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Comments on news posted 2012-11-29 12:55:15: Time Warner Cable today made a fairly tepid attempt to counter some of the constant positive press Google is receiving for Google Fiber, announcing that Kansas City residents now have access to free Wi-Fi (if they're a subscriber) and discount broadb.. ..

page: 1 · 2 · 3 · next

elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink

Time-Warner for the Win!

In the usual DSLR haze, Karl overlooks the bottom line.
Most households don't want to spend $70 a month for broadband, no matter how fast it might be.

They also don't want to have to pay $70 a month for broadband just to watch TV.

How many low-income households can actually do the math and get Google's "free" $300 service? Not many. $10/month works.

Unless Google responds with a competitively-priced product for everyone, and unbundled pay-tv, Cable will win the round and the battle.

thorin

join:2007-11-08
Liberty, MO
.

thorin

join:2007-11-08
Liberty, MO
delete

Os

join:2011-01-26
US
reply to elray
And what will $120 get you at Time Warner? It won't get you every channel known to man and 1Gbps internet.

Typical shill haze.


DaSneaky1D
what's up
Premium,MVM
join:2001-03-29
The Lou
Reviews:
·Charter

2 recommendations

Google fired a shot across the bow

Yesterday's post regarding Google Fiber had the most telling quote in it:

»Ars Realizes Internet Can't Keep Up With Google Fiber

"You've in essence removed a bottleneck that the Internet isn't yet structured to deal with being removed. Having that much pipe means you're basically plugging your computer directly into the thing you're downloading from. Your own bandwidth is so great that it becomes immaterial. It becomes a question of how much bandwidth the other side has available."
In reality, Google has said very little regarding the service other than "we're going to deliver fiber-based services to a selected area". Anything else that's been mentioned regarding it has been speculation based upon analysis of how the project priced, delivered and performed.

That said, Google's pricing a service at a nearly negligible cost is doing two major things:

1) Putting billions of dollars behind the belief that the consumer's attention is worth more then the investment. Essentially, they're force feeding a HUGE spoon to the base they reach and showing advertisers, "look, if you want their attention...send it down my pipes and you'll make money."

2) They're upsetting the model that people buy "services" for the sake of having "services." Residential customers don't buy electricity for the purpose of saying, "look, I have electricity!" They purchase it to consume products that benefit from having electric access. By almost giving away the access needed consume tv and online products, Google is removing any reason customers may have for conducting even more of their lives outside of their infrastructure....or those companies also benefit from Google's business interests.

They're a complete mind-shift that entrenched providers are not ready to compete against.

iansltx

join:2007-02-19
Austin, TX
kudos:2
Reviews:
·Time Warner Cable
·Verizon Online DSL
reply to elray

Re: Time-Warner for the Win!

As I've said before, for Google, TV service is not their bread and butter and that's not where they make their money (look at their lineup and their pricing). So they don't care if they pass up a subscriber who would have gone TV-only. That person can go TV-only with DISH and go along their merry way.

As far as low-income households go, if TWC has their way they would be paying $30-$35 per month for 'net access at 3 Mbps down, 1 Mbps up, after paying $20 per month for the first twelve. Compare this to 5/1 for $300 spread over 12 months and then nothing thereafter, and Google wins. Remember that many low-income families are paying more than $25 for phone service, even if they're on prepaid.


DaSneaky1D
what's up
Premium,MVM
join:2001-03-29
The Lou
Reviews:
·Charter
reply to elray
How may low income households do you know of? $10 a month for someone in such a position will likely not even be paid in a timely manner, which will lead to the suspension/cancellation of the services.

Unfortunately, a low income household is more apt to either 1) go completely without or 2) spend beyond their means and have the $100+ monthly service for TV.

I've seen this with my own eyes. I've seen homes that are LITERALLY falling apart with a satellite dish on their roof. Priorities are often misplaced when it comes to "needs and wants".

Crookshanks

join:2008-02-04
Binghamton, NY
reply to Os
Call him a shill if it makes you feel better about yourself, but the reality of the situation is that many consumers will not pay $70/mo for an internet connection. There's a reason why relatively slow but cheap DSL bundles remain popular. There's a reason why Time Warner offers a 1.5/384 product for $20/mo in my market. They don't advertise it, it goes around via word-of-mouth, or comes from retentions, but it's been available for as long as I can remember.

Some people don't NEED anything more than basic web browsing. Many of these people aren't willing to pay $40/mo, let alone $70/mo, and they'd go without internet service if that was their only option.

The typical DSLR reader is not in the mainstream of internet consumers. Many of the people around here (the ones willing to pay $300/mo for the insane FIOS/DOCSIS 3.0 tiers) aren't even in the mainstream of power users.


djrobx
Premium
join:2000-05-31
Valencia, CA
kudos:2
Reviews:
·Time Warner Cable
·VOIPO
reply to elray
said by elray:

In the usual DSLR haze, Karl overlooks the bottom line.
Most households don't want to spend $70 a month for broadband, no matter how fast it might be.

They also don't want to have to pay $70 a month for broadband just to watch TV.

How many low-income households can actually do the math and get Google's "free" $300 service? Not many. $10/month works.

Unless Google responds with a competitively-priced product for everyone, and unbundled pay-tv, Cable will win the round and the battle.

If by "win", you mean get all the lowest-paying customers with the smallest profit margins, you're absolutely right.

AT&T seems to do OK targeting this market, so it won't be the end of the world, but TWC ought to consider stepping up their game some. At the very least they could more fully utilize DOCSIS 3.

-- Rob
--
AT&T U-Hearse - RIP Unlimited Internet 1995-2011
Rethink Billable.

etaadmin

join:2002-01-17
Dallas, TX
kudos:1
reply to elray
Exactly, and besides are there any guaranties that if something breaks (and often do) in their $300 installation and then 'free' FTTH setup will google replace and fix it for free too? How about technical support is that free too? What prevents google from switching to a pay service in the future?

To me $10/mo sounds reasonable and a bargain.

Os

join:2011-01-26
US
reply to Crookshanks
DSL bundles remain so popular that AT&T and Verizon lose hundreds of thousands of customers every quarter.

Skippy25

join:2000-09-13
Hazelwood, MO
reply to elray
I must disagree with a lot of your silliness.

Now I can't argue for most households as you can, but I would say several households would be willing to pay $70 for 1gb symetrical. Even more would be willing to pay $120 for that same connection AND a nice TV lineup. That alone would reduce my bill by $70 a month and I only have a 12mb connection and absolutely no premium channels.

I am pretty sure many low-income households are capable of doing simple math, you implying low-income equals complete ignorance is pretty arrogant and stupid on your part. $10's a month would work better, you are correct. However, I have seen many "low-income" neighborhoods that have plenty of BMW's, $4000 rims and several other higher sticker items that they always seem to obtain when they want it. So $300 paid over a period of several months is doable by many more than you give credit too if that is what they want.

I wholeheartedly disagree with your cable will win prediction. Google has already won with TW trying to "compete", if you call it that. TW will either make major concessions to stay relevant in KC or as time goes on Google will take over.

Crusty

join:2008-11-11
Sanger, TX
Reviews:
·Embarq Now Centu..
·CenturyLink
reply to Crookshanks
said by Crookshanks:

There's a reason why Time Warner offers a 1.5/384 product for $20/mo in my market. They don't advertise it, it goes around via word-of-mouth, or comes from retentions, but it's been available for as long as I can remember.

That's an insane price for that slow of a speed. I was paying a mere $5 more than that nearly a decade ago.

....thus where the reality of the situation is.

Wilsdom

join:2009-08-06
reply to Crookshanks
Google's low tier is cheaper than anything TW offers, and their standard tier is cheaper and better quality than anything TW will ever offer. Where is the room for TW? Maybe 25/2 for $20 or something...

Crusty

join:2008-11-11
Sanger, TX
Reviews:
·Embarq Now Centu..
·CenturyLink
reply to iansltx
said by iansltx:

As far as low-income households go, if TWC has their way they would be paying $30-$35 per month for 'net access at 3 Mbps down, 1 Mbps up, after paying $20 per month for the first twelve. Compare this to 5/1 for $300 spread over 12 months and then nothing thereafter, and Google wins. Remember that many low-income families are paying more than $25 for phone service, even if they're on prepaid.

^This....$300 spread over equal payments over 12 months...equates to very little. I'd even argue some of the poorest households could easily afford this.


TKJunkMail
Premium
join:2005-12-09
reply to Crookshanks
said by Crookshanks:

Call him a shill if it makes you feel better about yourself, but the reality of the situation is that many consumers will not pay $70/mo for an internet connection. There's a reason why relatively slow but cheap DSL bundles remain popular. There's a reason why Time Warner offers a 1.5/384 product for $20/mo in my market. They don't advertise it, it goes around via word-of-mouth, or comes from retentions, but it's been available for as long as I can remember.

Some people don't NEED anything more than basic web browsing. Many of these people aren't willing to pay $40/mo, let alone $70/mo, and they'd go without internet service if that was their only option.

The typical DSLR reader is not in the mainstream of internet consumers. Many of the people around here (the ones willing to pay $300/mo for the insane FIOS/DOCSIS 3.0 tiers) aren't even in the mainstream of power users.

What part of

In contrast, Google's offering users a 5 Mbps connection over FTTH for "free," after you pay a $300 install fee. That fee can be paid in installments of $25 for a year, after which you don't pay a dime.

says $70/month to you?

Dampier
Phillip M Dampier

join:2003-03-23
Rochester, NY
reply to elray
You can pay off that up front fee in $20 monthly installments. Plus, to get TWC's service you have to jump through a lot of hoops to demonstrate you qualify. Google's 5Mbps tier is available to anyone who wants it.

I agree that $70 for broadband is a steep price at any speed for many families. But within 2 years at the current rate of broadband price hikes, the cable and phone company will be there too for broadband only service.

The double play offer at $120 a month is much more familiar territory for families with a bundled package. Add Ooma or Google Voice and you have a triple play package for that price.

The biggest problem Google will have is customer complacency. If a customer is more or less satisfied with TWC, it will be hard to prod them to switch, if only because of the inconvenience and the aggressive retention deals that will be thrown around.

Verizon learned this with FiOS, and needed $300-500 gift cards in some markets to win switching customers.
--
Phillip M. Dampier
Editor, Stop the Cap!
»stopthecap.com


tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

So, I wonder...

at what point TWC can reasonably press for anti-trust action against Google, for what is clearly predatory pricing?
Obviously they'll wait until quarterly results show clear signs of injury from the well below cost/predatory pricing scheme google is using to damage their existing business in KC.


TKJunkMail
Premium
join:2005-12-09
reply to etaadmin

Re: Time-Warner for the Win!

If you had bothered to even look, you'd see that Google will repair/replace the equipment under warranty as long as you are a subscriber.

xenophon

join:2007-09-17
reply to Crusty
The $300 for 5MB only is a home improvement fee to install fiber (or $25/month first year), not a service fee. If a homeowner pays the $300 then someone else moves in, the next person gets 5MB 'free' for the remaining of 7 years total.


TKJunkMail
Premium
join:2005-12-09
reply to tshirt

Re: So, I wonder...

LOL

Because Google is offering a better product at a lower price, it's predatory pricing? Perhaps you should read up on what that term means. There's no proof, over even indication, that Google is doing this to drive TWC out of business or even out of the market.

Crookshanks

join:2008-02-04
Binghamton, NY

1 recommendation

reply to TKJunkMail

Re: Time-Warner for the Win!

Cool, who do my friends in Binghamton call to sign up for Google Fiber? Oh wait, it's not available there, and it never will be, because the Google boys have the attention span of a six year old with ADHD. "Sergey, do your math homework." "Ok Mom, 1 plus 1 equals WOW A BICYCLE LET'S RIDE!!!!"

I vaguely recall Google threatening to shake up the status quo by building a nationwide cellular network. How'd that turn out? They didn't sell out when they realized it would cost billions of dollars, did they?


tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

1 recommendation

reply to TKJunkMail

Re: So, I wonder...

You don't believe offering to give away 5Mb service for 7 years for the install price is intended to draw away TWC customers?
or that $0 per month is so far below any realistic cost of existing "for profit" provider, that it is obvious predatory pricing intended to drive TWC from the market.
What part of predatory do you not understand?
That pricing and the extended term of service clearly exceed any reasonable "promo".


Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL
reply to elray

Re: Time-Warner for the Win!

Technically $300 for 7 years of 5mbps service = $3.57 per month
Now you can pay the $300 up front OR you can pay $25 a month for the 1st year only.

Crookshanks

join:2008-02-04
Binghamton, NY
reply to Os
AT&T and Verizon lose customers because they can't offer a competitive Triple Play product, with the exception of course of those areas lucky enough to have FIOS/U-Verse. Most people need (or think they need) TV, and cable is the preferred choice over satellite for most consumers who have access to it.

Few very non-techie folks actually purchase their internet connections based on promised speed. For most it's the perceived ease of a unified bill, combined with the perceived PITA of switching providers, even when a better product is available.


S1R1US

join:2002-08-25
Clearwater, FL

1 recommendation

Google Fiber

I think TWC is simply doing what should come naturally for any company; offering similar free ancillary features that their competitors are offering, whenever possible.

"Neither initiative is new, and neither really does much to counter Google's competitive karate chop to the center of the cable giant's forehead. "

Kansas is just one market. I would definitely call it a 'karate chop to their pinky toe' though heh...

"Time Warner Cable's largest effort to counter Google Fiber? Trying to lock customers into long-term contracts"

I actually hadn't heard about that. Is anyone here able to verify that part of the article?

said by elray:

In the usual DSLR haze, Karl overlooks the bottom line.
Most households don't want to spend $70 a month for broadband, no matter how fast it might be.

They also don't want to have to pay $70 a month for broadband just to watch TV.

How many low-income households can actually do the math and get Google's "free" $300 service? Not many. $10/month works.

Unless Google responds with a competitively-priced product for everyone, and unbundled pay-tv, Cable will win the round and the battle.

I think you bring up an important point. Customers just want an affordable rate for service that does what they need it to. If it's 2Mbit or 200Mbit, they just want to have a seemless experience. 1Gbit offerings from Google or 50/50 packages from FiOS, it's all marketing gimmicks. Granted, I believe Google's initiated is much more innovative and forward advancing, but it's not practical for markets across the rest of the country.

said by Os:

DSL bundles remain so popular that AT&T and Verizon lose hundreds of thousands of customers every quarter.

I think this is a bit magnified, but certainly there are still DSL and lower tier customers for a reason.

said by Crusty:

said by Crookshanks:

There's a reason why Time Warner offers a 1.5/384 product for $20/mo in my market. They don't advertise it, it goes around via word-of-mouth, or comes from retentions, but it's been available for as long as I can remember.

That's an insane price for that slow of a speed. I was paying a mere $5 more than that nearly a decade ago.

....thus where the reality of the situation is.

Does that make it any less worth it? Think about that statement for a minute. The fact that someone was paying that much a decade ago suggests that the cost has been kept from rising despite the economy and increasing costs of living. I just wrote in another post earlier that for a decade my Road Runner price stayed at 44.95, from 1998 to 2008. Throughout that time though the speed increased from 2mbit to 5, 7, 10, and then 15. Does that make 2Mbit any less worth the same price? All that's happened is over time we've become accustomed to getting more for last. Our expectations are changed. We should still keep in mind that a single dinner for two can easily cost more than this amount, yet it's available for use 24 hours a day, every day of the month. I think no matter what speed we're getting, we're certainly getting our money's worth.

said by DaSneaky1D:

How may low income households do you know of? $10 a month for someone in such a position will likely not even be paid in a timely manner, which will lead to the suspension/cancellation of the services.

Unfortunately, a low income household is more apt to either 1) go completely without or 2) spend beyond their means and have the $100+ monthly service for TV.

I've seen this with my own eyes. I've seen homes that are LITERALLY falling apart with a satellite dish on their roof. Priorities are often misplaced when it comes to "needs and wants".

Sad but true. It's not geographical or race related either, just pure human nature for some reason..

said by djrobx:

AT&T seems to do OK targeting this market, so it won't be the end of the world, but TWC ought to consider stepping up their game some. At the very least they could more fully utilize DOCSIS 3.

-- Rob

I'm curious about your specific thoughts on that topic. Obviously DOCSIS 3 allows for more capacity than what most providers are offering; what do you think would be an acceptable amount of bandwidth?


Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL
reply to DaSneaky1D

Re: Google fired a shot across the bow

I dont really agree with those points.
1) They built a fiber network. They are simply letting users use most of the capacity of the network. Sure they can artificially limit users like most ISPs do, but what would be the point in that when customers are paying you more than enough to cover all the costs to operate the network and have a great profit.
Using 5 mbps or using 100 mbps on their fiber network costs exactly the same per user as 99% of the costs are in the physical connection and hardware.

Now they do have their limited 5 mbps plan for $300 which only covers paying in installer to run fiber from the street to the persons house and hardware.
But if you built out the network to that street then any money is better than nothing and at least getting the 5 mbps hooked up is free advertisement to get more services to that house.

I dont see this as a mind-shift. It is simply building a fiber network that can be constantly upgraded for more speed with new equipment instead of having to change any wiring and offering a cheap teaser plan to get their foot in the door so any extra profitable services can be turned on instantly.

Google is simply trying to be a profitable successful ISP, not a monopoly that tries to rip off customers just because they can.
Remember the incumbents have been around for decades, their entire networks are already fully paid for so they can easily undercut google if they wanted to, the problem is they dont want to.


TKJunkMail
Premium
join:2005-12-09
reply to Crookshanks

Re: Time-Warner for the Win!

Nothing you just spewed has any relevance to your assertion that they only offer $70/month Internet service.

xenophon

join:2007-09-17
reply to S1R1US

Re: Google Fiber

Google fiber is only released in one KC fiberhood so far out of about 200 they will target over the next year. TWC doesn't need to do anything drastic until customers start leaving in droves.


TKJunkMail
Premium
join:2005-12-09
reply to tshirt

Re: So, I wonder...

Of course it's going to draw away TWC customers. It's not going to drive TWC out of the market.