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Don’t Meet Me in St. Louis — AT&T and Charter’s Internet Overcharging

Phillip Dampier April 18, 2011 AT&T, Broadband Speed, Charter Spectrum, Competition, Internet Overcharging 11 Comments

One of America’s largest midwestern cities is being victimized by not one, but two major Internet Service Providers with Internet Overcharging schemes that will limit broadband use by customers.

Charter Communications, which calls St. Louis home, delivers cable service to much of the city, and has lightly enforced arbitrary usage limits on its cable broadband customers since last November.  AT&T, the major telephone provider, plans to limit its DSL and U-verse customers starting in early May.

“Now we get to choose between Charter’s usage cap or AT&T’s,” says Reginald, a Stop the Cap! reader in St. Louis.  “As usual, AT&T is always the bigger ripoff — this company hasn’t done one consumer-friendly thing in at least a decade.”

Reginald is currently a U-verse customer who fled Charter around the time the cable company went bankrupt.

“Charter was, is, and will always be abysmal in providing good service and accurate bills, and I was not about to pay for their business mistakes,” Reginald writes.  “When U-verse became available I told AT&T I was signing up because they were offering unlimited use plans and Charter was playing games with their usage cap.”

When AT&T’s cap is in place, St. Louis residents will get to choose between the lesser of two evils:

Usage Limits

  • AT&T DSL Customers:  150GB per month
  • AT&T U-verse Customers:  250GB per month
  • Charter Lite/Express: 100GB per month
  • Charter Plus/Max: 250GB per month
  • Charter Ultra 60: 500GB per month

AT&T will deliver three warnings and then a higher bill — $10 for each 50GB of “excess usage.”  Charter sends out occasional warnings, then reserves the right to terminate your service.

“It stinks, and if I had my way I would not do business with any provider who has a usage cap,” Reginald says.  “I would rather pay a few dollars more a month and not have to worry, and I can’t imagine I’ve ever used over 100GB in a month.”

Jess, another St. Louis resident, pulls the plug on AT&T U-verse May 2nd.

“I almost wanted them to charge me an early cancellation fee so I could pound them with their sudden change of terms,” Jess says.  “I am switching back to Charter on May 2nd, the day AT&T starts their crap.  AT&T acted all surprised about why I would possibly ever not do business with them over this issue.”

Jess says she would rather deal with warning letters from Charter than a higher AT&T bill.

“Every penny more AT&T gets from us goes right into their lobbying to screw consumers more, and here are the results for everyone to see,” Jess says.  “If Charter wants to pull their games with me and my family, the next step is to declare war on the politicians who let this stuff happen.”

Bill says AT&T offered him a discount to stay with the company — he is canceling his U-Verse service May 1st.  But he refused, telling AT&T he will not do business with a company that engages in Internet Overcharging.

“I’m not too worried about Charter,” Bill writes Stop the Cap! “If they try and threaten me, I’ll let them cut me off and then we’ll sign up under my wife’s name, and bounce from account to account.”

Your money = Their Money

For all three of our readers, none of whom claim they will exceed the allowance, it’s a matter of principle.

Reginald, Jess, and Bill all feel strongly usage caps and overlimit fees are unjustified, and are more about protecting video packages than “unclogging” providers’ networks.

Bob Zimmermann, an AT&T customer in Richmond Heights, tells the Post-Dispatch he doesn’t like the new limit either. He watches an occasional Internet movie, and sometimes downloads video to his iPad. He doubts he’ll exceed the cap, but he doesn’t want to worry about it.

He is shopping for alternatives.

“I’ll see if I can negotiate a better deal,” he told the newspaper.

Jess wishes him luck finding someone else in St. Louis.  She suggests customers like Zimmermann play AT&T and Charter off each other to get a lower bill, at least temporarily.

“What is most important right now is to tell AT&T you are leaving them because they are abusive, and then sign up with a new customer discount with Charter,” Jess suggests.  “Then if and when Charter cuts you off, go back to AT&T and see if you can get them to waive any fees after the third warning or else you are switching back to Charter.”

Another alternative is to sign up for Charter’s business service, which has no usage cap, but comes at a significantly higher price than residential service.  Their starter package includes unlimited Internet at 16/2Mbps speeds, a domain name, and a business phone line with unlimited long distance and calling features.  It runs a steep $120 a month.

“If Charter didn’t offer a 500GB allowance on their 60Mbps tier, I might consider a business package if I used my connection a lot,” admits Bill.  “Isn’t it ridiculous when someone wants to sell you a super fast package you cannot really use because of usage limits?”

Bill partly blames the state legislature for letting AT&T get abusive with customers.

“AT&T shows up with a lot of cash to dole out in the Missouri legislature and in return they get to abuse customers,” Bill notes.  “You notice Verizon cannot get away with this in the more consumer-protection-friendly northeast.”

Jess says the whole thing is a mess.

“It really shows how the midwest is getting screwed once again — this time for Internet access,” she notes. “There is no Verizon fiber here, and even Google showing up in Kansas City won’t be enough to shame the likes of AT&T.”

Currently there are 11 comments on this Article:

  1. TK says:

    Saint Louis is a perfect example of the anticompetitive power of a duopoly. When there are just two broadband providers, they both do the same sh*t. How many other major cities face this same situation with caps on all the major providers?

    • In Canada, virtually all of them thanks to cable and Bell’s love of caps. Only Bell DSL resellers like TekSavvy provide an escape.

      In Alaska, same nightmare. Rochester was likely to be a victim of double capping if TWC managed to get their caps through. Frontier was pitching a 5GB cap for a time in 2009.

      Any city served by Charter and AT&T is screwed. So are some AT&T service areas served by smaller providers like the god-awful Cable One, owned by the Washington Post. Cable One makes AT&T look like Father Christmas.

      The best thing people can do about AT&T right now is at least threaten to cancel. Pound their call center with complaints. If you can leave, do it. AT&T uses classic Ferengi economics. They only care about the money. If enough people leave, they will change their practices.

      I know it is tough where AT&T is the only choice, which is why it is critical for those who do have a choice to take their business somewhere else. If I was in St. Louis, I would head to Charter myself. At least you won’t get bill shock with them.

  2. Tim says:

    I cancelled my AT&T Uverse Internet about a week ago, cancelled my Uverse TV about a few months ago and went OTA. The guy on the phone asked why I was cancelling and I told him that I didn’t like the data cap that they were about to impose on me and the change of TOS. I also said I was going to Time Warner who doesn’t have a cap. He seemed disinterested and didn’t bother fighting to keep me as a customer, figures.

    What made me switch to Time Warner, was a door-to-door TW salesman. I asked him if he had anything better than 24Mbps down and 3Mbps or around that for cheaper and sure enough he did. I got a 30Mbps down and 5Mbps line for $10/month cheaper! I asked if there was a charge for not having TV service and he said no. So I got the price locked in for a year, $55/month but I did have to pay a installation charge of $40 since I didn’t get the TV package but I save money over the long run so I didn’t mind that. Anyway I don’t have to worry about that data cap at least for now. And if you are in the Charlotte, NC area, TW is running that special still on their Turbo, $35/month for 10/1 line. For $20 more you can get the Wideband service 30/5 line.

    The only thing I hate are these DOCSIS 3 modems( with NAT Firewall and Wireless) they give ya. They are a pain in the rear to work with if you are trying to do a FTP server or something similar. I had to put mine in bridge mode to get my FTP site to work but now I can’t use the wireless part so I am going to have to purchase a new wireless router for that.

  3. travis varble says:

    This is an unstoppable train, Bandwidth is a limited resource, and is very costly to purchase more. Without caps you would be paying double for your internet so your neighbor could stream movies 24/7. The caps are designed to keep these Bandwidth hogs from slowing your internet down (no bandwidth available, No internet for you). Not to mention the wired systems grow more and more each day, so does the demand for more bandwidth. (no I dont work for charter, (anymore))
    There are a few options, St. Louis is a Clear 4g city. Clearwire still offers unlimited on the 4g, however you may need an experienced installer to install an outdoor ant. to bring the signal into your home. This is a little costly but pays for itself in the long run if you are a bandwidth hog that goes over your cap a lot. Another bad thing is finding an installer, as far as I know Cheetah wireless in Godfrey il. is the only one that does this work in the stl area.
    I work for Cheetah Wireless and install 3g/4g Internet service by using Air cards combined with amplifiers and antenna’s the majority of our providers have a 5gig cap (Verizon, T-mobile) however Verizon now offers a 10gig cap for $80 ($10 per gig -$20 discount for the plan) the overage charges are $10 per gig if you exceed your cap, we do most of our installs in rural il. where people are paying $80+ for 5gig caps on slow satellite internet. If you want a quote in your area call us at (618) 208-3538
    One way to off-set the high price of your internet is to talk to your tax person and figure out how you can claim it as a business expense for next years taxes.

    • Ron Dafoe says:

      Wrong – wrong and wrong again. RoadRunner has been fairly price stable until just recently for over 10 years. The CAPS are designed to keep people watching CABLE TV when your talking about wired cable internet providers.

      Can you explain to me why providers costs are going down and they are investing less in their networks than ever before, but placing caps and raising fees? Hint – if 2 – 5% of your users are crashing your network that bad you have more problems than arbitrarily limiting your customers to some number pulled out of a hat.

      BTW – the term bandwidth hog is a word used to elicit responses from people who have no idea what bandwidth is. Bandwidth is not a monthly data cap. A monthly data cap is designed to prevent users from using your network at all or overcharging users from using your network.

      Downloading 100 Gb in a month does not mean you are using too much bandwidth.

    • Scott says:

      This is so very wrong on many levels, obviously as a employee for a wireless provider, it’s easy to see why you perpetuate such mis-information.

      Bandwidth costs are mere pennies per gigabyte and dropping. Large providers like AT&T have ‘free’ transit across their massive network, where capacity is only dictated by the investments in their infrastructure for fiber, copper, and switches along the routes.

      Bandwidth is absolutely NOT a limited resource, providers would LOVE to make you think so, that way they can charge you like it’s water, or electricity and reap massive profits when in fact peak capacity on limited infrastructure that hasn’t been upgraded is the problem.

      Providers are NOT re-investing in their infrastructure as they used to, they’re pulling back that investment to create the problem of limited capacity in order to justify caps and fee’s all the while recording record profits.

      Wireless Internet service via WiMax or 4G are only reasonable for light or mobile users, they are not a solution the widespread wired internet access for consumers. You could be offering unlimited bandwidth as well – but of course, where’s the incentive when you can simply make more profit charging as a metered and capped service.

      • Travis, I don’t doubt Verizon spends billions of expand their wireless networks. They promote it in press releases and it all sounds wonderful. What they don’t promote are their enormous profits. If I said I donated $1,000 to the United Way, you’d say that sounds mighty generous. But if I earned $10,000,000 last year, it sort of makes that $1000 look stingy.

        Americans pay some of the most expensive prices around for wireless phone and data service. AT&T and Verizon do spend some of those profits on expanding service, but not nearly enough. A lot goes into lobbying for consumer-unfriendly legislation and policies. A lot more goes to shore up declines in their other business segments. Some even gets paid back to shareholders in dividends.

        At least Verizon was willing to pony up and launch FiOS fiber to the home, which is a smart way to stay relevant as Americans hurry to disconnect their phone lines. AT&T U-verse is much less innovative, but at least it is something.

        But considering where this country stands in broadband rankings compared with the rest of the world, we should all be embarrassed. Latvia is kicking our butt. In fact, a lot of eastern Europe has better broadband than we do. So does Japan and Korea.

        Remember what providers feed you is their point of view, their business model, and their plans to meet Wall Street demands. The ultimate reality check is to look outside of the United States and realize AT&T and Verizon are not leading the pack in anything but prices.

    • Travis, you are applying wireless pricing models to a wired broadband industry. Wireless data is constrained by a spectrum shortage that will eventually be alleviated either with additional spectrum, hyper-local cell towers to reduce load, or technology advancements.

      Wired broadband providers do not suffer these same constraints. Data congestion chokepoints are easily dealt with. The phone companies can install D-SLAMs and run fiber between them and the central office to expand capacity for DSL users. Cable companies are doing cost-effective upgrades to DOCSIS 3 which solves last mile congestion issues.

      Backbone providers deliver a near-limitless supply of connectivity, at prices that are plummeting.

      It is very important to distinguish wireless broadband from wired broadband for these reasons.

      It is not costly to purchase additional bandwidth. In fact, as broadband prices on the retail side have increased, the costs to provide the service have plummeted. Providers are using the excess revenue to shore up challenged balance sheets from their pay television business. Phone companies rake it in to help make their landline losses look less painful.

      Broadband is not gas, electric, or water, and should not be priced that way. Besides, where providers have gotten away with this, nobody saved a penny. In fact, bills kept going up even as some providers reduced bandwidth cap allowances.

      Broadband is a license to print money. Read any provider financial report and see for yourself.

  4. larry says:

    This bandwidth caps is another disgusting money grab by the isp’s . They think that everyone is fleeing from tv services and just streaming video online. If that is the case then why bill me extra if I have the damn tv service already. We never had bandwidth caps before but now all of a sudden we do. Heck I can come close to the caps just by downloading my podcasts each night so I can load up my ipod for work the next day.

    I’m currently on att uverse after switching from their dsl service which only has a lousy 100gb cap which I was waaay over. I must say as a internet gamer I’m pretty disappointed with uverse ping times too, my dsl had far better pings but did lose connection now and then.

    I’m seriously considering a switch back to charter since it’s cheaper even though it has caps too. sigh we need more options.

  5. Jerry says:

    I’m currently “borrowing” a neighbor’s unsecured Wi-fi to send this. Charter
    cut off my internet a bit after noon, today. I’m in Michigan, south of Detroit,
    and Charter has long been our only option other than dial-up. AT&T recently
    extended fiber to our area and it looks like I’m gonna have to go with them. I
    hope Charter knows where they can shove their “early termination fee” that I
    won’t be paying them! When I signed the 2 year contract it was represented
    to me that I’d be getting what I’d already had (25/3 Unlimited) at a better price.
    Charter is guilty either of misrepresentation through the customer rep that
    got me to sign the contract or (and possibly in addition to,) breach of contract
    by cutting me off. In either case I consider our contract null and void and will
    not give them one red cent.

    At least with AT&T U-verse I can get ALL my Tigers games in HD!

  6. James R Bivins says:

    Here is 2012 and internet services are support to be getting better and cheaper and it is not because companies are so full of greed.That they are making internet cheaper by dropping the GB’s to drop the price when we sould be getting alot more GB’s for alot cheaper price.Than they lie to new and old customers by getting you sucked in 2 yrs contract and etc.Than you sign up,you find out your screwed keeping these services and/or cancelling because your was lied to

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