Profiles in Economic Excellence
Time Warner has dropped its plans to test tiered broadband service in several cities around the country. It’s good that this particular proposal was ditched, because as I said earlier, it’s dumb.
But what’s more unsettling is everyone’s reaction to it. Because of this freakout, consumers in TWC markets will now have fewer choices, which is a shame, because most of the markets TWC was planning on experimenting in aren’t very competitive. Hopefully other companies won’t be dissuaded by experiments with metered bandwidth, which may be increasingly necessary as the migration from traditional phone and cable continues, as Richard Bennett pointed out this week.
But still, Rep. Eric Massa, the genius who said the caps may violate the First Amendment, isn’t satisfied. Even though TWC is backing off the plan, Massa is going to move forward with legislation to prohibit caps or tiers. “We will move forward with our legislation to ensure that any future plans to charge customers based on how much they download do not spring up anywhere else.”
Way to take a stand, Rep. Massa, against companies charge their customers based on consumption. I’m sure the people who only use the Internet for light web surfing and email will really appreciate having to pay as much as people who stream dozens of song, TV shows, or movies every week. (Now since I am one of the latter people, I appreciate the subsidy, but I don’t like the idea of it.)
I’m looking forward to a similarly principled stand in favor of flat rate grocery stores.
No Comments »Boom Boom Pow: Not Worth an Extra 30 Cents
Is it just me, or is Apple’s (and Amazon, et al) new variable pricing scheme ass backward? They’re charging $1.29 now for new, “hot” music like the Black Eyed Peas and Beyonce (okay, maybe I’d pay $1.29 for “Single Ladies,” if I didn’t already have it), $.99 for most stuff, and $.69 for “oldies but goodies.”
Seems to me though that the music that I’m constantly barraged with every time I turn on the TV, music that will only be at its peak popularity for a finite number of months, shouldn’t be the most expensive. They’re gonna lose the benefits of the higher price with lower volume. Meanwhile, I’d gladly pay a higher price for harder-to-find, less popular tracks.
It just seems to me that popular digital music should be treated like a volume business, unlike, say, physical CD sales where you’d want to extract top dollar for each unit. Unpopular digital tracks that aren’t being traded in high volumes, on the other hand, should require higher payments, and people will pay because of the relative ease of the transaction.
I’m not saying Milli Vanilli tracks should be selling for $1.75 a pop. (But don’t get me wrong here: if I really really needed “Blame It on the Rain” to complete my perfect playlist about love and loss, I’d totally buy it at that rate.) But the new song = high price, old song = low price just doesn’t seem to make much sense, especially given how quickly new becomes old in the music business.
In another 6 months, I can get Boom Boom Pow for $.99; since I hear it every time I turn on the radio anyway, I just don’t think my life is going to be all that empty for the waiting.
(And yes, I am a person who would spend $1.75 on a Milli Vanilli track for irony’s sake while waiting 6 months for a song I (grudgingly) like just to save $.30 on the deal. So maybe I’m not a typical consumer.)
What Free Speech Isn’t
Congressman Eric Massa (D- NY) has come out with a pretty absurd indictment of Time Warner Cable’s move to metered bandwidth billing with a statement from his office saying, “Now that the internet has become an essential communications tool used by most Americans, there are broad and sweeping First Amendment issues at stake as well.” Massa also points to the economic value of the Internet, suggesting that these caps will reduce Internet use, result in outrageous bills, and generally prevent the Awesome Power of Broadband from “rebuilding America.”
Time Warner’s cap system is pretty bogus. The tiers range from 5GB (not enough for a single HD movie download) to 40GB (which is about 10 times more than the average user consumes, but still pretty low for users who watch a lot of online video, use online video gaming systems, or have set-top streaming service). As Karl Bode wrote last week, TWC (and other cablecos with caps this low) are pretty clearly just trying to grab some cash and limit online competition to their cable offerings. It’s pretty outrageous, and it seems likely that TWC will see competition in the markets where these trials are happening. Note that so far, metered billing is largely only taking place in uncompetitive markets, most notably, markets without FiOS.
But Massa’s claim that 40GB caps will somehow kill jobs or stifle free speech is more than slightly ridiculous, and unlike Stacey Higginbotham at GigaOM, I’m pretty jazzed that the dude isn’t on any committees with any oversight of teh interwebs. I’m not so happy, however, that he has a job that has anything whatsoever to do with the Constitution. Bandwidth caps raise “broad and sweeping First Amendment issues?” Like what? Like how your ISP is required to provide you with the means to speak freely?
No. The First Amendment means that the government can’t stop you from expression. But it most certainly does NOT entitle you to a soapbox, a parcel of land on which to set your soapbox, or a megaphone. The US Post Office has to deliver my mail regardless of the content, but it doesn’t have to give me a pen and paper.
Saying that Americans are somehow entitled to affordable, reliable Internet as an extension of their right to free speech is a little like saying we’re also entitled to bullhorns, printing presses, skywriting airplanes, delivery trucks, distribution centers, and space on the shelf at the local news stand. That’s dumb. Those things cost money, and the more of them you use, the more you’ll have to pay. Same with bandwidth.
Now again, Time Warner’s plan is silly, and they’ll figure out just how silly when they start losing customers to new competitors or when they realize that Jeff Beweke’s TV Everewhere plan isn’t such a great deal with a 40 GB cap. But it certainly does not raise “broad and sweeping First Amendment issues.” And it’s a little scary to see that a member of the United States House of Representatives thinks that it does.
OMG, I’m Totally Geeking Out Right Now
I really can’t believe I’ve made it almost 2 years without my own blog, especially given that out of all my exercises in vanity, writing about myself is among my favorites. But I’m gonna try to limit the personal stuff and focus on geekery, largely about tech and telecom issues, since that’s what I’m thinking about all day (and in the interest of full disclosure, I now do new media consulting for some companies in that sector). But I’ll also dabble in some of my other interests that rise to the level of geekery–like everyday economics, the nature and uses of language, the sartorial missteps of myself and others, how evolutionary psychology explains away my love of celebrities, and, well, television.
So enjoy, if there’s anyone still out there who cares what I have to say. Except for you, Mom. You have to listen to what I say and act like you enjoy it even if you don’t care. Because you’re my mom.