Time Warner Cable's Hidden Easter Egg

Time Warner Cable has announced trial runs of their tiered Internet service in four cities. I live in one of them, Greensboro, NC. The other three are Rochester, NY, Austin, TX, and San Antonio, TX. The similarity of these four cities is simple…there is no other broadband Internet provider besides Time Warner. We do have Clearwire in Greensboro, but what people don’t know is that Time Warner owns 32 million shares (a $550 million investment) of Clearwire.

What this tiered Internet service is equates to this: I will receive the same Internet service as before (same speeds up and download), but now I have to choose a tier based on price and once I go over the amount of GB’s on that tier, I will pay an overage fee per GB extra used. I currently, as many of you do, pay $39.95 a month for Road Runner service with Time Warner. Under the cap I will have to choose from one of a few tiers with a cap. The tiers are 5GB a moth for $29.95, 10GB a month for $39.95, 20GB a month for $49.95, 40GB a month for $54.95 and 100GB a month for $75. They are going to charge $1 per GB that you go over. Now I pay $39.95 a month for unlimited service. Capped I will pay $150 a month for service. I use about 40GB a week here with 2 adults using 2 laptops, 2 children using another laptop, XBOX live content downloads, Netflix via my XBOX and my laptop, and a Time Warner Digital Phone all running through a home networking router.

Time Warner Cable claims it is because the traffic is bogging down their system. The logical solution is to upgrade to a bigger and faster network, in this case DOCSIS 3.0, but they won’t. And it’s not that they don’t have the money. On Stopthecap.com, they report that according to Securities and Exchange 10-Q filings by Time Warner, “High-speed data costs decreased for the three and nine months ended September 30, 2008 primarily due to a decrease in per-subscriber connectivity costs, partially offset by subscriber growth. “

Also from their findings, “In 2007, TW made $3,730 Million, on high speed data alone, and then had to turn around and spend $164 Million to support the cost of the network. 2007 total profit on high speed data: $3.566 Billion”

“In 2008, TW made $4,159 Million, on high speed data alone, and then had to turn around and spend $146 Million to support the cost of the network. 2008 total profit on high speed data: $4.013 Billion”

“It cost TW 11% less money in 2008, to keep their network running, than in 2007.”

There are a lot of reasons why this is a bad idea. You may be asking yourself why this affects me if I don’t live in a test market. The answer is that when they get done testing it, if it is successful, and increasing your prices while supplying the same service will work, it’s coming to your town next. Time Warner is not the only company trying this, AT&T U-Verse is trying this in Beaumont, TX and Reno, NV, Comcast already has a cap (albeit reasonable at 250GB per month before overage fees), and everyone else will follow suit.

There is a silver lining out there in the form of Representative Eric Massa, freshman Congressman from NY’s 29th District, Rochester, NY. He has pending legislation called the Broadband Internet Fairness Act which will “prohibit unfair tiered price structures from internet providers. The bill will also address the importance of helping broadband providers create jobs and increase their bandwidth while increasing competition in areas currently served by only one provider.” You can read Rep Massa’s statement at his Congressional website here. I have spoken with Rep Brad Miller about this and he will be speaking with Rep Massa when he returns from Congress’s break. I hope and believe Rep Miller will sign on to this legislation. Rep Watt will need some convincing from his constituents. In any case, I urge you to write your Congressman and ask them to look at Rep Massa’s pending legislation. Ask them to sign on.

Here are 10 reasons why this is a bad idea:
1. Small Businesses who cannot afford Business Class Internet service will be hurt by rising rates in an economy that already has us all struggling to survive.

10. While we use archaic infrastructure to deliver broadband at very slow speeds, the rest of the world delivers speeds up to 40 times the speed that we use here for half the cost.

Greensboro’s City Council has spoken out against this plan by Time Warner Cable. The whole story is here. They want to bring competition to the market, but competition is not the answer. Holding de fact-o monopolies responsible for an unreasonable profit grab, under no regulation by the FCC, in a time when the average American citizen is struggling to get by is the only choice. I am working closely with my Mayor on options and ideas for Greensboro. I am in contact with state Rep Pricey Harrison, who was one of 5 out of 170 legislators who voted against giving the control of companies like TWC to the Fed’s, stripping the power from municipalities. And, I am in contact with Rep Miller, Rep Watt’s office and the three other cities local groups who are trying to fight this.

I need your help. We all need your help. Educate yourself on this issue. Please visit the websites Stopthecap.com and StopTWC.info for more information. You can join our fight in Greensboro by joining the Facebook group Time Warner Cable Sucks. When we have enough folks in the group we plan to hold a day of protest at TWC’s Greensboro location. No torches and pitchforks, just cable boxes and modems in hand. They will hopefully get the point.