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Time Warner ToS Changes Could Mean Tiered Pricing, Throttling 162

Posted by timothy
from the testing-what-the-market-will-bear dept.
Mirell writes "Time Warner Cable has recently changed their Terms of Service, so that they are allowed to charge you at their discretion via consumption-based billing. They were shot down a few months ago after raising the wrath of many subscribers and several politicians. Now they're trying again, but since they make exclusions for their own voice and video not to count against the cap, this could draw the attention of the FCC."
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Time Warner ToS Changes Could Mean Tiered Pricing, Throttling

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  • by YesIAmAScript (886271) on Sunday May 31, 2009 @03:38PM (#28160445)

    This is not at all strange.

    AT&T justifies it by noting that accessing internal content doesn't use up their backhaul bandwidth. I would think the FCC would be somewhat sympathetic to this argument.

    What's most important is that for truly equivalent services, the providers should not be able to discriminate.

    • by sadler121 (735320) <msadler@gmail.com> on Sunday May 31, 2009 @03:40PM (#28160475) Homepage

      If they use that justification, than I want to be able to have torrent(any) traffic that stays inside their network not classified against my cap either.

      • by sopssa (1498795) <sopssa@email.com> on Sunday May 31, 2009 @03:55PM (#28160591) Journal

        That's a good point and technically possible aswell. I wonder if anyone has suggested it to them tho, rather than just bitching about it on forums :)

        • by Nivex (20616) on Sunday May 31, 2009 @05:45PM (#28161415) Homepage

          The cable companies do their throttling at the cable modem. It turns out this cap can be bypassed. There were some guys back in my hometown that got caught doing just this. The cable company threw the book at them.

          It would make more technical sense to do this at the headend, since they could keep the control closer to them. It would also allow customers who wanted to exchange data locally to do so at the full loop speed without chewing through upstream bandwidth. Instead, I'm stuck talking to my neighbor two apartment buildings away at 384kbit/sec. Obviously what makes the most technical sense does not necessarily mesh with what makes the most business sense.

          • by gad_zuki! (70830) on Sunday May 31, 2009 @06:53PM (#28161903)

            >I'm stuck talking to my neighbor two apartment buildings away at 384kbit/sec.

            The problem is that you dont know where the bottleneck is. Im sure in cable networks the bottlneck in many scenarios is local and in other times its the backhaul. Assuming there's 100mbps of unused bandwidth between the cable node you are on and the node your pal is on may not be correct.

            Not to mention, the docsis protocl may not be able to understand who to lift the cap for and who not too. Considering there's no business reason to provide that service, perhaps you and your neighbor should spring for a wifi link.

            I think the sad part of this scenario is that there should be a business reason to provide this type of service. I imagine a municipal run ISP would be able to handle this pretty well and it would help the community. It would be nice to have a 50 or 60mbps link to everyone on my local node. Oh well, perhaps someday the municipal government will wise up.

          • Re: (Score:2, Funny)

            by dziman (415307)

            Have you tried walking over to his/her apartment?

      • Re: (Score:1, Troll)

        by TooMuchToDo (882796)
        As someone who has run large ISP/hosting networks, this is entirely possible to do. Anyone who says otherwise is a liar.
      • That seems quite fair to me.

    • by NormalVisual (565491) on Sunday May 31, 2009 @03:52PM (#28160545)
      The thing is, the large telco/cablecos' VoIP offerings don't come anywhere close to being an equivalent service. I can't do nearly as much with TWC's VoIP service as I can with my current ala carte provider (Vitelity [vitelity.net]), and it costs many, many, many times more than what I pay now.
    • Re: (Score:2, Informative)

      by PacketU (1315113)
      I would have to say that these large Cable Companies are probably getting scared of possibility of IP based Television Companies cropping up and taking their client base. Their core product has to change from Cable Television service to IP Connectivity.
    • by metamatic (202216)

      AT&T justifies it by noting that accessing internal content doesn't use up their backhaul bandwidth. I would think the FCC would be somewhat sympathetic to this argument.

      Well, that depends how much difference there is between how much the backhaul bandwidth costs them, and how much they resell it to you for.

      In the case of Time Warner's proposed fees, they were planning to charge about 10x the free market rate, which is a bit much when you're a monopoly in many areas.

      • Re: (Score:3, Informative)

        by rtb61 (674572)

        Well the reality is, it is not about what they are planning to charge it is about economically excluding other content distribution companies from potential customers and establishing a content distribution monopoly.

        This is forcing a legislative stance, where bandwidth providers will only be allowed to supply bandwidth and absolutely nothing else, otherwise the will always attempt to restrict use of that bandwidth so as to increase profits well beyond reasonable terms for cost of provision of that bandwi

    • Operators usually justify throttling by saying that unlimited usage degrades service for everybody on the same cable. That justification makes sense.

      There is no reason why "backhaul bandwidth" should be a problem. If it really were a problem, they could fix it by increasing upload bandwidth (rather than decreasing download bandwidth).

  • by acrobg (1175095) on Sunday May 31, 2009 @03:39PM (#28160461) Journal
    Could they possibly be any more out of touch with their customer base?
    • by bobstreo (1320787) on Sunday May 31, 2009 @03:54PM (#28160585)

      I changed TWC's terms of service first.

      It's written on the back of the check in 1 point font.

      "Accepting this check indicates the acceptance of the following changes in
      service billing:..."

      • by mysidia (191772) on Sunday May 31, 2009 @10:16PM (#28163279)

        You can write whatever you want on your checks in 1 point font, it normally has zero effect on the agreement, although it may in theory be taken as an anticipatory breach of contract on your part..

        That is, because an attempt at changing the agreement under such irregular conditions is an unenforcable one, and you're obligated under terms of existing contract with TWC to send payment. You cannot impose new conditions before you meet the terms required of you.

        As a result, you also can't automatically bind TWC into an agreement based on them having payment made from your check.

        Even if you had no prior agreement with TWC, you couldn't do it, because of the special nature of a check.

        To condition accepting terms based on a payment, you have to make them sign the contract before or separate from the check.

        And all the requirements to have a contract have to be met; consideration, meeting of minds, etc.

        e.g. You'd have to send them a document that is the agreement but not a check / payment instrument that has another clear intent.

        1 point font is also small enough as to make its contents unenforceable, as the other party can rightly claim the text was not visible.

        • But changing the TOS in a small-type on a flimsy insert sent with the bill that takes a law degree, additional experience, and hours of careful reading to comprehend constitutes a "meeting of the minds"? Bullshit.

          The fact that this sort of thing is legally accepted shows only that common sense in the application of the law was thrown out the window long ago in order to accommodate the existence of mega-corporations.

          It may be a necessary evil, but that's no reason to dissemble about what's actually happening.

          • How about typing on the back of every cheque which you send the phrase "By accepting this payment (cashing this cheque) you agree to the amendments and changes to your Terms of Service, as stated at [URL]. Note that these changes and amendments may change at any time, and it is within these amendments and changes that I need not inform you of any such changes."

            What's good for the goose...
    • If they and the other major providers form a cartel and manipulate the government to implement this across the board, and kill off competition, then we are all baked, baked, and baked.
      • Re: (Score:3, Funny)

        by guyminuslife (1349809)

        No, the textile lobbies have already formed a cartel and manipulated the government specifically so that you aren't baked. ;-)

      • Re:Not really (Score:5, Insightful)

        by hairyfeet (841228) <bassbeast1968@NOsPAM.gmail.com> on Sunday May 31, 2009 @06:51PM (#28161879) Journal

        Actually they don't even need the government-they just do what they did here. i am at the edge of a rural area, and three times in the last five years a small startup has come along and tried to offer broadband to those that have gotten the finger from the local duopoly. The latest is Wifi, and it looks like they'll go under by summer. the pattern they use is always the same. They let the startup come in, sell them backbone access at a decent price, and then when their dialup customers begin dropping their crazy priced dialup services they just jack the backbone access until they can't stay in business. So basically they have decided that the rural customers can "suck this dialup and like it!"

        I learned this is their SOP by a buddy of mine who had his own mini-ISP trying to serve the same area nearly a decade ago. His business was out of their "service area" and when he saw plenty of other businesses and homes that were in the same shitty boat that he was in, he just did what any capitalist American should be able to do and tried to solve the problem. He paid a good chunk of money out of his own pocket for a T-1 and leased space off of it to his neighbors. He set up a little server with a freeware repository and Windows updating from there, and according to him after having "10k on a good day" dialup he and his customers were quite happy.

        Then the teleco got wind when the neighbors stopped paying for their crappy dialup and changed the TOS to "number of attached nodes" or some BS and raised his rates 4000%. They made it real clear "don't like it? Sue us". When he talked to his lawyer the lawyer said "Yeah you can sue them. For about half a million and a decade or so out of your life. Of course by then you will be completely bankrupt and won't be able to afford the appeals. If you are that crazy good luck, but I can't take the case. It would be economic suicide." So now the line sits rotting in a field, the business is empty because he moved away rather than go back to trying to run his business on 10k dialup, and the people there are screwed. Just as the WISP will be out of business by summer because the backbone charges are forcing them to charge $150 for 756k and of course at that price they can't keep enough customers in a rural area to stay afloat.

        So IMHO the only way we are going to get real competition is to go eminent domain on them. They have used our public right of way to run their cables, we paid them billions of dollars in tax breaks for nationwide high speed and got nothing but the finger, it is time to take it back. Take it back and force companies to compete for the lines while we use part of the money we make from the lease to run nationwide fiber. To those companies that want a monopoly? We say "See those rural customers? The ones we paid you to serve once before? You will get a monopoly for x number of years for running fiber to them. The farther and fewer there are, the more time you'll get. Have at it." The maybe those like my mom who was 2 blocks from the cable when she and dad built their house 29 years ago will actually be able to get broadband instead of STILL being two blocks away after 29 fricking years even though nearly 2 dozen houses have sprung up on the lousy quarter mile straight line from the junction box!

        • I've seen your comments on here quite a lot, and you seem to be consistently modded insightful for good reason.

          You should start a political party, should you feel so inclined, with a view to lobby your local governing bodies for exactly this sort of service.

          I'd donate, and I'm not even American. It just so happens that the UK seems to follow you everywhere, so maybe we'll see some fallout over the pond.
        • by Abcd1234 (188840)

          So IMHO the only way we are going to get real competition is to go eminent domain on them. They have used our public right of way to run their cables, we paid them billions of dollars in tax breaks for nationwide high speed and got nothing but the finger, it is time to take it back.

          Uhoh... yeah, that ain't gonna work. That's pinko hippy communist talk, and as we all know, that way leads Stalinistic purges. And honestly, given the choice between shitty broadband and Stalinistic purges, which would you pref

    • by nurb432 (527695) on Sunday May 31, 2009 @04:21PM (#28160853) Homepage Journal

      No, they not the least bit stupid and are totally "in touch". They just know they are a borderline monopoly so they really don't care what their customers want.

    • First I would have to ask, what's their real customer base. It doesn't sound to me that it would be "Joe the Subscriber".

  • Why not.... (Score:5, Insightful)

    by Darkness404 (1287218) on Sunday May 31, 2009 @03:39PM (#28160463)
    Why not mandate that if Time Warner uses any public property for their lines that they must be high capacity and they must not throttle/charge based on bandwidth. While I despise regulation of any free market the fact remains that a lot of Time Warner's lines run through public property so they should answer to the people.
    • by MoonBuggy (611105)

      I don't quite understand the total abhorrence of transfer capping around here. The way it's done now is certainly an issue, with the level of the caps, the prices and (worst of all) the blatantly untrue attempts to label a capped connection as 'unlimited' all being major problems, but that doesn't mean the idea itself is inherently flawed. Since I'm feeling lazy, here's what I said last time it came up:

      There is a logical, non-evil argument for transfer capping.

      Bandwidth is oversold, and there's not an inher

      • by tsm_sf (545316)
        I don't quite understand the total abhorrence of transfer capping around here.

        It's not abhorred. It's deceptive implementation is abhorred. That's it.

        The whole "slashdot/FOSS/etc hates commerce" thing is such a total red herring. Somehow 'not believing your bullshit' became a sign of communist sympathy.
      • Re: (Score:2, Insightful)

        by WillyWanker (1502057)
        You answered your own question. I don't think many would argue the merit of caps if they were set high enough and priced accordingly. But this is not the case. Hence all the bitching and moaning.

        We are also questioning the motivation. As you've pointed out, transfer caps have very little to do with bandwidth saturation. So while TWC is using this as their rationale, we who know better are calling bullsh*t.

        And seriously, did you actually read the new TOS? Does anyone think it's okay to sign up for a service
      • Re:Why not.... (Score:4, Insightful)

        by Uberbah (647458) on Monday June 01, 2009 @07:39AM (#28166113)

        I don't quite understand the total abhorrence of transfer capping around here.

        If you want to grab your ankles to increase TW's already high profit margins while they spend a fraction of a percentage of revenue on improving the infrastructure, knock yourself out. It's a free country. But don't be surprised as the abhorrence the rest of us have for it.

    • Why not mandate that if Time Warner uses any public property for their lines that they must be high capacity and they must not throttle/charge based on bandwidth.

      Because just about every company uses public property in some way and this doesn't give government the right to dictate their pricing strategy. Those people who own and work for that company are also members of the public so it's their property too (don't get me started on the evils of "public" property). In principle, this is the same thing as g
      • Re:Why not.... (Score:4, Insightful)

        by Uberbah (647458) on Monday June 01, 2009 @07:37AM (#28166103)

        Wow, so on one hand you don't want the companies to have to pay rent on the land they use, yet on the other you want a "free market". Just can't get enough of that corporate cock, can you?

        That's a very slippery slope for someone who despises regulation of the free market.

        Yes, because paying 1000% more for monopolized products and services will be such a boon for you, as well as deadly workplaces and poisonous food/medicine/products/drinking water.

        • Wow, so on one hand you don't want the companies to have to pay rent on the land they use, yet on the other you want a "free market".

          What a stupid thing to say. Of course they should pay the rent on the land they use. What has that got to do with the issue here which is this: does the fact that companies use public infrastructure like roads etc give the government unlimited power to control how those companies should run their business? If the government says this: you lay your cables through public pro
          • by Uberbah (647458)

            What a stupid thing to say.

            Your complaint was very stupid, yes. Then you decided to take the stupid up to 11, to the point where it makes my hair hurt:

            Of course they should pay the rent on the land they use. What has that got to do with the issue here which is this: does the fact that companies use public infrastructure like roads etc give the government unlimited power to control how those companies should run their business? If the government says this: you lay your cables through public property, theref

  • Oh no, no, no (Score:4, Interesting)

    by that IT girl (864406) on Sunday May 31, 2009 @03:47PM (#28160513) Journal
    Okay, you lost me at:

    they are allowed to charge you at their discretion

    When selling most goods and services, it's "here is our price per [measurement], take it or leave it". They do not look into why you are buying the item, and what you are using it for, and charge you based on that. And you are informed of the rate before you decide to purchase the goods or service.

    For some reason I'm having trouble putting my thoughts into words just now, but when they're deciding what to charge me for bandwidth based on what they think about my use of it... I don't think so.

    • Re: (Score:3, Insightful)

      by tthomas48 (180798)

      Yes, and we are allowed to bitch and moan and create massive campaigns about what poor service we're getting for the price that they want to increase.

      The only problem is that many of us don't have real choices (choosing between powerful corporations known for colluding isn't much choice). We're doing exactly what we should be doing in a free market. We're shouting at the vendor that they're overpriced and looking at legislation to keep them from changing prices (which is appropriate in this case since the c

    • Time Warner just wants to lock people into yearly contracts where they can charge whatever they want and if you want out of the contract, you will have to pay a penalty.

  • by salesgeek (263995) on Sunday May 31, 2009 @03:54PM (#28160583) Homepage

    Here's what's going on. Big content providers are primarily in the business of distributing movies, music, tv shows. Distribution used to be expensive because of exclusive licenses for limited radio spectrum or having cable pay for your content. Along comes this damn inconvenient packet switched broadband and basically reduces distribution costs to a ridiculously low number. So, some people who aren't as smart as you, or for that matter a poblano pepper decided that:

    * By raising the cost for residential broadband, it would make it cost you more to download Heroes vs. just watching it on their cable/on demand network.
    * Because you can get your shows for less through the cable company, then they can sell all the commercials and make more money.
    * Big content benefits because they can wrap everything up in a nice DRM wrapper on the DVR box you rent and then they get to sell you Cloverfield eight times over the next four years.

    There's just a couple of small holes in the plan:

    * It's probably illegal. If it's not it's so anticonsumer the FCC will have a lot of fun with these jokers.
    * The internet is not exclusively used for infringing on big media copyrights. Last I looked there were at least a few more things to do online than movies and music.
    * There are emerging technologies that are going to absolutely screw any business plan counting on a last mile monopoly (google meraki just for fun). Just for the hell of it, I'm going to start a mesh in the apartment complex I live in ($20/month/2.5MBPS).
    * Getting tiered pricing requires everyone to do it at the same time, and last I looked, the internet only ISP isn't gone yet... and won't be gone for some time.

    • Re: (Score:2, Insightful)

      by Darkness404 (1287218)

      Getting tiered pricing requires everyone to do it at the same time, and last I looked, the internet only ISP isn't gone yet... and won't be gone for some time.

      But most people really only have access to either Comcast, Time Warner or AT&T other then the occasional local ISP (which usually has slow connection speeds because of the lack of infrastructure) or dial up (unusable to download anything really) there are many people who can't switch even if they wanted to.

    • by nausea_malvarma (1544887) on Sunday May 31, 2009 @04:00PM (#28160643)

      * The internet is not exclusively used for infringing on big media copyrights. Last I looked there were at least a few more things to do online than movies and music.

      Porn?

  • Is it legal to change the terms? Do they count as a contract in the legal sense?

    I guess if you're paying month by month, changing them and, ideally, notifying your customers that you did and that's just the way the cookie crumbles, they can continue to purchase their services or not. But what if you got locked into one of those deals? You know, three months at such and such price but then you have to stay on for nine more months at full price or whatever?

    • by wjh31 (1372867) on Sunday May 31, 2009 @04:03PM (#28160677) Homepage
      i beleive a change in TOS/contract that changed the ammount you can be billed should typically excuse you from any early termination fees, see point 3 in this article: http://consumerist.com/272305/6-ways-to-cancel-any-cellphone-so-you-can-get-an-iphone [consumerist.com]
    • by Archfeld (6757) *

      If you read the ultra fine print you will probably find a clause that allows them to change the terms of the contract at their discretion, and that posting a update on their web site is sufficient notice, it's usually right before the clause that allows them to have any disputes settled by their cousin Harrold in a kangaroo court of their choosing....

      • At which point (in the UK at least), you would tell them to take it through the small claims court if they want their money back and cite OFT guidance [oft.gov.uk] (page 52) in your defense of the claim.

        I'd be surprised if you couldn't pull something similar in the US as two of the basic concepts of contract law are consideration [wikipedia.org] and estoppel [wikipedia.org]. I guess you would be probably relying on previous case law for this, unless the US has any guidance similar to that given in the UK.

    • by nomadic (141991)
      Is it legal to change the terms? Do they count as a contract in the legal sense?

      It might make it not a contract, but the only relief you'd be able to get out of that is you could quit their service without paying a penalty fee.
  • Looks like I may have to switch off of TWCable... sad. It was good service for a long time.

    • by sadler121 (735320)

      What are you going to switch to? AT&T and Verizon are doing, or will be doing the same thing.

    • by Moridineas (213502) on Sunday May 31, 2009 @04:20PM (#28160839) Journal

      FWIW I just switched from TWC to Earthlink cable.

      The funny thing is, TWC is still the cable provider, but Earthlink is the ISP. I still have the same cable modem TWC installed, etc. After I called Earthlink and signed up for their service ($20 a month cheaper than TWC for 6 months, then $10/mon cheaper than TWC forever...no contract) I had to call my local TWC office and they toggled something in software that made me get an Earthlink IP.

      I don't know if TWC will be able to start making Earthlink charge more, but when I talked to the people at Earthlink they specifically told me there were no bandwidth caps, no tiers, and no plans for such.

      • TWC controls all of Earthlink's billing. The rate I am charged, the speed of my connection, my eligibility for promotions are all determined by TWC, and have almost no relation to what Earthlink advertises. My bill for Earthlink is higher because I don't have TWC TV, so TWC would certainly feel free to incorporate usage billing too. It is implausible that TWC would watch 80% of their subscribers leave for Earthlink when tiers are implemented, and watch these same subscribers continue to "overuse" their own
        • by erroneus (253617)

          There is no "overuse." They see a means by which they can milk additional profit "...in these difficult times." They can certainly manage the loads they have everywere if they wanted to. They don't want to manage the load. They want more money... no, they need more money. Their top executives lost a lot of money when the markets fell and they have to make up for the loss somehow, somewhere.

          I see the Earthlink option as an interesting one and worth looking into. TXU Electric provides the power in my ar

        • Interesting.. I literally just switched so am not quite sure how all the billing details will play out.

          At the very least I hope TWC gets slightly less of my money now.

  • Voice and Video isn't on same channel as Data. Gigaom is just reading controversy where there is none. Video and telephony infrastructure operate on private channels on private infrastructure.
    • Re: (Score:3, Insightful)

      by sadler121 (735320)

      Isn't that the point? If they where forced to use those channels for data, wouldn't that mean they would have even more capacity?

      • Re: (Score:2, Insightful)

        by WillyWanker (1502057)
        Yes, and this is where the anti-competitive regulation come into play. Because TWC would essentially penalize you for using competitor's services instead of their own. And that's a big no-no.
  • I wonder what corporate genius thought this would make it more acceptable instead of less acceptable. This is like the Simpson's "can we have a pool dad" chant.

  • Wince the ISP's are tied ( or are actually one in the same... ) to the content producers, it is only a matter of time before we end up in a situation where you are punished for using competitors.

    Oh, and punished as a customer in general, like comcast does now.

  • Here's the trade. You cap my net, I block all ad servers. That should save me a bundle. Unclog the tubes with Drano.

  • I don't mind. (Score:5, Interesting)

    by Charcharodon (611187) on Sunday May 31, 2009 @05:35PM (#28161341)
    I'm all for tiered pricing, as long as the tiering applies to them as well.

    No more of this "up to X mps for $50 a month". If they promise X but can only deliver 1/5X then they only get to bill me $10 a month instead of $50.

  • by Jackie_Chan_Fan (730745) on Sunday May 31, 2009 @06:43PM (#28161821)

    So basically Time Warner is saying "we can charge you whatever we want based on whatever we feel like and you must agree to this or fuck off"

    Time Warner really gets it

  • Childish whining like the OP about cable companies' not metering their own television broadcasts or telephone calls, but metering Internet, gets nowhere. You all want cake, and you want it free, and to eat it too. But the cake is a lie.

    Cable runs telephone on reserved, engineered capacity (PacketCable) for which subscribers pay a fee. It doesn't touch the Internet; it goes to a media gateway into the phone network.

    Cable runs video on many channels, some analog, most QAM nowadays. That's sent from the head

    • by Doctor_Jest (688315) on Monday June 01, 2009 @02:44AM (#28164929)
      Whah, whah, whah. We got users actually taking advantage of our "unlimited" offer... now we don't like it and we want to charge them through the nose for going over some arbitrary limit (absurdly low in the era of VOD etc.), or gouge them with an "unlimited plan" that costs hundreds of dollars (over the cost of the cable TV if they have it.)

      Sorry, if they didn't want people using it "unlimited", then don't advertise it like that and then change TOS while the customer has your service. Either man up and friggin' say it's "X" GB a month (like they SUED Comcast into doing), or don't put a cap on it at all. Throttle the up/down speed past a certain amount (certainly more than 50GB).

      The cable companies made serious bank off the benevolence of imminent domain, using federal subsidies to lay the cable (meaning using OUR money to do it). Now they complain people are using "too much"? Bite me. Why didn't TWC try any tiered pricing in places where there was competition? Because it's a BAD IDEA. And if TWC does go through with their plans (try #2), you might well be the only one on their network. Good luck with that. The internet is filled with actual studies that prove your points to be incorrect regarding bandwidth caps and usage, not some "whining" by people who don't feel like being gouged by TWC.
  • Just when I thought I was in with cable Internet they push me away again.

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