Thursday, April 2, 2009

Time Warner Cable to start screwing you over with bandwidth caps

[caption id="attachment_1863" align="alignright" width="180" caption="Time Warner is putting forth an anti-competitive strategy that screws everybody over except themselves."]A typical rendition of a rich businessman doing whatever it takes so they don't get screwed over.[/caption]

Early last year, Time Warner announced that it planned to set up bandwidth cap trials. Sixteen months later, they're moving forward with this trial and will be testing these caps in four new cities.  The four new cities where Time Warner will be screwing over their customers over will be:

  • Rochester, NY

  • Austin, TX

  • San Antonio, TX

  • Greensboro, NC

What's interesting is Time Warner doesn't have other ISPs to deal with in these cities that offer competitive speed in broadband service.

CEO of Time Warner Glenn Britt said an in interview:
We need a viable model to be able to support the infrastructure of the broadband business.  We made a mistake early by not defining our business based on the consumption dimension.

Essentially what he's saying is that their existing flat-rate pricing model isn't "viable" enough to fund their infrastructure upgrades, despite the company being very profitable.  The company has other niche ways to make money by doing things like DNS redirection advertising, where if somebody mistakenly types in a wrong domain, they'll see ads come up on that page with similar domain names and suggestions of domain names that closely match what they probably meant to type.

In truth, the real purpose of this bandwidth cap is to allow them to take control of Internet Video.  The idea of charging customers more money for the exact same service, especially now with video sites like YouTube and Hulu that offer HD video clearly poses a huge threat to their TV business.  Time Warner's investors also pressured them to go this route.

The most ridiculous thing about this whole cap is the lack of bandwidth they're making available for their audience.  Time Warner wants to set a cap ranging between 5GB to 40GB.  If you're a subscriber to Netflix's HD streaming package, you could easily exceed 50GB in less then a week.  Their plan is to charge you $1 extra for every gig of bandwidth you go over.  A 40GB cap is extremely low, even Comcrap...err Comcast has a 250GB cap which is 6 times more then the max of what Time Warner offers.

I stumbled across this website: '' that lists common internet activities that could easily exceed their monthly 40GB cap:

  • Downloading game demos

  • Download your purchased steam games

  • Download music via iTunes

  • Backing up personal websites

  • Uploading videos to YouTube

  • Watching YouTube videos

  • Keeping our Dropbox synced

  • Stream video from Hulu/Vimeo/Netflix

  • Update operating system with drivers/service packs

  • Office networking between multiple branches

  • Remote Desktop Access, Online Gaming, Downloading Linux Distros, School Lectures

  • Backing up full resolution photos from my 8GB flash card to my online storage account.

  • Streaming music from Pandora

  • Uploading large amounts of pictures (20+ mega pixel pr. image) for sharing with friends on my personal website

  • Stream video with grandma so she can see her grand kids

  • World of Warcraft

  • Skype / VoIP

  • Downloading scientific data for research

  • Web seminars, web meetings

Other ISPs like Verizon FIOS (where available) offers very competitive speeds at a competitive price, and a much better package, also did I mention they don't rip you off by throwing in a bandwidth cap?

The decisions they're making  are outrageous and monopolistic.  Time Warner has no competition to deal with which is exactly why they're doing this crap, leaving the residents of those cities little to no choice when it comes to ISP selection.

Don't get me wrong, I'm not at all against businesses making money.  However, when you do something where it's obviously anti-competitive against other businesses, that's where I see it as the company being GREEDY.  These online video websites offer a new business model that goes against the archaic business model of Time Warner.  The most logical way to handle this situation is for Time Warner to change their business strategy and offer something better or unique for the customer rather then taking a sledgehammer and screwing everybody over.  Their current strategy really leaves the taste of barf in my mouth.

I hope to god there's a class action lawsuit against Time Warner.  Legislation needs to be passed because these sort of business not only hurts everybody in the long run, but it creates a huge obstacle when it comes to internet evolution.