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Does anyone still think that Time Warner’s proposed (and hopefully never to appear) 5GB per month data cap is reasonable?
If you do, check out the latest report from UCSD, which concludes that the average American consumes 34GB of content per day. Of that, just under 27% is computer data, or over 9GB per day.
As I’ve mentioned before, Time Warner are in a tough situation. They know that the prices of their bundled channel packages are pushing people to drop cable TV and switch to getting their shows via the Internet; but the content providers keep pushing up the cost of each channel, and won’t let them be sold à la carte.
The new year is the traditional time for price hikes, but it seems Time Warner aren’t going to watch their subscriber numbers keep dropping without a fight. They are launching a new campaign to try and make consumers aware of why their cable bills are so high. Their new site rolloverorgettough.com invites your comments.
Comcast sees the approaching problem:
“An entire generation is growing up, if we don’t figure out how to change that behavior so it respects copyright and subscription revenue on the part of distributors, we’re going to wake up and see cord cutting.”
While most people are taking this as a pirates vs media or Hulu vs cable story, the story they’re missing is in the reference to subscription revenue.
The problem is, what consumers want is a la carte programming, but the content providers won’t let Comcast or the other cable companies even sell individual channels.
Steve Burke of Comcast knows that Hulu is the wrong model, and not because it’s free. Even if Hulu introduced a paywall, it would end up being another big bundle of channels, and nobody wants to pay subscription prices for all the channels they don’t want.
Cord-cutting is already happening. I ditched cable and satellite TV in favor of AppleTV and PS3. Trying to charge subscriptions for Hulu is just rearranging the deckchairs on the Titanic.
Wouldn’t it be great to have 50Mbps fiber broadband for $50 a month? That’s 5× faster than Time Warner’s fastest offering.
If the experience of Monticello, MN is anything to go by, all we need to do is get the City of Austin to start building a city-owned broadband backbone…
In an article on WIRED News, Dylan F. Tweney writes that there are three problems with the FCC’s proposed position in favor of net neutrality.
His first alleged problem is that bandwidth is not infinite, and that providers “need the flexibility to ban or mitigate high-bandwidth uses of their network [...] Take away their ability to prioritize traffic, the ISPs say, and overall service will suffer.”
First of all, notice the sly (or perhaps careless) use of prioritization and banning as if they were synonyms. Prioritization is what I do on my home network: I give priority to the low bandwidth interactive protocols like SSH, HTTP, VoIP, video chat and online games, where delaying the data will be noticeable. The higher bandwidth non-interactive protocols like BitTorrent are given low priority, so that their data only occupies the bandwidth left over after the interactive stuff has been dealt with. Obviously, that’s a very different thing to banning entire classes of service.
Yes, there are genuine limits to total available bandwidth. We’ll probably stop seeing offers of unlimited Internet for a fixed monthly fee. But you know what? Unlimited Internet never really existed in the first place. While Time Warner doesn’t officially have any cap on usage that I can find on their help pages, you’ll still get cut off without warning if you exceed what they decide is reasonable; it happened to a friend a couple of months ago.
So your ISP may be telling you that you are paying for unlimited Internet, but try to use your connection 24/7 for a week and you’ll find out that it’s a lie. If we have to lose a pleasant-sounding lie, I’m happy with that. Also, I hate to harp on about it, but perhaps the telecoms utilities could build the high capacity fiber network we already paid for, eh? Or maybe deploy DOCSIS 3.0 at a one-time cost of $50 per customer in order to upgrade the network to 10× its current capacity?
The second cited problem is that enforcement of net neutrality regulations is going to be difficult. Well, yes, enforcement of most laws is difficult, sometimes notoriously so. Bernie Madoff was apparently hard to catch, but that doesn’t mean we should give up on the idea of laws against Ponzi schemes.
The third cited problem is the hilarious one, though: Tweney raises the spectre of government inefficiency damaging a business where “the free market has already proven its effectiveness”. That’ll be why the USA has worse broadband than most European countries, I suppose. (And to forestall the usual excuses, I note that Russia is far larger than America, and Finland is more sparsely populated, yet both have faster and cheaper broadband than the US. If population density and size were the issues, we’d still see fast, cheap broadband in all the major US cities, wouldn’t we?)
Tweney writes that “outside of small, rural markets, most of the U.S. offers a high level of competitive choice.” Tell that to Austin, where many of us have exactly two options: Time Warner cable, or AT&T DSL. Yes, other DSL providers may exist, but their connections depend on the same AT&T wire. Satellite internet exists, but is useless for modern applications like VoIP and online gaming.
FCC chairman Julius Genachowski spoke out in favor of net neutrality this week in a speech at the Brookings Institute, and President Obama also mentioned net neutrality in a speech he gave.
The FCC chairman’s speech must have made Time Warner very unhappy:
Today, I propose that the FCC adopt the existing principles as Commission rules, along with two additional principles that reflect the evolution of the Internet and that are essential to ensuring its continued openness.
The fifth principle is one of non-discrimination — stating that broadband providers cannot discriminate against particular Internet content or applications.
This means they cannot block or degrade lawful traffic over their networks, or pick winners by favoring some content or applications over others in the connection to subscribers’ homes. Nor can they disfavor an Internet service just because it competes with a similar service offered by that broadband provider.
This would seem to rule out Time Warner’s from offering their own streaming video for free, while charging per-GB usage fees for anyone choosing to download video from other sources. It also suggests that the FCC will not be happy if Time Warner try to throttle internet TV because it competes with their cable offerings.
Of course, it didn’t take long for various paid representatives of the cable TV companies to react. Texas Republican Senator Kay Bailey Hutchison went so far as to introduce legislation attempting to stop the FCC from spending any money enforcing any kind of net neutrality at all. Given that I didn’t even get a reply to my letter to her in April, I wasn’t surprised. I’m sure that generous campaign contributions from AT&T and the National Cable and Telecommunications Association had nothing to do with her stance on this issue.
The Obama administration’s Federal Communications Commission (FCC) plans to keep the Internet free of increased user fees based on heavy Web traffic and slow downloads.
Julius Genachowski, the FCC chairman, told The Hill that his agency will support “net neutrality” and go after anyone who violates its tenets.
Well, I bet that’s put a dampener on Time Warner’s mood.
Senator Ed Markey (D-MA) has introduced his network neutrality bill in Congress for the third time, as the Internet Freedom Preservation Act of 2009. While it doesn’t look as if it would prohibit usage fees, it would ensure that Time Warner would not be able to impose the fees only on other people’s content.
Via ars technica, the news that Rep. Eric Massa’s previously mentioned bill to regulate ISP usage caps is now ready for introduction in the House, and available to read as a PDF.
Rather than banning usage caps outright, the proposed legislation simply empowers the FCC to regulate the imposition of caps and the prices charged. Nevertheless, I imagine it’ll be heavily fought against by the broadband ISPs.
Wait, what?
Yes, cable companies may be in favor of charging discriminatory fees to stop you from getting your TV from someone else instead of them… but when it comes to TV content providers demanding fees from ISPs, suddenly cable companies decide they’re in favor of net neutrality and go running to the FCC.
So again we see that what’s really going on is a power struggle between the TV companies and the cable companies, and consumers are just getting squeezed in the middle.