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

1 recommendation

reply to Luminaris

Re: ISP/Video Competition

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.

Lazlow

join:2006-08-07
Saint Louis, MO
Combat Chuck

If you think TW has been looking ahead, you are deluding yourself. It has been obvious what direction the bandwidth usage has been headed for years. Yet, TW still has a ton of systems still running D1.1 and D2. If they had really been looking forward, a significant amount of their footprint would be D3 today.

All cable companies (or companies in general) have debt. Take a look at their 10k. After expenses they still made 4 BILLION dollars. Spend, say 1/3 of that, on network upgrades (today) and they will no longer have capacity issues for the next few years. You are correct in that the demand for more bandwidth will continue to grow. But the way to handle that is to plan for the future and provide the capacity for that bandwidth, not to try and stop it. Essentially what they are doing is like a car company selling a car that you can only drive 40 miles a day. If you want to drive more than 40 miles a day, they are going to charge you $1/mile. All trying to do stuff like this is going to accomplish is to drive customers elsewhere.

As far as other ISPs watching this; sure if customers are actually stupid enough to put up with this, they will want in on the action too. If customers will put up with it, any business would be foolish not to try something that will ten fold their profit margins. There is nothing in this that the ISPs have to do this.

soothsayer15

join:2002-03-01
Irving, TX
said by Lazlow:

Combat Chuck

If you think TW has been looking ahead, you are deluding yourself. It has been obvious what direction the bandwidth usage has been headed for years. Yet, TW still has a ton of systems still running D1.1 and D2. If they had really been looking forward, a significant amount of their footprint would be D3 today.

All cable companies (or companies in general) have debt. Take a look at their 10k. After expenses they still made 4 BILLION dollars. Spend, say 1/3 of that, on network upgrades (today) and they will no longer have capacity issues for the next few years. You are correct in that the demand for more bandwidth will continue to grow. But the way to handle that is to plan for the future and provide the capacity for that bandwidth, not to try and stop it. Essentially what they are doing is like a car company selling a car that you can only drive 40 miles a day. If you want to drive more than 40 miles a day, they are going to charge you $1/mile. All trying to do stuff like this is going to accomplish is to drive customers elsewhere.

As far as other ISPs watching this; sure if customers are actually stupid enough to put up with this, they will want in on the action too. If customers will put up with it, any business would be foolish not to try something that will ten fold their profit margins. There is nothing in this that the ISPs have to do this.
Use the profit to upgrade the network and invest in the company's future? Probably won't happen. They will use the profits to pay out dividends and increase the value of executive stock options.


Combat Chuck
Too Many Cannibals
Premium
join:2001-11-29
Verona, PA
reply to Lazlow
said by Lazlow:

Combat Chuck

If you think TW has been looking ahead, you are deluding yourself.
You're deluding yourself if you think that looking ahead is limited to the goal of figuring out how they can provide more bandwidth for you. They're looking at money, it's fairly clear that Time Warner cares little about their front end infrastructure.
--
Come let us reason together.

Lazlow

join:2006-08-07
Saint Louis, MO
Combat Chuck

You really do not understand how business works do you? In a consumer based market, if you do not keep up with what the consumer wants, you are going to loose customers. Loosing customers (in significant numbers) means that you are loosing money. The only reason companies reinvest in their infrastructure is so they can continue to be competitive. Fios did not come into play becuase it was a "cool" idea. It came about becuase it was obvious that ever increasing amounts of bandwidth were the direction things were/are headed. Cablevision understood this too (which is why they have 30Mbps D2 available today). Comcast even understands this, as evidenced by their rapid (relatively) switch to D3(despite their official caps, there has been no significant amount of action done to those that have exceeded the caps). Even Charter (broke as they are) recognizes that they have to offer more bandwidth (slower switchover to D3).

GyroCaptain

join:2008-08-01
said by Lazlow:

Combat Chuck

You really do not understand how business works do you? In a consumer based market, if you do not keep up with what the consumer wants, you are going to loose customers. Loosing customers (in significant numbers) means that you are loosing money. The only reason companies reinvest in their infrastructure is so they can continue to be competitive. Fios did not come into play becuase it was a "cool" idea. It came about becuase it was obvious that ever increasing amounts of bandwidth were the direction things were/are headed. Cablevision understood this too (which is why they have 30Mbps D2 available today). Comcast even understands this, as evidenced by their rapid (relatively) switch to D3(despite their official caps, there has been no significant amount of action done to those that have exceeded the caps). Even Charter (broke as they are) recognizes that they have to offer more bandwidth (slower switchover to D3).
Loosing eh?

Classic.

Lazlow

join:2006-08-07
Saint Louis, MO
My apologies for my typo. I should always have caffeine before I type. Despite my typo, I think everybody understood my point.


espaeth
Digital Plumber
Premium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2
reply to Lazlow
said by Lazlow:

If you think TW has been looking ahead, you are deluding yourself. It has been obvious what direction the bandwidth usage has been headed for years. Yet, TW still has a ton of systems still running D1.1 and D2. If they had really been looking forward, a significant amount of their footprint would be D3 today.
That's a little optimistic -- DOCSIS 3 early-use hardware didn't start manifesting itself until Q2/Q3 of 2008, with final full D3 certified gear arriving in Q4.

Comcast appears to be leading the way in DOCSIS3 deployments, and they aren't even close to 50% deployed yet.