A colleague first made me aware of Time Warner Cable’s move to sneak bandwidth caps into their existing markets. Now the news seems to be exploding in the blogosphere.
I received this from FreePress.net just yesterday.
We Want More Internet, Not Less
Just as Americans are suffering economically, Time Warner Cable is trying to squeeze us even further, forcing customers to pay a steep Internet penalty for exceeding an absurdly low monthly limit. This is ridiculous. Instead of meeting growing broadband demand, Time Warner Cable is gouging Internet users.
And when I posted the issue to my Facebook profile, a free-marketeer friend had the following to say:
While we are at it, we should insist on air traffic neutrality where you pay one price to fly all you want. Or ocean neutrality where you pay one price to fish all you want. Movie neutrality where one price allows you to watch all the movies you want (I guess Netflix already does this despite not having to.)
Phillip – don’t you think that people who hog bandwidth should pay more for reducing the bandwidth available to other net surfers. Do you think it’s unfair that cell phone companies charge differently for different times of the day so as to reduce network congestion? Or that charge me by the number of pages loaded?
Of course there is the small matter of monopoly providers of broadband access. But with competition I would expect that people would pay for the bandwidth they value and reduce the tragedy of the commons that occurs when I try to watch Netflix Watch it Now movies.
Right now, since I live in an area without real competition, I’m happy to raise awareness of TWC’s doings by any means available. I’ll lobby Congress if Congress is the mechanism by which I can stop TWC from switching their pricing mechanism midstream.
Should network providers charge more from individuals or businesses who use more bandwidth? Sure. But I should also have realistic options from my Internet Service Provider about which bandwidth cap I can sign up for. Right now, Time Warner Cable offers unlimited megabytes of downloaded data, within a context of limited download speeds. And that seems reasonable.
Think of it as if the Water Department offered residences unlimited use of water, through a pipe of predetermined width. That is, you could use each month as much water as you want. More precisely, you could use as much water will fit through a residential-sized pipe per month. The difference between business-class and residential-class service would be the diameter of the pipe.
For the most part, ISPs like TWC have determined their monthly charges in this way. They allow unlimited use of the service, piped into your home at a predetermined speed. That is, they use speed caps, not cumulative caps.
Surely I’m not suggesting that the Water Department shouldn’t charge my neighbor more than me when he waters his entire property, driveway included, every week. That’s right, I’m not suggesting that at all. Water is a precious limited resource. YouTube isn’t.
A better analogy might be cable television. For years, the model for cable television pricing has been based on the number of channels to which one wants to subscribe. Once I sign up for basic, premium, deluxe, or the super-over-the-top-all-movies package, I can watch as much TV as I want. Whether I leave a television turned on 24/7 or tune in for just the nightly Daily Show, the cable company isn’t going to charge me any more or less.
Cable TV providers have somehow avoided the “tragedy of the commons.” Never in my life has the television program I’ve been watching been “slow” because all my neighbors also have their televisions turned on.
So why isn’t TWC keeping cable Internet priced like cable TV? Because people are dropping their cable TV. TWC’s move to implement download caps is a typically monopolistic response to the growing popularity of Netflix on-demand, Roku boxes, Apple TV and other ways of streaming the TV you want to watch into your home, without signing up for TWC’s cable television service. And if they can set their bandwidth caps low enough, they’ll find a wellspring of new revenue. Business Insider reports that
…[i]n Beaumont, [TWC] had been testing caps of 40 gigabytes per month. That’s less than it sounds, especially as companies like Apple (AAPL) and Netflix (NFLX) increasingly offer hi-def movie services. (A hi-def movie can take up about 4 gigabytes.)
We think Comcast’s (CMCSA) caps are more reasonable — about 250 gigabytes per month. But Comcast is mostly trying to manage its network and weed out pirates. Time Warner Cable seems to be looking for new revenue growth areas as subscriber growth slows.
I think my friend is right on; TWC wouldn’t be able to get away with this if there were real competition. AT&T’s new service has not yet reached into my part of town, but as soon as it does, I’ll consider switching. But I’m also not going to wait (nor encourage) competition from another big business.
As for the suggestion that we ought to push for ocean neutrality while we’re at it… First, as a vegan, I probably don’t have a lot to say about this. But as far as I understand an individual’s fishing license, you can fish as much as you want with your license. If I could get away from work every day and go fishing, the state isn’t going to charge me any more than my friend who can fish only on weekends. Pricing based on volume comes into play only for commerical fishing, which just isn’t a relevant analog to home Internet service.
Like Woodward and Armstrong say about Justice William Douglas’ unabashed liberalism, I am “for individuals over government, government over big business, and the environment over all else.” In this case, by contacting members of Congress through freepress.net, I’m OK with using the government to protect the individual and stick it to the corporation.