A few weeks ago, Time Warner Cable announced the expansion of bandwidth cap trials. Their plan was to cap users at various levels (from 1GB to 40GB depending on how much you paid) with overage fees if you went over. They claimed this was to help protect their networks from bandwidth hogs, but don’t believe them. Claims of a so-called "exaflood" have been debunked. In the end, there is one big reason for cable companies to cap bandwidth and I can sum it up in two words: Internet Video.
With the rise of Hulu, YouTube, Netflix and other legal online video offerings, the reliance on cable TV has dimished. (I won’t touch upon illegal online video offerings now. These are much more vast, but open up a whole other complicated set of arguments.) Nowadays, you can watch nearly all of your favorite shows online without worrying about timeslots or channel numbers. If I miss the latest episode of Heroes (i.e. if my DVR experiences technical difficulties), I can watch it online the very next day. In some respects, the online offering is even better than the broadcast version. The ads are fewer and the "schedule" doesn’t require a DVR to adjust. I can watch it whenever I want, whereever I want (assuming a computer and high-speed Internet access). The broadcast version can either be watched whenever I want – in front of the TV with my DVR – or whereever I am at the time that the show airs assuming a TV is nearby.
This scares Cable companies. If people can get good, legal cable content online, Cable TV subscriptions could drop and cable companies would face dire financial straits. The cable company response is to cap Internet usage. This results in a win-win for cable companies. If people don’t use their capped Internet for online video, cable wins. If people use their capped Internet for online video and wind up with overage fees, cable wins.
In the case of Time Warner Cable, their caps plans were pushed back by angry consumers. However, they haven’t tossed the plans. They just sent them back to the PR department to get a nicy shiny coat of PR paint. Expect them to be released again either in a quieter fashion or with some glitzier PR attached to them. (In fact, there are already some signs that they’re going the quiet path. At least 3 users have been disconnected for exceeding some nebulous cap that Time Warner won’t name.)
I happen to have Time Warner Cable, Digital Phone, and RoadRunner Internet access. Where Digital Phone is concerned, I don’t have much choice. I refuse to go back to Verizon and their many hidden fees. There just isn’t another option beyond ditching our land-line entirely. Not sure if we’re ready for that. Likewise, there isn’t much option for Internet access. FIOS doesn’t reach our home yet and DSL is much slower than my current cable speeds. So I decided to aim my rebellion at Time Warner Cable’s Cable TV service.
First, I looked into DirecTV. I examined a few different plans and options and came to the conclusion that we could save $100-200 the first year with DirecTV. However, the second year and third years would deplete those savings. Then I got to thinking: What is our "Must See TV" anyway? What are the shows that if the TV worked for them, we wouldn’t mind if it was dark for all else. For me, it is Heroes, Batman: The Brave and the Bold, and Mythbusters. For my wife, Grey’s Anatomy, Desperate Housewives, Private Practice and The Biggest Loser. Of those, only Batman and Mythbusters aren’t online already. I might survive without Batman, but I need a weekly dose of Mythbusting action.
NHL currently likes Secret Agent Oso and Penguins of Madagascar, but he’s versitile TV-wise. His "favorite show" changes on a monthly basis. Given a steady supply of purchased DVDs (and a set top box to play them on), he could be satisfied. The same goes for JSL and his Sesame Street addiction. If we dropped cable TV entirely, we would save over $65 per month, or about $790 per year. If we only used half of those saved funds to buy DVDs (which would be ripped onto the set top video player), we would be able to spend $33 per month on DVDs. We would still save nearly $400 per year. Alternatively, we could get a subscription to Netflix for $16.99 per month and would save over $586. Either way, our cable TV habits could be satiated by non-cable TV sources.
We’re not going to drop cable TV tomorrow, but it certainly something for us to mull over. The lure of saving nearly $600 every year is pretty strong.