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Critics say cable protest is still on

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Friday, April 17, 2009

(Updated Saturday, April 18 - 12:50 pm)

By Joe Killian
Staff Writer

GREENSBORO — When Time Warner Cable announced it would postpone its plan to measure and cap cable Internet service Thursday, many customers celebrated.

But as they read the fine print, they realized the fight wasn’t over.

Though company representatives didn’t say when the plans might be seen again, they also didn’t say they were doing away with them.

“The way I look at it is, we won a battle but we didn’t yet win the war,” said Jay Ovittore, a Greensboro Time Warner customer. “They got a lot of opposition when they announced it, and they pulled back. But it’s basically just brushing us aside for now so they can slip it in later, when they think no one is looking.”

Ovittore was one of many who organized opposition to the Time Warner plan using Facebook, which spun off into a protest in front of the company’s Spring Garden Street offices this morning.

Though the plan has been postponed, protest organizer Jonathan Hall said the demonstration will go on.

“They’ve just postponed their plan,” Hall said. “We want to make it clear to them that we reject that plan as it was, and we’ll reject all future plans for this sort of system.”

Earlier this month, Time Warner announced it would test metered usage plans in the Triad; Rochester, N.Y.; and the Texas cities of Austin and San Antonio. Customers would go from a flat rate for unlimited Internet use to plans offering 10, 20, 40, and 60 gigabytes of data transfer.

Customers typically rack up gigabytes by downloading movies, watching TV shows online and playing online games — but can also eat up bandwidth downloading software and surfing complex and high-definition web pages. Customers would pay $1 per GB in overage fees if they went over their caps.

When the announcement was met with outrage from customers and threats of legislation from elected officials, the company postponed its plans in Texas.

For the Triad and Rochester, the company offered two additional tiers, including a “budget” tier allowing 1 GB of data use per month for $15 and a “super-tier” allowing up to 100 GB of data use for $75. The company also said it would limit overage fees to no more than $75, essentially creating an “unlimited” plan for those willing to pay the fees.

But as hundreds RSVPed on Facebook for protests in Rochester and Greensboro this weekend, Time Warner capitulated. The company announced Thursday it was shelving its tiered pricing.

But company representatives made it clear the plan wouldn’t go away entirely.

“It’s clear from the response we’ve gotten from Greensboro and other areas that there’s a lot of misinformation out there,” said Melissa Buscher, the company’s spokesperson for the Carolinas region. “What we heard is no one knows what their usage is.”

Buscher said the company would be working on ways to educate the public about their data usage and how the plan would actually work.

U.S. representative Eric Massa, a New York Democrat, said the public doesn’t need education about data caps — it needs legislation to prevent them.

Massa began drafting that legislation after hearing from angry constituents, including a group of radiologists who said the added costs could break them.

“Where these cable companies have monopolies on this kind of Internet service, they should be regulated like utilities,” Massa said. “I’m a big fan of American entrepreneurship and these types of plans discourage competition.”

Massa said Time Warner’s plan was a bad one on many levels — from low cap limits to charging a flat rate for its own digital phone service and charging customers more to use others. Massa also said the company was dishonest with customers about why it was implementing it.

“They’re monitoring the wrong thing,” Massa said. “Technologically, what’s important is not how much people download but the rate at which you download. Time Warner already has tiered pricing by speed, and that already addresses that problem.”

Massa said affordable high speed Internet drives education, business and creativity, so talking about how to improve infrastructure and get more people online is important.

“But we have to have an honest conversation about these issues,” Massa said. “As long as we see companies setting up these arbitrary and frankly artificial systems for their customers, we’re going to oppose them.”

U.S. Sen. Kay Hagan, a Greensboro Democrat and Greensboro Reps. Howard Coble and Brad Miller couldn’t be reached for comment on the plan Friday. But Massa said he’ll be talking with Miller next week about how the issue affects the Triad. Massa said he hopes to have support for his legislation from Triad representatives.

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

WANT TO GO?

The protest of Time Warner’s Internet tiered pricing plan is scheduled to go from 11 a.m. to 5 p.m. in front of Time Warner Cable’s offices at 1813 Spring Garden St.

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histrion

April 17, 2009 - 4:10 pm EDT

Woah. Really? We want to keep the company from doing it by legislative fiat? As dumb a move as I think this is for Time Warner, can't we let the free market system work for a change? I think they'll get the picture when they start losing customers. While there may not be *many* alternatives to Roadrunner in this area, there *are* alternatives. If we flee en masse into the waiting arms of AT&T, Time Warner will get the message. They pay for the pipes, though, so they have every right to make a shortsighted, sure-to-blow-up-in-their-face move like this.

inflator1

April 17, 2009 - 11:31 pm EDT

Histrion,

While in many situations I would agree with your comment, this situation is unique for a number of reasons:

1) the only company not currently planning or experimenting with data caps like Time Warner Cable is Verizon. So even if we all switched to At&T for example, there is nothing stopping AT&T from doing exactly what Time Warner is doing, especially since they are already working to roll it out.

2) In today's world internet is a near necessity, and in the future, it will become even more of a necessity. We regulate the food industry because to survive everybody needs to eat, why shouldn't we regulate the internet providers, because in the near future, an easy to access internet connection will be vital to being a full member of our society

3) Internet companies do exist as a bit of a natural monopoly, for two reasons.
A) It costs a lot of money to start up a profitable internet company. So even if people were begging for a no tier data cap plan, only a few people would be able to provide it. Many millions of dollars would be required, maybe even hundreds of millions, to allow any alternative company to make a dent in a local market share and be competition for TWC.
B) But lets assume that someone is able to get a business loan for the money required to start up that new internet company. There simply is a limit to the amount of space available on our telephone poles to allow companies to compete. This means that no matter what, unless you are willing to have our streets and backyards literally lined one next to the other with telephone poles, with hundreds of wires going into and out of your house, the type of competition that the free market requires to work simply cannot be had. And we would not want that to happen, because TWC is right, it cost a lot of money to maintain those wires and poles and to buy the equipment needed to upgrade the system, which means that if you have a neighborhood of say, 100 people, to be able to have the revenue to continue to provide service to that neighborhood, you would need to have 40 or so residents signed on with you, which means the market can only support two profitable internet providers in that area.

As it stands right now, we could probably have 3 or 4 at most internet providers in one area. This does not allow for free market competition. The free market works great in determining the price and business practices of things like corn growers, because it cost almost nothing to enter the market. However, the free market system really breaks down once you get passed a certain level of initial cost to enter into the market, and you run into the pesky things like space constraints. This is why legislation is entirely appropriate, and needed in this case, because the free market is incapable of correcting this mess, and we are as consumers, to a degree, subject to the whims of the internet providers.

InventorNC

April 18, 2009 - 4:06 am EDT

right on Historian
I am a pretty heavy user of T-W internet because I have VoIP phone service therefore I have a good reason to want to keep rates down. But I also must have quality or voice quality goes down the toilet.
We must let T-W set the rates that they can live with. That is not optional, it is a must.
So rates go up? Surprise: In comes the competition! Quality goes down? Surprise: In comes the competition.
We must stop trying to legislate when the free market can do a far better job of keeping suppliers honest. Government cannot do what the free market can do. I just wish the big egos in Washington would remember that.

camelcityman27105

April 17, 2009 - 4:31 pm EDT

I always thought of the Internet as a "free zone," one that is free of restrictions on bandwidth and speed, as well as being free of bloated prices and few competitors. Cyberspace is not just for TWC, but from this now-postponed tier-pricing plan, you would think that they were trying to buy all of the rights to cyberspace! Monopolies hurt progress, and they tend to muscle out far-cheaper and definitely better ways to surf the Net! Tomorrow's computers and networks will use far more memory and bandwidth than they do now, so those notorious TWC tiers may become obsolete far sooner than expected. Go ahead: Let TWC completely abolish this wicked plan once and for all! And Time Warner, don't bring any additional metered plans our way, OK? Our citizens still need to join together for a really high-spirited protest in front of every one of their offices all over the Triad...to keep them remembering that the customer always comes first, all of the time!

titus

April 17, 2009 - 7:08 pm EDT

First off I'd like to say that my internet from RR isn't that great anyway. It always seem slow even though I am a subscriber to that "super fast" service they advertise. Not to mention that just about once a month they are on my block "repairing" the lines leaving me without reliable internet from anywhere from 3 hours to a full week. This is not an option for an adult who takes online college courses. I live with 2 adults who are enrolled in such classes.

So anyway, I heard about TWC charging people on consumption about 3 weeks to a month ago and I have called them just about every week sometimes twice, to find out more and instead I get the run-around in a BIG way. Without exaggeration and without reliving the countless times I heard, "Well, ma'am you don't have to worry about that, YET. We aren't moving on that just yet, or it will only effect 14% of the population..." and so on and so forth. I cannot get ANYONE to tell me what my actual consumption is. I have been disconnected twice and have been on hold a total of more than an hour.

It's bad enough that I don't get the "service" I pay for, but now I am going to trust TWC to monitor and charge me "accordingly" in the future. If I paid them what they deserve...I would be writing my checks for half the amount I do each month.

I will absolutely be looking for a new internet provider.

Bill

April 17, 2009 - 10:15 pm EDT

Maybe it is time for a little competition for Time Warner! Lexcom Communications located in Lexington NC is a telephone, cable television and internet provider in Davidson County where they compete with Time Warner. I have heard they provide excellent service with very competitive rates. Maybe they might be interested in competing with Time Warner in Forsyth County.

atticusfinch

April 17, 2009 - 11:02 pm EDT

North State Telephone supposedly also has high speed fiber optic internet service.

celticcowgrl

April 18, 2009 - 4:46 pm EDT

Northstate is rolling out Fiber service but not to all areas. I live near Oak Hollow Mall and it is not even in the works to have it in my area. New subdivisions are getting it though.

atticusfinch

April 17, 2009 - 10:58 pm EDT

Why is it that legislators from Texas and New York can stand up for their constituents, but our Senator and Congressman are silent? Where is Howard Coble? And where is Kay Hagan? Now that we need them, they are nowhere to be found!

InventorNC

April 18, 2009 - 4:30 am EDT

atticus When prices go up competition comes in. Maybe not immediately but in time it will come in - and that is something that T-W must understand - or perish.

My only concern is that there be a free market where others can rent communication wires at the same price that T-W pays. Or somehow provide service to us without restriction.

There are other vendors already. AT&T's Bell South now offers internet service dont they? I did not switch over to them years ago because they insisted that a customer have phone service. Now I believe that we can get Internet service without the phone connection.

There are other vendors too who I bet would love to see T-W's rates go up so they could become increasing factors in the marketplace.

Compeition is the prime issue. Then let the free market go at it. We will all be winners then.

atticusfinch

April 18, 2009 - 9:21 am EDT

I 'll bet that News 14 Carolina doesn't cover the protest for Time Warner Cable.

swerdna

April 18, 2009 - 3:20 pm EDT

Switching internet providers will only be a temporary fix for people. Since Time Warner is the "giant elephant," it would only be a matter of time before others follow the new pricing system.

To be honest, I'm sort of on the fence on this issue. I'm certainly not one of those who use great amounts of bandwidth each month since I don't download movies, watch television shows or download music. My usage is pretty much limited to e-mailing, and general web-surfing. I'm against Time Warner changing the rules on my "unlimited access" package to suddenly charge me based on my internet use. Since there is no contractual time for my provider package to expire, it seems to me that legally, they can't suddenly limit access except on new accounts. However, that being said, I also don't want to see my rates go up simply because a minority use an abnormally large volume of bandwidth. Face it, one way or the other, Time Warner IS going to MAKE money!