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Time Warner Cable is gouging our future

by Foxy Moxy

Greensboro is an active community focused on economic development, quality of life and a secure future. Our city is planning for growth, expanding our base of hightech jobs and searching for opportunities.

Meanwhile, Time Warner is planning to limit its broadband subscribers to service levels significantly below current standards, preparing to triple prices to increase already luxurious profit margins, and acknowledging that heavy bandwidth use is not actually affecting the network. When you calculate how long it takes to go over the data limit, it is shocking. A subscriber paying $49.95 for high-speed internet has a 7Mbps connection to the globe. Even with the newly released plan, that subscriber can use less than 2 percent of the bandwidth that should be available. In other words, for $49.95 per month you get 13 hours of full usage or less than half an hour per day before Time Warner Cable starts charging overage fees. I’m glad that with the second “test plan” Time Warner Cable has finally created an unlimited plan, but my gratitude is immediately eliminated by the sheer audacity of greedily having the overage charges kick in at such a low point. If Time Warner Cable were to adopt the caps used by Comcast, it would be impossible for RoadRunner Lite subscribers to go over their cap. Time Warner Cable plans to charge “Super-Tier” subscribers $75 per month, but those customers would incur overage charges at 22.7 hours and the maximum $150 fee only 39.8 hours into the month. In other words, each household would pay the maximum “unlimited” fee at roughly 6 percent usage or one hour and 20 minutes per day. While I’m using the limits of what is possible in these calculations, and I know that is not typical usage, just wait until you or your kids spend a day on YouTube or CNN.com, a virus sneaks onto your computer, or your neighbor “borrows” your wireless. And who knows what new uses for the internet we will discover in 2010 and beyond? I’m not the only one asking Time Warner to plan for the future, upgrade its networks and stop trying to squeeze their subscribers during a recession. Many members of the mainstream and technology media are running the numbers, asking these questions, and concluding that Time Warner Cable has no motive except increasing already significant profits. Nate Anderson’s article at Ars Techica shows that the Time Warner Cable plan is so far removed from the prices that their competitors are charging that it makes Lake Brandt look like a puddle. If you use a fifth of the bandwidth for the most expensive AT&T DSL, you pay 9 cents/GB. The same amount of Verizon’s Fiber to the Home FiOS is 36 cents/GB, while Time Warner’s plans are $1-2 per GB. Saul Hansell of The New York Times reports that Verizon’s FiOS costs an average of $1,500 per subscriber to install in new areas. Time Warner Cable’s costs to upgrade to DOCSIS 3.0 this November will be $20 to $100 per home. And he quotes Time Warner Cable’s COO Landel Hobbs as saying that heavy bandwidth users are not affecting broadband costs. These numbers and actions don’t add up. Significantly increasing the price and limitations on internet access in a city with five colleges merely begs for the application of either regulation or competition. Without an intelligent solution to this economic brinksmanship, we all lose.

Eli Abrams is the owner of Utopia’s Edge Consulting, an IT services company in Greensboro. More information about the data cap is available at www.utopiasedge.com/twc.html

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