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Edward Cone: Time Warner plan could throttle economic development

Sunday, April 12, 2009
(Updated 3:00 am)

During Monday night's NCAA basketball championship game, the CBS announcers took a break from Carolina's epic beat-down of Michigan State to promote a neat online video service. Fans can click to a Web site and watch any tournament game on their computers, free of charge.

But fans in Greensboro and a handful of other cities may end up paying if they use such free services.

Under a new plan to be tested here by Time Warner Cable, high-speed Internet customers will be charged according to the amount of data they download and upload each month. (Other test sites include Austin and San Antonio, Texas, and Rochester, N.Y.) So long, flat-rate pricing; hello, usage caps so ridiculously low that watching even a relatively small amount of online video will jack up your cable bill.

This is a big deal for local consumers. Even if you don't watch much Web video now, your habits might change as your options continue to grow. Renting DVDs is unnecessary when movies arrive via the 'Net. Television shows, new and old, are available online whenever you want to watch them. Last year's Olympics were online, too -- but the site had a warning label advising people with metered plans not to watch. Meanwhile, applications beyond entertainment, such as communications with your health care providers, will become increasingly popular.

There are broader issues as well. As a test market, we will face economic development constraints not felt by other cities across the country.

"The cap is a serious issue for Greensboro," says Vint Cerf, a senior executive at Google who is known as the "Father of the Internet" for his pioneering work as a network engineer. "It will inhibit innovation. People will cut back on usage and become afraid to try new applications. It will be a terrible drag on new entrepreneurial services, and that's got to be exactly the wrong thing at a time when we're trying to stimulate the economy."

Time Warner's announcement has stirred up strong feelings in Greensboro. The blogs are buzzing. City Council members contacted by the News & Record's Joe Killian have voiced their concerns about the plan, and Mayor Yvonne Johnson says she'll work to bring competitors for Time Warner into our market. Yet local politicians have almost no authority over cable operators, and viable alternatives to the cable monopoly could take a while to arrive -- and may not offer much relief when they do.

"The idea of being rescued by AT&T is bizarre," says Cerf, referring to one possible option, which is not known for its customer-friendly approach.

Still, there are ways for Greensboro to fight back. When I described Greensboro's active response to Cerf, I said that maybe Time Warner had chosen the wrong place for this test. He replied that, when viewed from the perspective of those who favor innovation and realistic pricing, "Maybe it's the right place."

What's in a Gigabyte?

Time Warner Cable says metered usage is necessary because video puts a lot of strain on the network, and it needs to pay for upgrades to its equipment. It's true that video sucks up a lot of bandwidth, but the tiers to be tested (five, 10, 20 or 40 gigabytes of data per month, with a charge of $1 per gigabyte overage) put unrealistic constraints on users. Time Warner says it will add a 100-gig tier in the future, but even that is far lower than caps enforced by other companies.

Many observers believe that Time Warner's real goal is to inhibit people from viewing movies and other content over the Internet because it wants customers to use its own cable television services, such as pay-per-view movies, instead.

"Tiered broadband as constructed is not about network management, it's about revenue," says Stacey Higginbotham, an Austin-based writer for the technology Web site GigaOm, who has covered the issue extensively.

Cerf adds that the metering plan will meter the wrong thing. Measuring data volume alone doesn't make much sense because users can upload or download a lot of data over the course of a month without putting any stress on the system, depending on when and how they do it.

"People are not making a distinction between rate, and rate times time," he says. "It's like traveling in a car -- it's not how far you go but how fast you go that gets you in trouble." The Time Warner plan could easily penalize users, "even if people aren't demanding much of the network."

Tough fight ahead

"Time Warner is well connected and influential here at the legislature," says state Rep. Pricey Harrison, a Greensboro Democrat who is well-attuned to the issues at hand. The Federal Communications Commission, meanwhile, is rudderless and seems to lack the authority to deal with this specific problem.

But there may be other avenues of attack, especially if the Obama and Perdue administrations are as focused on technology as they promise to be. The lack of competition and the absurd pricing scheme, along with possibly inaccurate claims by cable companies about how much bandwidth they actually deliver at any given moment, make this a consumer issue that might interest the Federal Trade Commission or the Justice Department. The National Telecommunications and Information Administration could be involved. Congressman Eric Massa, who represents Rochester, is discussing legislation to curb Time Warner's plan. Our own representatives and senators need to get in the game as soon as possible.

This is where Mayor Johnson and the City Council can make a difference. Someone needs to step up and lead the charge, to coordinate strategy and make it happen. This could be a defining moment for Greensboro. Let's make it a good one.

Edward Cone (www.edcone.com, efcone@mindspring.com) writes a column for the News & Record on alternate Sundays.

Comments

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travelingman

April 12, 2009 - 7:51 am EDT

Once again, the Time Warner monopoly uses the ridiculous power granted to them by the communities they serve to fatten their pockets. This latest scam is in response to possible lost revenue as commercial TV makes itself available on the internet. I've read TWC's rational: internet usage is growing and will soon bog down bandwidth. This "apolcalypse" is only in their minds. No data exists to back this up. This is their way of increasing revenue without upgrading their antiquated system.

Government intervention is not needed. Competition would solve this. I blame the communities with their "one cable provider per municipality" plan. It created this monopoly. Other ISP's know that this is scam and would be happy to have TWC customers if they had access. I use earthlink as they do have access through TWC's pipes. They have no plans of metering. They also provide better service at competitive rates. Vote with your pocketbooks people. Dump roadrunner and cable all together. TWC will change once they start bleeding customers. I also applaud those community leaders looking to bring other providers to the area. Verizon's FIOS would be a wonderful addition to the triad.

Liquidsky

April 12, 2009 - 9:25 am EDT

I AM SWITCHING TO DSL. I cannot wait until Verizon FiOS or AT&T Uverse comes to The Triad, cable and DSL are such outdated technologies, but at least DSL is cheaper albeit a little slower, i won't be paying absurd rates for streaming television over the internet. Good riddance Time Warner.

Beadbaby

April 12, 2009 - 9:31 am EDT

If Time Warner Cable has a monopoly like a utility, they should be regulated like a utility. Then they couldn't pull this nonsense.

roverfixer

April 12, 2009 - 8:27 pm EDT

Check this out: http://www.usiwireless.com/service/minneapolis/overview.htm
To sum it up, Minneapolis built a city-wide Wi-Fi.
It covers 59 sq miles.
Prices start at $17.95/mo. http://www.usiwireless.com/service/pricing.htm
Even the most expensive plan is cheaper than cable. If one had a wi-fi capable phone, cell minutes wouldn't be needed.
Is Cable's a dying entity anyway?

nando

April 12, 2009 - 9:55 pm EDT

I don't know how many people remember TWC history but they converted their system to a fiber backbone that was suppose address this problem (DTV/HSD). Now that all the channels are going digital TWC will have more bandwidth then ever as will all cable companies. This claim that TWC needs to upgrade their system is based on either lack of management to scale correctly when they built their DTV system or trying to raise money since IPTV looks to be the future.

bbsmith2

April 13, 2009 - 10:17 pm EDT

For those with price plans please note that TWC can and according to their website will charge you for "overages"

http://tinyurl.com/cjv8wv

That is the link of their page answering come questions. It is a cached page, saved by Google. TWC took it down and put a new one up deleting the info about the small fee ($75) that could be charged if you go over.

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