is have them do so in a non-discriminatory manner, in as open a manner as possible, and with as much control to the consumer as possible."
http://blog.wired.com/business/2009/04/isp-download-ca.html