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Time Warner Cable Struggles to Defend Modem Fee
Has Hard Time Pretending This Isn't Just a Rate Hike
by Karl Bode 09:19AM Wednesday Oct 10 2012
Time Warner Cable first took heat recently by announcing a new $4 modem rental fee, then they took heat for being unprepared to support users looking to swap out their rented modems for customer purchased gear. As an interesting addendum the New York Times noticed that if you have Time Warner Cable digital voice service you'll still need a second modem from Time Warner even if you bought one for broadband, though you'll pay no fee for it. That means running two modems at once, since no commercially available modems support Time Warner Cable's digital voice service.

Click for full size
The Times amusingly tries to get the operator to explain why one set of users needs to pay a fee while the other doesn't, which would seemingly run contrary to last week's claim that the fee's necessary to cover the cost of repairing and replacing cable modems over time.

The company struggles to bridge the logic because, as we all know, existing prices already more than covered the cost of relatively-inexpensive hardware and this is just a price hike. But since you can't just be honest with your customers about it, the Times gets a string of nonsense:
quote:
Justin Venech, director of public relations at Time Warner Cable, acknowledged the disconnect between the company’s explanation of the fee and the inconsistent billing methods. When asked whether the decision to charge a rental fee for Internet use but not voice service contradicted his previous statement about the reason for the fee, Mr. Venech responded, “It does. But the way we have decided to charge this fee is, we’re charging it for use of the Internet portion of the modem.”

“It’s a business decision,” Mr. Venech added. “It’s a matter of starting to treat this equipment the same way we treat our other equipment.”

But why treat the same equipment differently for voice and Internet customers? Mr. Venech repeated that the company’s business decision was to charge for using the modem for the Internet, not voice.
In other words, Venech couldn't really justify the disconnect, but gave a half-hearted attempt by claiming the company is billing differently for different modems "to treat this equipment the same way we treat our other equipment." Make sense? Time Warner Cable probably just wishes they'd been charging this fee all along (like AT&T U-Verse or Comcast) so they didn't have to suddenly justify a rate hike on already expensive service using total nonsense.

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topics flat nest 

Failed!

They should of at least switched to a more expensive modem.

mromero
Premium
join:2000-12-07
The O.C.
kudos:1

Re: Failed!

thing that pisses me off is that you cant just buy any docsis 3.0 modem, it has to be on the approved list.

battleop

join:2005-09-28
00000

Technically not a rate hike, but it is.

It's a rate hike plain and simple. Since their competition will attack them over a rate hike (and they would do the same) they are adding this "Modem Fee" so they can technically say they didn't have a rate hike even though the rest of us knows it's a rate hike.
--
I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.

cypherstream
Premium,MVM
join:2004-12-02
Reading, PA
kudos:3

I thought thats how most providers operated?

I have a smaller cable co for phone and internet. I purchased my own Motorola 6120 in 2010 when it was a new product.

I have Phone and Internet with my provider. They supplied an Arris modem that although could technically do both, it only does voice. My Moto does Internet.

I just have a package price for Internet/Phone plus tax. No equipment fees.

This is with Service Electric Cablevision.

I seem to remember Comcast was the same way.

Anonymous_
Anonymous
Premium
join:2004-06-21
127.0.0.1
kudos:2

modem fee

modem fee was included in the cost of the service before.
All they did was raise the fee from 4.99 to 8.99
elefante72

join:2010-12-03
East Amherst, NY

It pays for the internet portion

Seeing the fee was $2.50 to $4, the $1.50 should cover the cost of providing the internet service for the month, and the rest is pure profit

Now I don't think a $4 fee is unreasonable, just how TWC handled it. If they were smart, they would have offered the modem online on their website (no price jack), and then charge $2.50 per month in maintenance so in essence they are still making their price increase, while taking a leased asset off the books. If it breaks, charge the customer $20 to return it. They know cable modems are not a high failure item.

In addition, they could have come up w/ a website to enter the CPE MAC in to reprovision so it's done in seconds.

These are all very reasonable things to do (and customer centric) but this is exactly as a monopolist behaves.

To add insult, that same modem if you have voice still sits in your house sucking down electricity on your dime, because they are too stubborn to be customer friendly.

When people port out voice and then cable (I forgot thats not happening), then they scratch their heads and ask why.

In any case, I would stick it to TWC and get your own VOIP. When I got FIOS it was cheaper to do 3 play vs 2 play so I went with it (mistake). In the last two years the fees on the phone portion have ballooned to over $6/mo MORE than when I signed up. Now I use voip.ms for my office, and in any case it's just as good and I only pay $4/month average. I probably don't use the house line for more than 300min in a month, so that would cost me $4 for voip.ms ALL IN with 911.

In any case if you don't do VOIP with your telco, you can easily switch providers on a dime without having to port your phone #. If you are keen, port to mobile, then to google voice and then you can do whatever you want from there (ring mobiles, any landline, softphone).

NoTWCfee

@unc.edu

Re: It pays for the internet portion

I'll give a thumbs up for VOIP.ms since I dumped Vonage for them. Unlocked my old SunRocket ATA and ported my number to VOIP.ms. Vonage was cheaper then TWC phone so I never wanted cable co phone service.

From what I can tell, TWC business customers don't have the modem fee. I talked them into a Teleworker plan with no contract and haven't seen modem fee on the bill. I pay $50 a month and my speeds are only 7x 768 but I can get static IP or any other "business" feature that they won't give you on a residential plan. Kept the same UBEE DDW3611 that had 30x5 at one point on residential. They just sent new config with TWCBC IP and routing.

I'm so fed up with TWC and Telco being the only real internet options. I wish I could start my own ISP but that is only dream unless I win the lottery.

antdude
A Ninja Ant
Premium,VIP
join:2001-03-25
United State
kudos:4
Reviews:
·Time Warner Cable

Re: It pays for the internet portion

said by NoTWCfee :

... I'm so fed up with TWC and Telco being the only real internet options. I wish I could start my own ISP but that is only dream unless I win the lottery.

For me, it is worse. No DSL and FIOS in my Verizon areas. TWC is the only waytto go!
pmilligan

join:2000-10-05
Indianapolis, IN
Business customers do have the modem fee, and are not allowed to replace the modem with there own. At least that is what I was told when I called the help desk about the modem fee for my business plan.

Obamas Mama

@cox.net
Just wanted to point out there is a lot more in the overhead than just "providing internet" at $1.50 a person... It really is hard to keep a business alive, even if and sometimes especially svc industy companies

Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
Reviews:
·ooma
·Comcast
·Callcentric
·Site5.com

1 recommendation

This really should have went a lot smoother

Time Warner really dropped the ball. I have no problems with them charging for rental modems. What I do have an issue with are the notice ahead of time and the list of approved modems. They should have given everyone 2-3 months notice before kicking this fee in. If they did send letters out a couple months in advance, then I would be more forgiving. They also should have expanded their list of approved modems. Only 5 DOCSIS 3.0 modems? Thats insane.

At the same time, why are people calling Time Warner to buy their modems through them? Newegg has all these modems and they can be bought at cheaper prices there anyway. Just buy the modem at Amazon or Newegg, and activate it on Time Warner's network. It isn't that hard.
--
My domain - Nightfall.net

Pathfinder
Dazed Confused
Premium
join:2000-03-26
Mount Vernon, NY

Re: This really should have went a lot smoother

In New York there are only 2 approved Docsis 3 modems, And 3 Doc 2.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Perhaps Venech should have said

TWC might have been bettered served by stating something to the effect that due to the additional revenue generated by subscribing to multiple services, double- and triple-play subscriptions already cover the costs of replacing/repairing the eMTAs.

Smith6612
Premium,MVM
join:2008-02-01
North Tonawanda, NY
kudos:24
Reviews:
·Verizon Online DSL
·Frontier Communi..

1 recommendation

The modem rental fee.

This fee is silly. Many folks I know stick with providers for years, which more than pays for the modems or cheap, buggy gateways. Plenty of users with SB5101s still or those horrible RCA modems that are years old. The modems are also still circulated throughout the area despite being old and run until they break for good.

Adelphia back when they owned this area used to allow folks to purchase their own Cable modem, which many folks oped for the Motorola SURFBoard. Time Warner permits this to happen too, but if you get their voice service and there is a customer owned modem, they come in, split off the two modems and put in a Voice/Data combo modem. What I find stupid is, when they do this they not only ruin your signal levels, with some lines in the area running in marginal spec as a result, but if you choose to run just ONE modem, you know, the free one they gave you for voice service and opt to sell or retire your personal modem, you would get smacked with a $2.50 fee each month for just having a good gesture of taking a modem off of the network. That price is getting hiked now apparently.

Yet, Verizon for FiOS gives out routers if you say it's broken. The router is yours after a year or two. For DSL? Say your service disconnects and you have another modem on the way, no fee. Apparently the cost of the gear isn't a problem for them!

I won't include Frontier into the discussion though. They're on the same level as Time Warner if you get suckered into their fees for their modem rental which is a few dollars more for the same, cheap and buggy gateways.

IowaCowboy
Iowa native
Premium
join:2010-10-16
Springfield, MA
kudos:1
Reviews:
·Verizon Broadban..
·Comcast

Maybe it'll keep Best Buy in business

I love shopping at Best Buy. I shop at the one at Holyoke Mall when I am at home but shop the one at the Maine Mall when I am at Grandma's house. They unfortunately closed the store in Biddeford (which my cousin worked there in the past). The matter is that they carry cable modems at their Maine stores (which is predominately Time Warner turf) so their cable modem inventory was not moving due to the fact that TWC provided the modem at no charge. They also have Comcast Internet self install kits at their Maine Mall store and I am not aware of any Comcast systems in Maine other than Kittery (which is part of the Portsmouth, NH system).

I am sure those cable modems are flying off the shelves now with this modem fee.

I have always owned my own modem as long as I've had broadband. My current modem is an Arris TM722G. I have personally dealt with Mediacom and Comcast and they both charge for modems (when I had Mediacom, they offered a discount off the advertised rate for owning a modem, which was the early 2000's).

If they would let me put in a purchased EMTA, I would gladly buy Grandma an Arris TM822G (available on Amazon) complete with battery (since reliable phone service is crucial to senior citizens and TWC does not provide batteries although I could pick up a UPS power strip for her).
--
I wish I still lived in Iowa; Everything there from rent and groceries to Cable TV is much cheaper in Iowa (especially with an overbuilder in town).

n2jtx

join:2001-01-13
Glen Head, NY

Re: Maybe it'll keep Best Buy in business

said by IowaCowboy:

I have always owned my own modem as long as I've had broadband.

Me too. When I first signed up for Optimum Online back in 2001, you had to buy your modem. There was no rental choice. Even though I have upgraded from the original purchased SB4100 to SB5100 through Cablevision, I continue to own the modem per their policies. As long as I can document the original ownership and serial number swaps (which I can), it is mine. I probably should sell it and get a freebe but I suspect at some point Cablevision will consider charging for modems too so I might as well keep it. It works!
--
I support the right to keep and arm bears.

swintec
Premium,VIP
join:2003-12-19
Alfred, ME
kudos:5
Reviews:
·Time Warner Cable
·VoicePulse
·Sprint Mobile Br..
·RapidVPS
said by IowaCowboy:

They also have Comcast Internet self install kits at their Maine Mall store and I am not aware of any Comcast systems in Maine other than Kittery (which is part of the Portsmouth, NH system).

I believe the berwicks are Comcast. Also, several years ago Comcast bought Suscom which services the mid coast. I think Brunswick, Durham and that area...it is a very small pocket and looks weird on a coverage map...but it is there. I am surprised they never swapped with TW.
--
Usenet Block Accounts | Unlimited Accounts

IowaCowboy
Iowa native
Premium
join:2010-10-16
Springfield, MA
kudos:1
Reviews:
·Verizon Broadban..
·Comcast

Re: Maybe it'll keep Best Buy in business

I wish we had Time Warner where I live in Springfield (MA) where I live. While Comcast is better with network upgrades (as we got D3 upgrades pretty quickly), I think Time Warner is better with customer service. I moved one of my TiVo boxes to grandma's house and I had a hard time provisioning the CableCard, they told me to swap the card and call back. Comcast will roll a truck and blame customer owned equipment (the its not our problem attitude). I swapped the card and it was working the next day with no truck roll required.

At least we now have D3 at Grandma's house.

It seems each state has a dominant cable provider such as Mass is Comcast, Maine is Time Warner and Iowa is Mediacom. Some times they do have systems where they are not dominant like Time Warner has a few systems in Mass such as Pittsfield and Gardner. Iowa has a lot of independent cable providers in the small towns (operated mostly by telecom co-ops).
--
I wish I still lived in Iowa; Everything there from rent and groceries to Cable TV is much cheaper in Iowa (especially with an overbuilder in town).
cramer
Premium
join:2007-04-10
Raleigh, NC
kudos:9
Negative. They *still* won't be moving as the fools aren't stocking things on the approved list. On the web, they list 6121 and 6580. The 6121 hasn't been on the list for years. On the shelves... 6140's. A few months back I asked one of the "managers" why the hell they're stocking these things as no cable operator within 100mi will activate it (officially.)

voipguy

join:2006-05-31
Forest Hills, NY

1 recommendation

Simple...

I can understand not expecting customers to buy their own voice modems. They are virtually unavailable at retail.

TWC should have known this and used it as an opportunity for bundling - they should have waived the modem fee for any data customers that are also voice customers.

Making the customer use their own data modem in addition to the TWC modem is really stupid - extra CMTS resources are tied up, another device must be tracked in their billing systems, the device may or may not be supported for firmware updates, not to mention forcing the customer to pay for extra power.

Really dumb.
cramer
Premium
join:2007-04-10
Raleigh, NC
kudos:9

1 recommendation

Re: Simple...

The entire purpose of the "approved list" is full support, which means tested firmware updates.

Before bitching about how much power they use, how about measuring it. You lose more pocket change per year than it takes to run one. If you're that damned worried about it, watch an hour less TV per month.

djrobx
Premium
join:2000-05-31
Valencia, CA
kudos:2
Reviews:
·Time Warner Cable
·VOIPO

3 recommendations

Lack of competition

TWC has most of their customers by the balls, and they know it.

With the telcos giving up on wireline, focusing on wireless, and making deals with cable cos, things may get a lot worse unless we get some sort of competition going again.

The funny part is that folks have been complaining about "monopoly" broadband for years, but I've always felt that there was a somewhat reasonable amount of competition between cable, telco, CLEC-provided, and independent ISPs. Imagine how bad things will be if your only alternative is a wireless data plan. Ouch.

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

AdamB

join:2001-01-07
Columbus, OH

1 recommendation

Can't explain that

Prices go up, but service stays the same. You can't explain that!
Skippy25

join:2000-09-13
Hazelwood, MO

Re: Can't explain that

You have to sit in on the stockholder meeting to actually get any explanation that makes sense. Otherwise it is Greek to everyone else.
Wilsdom

join:2009-08-06
Government prints a crapload of money: either prices go up, or service is degraded, or both. Change you can believe in.

AdamB

join:2001-01-07
Columbus, OH

Re: Can't explain that

Or secret option C - the telecoms are given monopolies and just pocket the cash.
jeffreydean1

join:2010-05-31
Because the Fed totally didn't print 'craploads' of money under Bush as well...
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

fee creation or increase= more money out of pocket

it's your bottom line cost of service that matters..

for those of you on docsis 2.0 level tiers a used motorola surfboard goes for $25 or less.. if your on docsis 3.0, it's possible to get an Arris docsis3 modem for btw $67 - $220 (usually the higher price includes the backup battery).

I see ZERO justification for a fee on docsis 2 tiers.. for docsis 3 tiers, it's possible to justify it as a warranty extension after your first year of service.. but I still think $4 is too high.. should be $1 or $2... based on a year prorate of a warranty extension plan over 12 months. $4+ would be over 50% of the $67 minimum price. You could also see this fee being waived in the customer rentention process.. since in some competitive areas of TWC and Comcast where FIOS is, the closer you get that bottom line price to FIOS.. the more incentive there is to jump ship.

hobgoblin
Sortof Agoblin
Premium
join:2001-11-25
Orchard Park, NY
kudos:11

Re: fee creation or increase= more money out of pocket

"for those of you on docsis 2.0 level tiers a used motorola surfboard goes for $25 or less.. if your on docsis 3.0, it's possible to get an Arris docsis3 modem for btw $67 - $220 (usually the higher price includes the backup battery)."

Please ensure that modems are on the approved list before you pay out any money.

Thanks

Hob
--
"A foolish consistency is the hobgoblin of little minds."
- Ralph Waldo Emerson

Anon1422

@comcast.net

Nothing new here

They have a hard time explaining it because it's bullshit, and they know it. Cable Companies own the consumer market for Internet, DSL has become the poor mans gateway to the interwebz. They do what they want, whenever they want, however they want. That's the world we live in and people have accepted. Since most people aren't passionate about these issues like those here, I have my money that people will shut up and take it indefinitely. As if we have competition in the local markets anyways with insanely long contract agreements to cities and countries often times stretching into decades.
bn1221

join:2009-04-29
Cortland, NY

Re: Nothing new here

Poor my butt for DSL. In Verizon territory you pay 29.99 for 1.1 - 3 mbit DSL AND you need a 34.99 POTS line.

I can get 1*3 cable modem for 19.99-24.99.

Shawn808

@rr.com

Extortion

Key financials $ millions % change
from 2009

Revenues 18,868.0 5.6

Profits 1,308.0 22.2

Its not like they didn't make 1.3 billion in profits...

Oh wait they did.

Call Time Warner and put in a cancellation of service on your next billing cycle.

You can always cancel your stop of service.

It is the only way to open up their eyes.

LOL @ you want to charge me money for the modem I have had for the past 5 years. @least give me a new modem or something....

It is as if the water company wanted to charge you rent for your water meter and faucets.

Paul MF

@level3.net

Modem issue

I you have internet & phone service, buy the new approved modem, then buy Magic Jack and pay $19 per year. Cancel your phone service and screw Time Warner.

anon202

@rr.com

Cancel Service!

With ROKU, Apple TV and other sources out there. Time Warner Cable is walking a fine line of being a Monopoly. Customers are smarter and are already jumping ship by cancelling services averaging over $100 per month.

ROKU $50 one time purchase, plus $7.99 Netflix and Hulu Plus $7.99. (30 day return at Best Buy)
Apple TV $99 one time purchase, plus $7.99 Netflix and Hulu Plus $7.99. (30 day return at Best Buy)

You will have more entertainment then you need. DITCH CABLE AND SATELLITE. Modem fees are hidden fees to make them more profit over Customer satisfaction.
bn1221

join:2009-04-29
Cortland, NY

Re: Cancel Service!

Hey Luddite - this is about internet access you'd still need that for the Roku ya know....

Screwed

@rr.com

Got to Wonder...

How many TWC execs cornered the market on modems...?