Time Warner testing usage-based billing

[Ghoulish Delight]

I haven't found details, but Time Warner in Texas is testing a system where they will bill cable internet users for bandwidth usage rather than a flat fee. They claim that it will only affect the top 5% of users and that most people won't notice a difference.

The concept doesn't make me happy. Hell, that's one of the reasons AOL used to suck so much. For 10 years we've gotten pretty used to "If you have access, it's unlimited access." The thought of having to think, "shoot, have I gone over my internet usage allotment" is a sucky thought.

Story (http://www.msnbc.msn.com/id/22707271/)

[Morrigoon]

What a boon for the providers of satellite in the area.

[Cadaverous Pallor]

Hmm, kinda sucks, but I guess it's only fair, right?

[Not Afraid]

We'd have the lowest bill in town!

[Chernabog]

Hmm, kinda sucks, but I guess it's only fair, right?

Not fair at all. It costs Time Warner next to zero for people that go over TW's imposed limit. This is just a way for TW to eke every last penny out of their customers.

Currently I annoyed with them because I paid a cable bill for two months in full on 12/29. Zero balance on the account. January bill comes, and has an extra charge for a late fee, back-date posted 12/22. How obnoxious is that?!? And yes, there was a late fee on the December bill too. So basically they charged double late fees. But who the hell wants to sit on the phone for an hour with their billing? Might as well pay it.

And don't get me started on how they upgraded our DVR, but made us pay for the cable to connect it to the television.

Or how they told us it was $10 extra a month to send us Hi-Def, but failed to mention that it was an additional $10 to RECEIVE the hi-def signal they were sending.

If our dog-hating landlord didn't also hate satellite dishes, there's no way we'd have Time Warner for anything.

[Alex]

Well, most of the providers have contract clauses stipulating that they have the ability to throttle excessive usage or upgrade account types. There are plenty of stories out there of various providers forcing users to upgrade to business account (which cost a lot more) based on usage volume.

To make it more palatable, though, if I were running things I'd also provide discounts to the bottom end of users too. But its weird how people don't mind this billing model in one area (cell phones) but the screaming is long and loud in this area.

[Ghoulish Delight]

Not fair at all. It costs Time Warner next to zero for people that go over TW's imposed limit. This is just a way for TW to eke every last penny out of their customers. If a small percentage of users are causing network demands to outpace their infrastructure, then it can cost them quite a bit, either in the cost of upgrading the network or in the cost of losing customers due to poor network performance. If, as they are stating, they are trying to curb only the heaviest of users (i.e. which would pretty much be people who have their computers doing nothing but downloading movies all day), it makes perfect sense. I don't necessarily have faith that that's all it will effect, but I can certainly see practical business reasons to do it.


Currently I annoyed with them because I paid a cable bill for two months in full on 12/29. Zero balance on the account. January bill comes, and has an extra charge for a late fee, back-date posted 12/22. How obnoxious is that?!? And yes, there was a late fee on the December bill too. So basically they charged double late fees. But who the hell wants to sit on the phone for an hour with their billing? Might as well pay it.
Have you tried? As I posted elsewhere, my most reason CS experience with Time Warner was a 180 degree turnaround from their sh*ttiness of the past.

[Chernabog]

I don't necessarily have faith that that's all it will effect, but I can certainly see practical business reasons to do it.

Yeah, and that "extra" -- is it actually COSTING them money, or simply eating a little into their profits (I have a hunch it's the latter).

And what's to stop them from arbitrarily doing the following:

TW Exec 1: "Well, the top 5% of people on the at-home cable service are eating into our profits by excessive bandwidth."

TW Exec 2: "Oh, so we're going to charge the top 5% some usage charges?"

TW Exec 1: "Um, you must be new here. We're going to charge the top 20% for these "excessive bandwidth" charges, and tell people we're only charging the top 5%, because nobody's really watching us and the people at home won't know either".

TW Exec 2: "Muahahahaha!"

TW Exec 1: "Muahahahaha!"

(Sorry I picture them like the green aliens in the Simpsons).

Have you tried? As I posted elsewhere, my most reason CS experience with Time Warner was a 180 degree turnaround from their sh*ttiness of the past.

In all honesty I haven't. The last time I tried to contact them was 2 weeks ago (15 minutes on hold), to ask a question about and then pay the bill to begin with, and THEN they charged me a double late fee. So no, it isn't worth my time.

[Alex]

Yeah, and that "extra" -- is it actually COSTING them money, or simply eating a little into their profits (I have a hunch it's the latter).

I'm afraid I don't see a difference between the former and the latter.

And I also don't see what "fair" has to do with it. They charge on the model they want to charge. There are alternative methods of accessing the internet. Customers agree to it or they take their business elsewhere.

Makes me think of a comment during an NPR story yesterday on how some hospitals are charging insurance plans more for the same procedures than other hospitals. "Is there a good reason for this or are they just charging what the market will bear?" asked the reporter. To me, the second part is a good reason.

If cable internet were the only way (and since cable company's generally have a regional monopoly) I'd have concerns, but they provide a service and if they want to charge more for people who use it more (regardless of what that actually costs them) then go ahead says I.

[Kevy Baby]

Yeah, and that "extra" -- is it actually COSTING them money, or simply eating a little into their profits (I have a hunch it's the latter).I know that Alex already responded with the same message, but I wanted to add my opin.

There is little to no difference between the two. TW Cable (as does any other corporation, Partnership, LLC, Proprietorship, etc.) exists to make money. They SHOULD make as much as they reasonably can. They do face the possibility of losing business.

Why is it good for big corporations to make money? Because then the people who work the big corporations get to have jobs. I'm not talking about the big executives; I am talking about the installers, the CS people on the phone (even if you don't like them), the accounting people who you never hear about, the janitor. Everyday people who have husbands and wives and kids.

Why else is it good for corporations to make money? Because then the value of their stock goes up and/or dividends are issued. Anyone who has a retirement fund probably has some of their nest egg building because of the success of the big ugly mean corporations. Not just the fat cats, but the accountants, office assistants, construction workers, etc. of the world.

I could go on, but I think I made the point.

[Chernabog]

I'm afraid I don't see a difference between the former and the latter.

Maybe I'm off, but (for arguments sake) say it costs TW $100 minimum to provide a service to their customer, and they charge the customer $150. Now, say the customer goes OVER the bandwidth service so far that it costs $110 for TW. It'd eat into their profit by $10, but they're still making $40.

Now let's say that the customer is total bandwidth hog. The customer goes so far over the minimal service that it costs TW $160 to provide the service. Now, TW is LOSING money every month on that customer. It's costing them $10 a month just to retain the customer. In that case, yeah, I can totally see them wanting to charge more.

Of course, things aren't quite that simple (plus I'm sure some people are using MUCH less bandwidth per month than others, so it'd even out anyway). But it costs them so little that I think scenario 1 is more likely (even though it is balanced out by people that use less bandwidth)

I guess I'm just coming from a place of having had such bad service and care from Time Warner, and have had to deal with their "we don't care we're the phone comp...er... Time Warner" attitude, that my gut instinct says they're trying to pull a fast one on the public. They're trying to say "yeah, we're going to charge you more for the same service, just because we're Time Warner and we want more money out of you. We'll tell you it's because it's costing us money, but really, we'll pass that extra $5 it costs us onto you, which will appear on your bill as $15."

And I also don't see what "fair" has to do with it. They charge on the model they want to charge. There are alternative methods of accessing the internet. Customers agree to it or they take their business elsewhere.

Of course, I personally don't have a choice (on the cable end), but okay :P

And they can charge whatever they want, of course, it's their business. I just find what they are doing is disingenuous and lousy from a customer service perspective. Don't pee on my leg and tell me it's raining, I think is the phrase Judge Judy uses ;)

[Ghoulish Delight]

But its weird how people don't mind this billing model in one area (cell phones) but the screaming is long and loud in this area.It has to do with what the market is accustomed to combined with how the services are used.

That model has been in place for telephone use pretty much since telephones became a household thing. Pay for your call. Want to pay less, use it less.

And while internet use started like that with the portal services like AOL and Prodigy, it quickly went out of favor. My guess for the reason is that the length of time you use the internet (the old "bill for usage" model") was in many ways out of the consumer's control. It's not their fault a page took forever to load, or a download got corrupted so they had to spend the time downloading it again. That, combined with the open-ended nature of internet usage, it was simply not as easy to curtail one's use the way we're used to with phones.

So once that model went out the window, we've now had 10 years to become accustomed to unlimited use. It's hard to go back at that point. Of course, the method of determining usage amounts is different, being bandwidth instead of time connected. But some of the same arguments still apply ("Hey, is it my fault the website I chose to go to was loaded with data-intensive multimedia content"). Of course, if they balance the billing right such that general web browsing, video viewing, some itunes downloads and a Skype call or 10 during a month leaves the vast majority of users paying something close to what they are paying now, it might not be an issue. But I still think it's rather jarring to force everyone to make that mental switch from unlimited to having to monitor every kilobyte of use.

[Alex]

I understand people getting used to the system and not wanting it to change (particularly if you're currently engaged in a project of downloading the entire history of cinema from bittorrent.

I just think it is weird that the idea of someone changing it is causing some people (nobody here really) to act as if TW is now requiring payment in children and eggshells. Like it is some wholly bizarre and terribly unethical method that has never before existed.

I never had AOL or any of the minute-based plans so I don't know exactly how they worked but I hope TW doesn't actually block access but just start charging more. I also hope they have tools for you to track your usage, and warnings when you are approaching a threshold.

[Ghoulish Delight]

I never had AOL or any of the minute-based plans so I don't know exactly how they worked but I hope TW doesn't actually block access but just start charging more. I also hope they have tools for you to track your usage, and warnings when you are approaching a threshold.That's pretty much what AOL did (though not so sure about the warnings).

I dunno. It think it would fundamentally change use patterns of the internet, and not necessarily for the better.

[Alex]

It might. But I don't see it changing my behavior any more than my limited phone minutes changes my phone behavior.

It all depends on where they set the caps. And if it pisses off too many people then other internet companies will arise that offer better plans and it'll sway back. Which is the reason all of the minute-based plans fell away (even after they expanded the # of minutes beyond what any reasonably average person actually used; I know they by the end they were offering a plan of 32 hours/day of connectivity) and why I do think this may actually really be just a method for trying to deal with the pain-in-the-ass customers using their full download pipe 24/day or running businesses on residential accounts.

[Ghoulish Delight]

I also don't consider it much of a coincidence that this is happening at a point where more and more television and television-replacement content is being viewed online.

In the end, it'll be a matter of whether it's, "I really want to download this video file, I guess I can eat the $.25" vs. "Oh crap, I wasn't paying attention and went over my bandwidth, my bill is $30 higher this month." vs. "I'm apparently not wasting nearly enough of my life on the internet because I'm still using it as much as I ever was and I'm not paying a dime more."

[Prudence]

Also, we've moved to an "it's all on the internet" philosophy (as noted in the other thread on rennet tablets). Maybe it's just my phone phobia, but I don't remember using the phone all day long, while I was doing other things, to accomplish a wide variety of tasks. Whereas I'm online pretty much all day - even if just to check the headlines every half-hour or so.

And we've somewhat abandoned the idea of preserving information in other formats, since the internet is widely accessible. For example, I don't think I even own a hard-copy dictionary any more. Not that occasional dictionary access would likely take me over whatever this use threshold ends up being; it's just one example.

[€uroMeinke]

I just don't want to have to keep track of such stuff. If someone has to pay, I'd be more inclined to stick the increase to the content providers as the cost increase might encourage the elimination of bandwidth eating pap. Might also discourage someone from putting their catalog of pirated content on the web. Most content sites have banner adds, so there's income being generated by their popularity and a viable revenue stream.

The corporate world is of course free to screw me as they please, but hopefully there will still be a competitor who promises to be more gentle.

[Cadaverous Pallor]

Slightly related - I found myself checking if the major candidates' books were checked out at the library. All the ones we did have, we had at least one copy on the shelf. The only exception was the latest John McCain book, which we still classify as "new" and is out along with all the other new books, so that's different.

People just don't pick up books for info the way they used to.

[Alex]

Did anybody ever read campaign books? Even when I was constantly surrounded by poli sci, public policy, and history people none of us ever did.

[figment1986]

its stupid to charge for bandwith... esp in this day of age when photos i post could be any size but be huge data files...

speed is the best thing to charge for... but not bandwidth where they make enough money off of charges for everything else...

[Kevy Baby]

speed is the best thing to charge for... but not bandwidth where they make enough money off of charges for everything else...You are making the assumption that the price point starts where it is now and goes up from there. What about the possible model that current pricing is the base and then lower bandwidth usage pays less and higher pays more?

Granted, one would probably have the change to save less (percentage wise) than the potential increase, but the model remains.

I am not so sure that introducing a bandwidth usage cost factor into pricing is not a fair variable. Using more bandwidth increases the usage factor; why shouldn't a company be compensated for same?

One way to look at it is this: an individual is paid for their time (assuming an hourly wage). Do you think that everyone should be paid the same if they all put through the same amount of work? I know that productivity based pay is (sadly) not used (I am not sure on the legality of it), but don't we (generally speaking) pay more for an employee who is more experienced (and have I exceeded the maximum allowable number of parenthetical references in a sentence?).

[Ghoulish Delight]

I know that productivity based pay is (sadly) not used (I am not sure on the legality of it), It's used in the sales world all the time (commissions).

The whole flap is partly perception, and we won't know the real impact until we see how they actually implement it. Will it be like, say, standard long distance phone service where you essentially start from zero and pay only for what you use each month? Or will it be like most cell phone plans where you pay a flat monthly rate as long as you use less than X amount of bandwidth, and then pay a premium if you go over that? Both have their advantages and disadvantages.

For me, I'm still uneasy about the possibility of having to be mindful of usage. If the pricing is set such that I actually have to monitor my use, that would be a reason for me to look elsewhere for service. I accept it with cell service because I simply don't use cell service the way I use the internet.