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[ NNSquad ] [IP] Congressman Wants to Ban Download Caps



Date: Tue, 14 Apr 2009 17:43:01 -0400
From: David Farber <dave@farber.net>
Subject: [IP] Congressman Wants to Ban Download Caps
Reply-To: dave@farber.net
To: ip <ip@v2.listbox.com>



Begin forwarded message:

From: Ken Deifik <kenneth.d@roadrunner.com>
Date: April 14, 2009 4:45:54 PM EDT
To: dave@farber.net
Subject: Congressman Wants to Ban Download Caps

Of possible interest to your readers. -K

Congressman Wants to Ban Download Caps
By Ryan Singel EmailApril 14, 2009 | 10:46:35 AM
http://blog.wired.com/business/2009/04/congressman-to.html

Time Warner Cable plans to test its controversial, new scheme to have  
users pay by the gigabyte in Rochester, New York, but the area's freshman 
congressman calls usage caps greedy and plans to introduce legislation to 
stop it.

New York Democratic Rep. Eric Massa called TWC's proposal to switch its 8.4 
million cable broadband customers to metered internet billing an 
"outrageous plan to tax the American people."

Massa, a longtime blogger at the liberal site DailyKos, says he will be 
joined by a "legion of activists" and called the fight against usage caps a 
"national issue of generational consequences." However, Massa's fight will 
not get far without support from powerful House members,including Virginia 
Democrat Rick Boucher who now controls a key committee on telecoms and the 
internet.

Critics say usage caps will cost users more and hurt innovation on the net 
— especially in new video services, as subscribers begin to calorie-count 
their internet usage.

TWC's new tiered pricing structure for its Roadrunner internet service  
starts at $15 for a plan that allows 1 GB a month with an overage charge of 
$2 per GB. The company say bandwidth hogs need to pay their fair share and 
maintain that if the company doesn't get enough money to build new 
infrastructure, "internet brownouts" will be inevitable.

Company spokesman Alex Dudley said the company cannot comment on the  
proposed legislation because it has not seen it, but company officials did 
participate in a townhall meeting with Rep. Massa last Thursday.

In a conference call with reporters Tuesday, Massa dismissed those  
arguments, describing TWC as a greedy, unregulated monopoly providing a 
utility service. His yet-to-be-introduced bill would seek to increase 
competition among broadband providers and regulate monopolies, he said, 
though he declined to give specifics.

"They are providing a utility and frankly you should not be able to impose 
cascading rate increases without justifying them," Massa said. "What Time 
Warner is saying is not true and their own SEC filings show that. This is 
AIG-style greed."

Company spokesman Alex Dudley said the company cannot comment on the  
proposed legislation since it has not seen it, but emphasized the company 
is trying to test whether this is the right pricing model, or not.

As Wired.com first pointed out, Time Warner Cable's 2008 annual report  
shows its high-speed data costs actually declined by 12 percent to $146 
million. Meanwhile subscribers increased by more than 10 percent to 8.4 
million, and high-speed data revenues climbed to more than $4 billion.

But TWC's Dudley says that the $146 million it paid in 2008 was simply the 
cost to transport traffic across the internet backbone. The company is 
warning that net traffic rose 'exponentially' at 30% a year -- putting the 
net in danger, but its cost to transfer that data across the net's backbone 
fell from $164 million in 2007.

Still, according to Dudley, the company has other costs, including labor, 
vans and hardware, that also go up with increased usage. Those are 
typically considered fixed costs that don't vary much whether a customer 
uses the net some or a lot, though Dudley disagrees.

"That $146 million is a small part of the variable costs," Dudley said. 
"Demands placed on network are a factor, such as 'Do we have to split a 
node to accommodate heavy use?' Those are capital costs that are directly 
related to use."

TWC first tested the plans in Beaumont, Texas, and is now collecting usage 
data in Rochester, NY and the Texas cities San Antonio and Austin, in 
preparation for an expanded metered billing test later this summer.

The plan has faced intense criticism since the company announced the  
changes at the beginning of the month. Hoping to mollify its critics, the 
company modified its tiers last Thursday, increasing the usage caps for 
each tier and adding a $150 all-you-can download plan.

Nearly all U.S. residential broadband providers sell their services based 
on bandwidth speeds, with no mention of a usage cap. Experts say that's in 
part because there's little data for the companies to base their pricing 
on, and because if one company offers unlimited data, the others do as 
well, at least in markets where there is broadband competition. Broadband 
usage continues to grow, most recently thanks to an explosion in online 
video services, but the cost of moving those bits also continues to fall.

Time Warner isn't alone in its campaign to crack down on heavy net users. 
AT&T announced last November that it would test monthly bandwidth caps and 
overage fees. Comcast installed a 250-GB cap last August; Canada's Rogers 
enforces a 60 GB limit; and New York-based DSL provider Frontier has a 
miserly 5-GB limit (though public pressure forced the company not to 
enforce it).

Timothy Karr, a campaign director at the consumer advocate group  
FreePress, argues that TWC is unfairly trying to protect its lucrative  
cable television business from customers switching over to online video.

"Charging consumers penalty fees on top of what they are already paying to 
download a movie or show will cripple online video," Karr said last week. 
"This is a win-win situation for Time Warner. Congress must investigate 
these anti-competitive practices before they become a nationwide problem."

A Massa spokesman said the text of the bill would be ready late in the  
week.

This story has been updated with comments from Time Warner Cable.




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at http://www.HarmonicaGuitar.com
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