To the Cyber-Barricades!
Time Warner Cable wants to meter its broadband – and the techno-peasants revolt
By now at least some Time Warner Cable executives must regret the decision to impose a new "tiered" pricing plan on broadband users, charging higher fees for big downloaders. All hell broke loose when the company announced its intent to "test" the pricing in four cities, including Austin, later this year: Online petitions, angry politicians (mayoral candidate Lee Leffingwell is outraged!), and, the new ultimate nightmare for any corporate campaign, an organized Facebook protest.
Under the proposed plan, heavy users will pay more, based on how much time they spend downloading music, playing interactive games, and watching hi-def porn. Although details are sketchy, when a user exceeds the downloading cap of his or her designated plan, Time Warner will likely charge something like $1 for every extra gigabyte used – much like those annoying overage charges on mobile phones. Sounds simple and irritating, in the classic, cable TV gouging tradition. But you don't have to be a paranoid Warcraft fanatic to see deeper implications in Time Warner's scheme.
In essence, the cable giant wants to change the pricing paradigm, taking broadband back to the good ol' dial-up days, when the company could put a timer on your computer use. "We made a mistake early on by not defining our business based on the consumption dimension," Time Warner Cable Chief Executive Glenn Britt told BusinessWeek. And there's an even larger issue at stake. At a time when the Internet is exploding with new bandwidth-gobbling possibilities, Time Warner wants to insert itself into the process, charging a toll for use of its pipes. Sure, you can stream TV shows and play games for hours on end, but you'll have to pay Time Warner. A 2 gigabyte movie? Over your cap? That'll be an extra $2.
Once Time Warner has its hand on the faucet, the cable company can exert huge power over the flow of the Internet. A quick reconfiguring of the tiers, a heartfelt note, and customers will be squeezed for a few more dollars, simply because they like to watch Saturday Night Live on Hulu instead of TV.
With users counting their gigabytes, Time Warner would then be able to wield more influence over content providers, perhaps negotiating deals with certain sites to allow consumers to download that site's content without the surcharge – giving favored status to whichever company pays Time Warner. Such proposals have been floated in the past (triggering the "Net neutrality" debate), raising concerns that only big companies will gain access to networks, squashing innovation and smaller competitors.
And that's why the geeks are mobilizing, launching websites and taking to their Facebook pages and Twitter feeds. No one wants to see broadband providers involved in the mix, affecting how consumers use their computers.
Although the city has no real jurisdiction over Time Warner's broadband pricing, Chip Rosenthal, a member of Austin's Community Technology and Telecommunications Commission, believes the "social and economic" issues make it a city issue. "I think that compels us to look into it," said Rosenthal, who has launched a website, the Austin Broadband Information Center, to help track the issue.
Time Warner Cable, which was recently spun off from parent Time Warner Inc., is trying to position the new pricing plan as an "experiment." To the company, the pricing is simply a Solomon-esque solution for the heavy burden placed on the network by the Internet addicts, who force the cable company into costly upgrades. "We've got these heavy users, and their usage continues to grow at an exponential rate," Time Warner Chief Operating Officer Landel C. Hobbs told The New York Times. "For those who want to use a tremendous amount of bandwidth, there should be a charge, because that costs money."
That is, of course, the rhetoric of bad cable infomercials. ("Your dollars go to support new Snuggie research!") In fact, bandwidth hogs don't cost Time Warner a single extra cent in operating costs. While it is true that Time Warner is going to need to upgrade its systems to compete, management simply wants its customers to pay for it, just like their customers have been paying for TV upgrades all these years.
But this is not the good ol' days, when cable systems could bitch slap their TV customers without fear of retribution. In their zeal to try to reconfigure the business, Time Warner has seriously miscalculated the realities of the cyberworld.
For starters, Time Warner is targeting its best customers, the most devoted fans of their service. On the stupid scale, this is an 11. (Hey, maybe we can charge customers who watch lots of TV, too!) Not coincidentally, the heavy bandwidth users are, by definition, also the most technology savvy customers. Not only do they know how to generate international protests with two keystrokes, they are keenly aware of their alternatives.
Without a doubt, legions of users will simply jump to other services as soon as Time Warner implements its "experiment." Nobody feels any loyalty to a cable company. A study last year by International Data Corporation – apparently missed by Time Warner – found that 51% of consumers surveyed said they would switch services if their provider tried to institute bandwidth caps. And just to rub it in, it's likely many of those customers will also bail on their Time Warner phone and TV plans, because there's no reason to do business with a company that positions itself as a gouging a-hole.
There are already signs that Time Warner is starting to back off. Last week, the company announced it would push back the rollout in Austin to October, and it revised details of the pricing tiers.
"The feedback we've received from our customers has been very helpful," Hobbs said in a press release. No doubt he can expect more helpful feedback in the near future.
For more info on the reaction to the Time Warner broadband proposal:
Austin Broadband Information Center www.austinbroadband.info
Stop the Cap! www.stopthecap.com
Petition Drive www.petitiononline.com/nocap/petition.html
Facebook Protest Group www.facebook.com/group.php?gid=89981891116