Lummox JR's BYOND blog

One of my favorite pastimes is skewering idiots who claim to be knowledgeable, so it should come as no surprise if you read this article by Mark McKinnon that he's due for a righteous Fisking. Mark's foray into professional stupidity is on the subject of Time-Warner's bandwidth cap plans. He thinks that, gosh, it's a shame we didn't get to see how they played out. Is he a complete imbecile or an industry shill grinding their ax for them? You be the judge, and by all means, judge harshly.

And, uh... Mark? We may yet see that pricing thing play out, and it isn't a shame, for reasons that will become clear once you have been awake for any length of time. Also, you're a moron. Let us begin.

When it comes to the future -- the future of content distribution, the future of the Internet, the future of technology -- no one is exactly sure what will work and what won't. The best way forward is experimentation: a marketplace of business models.

Hulu versus Netflix, iTunes versus Rhapsody, fiber to the home versus Docsis 3.0, LTE versus WiMax: Only time will tell which technologies work best for consumers and will thrive.

I'll take Business Models Where Competition Actually Exists And Are Therefore Irrelevant, Stupid for $2000, Alex.

Even within a single company, experimentation is necessary for figuring out what works best. Should an ISP offer a single, flat-rate price for broadband? Should it consider double- or triple-play packages? Should a telecom company offer its own IP voice package? Should a cable company follow suit? These are just some of the many questions companies consider as they determine how best to invest, expand, and innovate. The fact that they have been relatively free to experiment with these options is part of the reason there's so much choice for consumers.

Consumers have choices in some of these things, but not so much in their TV or broadband service. In rural areas, TV choices are quite limited and cable may not even be available, while the ISP situation on the ground presents them with one and only one broadband solution. Or in some cases, there may be only one real broadband solution while all the others, like DSL, suck on toast. Cable runs by local monopoly, which is why consumers have to pay for packaged pricing on their TV channels instead of per channel, for instance. Mark apparently lives in a magical place where five different companies are tripping over themselves month after month to get his business by offering great deals, cable bills go down over time, and service calls are handled by leprechauns.

That's why it's a shame to see that Time Warner Cable Inc. (NYSE: TWC)'s recent plan to roll out usage-based broadband pricing in additional test markets was hobbled by political opposition before it was able to reach consumers. (Tests in Beaumont, Texas, underway since last year, have continued.)

First correction: The situation in Beaumont is not a "test"; people are actually getting real bills with this and they're still stuck with this stupid system because they have no other choice in that area. Second correction: The political opposition existed because customers reacted vehemently to the change and demanded their representatives get involved. Practically nobody wants this change except for Time-Warner's execs.

Two groups opposing the plan most aggressively were Free Press, which petitioned Congress to investigate the "price-gouging scheme," and Public Knowledge, which called Time Warner's decision to shelve the plan "yet another victory for the netroots!"

But that was a change in tune for both organizations. Last year, Public Knowledge's Gigi Sohn said she was "delighted" about Time Warner's test of metered billing because "it provides both transparency and certainty" for consumers and "makes unnecessary controversial 'network management' decisions." Free Press's Tim Wu had a similar take, telling The Washington Post, "I don't quite see [metering] as an outrage, and in fact [it] is probably the fairest system going."

That they may have had a bad idea in the past that they now choose not to champion after sobering up is evidence of possible intellectual growth, not wishy-washiness. Everyone's entitled to change their mind on a drug-induced 3 AM brainfart. But even so, screw it. Lots of other groups opposed the caps from the beginning and never changed their tune at all. Furthermore, maybe the change has something to do with the ridiculously low caps suggested by Time-Warner's plans, caps that are likely to push average consumers into higher bills and push more and more people into overage charges as their use of services like Netflix and Hulu (remember that first paragraph, Mark?) grows.

It's certainly the fairest system going for many Internet users.

One of the more interesting things Time Warner planned to offer in the new test markets was a 1-Gbyte consumption tier (representing speeds up to 768 kbit/s) for just $15 a month, with only a $2-per-Gbyte overage fee. For people who only use the net at home for light Web surfing or email, this would have been a far preferable option to a $50 per month all-you-can-eat buffet of Internet downloading service.

On a technical level, I suppose you can call more than ten people "many". But percentage-wise, not hardly. About 30% of Time-Warner's users--based on raw data they won't release to the public, mind you, this is just their claim--currently use under 1 GB per month. That percentage will fall as the Internet evolves--there is no question in that. How many light users will think to upgrade their plan before crossing the threshold? How many are likely to be seniors on fixed incomes? How many may have unsecured wireless routers that could end up costing them huge overages?

And what's this "only a $2-per-Gbyte overage fee" crap? Did you seriously use the word "only" for that? That's not only high, it's twice what it was in the initial proposal. That was high too.

But let's put this in even more perspective. The modified price structure Time-Warner came up with, offering a 1 GB tier, only came into existence because their first plan had absolutely no way for customers to save money vs. current pricing. As it is, these light users can still switch to a lower-speed plan which is offered at a lower price, have no caps at all, and still save about the same money. In what way is the metered plan "far preferable" for them, italics or not, if it makes practically no difference compared to the existing lite plan? The existing lite plan comes with the added bonus of incurring no risk of a huge surprise bill if usage spikes or you get infected with a trojan or something. And that's the only comparison worth making; comparing the low-tier metered plan to the existing high-speed plan of course is apples vs. oranges. If it looks like an apple and tastes like an apple, you are definitely not dealing with a member of the citrus family.

For everyone else, the price for their current level of service is effectively going up. It may double or even triple, or more if they happen to incur overages unexpectedly. There is no excuse whatsoever for Time-Warner's 60 GB cap (originally 40) for instance, when the universally hated Comcast only cuts people off at 250. If Comcast can have caps of 250 GB per month and Cablevision can happily get away with having none at all, why does Time-Warner have to set the bar so low? Oh, right, those ridiculous overage charges. Anyone wanting "virtually unlimited" service, though, can gladly pay three times more for their service than they do now. Yay!

People know a cash grab when they see one, Mark. Even most stupid people. That you seem not to is, well, appalling on every level. Out of the gene pool, Mark; you are not fit to share my oxygen.

As Time Warner pointed out, nearly 30 percent of its customers download 1 Gbyte or less per month. Those customers could have saved $420 a year by only paying for the bandwidth they consume, rather than subsidizing heavier users. And for only $10 more a month, users could have had a 10-Gbyte plan, saving $300 a year over the one-size-fits-all approach.

But apparently those savings constitute "highway robbery."

How nice, Mark, to repeat Time-Warner's talking points verbatim without considering the other side of it. In the first place those customers could only save that much in the absence of any possible overages and only if the existing lite plan was not already available to them. And still, this is only a minority.

But nobody objects to light users saving money. The problem is that only this minority stands to save at all, and even then only if they don't end up with a hijacked router or a granddaughter who breezes through every episode of Pokemon when she visits for the week. For everyone else, bills will go up, and that everyone else includes the core of the user base. People are enjoying a somewhat reasonably priced service now which does not include artificial limits because it does not need them. There's plenty of bandwidth to go around, will be for some time to come, and it's cheap for the company to add more. The concept that light users are "subsidizing" heavy users is a complete fiction, and you're a butt-yodeling twit, Mark, for taking it at face value without even doing basic research.

Dramatically raising people's rates and lowering their level of service for no real economic reason whatsoever is pretty much textbook highway robbery. You don't get a pass on not recognizing that merely by having apparently never cracked open a textbook.

Sure, there may have been kinks in the plan that needed ironing out -- such as finding the right service tiers and making sure that the pricing doesn't discourage the use of new, innovative Internet applications; under the fiery rhetoric, these were the critics' main concerns. But one of the best ways to figure out where the problems are would have been to include additional test markets, which is what Time Warner proposed.

If customers in the test markets overwhelmingly rejected the bill of goods, how would expanding it to other test markets improve matters? Besides, it's not like they'd try different tiers in different places--that would only increase the blowback. But users in the know are firm on this: Capped usage is completely unacceptable no matter how high the cap. Give users all the speed tiers you want, but no caps. There is no need for such caps; bandwidth and network maintenance costs to the company are peanuts. Their profits have gone up year by year and costs have been plummeting--clearly there is no need for any caps. (And just to head off the most obvious point of rebuttal, the claim that caps may be needed in the future is unfounded and in any case does not justify caps so incredibly stingy.)

It's unfortunate that so-called consumer advocates reflexively criticized the plan without considering its potential benefits before Time Warner could even finish figuring out how to bring the best set of options to consumers.

Consumers themselves criticized it, as you would know if you stopped admiring the view of your own colon and took a look around. To most consumers, even those not in the test markets, this was an act of betrayal. People are hurting and this company has tried to rip much more money out of their wallets with absolutely the thinnest of excuses. I've literally crapped out better analysis of the situation than anything you just said, Mark, and yes I'm using the word "literally" correctly. It's proof that at some point I nourished a brain that actually considered more than the company press release as a basis on which to form an opinion.

It may very well be that Time Warner's plan for usage-based billing wouldn't have worked out. But consumers -- not professional advocacy groups and politicians -- should be in the driver's seat picking winners and losers in the digital society.

Consumers have spoken, and are still speaking. They are overwhelmingly saying NO. And they are saying it as loudly as possible, because the company isn't listening. Time-Warner has said bluntly that they feel people merely weren't "educated" enough about the plans and they want to push this forward in spite of resounding hatred--hatred, Mark--of the whole affair. Customers screamed at Time-Warner in droves, and because they had no viable options for competitive service they were ignored. It took a few politicians to get involved for the company even to back off this one baby step.

Bonus question for the peanut gallery: How is it this guy can research quotes from a year back from advocacy groups that have been more or less minor players in this whole thing, yet completely miss a huge outpouring of consumer anger that's incredibly easy to find? Heck, how can he even make "Consumers should have their say" his central point without addressing any of the consumers' serious points of contention? His piece extolling the company's "experiment" is so entirely one-sided it's beyond mockable. As lazy as journalists have gotten these days, I suppose it's still possible to chalk this up to a lack of journalistic integrity and commitment to quality writing. Gathering any amount of meaningful data at all, let alone real quotes from the opposition besides the two consumer groups he attacks, would have resulted in an entirely different piece. Which is to say, at least partially informed with an attempt at objectivity.

But wait! There's more! Don't miss the author's bona fides.

-- Mark McKinnon has worked for both Democratic and Republican political campaigns, including Texas Governors Mark White, Ann Richards, and George Bush, Louisiana Governor Buddy Roemer, and, in 2006, Senator John McCain's candidacy for President. He is a co-chairman of Arts+Labs and serves on the board of the Lance Armstrong Foundation.

It's just like they've been saying at StopTheCap!: This is not a left or right issue. Stupidity crosses party lines, to whatever extent those even matter these days.