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Plans for tiered pricing still underway for North Carolina and New York

ISPs looking to make more money off their subscribers have been looking for ways to raise prices of their web access for a long time. At first, many ISPs added bandwidth caps to all users under the auspices of trying to prevent piracy. Now some ISPs are not only instituting restrictive bandwidth caps, but they are significantly increasing prices as well.

One of the ISPs making the biggest waves as it ushers in new changes with its customers is Time Warner. The massive cable TV and broadband provider announced plans to implement tiered internet pricing on April 13 in San Antonio, Texas; Austin, Texas; Rochester, N.Y.; and Greensboro, North Carolina.

EWeek reports that the backlash to the announcements from consumers and Congress was swift and severe. After a massive influx of complaints from customers, Time Warner has decided to delay the rollout of the tier pricing plan in both Texas cities, though at this time it plans to continue with the roll out to Rochester and Greensboro.

Gavino Ramos, Time Warner VP of communications for South Texas told the San Antonio Express-News, "What happened as we're continuing to listen was we worked in some of the comments and ideas that got sent to us. We came to the realization, let's do this in October."

The tiered plan that Time Warner introduced would have seen customers in the four cities paying from $29.95 to $75 per month for internet access with strict bandwidth caps and overage charges of $1 per gigabyte for data usage over the limits. After criticism for the bandwidth caps Time Warner announced an unlimited bandwidth plan that would cost a whopping $149.99 per month.

Representative Eric Massa, representing the Rochester area, responded to the tiered plan with a threat of introducing legislation that would place limits on how much ISPs could charge for tiered broadband pricing, especially in areas where the cable company holds a monopoly.

Massa said, "Time Warner has announced an ill-conceived plan to charge residential and business broadband fees based on the amount of data they download. They [ISPs] have yet to explain how increased Internet usage increases their costs."

Time Warner COO Landel Hobbs released a statement reports eWeek saying, "We realize our communication to customers about these trials has been inadequate, and we apologize for any frustration we caused. We've heard the passionate feedback, and we've taken action to address our customers' concerns."

Despite Time Warner's claims of hearing the public outcry, Massa remains unmoved. It's very hard to justify an increase from $40 per month that the average Time Warner customer is now paying for unlimited bandwidth to $150 per month for the same service.

Massa said, "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, N.Y., Greensboro, N.C., and Austin and San Antonio, Texas, and it's almost certainly just a matter of time before they attempt to overcharge all of their customers."

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Anyone living in the G-boro Triad area
By AntiM on 4/15/2009 11:33:38 AM , Rating: 4
Looks like it's going to take some congressional action
to get this abomination fixed.

If you haven't already done so.... write your Representative. https://writerep.house.gov/writerep/welcome.shtml

and Senators http://www.senate.gov/reference/common/faq/How_to_...




RE: Anyone living in the G-boro Triad area
By Brandon Hill (blog) on 4/15/2009 11:42:31 AM , Rating: 2
Is this TWC bullhonkey affecting just Greensboro, or will it affect neighboring Burlington and Winston-Salem as well?

My parents live in Burlington, but use AT&T DSL.


RE: Anyone living in the G-boro Triad area
By AntiM on 4/15/2009 12:14:03 PM , Rating: 2
quote:
Is this TWC bullhonkey affecting just Greensboro, or will it affect neighboring Burlington and Winston-Salem as well?


To be honest, I'm not 100% sure. I live in Winston but TW of Gboro is technically my provider so I think it's a safe assumption that will at least affect Winston-Salem, High Point and probably Burlington as well.


By bigsnyder on 4/15/2009 11:17:18 PM , Rating: 2
Yes this effects anyone with a triad.rr.com address unless you are subscribed to their cable/internet/phone bundle with the price lock, of course once that price locks expires then the new plan takes effect. There is a protest scheduled for this Saturday right outside of their Greensboro office. I may just attend. Anyway, now is a good time to switch to AT&T. They are offering a cash back deal for existing cable internet customers to switch. Ordering online also has an extra cash back special.


RE: Anyone living in the G-boro Triad area
By FITCamaro on 4/15/2009 1:13:27 PM , Rating: 4
Yeah that action should be to end the mandated monopolies in an area. Then Time Warner would actually have to deal with competition. Bad government legislation isn't fixed by more legislation. Unless that legislation repeals the previous legislation.


RE: Anyone living in the G-boro Triad area
By PitViper007 on 4/15/2009 2:57:15 PM , Rating: 3
Exactly. Get rid of the government mandated monopolies, and companies like Verizon, who is chomping at the bit to roll our it's FiOS, would be in there fast. Unfortunately, most of those areas are local municipalities that have agreements with that one, maybe two companies. I'm in one of those areas that FiOS can't get to because of regulations. I'd drop my cable connection like a hot potato if I could get FiOS.


RE: Anyone living in the G-boro Triad area
By Avitar on 4/15/2009 5:32:17 PM , Rating: 2
I have always liked the proposal that kicked around congress before the Democrats 2006 victory to allow any company that has right-of-way to your house to run fiber optics to it. The power company, the gas company, the sewer company, the phone company, and the cable company would all be points of possible competition. It is hard enough to hold a price fixing conspiracy together among three companies with five I think most of the country would have competitive data services.

By the way, as an engineer building a Gigabit+ data and video network running nation wide in FIOS involves about $1500 per house. Think $120 a month for one year. Then 5% of that a year for technology renewal uses the same fibers for forty years and moves the customer through 32 Gigabytes per second over the life time of the fiber. I do not know what customers will do with all of that bandwidth.


By Zshazz on 4/16/2009 12:10:28 PM , Rating: 2
I want FIOS!

Blah, I live in the Greensboro area, so it sucks for us. I guess we're going to have to switch over to DSL now... still, you can get faster DSL for even less than I was paying for cable already. So, in the end, it ends up better for me. Good luck turning a profit when you have no customers TW! :)

BTW, legal monopolies are BS... it's held us back so much. I'm looking forward to them banishing that crap.


RE: Anyone living in the G-boro Triad area
By Old Man Dotes on 4/15/2009 2:58:59 PM , Rating: 2
Personally, I'd be looking into a different ISP. TWC has a reputation as being spam-friendly, too. Do you have trobule getting your outbound email delivered to other ISPs?


By rudolphna on 4/16/2009 10:12:55 AM , Rating: 2
I dont, and I dont have spam problems either. But this is too much. The only problem is I have to convince my wife to let us switch to verizon (she hates verizon). I dont want to pay $150 a month for internet. I live in upstate new york, and this is an outrage.


I've already switched.
By DarkElfa on 4/15/2009 11:48:07 AM , Rating: 2
You all know they;re going to do this everywhere. That's why I already dropped them. As soon as I heard they were testing it I knew it was all she wrote. It sucks my only other alternative is Zoomtown ADSL so I've lost 75% of my DL speeds, but at least what I do have is all mine and uncapped.




RE: I've already switched.
By acase on 4/15/2009 12:58:11 PM , Rating: 2
That is a good idea for anyone, anywhere that has TWC and the option to use anything else to go ahead and drop the assholes and teach them a lesson.


RE: I've already switched.
By chick0n on 4/15/2009 2:21:13 PM , Rating: 5
Me, my gf, my cousin, my friend(2 lines) all using TWC.

We are ALL planning to switch,in fact. I might go cancel my TW service this week. but I need to get my DSL working first.

F-U Time Warner. Go suck a c0ck !


RE: I've already switched.
By MadMan007 on 4/15/2009 2:55:30 PM , Rating: 5
For everyone who has TW and cancels, be sure to let them know specifically why you're cancelling.


RE: I've already switched.
By FITCamaro on 4/15/2009 3:03:25 PM , Rating: 2
I agree. I currently have TW and if they bring it to my area, I will cancel my internet with them. And I will make sure they know why.

Unfortunately the vast majority won't care since they won't go over the caps. But as technology progresses and more people want to stream things, they will get a wakeup call. And hopefully cancel.


RE: I've already switched.
By cunning plan on 4/16/2009 6:50:30 AM , Rating: 2
Absolutely right!

There are so many household devices that use the internet in one way or another now.

For example, not my house but a friends has a Wii, Xbox 360, PS3, 3 Windows rigs, 3 windows lappys, 1 iMac, 1 Macbook Pro, 1 DS - all connected to the internet - throw in a few downloads, usual msn transfers, web browsing, music streaming - you are soon going to hit the cap!

A bit of an extreme example there but the point ISPs need to understand / consider is that more and more devices are becoming internet reliant and as the regular (by regular I mean people who are fairly slow to take up new technologies) consumer gets involved with them because their neighbour showed them how or whatever, the more the 'regular' consumer will be effected by caps!


Rip-off ISP's
By blowfish on 4/15/2009 11:51:07 AM , Rating: 4
So the ISP's are determined to push the USA even further down the value for money scale!

In the UK, you can get a 40MB/s service for the equivalent of about $20 per month, compared with around $40 per month for a typical 1.5Mb/s DSL connection from the likes of AT&T.

US pricing is simply outrageous, and shows that something must be done about the telecom monopolies. Hope we get a bit of "yes we can" on the telcom problem!




RE: Rip-off ISP's
By RjBass on 4/15/2009 1:02:22 PM , Rating: 2
Hmmm I have AT&T DSL. I pay $34.99 a month for my services and I get up to 6mbps down with unlimited data caps.

Thats a bit better then what your talking about.


RE: Rip-off ISP's
By FITCamaro on 4/16/2009 12:27:30 PM , Rating: 2
In my area 6 mpbs is the highest we can get and its $45 a month plus the $10-15 a month for basic phone service. You can get DSL without a phone line in South Carolina but only at the slowest speeds available which is like 768 kbps down/128 kbps up.


RE: Rip-off ISP's
By Yawgm0th on 4/16/2009 3:24:34 AM , Rating: 2
quote:
In the UK, you can get a 40MB/s service for the equivalent of about $20 per month, compared with around $40 per month for a typical 1.5Mb/s DSL connection from the likes of AT&T.
You mean 40mbps, right? Because 40MB/s would be about 335mbps, and I simply don't believe you at that point.

Still, 40mbps is pretty good. I'm thinking about upgrading to Comcast's 50mbps service for a good 6-7 times what you're paying.


RE: Rip-off ISP's
By brightstar on 4/16/2009 5:41:48 PM , Rating: 2
Don't you Brits pay around 150/227 u.s. a month for water? If that's true, I'd hate to see your gas and electric bill. I guess we all get the shaft one way or the other.


$105 for unlimited not $150?
By DavidOrr on 4/15/2009 12:21:54 PM , Rating: 2
This is just a side note, but wouldn't unlimited bandwidth cost $105, not $150? If you just bought the cheapest plan ($30), and then went over their maximum limit ($75), you'd have unlimited bandwidth for $105.

This is still a ridiculous price for the exact same service they offer now, but it isn't $150. Am I missing something here?




RE: $105 for unlimited not $150?
By cparka23 on 4/15/2009 1:29:08 PM , Rating: 2
(Bandwidth = speed. Not the same as total data transferred.)

Did a little check on this, and it seems that customers can do exactly what you proposed. The $150 that they quote is if you get their 100GB/mo tier at "Turbo" speeds (10MB down/1MB up) and go over the $75. You could do the same thing at their 60GB/mo tier at the same speed and pay $125 each month. If you go lower than that, the more inexpensive plans also have more restrictive bandwidths.

Regardless of speed, I still wouldn't pay >$75/month for uncapped downloads and uploads.


RE: $105 for unlimited not $150?
By StevoLincolnite on 4/15/2009 10:56:33 PM , Rating: 2
quote:
Regardless of speed, I still wouldn't pay >$75/month for uncapped downloads and uploads.


I like the idea of a tiered service, but they have gone the wrong way about it, in my eyes they should have a service with say 1-2gb of data equal in price to Dial-up connections, for those who are low-income earners, and those who just check emails and that's all, but they should still keep the unlimited plan at the same price point where it used to be at.


RE: $105 for unlimited not $150?
By g35fan on 4/16/2009 4:49:31 AM , Rating: 2
Word. All you hear about is how millions of americans still don't have broadband service. While I'm sure some of those are in very rural areas - a lot of others just don't have the need for it or don't have the money for it. Offer a budget tier to draw more customers in.

If TWC thinks they are going to cap me and keep me as a customer - think again. I luckily have some options although as others have pointed out it's a certainty that if TWC gets away with this others will follow suit. We should all spend a few minutes of our time and sign online petitions and write congressmen on this one folks.

I wonder how this will effect free wifi areas and people stealing other's internet connections...


...
By Breathless on 4/15/2009 11:25:08 AM , Rating: 5
I hope they go out of business. Let a more reasonable company step in and innovate with higher speeds and lower costs instead of restricted use and higher costs.

Die Time Warner Cable, Die.




RE: ...
By Sazar on 4/15/2009 1:37:47 PM , Rating: 2
I have their Turbo Road Runner.

I called to cancel my service and was told there would be no changes to the plans till around the August timeframe.

I might stick with them till then, because the current pricing is good. After then, I am definitely going to have to cancel. I stream too much stuff from Hulu, Veoh and other services as well as gaming to have to be concerned about caps.


By sparkuss on 4/15/2009 11:59:03 AM , Rating: 2
I don't know if they are actually postponed, but they already sent us in San Antonio TX a new user agreement with all the tiered usage language.

So technically we've already "accepted" if we remain on their network.

But I'm moving next month so hopefully my new ISP won't start "quite" yet.




By MrPickins on 4/15/2009 1:11:12 PM , Rating: 2
Everybody I've talked to in Austin with RR service has vowed to cancel it if the caps are instituted.

This is gonna bite Time Warner in the ass.


By Staples on 4/15/2009 2:16:15 PM , Rating: 2
Well they sent it with their last bill. Depending on what time you get your bill, there may be some who have not gotten it yet.


Monopoly, price fixing, it's all the same.
By crleap on 4/15/2009 12:38:52 PM , Rating: 2
quote:
introducing legislation that would place limits on how much ISPs could charge for tiered broadband pricing, especially in areas where the cable company holds a monopoly


If that goes through, it needs to be everywhere, not just where there's a monopoly. In my area, we have AT&T or Comcast. I PROMISE you, high prices will NOT only result from monopoly. All these companies are watching each other to see what they can get away with. Once one raises their rates or tiers or screws us in some other way, the other WILL follow suit to match... monopoly or not, we'll all pay the same price.

quote:
They [ISPs] have yet to explain how increased Internet usage increases their costs."


Amen.




By Sazar on 4/15/2009 1:40:56 PM , Rating: 2
quote:
They [ISPs] have yet to explain how increased Internet usage increases their costs."


Well you see the internet is a series of tubes and as with any tube, when traffic increases, the tube requires more maintenance due to the heavy trucks and stuff. It's all very technical but suffice it to say that it increases costs.

Oh by the way, I back up my research with absolutely nothing.


By Solandri on 4/16/2009 2:03:45 PM , Rating: 2
quote:
In my area, we have AT&T or Comcast. I PROMISE you, high prices will NOT only result from monopoly. All these companies are watching each other to see what they can get away with. Once one raises their rates or tiers or screws us in some other way, the other WILL follow suit to match... monopoly or not, we'll all pay the same price.

Well duh we'll all pay the same price. That's what the market does - drive everyone towards a similar price because it's the most efficient price (maximizes the balance between # of sales vs. profit per sale). But just because the prices are the same doesn't mean there is no competition. If a company feels they can drum up enough extra business to make more money by undercutting a competitor's prices, they will. If one raises their rates and the others raise their rates to match instead of keeping the same (lower) price and snapping up all the customers, that's a pretty good indication that the new price point is closer to the market price. The danger with having fewer competitors is that it's easier for them to get into an unspoken "I won't compete if you won't compete" agreement.

This is how the airline prices work. One airline tries setting its fares slightly higher or lower. If the others follow, the price change sticks. If the others don't follow and it was a fare increase, the airline is forced to lower its prices again. If it was a fare sale, the airline gets the benefit of having a lower price, but the other airlines have basically judged that the money they'd lose from the lower price outweighs the business they'd lose by not matching the sale. If their judgment is correct (which it usually is), the airline running the sale ends up making less money from the sale (due to less profit per ticket sold) than if they'd never run the sale, and will end the sale on their own. If they end up making enough money to keep the sale running, they will keep it running and the other airlines will eventually be forced to match the sale price. The sale price then becomes the new market price.

The indicator of monopolies and collusion is a lack of price changes (or price changes always in one direction), not the fact that all the companies have the same price.


Monopoly?
By jonmcc33 on 4/15/2009 11:27:25 AM , Rating: 2
Well, if they are the only ISP in an area then that's the way the ball bounces. If there are other options however they can expect to lose a lot of customers. I know many people in Ohio that have cut Time Warner for AT&T DSL instead.




RE: Monopoly?
By frobizzle on 4/15/2009 1:58:36 PM , Rating: 2
When TWC first offered Road Runner in the Rochester area, it was 10mb/s (and of course, no caps.) One day, I and others noticed a profound reduction in bandwidth. At first TWC was in denial, blaming everything and anything. What is turned out to be was they lowered the speed to 2mb/s and apparently thought no one would notice the difference.

I sent a mail note to TWC, informing them that if they are reducing the bandwidth by 80%, I expect them to also lower my monthly bill by 80%. Strangely, I never received a reply. I sent another letter, again requesting a reduction in my bill comparable to the reduction in service. Again, silence from TWC.

About that time, the local telco, Frontier, started offering ADSL. I switched and have had no regrets. I get a consistant 6mb/s down and 384kb/s up. Not blazing by today's standards but certainly functional.


They rip you off
By Suzdurma on 4/16/2009 12:48:56 AM , Rating: 3
They are ripping you off.I live in Bulgaria(poorest country in whole Europe Union) in 2nd largest city(around 350 000 people) and we have more then 5 ISP one of them offers
26$/month Fiber optic to home 40mbit/s download and are1:1(unlimited traffic)and also you get phone with 300 free minutes to Bulgaria,Europe,USA and Canada.




Its a start
By Mitch101 on 4/15/2009 11:31:23 AM , Rating: 2
quote:
it's almost certainly just a matter of time before they attempt to overcharge all of their customers


They already do if your a non subscriber to cable service they charge you a monthly service connection fee even if all you want is high speed internet.

How about some class action to target these misc fees they get away with?

Just like people cant buy their own cable box and eventually pay rental fees beyond the cost of the boxes themselves. But that suit is already under way.




Time Warner in Texas is fail
By smackababy on 4/15/2009 11:40:12 AM , Rating: 2
I had Time Warner for awhile when I lived in Texas. Their customer support is terrible. If I hadn't gotten an empolyee discount, due to my roommate working for them, I would have dropped their service many times. I highly doubt a teired program will work for any but the most basic user. I download/upload upwards of 10GB a day to my FTP server. Now, I am probably in the minority, but there is no way I am spending $150 a month for that.




Thank God for Congress!
By borowki2 on 4/15/2009 12:54:17 PM , Rating: 2
Where it for not Congress--who knows?--we'd all be paying an extra 10, 20 bucks for Internet.




Pic
By Gasaraki88 on 4/15/2009 2:07:03 PM , Rating: 2
Nice picture. =)




October isn't any more like never
By Staples on 4/15/2009 2:12:35 PM , Rating: 2
I think they should just raise their limits. 40GB is ridiculous when the competition limits their usage to 250GB and 150GB. If this was 120GB I would not be so opposed to it but 40GB is just not acceptable. I may make the jump to DSL if their limit stays at 40GB.




Time Warner
By vaporwolf on 4/15/2009 5:06:26 PM , Rating: 2
Fine. Time Warner, from now on I want you to block all ads from any content that I download. Any web site, embedded video stream, google search page, whatever. If I am going to be charged for the amount of data (and not the pathetic speed rate that you currently deliver..), then I only want core content.
Let's see how long the rest of the web waits until it screams at you for destroying the main revenue model.




By PlasmaBomb on 4/15/2009 6:18:50 PM , Rating: 2
That really is impressive :)

1) Increase revenue - http://s113.photobucket.com/albums/n222/C_ED_99/?a...

2) Decrease costs - http://s113.photobucket.com/albums/n222/C_ED_99/?a...

3) Get money from government to update network

4) ...

5) Profit




By majestyy2k on 4/16/2009 1:59:22 AM , Rating: 2
I've been waiting for 2years now.




Is there a real usage concern?
By Counter on 4/16/2009 8:28:43 AM , Rating: 2
I'd like to know if the bandwidth available is really being used a near to full capacity. If it isn't, then this cap is just a way to make some cash. If, however, there is a real possibility of filling the pipes, so to speak, then something should be done.

In a way, it is like the utility industry. We are required to provide electricity to our customers. If, due to peaks in demand (afternoons on hot summer days, for example), the demand is greater than our ability to supply power, we need to purchase power. This is a short term fix.

To fix it long term, we need to either reduce peak usage or build new plants. Plants (or any infrastructure) are an expensive act, which is paid for by every user. Sometimes demand conservation is the better way to go. After all, on non-peak times, the extra capacity is not used.

Demand conservation will only go so far, however, and if base load increases to a certain level, then the new plant must be built.

There is one difference in the industries in that the end user does pay for what he/she takes off the system on a per unit basis, and not a flat rate.




Moving...
By cscpianoman on 4/16/2009 9:23:01 AM , Rating: 2
We are moving to Ohio in a couple of months, guess who got axed as choice for ISP?




Hooray . . . for now
By OAKside24 on 4/16/2009 9:44:05 AM , Rating: 2
I couldn't believe they targeted Austin (seemingly very tech oriented, location of world-renowned tech expo at SXSW) let alone my hometown of San Antonio (maybe a bit more understandable). I'm a happy AT&T DSL customer (6 Mb/s, $35/m, uncapped) that was in disbelief over TW's ridiculous bandwidth caps coming home and maybe spreading to all providers in the area. A battle seems to have been won, but the war for fair, fast & inexpensive internet access in the U.S. is far from over.




It's obvious why they're doing this
By goku on 4/16/2009 4:56:35 PM , Rating: 2
These companies are coming up with tiered pricing and whatnot because "the internet" is BAD for their bottom line. With services like hulu, youtube, and other video providers, VOIP, etc. it cuts into the companies bottom line of providing such services like cable TV and Phone. So in order to recover the savings the consumer is having with unlimited internet and using these alternative services, they're jacking up the prices and putting bandwidth caps on them, so they can maintain their monopoly.




Bandwidth cap pricing structure
By Savatar on 4/21/2009 11:27:54 AM , Rating: 2
Bandwidth caps in general aren't bad - let me explain. As someone mentioned, most colleges implement bandwidth capping pretty well. Students are allowed a reasonable amount of bandwidth (usually up to what around 95-99% of the people use) per a set time interval. But, instead of charging more, they just limit the speed of the line once that threshold is reached per day, week or month (whatever the specific identified limits are) so that other users aren't affected as much. Of course, this kind of model usually addresses an actual problem relatively well (people slowing others down). Time Warner's model doesn't seem to be actually addressing a problem like that. Time Warner's implementation is different. Drastically different, and I strongly feel that TW is taking the wrong approach for two main reasons.

First, the pricing model is simply unrealistic for the amount of bandwidth you get. $25 for 10 GB doesn't sound bad, but that's only around 333 MB per day. With services like Steam where you're expected to purchase and download games online (which are usually around 4-5 GB), you'll quickly find yourself halfway to your monthly cap in just a few hours. Several other practical (and even current) applications would be rendered financially impractical as well, like streaming high definition content from media providers. It's simply limiting innovation, and the pricing model doesn't reflect a realistic understanding of what the internet can do.

Second, their proposed pricing model doesn't seem to scale well. The $65 for 60 GB/month (roughly 2GB/day) price point is already well above what standard internet access currently costs ($39.95/month for Time Warner where I live).

Despite these painfully obvious problems (I'm really surprised that a system like this got approved by Time Warner), capping still has potential and shouldn't just be outlawed alltogether. What Time Warner needs is to identify a realistic system where they can accomplish their goals without hurting their customers and remaining competitive. Something like what colleges do, as identified in the first paragraph, may work wonders if implemented well. 800Kbps down being artificially limited to some percentage of the connection's available bandwidth after downloading a high amount of data like 40GB/week may help the problem, if there really is a problem to begin with... especially if customers find that they can actually save money by lowering the price a little, and charging slightly more for 'uncapped' access. It's not a bad idea, I just think they went about it entirely the wrong way.




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