Time Warner Cable Tiered Broadband Test Begins

from the if-only-there-were-competitors dept

Earlier this year, the story came out that Time Warner Cable wanted to experiment with capping its "unlimited" broadband, trying to force the heavy users to pay more. Even worse, it appeared to want to use exceptionally low caps that would discourage innovation. Despite all of the concerns, Time Warner Cable is moving forward with the test as planned.

The end result will be taking away value from customers -- not just in limiting how much bandwidth they get, but by adding a huge mental transaction cost. Basically, what Time Warner is doing, is adding a huge overhead in terms of whether or not users are willing to actually use the bandwidth they signed up for. Just the fact that people need to think about how much they're using will decrease usage significantly. While that may be what TWC wants, what it really does is annoy customers. This would never actually happen if there were real competition, but with very little competition out there, TWC can try out this plan. Any other broadband provider competing against TWC in areas where this test is going on should be hitting on the limits in any advertising campaign. TWC is free to do whatever it wants, of course, but it's never a good business move to take away features from customers -- especially if in doing so you add an annoying mental transaction fee.

Filed Under: broadband, broadband caps, cable, tiered service
Companies: time warner cable

So Much For Those Synergies Between Time Warner Cable And AOL, Huh?

from the nice-work,-guys dept

While the AOL/Time Warner merger has gone down in the record books as one of the worst mergers ever, I still contend that it could have gone much better if stronger management had been in place. Most specifically, there were obvious synergies between aspects of Time Warner and AOL -- but petty squabbles and turf wars kept most of those synergies from being realized. The most glaring and obvious of these was Time Warner Cable (or RoadRunner) and AOL. Both offered internet access, and it seemed perfectly reasonable to merge the two properties, and use RoadRunner to upgrade all those dialup users onto broadband, and then keep them engaged with all the Time Warner content. Of course, the Time Warner content people freaked out about content on the internet of course, so that would never have worked -- but the failure to link up RoadRunner and AOL never made any sense.

In fact, the two services began aggressively competing with each other. Then, after three years, someone finally realized that maybe the two should work together and made an announcement saying so. Of course... an announcement without action is worthless. So, another year goes by and another exec trots out with an announcement that the two divisions will work closely again. And again... nothing. Give it almost another year... and yet another announcement. Sense a pattern? In the end, the two groups never actually did combine, and with today's announcement that Time Warner is selling off the cable business entirely, it just puts an exclamation point on all these years of keeping the two businesses separate. Of course, in selling off Time Warner Cable, it will also likely lead to speculation that the company will sell off AOL (or merge it with Yahoo -- remember that plan?) as well -- though, as an entirely separate entity.

While I tend to be skeptical of mergers based on vague "synergies," it's still rather amazing that in all this time, no one at Time Warner ever got these two divisions together -- and now the company may end up selling each off separately. In the end, this was a deal that only worked out for the investment bankers. Remember, they love to convince companies to consolidate one year and diversify the next -- because they make money on both transactions.

Filed Under: internet access, mergers, synergies
Companies: aol, time warner, time warner cable

Verizon Sues Time Warner Over Misleading Ad... Has To Drop Its Own Misleading Ad

from the funny-how-that-works dept

Remember earlier this year when Verizon Wireless sued competitor Alltel Wireless for false advertising? That came right after the company had been fined for false advertising itself -- and the suit basically ignored the fact that Alltel's ad was accurate until Verizon Wireless (just a couple months earlier) had changed its policy. Now it looks like Verizon Wireless' parent company is doing something similar. Broadband Reports points us to the news that Verizon is suing Time Warner Cable over an incredibly dopey ad that suggests in a very misleading manner that Verizon's FiOS fiber optic offering was just catching up to Time Warner's use of fiber (confusing fiber in the network with fiber to the home) and also suggesting that FiOS-TV requires a satellite dish (which is simply untrue -- though, the company does offer satellite TV service for areas that can't get FiOS yet). Still, it does seem a bit aggressive to sue over this.

And, this situation is made even more amusing by the fact that Verizon itself just got caught running misleading advertising. In this case, Verizon credits CNET "experts" with claiming that FiOS is "near-flawless," which is taken entirely out of context. CNET's article wasn't a review, but about the service, and the context was: "This fierce competition reinforces how important it is for Verizon to offer a near-flawless TV experience." In other words, CNET was saying that FiOS TV needs to be near-flawless to compete -- not that it is. To its credit, Verizon admits that it was wrong in using the phrase in advertising, and won't be using those ads after its initial run is done next month. It also claims that TWC's ads are much more egregious, though I'm not sure that's true. It's quite easy for anyone investigating their options to understand that TWC's claims are false. But it may be much more difficult to confirm whether or not CNET's review really called FiOS "near flawless." Either way, these are industries that have a long history of stretching the truth as far as it can go in advertising messages. It makes you wonder if anyone takes either of their commercials seriously.

Filed Under: advertising, stretching the truth, truth in advertising
Companies: time warner cable, verizon

Time Warner's Overage Caps May Be Set Very Low

from the that's-not-overage----that's-normal-usage dept

Last week Broadband Reports broke the story of Time Warner's decision to test overage charges for their biggest users. I don't think it really makes sense for ISPs to charge in a way that makes their own services less valuable, but that's a different story. As long as the caps are clearly stated, it's worth seeing what happens. However, most of the talk about the caps seemed to suggest they would focus only on the off-the-charts extreme users of bandwidth in the "top 5%." However, Broadband Reports has another report now, suggesting that Time Warner will be testing a few different cap levels, including as low as 5GBs/month, which seems excessively low. If you're doing perfectly normal things, such as watching (authorized!) online videos or doing remote backups, 5GB can disappear mighty quickly. That doesn't seem like a way to stop "excessive" use. It seems like a way to squeeze more money out of a large percentage of users. On top of that, this gives less and less incentive for Time Warner to improve their network. The more they can claim the need for these congestion charges, the more money they can make. That seems backwards. Of course, this wouldn't be an issue if there were serious broadband competition, but that's still a long way away apparently.

Filed Under: bandwidth, caps, overage charges
Companies: time warner cable

Time Warner Cable Experimenting With Overage Charges For Top Users

from the bait-and-switch dept

Broadband Reports notes that internal memos from Time Warner Cable suggest the company is experimenting with overage fees for their highest bandwidth users in Beaumont, Texas. If those overage charges work, the idea, of course, would be to then roll them out nationwide. On the whole, overage charges are a lot more palatable than unpublished traffic shaping rules or "fuzzy caps" where the top users are cut off without any explanation of what line they crossed. The key, of course, is that with both of those latter "solutions," the subscriber is told they're getting unlimited service, but the reality is different. Assuming that the overage charges and the rules surrounding them are clearly communicated, such charges are more reasonable. However, there are still questions about how consumers will react to such a change, especially after being sold on an "unlimited" service. The bigger issue is that capping bandwidth usage is a way to slow down internet-based innovation. If there had been overage charges a few years back, services like YouTube might never have caught on, as people would be too worried about how much bandwidth it would suck up. If the cable companies can't provide enough bandwidth, that's clearly an issue -- but most reports suggest that claims of a bandwidth crunch are overblown. Update: Just saw Adam Thierer's amusing pre-emptive reply to me on the topic. I'm not as against the idea as he suggests, though I do think, in the long run, it's not a very good solution.

Filed Under: bandwidth, caps, overage charges
Companies: time warner cable

Why Are ISPs Trying To Sell Cars And Homes?

from the diversification? dept

We all know that various broadband ISPs are trying to get away from being "just dumb pipes," by providing "value added services" that most people ignore, such as customizable home pages and email, but we had no idea that broadband providers like Time Warner and Cox are both pushing their own car selling websites as well. Plus, it appears that Cablevision is doing something similar with home sales. It seems likely that all of these companies are merely putting their brand on someone else's car lead generation service, but it really does seem like an odd service for these ISPs to be offering. While broadband providers eventually are going to have to get comfortable with the whole notion of being a dumb pipe, you'd still think that if they want to offer additional value added services, they'd at least work on things that actually were somewhat related to the broadband they were providing.

Filed Under: cars, dumb pipes, isps
Companies: cox, roadrunner, time warner cable

Time Warner Cable To Enable Time Shifting... But Without A Fast Forward Feature

from the why-are-you-in-such-a-rush? dept

Back in 2003, Time Warner began work on what it hoped would be a TiVo-killer. It would be a centralized system that would allow people to time shift TV shows like they would with a local DVR, but all the processing and storage would be at Time Warner itself. Of course, even when this plan was first announced, many were skeptical. Other divisions within Time Warner wouldn't be happy about aiding and abetting consumers potentially skipping commercials. In fact, pressure from others eventually forced Time Warner to drastically scale back the plans and release a much simpler service that would let some users "start over" if they happened to pick up a show after it had started. There was no fast forwarding and no commercial skipping. You could just "start over." Of course, perhaps they were just doing that to avoid the inevitable lawsuit. A few years later, Cablevision decided that it would offer a centralized DVR and was quickly sued for doing so. Amazingly, Cablevision lost that case (though, there's still an appeals process).

Time Warner, then, is obviously being careful as it expands it's "start over" service. It only took the company three years to morph the start over service into the "look back" service, that will basically let you watch any show that was broadcast earlier in the day. Of course, it only goes back one day, and you can't fast forward through the commercials. Apparently, there are still TV execs out there who think that commercial skipping isn't a key feature of DVRs. Rather than trying to prevent popular features, wouldn't these companies be better off coming up with creative ideas that don't involve pissing off customers?

Filed Under: commercials, dvrs, fast forward
Companies: cablevision, time warner cable