Time Warner Cable executive claims consumers don’t want gigabit Internet

[techs]

http://bgr.com/2013/02/28/google-fiber-time-warner-cable-347728/

http://bgr.com/2013/03/01/time-warner-cable-criticism-353827/

By now you’ve probably read the comments from Time Warner Cable (TWC) CTO Irene Esteves explaining that her company doesn’t plan to build out fiber to the home because there’s no evidence that American consumers actually want super-fast networks. While a lot of people expressed surprise in response to this attitude, it’s actually been a common refrain from the cable industry and its defenders for quite some time now — let’s recall that National Cable & Telecommunications Association CEO Michael Powell recently described achieving gigabit speeds as an “irrelevant exercise in bragging rights.” That this attitude isn’t just consigned to one company but is apparently held by the entire industry indicates that the market for home broadband in the United States is horrendously uncompetitive and is in desperate need of a shakeup.

Before going any further let’s contemplate how ridiculous Esteves and Powell’s statements would sound if they were top executives in just about any other industry. Can you imagine Tim Cook, for instance, saying that he hasn’t found that people want completely accurate mapping information and that the data provided by the original iOS Maps is good enough? Or if after Siri had been released, Google (GOOG) CEO Larry Page had said that there’s no evidence that consumers want voice-enabled personal assistants and that his company wouldn’t devote any resources into creating a competitive offering of its own? Or if the CEO of Samsung (005930) declared that his company wouldn’t be spending additional resources to improve display technology because consumers right now seem pretty happy with how the Galaxy S III looks?

The reason such statements would be widely ridiculed is because all of these companies are in intensely competitive markets and they always want to be seen as striving for the best. They know that if consumers think that they’re falling behind the times and aren’t doing everything in their power to deliver the best devices and services, they will lose business very quickly. Just look at what happened to BlackBerry (BBRY) after the company decided that having a wide selection of mobile apps wasn’t that important just a couple of years ago: Consumers fled to iOS and Android and left the company in the desperate position that it’s in today.

It goes without saying that the cable industry doesn’t fear such backlash because it knows consumers have nowhere else to go.

In my neighborhood, I have Comcast (CMCSA), Verizon (VZ) DSL and… well, that’s it. If I want a reasonably fast home broadband connection, then I’m pretty much stuck with Comcast. And from everything I’ve read, most Time Warner Cable customers out there are similarly stuck with Time Warner because the cable companies have created regional fiefdoms where they don’t compete with one another and can get away with telling the world that they don’t plan to invest in fiber anytime soon.

The end result is a cable industry that can pile up cash from its Internet services despite ranking among the lowest-rated industries in customer satisfaction every year.

Or put another way, cable companies had better enjoy their regional monopolies while they can. Because if any competitor comes along that delivers a faster service at a reasonable price in the near future, then the consumer exodus from cable will be swift and permanent.


Yet another reason America is in trouble.

 

[SSSnail]

>> Time Warner Cable (TWC) CTO Irene Esteves
>> CTO Irene Esteves
>> Irene Esteves
>> Irene

I have located the source of the problem.

 

[rh71]

monopolies have always been a problem. We get reamed by union-employed (schools, railroad, police) services. $$$

I'm glad we have FIOS here to compete with Cablevision. Before FIOS came along, CV was able to do whatever they wanted - and did (capping/throttling).

 

[Anonemous]

Verizon also said the same thing so it must be true! /secret handshake with TWC

 

[CPA]

Does this remind anyone of when Xerox developed a marketable home computing mouse? They didn't think it had any consumer use either.

 

[jpiniero]

Or put another way, cable companies had better enjoy their regional monopolies while they can. Because if any competitor comes along that delivers a faster service at a reasonable price in the near future, then the consumer exodus from cable will be swift and permanent.

Wireless would be the obvious answer; LTE is rather fast already and LTE Advanced is coming. Whether any of the Big 4 would aggressively go after home internet users is another question.

 

[jpiniero]

Verizon also said the same thing so it must be true! /secret handshake with TWC

Verizon wrote off billions on FiOS a couple years ago. Their failure has convinced Big Cable that FTTH is too costly to implement, and they would be right.

 

[Anubis]

we may want it but TBH we dont need it. no server out there is gonna be able to saturate it

id be happy if i could get a 20/5 connection

 

[MaxPayne63]

The relevant question isn't 'Do consumers want faster service?' but 'Are consumers willing to pay more for faster service?'

Personally I wouldn't. With higher res streaming content (and the necessary displays) then I might consider it but I doubt I would pay much more.

This isn't nearly as black and white as a lot of people are making it out to be.

 

[Anonemous]

Verizon wrote off billions on FiOS a couple years ago. Their failure has convinced Big Cable that FTTH is too costly to implement, and they would be right.

Or they just reached an agreement not to expand into their regions. In exchange TWC/Comcast doesn't go into the Wireless game (LTE/4G etc...).

 

[Anonemous]

Wireless would be the obvious answer; LTE is rather fast already and LTE Advanced is coming. Whether any of the Big 4 would aggressively go after home internet users is another question.

Hell yea LTE is worth it for Verizon to go after they can make $$$ charging per GB of data.

 

[rh71]

Verizon wrote off billions on FiOS a couple years ago. Their failure has convinced Big Cable that FTTH is too costly to implement, and they would be right.

according to this article it costs Verizon $700 to reach each home with fiber. They make that up easily in only ~6-7 months of service to the home. Yes I realize they had other overhead, but they've also had customers paying since 2005.

http://stopthecap.com/2012/09/25/ve...nt-franchise-obligations-cfo-tells-investors/

True, they're not expanding further - so that they can start to maximize profits, which is another way of looking at it.

 

[Anonemous]

And 4K content is coming soon...

Imagine having to DL 100 gig content in the near future...
http://forums.anandtech.com/showthread.php?t=2304909

 

[coloumb]

Probably for most people this is true - my connection is 25/3 [latest speed test run] and it's fast enough for me to watch youtube, hulu, play games, download files, etc.

However, if I were given the option to have faster service without a price increase - I wouldn't turn it down. But if faster service = huge price increase = no thanks.. it's already too damn expensive as it is now.

 

[rh71]

right now people on FIOS are able to upgrade from 25/15 to 50/25 for $5 more a month. Included in the triple play, that's only about $100/mo.

 

[jpiniero]

according to this article it costs Verizon $700 to reach each home with fiber. They make that up easily in only ~6-7 months of service to the home. Yes I realize they had other overhead, but they've also had customers paying since 2005..

That's actually not too bad, but I imagine that cherry picking has a lot to do with that - at the end they must have been only picking towns that were super easy to do and had a TV deal in place.

Or they just reached an agreement not to expand into their regions. In exchange TWC/Comcast doesn't go into the Wireless game (LTE/4G etc...).

I was actually kind of surprised that Big Cable agreed to that deal. It would only make sense for them to get into wireless. I guess it just shows how committed they are to Cable TV - and little else.

 

[Jaskalas]

And 4K content is coming soon...

Imagine having to DL 100 gig content in the near future...
http://forums.anandtech.com/showthread.php?t=2304909

"Having to" and "near future".

No. Never. It'll take a decade to roll this out to the point where it might be "having to".

 

[Jaskalas]

Time Warner Cable executive claims consumers don’t want gigabit Internet

I'll assume they're saying this until it's cost effective for them. They would want to charge several hundred dollars a month for compensation, and no one would want it at a ridiculous price point.

 

[EagleKeeper]

One can walk down the street and most of tbe internet connections are used for email, YouTube, and search/research for school.

The high Bandwidth usage is very rare.
Few people are running video servers or hosting TCP/IP file servers.

Techies may want the fastest; few standard subscribers have the need.

 

[Jaskalas]

One can walk down the street and most of tbe internet connections are used for email, YouTube, and search/research for school.

The high Bandwidth usage is very rare.
Few people are running video servers or hosting TCP/IP file servers.

Techies may want the fastest; few standard subscribers have the need.

No. Television is coming through the net more and more. Soon no one is going to pay for satellite coms.

Granted, 1080p doesn't need a anything remotely near a gigabit.

 

[Phoenix86]

So let's take the average house, 1080p x 4 TVs/browsers, internet usage x4, IP phones.

How much bandwidth would that require?

 

[Red Squirrel]

They're probably basing this on customers who don't really use their internet much. I think Gigabit would only be good if it was unlimited though. What's the point of such high speed if they cap it (and they probably would). I'd rather have 100mbps up/down unmetered with no restrictions. I'd pay a couple 100 bucks a month if I could get such a connection. Host a couple dedicated servers or lot of shared hosting accounts and it pays for itself.

I work for my ISP and there's lot of internal rumors that we might be getting fiber here. It's nothing but rumors though but it definitely has me excited. I hope their business package is decent since I'll get it so I can be allowed to host my own server. I will save close to $100/mo by hosting it at home.

 

[OverVolt]

RIAA doesn't want people to be able to fileshare all music known to man in 28 seconds.

 

[Red Squirrel]

Yeah if RIAA had their way we'd all be using 1200 baud modems.

 

[Sonikku]

Time Warner charges what they do for the slow service they have because they are strapped for cash and are incapable of laying down anything better. It is not as though the government paid them a fortune to lay down cable and covered a lot of their costs of doing business and Warner is now eating their cake and having it too with high prices/collusion with verizon/expenses paid by government or anything.