Shaw Communications is preparing to introduce a formal Internet Overcharging scheme for its customers across western and central Canada.  Although the company has maintained “soft caps” that have generally been unenforced, that is about to change.

An Edmonton reader of Broadband Reports first noticed the appearance of a new formal Internet Data Usage Policies section on Shaw’s website.  Some customers also received access to a usage meter that was roundly criticized for being inaccurate.

She's blown away by her high broadband bill.

In short, Shaw Cable plans a “three strikes and then you pay” approach to usage limit enforcement.  After a customer exceeding plan limits receives three warnings from the company, excess usage charges will start to appear on customer bills.

A participant on Broadband Reports inferring he’s a Shaw employee admits the company’s usage meter was so inaccurate, it has been pulled.  So has much of the information on Shaw’s website, which now provides a more general “stay-tuned” announcement:

Thank you for your interest in Shaw’s Internet Data Usage policies. Please stay tuned as we develop information specific to your area on this topic.

Shaw currently sells four levels of service in most areas (“Nitro” is available in limited areas with DOCSIS 3 upgraded service), sold by both speed and data transfer limits:

*Service availability may vary by market. Docsis modem required.
^† Limited areas that are not DOCSIS 3.0 ready will receive 25 Mbps download and 2 Mbps upload.

In contrast, most Americans pay lower prices for equivalent levels of service, with no data transfer limits.

Shaw customers will soon see usage graphs on their monthly bills and face the prospect of paying overlimit fees once they exhaust their usage warnings.  While Shaw works to implement its broadband overcharging scheme, it is also making hay out of its new 1Gbps fiber-based broadband trials in British Columbia (primarily to stay competitive with its nemesis — competitor Novus Entertainment) and Alberta:

This service launched in select Vancouver neighbourhoods in June – and Pinebrook, a suburb west of Calgary, will be the latest area to try out the 1 Gigabit Internet service FREE for six months!

Our test neighbourhoods have the advantage of “future proofing” as they receive the best technology has to offer with Fibre-to-the-Premises (FTTP) and will be able to support new, cutting-edge Internet applications that will require faster download speeds – compliments of Shaw.

At the end of the six month trial, customers will still be able to retain their existing services without any change in features or function.

This is a great opportunity for our customers and we are thrilled to be the first provider in Canada to offer this incredible service.

Of course, most of the applications that require faster broadband speeds also consume plenty of data, and when Shaw formally introduces the fiber service, limits on its use are likely to come along for the ride.

Early adopters of Google TV will find nothing but frustration if they want to watch ABC’s “Modern Family” and Fox’s “Glee” with the new broadband-driven TV service.  They can’t, thanks to America’s content companies erecting Berlin Wall-like blockades of programming the service was supposed to provide.

Google TV has already come under a state of siege from a coordinated campaign by the four major broadcast networks to keep programming off the new service until Google agrees to pay retransmission consent fees.  Even Hulu, which delivers online access to hundreds of shows for free, has successfully manned the barricades to keep “unauthorized” Google TV out in the cold.

Some of the virtual barbed-wire fences have become so sophisticated, many wonder whether the biggest players in online video are spending more time and energy on innovating new ways to stop people from accessing content than on actually delivering it.

For a service trying to gain attention out of the starting gate, Google TV has remarkably little mainstream programming to show on it.  To date, their most significant content partners are HBO’s Go service, available only to authenticated HBO subscribers, Turner’s TNT and TBS channels, also only available to current cable, satellite, or telco-TV video subscribers, and a CNBC “app.”

The spat between Google and the broadcasters is similar to the one between Cablevision and Fox in suburban New York City — until a company like Google agrees to pay a fee for the right to deliver content already given away for free online, the online portals that provide access will identify and block Google TV customers from accessing any of it.

Those fees are likely to be passed down to subscribers, and now some are wondering just how successful ventures like Google TV can be if consumers have to pay another monthly TV bill.

Wall Street is one, Variety notes:

That’s a major problem for any business plan, but excessive fees could also destroy interest in Google’s nascent entry into the world of online entertainment television.  Consumers already face steep hardware costs up to $300 just to make Google TV work.  Whether they would also part with a monthly subscription fee should not be too difficult for the folks in Mountain View to answer.

In fact, it’s the same answer Hulu’s owners are getting from viewers about its Hulu Plus pay-TV service, which delivers the same commercials as its free companion and charges $10 a month to watch them.

Subscribers to Hulu’s premium tier were promised access to entire runs of popular shows, programming not available on its free alternative, and a library of episodes that don’t expire and disappear after a few weeks.  But many paying customers complain Hulu Plus still limits most of its shows and offers few exclusives. Even less-in-demand shows like Fox’s “COPS,” profiling the criminally stupid for more than 23 years, remain limited on the premium (and free) service to a single month of episodes.

But nothing causes more annoyance than Hulu’s recently-increased advertising load, dumped equally on both sides of the pay wall.

“Why should I pay $10 a month when I get (mostly) the same shows for free on Hulu, and have to watch the same ads?” asks our reader Stephanie.  “It should be one or the other — ad-free pay or ad-supported free.”

Because Stephanie is hardly alone in asking that question, there are reports Hulu is about to slash its premium asking price in half to attract more subscribers.

Peter Kafka, who writes The Media Memo for All Things Digital, wrote Hulu is preparing to change its pricing as early as this week.

The idea is that paying subscribers get access to a deeper catalog of TV shows and movies than what the free service offers, as well as the ability to watch Hulu on devices like Apple’s iPhone and iPad, Microsoft’s Xbox 360 game machine and Internet-connected TVs from Samsung and Sony.

But a price cut would indicate that consumers haven’t bought in to the pitch. That shouldn’t be a shock, considering the other video options that consumers have, and the limits that Hulu’s content providers have placed on the service.

But even at half-price, many former Hulu Plus customers won’t be back.

Zwei, commenting on the rumored price change, said he dropped his subscription before the first month was up because of the Hulu’s byzantine rules and technical limitations over how premium shows can be accessed.

Watch it their way or not at all.

“You aren’t guaranteed the ability to stream to anything but your computer! “Fringe?” Not available to stream to my other devices. “Caprica?” Not available to stream to my other devices.  Why the heck would I want to pay $10 a month if I still have to watch a lot of the content on my Mac,” he writes.

Paul notes it’s also hard to attract paying customers when most of your library consists of old shows already rerun into the ground:

“The problem is that they are cutting all the most appealing content from the service, Hulu Plus has a huge catalog of content, but it’s 95% leftovers from the 80′s.  Give us current content when and how we want it (quickly and on the devices we want) and people will pay for it, even more than $10/mo.  But if they give us 20 year-old content that we might not even have liked the first time, they shouldn’t expect our money,” Paul says. “It’s funny when they get worked up about piracy too. It’s just another market force — people only go to it when they don’t have other valid options,  just like they’re doing here.”

Networks increasingly treat their programming as a valued commodity that can be sold, re-purposed, re-packaged, and re-sold again and again.  Syndication, DVD box sets, online rental, cable company on-demand, and online ad-supported streaming each can fetch plenty of money, and many agreements include temporary restrictions on other distribution mechanisms to avoid “diluting” the programming’s value.

Consumers don’t care about these restrictions, because many will simply search out the shows they want regardless of the source — legal or otherwise, preferably for free.

Two reports about Google TV — a review of the service from KSTU-TV Salt Lake City’s ‘Kurt the Cyberguy’ and a report from KTBS-TV in Shreveport, Louisiana (5 minutes)

Telephone companies will lose up to half of their broadband market share if they insist on sticking with DSL technology to deliver Internet access, according to a new report from Credit Suisse analyst Stefan Anninger.

Anninger predicts DSL will increasingly be seen as the “dial-up” service of the 2010s, as demand for more broadband speed moves beyond what most phone companies are willing or able to provide.  Credit Suisse’s analysis says DSL accounts sold in the United States top out at an average speed of just 4Mbps, while consumers are increasingly seeking out service at speeds of at least 7Mbps.  The higher speeds are necessary to support high quality online video and the ability for multiple users in a household to share a connection without encountering speed slowdowns.

A lack of investment by landline providers to keep up with cable broadband speeds will prove costly to phone companies, according to Anninger. He believes a growing number of Americans understand cable and fiber-based broadband deliver the highest speeds, and consumers are increasingly dropping DSL for cable and fiber competitors.  Any investments now may be a case of “too little, too late,” especially if they only incrementally improve DSL speeds.

Anninger says providers may be able to offer up to 18Mbps in five years by deploying ADSL 2+ or VDSL technology, but by that time cable operators will be providing speeds up to 200Mbps, and many municipal providers will have gigabit speeds available.

The impact on phone company broadband market share will prove bleak for phone companies in all but the most rural areas, Anninger predicts.  He says by 2015, cable companies will have secured 56 percent of the market (up by 2 percent from today), phone companies will drop from 30 percent to just 15 percent, Verizon FiOS, AT&T U-verse, and wireless broadband will each control around 7 percent of the market, with the remainder split among municipal fiber, satellite, and other technologies.

Anninger is also pessimistic about wireless broadband being a wired broadband replacement in the next five years.

A Credit Suisse online survey of 1,000 consumers in August found that less than half would consider going wireless only.  The reasons?  It’s too slow, too expensive and most plans have Internet Overcharging schemes like usage caps and speed throttles.

Although cable companies are on track to be the big winners in broadband market share, still have one giant hurdle to overcome — a lousy image.  Just 36 percent of cable customers say they are “very satisfied” with their local provider.  More than 60% of FiOS and U-verse’s broadband customers said they are “very satisfied” with the services these advanced telephone company networks provide.  Consumer Reports has regularly awarded top honors to Verizon FiOS for the last several years.

Independent phone companies and smaller cable operators routinely score at the bottom, typically because they are relying on outdated technology to supply service.

This makes the marketplace ripe for disaffected consumers to jump to an alternative provider.  Unfortunately, as most Americans face a duopoly of the cable company they hate and the phone company that doesn’t deliver the services they want, there is no place for them to go.

Anninger also predicts the risk of broadband reform by reclassifying broadband under Title II at the Federal Communications Commission is now “minimal.”  That suggests Net Neutrality enforcement at the FCC is not a priority.  The Credit Suisse analyst says if action hasn’t been taken by winter or spring of next year, it’s a safe bet the Commission will never re-assert its authority.

"DVD's are so five years ago!"

Netflix, which has seen its Canadian streaming-only video service welcomed with usage cap reductions by Rogers Cable, has finally started to wake up to the threat its online video business model is one speed throttle or usage cap away from oblivion.

As the video rental company now contemplates launching a streaming-only version of its service in the United States, it has now firmly waded into the Net Neutrality debate.  In a filing earlier this month, Netflix impressed upon the Federal Communications Commission the importance of prohibiting providers from establishing blockades to keep its competing video service from threatening cable-TV revenue:

“The Commission must assure that specialized services do not, in effect, transform the public Internet into a private network in which access is not open but is controlled by the network operator, and innovative Internet-based enterprises are permitted effective access to their consumers only if the enterprises pay network operators unreasonable fees or are otherwise seen by such network operators as not threatening a competitive venture.”

Netflix online video packs a real wallop, as Americans embraces the service as a suitable and cheaper replacement for premium cable movie channels.

Sandvine, which pitches “network management” products to the broadband industry, reported Netflix now represents more than 20 percent of all downstream broadband traffic in the United States during peak usage times between 8-10pm.

The company’s financial results seem to affirm its growing impact as an online video entertainment player.  The Washington Post reports in the third quarter, Netflix saw a 52 percent gain in subscribers to 16.9 million. Revenue increased 31 percent to $553 million. But most interesting: 66 percent of subscribers watched more than 15 minutes of streaming video compared with 41 percent during the same period last year. The company predicted Wednesday that in the fourth quarter, a majority of Netflix subscribers would watch more content streamed from the Web on Netflix than on DVD.

That prompted CEO Reed Hastings to say Netflix should now be considered a streaming company that also offers DVD-by-mail service.

If providers launch Internet Overcharging schemes that limit broadband usage or throttle their competitors to barely usable speeds, that growth could come to an end quicker than the introduction of the next “unfair usage policy.”

Sandvine’s research confirmed something else.  As broadband speeds increase, so does usage.  In Asia where broadband speeds are dramatically higher than in the United States, Sandvine found median monthly data consumption is close to 12 gigabytes per household compared to 4 gigabytes in North America.  And Asians stay very close to their broadband connections, using them on average for almost 5.5 hours per day, compared to just three hours for North Americans.

When one considers the majority of broadband users are only starting to discover online video, those numbers are headed upwards… fast.

GCI delivers unlimited downloads of customers' money.

GCI spokesman David Morris either does not know what his own company does to abuse its customers or he openly lied about it in statements to the media:

GCI said it hasn’t yet charged anyone fees for exceeding the data limits (some customers dispute this), but the company began contacting its heaviest data users this summer to move them to new, limited plans. The company is also upgrading Internet speed for its customers this year at no extra cost.

GCI said it hasn’t decided when to enforce the data limits on everyone else. The crackdown might not happen until next year, according to Morris.

Apparently Morris is living in a time warp, because “next year” is this year.

After our article earlier this morning, Stop the Cap! started receiving e-mail from angry GCI customers with bills showing outrageous overlimit fees running into the hundreds of dollars GCI claims they are not charging.

Our reader Steve in Alaska sums it up:

“GCI is a bad actor that abuses its customers with bait and switch broadband, baiting customers with expensive unlimited bundled plans and then switching them to limited plans with unjustified fees,” he writes. “A legal investigation exploring whether this company is violating consumer protection laws is required, especially after misrepresenting the nature of these overcharges in the Alaskan media through its spokesman.”

GCI is apparently iterating the credit card industry’s tricks and traps.

Our reader Scott’s latest broadband bill shows just how abusive GCI pricing can get:

GCI: the Grinch That Stole the Internet (click to enlarge)

Scott was floored by GCI’s Festival of Overcharging, which turned a $55 a month bill for broadband into nearly $200.  It exemplifies everything we’ve warned about over the past two years with these pricing schemes:

Well it finally happened, I got hit with GCI internet bill shock, $196.58 total for my 8Mbps plan with 25GB usage.

My usage prior to this has always been around 15-20GB/mo according to them — just the usual web surfing/e-mail with a little online gaming over the weekends (Eve Online) but not much.

Something ratcheted up my usage to nearly twice that (I did buy one game off Steam for digital delivery), which still would have been perfectly reasonable given the $75.00/mo plan I chose — that’s double what most people pay for unlimited in the lower 48 states. I only moved to this plan because their $135/mo bundle plan wasn’t affordable due to the required overpriced digital phone + taxes.

I tried calling their customer service and just got the company line about how expensive it was to provide their service, and I must have an open Wi-Fi router or “downloaded” too many YouTube videos, iTunes, or other content. He also stressed five or six times lots of customers go over their limits thanks to Netflix streaming and you really can’t use it with GCI Internet service.

To date I’ve never gotten a straight story from them on how this is managed, or from their marketing material which never mentioned overage until recently, or their reps that used to say you’d get a phone call to warn you if you went over their limits. The rep I spoke to most recently claims you’re supposed to call them daily or every other day – or login to a special portal online to monitor usage.

Either way this company has no sense of customer service, nor does it operate in the interest of Alaskan consumers that are cut off from the lower 48 and need reliable and affordable Internet services.

Stop the Cap! recommends making a copy of David Morris’ comments and notifying GCI you are not paying their overage fees because they are “obviously in error,” at least according to the company’s own spokesman.  Then get on the line with the State of Alaska’s Consumer Protection Unit and the Better Business Bureau and demand your overlimit fees be credited or refunded.  We’ve even got the complaint form started for you.  GCI values its A+ Better Business Bureau rating, so chances are very good they’ll take care of you to satisfactorily close the complaint.

GCI’s claims that with Internet usage limits, the company can deliver its customers faster speeds.  But Stop the Cap! argues those speeds are ultimately useless when GCI allows you to use as little as 3 percent of your service before those overlimit fees kick in.

A Broadband Reports reader ran the numbers before speed upgrades made them even worse:

Get used to seeing this screen because we saw it for minutes on end when testing Time Warner's new Remote DVR service.

Time Warner Cable has launched its free Remote DVR programming service throughout the country, allowing customers to remotely manage their DVRs from the cable company’s website or through a smartphone application.

Stop the Cap! gave the service a test run this morning to see how well it works.

Here are some of our early impressions using the online, web-based interface (we did not test the smartphone application):

1.  The service is in beta and it showed.  Our first attempt to use the system this morning was laboriously slow, taking 30 seconds or more to change pages.  Things worked better as the morning progressed, but it still suffers from sluggish responsiveness.  Several features failed for us occasionally, such as deleting some scheduled recordings remotely.  After two minutes or more of waiting, we gave up.

2.  The application was generally intuitive and we did not need a lot of hand-holding to get started. But at the same time, the usefulness of the application itself was limited.  Scrolling through the online program grid was as tedious as the using the television version.  It’s fine if you know exactly what you want to watch and what channels to check, but terrible for browsing through hundreds of channels.

3.  The search and browse functions are far too limited to be useful.  It is impossible, for instance, to search just for movies.  Categories are too broad to be of much use, and many are missing.  “Drama” and “Action” included everything from a documentary to a series to a movie.  Netflix succeeds where Time Warner fails.  Their search categories are much better — documentaries, TV series, horror, foreign and classic films, and many more make it far easier to drill down to the type of show you want to see.  Netflix even offers sub-categories, helping people find similar programs to watch they never realized were available.

4.  Changing the name of the DVR from its hexadecimal default did not work consistently.  When we tried to rename ours to “Living Room,” sometimes it appeared that way, other times it defaulted back to the cryptic “DVR 00:xx:92.E9.xx.xx” (we replaced some numbers and letters with “x”).

5.  The more scheduled recordings you have, the more ponderous the application seemed to work.  We tried deleting some series (which did not always work either) and it helped responsiveness.  If you use your DVR a lot, you may find using Remote DVR a patience-testing experience.

6.  There did not seem to be an indicator as to how much recording space you have remaining or what is already stored on your DVR.

Time Warner customers who use smartphones and other Web-enabled mobile devices can access “Remote DVR Manager” at mdvr.timewarnercable.com.

Time Warner Cable produced this video to help introduce customers to its Remote DVR service, explaining how to register and get started with the free service.  (1 minute)

GCI, an Alaskan Internet Service Provider, is getting pummeled by angry customers as they continue to learn the company has launched an Internet Overcharging scheme that limits their broadband use.  Some customer claim the company is actively trying to trick those previously enrolled in unlimited plans into limited service tiers with tantalizing “free speed upgrades.”

Stop the Cap! reader Thomas was one of more than a dozen readers who complained to the Anchorage Daily News about the broadband ripoff.

He is outraged by the bait and switch tactics employed by GCI that sold customers on expensive bundled service packages that promised “unlimited Internet” service the company is now trying to take away.

Thomas first learned GCI had slapped limits on his broadband account… from Stop the Cap! GCI never bothered to inform him, or many other customers, about the new usage limits.  After he read our earlier story, he called GCI and learned he was a victim of Internet Overcharging.

GCI’s limits range from 40-100GB on plans ranging in price from $45-105 per month.

GCI, like most Internet Overchargers, tries to blame its customers for the imposed limits.

GCI estimates that 5 percent of its Internet customers are consuming 70 percent of the company’s available bandwidth. These users share a portion of their Internet cable with other GCI customers, and they have been slowing down the other households’ Internet speed, GCI spokesman David Morris told the Anchorage newspaper.

In an effort to prove their contention that usage limits improve service, GCI handed out free speed upgrades along with usage allowances and attempted to conflate the two.

In reality, most broadband slowdowns come from overselling access and being unwilling to invest in appropriate capacity upgrades to meet the growing needs of customers.  For companies like GCI, imposing usage limits to scare users away from high bandwidth services is cheaper and more profitable than meeting customer demand.

“Most of the under-30 crowd that I know use Netflix and Hulu streaming services so we can watch what we want, when we want. Cable TV does not give us the flexibility we want,” Sean Hogan, an Anchorage accountant, told the newspaper.

“I’m getting charged $180 per month and I don’t even want the phone or cable,” said Mike White, an Anchorage customer who upgraded his data-usage plan recently because he was worried about violating GCI’s limits.

GCI claims its new limits allow customers to do many things they had no interest in doing under their old unlimited plans, like sending millions of e-mail messages or browsing tens of thousands of web pages.  To make the limits sound generous, they made a chart:

Of course, these limits ignore the reality customers do most or all of these things, and if they use their high speed connection to download files or watch the increasing amount of video content delivered in High Definition, they’ll blow through some of GCI’s limits with little effort.

Despite GCI’s claims of generosity, its customers think otherwise, and many are moving to curb their usage to avoid potential penalty fees or service termination the company could impose with enforcement of their caps:

Morris said that most of GCI’s customers will discover that their Internet usage is far below the new limits. Depending on the plan, the limits range between 50 and 125 gigabytes per month.

Chris Bruns, an Anchorage father and college student, isn’t so sure. “I’m in the high-30 (gigabyte) range every month,” he said.

GCI’s cheapest substitute for an unlimited plan is 40 gigabytes — the equivalent of downloading and watching 60 movies per month on your computer.

Bruns found out recently — after calling GCI to ask some questions about his family’s Internet speed and usage — that his previously unlimited plan, called Ultimate Xtreme, now had a 40 gigabyte ceiling.

“I was pretty miffed. It came as a surprise,” he said.

“When we signed up, we specifically got the unlimited plan because we knew we used it a lot,” he said.

He said he has since curbed the family’s Internet usage to be on the safe side. He said he and his wife regularly download movies for themselves and cartoons for their two children on Netflix to watch on their computer. Using Netflix is a way to keep the kids from seeing “garbage” on TV, Bruns said.

Ed Sniffen, a consumer-protection attorney in the Alaska Department of Law, may a victim of GCI’s bait and switch broadband himself.

Sniffen said he has had an unlimited-data plan with GCI and didn’t know on Tuesday afternoon whether he received a notice about the new policy. He said anyone who has a concern should contact the Law Department’s consumer-protection office.

The story in the newspaper prompted an enormous response — some 265 comments and counting.  A sampler:

GCI provides terrible service compared to companies in the lower 48 at exorbitant prices. They are a monopoly that needs to be tweaked.

GCI’s Network costs are FIXED. They are raping and pillaging us.

“GCI said it hasn’t yet charged anyone fees for exceeding the data limits…” — GCI lies. Just a few months ago I was charged nearly $100 for exceeding the bandwidth limit. Since then, I’ve upgraded my package to a ridiculous amount of bandwidth (at a ridiculous price) just so I can avoid that problem.

This is crazy. You go anywhere in the lower 48 and almost every Internet provider out there has some sort of unlimited plan, and it doesn’t involve payment with an arm, a leg, a kidney, or a first-born child. GCI needs to get this crap sorted out.

I got an offer to double my Internet speed and usage for a few bucks extra, and free cable (the good package, not the basic cable). Two months later, I still haven’t seen anyone show up to do anything, and I’m still getting charged out the tail end for overage charges. I keep requesting to up my Internet (I have a college student who takes some Internet classes) but they never do it. The only reasons I switched from ACS were because when it rained we had no phone OR internet (they said the problem was with our lines – our landlord at the time needed to fix it, but the contractor said it was ACS’s line problem – THEY needed to fix it.)  If there was another alternative to phone/Internet, I would so be there.

I was out and out LIED to by a GCI Rep. I was told if I changed my plan I would receive higher speeds with NO OTHER CHANGE for the same price. I questioned the GCI rep about this in detail several times before agreeing. The next day I no longer had unlimited downloads. I was LIED to and RIPPED OFF by GCI.

GCI’s statement that they have not charged overlimit charges is incorrect as over ten individuals that I know including myself have been hit with bills ranging from $300 to $2000 for one month of service.

Time Warner Cable's office on Mt. Hope Avenue in Rochester, N.Y.

A second major outage is impacting thousands of Time Warner Cable customers in the Rochester metropolitan area, this time taking down cable television service.

It’s the second major outage for the cable operator in the last three weeks.

The outage began at around 2:15pm this afternoon and is affecting several parts of the area.

Time Warner Cable spokeswoman Lara Pritchard says there is an interruption in video service and engineers are working to restore service as quickly as possible.

At this time, no other information is available, and Time Warner Cable’s phone lines are jammed with callers.

Affected cable television customers are now entitled to a day’s credit for lost video service — but only if you ask.

Stop the Cap! Presents Your Easy Service Credit Request Menu

Customers can request one day of credit for cable TV service.

Sample Request You Can Cut and Paste:

I am writing to request one day service credit for the cable-TV outage that occurred in Rochester today, Wednesday Oct. 19th.  Please credit my account.

Methods to Obtain Credit:

1. Use Time Warner Cable’s Online Chat system, select Billing Inquiry, and type to a customer service representative.
2. Call (585) 756-5000 or toll free 1-800-756-7956 and speak with a customer service representative.
3. Use the Online E-Mail form, select Billing Inquiry, and send a message requesting credit.

[Update: The credit request section above was modified.  Customers can request credit for cable television service, not Internet and phone.]

Rhode Island politicians and some local television stations are celebrating a $21.7-million federal stimulus grant awarded to a non-profit consortium of educational, governmental and health-care organizations to construct a new fiber optic network that some claim will help “improve broadband service” for Rhode Island residents.

Unfortunately for residents of the Ocean State, the proposed network of 339 miles of fiber cable represents an example of “look, but don’t touch.”

The OSHEAN (pronounced ‘Ocean’) project is yet another example of an institutional network that is strictly off-limits to residential homeowners, unless they happen to use the service at an area school or library.

But politicians who appear at announcement ceremonies to celebrate stimulus awards, and the media that covers them, far too often sell the benefits of such projects to residents who can’t ultimately use the service their tax dollars are helping to fund.

Many parts of Rhode Island already receive access to fiber service from Verizon FiOS, which represents another reason to keep consumers out.

“Verizon would object strenuously if this stimulus grant allowed OSHEAN’s network to be available to anyone who wants access,” writes our reader Mike who lives in Providence.  “So to keep Verizon and other providers quiet, the network promises not to directly wire any residence or individual business who wants access.”

Instead, the network will predominately benefit Brown University, the City of Providence, Lifespan hospitals, the Rhode Island Division of Information Technology, the University of Rhode Island and the U.S. Naval War College.

Here is WPRI-TV in Providence misleading viewers about the benefits of a broadband stimulus award, suggesting it will somehow improve residents’ Internet service.  (1 minute)

A controversial proposition on the ballot to extend a 1970 telecommunications tax to cell phones and “digital phone” service that largely did not exist when the tax was originally enacted has created a war of words between Chula Vista, Calif., mayor Cheryl Cox and the cable company that bears her last name (but no relation) — Cox Cable.

The proposed tax extension would broaden the types of telecommunications services that are subject to it, including Cox Cable’s “digital phone” service and broadband.  Cox officials appeared at city council meetings to oppose the tax, saying it would result in higher bills for customers.

But when Cox went on the air with “informational ads” the mayor accused of undermining support for Proposition H, Cox and the cable company started trading barbs in the local media.

Now the controversy has drawn the attention of San Diego’s local ABC affiliate.  On Monday, Mayor Cox accused Cox Cable of punishing the city by withdrawing free Internet access at the end of the year for City Hall, public libraries, and public safety agencies including the fire and police departments.

Mayor Cox called the timing of Cox’s announcement suspicious, coming the same day she did an interview complaining about Cox on San Diego’s KGTV-TV.

Under the terms of Cox’s franchise agreement with the city, Chula Vista was supposed to receive free Internet service through 2019, but now the cable company is reneging on the deal, a charge Cox Cable vigorously disputes.

Mayor Cox

With Chula Vista’s current budget crisis, the cash-strapped city is weighing the $30,000 a year it will cost to obtain the service at Cox Cable’s business rates, which could cause the city’s 1,012 computers, most available to the public, to lose access Jan. 1st.  Mayor Cox is also concerned the police department will lose its own connection, which it uses to communicate with other police departments and the Department of Justice.

The tax at the center of the debate, known as the City’s Utility Users’ Tax or U.U.T., amounts to 5 percent and is charged primarily to landline telephone customers.  Because of the way the tax ordinance was worded in 1970, technology changes that have taken place since have allowed more residents to escape paying the tax by switching to cell phone service or “digital phone” Voice Over IP service offered by Cox Cable or other broadband providers.

As a result, potential revenue earned from the tax has dropped over the years, especially as residents disconnect landline service.  With Chula Vista facing a $4 million deficit in the city budget, city officials are looking for new revenue sources.

Proposition “H,” before local voters Nov. 2nd, would keep the rate at 5 percent, but extend the tax to other telecommunications services, including:

• Wireless communications
• Text Messaging
• Prepaid/Postpaid telecommunications
• Private communication services
• Paging
• VoIP
• Toll free numbers

“Proposition H is all about continuing to fund the services we all benefit from: maintaining streets and parks, keeping libraries open, and the police protection and fire services that keep us safe,” Mayor Cheryl Cox wrote in a recent guest editorial in the San Diego Union-Tribune.

City officials are warning that without the estimated $5.6 million in estimated revenue from the tax, the city will have to cut services to cover the budget shortfall or raise other taxes.

Like many cash-strapped communities and states who have watched tax receipts plummet from dramatically lower property tax collections and increases in funding mandates, Chula Vista is trying a combination of budget cuts and tax increases to cover the difference.  But local voters are in no mood for tax increases, and last year rejected a proposal to raise the area’s sales tax by one percent.

Judging from the well-organized opposition campaign, local voters may be on track to disappoint the city a second time.

Mayor Cox’s editorial advocating approval of the tax extension even met resistance from the newspaper it was printed in:

But business and taxpayer organizations question that claim and contend the long-term tax hike could be much bigger than 5 percent as new communications devices come to the fore. They argue Chula Vista hasn’t done enough to shore up its finances long-term to deserve voter support of a tax increase.

On balance, we agree. While city leaders have overseen some $40 million in budget cuts and eliminated 259 jobs, they mostly have been AWOL on one of the most crucial issues in modern government finance: the extreme cost of public employee pensions.

[...]This framing of the debate is not fair to Chula Vista taxpayers who now cover the entire cost of pensions that allow city firefighters and police officers to retire at age 50 with 90 percent of their final annual pay and general employees to retire at age 60 with 90 percent of annual pay.

These policies must be recognized as unsustainable and then be drastically changed. Only when that happens will Chula Vista’s leaders have the credibility to ask voters to raise their own taxes.

Vote no on Proposition H.

The San Diego South Chamber of Commerce ridiculed the tax as a “dash for cash” and many area small business associations are also opposed.

While the debate rages, the mayor’s office accused Cox Cable of being too cute by half by pretending to be a “neutral” party.  The cable company claimed its ads were “informational” and did not take a position either for or against the proposition.

But KGTV notes the ad only mentions groups opposed to the tax — no supporters, and ends with the tagline, “Proposition H: It’s not what it seems.”

An expenditure report obtained by 10News shows Cox Communications spent more than $2,400 on the Proposition “H” ad and additional literature. The report also lists money going towards Proposition H opposition. A Cox spokesman said they wanted to choose “neutral” but had to chose between “support” and “opposed” on the filing.

Three reports from KGTV-TV San Diego trace the dispute over the tax over the last few months.  Also included is a portion of a video from a taxpayer’s group opposed to the telecom tax.  (13 minutes)