Time Warner Cable Earnings Again Beat Estimates → Re: Most profitable quarter ever... what?!

Thank you for telling me I'm arguing something I'm not arguing. First I'm told I'm telling Time Warner Cable how much money they should make (not true), now I'm arguing about oil shortages (both strange and not true)?

Is flat rate broadband pricing sustainable or not? Because again, Time Warner Cable just two quarters ago insisted to everyone it wasn't. Looking at both long and short term ISP numbers it certainly strikes me as a perfectly profitable business both today and tomorrow. References to some unmanageable, looming fantasy capacity implosion have also been repeatedly debunked as untrue constructs of PR and policy folk.

Sustainable over what timeframe? I don't have a crystal ball where I can see what technology advancements will be revealed in the 36-60 months that would drop deployment costs. Do you?

My point is that just because they turned a profit over the last 6 months doesn't mean the model will be profitable perpetually. A number of power utilities started out as a flat rate service and eventually broke into metered billing because demand forced the creation of new power plants (typically coal) which increased the costs of production. When everyone could run off the local hydroelectric plant alone the flat rate system made more sense.

What we know at this point is that demand continues to increase, and as much as we try to model the growth rate we're still not able to predict capacity demand far enough out into the future to plan sufficiently for growth. If you get too far ahead in capacity you end up like all the fiber network vendors who went bankrupt in the dot-com bust (at the benefit of giving us all access to now dirt cheap fiber assets recovered from bankruptcy proceedings), and if appropriate advancements don't come down from your DOCSIS / DSL / whatever equipment vendors then you're stuck building out capacity using building blocks that are more expensive than your business model may support.

Your post is pure FUD. Internet growth has been incredibly consistent and is extremely predictable. Bandwidth growth is the exact same thing. These ISPs have been making record profits while decreasing capex and network investment annually. With modern technology network congestion has been completely eliminated. For wireless:

"Glen Campbell of Merrill Lynch calculated bandwidth cost, traffic growth estimates, necessary capex, and the effect different pricing strategies. In an important paper, he concluded there is no crisis to fear. »bit.ly/bK5s4y. His paper was influential in the broadband plan, who independently came to a similar conclusion. Wireless speeds should be reliably at 5 megabits and above to a traffic load far higher than today but not unlimited in the short run."

And on landline:
"The minimal Comcast throttling is possible because they have essentially solved the p2p upstream congestion issue. Comcast top technical people have described how they've made inexpensive upgrades to 10-20 megabits from the 2 megabits of older systems. Explaining why they are moving slowly on DOCSIS 3.0 bonding, 4 CTO-level execs told Cable Show audiences they have essentially no upstream congestion these days. The speakers were in charge of several of the largest networks in the world. It's amazing how many in D.C., including just about all the cable lobbyists, don't seem to know the progress they've made."

So shut your mouth already.

Which is why so many individuals and companies have had issues coming up with a consistent prediction of growth?

...at the end of 2005, John Chambers, the CEO of Cisco, claimed that Internet traffic was growing at about 100% per year Boslet2005, and similar claims are common (e.g., Roberts2006). Chambers also predicted both in 2005 and in a keynote at the NXTcomm conference in June 2007 Chambers2007, Duffy2007 that growth might accelerate towards 300 to 500% per year, and that the internal Cisco corporate network traffic load is currently growing at such rates. On the other hand, in August 2007, Cisco released a pair of white papers Cisco07a and Cisco07b which estimate that worldwide Internet traffic growth has been around 50% per year over the last few years, and project similar growth for the next few years. (See also the article DW2007 that draws on the Cisco white papers and other sources.) Thus even within a single company, and one that plays a central role in making the Internet function to boot, there are wide disparities in growth estimates, between 50 and 100% per year for current growth rates, and between 50 and 500% per year going forward.

Source: »www.dtc.umn.edu/mints/

A growth rate of 100% per year means traffic grows 1000-fold over the next 10 years.

A growth rate of 50% per year means 58-fold over the next 10 years.

Those are vastly different numbers to plan for -- and the "killer apps" that would influence growth over the next 10 years are still completely unknown. Just look at the evolution of the Internet in the last 10 years -- who, in 2000, would have predicted the rise of a site like YouTube?"Record Profits" is a bad indicator because it's simply pulling out a single statistic without looking at the whole system. TWC has also had "Record Revnue" coupled with "Record Operating Expenses."

Look at the annual numbers for TWC: »www.google.com/finance?q ··· stype=ii

Revenue has gone up, operating expenses have gone up, net income has gone down.

Your quotes are also self contradictory. You appear to be making the argument that broadband ISPs aren't investing enough money in their infrastructure, and then you provide quotes that say they've invested in capacity so much that they've completely eliminated congestion.

DOCSIS 3.0 address the immediate demand for cable operators -- where is the cheap fix for DSL providers?

DSL providers are not what's up for discussion here, it's cable operators that are, and to be honest Copper was doomed from the beginning and we all know that.

Although Fiber to the Terminal is working quite well for qwest, im getting 40meg down/5mbps up on my "DSL" connection, and would personally never trade it back for Cable.