2009-04-08 06:31 pm (UTC)
Great e-mail, Greg. I plan to fire off a similar e-mail to Time Warner in the near future. And calling is a good idea too.
Comments from someone who has very little understanding of how digital infrastructure works, economics, business, or PR (which I guess makes me a math major in the most classical sense of the term):
Here's what I'm concerned about. A few months ago they rolled out (and by rolled out, I mean "aggressively sold") their "Price Lock Guarantee" deal where you pay a bundled price for cable, internet, and phone service that isn't supposed to change for two years. In return, I "signed" a verbal contract (there may have been a written contract as well, I forget) stating that I would keep their service for those two years. If I drop them, I have to pay an early-cancel fee. If they change their pricing on the high-speed internet (which is essentially what a bandwidth cap does), does that mean I'm no longer bound to my part of the contract? I'm sure they've anticipated this issue and either hired a lawyer who can make a convincing argument that no, their contract allows them to pull this kind of tomfoolery and I still can't get out of it, or are going to apply a grandfather rule to people who are currently on the price-lock deal (which for selfish reasons I hope they will do; I'm probably out of Austin in a year anyway).
What really surprises me is that Time Warner doesn't seem to have rolled out any sort of PR campaign to mitigate the backlash they're going to get. These guys had to know that if you mess with the internets, the internets are going to mess with you. So you have to have some sort of message explaining why it's "necessary" to do this (even if it doesn't stand up to technical scrutiny, as I'm sure it would not). I don't hear any of that from TWC, except for a couple of sound bites by top execs in articles in the business and tech sections of the paper.
There was this good quote about how newspapers are being forced to replace print dollars with digital pennies. It looks like TWC is trying to replace TV dollars with digital dollars before those dollars get replaced with digital pennies. Sadly, they are fighting a losing battle. The free flow of digital information is getting cheaper and cheaper, and these corporations and the government that serves them can only engage in collusion and price-fixing for so long before the bubble bursts.
Sorry about the anonymous comment - that was me. Forgot that I wasn't logged in.
That's a very good question - I think I may have agreed to a contract for a lower rate as well, but I'm not sure. It sure seems to me like changing the deal in the middle would break that contract, but IANAL...
Now I'm not a lawyer, nor do I play one on TV, but if there is a signed contract and they change its terms midway through without your consent would constitute breach. They would either have to continue to honor the agreement (and do the new plan at renewal) or pay you some calculated damages.
Verbal contracts however would require some proof it was actually that way so it would get dicier.
If I had to guess they will honor any contracts they have and roll the issue out at renewal. Also they aren't going to do a big PR plan because it draw attention to what they are doing. Most people will just not pay attention and then one month get a slight increase in their bill and not really think much about it.
Some contracts have provisions that allow one party to change the terms at any time. The legal implications of those terms is dubious, but I'm sure a lawyer would be happy to take your money and take the issue to court.
Verbal contracts are generally unenforceable in Texas. In practice, however, anything can end up in court. Did you blink twice while saying "yes" under the light of a full moon on a Thursday? That might be in the Texas Constitution somewhere, or something.
Er, I meant "oral contract" rather than "verbal contract." I'm not a lawyer either, but I do know there's a difference between those two.
2009-04-09 02:34 pm (UTC)
Yeah, I believe most contracts with companies includes a clause that they can change anything at anytime...and this allows you to get out of the contract with no penalties.
So they could just break all their contracts, no problem.
My first introduction to bandwidth caps was when we moved to Portugal. Having never measured my bandwidth usage before, I wasn't sure how large an amount we would need. We opted for one of the cheaper plans that had a limit of around 15-20GB a month.
At first I was paranoid about downloading anything large, using Skype or visiting any sites with streaming videos. I installed bandwidth monitors on our computers and checked them carefully to make sure we weren't getting near the limit. In an average month, we'd barely even reached 5GB. After doing this for the first few months, I realized that there was no need to be paranoid and that you'd have to be a super-heavy user to get anywhere near the limit.
Since then I've almost completely stopped worrying about the limits at all and just use the Internet as I normally would. Unless you're downloading tons of huge movie files or ISOs (more than 1GB everyday!) I can't see how the average person would come close to the cap.
Outside of the US, bandwidth limits and paying per GB transferred are quite common. Having an clearly stated price for bandwidth can be an advantage over a "unlimited" plan that in reality has a secret or unwritten limit set by the ISP anyway. In Portugal, many of the plans had all you can use bandwidth "happy-hours" during off-peak times. They also offered very cheap monthly plans with low limits like ($10 a month for 1GB) for very light users or even pay-as-you-go plans.
So, I guess my point us that for most customers I think bandwidth caps are a non-issue and very light users may even be able to save money by using smaller plans. (Not sure if that is something that Time Warner is going to offer.)
It does stink that most people are probably going to pay the same amount for a limited service that was previously unlimited. I would also worry that this could be the beginning of the end for net neutrality. You can easily imagine, that specially approved Time Warner "partners" will be exempt from bandwidth caps effectively putting other services at a disadvantage.
Just my two cents. :)
Also, I recommend you switch to Grande just to "stick to the man"! Todd and I had them for several years and had no complaints.
Sadly, Grande doesn't serve our zip code...
Fair enough. I'm very interested in seeing how much we use in a month (they've said they're going to have a "bandwidth meter" for a few months before the caps start). I'm just worried that having 4 people here, playing WoW and downloading patches and running a webserver, it might add up quickly...
And netflix on demand, and Amazon unbox, and Hulu, PS3 downloads, Wii ware downloads, etc.
Yeah, I think the average user probably only gets 5 GB...but under TWC's new plan, these people would see little decrease in their bill. And, everyone else who uses their computer for Hulu, etc. will see their bill go up.
They are using the excuse of adding caps to sneak in an increase in rates in general.
Yeah, I guess my point was that in my opinion metered internet access in of itself isn't necessarily a bad thing and actually has some advantages. It does sound like the way the caps are being introduced and priced by TWC does suck.
I don't understand their logic in choosing Austin as one of the first places to do this. Austinites tend to be tech-saavy. With such a large portion of the local population involved in computer-related industries this won't exactly go unnoticed.
Actually, they first tried it out in big city Beaumont, Texas I believe.
2009-04-09 02:42 pm (UTC)
Right. Beaumont makes sense, but as I understand it Austin is one of their larger "pilot" markets before rolling it out nationwide. Perhaps they figure that Austin is a tougher market so if it works there it'll work everywhere? Or perhaps they know that Austin has heavy rates of internet usage so they can use it to brag to management about how successful the plan is at bringing in more revenue.
Yeah, and honestly, I'm not hopeful about stopping it. Let's say they lose a record 10% of their users through this...well, they are hiking up prices probably more than 10% on average, so it's still a win for them. AND the users leaving are probably the heavier users, so TWC gains back some bandwidth then to sell to lighter users.