 espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2
 ·Clear Wireless
| reply to a333
Re: Most profitable quarter ever... what?! I was using the oil analogy to describe forward looking strategy, not directly relating it to bandwidth being a limited quantity.
Yes, capacity can always be added for additional cost. The problem will result when the cost of augmenting capacity exceeds the revenue generated under the current pricing model.
I don't want to get specifically into TWC's test implementation of metered billing because enough data simply isn't available to make an educated evaluation of how "fair" that was structured. People like to relate the costs of operating a DOCSIS network to that of providing bandwidth in a carrier neutral data center facility. The equipment, design, and support models are completely different. That's like trying to compare the manufacturing production costs of producing shoes in a sweat shop in China to manufacturing shoes in a shop in Seattle that pays its workers a living wage. The shoes from the Seattle shop would indeed cost more, but that doesn't necessarily mean the profit margins are higher. |
 RallyBah HumbugPremium
join:2000-10-27
Astoria, NY
 ·RoadRunner Cable
| 7% isn't bad in this industry. Plus breaking away from Time Warner, this isn't too bad at all. When they were trying to get it's customer base to accept low caps and high overages, they claimed they had no choice but they wouldnt be 'able to turn a profit' etc..
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I tie a rope around my penis and jump from a tree. Dont you want to grow up and be just like me. |
 a333A hot cup of integrals please
join:2007-06-12
Rego Park, NY
·Cingular Wireless
| reply to espaeth
I actually addressed that very point in my post. Once again, the ideal billing model would take ALL last-mile costs into account in the fixed monthly fee all subscribers pay for the maintenance and upkeep of the last-mile network. Overages would then cover SOLELY any additional bandwidth required at a cost similar the actual costs at the edge of the backbone.
And BTW, justifications of 40-GB caps on a supposedly "high-end" cable network are quite hard to swallow, especially when small indie ISP's like TekSavvy in Canada can manage to provide caps in the 200+ GB range, and with reasonable (~ $0.10 / GB) overages without having to "educate" the consumer. Even Comcast here in the states has a 250 GB cap that will hopefully grow due to competition from companies like Verizon.
Again, I am not an all-you-can-eat plan zealot. However, I, along with others simply consider Time Warner's actions dubious, especially considering that the caps and overages they have set and justified with made-up statistics will actually RAISE many people's broadband bills, while the increased revenues do not go into capex but rather the pockets of CEO's and investors.
-a333
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Physics: Will you break the laws of physics, or will the laws of physics break you?
If physicists stand on each other's shoulders, computer scientists stand on each other's toes, and computer programmers dig each other's graves. |
