Shaila’s Weblog

Archive for February 2009

More and more broadband users will soon face measures that could crimp their ability to watch online video or engage in other bandwidth-intensive activities.

High bandwidth ( broadband) users will soon face measures that could curb their limits to watch online videos or engage in other bandwidth intensive activities. Many more cable companies are intended to roll out measures that could crimp customers ability to perform bw intensive activities.

A cable company named charter communications confirmed yesterday that it will impose new bandwidth caps on subscribers. In addition, Time Warner, which is currently testing a pay-per-download plan in Beaumont, Texas, said Wednesday it intends to expand that test soon to four additional cities.

As of Feb. 9, Charter–the fourth-largest cable company in the U.S.– will limit customers who purchase speeds of up to 15 Mbps to 100 gigabytes a month, while those who purchase up to 25 Mbps will be capped at 250 gigabytes. People who pay for speeds up of to 60 Mbps will not face any limits. News of the caps was first reported by

A Charter spokesperson said the limits will not affect many subscribers. “More than 99% of current Charter Internet customers use less bandwidth than the threshold allows and therefore will not need to change their surfing habits in any manner,” the spokesperson said.

Time Warner spokesperson Alex Dudley said the company is still choosing which cities to expand its pay-as-you-go program to. “We’re looking for diverse geography and diverse demographics,” he said. “What we’ve learned from the Beaumont trial is that we can make this work. Now we need to see if it will scale to larger, more urban environments.”

New Time Warner subscribers in Beaumont are offered a choice of four plans that allow them to download set amounts each month: 5, 10, 20 or 40 Gigabytes. Those who go over their allotment are charged extra.

Other companies also have recently moved to limit bandwidth use. The number one search engine google has stated that it is launching tools that will tell the customers if their broadband provider is curtailing the bandwidths from their plan… this is something going to generate much speculation on intransparent and often grey practices adopted by the cable operators.

some consumer advocates worry that these types of limits will hinder the growth of the Web. Derek Turner, research director of Free Press, said that at least some Web users are likely to curtail their use rather than worry about overage charges like those to be imposed by Time Warner, the second-largest U.S. cable company.

Turner also discounted Charter’s claim that fewer than 1% of users exceed the proposed caps. Even if that’s currently the case, average bandwidth consumption is likely to continue to surge as more content migrates online. Already in the last several years, consumption has grown tremendously, thanks to online video at sites like YouTube, iTunes and Netflix. “Today’s average user, two or three years ago, would have been considered excessive,” Turner said.

A massive dive in media assets writedown to the scale of $24 billions forced Time Warner deeply in the red, landing the company with a $16 billion net loss for its fourth-quarter financial results. At the same time, the company announced a inevitable round of major layoffs.

The writedown of its assets amounted to $24.2 billion. A year ago, the company had a much brighter period, earning a $1.03 billion profit. The stock market, anticipating the news, offered a shrug–down just 1% to $9.70 in midday trading.

Time Warner’s revenue also slipped–down 3%–to $12.31 billion. Media companies have been hit hard recently. The day before, Walt Disney posted lower results, but still reported a profit. It had a 32% decline in quarterly net earnings, as a result of decreased DVD and advertising sales.

While most media companies’ broadcast sales have been lower, that hasn’t been the case for its cable networks.

For example, revenue at Walt Disney’s cable networks Disney Channel and ESPN rose 2% to $2.45 billion. Time Warner also improved 9% in overall revenue to $2.9 billion for Turner Broadcasting and HBO. Ad revenues rose 7% for Turner. In addition, fees paid by cable and satellite operators for Turner and HBO were up 7%.

Still, earnings fell 20% in Time Warner’s network division to $682 billion, mostly due to a $270 million charge from a court judgment.

Continuing problems are hitting Time Warner’s AOL division. Revenue was down 23% to $968 million, subscription revenue fell 27%, and ad sales sank 18%. Time Warner’s publishing division also had a rough time, with a 13% decline in revenue to $1.3 billion, pushed lower by a big 20% drop in ad sales.

Because of the writedown, quarterly results were brought down $4.70 a share. lthough Time Warner Inc. said Wednesday it will lay off 1,250 employees in all its operations in the next few weeks, customers and field office employees here will notice little change in their daily operations, said Gary Underwood, vice president of communications for the company’s North Texas division

“The layoff number is nationwide,” Underwood said.

“This is a small number of jobs company-wide that are affected. It is a minimal change, a very small portion.” With the layoffs, the company believes it will save $90 million a year.

Based in New York, Time Warner is the second largest cable operator in the U.S. with locations in 28 states including California, Ohio, Texas, Nebraska and the Carolinas.

It is the major provider of cable television service in Southeast Texas.



February 2009