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BrustBlog Pontifications on Microsoft and the Tech Industry

Forget about Web 2.0 (really, forget it, it’s a dumb name).  Bigger stuff is coming over IP (BSCoIP?).  And it’s about time for cable broadband in New York City to get faster, cheaper, or both.  Time Warner Cable has an excellent product and service in RoadRunner, but it’s starting to show its age.  Downstream speeds run at (a theoretical maximum of) 5Mbps, with upstream speeds of only 384Kbps.  RoadRunner Premium, running at 8Mbps down/512Kbps up, costs an extra $20/month.

While these speeds are pretty fast, CableVision trumps them: Optimum Online’s standard service runs at 8Mbps down and its new Optimum “Boost” service, available for a surcharge of between $9.95 and $14.95, claims speeds of up to 30Mbps down / 2Mpbs up.  CableVision doesn't offer service in TWC's franchise areas, so they're not technically a competitor.  But service that fast will generate demand that Time Warner will find unstoppable.

Worse yet, even with bundle discounts, RoadRunner costs $44.95/month.  While I’d never trade it for its archrival Verizon DSL, that service costs only $14.95/month for 768Kbps service.  If Verizon’s FiOS fiber optic service ever gets pulled through New York City’s conduits (which, you should know, are owned by a company called Empire City Subway, itself a division of Verizon), Time Warner Cable had better watch out.  FiOS offers a 15Mbps down / 2Mbps up service for the same $44.95 monthly charge.

Time Warner Cable’s also got to watch out for its traditional cable TV service as well; FiOS itself offers a digital cable service with a nearly identical channel lineup, equivalent video on demand capabilities, HDTV and DVR options.  The “expanded basic” service is only $34.95/month when bundled with its broadband service and $39.95 otherwise.  Compare that to Time Warner’s DTV service at a net cost of $53.95/month when combined with RoadRunner.

Rounding out the so-called “triple play” of broadband Internet, digital video, and VoIP phone service, Time Warner’s Digital Phone service costs $15 more per month more than Vonage's unlimited plan and that’s without voice mail.

While these premiums may be helping TWC today, they're going to create a huge backlash for them later.  It’s time for them to revamp their services and pricing.  They should also consider seriously a build-out of their system to once and for all get rid of the coax and pull the fiber all the way on-premises.  Yes, it will cost them a lot.  But without such a move, Verizon will eventually eclipse them as the internet provider of choice.  And once video programming is fully IP based, it’s only the Internet pipe that will matter.

Posted on Friday, February 3, 2006 11:47 PM | Back to top

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