Time Warner's Latest Cap Justification: 'Labor Is Expensive!' Especially for those DOCSIS 3.0 upgrades we aren't doing much of... Tipped by Gbcue 
Nate Anderson at Ars Technica does a nice job searching for the truth about how low caps and high overages have nothing to do with fairness, and everything to do with already-very-profitable companies making more money, pleasing investors, and setting up the ISP in the role of toll keeper for Internet video (well ok, Ars misses that last one). Fresh off of last year's capping PR disaster, Time Warner Cable tells Ars it's the cost of labor that's really why they need to impose caps and overages: As Internet use increases, TWC techs, engineers, and executives need to make adjustments such as DOCSIS upgrades at the cable company headend or "node splits" that divide a shared cable loop in two when bandwidth use hits certain metrics. Paying all of these people costs money, and those costs increase as the network is more heavily used. (This differs from how Landel Hobbs defended the company at the height of the backlash against TWC last year. He quite clearly stated that bandwidth creates real costs for the company and that those need to be covered. "For those who want to use a tremendous amount of bandwidth, there should be a charge, because that costs money," he told the Times.) Well, Time Warner Cable CEO Glenn Britt did see a total executive compensation of $15.8 million last year, but labor still doesn't justify imposing higher per gig penalties during a recession. Using labor as an excuse is about as hollow as the company's previous justifications, all of which ignore the plummeting cost of bandwidth and delivery. Most consumers realize companies like AT&T and Time Warner Cable really are simply looking to charge more, which is why they've had to cancel their metered billing trials in markets like Beaumont, Texas. Both companies however make it perfectly clear it's something they'll pursue should consumers ever allow it, so they keep trying new excuses with the press in the hopes they find something that sticks. "Paying workers is expensive!" is apparently the latest. The problem is, Time Warner Cable just got done recording their most profitable quarter ever under the flat-rate pricing model. They're also among the slowest cable operators when it comes to already-relatively inexpensive DOCSIS 3.0 upgrades, which the company suggests to Ars is their primary manpower drain. The truth (once again) is there is no Internet apocalypse bogeyman, caps and overages are not necessary to fend off financial collapse, and ISPs are complaining about congestion with one hand, while intentionally cutting network investment (and often employees) to offer investors short term happiness with the other. Of course we've already been over this many, many times -- but it's nice to see other people occasionally look at an ISP 10-K and realize the flat-rate residential broadband model is working perfectly well for everyone involved.
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 |  | PDXPLT
join:2003-12-04
Banks, OR | Re: Go down to the Hog Farm! said by Mr Matt:  Go down to the Hog Farm and you will see a bunch of Hogs that act like the Broadband Service Providers CEO's. Those Hogs at the Hog Farm cannot get enough slop and the ISP pigs cannot get enough money from their customers and will try anything to get more. That's the CEO's job, and that's why their companies exist. If the CEO wasn't trying to make as much money as they can, the Board of Directors would fire them, and shareholder lawsuits would be filed.
The CEO's would like to charge $1000/Mbyte if they could; the only thing stopping them is competive market forces. The free enterprise system at work.
Of course, that doesn't work so well in regions where there are few competing ISP's. | |
| | |  KrKHeavy Artillery For The Little GuyPremium
join:2000-01-17
Tulsa, OK
 ·AT&T DSL Service
| Re: Go down to the Hog Farm! Apparently, however, many of them aren't very smart, because they make nonsense claims to the press and industry which then gets out and is easily debunked.
They should just say what they mean: We want more money. We want more money. Greed is good. We want more money.
That would at least be honest.
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"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
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| | | |  jester121Premium
join:2003-08-09
Lake Zurich, IL
 ·voip.ms
| Re: Go down to the Hog Farm! said by KrK:Apparently, however, many of them aren't very smart, because they make nonsense claims to the press and industry which then gets out and is easily debunked. ...yet which no one outside of sites like this ever hear or give a good damn about. | |
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| | cramer
join:2007-04-10
Raleigh, NC
kudos:5 Reviews:
·AT&T Southeast
| Yes and no. The CEO's job is make the company profitable. Running the company in the ground in the process (read: for short term return) is what a stupid CEO does. (I've seen it more times than I want to count.)
At 1k$/MB, they'd price themselves completely out of the market irrespective of competition. It's more an issue of supply-and-demand than competition in this respect -- esp. when there is next to no competition anyway. But yes, they (and all ISPs) want to charge as much as they can get away with while doing the absolute minimum. This has been their way of doing things for thousands of years. If someone else isn't doing it in their territory -- and costing them customers -- they won't even look at it. | |
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| | | Perfectly said.
And I might add that this is the way that our government works as well.Just go look at those democrat and republican hogs chawing down on the slop. | |
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1 edit | (insert my continued disdain for TW here) So TW, where does our monthly payment for our net connection go if not to "labor?" Explain to me again why you need to double dip? (triple dip?) Oh right... shareholders... bonuses... if I could actually trust you to give it to the employees or invest in the net infrustructure I might not mind, but lets not kid ourselves. | |
| | cramer
join:2007-04-10
Raleigh, NC
kudos:5 Reviews:
·AT&T Southeast
| Re: (insert my continued disdain for TW here) I'd have to go look at the numbers again, but I would not be surprised to see 80-90% of their operating costs being labor (people, office space, etc.) The costs for hardware, maint. contracts, and bandwidth are nothing by comparison. The cost of running their network has been going down for years, all the while revenues have been increasing. | |
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 jnc2000Premium
join:2003-08-05
East Palestine, OH | Typical Companies are more then willing to throw the "worker bees" under the bus in the name of the shareholder or some higher up. | |
| Prespd
join:2004-03-10
Wyoming, MI | Please TWC and AT&T think of me Well, let me just say I had TWC in San Diego and I loved it. I gave up on the landline phone but absolutely loved the service and speed I got from both my internet and cable. Also got the wife addicted to DVR.
I was sad to leave SD for Michigan, and I missed my open and what felt like unlimited internet. Speed was good too. Not blazing fast top tier, but enough for me. And they didn't snoop, cut my service or release my name to the MPAA or RIAA (I hope). No slow torrents there.
So I move to Michigan and chose AT&T over Comcrap. I'm liking the AT&T. The speed is ok, again not blazing fast cause my upscale neighborhood doesn't have the footprint to lay the fiber. So i only get one live HD feed at a time. They did try to bump it up and increase the speed but the network runs couldn't handle it. No splices in the line either, just a ton of distance between me and the closest box. Probably the only one with U-Verse in my hood.
Again, no throttling, good speed, and good TV service (minus the limited HD feeds).
I didn't mind paying a little more to TWC in the past and don't mind it for AT&T now. But if I see one ounce of limits or caps put on my service, I'm out. Would have done the same with TWC.
So I say, don't cap me, keep it flat and you'll have a happy customer. I'll still push for FTTH, but I get it, we're not a priority in Wyoming, MI. Don't rattle my cage and I'll keep my service. Otherwise, kiss your $160/month bill goodbye. Don't think for a moment I didn't complain to TWC when the metered billing came up. I'm just one more person that I think BBR thinks of when they speak of people opposing these measures. | |
| | | What I just don't understand.... Is that you can have waaaaayyyyy more money than you could ever hope to spend in a lifetime... but you still want MORE. You made 17 million dollars in profit last year and now you feel like you have to make 24 million this year. Why? Why do you need more than the 17 million that you made. Why is that so bad that you only made 17 million this year too. And the next year and the next year as well? Remember, not 17 million total... I mean profit wise. You took home 17 million. Even after taxes you're still sitting pretty. C'mon, I'm not trying to be an ass with these questions. Someone who may know the answers please feel free to fill me in. | |
| |  Romney2012Defeat Obama 2012-Chg we can believe inPremium
join:2002-03-03
USA
kudos:4 | Re: What I just don't understand.... said by tdouglas22:Is that you can have waaaaayyyyy more money than you could ever hope to spend in a lifetime... but you still want MORE. You made 17 million dollars in profit last year and now you feel like you have to make 24 million this year. Why? Why do you need more than the 17 million that you made. Why is that so bad that you only made 17 million this year too. And the next year and the next year as well? Remember, not 17 million total... I mean profit wise. You took home 17 million. Even after taxes you're still sitting pretty. C'mon, I'm not trying to be an ass with these questions. Someone who may know the answers please feel free to fill me in. Would you turn down a raise if the company offered you one? I thought not.
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Are you happy with your rep in Washington, DC? | |
| | |  The LimitPremium
join:2007-09-25
Greensboro, NC
kudos:2
·Windstream
1 edit | Re: What I just don't understand.... Like I was saying, greed starts at a local level. Nothing changes unless the local level changes, and last I checked I haven't found a person yet who doesn't complain about wanting more or not having enough money.
From my own experiences, I am starting to realize that the reason why those who have nothing are the ones who are financing purchases out of control or spending money on lavish products that aren't needed. My grandfather knew what was going on back in the 60's, he purchased EVERYTHING with cash except his house, and even then his house was paid for in the long run.
Like I said, the culture has taken a dramatic shift since then. Nobody is ever satisfied.
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Do or do not, there is no try! - Yoda | |
| | | | | There is the declining marginal value of a dollar.
Going from $40-50,000 can increase one's quality of life in ways that going from $4-5 billion a year can't.
Also the fact that I may have the same instinct doesn't answer the question of why or of whether we shouldn't all be trying harder to control our instincts. | |
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approval from:
nishiko7
| Unfortunately, we remain monkeys, and I think most money grubbing has less to do with the material benefits than with the human obsession with social rank/position. It becomes a game in which the numbers are simply abstractions to rank people in the social hierarchy. People, especially males(and lets be clear most females desire these types of males), want to be top dog, alpha male, have the choicest pick of the juicy mates, and so on. This desire to feel superior to others and be ranked higher than others is a much bigger driver of human economic behavior than the possessions that can be bought with the money.
If everyone has a million dollars I want 10 million.
If some people have 10 million I want 1 billion.
If some people have 1 trillion I want 10 trillion.
Why? Because I want to be ranked ahead of and superior to everyone else.
It used to be considered a moral issue to control ones animal appetites. Succumbing to lust used to be a sign of moral failure. Not controlling one's rapacious greed used to be cause for social opprobrium, not worship.
As western civilization unwinds we wallow in and glorify all the animal instincts that civilization and religion used to teach us to control and temper for the purpose of maintaining a stable social order. It would be nice if we could find a balance between rigid rules and shameless self-indulgence but we seem to be doomed to swing from one extreme to the other. | |
| | | The LimitPremium
join:2007-09-25
Greensboro, NC
kudos:2 Reviews:
·Windstream
| Re: What I just don't understand.... And it's only going to get worse, as our federal spending attests to this.
I agree with everything you state above, and I also think there should be a happy medium. I think this resembles alcoholism, that one drink gets many, but few are able to "drink responsibly".
Everyone wants more, more, more. Basically, that's what my future and my children's future is moving towards? Can't afford that 250k house? Just FINANCE IT for only $500 a month! Bad credit?? How about a %20 mortgage loan that you can NEVER repay in your lifetime!
How about that brand new dodge charger that you have always dreamed of having! Just FINANCE IT!
Everything is revolving around credit these days. I hate credit, I wish I could do without credit but it's getting to the point that I MUST have credit in order to obtain a decent loan on a house that I can repay in 10 years.
I really don't want to sound all doom and gloom but really, take a look at the numbers, the future is in the numbers. Sure, there are anomalies, but just take a look at the nation's deficit and the sheer wall that has to be climbed in order to just START paying off principal.
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Do or do not, there is no try! - Yoda | |
| | | nishiko7Premium
join:2007-05-01
Pleasant Hill, CA
1 edit | Great post asdfdfdfdfdf ! Very well said. | |
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| | Cable Companies The cable companies/ISP are making insane amounts of money because they have a monopoly in most areas (for cable) and are not subject to the same taxes & regulation as the phone companies or other utilities.
They want a cap? Fine, I want the first gigabyte free every month. | |
| | | Competition is increasing in metro hoods There are a lot more broadband options than there used to be in one location, so curious they can increase prices or add caps - or both.
In many metro areas, there used to be many players across the metro but only one in a hood. That's now changing. I used to have TWC as it was only option in my hood. Now there is also Uverse and Clearwire for broadband in my hood and streaming video to compete with cable TV yet TWC want to reduce service for more.
I've dumped TWC as they kept raising rates yet I only watched a few channels. | |
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1 edit | Re: Competition is increasing in metro hoods said by xenophon:There are a lot more broadband options than there used to be in one location, so curious they can increase prices or add caps - or both. It is called collusion. | |
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 IgnitePremium,VIP
join:2004-03-18
UK | Nonsense Fibre can be pulled to the nodes and the node can be split and recombined back multiple times in one evening.
This means that when it comes to splitting a node again all that needs to be done is undoing the combining in the headend / hub and moving newly separated nodes onto new CMTS.
This is really not rocket science if labour is such an 'issue'. The increment in terms of labour of splitting a node into 4 over into 2 at the same time is extremely minimal and undoing the combining is fairly painless. | |
| | | SDV will drive node splits over time as well. SDV will drive node splits over time as well. | |
| kd6caeP2p Shouldn't Be A Crime
join:2001-08-27
Palmdale, CA Reviews:
·Vitelity VOIP
 ·AT&T U-Verse
| TWC should at least offer more speed I've been a TWC subscriber since July 2008, when I had TWC business class 15/2 speeds. Since then, I've had to dump business class do to some kind of rediculous packet shaping that TWC was doing on their network where I couldn't sustain an FTP or HTTP transfer as it'd always get reset.
Back then the top residential tier here in Socal was 10/1. But now the top tier for both business and residential cable customers is 15/2, and has been that for some time. Of course residential does have powerboost, but to me that's a complete joke and is only good for downloading short files of a few megs. It doesn't really help if you're trying to download a multi-gig file when having faster speeds on a constant basis would be useful to have.
I'd like to see Time Warner increase top tier speeds here in Southern California to at least 20 mbits downstream and 3 or 4 mbits upstream which I'm sure could be done without even going to Docsis 3.
Why isn't Southern California getting any kind of speed increase whatsoever after over 2 years? I very well may downgrade back to standard tier because really I'm not sure there's all that much of a difference between the 2 options. What will it take for TWC to actually give customers more? Maybe the shareholders actually working for TWC? I don't know, I'm just wishing something would happen. | |
| | | | Re: TWC should at least offer more speed At least you get 2Mb up... that's 266% of my upload on turbo... | |
| | | cramer
join:2007-04-10
Raleigh, NC
kudos:5 | Re: TWC should at least offer more speed Actually, he most likely didn't. I have a site using TWC:BC @ 1M up. At 500k they start dropping traffic. Confirmed by one of their network engineers... that's how the network is setup. | |
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| | | | rradina
join:2000-08-08
Chesterfield, MO | Re: TWC should at least offer more speed AT&T does the same type of "surgical" upgrades. I can throw a stone at houses that have U-Verse. They are beyond 20,000ft from the CO just like me. Unfortunately, the two subdivisions were built 10 years apart and they didn't exist when my subdivision existed. AT&T must have installed remote terminals in their subdivision but ignored mine. It's now been two years since they announced U-Verse in my area and nothing has been done to bring U-Verse to my subdivision.
Finally Clear is offering service in St. Louis. For the first time in 11 years, I actually have a competitive choice for HSI. $40/month for 6/1 service (slow compared to Charter's 8/1 with speed boost) but it's cheaper. Charter charges $49/month, Clear is $40/month.
By this time I would have thought AT&T would be more of a competitor to Charter in my area. They've done nothing in all that time. | |
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| kd6caeP2p Shouldn't Be A Crime
join:2001-08-27
Palmdale, CA Reviews:
·Vitelity VOIP
·AT&T U-Verse
| I wish Comcast still had a presence here in southern California. At least they give their customers decent upstream and downstream options, something TWC obviously doesn't want to attempt to try and do. Why have only New York and Dallas seen D3 upgrades? They make no sense to me, but as they're the fastest consumer internet around I'm stuck with them. | |
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kaila
join:2000-10-11
Lincolnshire, IL | Good grief....... Does TW not realize that the business they are in involves some employee costs along with their CAPEX? It's not like they have a lot of competitive pressure to do something drastically more expensive, like FTTH or even aggressively roll out DOCSIS 3.
With the wind at their backs right now (plus a decreasing year to year CAPEX), they're going to have to come up with a better excuse than that.
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Jeff Howe
Jeff's Blog - »www.ostjournal.net | |
| | | | Re: Good grief....... said by kaila:Does TW not realize that the business they are in involves some employee costs along with their CAPEX? It's not like they have a lot of competitive pressure to do something drastically more expensive, like FTTH or even aggressively roll out DOCSIS 3. With the wind at their backs right now (plus a decreasing year to year CAPEX), they're going to have to come up with a better excuse than that. They do not need excuses. With the government not doing their job to break monopolies and investigate collusion practices they can do whatever they want. | |
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Core0000Premium
join:2008-05-04
Somerset, KY Reviews:
 ·New Wave Communi..
| Oh, so the low men on the totem pole are costing.... I would say to some degree, they are not lying... I mean with all the taxes you have to pay the government to hire employees. All the legal paper work as well. I would say it does add up.
But hey, quit paying the CEO's so much freaking money. You mean they can't do well on 5 million a year? No they need 20 or 30?..Bonuses... and all that good stuff.
And redirect that money to the expenses for the low guys on the totem pole. Because when it comes down to it. These are the guys busting there tails and actually making stuff happen.
Randomness:...I absolutely despise my district manager. He comes in, makes all these decisions... oh its so hard to tell a manager what to do... That's what the district gets a 6 figure income for, him and his damn pink shirt.
Which the manager then... delegates said task to me, and even though I am the lowest paid, I am the hardest worker. It's bullshit. Really is. My point with this is... from experience, all companies are like this, and work to this same set up. Its like a freaking pyramid. I hate this system.... anyways..
I bet if there were not such huge barriers to entry, we'd have tons of competition when it came to broadband. | |
| | cramer
join:2007-04-10
Raleigh, NC
kudos:5 Reviews:
·AT&T Southeast
| Re: Oh, so the low men on the totem pole are costing.... If what they are claiming is true, they'd be hiring new employees and increasing their outside contracting. There's no evidence they've done either. The work force they have is what they have; they cost the same doing DOCSIS3 upgrades as not.
That said, the hardware and software upgrades plus buying and distributing new modems do have their associated costs. But that's not "labor". And it's pretty much a one time thing. | |
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 VanPremium
join:2009-07-08
New Orleans, LA | To think that they are putting in these caps to deal with data hogs is hilarious
If that were true, the caps would be extremely high
Rather, they are low and allow many average users to get hit up with penalties
What a joke | |
| | Reviews:
·magicjack.com
1 edit | Re: To think that they are putting in these caps said by Van:Rather, they are low and allow many average users to get hit up with penalties How many average people get hit up?
I keep hearing this claim, but nobody seems to know. I've seen some with ties to ISPs claim that it's a tiny fraction who are often worked with to move their higher-consuming activities to off-peak periods. | |
| | | VanPremium
join:2009-07-08
New Orleans, LA | Re: To think that they are putting in these caps said by amigo_boy:How many average people get hit up? Considering few have caps right now, not many
If more have caps, many | |
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| | BULLSHIT. whats next TWC? Labor fee for the billing too? | |
| | cramer
join:2007-04-10
Raleigh, NC
kudos:5 | Re: BULLSHIT. Heh. Actually, several places already do this... they charge you to print and mail a paper bill every month. (or give you a "discount" if you opt-out of paper billing.) | |
| | | | | Re: BULLSHIT. Actually on that note many companies do not give a discount for the billing, paperless or paper. National Grid in New York State still charges that .59¢ for the bill.
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Knowledge is a terrible thing to waste. That is why I post when I can. | |
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| | Boooooooo I HATE caps. That is all. | |
| Ulmo
join:2005-09-22
San Jose, CA Reviews:
·SONIC.NET
| Cable Labor I just learned that Comcast's major field labor expense is correcting problems caused by disconnects, reconnects, and the positioning of access boxes where they can easily get to them to do their disconnects, reconnects, and correcting of problems, causing all sorts of weather and vandalism problems.
In other words, most of Comcast's labor is make-work for a bunch of poorly trained low-class field workers, sourced 100% from their desire to not encrypt anything. If Comcast would just encrypt 100% of their channels, then they can move all the access panels to dry vandal-unlikely locations, out of the way, not where they can get to them easily but where they won't have to get to them often because no one's fiddling with it and it's not subject to the weather and environment. Their field calls will go down 85%, and most of the rest will be modem resetting stuff, as well as the first wave of reconnects after the no-disconnect policy finally gets implemented. After the first wave of reconnects is finished, Comcast can fire that labor pool, and get a more advanced, sophisticated, educated, smaller and therefore less expensive, labor pool, and save a bunch of money, and deliver a better product.
I bet you Time Warner is similar, but someone tell me if TW has already gone the 100% encryption route. | |
| Reviews:
·Optimum Online
·Verizon FiOS
| 2011 pricing time for 100/100 megabits for $49.95, no caps-- you the people have to demand it, or it will take a long, long long time to get there!
meanwhile, the morons keep griping over the last few cents they will get over espn, and local channels such as abc. little do the fools know that once the costs go above what the consumer is willing to pay, they will just torrent the best parts and screw paying for cable-tv altogether, even with a 5-15 megabit connection let alone a 100/100 one (capped or not). | |
| dforan
join:2000-12-09
Willoughby, OH Reviews:
·AT&T DSL Service
| Just do not get it No one realizes the wear and tear of the data passing over the wire.. The erosion of the copper can not be measured, fiber is out of the question, they may have to spend some fat cats bonus to put in fiber. Let alone the cost of the hardware to measure the bits and bytes. The cable in my neighborhood is some 30 years old that Continental Cable installed. But we are going to pay dearly for total mis-management.. Gotta keep the slackers in their cushy offices | |
| | | Do you want me or not. VERY SIMPLE. Put in a cap and I'm a 15+ year customer that will be gone in about 5 minutes. DO YOU HEAR ME NOW? (sorry, wrong company, but I love that line!) | |
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Go down to the Hog Farm!
