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Nearly 10 percent of GCI’s revenue is now earned from overlimit fees collected from Alaskan broadband customers who exceed their cable or wireless usage limits.
GCI is Alaska’s largest cable operator and for many it is the only provider able to deliver stable speeds of 10Mbps+, especially to those who live too far away for comparable DSL speeds from ACS, one of GCI’s largest competitors.
The result has given GCI a de facto monopoly on High Speed Internet (10+ Mbps) access, a position that has allowed the company to dramatically raise prices and slap usage limits on broadband users and charge onerous overlimit fees on those who exceed their allowance.
GCI already charges some of the highest broadband service prices in the country and has insisted on imposing usage caps and overlimit fees on even its most expensive plans, creating high profits for them and enormous bills for customers who have no reliable way to consistently track their usage. GCI’s suspect usage meter is often offline and often delivers usage estimates that customers insist are far from accurate. GCI says it has the last word on the accuracy of that meter and has not submitted its meter to independent testing and verification by a local or state regulatory body specializing in measurement accuracy.
GCI also makes it extremely difficult for customers to understand what happens after customers exceed their usage limits. The website only vaguely offers that overlimit fees vary from “$.001 (half penny) to $.03 (three cents) per MB,” which is factually inaccurate: $.001 does not equal a half-penny. It can equal bill shock if a customer happens to be watching a Netflix movie when their allowance runs out.
KC D’Onfro of Bethel subscribes to GCI’s Alaska Extreme Internet plan, which in February cost $100 a month for 4/1Mbps service with a 25GB usage cap. While that allowance is plenty for the countless e-mails GCI promises you can send, any sort of streaming video can chew through that allowance quickly.
Business Insider explains what happened:
One fateful night, she and her roommate decided to watch a movie on Netflix. Both of them fell asleep halfway through, but the movie played ’til the end, eating up two GBs of data too many and consequently doubling their bill for that month. (One hour of HD video on Netflix can use up to 2.3 GB of data.)
“Now, I don’t even consider Netflix until near the very end of the month, and I have to be sure that I’m no more than three-fourths of the way into my total data, at the absolute most,” KC says. (Her provider, a company called GCI, allows subscribers to view their daily usage and sends them a notice when they’ve hit 80%.) “It’s a very serious business – I have to poll people to figure out what that one very special movie should be.”
That left the D’Onfro family with a $200 broadband bill – $100 for the service and an extra $100 overlimit fee for that single Netflix movie. Today, GCI demands $114.99 a month for that same plan (with the same usage allowance) and those not subscribing to their TV service also face a monthly $11.99 “access fee” surcharge for Internet-only service.
“Many Alaska consumers have brought their GCI broadband bills to ACS for a comparative quote, providing dozens of examples of GCI overage charges,” said Caitlin McDiffett, product manager of Alaska Communications Systems (ACS), the state’s largest landline phone company. “Many of these examples include overage charges of $200 to $600 in a single month. In one instance, a customer was charged $1 ,200 in overage fees.”
GCI also keeps most customers in place with a 24-month contract, making it difficult and costly to switch providers.
McDiffett told the FCC the average Alaskan with a Netflix subscription must pay for at least a 12Mbps connection to get the 60GB usage allowance they will need to watch more than two Netflix movies a week in addition to other typical online activities. GCI makes sure that costs average Alaskans real money.
“A customer purchasing 12Mbps for standalone (non-bundled) Home Internet from GCI pays $59.99 per month plus an $11.99 monthly “access” fee for a total of $71.98 per month with a 60GB usage limit ($0.004/MB overage charge),” reports McDiffett. “Thus, the monthly bill for this service is more typically $76.98, including a $5.00 overage charge. To purchase a service with a usage limit of at least 100GB per month, a GCI customer would have to pay $81.98 per month (the $69.99 standalone rate plus $11.99 monthly access fee), subject to an overage charge of $0.003/MB.”
Rural Alaskans pay even more when using GCI’s expensive wireless ISP.
Regular Alaskan Stop the Cap! reader Scott reports that no matter what plan you choose from GCI, they are waiting and ready to slap overlimit fees on you as soon as they decide you are over your limit.
Their super-deluxe re:D service — up to 200Mbps, now available in Anchorage, MatSu, Fairbanks, Juneau, Kenai, Ketchikan, Sitka, and Soldotna areas, is not cheap.
“It’s a whopping $209.99 + taxes, and if you don’t have cable TV service bundled, the $11.99 monthly access fee also applies,” Scott says.
For that kind of money, one might expect a respite from the usage meter, but not with GCI.
“As a top tier service, you’d think they could just offer it as ’unlimited’ at that rate,” Scott says. “Actually, it has a 500GB usage cap and $.50/GB overage fee. Again, we have a metering provider who claims the overages were to penalize bandwidth hogs, yet then offer [faster] service, increasing overall load on their network, instead of just offering a fair amount of bandwidth per customer and eliminating overages by offering unlimited usage.”
One of ACS’ strong selling points is no data caps, but DSL isn’t available to everyone.
In a filing with the FCC, ACS’ McDiffett suspects usage caps are all about the money.
“GCI reported 2012 Home Internet revenue of $86 million of which $7.9 million (nearly ten percent) was derived from overage charges,” said McDiffett. “On average, about $5 per customer per month can be attributed to GCI overage charges. GCI imposes usage limits or data caps at every level of Home Internet service, from its 10 Mbps service (10GB limit, $0.005/MB overage charge) to its 100 Mbps service (500GB limit, $0.0005/MB overage charge).”
Over time, and after several cases of bill shock, Alaskan Internet customers have become more careful about watching everything they do online, fearing GCI’s penalties. That threatens GCI’s overlimit revenue, and now Stop the Cap! readers report sudden, long-lasting problems with GCI’s usage checker, often followed by substantial bills with steep overlimit penalties they claim just are not accurate.
“I currently pay $184.99 a month for GCI‘s highest offered broadband service. 200/5Mbps, with a 500GB monthly data cap,” shares Stop the Cap! reader Luke Benson. “According to GCI, over the past couple months our usage has increased resulting in overage charges at $1.00 a GB.”
In May, Benson was billed $130 in overlimit fees, but after complaining, the company finally agreed to credit back $100. A month later, they recaptured $60 of that credit from new overlimit fees. This month, Benson would have to unplug his modem halfway through his billing cycle or face another $50 in penalties.
GCI’s bandwidth monitor has proved less than helpful, either because it is offline or reports no usage according to several readers reaching out to us. GCI’s own technical support team notes the meter will not report usage until at least 72 hours after it occurs. GCI itself does not rely on its online usage monitor for customer billing. Customer Internet charges are measured, calculated, and applied by an internal billing system off-limits for public inspection.
“I have reached out to GCI multiple times asking for help, suggestions, resolution,” complains Benson. “All I get told is to turn down the viewing quality of Netflix, don’t allow devices to auto update, etc. They pretty much blamed every service but their own.”
Other customers have unwittingly fallen into GCI’s overlimit fee trap while running popular Internet applications that wouldn’t exist if GCI’s caps and overlimit fees were common across the country. Lifelong Bethel resident and tech consultant John Wallace knows the local horror stories:
Two girls had unwittingly allowed Dropbox to continuously sync to their computers, racking up a $3,500 overcharge in two weeks;- One user’s virus protection updater got stuck on and it cost him $600;
- Wallace has heard people say, “I was gaming and I got a little out of hand and I had to pay $2,800;”
- Two six-year-old girls ran up $2,000 playing an online preschool game. Mom was totally unaware of what was going on, until she got the bill.
GCI’s own Facebook page was the home of a number of customer complaints until the complaint messages mysteriously disappeared. Stop the Cap! itself discovered it was not allowed to even ask questions on the company’s social media pages, apparently already on their banned list.
“It’s about equal access and opportunity,” Wallace told Business Insider. “The Internet was meant to improve the lives of people in rural Alaska, but – because of the data caps and the sky-high overage fees – it ends up costing them huge amounts of money. We have one of the highest unemployment rates in the nation, and some of the highest rates of suicide, sexual assault, and drug abuse. The people who can’t afford it are the ones that are getting victimized. It was supposed to bring access – true availability of goods and services – but it really just brought a huge bill that many can’t afford.”
if you can afford a bill that high, you can afford to move the hell out!
Is there a way we could organize a coop to break the GCI/ACS monopoly.
(GCI forced ACS to sign an agreement to split up the pie over 2 years ago, when they were the only major communications company who refused to sell out.)
It would have it’s problems, such as can a coop make the necessary bribes, which is GCI’s primary tool to maintain their monopoly.
It would be so nice to put those crooks out of business.
GCI has a usage page where we’re supposed to be able to monitor the usage. I usually quit any significant downloading about halfway through the billing cycle, before the usage shows 90%, and the usage appears to stay the same up till the end, then I get billed for around 10% more than the usage page shows. They deny that they do this for the sake of encouraging overage….. It’s really irritating living where one crooked company has been granted a monopoly. Like 90 to 99 percent of Alaskans, I would switch in a heartbeat if another company could come… Read more »
What is not mentioned here is that ACS and GCI have combined resources and have a near monopoly on internet and wireless service in Alaska. AT&T has a presence but not as large as the previous two. People are really at their mercy. I have been waiting for broadband and home phone service for over 19 months from ACS, the only provider in the Delta Junction area. I live 4 miles from Delta Junction and ACS has service across the road but not on my side of the road. I was told I was 1000′ from an already overloaded access… Read more »
And anon, no I can’t really afford it, but surprisingly, at least to you, I don’t want to move just for decent communications access.
The federal government pays for their upgrades, then GCI passes the ‘cost’ on to us….
I like Alaska, but there are several irritating things about living in ‘the richest state in the union, with the smallest population, and the lowest per capita income’. It doesn’t require much investigation to know something is wrong there, and it’s not just GCI.
GCI recently removed the Last Updated field from their broadband usage viewer. This means you can’t tell when it was last updated, which makes it of dubious value in terms of controlling your usage. GCI is setting customers up for overages by giving the illusion that they can see their current usage. GCIs upcoming broadband changes will remove their “overage” fees, because they’re trying to hide from that big bad word. In its place GCI will sell you a data bucket. When you get to the end of your bucket your connection speed will be throttled down to practically dial-up… Read more »
GCI is the AT&T of Alaska, always doing the wrong thing to their customers. I remain pleased to see ACS giving GCI hell for its regime of usage caps. Overlimit fees are pure profit-taking and I suspect they lose a customer everytime they subject one to overlimit bill shock. Throttling customers to dial-up speeds will still force a lot of customers to upgrade (more profits) but prevents a surprise bill shock. Usage meters remain very dubious, with regular reports of inaccuracy and trickery similar to what you are reporting. There is no independent oversight of the accuracy of these meters.… Read more »
Anon, I suggest you move ##!!
Haha just imagin what we pay up here in Barrow for Internet and the surrounding villages, I think 2g on cell phone data is faster data then what they offer up here in barrow, but yet we only have Edge no 2 or 3G data,
they even charge our store for an extra antenna that we don’t have that is the one that use a lot of gigga bites got disconnect for non payment even told me I ordered an antenna in January which I didn’t so hopefully something will get done about refunding
I HATE GCI….
Screw GCI
They lied about the package plan. Ended paying more then what was on there terms!!!
http://www.courtrecords.alaska.gov/eservices/?x=LiAWixBRFXgASCva78TP8tyxxz9FDyOInBEO6Vhs*oeKrNSUEuntXI93HZMTvVCKpCvwGdrTi4*WQ32g9zkhdg
Here is a link. GCI has a class action lawsuit against them.
Our office’s bill has run around 69-70 dollars per month for years, we recently were charged $600 for overages, which no one can explain.
Well this is what I know. There are 4 internet plans called r:10 r:50 r:100 and RED. And these plans are cheaper than the old plans. Those old plans u see in this page have been grandfathered and are no longer avail to get except the red plans, unless u were already on that plan. They have been out a couple months now and there commercials about them have been blasted all over, months before the plans became avail. All those internet plans HAVE NO OVERAGE FEES. Speeds range from 10/m to 250/m a sec. R:50 plan starts at 2… Read more »
even with the new plans, you are still data capped, they just speed rate you at that point vs charging you for overages. You are given the ability to pay for more data if you need. This is still theft for consumers. GCI represents all that is wrong with internet providers. Since they don’t have competition currently, they set the terms, which means Alaskans foot the bill. I would switch to acs @50mbs from my 250mbs in a heartbeat If I could.
How do you think their Senior Vice President of Consumer services funds his opulent exotic car collection???
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This entire article reeks of “poor me, I’m a victim and I can’t be responsible about my own Internet usage, my own bills or my own actions.” Grow up.
Actually my usage has decreased over the years as I sold my business and only kept the internet for a few tax returns that I still do, no employees now to use and cost should go down instead of up.
“Over the years” people are using the internet differently. If your bill went up, you have usage. Responsible would be calling and talking to them about it.
I did but customer no service was no help – said it did no good to have pass word with symbols, cap and small letters and #’s.
IF only I had an alternative to GCI. Oh well, a couple of months and they can go away.
That assumes this customer had access to a working usage meter and notification messages and ignored them. Evidently it was big enough of a problem for GCI to switch to a throttling system that doesn’t result in bill shock, just a painfully slow connection after an allowance is reached.
Any overlimit system should require a customer to actively opt in to excess fees as their allowance runs out, not surprise them later.
Agreed, people need to be more responsible about their internet usage. When signing up for internet service with data caps, you are heavily informed to avoid any of the issues such as that of the upset users posting here. Like a credit card, or a cell phone, you should know your limit and be prepared to pay the fees if you exceed said limit. I’m not saying that people who use excessive amounts of internet every month are irresponsible, so long as they’ve found a provider who will support their usage at a price they can afford. The main thing… Read more »
For years and years John McCain has been trying to break up telecommunications monopolies with no success. Telecommunicatoins are the second largest campaign donators in the U.S. behind military industrial complex. I have recently heard of crowd funding services that might just be the ticket. Get your sharpest people together and draw up a business plan for company number three. Number four? There is obviously enough margin involved and it sounds like it’s time. Of course infrastructure will have to be addressed to cover the limited bandwidth issue. I’m told parts of Europe and China have amazing bandwidth because they… Read more »
An intense investigation needs to put into this! As soon as one starts I bet they’ll stop charging/cheating people from over usage. Before they bought United Utilities Inc. There was hardly to never over usages.
I’ve had ACS internet for 5 years now…never a problem, $110 for unlimited internet and another $100 to GCI for cable…$210/mo, no overages, no problem. Don’t think I’ll be giving GCI my FULL business….not until they offer unlimited at a reasonable price!
Gci did have unlimited internet back in 2010 then they remove it, lote of internet companies Started to remove there unlimited deta. Don’t know way.
GCI has been a nightmare here in the vilages. Their WISP antenna which was 256kps was very expensive and barely working. Now they claim to have Alaska’s highest speed internet for 6 mps which rarely goes that fast. The overage charges they give me is $40 a gig. They have another tactic to squeeze any last bit of money the villages have; They once cut off my internet service unexpectedly even though I just paid my bill. They said that i “forgot” to pay $1 from a few months ago and that I have to pay over $300 in order… Read more »
You probably have a lifeline phone.
They disconnected me 3 months in a row for being past due $3, even though I had paid all past due bills. I finally got someone there to tell me why. The government requires that the lifeline phone be paid in full before any other charges.
If you pay a $200 overdue internet bill, they only apply 197 to it because the $3 is applied to the lifeline bill. NOW if I’m behind, I pay a little extra to avoid that problem.
Doesn’t mean they’re not a__holes for disconnecting you for less than $5.
Oh, I’m sorry, are you upset that you actually have to pay for your government subsidized cell phone that costs you a whopping $6.00 a month at the most? Grow up, a bill is a bill and if you don’t pay for the service don’t expect the company to keep it active.
They do have to treat Lifeline service as the priority service, so whatever payments you make would apply to Lifeline first, followed by any other services. They cannot disconnect your landline because your Internet bill is short, for example. Because the Internet service is deregulated, it isn’t protected from being disconnected on a whim. In most states, to restore service you would have to pay the past due balance (and 30 days late isn’t enough to cut you off) and that is all. The current balance is due by the billing due date — they can’t make you prepay it… Read more »
Software engineer that just recently moved from Chicago to Anchorage.
I work from home, and use cloud transfers everyday.
I signed up for the most expensive GCI residential 600gb package and it still isn’t enough to cover me for a month.
i’m literally paying money every day to purchase data buckets to keep me afloat until the rollover period.
I know this is Alaska, and things might be behind the times here, but my internet bill averages a ridiculous $450 a month. I use to pay only $49.99 in Chicago for faster, cheaper and uncapped service.
They even have customer service reps who have you pay your monthly bill twice. earlier this year I have had two representatives tell me I missed one month of payment twice in a row, the first time I paid it thinking it was error on my end, the second time I strongly told the chick to look at my account payment nearly four times until she reported I had paid the bill prior to her phone call. So the usage cap isn’t the only crooked part of this Communications Giant, so fellow GCI customers beware, make sure the representatives rent… Read more »
Ted Stevens would roll over if he knew that GCI did this to us after the state funded there expansions!
Net10 has unlimited data, it’s throttled but at least you don’t get over charged for over using your data. Last time I had a bill with gci, it was over $400 dollars. When the day comes that gci crashes and burns is when I pick up a pint and celebrate.
While I’m sympathetic to people agreeing to a contract, then getting hit in the shorts with overage charges they’ve agreed to pay in signing said contract, I do not believe those people should weasel out of paying for what they’ve used. All the excuses in the world can’t buy a loaf of bread. The complaint I’ve got with GCI is nothing less than the commission of out and out fraud by the company. We’ve been fairly consistent in our data usage for a long time, then, all of a sudden in the span of one minute, we got hit with… Read more »
You say you don’t have any sympathy for those of us who go over. I don’t believe you understand. Make a screenshot of your usage meter near the end of your usage period, then compare it to the billed usage after they post it. Every days usage will be inflated in the billed usage. Not a delay, an even 5 or 10% increase across the board. If I stop 1/2 or even 1 gig short of my usage cap, I still go over. There’s no way to know when you are close. And of course there’s no oversight of their… Read more »
The CAPS aren’t even the worst of it!
The EXTREME PRICE GOUGING of these two are absurd!
GCI & ACS charge out the ass and they should be shot!
Over $100 for a 10MB Line Speed! Are people on CRACK to pay these prices!
Where is FAIR MARKET here people!