Time Warner introducing even lower caps in the U.S.

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freitasm

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#31883 3-Apr-2009 08:12

For those who keep quoting the U.S. as the land of wonderful Internet, here comes the caps. While Comcast introduced a quite generous 250GB cap in their plans, Time Warner is introducing plans with 5, 10, 20 and 40GB caps.

By charging a premium to the heaviest broadband users, much the same way cell-phone providers collect fees from subscribers who exceed their allotted minutes, Time Warner would upend a longstanding pricing strategy among Internet service providers. Typically, phone and cable companies charge flat fees for unlimited access to the Web. "We need a viable model to be able to support the infrastructure of the broadband business," Time Warner Cable CEO Glenn Britt says in an interview. "We made a mistake early on by not defining our business based on the consumption dimension." Time Warner Cable has 8.4 million broadband customers.

In other words they have found out that unlimited data is not the way to go, from the providers' perspective. Heavy downloaders made it easy for the providers to create a case to limit Internet for everyone else.

I wonder if those heavy downloaders actually do anything with all that digital content they download...

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#205061 3-Apr-2009 08:25

There goes the world of IPTV and Netflix type movies on demand and the like which is being touted as the replacement for Blu-ray and satellite TV..

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Old3eyes

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#205094 3-Apr-2009 10:59

Time warner is simply trying to protect its cable business, If people start watching legal video online (hulu etc) it is less subsciption revenue they will receive.

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#205100 3-Apr-2009 12:05

old3eyes: There goes the world of IPTV and Netflix type movies on demand and the like which is being touted as the replacement for Blu-ray and satellite TV..

No. The exact opposite will now happen.

Expect the IPTV and Netflix type business to now prosper as they enter into agreements with ISP's for zero rated traffic or flat rate traffic. Kill P2P because it costs too much and zero rate the competition. Very smart move..

Ilmarin

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#205109 3-Apr-2009 12:42

sbiddle:
old3eyes: There goes the world of IPTV and Netflix type movies on demand and the like which is being touted as the replacement for Blu-ray and satellite TV..

No. The exact opposite will now happen.

Expect the IPTV and Netflix type business to now prosper as they enter into agreements with ISP's for zero rated traffic or flat rate traffic. Kill P2P because it costs too much and zero rate the competition. Very smart move..

... and likely to happen here as well, given that we currently pay through the nose for all traffic, regardless of its origin, thus making the prospect of streaming legal HD content for minimal traffic costs and a flat charge rather attractive compared to the less legitimate options.

However, considering how competitive the North American market is, it's hard to see Time Warner's strategy having much of an effect in the long run, whereas NZ consumers are already trapped in an environment that engenders a demand for high-def content without the exhorbitant traffic charges.

NzKaizer

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#205114 3-Apr-2009 12:46

old3eyes: There goes the world of IPTV and Netflix type movies on demand and the like which is being touted as the replacement for Blu-ray and satellite TV..

Yip,

richgamer

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#205143 3-Apr-2009 14:32

watch everyone switch over to comcast for their 250gb cap. bad move from time warner. their going to lose all their subscribers.

freitasm

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#205144 3-Apr-2009 14:36

richgamer:

watch everyone switch over to comcast for their 250gb cap. bad move from time warner. their going to lose all their subscribers.

No they won't. First because for a lot of people 5GB, 10GB or 20GB is plenty enough - not everyone downloads illegal TV shows all day every day. Next because Comcast is not available everywhere, and vice-versa. Some will be stuck with that.

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#205316 4-Apr-2009 19:45

sbiddle:
old3eyes: There goes the world of IPTV and Netflix type movies on demand and the like which is being touted as the replacement for Blu-ray and satellite TV..

No. The exact opposite will now happen.

Expect the IPTV and Netflix type business to now prosper as they enter into agreements with ISP's for zero rated traffic or flat rate traffic. Kill P2P because it costs too much and zero rate the competition. Very smart move..

Except of course, because this is Time Warner, they won't offer zero-rated IPTV. Why would they let some third-party offer movies etc for cheaper than Time Warner charges over their regular cable TV service?

It is simply a move to reduce internet-delivered content (illegal or otherwise) so that more people watch TV via the regular cable TV box. They don't want IPTV, Netflix and Hulu to take over their broadcast TV model.

JonC

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#205317 4-Apr-2009 19:50

freitasm:
richgamer:

watch everyone switch over to comcast for their 250gb cap. bad move from time warner. their going to lose all their subscribers.

No they won't. First because for a lot of people 5GB, 10GB or 20GB is plenty enough - not everyone downloads illegal TV shows all day every day. Next because Comcast is not available everywhere, and vice-versa. Some will be stuck with that.

If the 5/10/20GB plan is substantially cheaper than the 250GB plan and they're a light user then sure, TW's plans will seem a better deal. But if the 250GB is the same price, then why would you go with the 20GB plan?

Anyway, as I understand it, most people in the US don't have a choice between cable providers - it's usually a choice between cable or ADSL.

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#205358 5-Apr-2009 07:55

sbiddle:
old3eyes: There goes the world of IPTV and Netflix type movies on demand and the like which is being touted as the replacement for Blu-ray and satellite TV..

No. The exact opposite will now happen.

Expect the IPTV and Netflix type business to now prosper as they enter into agreements with ISP's for zero rated traffic or flat rate traffic. Kill P2P because it costs too much and zero rate the competition. Very smart move..

I agree with the idea ... but I do wonder if a provider will be prevented from such an action due to "net neutrality". They are not prioritising that traffic perhaps, but they are making it preferential by not charging for it....

My views are my own, and may not necessarily represent those of my employer.

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#205421 5-Apr-2009 17:21

I am rather keen to find out who tivo nz (tvnz) are partnering with to offer free bandwidth for the ondemmand and extra features of the tivo service. Probably telecom but will be interesting if they choose someone else or could go with a number of isp's

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#205438 5-Apr-2009 19:03

When you got to the TiVo site and sign up they ask what ISP you are with and are you locked into a contract..

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#205439 5-Apr-2009 19:05

raytaylor: I am rather keen to find out who tivo nz (tvnz) are partnering with to offer free bandwidth for the ondemmand and extra features of the tivo service. Probably telecom but will be interesting if they choose someone else or could go with a number of isp's

well kordia (orcon, ex bcl) would probably seem logical given that they are the SOE and given their histroy with TVNZ ownership.

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JonC

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#206638 13-Apr-2009 10:42

And in a follow-up to this, the uproar about the stingy caps has drawn the attention of politicians who want to regulate ISPs that have a monopoly.

http://www.eweek.com/c/a/IT-Infrastructure/Time-Warners-Broadband-Cap-Plans-Draw-Lawmakers-Ire-202147/

Massa added that while he favored a "business's right to maximize their profit potential, I believe safeguards must be put in place when a business has a monopoly on a specific region."

C/O Slashdot: http://news.slashdot.org/article.pl?sid=09/04/12/2044244

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#206690 13-Apr-2009 16:56

freitasm: For those who keep quoting the U.S. as the land of wonderful Internet, here comes the caps. While Comcast introduced a quite generous 250GB cap in their plans, Time Warner is introducing plans with 5, 10, 20 and 40GB caps.

The US situation is completely different imo. Local peered traffic is 99% of their traffic, how does variable data usage cost TWC money when their network is peered and most costs are fixed?

For example in 2008 TWC's costs went down 12%, revenue went up 11% and data usage was rising the entire time. Ref: Time Warner Cable Earnings Refute Bandwidth Cap Economics
http://blog.wired.com/business/2009/04/time-warner-cab.html

TWC's revenues are going up while its costs are going down it doesn't take a genius to realize this is about: 1) Squeezing cash out of broadband users and 2) Keeping TWC's cable TV operation alive by making Internet video less desirable.

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