Wednesday, July 21, 2010

Time Warner Cable Wants $20,000 Per Mile to Serve Rural America

That headline is not a typo, we recently discovered that Time Warner Cable is quoting $20,000 per mile to bring broadband Internet service to unserved rural areas. Here's how we found out: We conducted an experiment in rural broadband access.

We went to the Time Warner Cable Business Class website. We wanted to show the company we were serious about buying a big chunk of their service (for the record, we were willing and able to pay any reasonable fees for business class service, indeed we still are). We submitted a request for a quote via the website on May 29. This quote included some heavy duty broadband plus TV plus phone service to a location in rural New York state about 50 miles from the capital, Albany.

As background we should point out that this area produces a lot of the milk and other dairy products that are consumed in cities like Albany and New York (a lot of people don't realize that the state of New York is America's third largest when it comes to producing dairy products).

We got an email confirmation of the website quote right (click the image for a larger view).

A few days later we got a phone call from a nice lady at TWC. She discussed our order and actually got the price down to $199 per month for a 36 month contract, confirmed in an email on June 2 (click the image for a larger view). We were delighted!

(While $199 doesn't match those $89 per month Verizon FIOS deals that city dwellers get in places like Manhattan, this figure is way less than the amount that people in this part of rural New York state are required to pay to get very inferior service. For example, landline + long distance + 238Kbps satellite Internet capped at 350Mb of downloading per day + satellite TV = $285 per month.)

In fact, before we signed the contract we asked for clarification that this number was correct.

After that, things did not go so well. We were told the number was correct but "The problem at this point is that your address populated for the Albany district and you are not in their footprint so we now sent it to the CNY division to see if you are serviceable under that division.  I have not heard back as of yet.

And so we waited, and waited. One week, two weeks; and when we asked why it was taking so long, we were told, on July 6, that: "you are outside the TWC footprint and it would be over 100k to get the services to you.  I thought this was relayed to you and I apologize if they did not."

Over $100,000? The nearest Time Warner customer is only 5 miles from the location for which we requested service. That's at least $20,000 per mile, to string cable? And there are other businesses and homes all along those 5 miles, many of whom are ideal candidates for TWC service.

To add further context, the location for which we requested a quote is not along some season logging road but adjacent to a fully-maintained state highway which already has power lines and telephone lines running along it. (The route even has Verizon fiber optic cable along much of it, but apparently that's for inter-city communications and not for use by rural folk who just get to look at it.)

The target location is less than 5 miles from the nearest existing Time Warner customer in one direction and there is TWC service 7 miles in the other direction, and both directions are along state highways. There are lots of other businesses and residences along these highway, so if Time Warner just ran their cable down this 12 mile stretch of highway they could reach hundreds of eager customers. (Even if they only signed 85 customers at $199 per month; that's still over $200,000 in annual revenue.)

So why the quote of $100,000 to bring cable 5 miles down a road that could yield a lot more than one new customer? Was it just a number they dreamed up to make us go away? Or does it reflect a grossly incompetent mega-company that has such poor controls over its costs that it can't string cable for less than $20,000 a mile?

We don't know the answer those questions. But we do have more questions, like why does the State of New York allow Time Warner to cherry pick its customers? Why does Otsego County, home of Baseball's Hall of Fame, allow Time Warner Cable to criss-cross its lands with wires without serving its residents? And why does Time Warner Cable think it is an acceptable business practice to demand exorbitant fees from the communities that raise the cattle and corn that produce the food and milk that Time Warner's suburban customers buy at such affordable prices. We'd like answers because right now it sounds a lot like another case of little people who just don't matter to the big people.

1 comment:

  1. I am having the same problem. They won't budge contact your local politicians and sick them on it

    ReplyDelete