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Council to look at Internet pricing

Tuesday, April 7, 2009
(Updated 3:19 pm)
By Joe Killian
Staff Writer

GREENSBORO — Time Warner Cable customers weren’t happy last week to hear the company will soon begin measuring their Internet use, a move that could inflate their monthly bill. The Greensboro City Council isn’t happy either.

“I don’t like it at all,” Mayor Yvonne Johnson said of the switch. “I’m not a happy camper about it. I think it’s bad for their customers and it’s bad for the city.”

Johnson said she and other council members heard from angry Time Warner customers over the weekend — and share their frustrations.

Johnson, a Time Warner customer herself, said the council has no authority over the company — that power has moved to the state and federal government. But Johnson said the council can — and will — show its displeasure with the decision.

“I’d certainly be willing to speak to Time Warner and let them know what citizens think,” Johnson said. “I think that having the best, cheapest Internet options we can is what’s best for the city, and I think the majority of the council will agree and want to get involved.”

Time Warner is expected to do away with flat-rate pricing in the fall, capping customers’ Internet use at 10, 20, 30 or 40 gigabytes of uploads/downloads per month.

Customers will pay an extra $1 per gigabyte when going over their cap.

All Triad Time Warner customers will be affected, including those getting service through providers such as EarthLink who use Time Warner’s cable. Existing customers will have to choose a capped plan at the end of current contracts.

The Triad is one of four test markets for the company’s metered pricing; the others are the Texas cities of Austin and San Antonio and Rochester, N.Y.

“Greensboro being a test market for this is going to put us at a disadvantage for attracting the small-business type of people who use this kind of service,” said Councilman Robbie Perkins. “It’s also going to hurt us from a freedom of expression standpoint.”

Perkins and other council members said the city should begin actively courting companies that can provide high-speed Internet competition for Time Warner.

City officials said AT&T has been negotiating to bring its AT&T U-Verse line of phone, TV and high-speed Internet services to the Triad. Some Time Warner customers said they hope that Verizon’s FiOS, another high-speed Internet service, will come to area as well.

“I think more competition would help get prices lower and bring better service to more people,” Johnson said.

Perkins said he hoped the city could negotiate with Time Warner without having to go after competition for them. But he said if the City Council can’t negotiate with the company on behalf of residents, that might be necessary.

“I’m a Time Warner customer, and up until I read these headlines I didn’t feel bad about it,” Perkins said. “But if we need to bring in some competition because of it, then that’s what we should do.”

Councilman Zack Matheny said he’s not a Time Warner Cable customer, but has gotten many e-mails from constituents complaining about the switch. He said people shouldn’t vilify Time Warner, which he called a good corporate citizen. But he said he’d be for the council trying to talk them out of the move, and bring in more competition.

“We’ve got to listen to and take up for our citizens,” Matheny said. “Especially in these trying times.”

Councilman Mary Rakestraw also said Time Warner being the area’s only high-speed cable Internet option is a serious problem.

“I think there shouldn’t be a monopoly so that people don’t have any options whatsoever,” Rakestraw said. “As elected officials we should be asking the right questions and talking to this company about the deal that they give to the public.”

Rakestraw, who is not a Time Warner Cable customer, said she’s studying the issue and plans to bring it up at tonight’s City Council meeting.
 

Contact Joe Killian at 373-7023 or joe.killian@news-record.com
 

Comments

This article has been closed to new comments. Comments are generally closed after 14 days. However, comments may be closed earlier at the discretion of the News & Record.

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Lakeshia

April 6, 2009 - 4:13 pm EDT

If Obama can fire the CEO of GM surely Yvonne Johnson can fire the local head of Time-Warner - you go girl !

Hyatt

April 6, 2009 - 4:24 pm EDT

I just want the NFL Network. I have only been complaining about that since the NFL Network was started.

jrp1

April 6, 2009 - 4:27 pm EDT

But the head of the snake is in New York. The regional manager has no power in this case.

Get Real

April 6, 2009 - 5:38 pm EDT

That's it. I'm moving to Raleigh.

ncnole

April 6, 2009 - 5:54 pm EDT

Competition from AT&T and/or Verizon would solve the problem. It would be interesting to know if TW has a monopoly on broadband service in the other test market cities. I bet they do. They wouldn't try this if they weren't the only show in town.

I have emailed TW several times, as well as my counsel representative to complain, and the NC Attorney General to ask for an investigation into the monopoly that exists and unfair trade practices in which they are engaging. I am usually not for regulation, but when no other options exist, the state or feds should step in for the benefit of the citizens.

The residents of the Triad should flood local, state, and federal government officials to complain. Let's also let TW know of our displeasure and let AT&T and Verizon know that their businesses are welcome.

darkmoon

April 6, 2009 - 6:39 pm EDT

Not necessarily. Let's also recognize the fact that AT&T has also been trying tiered Internet pricing in test markets. If they all decide to do it, then we'll be in the same boat as we are currently.

Let's also not forget that those people that actually pay for the Internet/cable/phone service will also be "paying twice". Once for voip phone service, and once through the data cap.

If TWC pulls the data cap for their own phone service, then they're getting into a problem where they will be providing an unfair business advantage for themselves as a transport carrier against other voip businesses. If they don't, then the consumer loses out. Twice. The entire thing is plain... blech.

uncwgm

April 6, 2009 - 6:25 pm EDT

If this were a nationwide pricing change it wouldn't be an issue for me..but it's not. It a targeted surcharge that affects only one location in NC and only 4 locations in the whole US.

I would like to know why the Triad was chosen to incur additional charges? Did anyone at Time Warner even discuss this with local officials?

This couldn't be a positive thing for attracting new businesses or promoting technology in our area, doing this only in our location puts us at a severe disadvantage in our state and the nation.

saveus

April 11, 2009 - 6:35 am EDT

NC was chosen because it is one of the most "business-friendly" (read: consumer-unfriendly) states in the country. The Triad was chosen because there is no competition, but the user-base is large enough to make it worthwhile for TWC.

http://savegso.blogspot.com/

Illiterati

April 6, 2009 - 6:32 pm EDT

Access to broadband is definitely no longer for the elite. It's a necessity if, for instance, you happen to be one of the millions in this country looking for a job. My neighbor has no online access, so he finds job listings in the paper, but my husband finds job listings and applies to them all day online, often several days before my neighbor sees the exact same job ad in the paper. He's had several interviews, while the neighbor has had none because by the time he applies, hundreds have beaten him to it online.

By making broadband more expensive, broadband suppliers aren't just inconveniencing the techy gamer or Hulu video watcher, they're closing doors of opportunity to job seekers, small business owners, adults retraining for better careers via online courses, and more. This is a regressive fee plan that benefits only Time Warner and hurts the rest of us. But for now, many of us have no other viable option. That has to change.

conturax

April 6, 2009 - 8:23 pm EDT

Comcast is trying the same test in different markets... but with a 250 GB cap!!!! Time Warner? 40GB cap. Its obvious they are scared of online video & movies thru netflix/apple/amazon, etc. They set the cap so low that if you downloaded a few shows or movies through itunes or wherever, you'd easily go over your cap. Total BS. I've been (was) a happy time warner internet customer for 5 years... when this takes effect, hello AT&T DSL. 42.95 for 6MB download speed and no caps. You reap what you sow, Time Warner. Enjoy losing boatloads of customers.

Get Real

April 7, 2009 - 3:53 am EDT

This is bad for everyone except TW. I struggle to get by as a freelance graphic designer in this town enough as it is. I have to keep my website updated with pictures, email attachments, upload huge files for clients. How are people like me supposed afford the basic requirements to be successful in this line of work? Finding work will now become much harder.

tledford

April 7, 2009 - 3:23 pm EDT

GetReal, I'm not running my own business, but I do work from home, and that work frequently involves moving large amounts of data. So I'm in a similar, if not exactly the same, situation.

TWC offers two business-class service plans that have no cap on data. One costs $80/month ($20 more than the 10 Mbps downstream I'm paying now) and offers 1.5 Mbps down/384 Kbps up, the other costs $130/month and offers 5 Mbps down/768 Kbps up. Want a static IP address? (That would be helpful, but not essential, for me.) Add another $20 per month to either plan.

So, if I decide to stick with TWC, I'll *have* to go business-class, as 40 GB wouldn't get me through more than a couple of weeks (counting work and personal use).

I'd love to see what UVerse has to offer and would *really* love Verizon FIOS as an option, but by August? I'm pessimistic that either of those will be in place by then.

jhurley

April 6, 2009 - 8:59 pm EDT

I have never understood how TW cable has a monopoly here. I used to be a TW cable customer (for 8 loyal years) and when I asked them to lower my internet bill, they refused, so I left. My parents live in MI and there are 3 cable internet providers, TW being one of them, so they have high speed cable internet from TW for 20.00 per month! What you people pay here is crazy! Switch to DSL, it's way cheaper and just as fast! Good luck keeping customers in this economy TW cable, if this is your plan!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

uncwgm

April 6, 2009 - 10:20 pm EDT

I'm watching the NCAA Championship advertised online on http://mmod.ncaa.com tonight while catching up on some work.

Unlike ALMOST every other location in the United States, living in Greensboro, I WILL get surcharged for the exact same thing every other RR customer gets for free in the future.

Thanks a lot Time Warner of the Triad, you're doing a hell of a job for our community!

talosman

April 7, 2009 - 12:30 am EDT

This is TWC's financials:
cable high speed revenus up 12% to $429M, rev rose 8%, excl adjustments net income rose

Here is their rip off plan... notice their overage is 1000% markup from their wholesale cost.

Road Runner High Speed Internet Cost Review
Tier $/Included Traffic Allowance = Your Cost vs. Theirs

Your Monthly Price Per GB Time Warner Pays Per GB¹
$29.99 (5 GB Tier) $ 6.00 less than 10¢
$39.99 (10GB Tier) $ 4.00 less than 10¢
$49.99 (20GB Tier) $ 2.50 less than 10¢
$54.90 (40GB Tier) $ 1.37 less than 10¢
IYHTAYCAI² (100GB Tier) N/A less than 10¢ each

¹New York Times, January 17, 2008 - ²IYHTAYCAI = “If You Have to Ask, You Can’t Afford It”/Time Warner has not released pricing details.

Tell me that isn't greed?

talosman

April 7, 2009 - 12:34 am EDT

Your Monthly Price ------------Per GB -------Time Warner Pays Per GB¹
$29.99 (5 GB Tier) -------------$ 6.00 ------------ less than 10¢
$39.99 (10GB Tier) ------------$ 4.00 ------------ less than 10¢
$49.99 (20GB Tier) ------------$ 2.50 ------------ less than 10¢
$54.90 (40GB Tier) ------------$ 1.37 ------------ less than 10¢
IYHTAYCAI² (100GB Tier) ----N/A- ------------- less than 10¢ each

weatherwithyou33

April 7, 2009 - 9:24 am EDT

With statements like this how do these people keep getting elected?
FTA:
"Perkins said he hoped the city could negotiate with Time Warner without having to go after competition for them."

Shouldn't our city council be doing everything it can to bring in healthy competition? We should go after competition for every business in an effort to bring down prices, bring in jobs and give our citizens choices. Wouldn't other service providers help make rates more competitive? This just shows the backward thinking of our city leaders.

buzzman

April 7, 2009 - 12:29 pm EDT

Hey weatherwithyou33, you are right on the money! Greensboro should be trying to bring competition in any situation like this where customers don't have adequate choices. Oh! I forgot! The City has a monopoly on their services, so it's OK!
Robbie Perkins just likes to see his quotes in the N&R and apparently several reporters call him when they need one instead of getting a good sample of what City Council is thinking.

Joekillian

April 7, 2009 - 5:44 pm EDT

I reported this story and though I don't often have to talk to the City Council on my regular beat as a Higher Education reporter I did call every city council member and members of the city council of High Point and Winston. Those you see in the article are those who returned my calls.

weatherwithyou33

April 7, 2009 - 8:09 pm EDT

Joe - Glad you reported on this to bring it to people's attention. I guess you have to take what you can get when it comes to politicians. Certainly nothing against your reporting but I think it's sad when you get so few responses from our leaders. While there seemed to be some concern from a few council members, Perkins comment really stuck out to me as the common attitude of our city leaders. Any chance you could do a follow up and get in touch with anyone at AT&T to see when they expect to roll out Uverse in our area. Similarly if Verizon has any plans to bring FiOS to NC soon. These two would be huge competition for TWC and give the consumer a real choice.

MedicRed81

April 7, 2009 - 1:14 pm EDT

Now we do have Direct TV and BellSouth that has internet, pretty good service too. Why don't you all change over to them. I do agree more competion is needed though. But if they want to trial this city, lets show them it won't work. Look at it as saving a nation of Time Warner victims.

Illiterati

April 8, 2009 - 11:13 am EDT

Here's an eye-opening post from NYT's Bits blog about Japan's $20/month broadband service, which is also the world's fastest. Also some interesting bits about the role competition—and lack thereof—plays in why U.S. broadband service falls far behind that of other countries.

http://bits.blogs.nytimes.com/2009/04/03/the-cost-to-offer-the-worlds-fa...

It's time we got past the idea that being online is just for fun and games and banal Twittering. Lots of us make a living online and bring in plenty of revenue to our communities in the process—and not just by writing snarky gossip blogs! City leaders must allow competition among service providers so we can stay competitive with the rest of the world.

yomama

April 10, 2009 - 9:03 pm EDT

How about this? "Leaders" focus on real job growth initiatives and consumers pay for what they use.

Alternatively, how about flat rate water / sewer pricing? Everyone pays $20 / month including businesses. That may bring back some jobs...

Impossible you say? Because people have to pay for what they use. Really, quit being a jackass then.

weatherwithyou33

April 13, 2009 - 10:56 am EDT

Perhaps you should take a closer look at what most people are complaining about. It is not the pay for use concept that is a problem. While we certainly would like unlimited usage most people feel TWC's cap rate are very unfair and are a direct result of the lack of competition. Comcast offers a 250GB cap for about $55. TWC has now announced a 100GB cap plan for $75. This is the problem. If Comcast were in this market TWC certainly couldn't over charge the consumer in this manner. Why isn't TWC unrolling this concept in Raleigh or other major markets? COMPETITION!

Since you seem to like water/sewer here is a comparison for you:
Let’s say your water/sewer bill went up 36% per month and then you were charged more per gallon if you went over 50 gal per month while neighboring cities water/sewer pricing stayed the same and they didn't have to pay extra until they went over 100 gal per month. Your neighboring city’s lower price and higher usage cap was because there was a second water company in that city competing for business, but you'd be happy with your increase knowing that if your city "Leaders" actually "focused on real job growth” they could possibly bring in competition to help lower this cost increase, increase the usage cap and create jobs? Maybe you don't mind giving away a few hundred dollars extra every year to help make others rich. I'll be happy to send you my address. I take cash, check, and credit.

crabbyone

April 11, 2009 - 10:09 pm EDT

This sucks...first they take away our usenet (newsgroup) access, now they are trying to limit what we can download or watch by imposing these stupid low limits. I can understand putting a limit on users, but 40 GB...what about us that are attending online college classes? We are REQUIRED to watch videos, download content and other bandwidth consuming tasks. We also need updates for our computers, updates for software packages and updates for other things we use daily. These things add up...I wish the County and City government would get the State involved and attempt to bring some competition into the area. I really think Verizon would be a welcome alternative to TW crap. I have a 2 yr price lock and if this is allowed to happen, I will switch to anything else available and gladly tell TWC to kiss it...Maybe ALL of us in the Greensboro area need to call TWC and threaten to drop their service if this is not changed, and I don't think the max fee of another $75 if we go over these stupid low caps is fair. If TWC insists on this cap stuff, then they need to raise the cap to something realistic, like 200-250 GB a month. They should also be investigated for anti-competitive practices no matter what happens.

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