Sunday, April 05, 2009

Time Warner's Disingenuous Email

I sent a note through to Time Warner telling them I wasn't pleased by their plans to cap and meter. The nets were a flurry of activity last week on the subject - with the idiocy of the move going right to the top of Reddit and Digg. The response I got from TWC was 'we have to find an equitable solution for everyone'... which is exactly the sort of garbage excuse they teach crap middle managers to use on hard working employees at a big company when they're not going to give them a raise. Honestly the response was offensive to me - it was so hamfisted and filled with garbage marketing - making assumptions that I didnt actually KNOW better (though, I suppose, most people dont actually know better).

So last night I ran across this from the NYTimes. To be fair - there are huge population density advantages to tokyo over a city like Austin, and there are restrictions against VoIP in Japan that limit that interchange of service (though, with that kind of bandwidth why not just push 30 fps HD video conferencing - who the hell needs the CLECs)... but that's still no excuse for the absurd talk from the greedy monopolists at TWC telling us that they need MORE of our money for less.

The reality is that in 1996 Clinton passed the Telecom act which gave out over $200b in tax breaks to these carriers but they had to spend that money on infrastructure improvements to hit big bandwidth targets. They charged consumers fees on their bills - kept the money - and delivered none of the infrastructure improvement (because regulators never enforced anything - and no one ever called them on it).

Now a decade later - after a huge telecom boom which saw billions spent by other companies (who didnt reap the tax benefits) and who's infrastructure was snapped up for pennies after the bubble burst (and everyone doubled down on real estate) there were 10s of dark fiber strands in the ground for every lit one... so all that OC-48 gear that got deployed and depreciated (more tax writeoffs) suddenly got big wave-division multiplexers attached that can split the light into 160 channels - so suddenly every strand of fiber can carry 160x what it used to...


The most prescient point in the NYTimes article (to me) was this... (emphasis mine)

Competition, or the lack of it, goes a long way to explaining why the fees are higher in the United States. There is less competition in the United States than in many other countries. Broadband already has the highest profit margins of any product cable companies offer. Like any profit-maximizing business would do, they set prices in relation to other providers and market demand rather than based on costs.

I sent this quote to TWC as a response to their garbage boilerplate - and flatly called them liars.

Their response?
I totally understand your concern. It is feedback like this, which will enable us to adopt a best course plan, which will be profitable to both the customers and us. Our plan to adopt a tiered plan is currently in its nascent stage. We are taking in customer feedback and closely watching the evolution of the Internet so that we may decide what needs to be done. Also, contrary to exaggerated media reports, no final decision has been taken. Please be assured that any updates regarding this will be reported and you will be informed. Once again, we thank you for being a valuable customer and your feedback. We shall forward this to our higher resources.

Let's talk about this then...
You sell me 8Mbps down and 384Kbps up for $50 a month, right? Let's not talk about whether that's hugely profitable for you... we'll just pretend it's not for some reason. Ok. Now you're upset if I use too much of it... ok. We'll I'm upset if my internet speed isn't 8Mbps down like I'm supposed to get.

Tell you what... you charge me your metered rate - and in return you make sure my 8Mbps is a CIR. Any day my meter says I dont get 95% of my 8Mbps 95% of the time you don't charge me for that day at all. I've negotiated much harsher contracts with Cable and Wireless and MCI over the years - this is hugely padded in your favor. What? No? Nevermind? You mean you've oversubscribed my bandwidth and if you actually had to deliver it 'on demand' like you claimed you'd have to have spent some of that $200b on infrastructure improvements instead of executive bonuses?

It cuts both ways assholes.

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