Harold Feld talked about Time Warner Cable's money grab earlier. He notes the bogosity of their excuses of needing the money to keep up with users' expanding bandwidth needs. But, more importantly, he noted that Time Warner Cable claimed that their users were “fine with usage caps.”
Except they weren't fine. Users tore up the company in phone and ether-print and, late yesterday, the company responded with a more convoluted tale.
Don't let that link go by without reading it.
First, users are still fine with caps, it's just that the “premature” press “did not tell the full story.”
Second, and this is BIG NEWS, “With the ever-increasing flood of content on the Internet, bandwidth consumption is growing exponentially.” Get your hard-hats, folks, we're going to be crushed by all this traffic!
Actually, every study on the subject shows that growth this decade has been slowing slightly over previous decades. The growth rate which used to be between 80% and 100% one year to the next slowed to around 50% years ago and has pretty much stayed there. Last year, in fact, it grew even more slowly — ISP traffic being a lazy 30-40% higher than the year previously. Excuses, excuses, the Roadrunner's pants are on fire.
Back under its hardhat, the Roadrunner continues, “For good reason. Internet demand is rising at a rate that could outpace capacity within a few years. According to industry analysts, the infrastructure may not be able to accommodate the explosion of online content by 2012. This could result in Internet brownouts.”
There's much more to the Roadrunner's “Long Reply” and I really do encourage you to read it. One thing that made me laugh, though, is that they created a new tier, saying, “To accommodate lighter Internet users and those who need a lower priced option, we are introducing a 1 GB per month tier offering speeds of 768 KB/128 KB for $15 per month. Overage charges will be $2 per GB per month. Our usage data show that about 30% of our customers use less than 1 GB per month.”
Oh really? So basically, “30% of our users are paying about $50 a month and really we only want $15 from them from now on.” That ought to help customers like the plan, but it won't help investors to like TWC's revenue! It's a lousy plan, though, with both unreasonable limits on one end (1 GB is about 3% of the capacity of a dial-up account) and unreasonable charges on the other ($2 / GB is highway robbery).
If this was intended to sooth TWC's customers, it's likely to backfire. This was a bad idea, inventing reasons to explain it is just another bad idea.