Tuesday, April 14, 2009

Will bandwidth caps be the next battle for Network Neutrality

[Increasingly we are seeing carriers look to impose bandwidth caps and a variety of tiered services for Internet usage. Although I think some sort of bandwidth cap may be necessary for egregious users, there proliferation and adoption by cablecos and telco flies in the face of the fact that growth of Internet traffic is slowing down substantially as evidenced by the data provided by Andrew Olydzko. The cablecos and telcos seem to be the only industry that intentionally punishes their biggest customers when given declining growth rates they should be rewarding them. One suspects other motives may be at play as detailed in the following blogs and e-mails. From David Farber and Lauren Weinstein’s lists – BSA]

Andrew Oldzyko Presentation
Internet traffic growth and implications for access technologies

[From a posting by Richard Forno on David Farber’s list]

Download capping is the new DRM


Much like everyone reading this article, I'm a genuine supporter of advancement in hardware and technology services. Suffice to say, I was happy with the progression of Internet connection services over the years.
Recently, however, I would have to say that Internet connection advancement in the U.S. and Canada has been purely an interest of the corporations that provide them and not about serving the consumer-- you--and the advancement of technology in America in general.

In late March, I wrote an article on Tom's Hardware explaining why HDCP (high definition content protection) is the bane of movie watchers everywhere. Not only is HDCP an invasive technology that kills the enjoyment of movies for enthusiasts, it does nothing to stop pirates. We all know this to be true.

Don't think for a moment though, that big media doesn't know this--they absolutely do. Now, they have a new plan. Since big media can't directly go after pirates, they've decided to go after to after the group of people who they think can't do a thing about it: anyone using an Internet connection.

< - >

Download capping is the new DRM.

It ensures several things:

- You will be more hesitant to download movies and music legitimately-- even though you've paid to watch/listen.
- You will watch more cable TV (so you can see all those great ads).
- You will accidentally pay more for less.
- Pirates get a whacking.

Big media and ISPs can't effectively eliminate piracy by going after pirates directly or stop online video and music streaming services. So they have a better plan now: go after everyone.

How Much Time Warner's Broadband Caps Will Screw You - Broadband caps

The money quote comes from Time Warner's SEC filing as highlighted in this article and reveals the anti-competitive issue for consumers and video producers.


One position from Time Warner's COO,

Moreover it's clear that Time Warner fully expects its customers to keep climbing that bandwidth ladder over time, ratcheting themselves into sweeter and sweeter profit positions thanks to the tiered strategy plus known usage increases, thanks to a money quote (literally) from Hobbs: "Broadband data is such a great product. I think there will be some customers who don’t use much that will select the lower tier. But over time, they will use more and move up to the higher price plans." This too reveals that metered broadband isn't really about saving the internet or ensuring great customer experience for the more "polite," less bandwidth-hungry users on the network — it's about setting up a tiered scheme in which Time Warner stands to make an incredible amount of bank as general demand for internet usage is increasing.

And now the anti-competitive "money quote" from TW:

Thanks also to TW's SEC filing we know it's additionally about thwarting the increasing competition their cable video business faces from competitors delivering video content over the web: "TWC faces competition from a range of other competitors, including, increasingly, companies that deliver content to consumers over the Internet, often without charging a fee for access to the content. This trend
could negatively impact customer demand for TWC’s video services, especially premium and On-Demand services."

Time Warner's data caps could cost us much more than high monthly fees, if the company has it way.

On Fri, Apr 10, 2009 at 10:08 AM, David Farber wrote:

Like the virus in 28 Days Later, Time Warner's internet-strangling broadband caps is spreading all over the country. They've got brand new pricing plans too and they yep, they suck. Let's look.
The old cap scheme was pretty limited, only going up to a max of 40GB. Now they've got a whole Skittles bag of caps. Here's how Time Warner Cable's COO Landel Hobbs breaks it down, all while breaking out the familiar warning that the internet is about to die if you don't limit your porn consumption to two times a day—MAX:
Internet demand is rising at a rate that could outpace capacity within a few years. According to industry analysts, the infrastructure may not be able to accommodate the explosion of online content by 2012. This could result in Internet brownouts.

• 1GB with 768kbps downstream for $15/month with $2/GB overcharges
• 10, 20, 40 and 60GB will go with Roadrunner Lite, Basic, Standard and Turbo packages, respectively, and maintain the same pricing. Overage is $1/GB.
• 100GB will be the new Road Runner...Turbo (I'm not sure why there are two Turbo packages) which is 10Mbps downstream and 1Mbps upstream for $75/month. This is still an order of magnitude more restrictive than AT&T and Comcast, who have caps of 150GB and 250GB, respectively.
• A 50Mbps/5Mbps down/up speed tier is coming for $100/month wh