Time Warner and AT&T Can't Hide From the Future

What does Time Warner Cable’s screwing of it customers over bandwidth caps have to do with AT&T Wireless’ screwing of its customers over their use of Skype on iPhones?

Lots, because each is an example of a technology company trying to protect its legacy business and not knowing how to move successfully into the future. If you imagine two bratty kids who don’t want to “grow up” you pretty much have the picture.

Hot news: Charging by the minute for voice calls and by the message for SMS is a losing game. Likewise, charging for cable television by the channel or group of channels. All are dead business models that would be gone already except for the big investment the telecom giants have made in them.

These companies have no choice but to realize that data is data, no matter what its purpose. Pricing different “types” of data differently makes sense only in very limited circumstances, such as streaming media and live games, where latency matters. Internet access wants to be free. It isn’t there, yet, but once you are connected, it really should not matter, within reason, how much data you send or receive.

Time Warner is trying to make the case that it does matter, but has a hard time justifying the position to anyone who has watched bandwidth capacity steadily increase as the price per gigabyte continues to fall.

That is, everywhere except Time Warner Cable, where data is becoming incredibly expensive, perhaps as a way to convince people to continue using the legacy cable system rather than watching TV and movies over the Internet.

I think the days of cable television companies being able to charge for delivering programming are pretty much over. They can charge for bandwidth, but what we do with that capacity, where watch movies, place VoIP calls, send email, surf, or play games should not matter at all.

AT&T needs to understand that cellular dial tone and per minute charges are outdated. Likewise overpriced SMS messages, a cash cow if ever there was one.

This reminds me of an old Far Side cartoon I saw posted at Bell Labs back when AT&T was being broken up.

It showed a dinosaur standing at a podium–to which someone had added the AT&T corporate logo of the day. The dinosaur was addressing an auditorium filled with other reptiles, all seated and looking at the speaker.

I paraphrase: “The climate is changing, the mammals are getting smarter, and we have brains the size of walnuts.”

Doubtless, the cable and cellular carriers will be able to hold on for a while. For a time, they may actually get away with some new pricing schemes that seek to protect their revenue while they try to figure out what to do next.

However, the more they try to hold on to the past, the more they will end up hurting themselves. And proving what we already know: These companies really do have brains the size of walnuts.

David Coursey enjoys watching greedy corporations get their come-uppance. Write to him using the contact form at www.coursey.com/contact.