Will Congress Stop the Cable Guys From Charging by the Byte?
by Peter Kafka
Posted on April 14, 2009 at 1:36 PM PT
More drum-beating from Eric Massa, the Democratic congressman who has decided to make an enemy/example out of Time Warner Cable (TWC), which wants to charge its broadband customers based on their Web usage.
Massa says he will introduce a bill that will prevent Time Warner, along with other pipe providers like Comcast (CMCSA) and AT&T (T), from introducing usage “caps” on their Internet services. Wired.com:
“In a conference call with reporters Tuesday, Massa [described] TWC as a greedy, unregulated monopoly providing a utility service. His yet-to-be released bill would seek to increase competition among broadband providers and regulate monopolies, he said, though he declined to give specifics.
‘They are providing a utility and frankly you should not be able to impose cascading rate increases without justifying them,’ Massa said. ‘What Time Warner is saying is not true and their own SEC filings show that. This is AIG-style greed.’”
There’s no reason to think Massa’s bill will get any traction, at least until we hear from more established players in Congress who have more traction. But it continues to underscore the tricky task in front of the pipe guys: Now that they’ve trained customers to eat as much bandwidth as they want, it’s going to be hard to start charging by the byte.
Give Time Warner Cable credit for trying to tackle this by pitching the tiered offerings as a way for some customers to save money. In theory, some of its subscribers could see their bandwidth bills drop to $15 a month, the company says. But this is a PR battle that’s just starting up.
Comments
The phone companies are no angels by any means, but I wonder why they are not having these same issues.
I regularly see the cable Internet plans advertised as being faster, sometimes much so, but reports indicate they are not always faster in actual use, there are more service disruptions and they’ve been tinkering with these hidden limits for years.
You have to wonder how the phone companies seem to be able to do so much more with a couple pieces of copper than the cable companies are doing with a much more expensive cable run.
If legislation doesn’t make this practice illegal I would hope that at least those with usage caps are required to spell out that fact in 48-point fonts on all their advertising
Posted by Mac Beach at April 14th, 2009 at 2:47 pmAll other utility companies charge by the watt, minute, or gallon. Pay per use.
Why should bandwidth be any different?
Posted by Michael Long at April 14th, 2009 at 5:07 pmBecause we actually need light, water, and electricity. We don’t NEED internet per-se. If cable companies start charging for the bandwith, I’d gather you’ll see a lot more people back in the libraries again, this time for free internet instead of free books.
I remember my phone company tried to pull the same gotcha technique with wireless internet, and I promptly pulled the plug on the service.
No way!
Posted by Nokware Knight at April 14th, 2009 at 5:46 pmIt will also just encourage people to go back to old media. We’ve seen people shift from magazines and newspapers to internet partly because they get similar content at a cheaper net cost.
What encourages them to stay on the internet once the reason they are their is taken away? A good thing for Barnes and Noble I guess…
Posted by Nokware Knight at April 14th, 2009 at 5:53 pmOne would have to be a gullible as the gatekeepers of Troy in failing to recognize that metered bandwidth is anything but an attempt to strangle Internet Video in the cradle. Unfortunately it will result in massive collateral damage since the natural evolution of the Internet is toward increasing intelligence at the end-points.
It is all so unnecessary because the Cable Operators could prosper in and environment whereby they focus on merely providing truly high-speed Internet service. There would be such an expansion of applications that broadband ISP access would become indispensable to the typical business and consumer to the everlasting benefit of CATV ISPs.
This is Third Generation Television.
http://www.insidedigitalmedia.com
Posted by Phil Leigh at April 15th, 2009 at 6:24 amThe main reason for the caps is they don’t like having to compete with the likes of Netflix, and other VOD services when their own VOD is so grossly overpriced its ridiculous.
They are monopolies, and they resist even state-wide regulation of their municipal monopolies.
There really is no other choice than Time Warner here in this Southern California city. AT&T DSL is not competitive, and we don’t get FIOS of any kind here yet.
I think the FTC should have something to say about how cable companies act as well as the FCC. Advertising 10mbps when they actually only deliver 2 or 3 should be as illegal as misrepresenting treatment of emeralds or diamonds. Yet the latter is strictly regulated.
This is why America is so far down the list of rankings in broadband availability. It’s like the cellphone industry was before the iPhone. Dull, slow and no real innovation anywhere. Providers releasing absolutely the minimum incremental improvements to keep people buying phones every two years while maintaining ludicrous level of profits for the meager quality of service they offered.
Posted by Eric Welch at April 15th, 2009 at 8:39 am