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Congressman Mad About TWC's Internet Meter

Congressman Eric Massa (D-NY) is formally opposing Time Warner Cable Inc. (NYSE: TWC)'s Internet pricing plan that charges customers more if their bandwidth consumption exceeds defined thresholds.

In a statement issued yesterday, Massa labeled the MSO's plan as "ill-conceived" and "monopolistic."

"The problem is that by [installing a metered billing plan], broadband Internet users' usage will obviously take a steep decline or else middle income families will see outrageous Internet bills," Massa argued. "Internet access is as essential to our economy as water is to our survival. I firmly oppose capping Internet usage and I will be taking a leadership role in stopping this outrageous, job killing initiative."

Time Warner Cable first tested the metered Internet concept in Beaumont, Texas, charging new customers $1 for every gigabyte consumed beyond a given limit -- 5 GB for the operator's "Lite" 768 Kbit/s; 10 GB for the 3 Mbit/s "Basic" offering; 20 GB for its 7 Mbit/s "Standard" tier; and 40 GB for "Turbo," which offers speeds up to 10 Mbit/s. (See Metered Usage Test Rolls On and TWC Tees Up Metered Internet Trial .)

The company told Business Week that about 14 percent of the 10,000 customers subject to the test in Beaumont exceeded the cap, with overage fees averaging about $19 per month.

As indicated by the MSO in February, Time Warner Cable is preparing to launch similar trials in several additional markets, including systems serving Austin and San Antonio, Texas; Rochester, N.Y.; and Greensboro, N.C. (See TWC Tees Up More Meters .)

In addition to the usage-based tiers already offered in Beaumont, trials in these additional markets will also introduce a new "super-tier" that sets a 100-gigabyte threshold. The MSO, which also plans to provide customers with a "gas gauge" that monitors their bandwidth consumption, has yet to reveal pricing on the 100 GB tier.

TWC doesn't anticipate charging any applicable overage fees until after it completes a three-month evaluation that aims to help customers get a grip on their consumption levels and pick the tier that best suits their bandwidth usage. Timing will vary by system, but billing on the new set of trial markets likely won't start until September, a TWC spokesman says.

Although the MSO says it must migrate to a usage-based system, detractors believe the company is attempting to discourage customers from tapping "over-the-top" Internet video sources and to stifle the success of Web TV competitors. TWC and Comcast Corp. (Nasdaq: CMCSA, CMCSK) are developing Web TV models of their own that look to complement their traditional subscription-based video offerings and to prevent so-called "cord-cutting." (See Cable-Led Web TV Deals Still Forming and Cable Web TV: Results May Vary .)

Comcast has so far resisted a billing-based, metered Internet model, instead opting for a policy that keeps "excessive" users in check with a monthly 250-gigabyte consumption cap. Canada's Rogers Communications Inc. (NYSE: RG; Toronto: RCI), meanwhile, has launched a metered billing platform in all its markets. (See Rogers Takes Internet Meter to the Masses and Comcast Draws the Line at 250GB.)

— Jeff Baumgartner, Site Editor, Cable Digital News

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paolo.franzoi 12/5/2012 | 4:07:12 PM
re: Congressman Mad About TWC's Internet Meter

 


Of course, D-NY means NY State which turns out is actually larger than the confines of NY City.  This may surprise you but Upstate New Yorkers get legislative representation like Congressman Massa - who is NOT from NY City.


Nice snide comment with no research.


seven


 

Matthew D. Miller 12/5/2012 | 4:07:12 PM
re: Congressman Mad About TWC's Internet Meter

I wonder how the Congressman feels about meter power and water? Oh, wait, New York City has un-metered water and the massive waste of the resource that comes with it.

miar70 12/5/2012 | 4:07:21 PM
re: Congressman Mad About TWC's Internet Meter

Jeff,


Thanks for the further information. So far I find 100GB good enough for my needs, but then I live somewhere that doesn't have access to Hulu or iPlayer, so perhaps I am skewed. Still the caps and pricing could use some work.


 


Seven,


Couldn't agree more ! As you can see the 250GB limit imposed by Comcast suddenly looks almost generous :) I think the caps are too low and can stifle use of the internet. Certainly have to be careful with video delivery in any particular month.


 

Jeff Baumgartner 12/5/2012 | 4:07:22 PM
re: Congressman Mad About TWC's Internet Meter

TWC announced earlier tonight that it's increasing the caps for the Beaumont trial and its new pilot markets.  It's also debuting a 100 GB cap for heavy users and a 1 GB cap tailored for subs who don't do much more than surf the web and check email. 


Also, the MSO mentioned that it will get Docsis 3.0 off the ground with a 50-meg tier that runs $99 per month.


A story is on the way, but the TWC COO detailed those changes in this  statement.


 

rjs 12/5/2012 | 4:07:23 PM
re: Congressman Mad About TWC's Internet Meter

The congressman should do something real and useful and stop this useless rant about charges and rather change the system that causes it. Bring in competition for services by separating transport from service.


As Miar70  noted in a earlier post, separation of transport and services is the only way to go.  This separation will ensure competition amongst the service providers  and transport (bit carriers).


This separation prevents unfair tie-in and actually makes businesses more efficient by having to clearly itemize transport costs without unfair subsidization of losses from the services tied-in.


It is very simple, for example separate VZ into VZ-FioS (transport)  and VZ-Internet VZ-Content VZ-wireless etc etc.  Each of these entities has a separate P&L statement and are subject to antitrust laws.


As regards the govt investing in transport, it is a completely different and independent issue. It depends on funding capacity. After seeing AIG and the banks receive BILLIONS from govt, I have no objection to govt being a 40% owner.  And we have seen how well the too big to fail banks have performed.  Also, note that if the transport is separated from services, it marginalizes the issue of part govt ownership of transport.


 


-RJS

paolo.franzoi 12/5/2012 | 4:07:23 PM
re: Congressman Mad About TWC's Internet Meter

 


Miar,


The only problem I have is with the caps and there size.  These seem very low:


30Gbytes of traffic is about 32,000 seconds of downloading at 7.5Mb/s.


3600 seconds in an hour that means one can download for about 10 hours/month with this cap.


30 * 24 = 720 hours/month total or


One can use their service for about 1/72 of the time before the cap is hit.  This is perhaps an area where regulators can step in.  Maybe 1/10th is good?


 


seven


 

miar70 12/5/2012 | 4:07:24 PM
re: Congressman Mad About TWC's Internet Meter

Seven,


I agree that competition is critical in providing the motivation to offer good service and deals to consumers. Unfortunately there is not enough competition in a lot of areas and leads to little choice for consumers. It would be great if those options were available, similar as they are to pre-paid wireless users. My local MSO does offer a range of speeds and capacities (MSO remains unamed :) )

<table border="0" class="ici">
<tbody>
</tbody>
<thead>
<tr>
<th class="linedef" id="services"></th> <th id="downloadBits">Download speed</th> <th id="uploadBits">Upload speed</th> <th id="downloadMois">Monthly capacity
(Downloading)</th> <th class="lineend" id="uploadMois">Monthly capacity
(Uploading)</th>
</tr>
</thead>
<tbody>
<tr class="tgv30">
<td class="linedef">Ultimate Speed Internet 50</td>
<td>50 Mbps</td>
<td>1 Mbps</td>
<td align="center" colspan="2">100 GB&nbsp;&nbsp;&nbsp;
combined**</td>
</tr>
<tr class="tgv30">
<td class="linedef">Ultimate Speed Internet 30</td>
<td>30 Mbps</td>
<td>1 Mbps</td>
<td align="center" colspan="2">70 GB&nbsp;&nbsp;&nbsp;
combined**</td>
</tr>
<tr class="ixtmPlus">
<td class="linedef">Extreme High-Speed Internet Plus</td>
<td>20 Mbps</td>
<td>1 Mbps</td>
<td align="center" colspan="2">30 GB&nbsp;&nbsp;&nbsp;
combined*</td>
</tr>
<tr class="ixtm">
<td class="linedef">Extreme High-Speed Internet</td>
<td>10 Mbps</td>
<td>900 Kbps</td>
<td align="center" colspan="2">100 GB&nbsp;&nbsp;&nbsp;
combined**</td>
</tr>
<tr class="ihv">
<td class="linedef">High-Speed Internet</td>
<td>7.5 Mbps</td>
<td>820 Kbps</td>
<td align="center" colspan="2">30 GB&nbsp;&nbsp;&nbsp;
combined*</td>
</tr>
<tr class="ici">
<td class="linedef">Basic Internet</td>
<td>600 Kbps</td>
<td>128 Kbps</td>
<td align="center" colspan="2">2 GB
combined*</td>
</tr>
<tr class="itel">
<td class="linedef">Dial-up Internet</td>
<td>56 Kbps</td>
<td>28 Kbps</td>
<td>N/A</td>
<td class="lineend">N/A</td>
</tr>
<tr>
<td colspan="5" id="texte">* $7.95 per additionnal gigabyte
Basic Internet, up to a maximum of $50 per month,
High-Speed Internet, up to a maximum of $50 per month.
Extreme Plus High-Speed Internet, no fees limit.
** $1.50 per additionnal gigabyte. No fees limit.</td>
</tr>
</tbody>
</table>

Will we ever see a minutes/GBytes 'a la carte' menu and will we see more choice like this in other markets ?


P.S - Hope I don't break any rules by posting pricing info, but it is generally available on the internet.

paolo.franzoi 12/5/2012 | 4:07:25 PM
re: Congressman Mad About TWC's Internet Meter

&nbsp;


miar,


There are internet tiers (DSL primarily) of $12.95/month service.&nbsp; Most cable operators work in the $35/month service with some higher tiers.


If I was told that I could get a baseline $12.95 or $9.95 per month service with a reasonable bw cap/overage charge that might make sense.&nbsp; Then I could buy additional rate cap (like minutes on wireless).


If I use wireless as an example, there is an MVNO that sells prepaid connectivity for $7/month.&nbsp; Calls are expensive ($.10/minute iirc), but for those folks that just use their cell for emergencies that might make sense.


Now, here is the problem - what we need to make this work for the consumer is competition.&nbsp; The beauty is that if my cable vendor does this, then I am likely to shift back to DSL.&nbsp; I feel no compulsion to live with a deal that makes no sense to me.


&nbsp;


seven


&nbsp;

miar70 12/5/2012 | 4:07:25 PM
re: Congressman Mad About TWC's Internet Meter

I agree that the internet is extremely valuable and essential to any country and economy to have a high quality network to facilitate business and learning for growth in the future. However while I would like the government to actually build out/subsidize a fast broadband network, should it really be doing so to facilitate my streaming of Hulu, Netflix etc (which is doing great damage to Blockbuster...) ?


So for business and learning, government money to subsidize and for entertainment probbaly not. Sounds like a 2 tier internet already...


So perhaps the Australians (and UK with OpenReach) have got it right, by separating transport from service. Government pays for the access networks and provides fast pipes everywhere. Then learning and business is done in a 'free' environment and service providers will need to pay carriage fees for transporting content etc into your home. That would at least put cable, satellite and internet streaming on an equal footing as well :)


If only it were that simple...

miar70 12/5/2012 | 4:07:25 PM
re: Congressman Mad About TWC's Internet Meter

Whilst everyone would like lower prices, the operator must balance whether or not they can really get the higher prices out of the higher bandwidth consumer. Right now it is an average across the board, chances are that higher consumers are likely to take steps to cut their bills if they went to a pay-what-you-use model.


One other thing, if you have service and you don't use it, you still need to cover the cost of providing the network for you not to use it, so there would be something like a small fixed cost (line rental sounds familiar ?).


I agree with the careful analogies, but let's reverse it. I think it is outrageous that gasoline is metered, after all this is clearly stifling the economy and doing great damage to large engined vehicle manufactures who are finding it much harder to compete, perhaps if we introduce an uncapped $300/month gas plan for all we could save the auto industry !! ;)

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