That's not all that expanded in Reno... customer's broadband bills faced $1/GB overlimit penalties as part of an Internet Overcharging experiment

AT&T’s experiment with usage caps appears to have lost them loyal customers, and generated numerous complaints against AT&T with the Better Business Bureau regional offices in Nevada and Texas for false advertising.  Now there are indications AT&T will wrap up the entire experiment by this April and “study the results.”  Stop the Cap! reader John wrote to say the nightmare may be ending… for now.  At least one of our readers arguing with intransigent AT&T executives heard likewise.

AT&T last year subjected Beaumont, Texas and Reno, Nevada to a trial forcing a usage allowance between 20-150 gigabytes per month on customers, depending on the type of broadband plan selected.  The proposed overlimit fee?  $1.00 per gigabyte, although problems with their usage meter often kept overlimit fees off customer bills.

We’ve documented the howls of complaints from customers who were falsely sold an “unlimited” plan from AT&T and were never notified, or notified after signing up, of the existence of the Internet Overcharging scheme.  Some customers received express mail letters officially notifying them of the scheme, others received robocalls.  Complaints to the Better Business Bureau usually got any excess charges refunded, and some managed to secure a complete exemption from the usage cap trial, under threat of canceling their accounts.

Stop the Cap! reader Robin is a typical example of a customer who was sold a bill of goods by AT&T’s marketing, only to be punished with the fine print after signing on the dotted line.

“I just got my Express letter in the mail today. My internet was hooked up yesterday – no one ever said anything about any cap! I was in shock when I received the letter in the mail, I have never heard of anything like this. I live about 30 minutes out of Reno. Needless to say I am very very upset and trying to figure out what I am going to do now as I know I will go over the cap every month, I can’t afford that and I can’t afford cable internet at this time either. AT&T sucks and so does their customer service.”

Robin joins many other customers in both communities stuck in a trial that even some AT&T customer service representatives don’t understand.  Robin’s calls to customer service met with claims the account could not be found, and transfers to four different AT&T departments before being able to address the usage cap surprise.

Albert, another reader, was similarly surprised.

“They are fraudulent in every respect. The state attorney should look into this. They say “unlimited” and when you sign up, they send you a little email saying you are screwed [with the trial],” he writes.

AT&T’s response to Albert was essentially “tough cookies” and if he didn’t like it, he could cancel.

Our readers in Beaumont went through the same AT&T Confusion Circus, transferred between departments until someone recognized the caller was a lucky winner of an Internet Overcharging experiment.

In both cities, delivering an effective message of customer contempt with AT&T’s usage cap scheme means filing a complaint with the Better Business Bureau.  As an accredited member, AT&T values its rating very highly, and targeting complaints to the Bureau forces them to spend time and money to respond.  Better yet, AT&T executives don’t like it one bit, as Albert writes:

“Go to the Southern Nevada Better Business Bureau and file a complaint. I just had the VP of Regional West of AT&T call.  She was pissed that I filed a complaint, and now she has to personally reply. She hung up on me.”

Being an active consumer willing to make your voice heard is an effective way to deliver the message pricing and usage tricks and traps are unacceptable.  Better yet, it annoys providers with dollar signs in their eyes, especially when canceling your service.

Albert was told the nightmare ends April 1st, when the trial wraps up, but now is the time to deliver the final protest AT&T cannot ignore.

April 1st is an ironic date — the first anniversary of  Time Warner Cable sharing word of its own Internet Overcharging experiment in Austin, San Antonio, Greensboro, NC and Rochester, NY. After two weeks of protest, Time Warner Cable shelved their experiment.

If you’re a resident of Reno or Beaumont, it’s critically important to deliver AT&T a message they can understand:

1. Contact the local media and request they publicize the ongoing controversy over Internet Overcharging schemes;
2. Contact your local and federal elected officials and let them know AT&T’s schemes are unacceptable.  See our “Take Action” section regarding support for legislation that would outlaw such schemes;
3. File a detailed complaint with the Better Business Bureau, particularly emphasizing any lack of disclosure about the experiment, bait and switch advertising, ripoff pricing, etc.  Demand an immediate and full refund for any overage charges and a free pass to cancel AT&T services without any early termination fees.
4. Reno residents — contact Barbara DiCianno at 775-334-3112. She is the mayor’s assistant. Call her and ask to have an investigation launched regarding AT&T’s discrimination against Reno with overcharging schemes that put the city at a distinct broadband disadvantage.  Local elected officials can deliver a strong political message to AT&T that such overcharging schemes will lead to robust support for re-regulation of AT&T’s broadband business to protect consumers.
5. Tell AT&T you will never remain a customer of a provider that has Internet Overcharging pricing schemes.  Tell them in no uncertain terms usage limits and usage based billing are unacceptable, and you will cancel service the moment they attempt to implement either.

A year ago, it was the residents of Beaumont and the other cities impacted by Time Warner Cable’s overcharging scheme that fought on the front line to protect every Time Warner Cable customer from facing a tripling of their price for broadband service.  Today it’s Reno and Beaumont fighting for AT&T customers, both inside their own communities and those nationwide.  As Albert reminds us:

“We will be the ones that determine if this continues or stops here and now.”

Stop the Cap! reader Brian thought he noticed a change in Time Warner Cable’s speedtest website for upstate New York residents — he thought the top speed on the gauge may have increased.  At the same time, a few readers on the Broadband Reports Road Runner forum wondered if a change in the Texas division’s speedtest gauge meant DOCSIS 3 upgrades were headed their way.

Perhaps, but Time Warner Cable’s speedtest gauges probably aren’t a guaranteed indicator of an imminent upgrade.  The one for western New York has shown a maximum speed of 120Mbps for months now, but there’s no evidence every city covered by it will soon have up to 100Mbps service.

A quick survey of Road Runner speedtest sites show a remarkable variation:

Verizon Communications has made its intentions clear — would-be broadband customers in its service area who are off the FiOS footprint can pound salt.  The Federal Communications Commission issues regular reports on broadband services and their adoption by consumers across the United States.  In the latest report, published this month, customers in Verizon’s current or former service areas who are not being served by Verizon FiOS are behind the broadband 8-ball, waiting for the arrival of DSL service from a company that has diverted most of its time, money, and attention on deploying its fiber-to-the-home service for the big city folks.

One might think the worst DSL availability in the country would be in rural states like Alaska, or territories like Guam, or income-challenged Mississippi.  No, the bottom of the barrel can be found in northern New England and the mid-Atlantic states — largely the current or former domain of Verizon:

Percentage of Residential End-User Premises with Access to High-Speed Services by State
(Connections over 200 kbps in at least one direction)

Source: FCC High-Speed Services for Internet Access: Table 19

Some might argue that DSL penetration ignores Verizon’s fiber upgrades, but does it?

Providers of High-Speed Connections by Fiber by State as of December 31, 2008
(Connections over 200 kbps in at least one direction)

Source: FCC High-Speed Services for Internet Access: Table 20

A survey of the rest of the country calls out Verizon’s inattentiveness to DSL expansion in its remaining service areas not covered by FiOS.

For example: Alabama, Idaho, Montana, and Oklahoma all enjoy 80 percent DSL availability.  Utah and Nevada achieved 90 percent coverage.  Even mountainous Wyoming, the least populous state in the country, provides 78 percent of its state’s customers with the choice of getting DSL service.  Yet New York manages only one point higher among its telephone companies, largely because of enormous service gaps upstate.

What happened?  By 2002 Verizon began to realize their future depended on moving beyond providing landline service.  The company began to divert most of its resources to a grand plan to deliver fiber connections to residences in larger markets in its service areas.  While great news for those who live there, those that don’t discovered they’ve been left behind by Verizon.  Northern New England got flushed by Verizon altogether — sold to the revenue-challenged FairPoint Communications who assumed control of Verizon’s problems and managed to make them worse.

The argument that rural broadband is “too expensive” doesn’t fly when looking at DSL availability in the expansive mountain west or rural desert regions.  Compact states like Vermont, New Hampshire, and Maryland are far easier to wire than North Dakota, New Mexico or even Texas with its large rural areas (87, 87, and 81 percent coverage, respectively).  Verizon simply doesn’t realize the kind of Return on Investment it seeks from FiOS customers — a dollar amount investors want to see.

Of course, that’s the argument Frontier Communications, and FairPoint behind it, made to regulators in sweeping promises to deliver better broadband service.  FairPoint missed its targets and declared bankruptcy.  Frontier is still in the “promises, promises” stage of its deal to take over millions of rural customers currently served by Verizon.

Broadband Reports this morning heard from a trusted source who says America’s largest cable operator is considering offering 250Mbps service to customers, perhaps as early as 2011.

While some cable operators (Time Warner Cable) have dragged their feet on DOCSIS 3 upgrades, Comcast has not — it is expected to have 100 percent of its cable systems upgraded this year.

DOCSIS 3 provides vastly increased speeds across a more robust network.  Older standards provided neighborhoods with a single 6 Mhz channel, with a 36Mbps downstream pipeline.  While that may be fine for a neighborhood browsing web pages and checking e-mail, it doesn’t take much too much high bandwidth activity to start slowing speeds down.  DOCSIS 3 “bonds” multiple channels together to create one fat pipeline.  Newer chipsets support eight combined 6Mhz channels, capable of providing that same neighborhood with 320Mbps of capacity.  Using schemes like PowerBoost, or with few others online, Comcast can deliver occasional bursts of speed at 250Mbps to customers without further upgrades, notes Dave Burstein of DSL Prime.

The bigger question is will customers pay the premium price for 250Mbps if Comcast maintains its 250GB usage limit on it?  Super speed tiers like this are useful to customers using high bandwidth applications.  It doesn’t make sense to upgrade to premium speeds if they’re accompanied by a usage governor.

When AT&T’s U-verse system arrived in Lawrence, Kansas residents rejoiced at the prospect of finally getting broadband service that didn’t come with Internet Overcharging schemes attached.  Sunflower Broadband, the local independent cable system, tied its fortunes to broadband usage allowances as low as three gigabytes per month.  Exceeding the allowance kicked in an overlimit fee for every extra gigabyte used.

As AT&T continues to make inroads in Lawrence with U-verse, which doesn’t have usage limits, customers noticed and began dropping Sunflower.  The cable system also noticed, and has increased plan allowances.

On the low end, the Bronze plan still charges $17.95 per month for 3Mbps/256kbps service with a three gigabyte allowance .  The Silver plan — $29.95 per month — received a speed and allowance upgrade.  Up from 7Mbps to 10Mbps, the monthly limit has now doubled to 50 GB per month.  Upload speeds remain an anemic 256kbps, however.  The biggest change comes for Gold plan users.  For $59.95 per month, the company offers 50/1Mbps service with a considerably more generous allowance — 250GB per month, up from 120GB.

Sunflower Broadband's Old Pricing/Service Plan (from January 2010)

Sunflower also sells a flat rate, unlimited plan called Palladium that doesn’t offer customers a set speed.  The company cut the price from $49.95 to $44.95 a month, perhaps in response to an underwhelmed customer base.  As we reported in January, Palladium speeds do not impress many Sunflower customers.  But some local residents report speeds are improving for those moved to Sunflower’s new DOCSIS 3 platform, an upgrade from Sunflower’s older system, where most of the speed complaints were noted.

The Lawrence Broadband Observer says AT&T and Sunflower are becoming close competitors in most respects, except upload speeds:

The one area where Sunflower still lags is upload speed, which even on the high-end plan is still limited to 1 megabit. This seems puzzling, and the 50 down to 1 up ratio of is greater then any other DOCSIS 3 cable company I was able to find, and makes it difficult to use services like photo and movie uploading, file sharing and online backup services. If Sunflower ever raises their upload speeds, they might just be able to lure this former customer back into the fold!

They could lure many more back if they dropped the hated usage limits and overlimit fees.  DOCSIS 3 provides substantially improved bandwidth, making such limits unnecessary.

Sunflower's New Broadband Plans & Pricing (February 2010)

TelstraClear serves New Zealand

Some broadband customers in New Zealand are treating their monthly usage allowances as usage targets, dedicated to ringing every last penny of value out of the Internet Overcharging schemes.  That means bandwidth usage increases just because customers don’t want to leave their remaining allowance on the table at the start of a new month.

PC World New Zealand notes “caps are essentially stupid” because your allowance resets at the end of every billing cycle:

If I’m away for a month and use zero bytes, it costs just the same as if I’d used my full 20GB. This wouldn’t be so galling if some allowance were made for under-utilising my capacity. It doesn’t have to be a 1:1 thing or roll over from month to month, but some concession would be nice. Perhaps a 1:2 ratio that must be used within the next billing period; in this case an allowance to go up to 30GB in the next month seems reasonable.

That would also get around the other irritating thing about data caps, the punitive charges if you go a single byte over your limit. In the case of TelstraClear it’s $2.95 per GB or part thereof.

TelstraClear - The Internet. Overcharged.

Readers shared their two cents:

I have a 40GB cap which I regularly go over. Telscum charge $20/Gb so it hurts like hell. I tried [switching] to TelstraClear but after three months all I had from them was a bill for services I didn’t receive.

We have 20Gb shared between the three of us and it is rare to go over but we do try like you to use it all up simply because we have paid for it. There is a company in NZ that allows you to roll it over it is Trust power Kinect. A friend uses them and roughly every three months he reckons he can save a month. You do need to have your power and phone with them though and for us it would actually work out more expensive but for others it might not. I do think caps suck though and wish they could be scrapped as I think we would actually use less bandwidth.

I think this part of the world and UK is an exception when it comes to data caps. In Europe data caps are very rare (except in UK which is not typical for Europe in any aspects). Being from Sweden I was a bit surprised moving to NZ and discovered data caps as well as very slow and expensive Internet. Sweden is similar to NZ (e.g. size, population) so it’s a fair comparison. You are being ripped off!

Jackson

A Tennessee state senator has introduced a bill that would fine the state’s cable companies for running racy television advertising on its cable channels.

Dubbed the “Girls Gone Wild Bill,” the legislation would hopefully curb cable operators’ willingness to run suggestive advertising, according to the bill’s author Sen. Doug Jackson (D-Dickson).

This isn’t the first go around for Jackson’s bill, having failed to pass during the last two legislative sessions.  But Jackson believes the third time is a charm, passing a vote in the Senate Commerce Committee 8-0, with one member abstaining.

The Tennessean talked with Jackson to learn why the bill was necessary:

Jackson has said he got the idea for the proposal after seeing partially censored commercials for “Girls Gone Wild” videos that show young women disrobing and acting out other sexual situations.

“They’re provocative and shocking to a lot of families trying to raise children,” Jackson said.

The bill would make any television advertisements considered “obscene” to be illegal. Obscenity, Jackson said, is not protected by the First Amendment. Under common law, it is established by community standards, and in Tennessee, each judicial district can establish for themselves what is considered obscene.

“A jury in Dickson County could determine the videos being sold are obscene, which makes it an illegal product,” he said.

The legislation has gotten Jackson plenty of attention across the state, as Tennessee media covered the unusual legislation.  But some fear Tennessee could become a laughing stock over bills like these.

Columnist Gail Kerr, also writing for the Tennessean, called the mad rush of oddball legislation a bunch of  “crazy crap”:

You can sure tell the Tennessee General Assembly doesn’t have any money to spend this year.

After a slam dunk, fast special session on education, our esteemed lawmakers have returned to their usual bad habits.

They have filed legislation that would kill Nashville’s honky tonks, debated whether to outlaw putting electronic chips in people and whether to amend the state constitution to assure you the right to catch a catfish.

Sen. Doug Jackson wants a constitutional amendment to assure every Tennessean has the right to hunt and fish. No one is trying to stop you from hunting and fishing. Jackson also is bringing back his “Girls Gone Wild” legislation, aimed at stopping the late night television commercials promoting the raunchy videos. He was inspired by watching the commercials.

One thing’s for sure, state law prevents these folks from taking campaign donations while in session. With two of them running for governor, one running for Congress and a slew up for re-election, they’ll start getting eager to adjourn pretty quick. It cannot happen too soon.

WKRN-TV in Nashville reports Sen. Doug Jackson’s bill would allow communities to define certain ads on cable television obscene and have them pulled off the air.  (1 minute)

http://www.phillipdampier.com/video/WSMV Nashville Senator-Companies Liable For Obscene Ads 2-9-2010.flv

Some members of the Tennessee Legislature believe the state’s cable companies should not be taking money from companies peddling smut, as WSMV-TV Nashville reports. (2 minutes)

Protesting adult programming on cable and satellite television is a long-standing tradition in Tennessee.  Some elected officials even dislike the prospect of MTV running on state cable systems.  But most agree lawmakers have the biggest problem with cable’s dirty little secret — extremely explicit adult programming aired on pay per view channels.  Most cable systems don’t go out of their way to promote this type of programming, but viewers learn it is there when skimming electronic program guides.  Most adult movies have titles that leave little doubt what they offer viewers willing to purchase it, and plenty do — it’s very profitable for most cable operators.

http://www.phillipdampier.com/video/WDEF Chattanooga Fowler Objects To EPB Content 11-02-09.flv

David Fowler, a former state senator from Signal Mountain, last November denounced EPB, Chattanooga’s city-owned fiber television and broadband provider, for allowing adult programming on the lineup in the first place. (WDEF-TV Chattanooga) (11/2/2009 – 1 minute)

El Paso, Texas

More than 14,000 residents of El Paso are under investigation for potential cable theft.  That remarkable number comes from El Paso, Texas TV station KFOX-TV.  Reporter Martina Valverde notes that Time Warner Cable is now engaged in a city-wide system audit to identify and disconnect illegitimate cable connections.

“Our paying customers who rely on us for phone service, video service, and Internet service,” Gary Underwood, vice president of communications for Time Warner’s Texas operation told KFOX viewers. “They might not be able to access those services when they most need them because the damage that was caused further down the line.”

The company told KFOX when it discovers an illegal connection, it makes two attempts to convert the customer to legitimate service.  On the third attempt, local law enforcement becomes involved.  Those found guilty face fines of $500.

“We have what’s called a tab audit team. They go out and they look at different areas to see. We have a system of tagging and flagging on these lines to so our folks can identify an authorized versus unauthorized connection,” Underwood said.

Cable theft is not just a problem in El Paso.  Some brazen entrepreneurs go further, pretending to represent providers willing to hook customers up for a one time, flat fee they pocket.

Grande Communications faced one such individual, who last summer slapped a magnetic sign with Grande’s logo on his truck and pitched cable service to apartment complexes and homes around San Marcos, Texas.

Unwitting customers who signed up for the deal were offered special discounts by Grande when their illegal cable connection was discovered.

KFOX-TV in El Paso, Texas ran this report last night claiming more than 14,000 residents were under investigation for cable theft in the community. (1 minute)

http://www.phillipdampier.com/video/KXAN Austin Fake Cable Guy Selling Cable 7-24-09.flv

Last summer, Grande Communications had to contend with someone illegally hooking up customers around San Marcos, Texas. KXAN-TV in Austin ran this report July 24th. (2 minutes)

Time Warner Cable this week announced it signed up its’ nine-millionth Road Runner customer, making the company the third largest Internet Service Provider in the United States.

Broadband service continues to grab an increasing share of business for the nation’s cable operators, even as they continue to lose video subscribers.  During the last quarter of 2009, Time Warner lost 105,000 video subscribers  but added 120,000 residential high-speed Internet subscriptions.

Nine million subscribers paying even a promotional rate of $30 a month earns the company $270 million dollars a month — $3.24 billion dollars a year.

Hobbs

“This is a great milestone for Time Warner Cable, and it further proves that our customers enjoy the speed and content our HSD products deliver, as well as the value seen when bundling this service with our video and phone offerings,” said Landel Hobbs, COO of Time Warner Cable. “High Speed Data continues to be a growing part of our business and we look to keep adding new features and further enhance speeds as we move through 2010.”

The company claims it has not lost a significant amount of business to its most-feared potential competitor, Verizon’s fiber to the home network FiOS.  But the company is installing DOCSIS 3 upgrades to increase speeds in markets where FiOS competes for broadband customers.  Cable industry experts suggest broadband is becoming a mature industry, and growth from customers new to the high speed experience are fewer in number.  A strong percentage of new Time Warner Cable broadband customers come from landline customers defecting from relatively slower DSL service from phone companies.

As interest in high bandwidth applications like streaming video increase, DSL service can prove a frustrating experience for those stuck with lower speeds.  Despite claims by some phone companies that consumers don’t care about broadband speed, Time Warner Cable will offer increased speed tiers and upgrades in most of its competitive markets in 2010 based on the assumption many customers do.

HBO Go is currently only available directly to Verizon FiOS customers. Comcast customers have access through Fancast, and Time Warner Cable indicated it wasn't interested in participating in HBO Go, for now.

HBO subscribers who are also Verizon FiOS TV customers are the first to get access to the premium channel’s new online video portal — HBO Go, launched Wednesday with over 600 hours of HBO programming, available free to authenticated HBO and FiOS subscribers.

HBO Go is another project spawned from the cable and pay television industry’s TV Everywhere project — putting television programming online for anytime viewing, for free, as long as you maintain a cable or pay television subscription.

Ironically, the service launched Wednesday on Verizon’s telco-TV service FiOS, leaving lots of cable subscribers waiting for access.  If you subscribe to HBO through cable, satellite, or U-verse, the service remains unavailable to you, for now.  Comcast subscribers already had access to HBO’s programming through the Fancast Xfinity TV website.  If you don’t pay for television, the service remains unavailable to you indefinitely — they won’t sell it to you at any price.

“Ultimately this is about extending the subscriber lifecycle,” HBO co-president Eric Kessler said. “It’s more about subscriber retention.”

Subscriber retention through incumbent providers, he means.  HBO doesn’t want to risk selling direct to online consumers who might want to cut ties with their cable or other pay television provider.

Stop the Cap! reader Jared has FiOS and HBO and let us sample the service through his FiOS connection (his 25Mbps/25Mbps connection with remote access maxed out our Road Runner Turbo connection and still left him plenty of leftover speed).

Let’s start with the viewing experience.

It’s a big improvement over HBO’s Wisconsin trial in 2008 with Time Warner Cable, which required viewers to download Windows Media-encoded video files protected with Microsoft’s annoying digital rights management scheme.  It was cumbersome for trial participants, and dealing with Microsoft’s player and DRM cut Mac owners out of the trial.

HBO Go is Flash-based, using Adobe’s Real-Time Messaging Protocol to keep viewers from saving permanent copies for themselves (and potentially their friends.)  Using Verizon FiOS, viewers should rarely encounter any artifacts or speed-related viewing problems.  The picture was fine, even for me using remote access software. Of course, if your Internet connection is considerably slower than FiOS or your neighborhood suffers from online congestion, you could experience issues streaming HD content, but HBO Go is designed to buffer when encountering slower connections.  The files are encoded in MPEG-4 at 1.2Mbps and 2.6Mbps, which theoretically should be fine for the majority of viewers.  Comcast subscribers – remember watching counts against your usage cap.

Wandering around the HBO Go library was simple  — easier to navigate and less cluttered than Hulu.  The site was intuitive and should be easy to use for just about everyone.

Up to three members of your household can each watch programming from the service at the same time, even away from home, anywhere in the country.

HBO Go claims to be a work in progress — about 25% of the content will be refreshed by HBO every week, with new episodes available on the service immediately following their TV premiere.

But the service hardly offers a comprehensive viewing experience.  It’s much closer to Hulu or your cable company’s HBO on Demand service.

For example, rights issues limit virtually all of HBO’s original series to a handful of recent episodes or seasons.  Only The Wire has a complete library to watch from its premiere forward.  Curb Your Enthusiasm, aptly named when considering HBO Go, is missing completely.  So is Real Time with Bill Maher, although four of his earlier specials are archived on the site.

As for movies, there are gaping holes there as well.  Available titles resemble Cinemax’s selection of movies you’ve already seen.  There are gaps between what you can watch on HBO itself and what is available on HBO Go.  Babe is online, for instance, but anything Harry Potter isn’t.

In other words, what could have been a compelling addition for HBO subscribers feels redundant.  I would never pay anything extra for HBO Go, nor will it be a factor in keeping HBO.

Online viewers need not apply.

HBO could have used the opportunity to sell the service to non-cable subscribers for a monthly fee and pick up some additional revenue, but that wouldn’t sit well with the pay television cartel that is behind the TV Everywhere concept.  They don’t want you cord cutting — those that have are locked out of the HBO Go Clubhouse.  For now, I suspect few were clamoring to get in.