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myokitis

join:2004-06-19
Alexandria, VA

More Populist ISP Bashing from BBR

I'm sick of all of this carping about corporate "greed" on this site and elsewhere. IMO, TWC is trying to manage a complex, capital-intensive business in a highly competitive environment.

Consider these factors:
- Demand for bandwidth is growing rapidly as customers use more bandwidth-intensive applications like video, and in the near future, HD video. This would certainly put strain on backend networks.

- TWC is carrying a massive amount of debt dumped on it upon divestiture from the larger Time Warner corporation. I wonder if they have the financial ability, in tight credit markets and under intense competition from VZ & DirecTV/Dish, to make massive capital investments to beef up their network.

- Changing customer habits to increased video streaming/downloading puts their entire video business model at risk.

I think I understand why they're doing this. It has nothing to due with greed and everything to do w/ long-term survival. Unfortunately, caps would probably cause increased churn, so in my estimation they're between a rock and a hard place.


woody7
Premium
join:2000-10-13
Torrance, CA
and your point is?
--
BlooMe

jimbo2150

join:2004-05-10
Euclid, OH
reply to myokitis
said by myokitis:

a highly competitive environment
I highly disagree. I only notice decent to good competition in larger cities.
--

- "Techie" Jim

myokitis

join:2004-06-19
Alexandria, VA

1 recommendation

ISP/Video Competition

said by jimbo2150:

said by myokitis:

a highly competitive environment
I highly disagree. I only notice decent to good competition in larger cities.
You obviously don't work for a MSO or Telco. Take it from somebody in the business: The level of competition is intense. They're desperate to win customers from each other, with employment (or lack thereof) implications depending on how the battle goes.

It's the difference between being an armchair quarterback and actually being in the game.


Bit00
Premium
join:2009-02-19
00000
reply to myokitis

Re: More Populist ISP Bashing from BBR

They don't have capacity issues and they are profitable.

This has nothing to do with consumption of internet services and everything to do with TWC moving to defend their video revenues from ever-rising streaming competitors.

IOW, it's everything to do with greed.

jimbo2150

join:2004-05-10
Euclid, OH
reply to myokitis

Re: ISP/Video Competition

said by myokitis:

You obviously don't work for a MSO or Telco. Take it from somebody in the business: The level of competition is intense. They're desperate to win customers from each other, with employment (or lack thereof) implications depending on how the battle goes.

It's the difference between being an armchair quarterback and actually being in the game.
You obviously don't live in an area where you only have 2 options that have not changed in over a decade and commonly see people in areas that have 1 or no broadband options. From what I hear Virginia is already one of the most wired states in the nation.
--

- "Techie" Jim

me1212

join:2008-11-20
Pleasant Hill, MO

1 recommendation

reply to Bit00

Re: More Populist ISP Bashing from BBR

said by Bit00:

They don't have capacity issues and they are profitable.

This has nothing to do with consumption of internet services and everything to do with TWC moving to defend their video revenues from ever-rising streaming competitors.

IOW, it's everything to do with greed.
Maybe we need more internet only ISPs, they would not have any video or phone money to protect.

kaila

join:2000-10-11
Lincolnshire, IL
reply to myokitis
If things are that hard and that complex, then TWC should quit the broadband business and get out of the way. Their stockholders will thank them.
--
Jeff Howe
Jeff's Blog - »www.jeffhowe.net/Jeffhowe.net/Blog/Blog.html

myokitis

join:2004-06-19
Alexandria, VA
reply to jimbo2150

Re: ISP/Video Competition

said by jimbo2150:

said by myokitis:

You obviously don't live in an area where you only have 2 options that have not changed in over a decade and commonly see people in areas that have 1 or no broadband options.
I understand where you're coming from. But that doesn't change the fact that both groups of companies are indeed intensely competing against each other for survival. It's just that your area probably isn't one of their primary battlegrounds.


KodiacZiller
Premium
join:2008-09-04
73368
kudos:2
reply to myokitis

Re: More Populist ISP Bashing from BBR

said by myokitis:

I'm sick of all of this carping about corporate "greed" on this site and elsewhere. IMO, TWC is trying to manage a complex, capital-intensive business in a highly competitive environment.
What exactly is competitive about monopolies and duopolies? Verizon's FiOS is only in, what, about 10% of markets? The "big dogs" like TWC, Comcast, and Cox usually only have mediocre DSL to contend with in most areas, and sometimes no competition at all in other areas.

- TWC is carrying a massive amount of debt dumped on it upon divestiture from the larger Time Warner corporation. I wonder if they have the financial ability, in tight credit markets and under intense competition from VZ & DirecTV/Dish, to make massive capital investments to beef up their network.
As Comcast's CEO and others in that corporation have said, the cost of D3 upgrades equates to "couch change." I am sure the relative cost for TWC would be about the same.

- Changing customer habits to increased video streaming/downloading puts their entire video business model at risk.
Precisely. So their strategy is to drive up the price, cap usage, and charge 2000% mark-ups for overages so they can "discourage" too much Internet video viewing. No, a real business plan would include innovation and investment in the right areas in order to find a way to change with the times (hello RIAA).

TWC's attitude should be, "OK, there is a shift towards using TCP/IP for video, thus we need to make this experience the best possible for our users and focus more on it than the TV side of the business."

Of course, this will never happen without real competition. Period. If TWC can't do it, someone else will be happy to (that's REAL capitalism). The problem is the silly zoning agreements keep the competition out.


RayW
Premium
join:2001-09-01
Layton, UT
kudos:1
reply to me1212
said by me1212:

said by Bit00:

They don't have capacity issues and they are profitable.

This has nothing to do with consumption of internet services and everything to do with TWC moving to defend their video revenues from ever-rising streaming competitors.

IOW, it's everything to do with greed.
Maybe we need more internet only ISPs, they would not have any video or phone money to protect.
You mean a REAL ISP and not a corporate monster? Those folks are not worth talking about, they do a good job and keep users happy (and most of them do have caps since they have to pay for the bandwidth their customers use) and can not hide profits and losses among the other businesses they have.

I like Xmission and listening to what some of my neighbors say about Comcast and the MSN/QWEST offering, I am not about to change, even if it is a few dollars cheaper to do so.
--
I am not lost, I find myself every time.

Luminaris

join:2005-12-01
Waterford, VA
Reviews:
·exede by ViaSat
reply to myokitis

Re: ISP/Video Competition

said by myokitis:

said by jimbo2150:

said by myokitis:

a highly competitive environment
I highly disagree. I only notice decent to good competition in larger cities.
You obviously don't work for a MSO or Telco. Take it from somebody in the business: The level of competition is intense. They're desperate to win customers from each other, with employment (or lack thereof) implications depending on how the battle goes.

It's the difference between being an armchair quarterback and actually being in the game.
This makes no sense in this case. If TW were trying to win customers, they wouldn't even be introducing caps at all. If you want to win customers, you have to be innovative and for the consumer which TW is NOT in this case at all.

me1212

join:2008-11-20
Pleasant Hill, MO
reply to RayW

Re: More Populist ISP Bashing from BBR

When you say REAL ISP is that a good thing? Ether way I have a "real" ISP(I love them their tech support is GREAT and the owner himself will come to your house, even after hours if you have a problem and the tech guys are @ another house), if they have a cap I have never hit it, even with hq youtube a great amount if time each day, lots(actually about the same, some times juts do not want to go up stairs and use the PC but when I do I get HQ so.....) of nq youtube on the wii, VOIPo, and online gaming.


djrobx
Premium
join:2000-05-31
Valencia, CA
kudos:2
Reviews:
·Time Warner Cable
·VOIPO
reply to me1212
said by Bit00:

Maybe we need more internet only ISPs, they would not have any video or phone money to protect.
And that is the actual source of this problem. Our telecommunications providers have become video providers, so none want to be a pipeline for their competitor. That does makes some sense, which is why I'm not totally opposed to metered billing. But it has to be fair, and capping your standard customers at 20GB is not fair. $1/gb overages is not reasonable.

If anyone should be screaming about rising costs of bandwidth use, it should be the smaller independent ISPs that use their own transit, like DSLExtreme. They have very little margin to play with after the gorillas get their share. Yet somehow they're not the ones driving this shift.
--
AT&T U-Hearse
Your funeral. Delivered.


Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12
reply to myokitis
said by myokitis:

I'm sick of all of this carping about corporate "greed" on this site and elsewhere. IMO, TWC is trying to manage a complex, capital-intensive business in a highly competitive environment.

Consider these factors:
- Demand for bandwidth is growing rapidly as customers use more bandwidth-intensive applications like video, and in the near future, HD video. This would certainly put strain on backend networks.

- TWC is carrying a massive amount of debt dumped on it upon divestiture from the larger Time Warner corporation. I wonder if they have the financial ability, in tight credit markets and under intense competition from VZ & DirecTV/Dish, to make massive capital investments to beef up their network.

- Changing customer habits to increased video streaming/downloading puts their entire video business model at risk.

I think I understand why they're doing this. It has nothing to due with greed and everything to do w/ long-term survival. Unfortunately, caps would probably cause increased churn, so in my estimation they're between a rock and a hard place.
A highly competitive environment?!? I have two choice, my local ILEC or TW, some have AT&T (DSL, not even U-Verse yet) or TW. That is called a duopoloy and is hardly "highly competitive." In how many areas does Time Warner actually have to compete? Why aren't they rolling out the usage based trials in THOSE areas if they are serious about it? Why are they rolling them out in their extremely UNcompetitive markets? Perhaps because they know the consumers in those markets have little choice but to accept the slop they're fed?

Secondly, Time Warner has turned a $7 or $8 billion profit year after year. That's net, not gross. They took a huge writeoff last year and contrary to what you think, will probably make an even larger profit next year due to the separation from Time Warner Inc. $45 a month internet accounts and $60 TV bills pushed across decade old infrastructure equals a very nice profit margin.

The proof of this is right in their 10-K filing and I've heard it out of the mouths of local engineers when I was given a tour of their local RDC. They make an absolutely BOATLOAD of money on TV and VoD services. Hulu, Netflix, Amazon Unbox, all are eating not only into their TV profits as consumers downgrade cable packages, but they state it's expected to cause their advertising revenue to fall.

There is absolutely nothing wrong with trying to protect that revenue stream, but at least make a reasonable effort and be very clear about your reasoning. The caps and outrageous overages were designed to discourage use of these online services, but were also designed to increase existing revenue. So in the middle of the largest recession most can remember, Time Warner wants to eliminate the ability for you to save money and simultaneously pop the average family with an extra $5-$10 a month on their cable bill in overage charges.

It is absolutely ludicrous and the fact they thought they could just slip it in under the noses of 8 million customers and technical minded people shows the arrogance and complete disregard for consumers that is prevalent throughout corporate america.


Anon51

@rr.com
reply to myokitis
A few of your point are valid. Time Warner has not kept their network current, as much of the system is still on Docsis 1.1,
while other companies have moved on to Docsis 2.0 and even Docsis 3.0.
This causes a strain on the entire network. Result...
High latency, frequent disconnects, cable boxes continuously needing to be rebooted, Etc.
This didnt stop TW from rolling out new services like Phone service, to make them even more money, all while failing to upgrade their network to support the increased demand.
In your thought process, TW should be excused because the rest of the world evolved and became innovative in new expanding uses of the internet, yet they didn't plan ahead for this ? And now they have an extreme debt burden.
And all this while just one of their executives is taking $19.9 Million in salary and stock option bonuses in 2008.
How is this not everything to do with GREED ?


fireflier
Coffee. . .Need Coffee
Premium
join:2001-05-25
Limbo
reply to myokitis

Re: ISP/Video Competition

said by myokitis:

They're desperate to win customers from each other, with employment (or lack thereof) implications depending on how the battle goes.
I don't work for a MSO or Telco but I'm smart enough to observe that someone desperate to win customers is not going to do so with ridiculous cap levels and insane markups when a competitor in the same market has no caps.

If TWC had simply opened their stats for public or independent scrutiny that could determine that in fact they are having bandwidth issues, it would go a long way toward resolving this dispute. That will never happen though.

So I see now, there's hinting at the layoff boogeyman if TWC doesn't "compete" (translation: caps and overages).
--
Tradition: Just because you've always done it that way doesn't mean it's not incredibly stupid. --despair.com


fireflier
Coffee. . .Need Coffee
Premium
join:2001-05-25
Limbo
reply to Matt3

Re: More Populist ISP Bashing from BBR

said by Matt3:

It is absolutely ludicrous and the fact they thought they could just slip it in under the noses of 8 million customers and technical minded people shows the arrogance and complete disregard for consumers that is prevalent throughout corporate america.
I couldn't agree more!
--
Tradition: Just because you've always done it that way doesn't mean it's not incredibly stupid. --despair.com


sivran
Seamonkey's back
Premium
join:2003-09-15
Irving, TX
kudos:1
reply to myokitis

Re: ISP/Video Competition

Ain't it funny, too, how the "trial areas" are all non-competitive market...

I live in the middle of the DFW area, and the "competition" here is little more than the mere presence of two broadband ISPs: AT&T and TWC. They set up shop, display their wares, and that's pretty much the extent of the competition. They don't even try to respond to one another. It's a "We're here. Pick one." kind of situation.

Being that Verizon FIOS is ~30 miles away from Arlington (and practically non-existent in Tarrant County, and our ILEC is AT&T, I wouldn't be surprised if one of those "trials" showed up here.

Frontier did everyone a favor by making noise about dropping caps in Rochester. What did AT&T do in Beaumont? Implement caps themselves. If you ask AT&T, competition is the race to see who can gouge their customers more.
--
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon profitable cause...


Matt3
All noise, no signal.
Premium
join:2003-07-20
Jamestown, NC
kudos:12
said by sivran:

If you ask AT&T, competition is the race to see who can gouge their customers more.
I couldn't agree more. It seems as though the two compete against themselves to see who can create the most confusing package to entice a customer to their service. All the while providing the least amount of actual service possible.

They don't compete on the actual merits of their respective offering. Verizon and Cablevision seems to be the only larger companies who do that.


Dolgan
Premium
join:2005-10-01
Sun Prairie, WI
Reviews:
·Charter

1 edit
reply to myokitis

Corp Greed is the reason

This model has every thing to do with greed. TWC is trying to circumvent network neutrality and kill off possible competition from online video providers--instead of adapting their business model to reflect the shift in services that customers want, and how those services are delivered. TWC has been/is profitable, and the threats of "internet brownouts" are nothing more than browbeating the public into believing this pricing is a necessity for them to survive when the reality is much different.

TWC should be investing in network upgrades instead of taking the easy, and shady, way out of avoiding competition.


sturmvogel
Obama '08

join:2008-02-07
Houston, TX

1 edit
reply to myokitis

Re: ISP/Video Competition

said by myokitis:

said by jimbo2150:

said by myokitis:

a highly competitive environment
I highly disagree. I only notice decent to good competition in larger cities.
You obviously don't work for a MSO or Telco. Take it from somebody in the business: The level of competition is intense. They're desperate to win customers from each other, with employment (or lack thereof) implications depending on how the battle goes.

It's the difference between being an armchair quarterback and actually being in the game.
I am a CUSTOMER. In my area the competition is ZERO, I have as the only option for good high speed internet access Comcast.

The lies about competitive market are just designed to hide the truth from uneducated politicians and customers. and that is what they are:

LIES.
--
Obama '08. Will help resolve the terrible broadband issues we have that put us so far behind other countries.


Combat Chuck
Too Many Cannibals
Premium
join:2001-11-29
Verona, PA

1 recommendation

reply to Luminaris
said by Luminaris:

This makes no sense in this case. If TW were trying to win customers, they wouldn't even be introducing caps at all. If you want to win customers, you have to be innovative and for the consumer which TW is NOT in this case at all.
Did you read the part where he said they're between a rock and a hard place?

What do you do when you have two bad choices? They're going with the one they think everyone will be doing in a couple years and hoping they can ride out the churn.

Here's the thing, everyone is looking at this from the point of view of right now. People see they had good profits last year and using that to "prove" that their cries of running out of money are nothing but BS. They are looking 3 to 10 years in the future something the majority of people don't do, which is pretty much the root cause of all the problems in society.

You can be sure that the people at the helm of Verizon and the others are all sitting at the helm with their finger on the button. No one wants to be the first to do it, the desperate companies are going to be the first to do it and the rest will hang onto flat rate as long as they can comfortably do so to snatch up all the defectors of the early adopters, then they'll switch to metered billing.
--
Come let us reason together.


El Quintron
Resident Mouth Breather
Premium
join:2008-04-28
Etobicoke, ON
kudos:4
Reviews:
·TekSavvy Cable
·TekSavvy DSL
reply to myokitis
Seriously...

I worked for a major Telco, and that's the refrain they'll keep repeating not to pay you a decent salary, and the one they tell the customers to keep gouging them.

If I had to do it all over again, (work in the Telecom field that is) I'd go with a start-up, cause my career would have nowhere to go but up.
--
Working to bring you closer to a Bell and Rogers free household.

iansltx

join:2007-02-19
Austin, TX
kudos:2
reply to RayW

Re: More Populist ISP Bashing from BBR

DSLExtreme is a real ISP...no caps Too bad you can't get them where I live


MyNameIsDanger

@ssimed.com
reply to myokitis
While comcast, Cox, ATT, and Verizon spent millions of bucks rebuilding their infrastructure, TWC didnt... WHY should the customers be punished for that?? You obviously dont get it...

jimbo2150

join:2004-05-10
Euclid, OH
reply to myokitis

Re: ISP/Video Competition

said by myokitis:

I understand where you're coming from. But that doesn't change the fact that both groups of companies are indeed intensely competing against each other for survival. It's just that your area probably isn't one of their primary battlegrounds.
I understand that, but you were also making it sound like the select few areas that they are competing equates to the entire (or at least a majority) of the market, which it does not. I just don't see the "ravenous" competition that they so often claim. For example: Just because they are competing in, lets say five, select markets... is it really necessary to claim stiff competition when the majority are not in areas with much or any competition? See my point?
--

- "Techie" Jim

myokitis

join:2004-06-19
Alexandria, VA
said by jimbo2150:

... is it really necessary to claim stiff competition when the majority are not in areas with much or any competition? See my point?
I think I do, but it sounds like you're speaking in terms of %of geography, while the companies need to look at things in terms of %of customers (where their revenue comes from).

The current acquisition offers d'jour from select MSOs & Telcos are around $200 in value (cashback,credits, etc; I know of at last one major telco and one major MSO w/ offers like this), and the companies wouldn't be spending that $$$ to win customers from each other if they didn't think they needed to, if their management and shareowners weren't applying the pressure on their organizations to do so.

I think we'll just have to agree to disagree. This is a situation where "position determines perspective".


maartena
Elmo
Premium
join:2002-05-10
Orange, CA
kudos:3
reply to myokitis
said by myokitis:

said by jimbo2150:

said by myokitis:

a highly competitive environment
I highly disagree. I only notice decent to good competition in larger cities.
You obviously don't work for a MSO or Telco. Take it from somebody in the business: The level of competition is intense. They're desperate to win customers from each other, with employment (or lack thereof) implications depending on how the battle goes.

It's the difference between being an armchair quarterback and actually being in the game.
Sure, if you look at an area like the greater southern california area, where half of telco-land is owned by Verizon, the other half owned by AT&T, and where Time Warner Cable owns about 90% of the cable business.... (and 5% to Charter, and 5% to Cox, give or take) ... there is plenty of competition there.

I get calls from AT&T at least once a month (and they are allowed to do so as they supply one of my phone lines, thus existing customer) if I don't want to switch to their DSL service. TV ads from FIOS, Uverse, and Time Warner are slamming each other.

I never believed for one minute that in the greater SoCal area, they would ever introduce caps, as both Verizon and AT&T would have a FIELD DAY and rake in the customers.

But if you are living in a city like Boise, ID where the competition is a sub-par DSL provider that considers "standard" to be 1.5 Mbps and "ultra" is 3 Mbps, and the city is so widespread, with so many neigborhoods far away from any CO.... cable companies can easily introduce caps and get away with a whole lot more.


en102
Canadian, eh?

join:2001-01-26
Valencia, CA
reply to djrobx

Re: More Populist ISP Bashing from BBR

I agree... indie ISPs have a tough time out there, but are willing to do this.

I am not against 'reasonable' caps either. TWC's caps are similar to that of wireless cellphone.
--
Canada = Hollywood North