Time Warner's Latest Cap Justification: 'Labor Is Expensive!'
Especially for those DOCSIS 3.0 upgrades we aren't doing much of...
by Karl Bode 01:23PM Tuesday Jul 20 2010 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.
Re: Go down to the Hog Farm!
said by Mr Matt: 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.
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.
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
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.
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
Lake Zurich, IL
Re: Go down to the Hog Farm!
said by KrK:...yet which no one outside of sites like this ever hear or give a good damn about.
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.
Typical Companies are more then willing to throw the "worker bees" under the bus in the name of the shareholder or some higher up.
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.
Re: What I just don't understand....
said by tdouglas22:Would you turn down a raise if the company offered you one? I thought not.
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.
Are you happy with your rep in Washington, DC?
| |The LimitPremium
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.
Do or do not, there is no try! - Yoda
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.
Re: Competition is increasing in metro hoods
said by xenophon:It is called collusion.
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.
Re: Good grief.......
said by kaila: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.
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.
·Time Warner VOIP
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.
Re: To think that they are putting in these caps
said by Bill Neilson:How many average people get hit up?
Rather, they are low and allow many average users to get hit up with penalties
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.
Re: To think that they are putting in these caps
said by amigo_boy:Considering few have caps right now, not many
How many average people get hit up?
If more have caps, many
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.)
San Jose, CA
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.
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