Open Letter to Time Warner Cable

This is a copy of an email sent to realideas@twcable.com

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To whom it may concern at Time Warner Cable:

It would seem to be quite clear that there is a very vocal section of the population in Rochester, NY, Greensboro, NC, Austin, TX, and San Antonio, TX who believe (correctly or not) that they will be adversely affected by your proposed bandwidth caps. I don't know for sure yet, but I have a very strong sense that I will fall well outside your 40 GB/month cap without considering myself an abuser of the system (I don't use BitTorrent or download anything illegal). I am, however an avid Internet media user including streaming tv shows and short video such as You Tube.

If as your trial in Beaumont shows that only 14% of the test population exceeded the caps, and only 25% of users take up the majority of bandwidth then what sense does it make to roll out this PR nightmare of a bandwidth cap plan? Why not simply address directly those users who are causing you problems? Perhaps some sort of arrangement can be made or network shaping can be used on those offenders instead of on the population as a whole.

I do understand from a monetary perspective implementing a cap with overage fees is of great benefit to Time Warner Cable. From a monetary perspective I think most cap and overage schemes are very beneficial, but from a goodwill perspective they can be extremely costly.

If I may, let's compare TWC's proposed plan to other existing capping plans that are either currently implemented or were implemented in the past.

• AT&T currently starts their lowest-tiered cap at 20 GB/month. This is 4 times higher than your lowest tier. Their highest cap is 150 GB/month; over 3 times as high as your highest tier. Additionally, their service pro-actively lets users know when they're at 80% of their cap versus placing the onus on each household to monitor their "gas gauge" with paranoid anticipation of going over their limit.
  (http://i.gizmodo.com/5075831/att-monthly-bandwidth-caps-are-here)
• Comcast currently places a generic 250 GB/month cap on all of their customers, no tiers. 250 GB is a lot of data even in a video-streaming, game-playing household. The major difference here is obviously no tiers and a somewhat reasonable usage cap across the board. Users are contacted by Comcast if they exceed their cap. For most people this wouldn't even be perceived as a change; far less so than a tiered system that requires they check a meter to see if they've gone over (and you know there will be low-use customers who continually monitor their gauge out of fear of going over anyway simply because they're not familiar with Internet quantities).
  (http://arstechnica.com/old/content/2008/08/its-official-comcast-starts-250gb-bandwidth-caps-october-1.ars)
• Verizon's FIOS of course is even higher speeds (upstream and down) than RoadRunner and it has no caps at all in terms of bandwidth. That's not to say they won't try in the future, but for the time being they are your biggest competitor in the nearby markets and thus must be considered.
• Frontier DSL attempted to place a 5 GB/month bandwidth cap on users in 2008 which was highly unpopular and resulted in their indefinite postponement of said caps. Customers didn't like caps then and have not grown a taste for them now. Changing the label from vinegar to wine doesn't make it taste better.
• Cell phone plans from the 90s and early 2000s used a cap system (heck, even AOL started with a cap by minutes) but all of these providers moved to larger and larger caps as their customer base grew eventually ending up with "unlimited" plans that we all now know and love. Why did they do this if it was problematic? Because that's what the customer wanted and they're willing to pay for it. Your plan does not reduce the price of the top tier which theoretically is infinitely lower than an unlimited plan and should at least be reflected somewhat in the price.

We now have some context of how TWC fits into the larger picture of markets with competition (obviously not Rochester, Austin, San Antonio, Greensboro, or Beaumont). I'm curious how your company ever planned on rolling out such draconian caps into competitive markets with Comcast, AT&T, or Verizon? If there is no plan to roll out caps into those markets then this action now more or less amounts to extortion of your captive audience.

Time Warner Cable has claimed these are just 'tests', but aren't tests supposed to be simulations of real-world environments to gauge the outcome? A real test would have been in a market with significant competition. If a test is not a prelude to a larger roll-out, then the use of the word 'test' is a lie and an excuse for uncouth behavior.

Having said all that, what would it take to make customers happy and stay with Time Warner Cable? What is the major problem you need to address? What changes can you affect that fix your problem without major impact to your existing customers?

First, what's the major problem? As I gather, it's a bandwidth issue. That is, there isn't enough for everyone to download Lost streaming from abc.com at the same time on one network. Additionally, some people "abuse" their unlimited plan by actually using it to their fullest advantage.

I propose that customers who purchased the high speed unlimited plans are not actually stupid and understand that they are high bandwidth users who are willing to pay a flat access rate for a particular speed. If I am not concerned with the speed of my network connection I can spend much less on lower-speed access, but I still expect that I will not be also limited by the amount of data I consume or produce - merely the rate at which I do so. Users who consume and produce the most are most likely to chose the highest speed tier because that enables them to be most productive.

As such, no amount of usage of an unlimited plan is abuse. Only the manner in which that usage violates the terms of service could it constitute abuse (such as downloading child pornography or other such materials).

What Time Warner Cable is saying now is, "No, you cannot do anything you want on the Internet because what you do overwhelms our bandwidth capabilities." Isn't that however, a problem with your sales practices or your hardware? If you do not sell more bandwidth than you have people could not exceed it or cause congestion. If you upgraded your hardware to expand the amount of burstable or sustained capacity wouldn't that solve the problem? What will TWC do with the money it receives from the $7.5 billion broadband expansion and infrastructure stimulus (with the understanding that $2-4 billion is earmarked for rural expansion) if not improve your hardware and infrastructure?

So what can Time Warner Cable do to improve their situation without alienating their customer base (even if they're captive)? Here's a few alternatives I've come up with:

1. Bandwidth Incentive Tiers

Instead of punishing those who exceed their bandwidth, reward those that do not use as much, but charge a single flat rate for Internet access. It would look something like this assuming a flat $55 / month access fee:

Monthly Usage	Incentive amount reduced from bill	Monthly total after rebate
60GB and up	No incentive reduction	$55
40 - 59 GB	$10 credit / rebate	$45
20 - 39 GB	$15 credit / rebate	$40
5 - 19 GB	$20 credit / rebate	$35
< 5 GB	$25 credit / rebate	$30

With this scheme, if your Internet access is $55 / month, low-usage users would receive credits or rebates on their next month's bill bringing the price back down to your economy tier (< 5 GB users pay only $30 / month). The advantage of this system is that it doesn't appear to punish anyone, only rewarding those who don't use much bandwidth. Obviously you can use your numbers to play with these levels to your greatest financial advantage, but you give the appearance of being benevolent instead of imposing.

2. Set a single higher cap like Comcast

Another alternative that won't ruffle as many feathers is to set a single much higher cap (nothing less than 200 GB) in the same manner that Comcast does. Time Warner Cable is one of the largest (if not the largest) cable company in the U.S. I have a hard time believing that Comcast or AT&T have more bandwidth available to them than Time Warner Cable does.

3. Deal directly with the 14% of excessive users

The last approach is more effort but also more engaging. Contact the 14% of users who use excessive amounts of bandwidth and find out what their usage entails. Perhaps they are simply an indicator of what's to come and can act as an early warning device to the "next big thing" online. This could be your golden opportunity to find out what's going to be big before it is and have time to prepare while at the same time keeping your customers happy.

In closing, I wish to say that Time Warner Cable is presently being perceived as nothing more than heartless money-grubbing creeps who are taking advantage of high-tech areas with no competition in hard economic times. I don't think that's the perception you want to maintain. If you go forward with this bandwidth cap, I will strongly and seriously consider canceling my 10+ years of service and move to your competitor not because they provide a better product, but because I don't want you to have my money.

Please consider this feedback seriously.

Thank you,
Brion Swanson