Even The Government Thinks Time Warner's Caps Are Ridiculous

Someone over at Time Warner has missed the memo that the people want a free (or low cost), uncensored internet that will allow the free movement of information. That must have been the same memo that told the ISP that people are moving away from traditional media sources and focusing on internet based solutions which use up more and more bandwidth. That or they are just trying to gouge their customers, the later is the opinion shared by U.S. Rep. Eric Massa of New York.

In his press statement released late last week Rep Massa said that he believes that Time Warner's new tiered usage cap and pricing plans is "nothing more than a large corporation making a move to force customers into paying more money."

Responding to Time Warner COO Landel Hobbs' 4/9/09 statement, Rep. Massa had this to say:

"Time Warner's decision has the potential to more than triple customers' current rates and I think most families will find this to be too taxing to afford. Time Warner believes they can do this in Rochester NY, Greensboro NC, Austin TX and San Antonio TX, and it's almost certainly just a matter of time before they attempt to overcharge all of their customers. And while I favor a business's right to maximize their profit potential, I believe safeguards must be put in place when a business has a monopoly on a specific region."

Massa, along with tons of complaining Time Warner customers, would like some answers. Time Warner claims that the price increase is due to increased Internet usage and cost associated with that usage. However they show no information backing the excessive and disproportionate charges. Under the new plans consumers wanting the same unlimited internet that they currently have would be billed $150 per month about 3.5 times that of their current rates.

Surely Time Warner's costs to use the same old broadband backbone has skyrocketed that much? In fact late last week Wired.com gave everyone a compairison of TWC's earnings. Their reports show that broadband costs had decreased by 12 percent in 2008 even as broadband revenues had increased by 11 percent.

Putting The Caps Into Perspective:

Ars Technica's Nate Anderson put together a nice per-gig price breakdown of Time Warner Cable's plan. He estimates that TWC's price/GB is many times higher than competitors Comcast, Verizon and AT&T. For instance, TWC's base rate works out to $6 a GB, while the heaviest user of Comcast's cable service would pay 17 cents per GB.

TWC's new base plan is going to be 1GB per month tier offering speeds of 768 KB/128 KB for $15 per month. Overage charges will be $2 per GB per month. So what does that really get you on the web. To be honest not much. You would be able to use Netflix to download movies as any single movie would be well over your usage quota. You wouldn't really be able to sit at home and stream those episodes of Lost you missed, nor would you want to download much music.

With the proposed 10, 20, 40 and even 60 GB tiers (Road Runner Lite, Basic, Standard and Turbo packages), you could download several movies, stream a few TV shows and add the latest tracks to your iPod. But if you were on the lite package you'd still need to be concerned about your overages. Even if it was only a $1/GB charge if like me you have 3-4 users all wanting to watch their own videos then you would gobble 10-20 GBs in a hurry!

Somewhere there has to be a middle ground. Congressman Messa's "Broadband Internet Fairness Act" may or may not be it. But one thing is for sure Time Warner's proposal isn't it. Time Warner might not be alone in setting caps but they are definitely the only ones reaching these types of extremes.