So, Time Warner has decided to move to test a series of bandwidth limited plans.

*UPDATE* Time Warner has indicated it plans to expand these caps to more cities around the US including Rochester NY (my current residence).*END UPDATE*

First and foremost welcome to Amish country. You thought it was restricted to Lancaster County Pennsylvania, but the Amish Paradise is spreading. You can churn butter once or even twice if you like.

An AP story regarding this situation I will source in my statements bellow.

Time Warner Cable had said in January that it was planning to conduct the trial in Beaumont, but did not give any details. On Monday, Leddy said its tiers will range from $29.95 a month for relatively slow service at 768 kilobits per second and a 5-gigabyte monthly cap to $54.90 per month for fast downloads at 15 megabits per second and a 40-gigabyte cap. Those prices cover the Internet portion of subscription bundles that include video or phone services. Both downloads and uploads will count toward the monthly cap.

So, in a true serial fashion, lets start with the first plan. Thirty dollars a month for 768k limited to five gigabytes. To give you an idea how terrible this is, back in NJ, you can get the same speed dsl line with no bandwidth caps for the low low price of 20 dollars + some tax and tags. That is nearly half the price at the same speed with no ludicrous limitations. To give someone a little less tech savvy an idea as to how little 5 gigabytes is, you could easily consume that much bandwidth in a week or so with regular use of YouTube. The iPhone has, off the top of my head, 16 gigabytes of memory. It would take more than three months of bandwidth to fill it with music that you *legally* downloaded. Maybe you forgot to run windows update in the last year (or ever) well, that’ll consume the whole month’s worth of bandwidth right there. For a ludicrous comparison between DSL and Cable internet service from Time Warner’s perspective you can go here.Time Warner’s take on cable vs dsl right here.
If this trial extends nationally, we will be the laughing stock of industrialized nations. South Korea already outshines us in its internet glory and China is not far behind.
I don’t think I want to bore you with more ranting on the higher tear deal, just know this. Better deals existed in 1999. Even if the advertised speed was 5 Mb then, you aren’t even getting anything close to the advertised speeds of today (in fact you are probably still getting about the same speeds you got in 2001) and back then bandwidth caps didn’t exist.

I have some speculation to do.

Since I am in Rochester, everyone likes to talk about Kodak. It dominates the media here. In case you didn’t know, an engineer at Kodak invented a little device we high faulting computer scientists call a digital camera. It was a gigantic monstrosity that took horrendous pictures, but it was a proof of concept. He went to the Kodak executives who had a look at the device. They patted him on the back and when he wasn’t looking threw it in an incinerator.
While that isn’t exactly what happened the fact still remains that the digital camera was invented at Kodak. The executives wanted to keep it hushed in an attempt to continue on their monopoly on the film market. That didn’t go so well. Abandoned Kodak facilities now liter the Greater Rochester landscape.

There were two forces at work here. Kodak wished to force its obsoleted business model on the market. It was also unable to develop the technologies for digital in time. Their lack of forward vision stifled their innovation. Both problems leave Kodak pushing film on the market and the market simply not caring. Digital won in almost all contexts. There are a few reasons to use film, but go ask your nearest photo student…

My speculation on why the cable companies intend on throttling the internet is very similar to the Kodak story. It is little more than a rabbit hole theory, but unfortunately, the more I think about it the more plausible this scenario sounds.

Cable companies have another product they’ve been selling for the last few years, actual cable television… The internet is a significant threat to that market. Now that more and more television shows are online, the need for a constant real time stream of a bunch of channels is becoming smaller and smaller. By limiting bandwidth, they limit the ability of a consumer to watch those shows. This helps the cable market until they can do some even more devious deals on the internet.

Theoretically, Time Warner could secure deals with the major television networks, and other websites. They could make deals with content providers.  Suddenly NBC.com and ABC.com are now free to access and do not accumulate onto your bandwidth total, which by then might be so absurdly small even your great grandmother is complaining. However, CBS.com might cause accumulation. You come to this site and decide you would like to purchase my newest album of sarcastic lyrics with genius jazz piano accompaniment, but the download would run you over your limit and you don’t want to have to pay the overages, especially since the overage charge is more expensive than the album. Oh, but you see another musician who is almost as good and it looks like he is part of a large network of musicians who belong to a site on the list of free access.

The other Kodak comparison is that Time Warner simply didn’t foresee the modern bandwidth needs of consumers. However, if this were true, they again deserve to be crushed. A technology company that cannot foresee the future needs of its customers has no place in that sector. Would you go to a computer store that still sold 486 systems with no mouse at $2000 a piece? The network needs upgrades both at the back end and at the consumer end. It will be expensive, but that is the cost of being in that business. If they don’t like it they can get out.

*UPDATE*  The costs of upgrading really are not that high.  The costs of the equipment are plummeting.  The cost of bandwidth to the rest of the internet is either nill, or utter dirt cheap.  Ars Technica has more information on this situation. *END UPDATE*

It comes down to the cable companies attempting to force an outmoded business model onto the market, or simply don’t want to foot the bill improving the technology. Its clear that they can’t learn from every other attempt in history  but the temptation is too great. Its hard for me to blame them for attempting this, as after all the the pursuit of money is the heart of capitalism and I do heart me some capitalism.

Competition is the force that should keep them in check. Unfortunately, not everyone has a choice on that market. Cable is a monopoly both natural and government enforced.

I can even hear a case for a per gigabyte internet fee. However, the tiers offered by Time Warner and the overage price are way too high.  If the overage was a nickle a GB, a Dime, or even a Quarter, instead of a Dollar, I might be less angry.

For example, I pay around 7 dollars a month for the hosting services to this website. I get a maximum of 300 Gigabytes in a month. It is however a different market with different costs. Its a competative market. I can go with any hosting provider on the internet I want. It makes no difference. The cost of that bandwidth and network is lower as well. The site is hosted on a shared server in some server farm with a giant pipe to the internet. The servers are meters away as opposed to potentially hundreds of yards between computers in the case of home based internet.

The free market worked out digital vs film in a very simple way, but this is significantly more complex. A consumer has three choices if they are lucky. They can go with DSL, Fiber to the home, or they can go with cable internet. Often its only one choice, Time Warner Cable. As much as I hate regulation, something has to be done. Its been suggested that the existing trust prevention legislation be extended to the world of the internet. This sort of thing would nail that collusion-like stuff right on the head and would in practice help ensure a neutral internet without stifling innovation or create a policy so riddled with holes, its almost a letter of love to the media companies.
As for the network upgrade issue, try going to the local government. I believe they are the ones responsible for the license of the cable company to be active in that community. Stir the pot and make Comcast and Time Warner scared. It wasn’t long ago before I saw Comcast spreading fear uncertainty and doubt (FUD if you’ve seen that term before and didn’t know what it meant) about the Verizon FIOS TV that is being installed in South Jersey. Theses companies are truly afraid of the consumer and the fluctuations of the market. If these fluctuations are too much for the company, so be it, let a new one that can handle them come in. That is the advantage of capitalism.

The internet is also becoming more and more of a utility. Water is often supplied by a municipality, or a contracted company. Why not decent internet. With power, in many states, one can choose among various power companies and simply pay a smaller delivery charge to the local company. Why should that not be extended to the internet? One can easily change between local and long distance phone services. Utilities can be municipally provided or regulated into a pseudo competitive market. Why can’t the Internet? Even if you don’t feel the internet is of vital enough importance to be considered a utility. Remember that the same could be said of water, power and phones in various eras.

The short term is that a large company is either trying to force onto the market a business model that is becoming obsolete, or that it could not foresee the future needs of its customers Either way its bad news for that company in the long term. The Internet is a place of innovation and freedom not of overarching control.