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AT&T Exec Admits Wireless Network Built On Backs of Landline Customers

att mobileAn AT&T executive casually told an audience attending the Wells Fargo 2016 Convergence & Connectivity Symposium that a significant part of AT&T’s wireless network was built with money intended for AT&T’s landline network.

“I came more from the wireline [landline] business and had always a little bit of frustration for me because for many years before I picked up operations in construction and everything for the wireless side of the business, in the wireline world, I was spending a lot of money that was directly supporting the wireless operation, but it showed up as wireline spend,” said Bill Smith,  who has been with AT&T for 37 years and has served as president of AT&T’s Technology Operations since January, 2010. “So we’re not that good at allocating those expenditures.”

Smith’s admission gives further evidence that AT&T has been shortchanging investment in wireline and fiber networks for years, to the benefit of AT&T’s profitable wireless business.

Smith

Smith

When mobile networks were first being constructed, there was concern that private investment, not landline ratepayers, be responsible for covering the costs of building wireless infrastructure. Both AT&T and Verizon submitted regular rate increase requests to state regulators during the period, claiming additional compensation was needed to cover the costs of landline network upkeep and upgrades. In most cases, regulators approved those rate increases.

Smith’s admission suggests AT&T systematically allocated expenses associated with its wireless network on the wireline side of the business ledger, reducing the amount available to maintain landline service. Had regulators known, they would have likely rejected the rate increase requests and, more importantly, required AT&T to stop spending landline ratepayer funds on wireless networks.

By depleting funds designated for wired networks, AT&T ultimately made a cheaper choice about the type of advanced network it would deploy. AT&T rejected Verizon’s choice of FiOS fiber to the home service because it was ‘too expensive.’ AT&T’s less costly solution, U-verse, relies on fiber to the neighborhood, with existing copper wiring remaining in place between the nearest fiber link and the telephone interface box on the back of your home or business.

Smith also handily defeated his employer’s justifications for data caps, telling the audience AT&T has strong capacity with plenty to spare, noting increasing traffic demands on AT&T’s networks are nothing new for the company.

“But getting back to the capacity question, I don’t lay awake at night worried about that,” Smith said. “Yeah there are a lot more demands coming in to the business, but there is nothing new about that. We’ve lived through many, many cases of new applications, new waves causing increases in consumption. I feel very good about where we are. The density of our network is very strong, and as I mentioned, I think we lead the industry in terms of U.S. footprint in the density of our network and that’s great. Also we have things like small cell coming on the horizon.”

 

America’s 5G Revolution Comes By Giving Wireless Industry Whatever It Wants

Wheeler

Wheeler

FCC chairman Thomas Wheeler today told an audience at the National Press Club that 5G — the next generation of wireless networks — “is a national priority, and why, this Thursday, I am circulating to my colleagues proposed new rules that will identify and open up vast amounts of spectrum for 5G applications.”

Wheeler’s proposal, dubbed “Spectrum Frontiers,” is supposed to deliver wireless connectivity as fast as fiber optic broadband, and in Wheeler’s view, will deliver competitive high-speed access for consumers.

“If the Commission approves my proposal next month, the United States will be the first country in the world to open up high-band spectrum for 5G networks and applications,” said Wheeler. “And that’s damn important because it means U.S. companies will be first out of the gate.”

Central to Wheeler’s 5G proposal is opening up very high frequency millimeter wave spectrum — for unlicensed and licensed data communications. Wheeler named two in his speech: a “massive” 14GHz unlicensed band and a 28GHz “shared band” that will allow mobile and satellite operators to co-exist.

“Consider that – 14,000 megahertz of unlicensed spectrum, with the same flexible-use rules that has allowed unlicensed to become a breeding ground for innovation,” Wheeler said.

5g“Sharing is essential for the future of spectrum utilization. Many of the high-frequency bands we will make available for 5G currently have some satellite users, and some federal users, or at least the possibility of future satellite and federal users,” Wheeler noted. “This means sharing will be required between satellite and terrestrial wireless; an issue that is especially relevant in the 28GHz band. It is also a consideration in the additional bands we will identify for future exploration. We will strike a balance that offers flexibility for satellite users to expand, while providing terrestrial licensees with predictability about the areas in which satellite will locate.”

The CTIA – The Wireless Association, America’s largest mobile carrier lobbying and trade association, is all for opening up new spectrum for the use of their members — AT&T, Verizon Wireless, Sprint, T-Mobile, among others. They just don’t want to share it. Ironically, they are calling on the FCC to regulate who gets access to what frequencies and what services can use them. They’d also appreciate federal rules restricting or preempting local officials responsible for approving where new cell towers can be located, and some form of price regulation for backhaul services would also be nice:

First, we need the right rules for high-band spectrum based on a time-tested regulatory framework. It must strike a reasonable balance for licensed and unlicensed use while promoting investment with clear service and licensing rules. We should avoid experimenting with novel spectrum sharing regimes or new technology mandates.

Second, we need the right rules to help build our 5G infrastructure. Traditional spectrum travels many miles, depending on large cell towers to transmit signals. In contrast, high-band spectrum – capable of carrying greater amounts of data –travels meters, not miles and will require the deployment of thousands of new small cells the size of smoke alarms. This network evolution requires a new infrastructure approach, and Congress, the FCC and states must streamline and simplify local siting and rights of way rules.

Wheeler recognizes that 5G services will work very differently from the 3G and 4G networks we’ve used in the past.

ctia

CTIA is the wireless industry’s biggest lobbyist and trade association.

“5G will use much higher-frequency bands than previously thought viable for mobile broadband and other applications,” Wheeler said. “Such millimeter wave signals have physical properties that are both a limitation and a strength: they tend to travel best in narrow and straight lines, and do not go through physical obstacles very well. This means that very narrow signals in an urban environment tend to bounce around buildings and other obstacles making it difficult to connect to a moving point. But it also means that the spectrum can be reused over and over again.”

In other words, think about 5G as an initially limited range wireless network that may turn out to be best suited for fixed wireless service or limited range hotspots, especially before network densification helps make 5G service more ubiquitous. The wireless industry doesn’t think Wheeler’s vision will be enough to resolve capacity issues in the short term, and is calling on the FCC to release even more low and mid-band spectrum in the 600MHz range that can travel inside buildings and offer a wider coverage area.

Wheeler’s recognition that 5G’s shorter range signals will likely require a massive overlay of new infrastructure has also opened the door for the CTIA to call on the FCC to revisit local zoning and antenna placement rules and policies, with the likely goal of preempting or watering down local authority to accept or reject where cell phone companies want to place their next small cell or cell tower. Wireless companies are also expected to push for easy access to utility poles, time limits to approve new cell tower construction applications, and pricing regulation for fiber lines needed to connect 5G infrastructure to backhaul networks.

Cell tower camouflage failure.

Cell tower camouflage failure.

On the issue of backhaul — the connection between a cell tower and the wireless carrier’s network, the FCC is planning a pro-regulatory “anchor pricing” approach to benefit wireless companies. Consumers can also relate to being overcharged for slow speed Internet access with little or no competition, but the FCC is only acting for the benefit of the wireless companies for now — the same companies that would undoubtedly complain loudly if anchor pricing was ever applied to them.

“Lack of competition doesn’t just hurt the deployment of wireless networks today, it threatens as well to delay the buildout of 5G networks with its demand for many, many more backhaul connections to many, many more antennae,” complained Wheeler. “Before the end of this year the Commission will take up a reform proposal – supported by the nation’s leading wireless carriers, save one – that will encourage innovation and investment in Business Data Services while ensuring that lack of competition in some places cannot be used to hold 5G hostage.”

While Wheeler’s goals are laudable, there are stunning examples of hypocrisy and self-interest from the wireless industry. Yet again, the industry is seeking regulatory protection from having to share spectrum with unlicensed users, existing licensees, or competitors.  No letting the “free market” decide here. Second, there are absolutely no assurances the wireless industry will deliver substantial home broadband competition. Verizon and AT&T will be effectively competing with themselves in areas where they already offer wired broadband. Is there a willingness from AT&T and Verizon to sell unlimited broadband over 5G networks or will customers be expected to pay “usage pack”-prices as high as $10 per gigabyte, which doesn’t include the monthly cost of the service itself. Offering customers unlimited 5G could cannibalize the massive profits earned selling data plans to wireless customers.

Cactus or cell tower

Cactus or cell tower

Upgrading to 5G service will be expensive and take years to reach many neighborhoods. Verizon’s chief financial officer believes 5G wireless will be more cost-effective to deploy than its FiOS fiber to the home network, but considering Verizon largely ended its deployment of FiOS several years ago and has allowed its DSL customers to languish just as long, 5G will need to be far more profitable to stimulate Verizon’s interest in spending tens of billions on 5G infrastructure. It does not seem likely the result will be $25/month unlimited, fiber-like fast, Internet plans.

Although the mobile industry will argue its investment dollars should be reason enough to further deregulate and dis-empower local officials that oversee the placement of cellular infrastructure, it would be a tremendous mistake to allow wireless carriers to erect cell towers and small cells wherever they see fit. Most small cells aren’t much larger than a toaster and will probably fit easily on utility poles. But it will likely spark another wave of pole access controversies. The aesthetics of traditional cell tower placement, especially in historical districts, parks, and suburbs, almost always create controversy. The FCC should not tip the balance of authority for tower placement away from those that have to live with the results.

The mobile industry doesn’t make investments for free, and before we reward them for investing in their networks, let’s recall the United States pays some of the highest mobile service prices in the world. The industry argues what you get in return for that $100+ wireless bill is better than ever, an argument similarly used by the cable industry to justify charging $80 a month for hundreds of channels you don’t watch or want. Therefore, incentives offered to the wireless industry should be tied to permanent pro-consumer commitments, such as unlimited 5G broadband, better rural coverage, and the power to unbundle current wireless packages and ditch services like unlimited texting many customers don’t need. Otherwise, it’s just another one-sided corporate welfare plan we can’t afford.

Cox’s Data Limbo Dance: Slashes “Ultimate” Allowance in Half, Lies About Why

Cox's data plan limbo dance. How low can they go?

Cox’s data plan limbo dance. How low can they go?

Cox Communications has cut by half the data usage allowance of one of its fastest broadband plans targeting so-called “heavy users,” exposing unsuspecting customers to expensive overlimit fees, while claiming usage caps are now mandated by law.

Stop the Cap! reader John C. wrote to tell us he discovered his allowance for Cox’s “Ultimate” Plan, delivering 200/20Mbps, has been slashed from 2,000GB to 1,000GB, with little warning except in an obscure support FAQ.

“About 95% of Cox customers are currently on a data plan that more than adequately meets the monthly needs of their household,” Cox claimed. “However, some households, particularly those with multiple Internet users that enjoy streaming TV or movies, may want to select an Internet package with a larger data plan. That is why we offer plans for all types of users so you can choose what is best for your household.”

The plan that most customers want is a flat rate, unlimited-use plan, one that Cox has unilaterally decided to stop offering. Just as bad: targeting the most widely available premium plan for a major usage allowance cut with no explanation whatsoever. It’s bad news for John, who says after paying Cox their asking price for Ultimate service, he cannot afford to also pay overage fees on top of that (currently $10 for each 50GB allotment, charged only in the Cleveland, Oh. area for now).

Customers who contact Cox and complain about their usage caps or allowance changes are being told false fables by Cox’s customer service specialists, who claim data caps are now the law in the United States.

Here is an example of an actual support session with Cox employees, (emphasis ours, edited (…) for brevity):

cox say noYou: I also learned that you have internet data cap?

Jenna: Data limits were implemented by the FCC in 2011. By law, we have to have them. If you exceed the limit for 3 consecutive months, you will be contacted to discuss your options for upgrading.

You: FCC? can you send me details about that

[…]

Jenna: As I mentioned, there’s no fee for exceeding those limits. If you exceed the limit for 3 consecutive months, you will be contacted to discuss your options for upgrading. You can save a copy of this chat transcript for your records if you wish.

Jenna: I can also get you over to Customer Care for more information.

You: so why would you mention FCC rules then?

Jenna: Because you asked about our data limits.

Jenna: That’s why we have them.

You: Sure so can you tell me what FCC rule from 2011 you are referrind to?

Jenna: Sure, I’ll get you the link to the FCC website.

[…]

Jenna: Sure thing. Allow me a moment to get you over to Customer Care chat for further information about our Data Caps policies, and why we have them.

[…]

Christian O.: I see, well our Internet packages have a data usage limit however if you exceed that limit we won’t downgrade your speed or restrict your access to Internet or charge you more.

Christian O.: I think I found some information on the date usage and the FCC on 2011. One moment, please.

You: but it says right there that you will cahrge $10 for 50GB after I reach data cap

You: And FCC is very strict about data caps

Christian O.: Give me a moment to check something.

You: ok thanks

Christian O.: If you exceed your data plan, Cox may notify you by email to alert you. Your service will not be interrupted if you choose to stay on your existing package except in the rare cases of excessive usage. In those extremely rare situations, Cox may suspend service after attempting to resolve the issue.

Christian O.: Cox is conducting a limited data usage trial in Cleveland, Ohio. In all other markets, Cox does not currently charge additional fees if your data plan is exceeded.

You: what you are doing with data caps / usage is illegal

You: But please send me the FCC rule from 2011 that Jenna and you mention

You: “Jenna: Data limits were implemented by the FCC in 2011. By law, we have to have them.”

Christian O.: I don’t have such rule that talks about that. Do you have the rule where it says that is illegal?

Christian O.: Just asking.

[…]

Christian O.: Honestly I don’t have any idea about the rule that Jenna was speaking about. Let me go ask my supervisor. One moment, please.

[…]

Christian O.: Unfortunately we couldn’t find any information about that rule established by the FCC.

To clarify, the FCC neither has rules for or against data caps. It has remained neutral on the subject, although FCC chairman Thomas Wheeler recently advocated imposing a moratorium on data caps or usage billing for up to seven years as a condition of approving Charter Communications’ acquisitions of Time Warner Cable and Bright House Networks.

Here are Cox’s current data plans, which are effective for all residential customers. However, only customers in Cleveland will face penalties for exceeding them at this time.

Package Monthly Included Data Speeds

Download / Upload

Starter 200 GB 5 Mbps / 1 Mbps
Essential 250 GB 15 Mbps / 2 Mbps
Preferred 350 GB 50 Mbps / 5 Mbps
Premier 700 GB 100 Mbps / 10 Mbps
Ultimate 1000 GB 200 Mbps / 20 Mbps
Gigablast (Where Available) 2000 GB 1 Gbps / 1 Gbps

Verizon: Forget About FiOS, We’re Moving to a Broadband Wireless World

Who needs FiOS when you can get 5G wireless service with a data plan?

Who needs FiOS when you can get 5G wireless service with a data plan?

Fran Shammo has a message for Verizon customers and investors: fiber optic broadband is so… yesterday. Your millennial kids aren’t interested in gigabit speed, unlimited use Internet in the home. They want to watch most of their content on a smartphone and spend more on usage-capped wireless plans.

Shammo is Verizon’s money man – the chief financial officer and prognosticator of the great Internet future.

Like his boss, CEO Lowell McAdam, Frammo has his feet firmly planted in the direction of Verizon Wireless, the phone company’s top moneymaker. If one ever wondered why Verizon Communications has let FiOS expansion wither on the vine, Mr. McAdam and Mr. Shammo would be the two to speak with.

This week, Shammo doubled down on his pro-wireless rhetoric while attending the Bank of America Merrill Lynch 2016 Media, Communications & Entertainment Conference — one of many regular gathering spots for Wall Street analysts and investors. He left little doubt about the direction Verizon was headed in.

Shammo

Shammo

“As we look at the world if you will, and we look at our ecosystem, […] the world is moving to a broadband wireless world,” Shammo told the audience. “Now, I am really – when I say world, I am really talking the U.S., right. So, but I do think the world is moving to a wireless world.”

In Shammo’s view, the vast majority of people want to consume content, including entertainment, over a 4G LTE (or future 5G) wireless network on a portable device tied to a data plan. Shammo predicted wireless usage will surpass DSL, cable broadband, and even FiOS consumption in 3-5 years. If he’s right, that means a mountain of money for Verizon and its investors, as consumers will easily have to spend over $100 a month just on a data plan sufficient to cope with Shammo’s predicted usage curve. In fact, your future Verizon Wireless bill will likely rival what you pay for cable television, broadband, and phone service together.

Millennials don’t want fiber, they want wireless data plans

Shammo argued millennials are driving the transition to wireless, claiming they already watch most of their entertainment over smartphones and tablets, not home broadband or linear TV. His view is the rest of us are soon to follow. Shammo claims those under 30 are turning down cable television and disconnecting their home broadband service because they prefer wireless. Others wonder if it is more a matter of being able to afford both. A 2013 survey by Pew data found 84% of households making more than $54,000 have broadband. That number drops to 54% when annual household incomes are lower than $30,000 per year. But those income-challenged millennials don’t always forego Internet access — some rely on their wireless smartphone to access online content instead.

A microcell

A microcell

Verizon Wireless may be banking on the same kind of “hard choice” many made about their landline service. Pay for a landline and a mobile phone, or just keep mobile and disconnect the home phone to save money. Usage growth curves may soon force a choice about increasing your data plan or keeping broadband service at home. Shammo is betting most need Verizon Wireless more.

Verizon FiOS is really about network densification of our 4G LTE network

Shammo continued to frame its FiOS network as “east coast-centric” and almost a piece of nostalgia. The recent decision to expand FiOS in Boston is not based on a renewed belief in the future of fiber, Shammo admitted, it is being done primarily to lay the infrastructure needed to densify Verizon’s existing LTE wireless network in metro Boston to better manage increased wireless usage. Shammo’s spending priorities couldn’t be clearer.

“Obviously, we said, we would build up Boston now, because it makes sense from a LTE perspective,” Shammo said. “We can spend $300 million over the next three years to make that more palatable to expand FIOS. So we will continue to expand that broadband connection via fiber where it makes financial sense for us.”

verizon 5gIn other words, it is much easier to justify capital expenses of $300 million on network expansion to Wall Street if you explain it’s primarily for the high-profit wireless side of the business, not to give customers an alternative to Time Warner Cable or Comcast. FiOS powers cell sites as well as much smaller microcells and short-distance antennas designed to manage usage in high traffic neighborhoods.

Shammo also believes Verizon must not just be a ‘dumb wireless’ connection. Controlling and distributing content is also critically important, and Shammo is still a big believer in Verizon’s ho-hum GO90 platform, which compared to Hulu and Netflix couldn’t draw flies.

Even Verizon CEO McAdam admitted a few weeks ago at another Wall Street conference GO90 was “a little bit overhyped.” Most of GO90’s content library is mostly short video clips targeted at millennials with short attention spans. The downside of making that your target audience is the rumor many who sampled the service early on have already forgotten about it and moved on.

Forget about congested home and on-the-go Wi-Fi and expensive fiber optics. Verizon will sell you 5G wireless (with a data plan) for everywhere.

Shammo believes the future isn’t good for Wi-Fi in the home and on-the-go. As data demands increase, he believes Wi-Fi will become slow and overcongested.

“There is a quality of service with our network that you can’t get with others,” Shammo said. “I mean, most people in this room would realize that when Wi-Fi gets clogged, quality of service goes significantly down. It’s an unmanaged network. You can’t manage that.”

Instead, Verizon will eventually deploy 5G wireless instead of FiOS in many areas without fiber optic service today. Frammo said 5G would cost Verizon a lot less than fiber, “because there is no labor to dig up your front lawn, lay in fiber, or be able to fix something.”

Shammo doesn’t believe 5G wireless will replace 4G LTE wireless, however.

“LTE will be here for a very long time and be the predominant voice, text, data platform for mobile,” Shammo said.

So instead of unlimited fiber optic broadband, Verizon plans to sell home broadband customers something closer to Wi-Fi, except with a data allowance. It’s a return to fixed wireless service.

Verizon Wireless' existing fixed wireless service is heavily usage capped and no cheap.

Verizon Wireless’ existing fixed wireless service is heavily usage capped and not cheap.

Just a few short years ago, Verizon was looking to fixed wireless as a replacement for rural DSL and landline service. Now Shammo sees the economics as favorable to push a similar service on all of its customers, except those already fitted for FiOS. That changes the dynamics on usage as well, because Verizon Wireless ditched unlimited service several years ago except for a dwindling number of customer grandfathered in on its old unlimited plan.

Current 4G LTE fixed wireless customers can expect 5-12Mbps speeds with data plan options of $60 for 10GB, $90 for 20GB, or $120 for 30GB. The 5G service would be substantially faster than Verizon’s current fixed LTE wireless service, but the company’s philosophy favoring data caps for wireless services makes it likely customers will pay much higher prices for service, higher than Verizon charges for FiOS itself.

Comcast’s 1TB Usage Cap Goes Live, Replaces Old 300GB Usage Allowance

1024gbAfter four years of a gradually expanding “beta test” no customer wanted to be part of, Comcast’s never-ending data cap trial has increased data allowances for the first time since 2012.

xfinitylogoComcast customers in data cap trial areas tell Stop the Cap! their Comcast usage meter now reflects the new 1,024GB allowance Comcast promised back in April (some customers in Atlanta seem to have gotten a 2,048GB allowance for an unknown reason). It’s a major improvement over the old 300GB cap many customers endured with expensive overlimit fees that applied when they exceeded their allowance. Comcast will continue to bill those overlimit fees of $10 for each 50GB increment of excess usage over the allowance, but now plans to cap those overlimit fees at $200 a month.

“The new meter showed up June 1st in southern Florida, and it’s about time,” said our reader Javier from Miami. “But wouldn’t you know, Comcast screwed us out of one more month of paying their $30 extortion fee to keep unlimited.”

300GB was not enough for many Comcast customers.

300GB was not enough for many Comcast customers.

Javier is referring to Comcast’s unlimited usage insurance plan. For $30-35 extra, the cable company removes your data cap and you face no overlimit fees. But since Comcast bills one month ahead, a customer enrolled in the insurance plan paid for an unlimited June on their May bill. Now that usage allowances have more than tripled, Javier wanted to cancel his insurance for this month because he doesn’t come close to Comcast’s new cap.

No dice, replied Comcast, who canceled his unlimited insurance plan effective July 1.

“Once you begin a new month, you cannot stop the charges until the following month,” Javier explained, even though he canceled the plan on the 1st of the month. “They told me it was too late.”

Javier is still glad he canceled the insurance.

“If I didn’t, they planned to auto-enroll me in their new unlimited option, which costs a ridiculous $50 a month,” said Javier.

Not all Comcast service areas are subject to data caps. Comcast issued broad clarifications about the usage cap trial changes on its website:

A terabyte still isn't enough for some customers. (Image: NAM)

A terabyte still isn’t enough for some customers. (Image: NAM)

New Data Usage Trials

On June 1, 2016, we will be migrating all customers currently in usage trials to a new 1 Terabyte plan, and the following is an overview. For more details on this trial plan, see Questions & Answers About Our Data Usage Plan Trials. For a detailed list of trial locations, see Is my area part of the data usage plan trials? For trial start dates, see Where will these plans be launched?

In the markets of Huntsville, Mobile and Tuscaloosa, Alabama; Tucson, Arizona; Little Rock, Arkansas;Fort Lauderdale, the Keys, and Miami, Florida; Atlanta, Augusta and Savannah, Georgia; Central Kentucky; Houma, LaPlace, and Shreveport, Louisiana; Maine; Jackson and Tupelo, Mississippi;Chattanooga, Greeneville, Johnson City/Gray, Knoxville, Memphis and Nashville, Tennessee;Charleston, South Carolina; and Galax, Virginia, we will increase our monthly data usage plan for all XFINITY Internet tiers to 1 terabyte (1,024 GB) per month and will offer additional gigabytes in increments/blocks ($10 per 50 GB, up to $200 each month). You will also be able to choose to enroll in an Unlimited Data Option for an additional recurring flat fee of $50 per month. Under this option, the 1 Terabyte data usage plan will not be enforced on your account. For more information on the Unlimited Data Option, see What is the Unlimited Data Option?

If you are an XFINITY Internet Economy Plus or Performance Starter customer, you can instead choose to enroll in the Flexible Data Option to receive a $5 credit on your monthly bill if you reduce your data usage plan to 5 GB. If you choose this option and use 6 GB of data or more in any given month, you will not receive the $5 credit and will be charged an additional $1 for each gigabyte of data used over the 5 GB included in the Flexible Data Option. For more information on the Flexible Data Option, see What is the Flexible Data Option?

Expired Data Usage Plans

Important Note: These data usage plans, which Comcast previously had in place, expired on June 1, 2016, and have been replaced with the new plans described above

In the markets of Huntsville, Mobile and Tuscaloosa, Alabama; Little Rock, Arkansas; Fort Lauderdale,the Keys, and Miami, Florida; Atlanta, Augusta and Savannah, Georgia; Houma, LaPlace, andShreveport, Louisiana; Jackson and Tupelo, Mississippi; Chattanooga, Greeneville, Johnson City/Gray,Knoxville, Memphis and Nashville, Tennessee; Charleston, South Carolina; and Galax, Virginia, we have increased our monthly data usage plan for all XFINITY Internet tiers to 300 GB per month and will offer additional gigabytes in increments/blocks ($10 per 50 GB). In this trial, you can also choose to enroll in an Unlimited Data Option for an additional recurring flat fee (e.g., $30-$35 per month). Under this option, the 300 GB data usage plan will not be enforced on your account. If you subscribe to Economy Plus or Performance Starter XFINITY Internet, you can instead choose to enroll in the Flexible Data Option to receive a $5 credit on your monthly bill if you reduce your data usage plan to 5 GB. If you choose this option and use 6 GB of data or more in any given month, you will not receive the $5 credit and will be charged an additional $1 for each gigabyte of data used over the 5 GB included in the Flexible Data Option.

In the markets of Central Kentucky and Maine, we have increased our data usage plan for XFINITY Internet tiers to 300 GB per month, offering additional gigabytes in increments/blocks ($10 per 50 GB). In this trial, XFINITY Internet Economy Plus customers can instead choose to enroll in the Flexible Data Option to receive a $5 credit on their monthly bill if they reduce their data usage plan to 5 GB. If you choose this option and use 6 GB of data or more in any given month, you will not receive the $5 credit and will be charged an additional $1 for each gigabyte of data used over the 5 GB included in the Flexible Data Option. Currently, the Unlimited Data Option is not available in these markets.

In the Tucson, Arizona, market, we have increased our monthly data usage plan for Economy Plus through Performance XFINITY Internet tiers to 300 GB. Those customers subscribed to the Performance Pro and Blast! Internet tiers receive 350 GB in their data usage plan; Blast! Pro customers receive 450 GB in their data usage plan; and Extreme customers receive 600 GB in their data usage plan. As in our other trial market areas, we offer additional gigabytes in increments/blocks of 50 GB for $10 each in the event the customer exceeds their included data amount. Currently, the Unlimited Data Option and the Flexible Data Option are not available in this market.

In Fresno, California, Economy Plus customers have the option of enrolling in the Flexible Data Option.

Spring 2016: An Update and Progress Report for Our Members

stcDear Members,

We have had a very busy winter and spring here at Stop the Cap! and we thought it important to update you on our efforts.

You may have noticed a drop in new content online over the last few months, and we’ve had some inquiries about it. The primary reason for this is the additional time and energy being spent to directly connect with legislators and regulators about the issues we are concerned about. Someone recently asked me why we spend a lot of time and energy writing exposés to an audience that almost certainly already agrees with us. If supporters were the only readers here, they would have a point. Stop the Cap! is followed regularly by legislators, regulators, public policy lobbyists, consumer groups, telecom executives, and members of the media. Our content is regularly cited in books, articles, regulatory filings, and in media reports. That is why we spend a lot of time and energy documenting our positions about data caps, usage billing, Net Neutrality, and the state of broadband in the United States and Canada.

A lengthy piece appearing here can easily take more than eight hours (sometimes longer) to put together from research to final publication. We feel it is critical to make sure this information gets into the hands of those that can help make a difference, whether they visit us on the web or not. So we have made an extra effort to inform, educate, and persuade decision-makers and reporters towards our point of view, helping to counter the well-funded propaganda campaigns of Big Telecom companies that regularly distort the issues and defend the indefensible.

Four issues have gotten most of our attention over the last six months:

  1. The Charter/Time Warner Cable/Bright House merger;
  2. Data cap traps and trials (especially those from Comcast, Blue Ridge, Cox, and Suddenlink);
  3. Cablevision/Altice merger;
  4. Frontier’s acquisition of Verizon landlines and that phone company’s upgrade plans for existing customers.

We’ve been successful raising important issues about the scarcity of benefits from telecom company mergers. In short, there are none of significance, unless you happen to be a Wall Street banker, a shareholder, or a company executive. The last thing an already-concentrated marketplace needs is more telecom mergers. We’re also continuing to expose just how nonsensical data caps and usage-based billing is for 21st century broadband providers. Despite claims of “fairness,” data caps are nothing more than cable-TV protectionism and the further exploitation of a broadband duopoly that makes it easy for Wall Street analysts to argue “there is room for broadband rate hikes” in North America. Stop the Cap! will continue to coordinate with other consumer groups to fight this issue, and we’ve successfully convinced at least some at the FCC that the excuses offered for data caps don’t hold water.

Dampier

Dampier

FCC chairman Tom Wheeler’s broadening of Charter’s voluntary three-year moratorium on data caps to a compulsory term as long as seven years sent a clear message to broadband providers that the jig is up — data caps are a direct threat to the emerging online video marketplace that might finally deliver serious competition to the current bloated and overpriced cable television package.

Wheeler’s actions were directly responsible for Comcast’s sudden generosity in more than tripling the usage allowance it has imposed on several markets across the south and midwest. But we won’t be happy until those compulsory data caps are gone for good.

More than 10,000 Comcast customers have already told the FCC in customer complaints that Comcast’s data caps are egregious and unfair. Considering how unresponsive Comcast has been towards its own customers that despise data caps of any kind, Comcast obviously doesn’t care what their customers think. But they care very much about what the FCC thinks about regulatory issues like data caps and set-top box monopolies. How do we know this? Because Comcast’s chief financial officer this week told the audience attending the JPMorgan Technology, Media and Telecom Broker Conference Comcast always pays attention to regulator headwinds.

“I think it’s our job to make sure we pivot and react accordingly and make sure the company thrives whatever the outcome is on some of the regulatory proposals that are out there,” said Comcast’s Mike Cavanagh. We suspect if Chairman Wheeler goes just one step further and calls on ISPs to permanently ditch data caps and usage billing, many would. We will continue to press him to do exactly that.

Stop the Cap! supports municipal and community-owned broadband providers.

Stop the Cap! supports municipal and community-owned broadband providers.

Other companies are also still making bad decisions for their customers. Besides Comcast’s ongoing abusive data cap experiment, Cox’s ongoing data cap trial in Cleveland, Ohio is completely unacceptable and has no justification. The usage allowances provided are also unacceptably stingy. Suddenlink, now owned by Altice, should not even attempt to alienate their customers, particularly as the cable conglomerate seeks new acquisition opportunities in the United States in the future. We find it telling that Altice feels justified retaining usage caps on customers in smaller communities served by Suddenlink while denying they would even think of doing the same in Cablevision territory in suburban New York City. Both Suddenlink and Cablevision have upgraded their networks to deliver faster speed service. What is Altice’s excuse about why it treats its urban and rural customers so differently? It frankly doesn’t have one. We’ll be working to convince Altice it is time for Suddenlink’s data caps to be retired for good.

We will also be turning more attention back on the issue of community broadband, which continues to be the only competitive alternative to the phone and cable companies most Americans will likely ever see. The dollar-a-holler lobbyists are still writing editorials and articles claiming “government-owned networks” are risky and/or a failure, without bothering to disclose the authors have a direct financial relationship to the phone and cable companies that don’t want the competition. We will be pressing state lawmakers to ditch municipal broadband bans and not to enact any new ones.

We will also continue to watch AT&T and Verizon — two large phone companies that continue to seek opportunities to neglect or ditch their wired services either by decommissioning rural landlines or selling parts of their service areas to companies like Frontier. AT&T specializes in bait-n-switch bills in state legislatures that promise “upgrades” in return for further deregulation and permission to switch off rural service in favor of wireless alternatives. That’s great for AT&T, but a potential life-threatening disaster for rural America.

We continue to abide by our mandate: fighting data caps and consumption billing and promoting better broadband, regardless of what company or community supplies it.

As always, thank you so much for your financial support (the donate button that sustains us entirely is to your right) and for your engagement in the fight against unfair broadband pricing and policies. Broadband is not just a nice thing to have. It is an essential utility just as important as clean water, electricity, natural gas, and telephone service.

Phillip M. Dampier
Founder & President, Stop the Cap!

Cox Upgrading to Fiber-to-the-Node, DOCSIS 3.1 Broadband Platform

COX_RES_RGBCox Communications will push broadband speed upgrades as high as a gigabit to customers over an upgraded network heavy on fiber and much lighter on copper coaxial cable.

In an effort to stay competitive and reduce operational and maintenance costs, Cox will begin major upgrades of its cable plant, removing as much copper and as many signal amplifiers as possible to simplify upkeep and make future upgrades simpler.

Cox chief technology officer Kevin Hart told Light Reading he wants to push fiber optics deeper into Cox’s network, bringing optical fiber closer to the neighborhoods where customers live and work. This will allow Cox to reduce the number of customers sharing the same bandwidth. It also eases Cox’s forthcoming upgrade to DOCSIS 3.1 technology.

“We’re […] taking fiber deeper as a part of our multi-year network transformation plan, working towards a node-plus-zero architecture that allows us to take fiber to the home, and allows us to bring gigabit speeds on demand. And of course we’re aligning around DOCSIS 3.1,” Hart said.

Cox is planning its first rollout of DOCSIS 3.1, which gives cable companies to ability to offer gigabit download speeds, in the fourth quarter of this year. It will choose one of the smaller communities it serves as a test market. If all goes well, Cox will push DOCSIS 3.1 across all of its markets between 2017-2020, likely focusing on Phoenix and San Diego first.

Cox is evaluating DOCSIS 3.1 cable modems from a number of vendors, with Arris and Technicolor likely contenders.

Cox continues to support data caps and usage-based billing in some of its markets and has become one of the stingiest with data allowances:

Package Usage Cap Speeds
Download / Upload
Starter 150 GB 5 Mbps / 1 Mbps
Essential 250 GB 15 Mbps / 2 Mbps
Preferred 350 GB 50 Mbps / 5 Mbps
Premier 700 GB 100 Mbps / 10 Mbps
Ultimate 2000 GB 200 Mbps / 20 Mbps
Gigablast (Where Available) 2000 GB 1 Gbps / 1 Gbps

Customers in Cleveland, Ohio are the unluckiest of all, because they also face an overlimit fee when they exceed their allowance: $10 for each additional 50GB block of data. Some customers in Cleveland’s downtown area have found a loophole around the data cap, however. If they access the Internet over Cox WiFi and Cable WiFi hotspots, it does not count against one’s allowance at this time.

Charter Completes Time Warner Cable/Bright House Merger Today

charter twc bhAmerica has a new second largest cable conglomerate with 17 million customers and a new name.

Charter Communications formally completed their $55 billion acquisition of Time Warner Cable and Bright House Networks today, creating a new cable giant that more closely rivals number one Comcast in size and scope.

The approval came despite warnings from a team at the FCC assigned to review the impact of the merger.

The Deal is Likely to Trigger an Abusive Money Party at the Expense of Customers… Merger Approved

“We conclude that the transaction will materially alter [Charter’s] incentives and abilities in ways that are potentially harmful to the public interest,” an FCC report about the impact of the merger states.

The FCC concluded the deal could become an enormous money-maker for Charter and its investors through the eventual metering of online usage. There are strong incentives, according to the FCC, for Charter “to impose data caps and usage-based prices in order to make watching online video more expensive, and in particular more expensive than subscribing to a traditional pay-TV bundle” after its voluntary commitment not to impose data caps expires.

Existing Charter customers warn this isn't the cable company you are looking for.

Existing Charter customers warn this isn’t the cable company you are looking for.

The FCC is also certain Charter will enjoy considerable pricing power with its near broadband monopoly at speeds of 25Mbps or higher. That means one thing: substantial rate increases unchecked by competition.

Despite the gloomy prospects, FCC commissioners found a “compromise” that will impose consumer-friendly conditions on the merger, but will expire between 5-7 years from today. After that, in the absence of robust competition from a player like Google Fiber, it will be open season on broadband customers.

Consumer advocates were less than pleased.

“There’s nothing about this massive merger that serves the public interest. There’s nothing about it that helps make the market for cable TV and Internet services more affordable and competitive for Americans,” said Free Press president and CEO Craig Aaron. “Customers of the newly merged entity will be socked with higher prices as Charter attempts to pay off the nearly $27 billion debt load it took on to finance this deal. The wasted expense of this merger is staggering. For the money Charter spent to make this happen it could have built new competitive broadband options for tens of millions of people. Now these billions of dollars will do little more than line the pockets of Time Warner Cable’s shareholders and executives. CEO Rob Marcus will walk away with a $100 million golden parachute.”

[Image: WSJ.com]

In fact, the golden parachutes will extend far beyond retiring Time Warner Cable CEO Rob Marcus. According to a regulatory filing, Marcus’ contract was written to allow him to sell the company and effectively be “terminated without cause,” which activates the equivalent of a Powerball Powerplay. Marcus will automatically qualify to receive several years’ worth of his original salary, expected bonuses, and compensation in stock for showing himself to the exit. That alone is expected to exceed $100 million. Marcus’ ancillary benefits also add up, and will be eventually disclosed in future filings with the Securities & Exchange Commission.

Marcus’ colleagues won’t leave empty-handed either. The chief operating officer and chief financial officer of Time Warner Cable could each get $32 million in compensation. The general counsel of Time Warner will retire with around $22 million and some mid-level executives could leave with around $18 million each.

Familar names on Wall Street will also enjoy proceeds worthy of Donald Trump Lotto. Everyone’s favorite financial casino Goldman Sachs is sitting pretty with millions in fees advising Charter on both its acquisitions of Bright House and Time Warner Cable. UBS helped lead the financing of the whopping $55 billion deal on behalf of Charter and is the sole financial adviser to Advance/Newhouse, which owns Bright House. That means big bucks for the Swiss bank.

fishThe Small Swallow the Big

Charter was a much smaller, and not well-regarded cable company before it financed the acquisition of two of its non-competing rivals. In fact, Time Warner Cable was already the country’s second largest cable operator before the acquisition, and Charter will have to contend with managing a cable operator much larger than itself. Charter executives have hinted it will take many months to manage that transition, with the eventual retirement of both the Time Warner Cable and Bright House brands, in favor of Charter and its Spectrum product suite.

Those not already Charter customers will be subjected to a publicity campaign to manage the introduction of Charter in the best possible light, despite the fact current Charter customers rate the cable operator as mediocre in consumer surveys. Its reputation is well-known, especially in the middle of the country where many Charter systems operate.

Charter will continue to be led by CEO Thomas Rutledge, who will also hold the titles of president and chairman of the board. But the man behind-the-scenes expected to have a substantial amount of influence in how Charter is run in the future is ex-Tele-Communications, Inc. (TCI) CEO Dr. John Malone through his entity Liberty Broadband, which will control three seats on Charter’s board of directors, including one for Malone himself. Malone advocated for Rutledge to become CEO of Charter after the cable company emerged from bankruptcy reorganization in 2009.

makeoverHow to Remake Your Image: Change the Name

Renaming Time Warner Cable isn’t likely to fix the scandalously low regard its customers hold the company. But it couldn’t hurt either.

“It’s not surprising Charter wants to rebrand Time Warner Cable,” said David VanAmburg, managing director of the American Customer Satisfaction Index, which regularly rates Time Warner Cable (and often Comcast trading places) the worst companies in the country. “Charter has scored better than Time Warner Cable in recent years, so it could bode well for Time Warner Cable customers. But the data suggests leaps-and-bounds improvement could be difficult.”

ACSI graded Charter 57 in 2015. Time Warner Cable managed a 58 — both effectively failing grades on a scale of 0-100.

What kinds of services Charter is now compelled to offer is dependent on the state of the cable system serving each area and if regulators extracted concessions on the state level to guarantee better service. The state that worked the hardest to compel upgrades and insist on a more customer-friendly transition is New York, where the Public Service Commission forced concessions to upgrade all of the state and allow customers to keep their current Time Warner Cable plans if they wished.

“On Day One, customers of (Time Warner) won’t really see any changes,” Charter spokesman Justin Venech told the Albany Times Union. “Time Warner Cable and Charter Spectrum will continue offering their current suite of advanced products and services to customers in their markets.”

“As we go all digital market by market, we will launch the Spectrum brand product, pricing and packaging, and Charter will also launch Spectrum in those markets in which (Time Warner has) already gone all digital,” Venech said. “We will be communicating directly with customers, letting them know when they will start seeing the Spectrum brand. In addition, when our Spectrum packages launch, if a customer likes the package they are currently in, they will be able to stay in that package.”

Financial Mess for Altice Abroad, U.S. Cable Customers Will Help Cover the Losses

altice debtAs Patrick Drahi’s telecom empire continues to strain under massive debts, a customer exodus in France, and cut throat competition in Europe that has reduced prices of some plans to less than $5 a month, the one thing his parent company Altice can count on is the deep pockets of the American cable subscriber.

The two cable companies that could make all the difference in helping Mr. Drahi keep the proverbial lights on at Empire Altice are his American acquisitions: Suddenlink and, if regulators ultimately approve, Cablevision. The French newspaper Les Echos notes Suddenlink customers are already helping cover Altice’s terrible financial performance in Europe, thanks to that cable company’s 42.5% profit margin. Suddenlink customers will be doing even more to help bail out Drahi’s difficult situation in France, thanks to future rate increases and the continued implementation of broadband usage plans that will push customers towards upgrades. But there is more to come.

“Cablevision will complete the ‘desensitization’ of France’s turbulent [telecom] marketplace for Altice,” reports the newspaper. Cablevision gives Altice an opportunity to cut costs and rely on New York, New Jersey and Connecticut customers to squeeze money out of the New York-based cable operator, validating Drahi’s “American adventure” — acquiring barely competitive cable companies to bolster revenue and profits. Customers are not expected to see lower cable bills, despite the cost cutting.

Overleveraged

Overleveraged

Altice’s troubled SFR-Numericable, which provides cable and mobile service in France, continues to endure a wholesale customer exodus, losing another 272,000 wireless customers during the first three months of 2016. Another 61,000 customers canceled cable and broadband service at the same time, despite price cuts. Even with cut-rate promotions, more than 1.4 million customers asked SFR-Numericable for a divorce over the last 15 months.

“They can’t give the service away for free,” says François Beauparlant, who dropped SFR-Numericable in January. “The company specializes in broken promises and shady deals. They promised upgrades and left us with service that regularly fails or Internet speeds only a small amount of what they promoted.”

Beauparlant rebuffed SFR despite its well-publicized offer of a wireless service package with 20GB of data and unlimited calls and text messages for $4.50 a month for a year.

Meanwhile, in Bethpage, N.Y., the neighbors are hopeful that quieter skies are in their future as the long-predicted Great Slash-a-thon at Cablevision is reportedly about the begin, starting with the permanent grounding of the cable company’s fleet of four executive helicopters which regularly fly in and out of Cablevision’s corporate headquarters.

The executives that relied on them won’t have much time to lament the loss, as the New York Post reports Drahi is ready to show Cablevision’s top-10 executives the door within weeks. Drahi wants everyone earning $300,000 or more out of the company as soon as possible.

Altice's cost-cutting Huns arrive.

Altice’s cost-cutting warriors arrive.

“I do not like to pay salaries. I pay as little as I can,” Drahi told investors at a conference last year.

Drahi also said he prefers to pay minimum wage wherever possible, a fact lesser Cablevision employees are likely to find out this summer. While those in lower level positions are likely to get “take it or leave it” offers, the top echelon of well-paid Cablevision executives will be paid even more in golden parachute exit packages, expected to be worth millions.

Among the recipients will likely be CEO James Dolan, general counsel David Ellen and vice-chairmen Hank Ratner and Gregg Seibert. Dolan’s wife Kristen, appointed chief operating officer several years ago, is still up in the air. She won’t be working at Altice’s pay scale, but may form a data-oriented joint venture with Altice later, according to the Post.

Drahi still insists he can find $900 million to cut from Cablevision’s annual budget. Critics of Altice’s acquisition of Cablevision insist those savings will come at the cost of customers, who could end up with the consequences of a dramatically reduced budget to manage upgrades, outsourced customer service, and dubious subcontractors.

Drahi’s willingness to withhold payments from vendors and suppliers to extract discounts is also likely to affect Cablevision’s relationships with cable programming networks and TV stations. The Post reports he is looking to offer slimmed-down cable TV packages, which means confronting powerful entertainment conglomerates like Disney, Viacom, Discovery, Comcast, and News Corp. Playing hardball with Viacom has not gone well for smaller cable conglomerates like Cable One, which dropped Viacom-owned channels from its lineup when it could not win enough price concessions. Disney’s ESPN has shown a willingness to sue if its expensive sports network is shunned from discounted cable TV packages.

Drahi concedes Altice and SFR-Numericable may not be the most popular companies in France, but ultimately it may not matter if he owns and controls the content customers want to watch. He is pouring money into French media acquisitions, including newspapers, launching his own Paris-based news channel, and acquiring TV networks and the exclusive rights to show popular sports like English football on them.

TDS Gets Tedious With 250GB Usage Cap

tds cap

TDS DSL customers have a 250GB data cap in their future.

Arch, a Stop the Cap! reader in eastern Kentucky, just received a notification letter informing him his Internet access is about to be rationed, and unless he buys additional usage before June 1, TDS is likely to charge him penalty overlimit rates.

tds cap optionsLike some data caps of the past, TDS is giving customers a small break by remaining unlimited during the overnight hours, but for many customers, it won’t be enough to prevent a higher broadband bill.

“We are writing to you inform you TDS s implementing data-usage allowance plans in your area,” reads TDS’ letter. “Beginning with the June billing period, data usage will be measured during peak time (6am-midnight CST). Data usage during non-peak time will be unlimited. In June and thereafter, if your monthly data usage exceeds the 250GB allowance you will be assessed a $20 overage fee for every 250GB exceeded (up to $60).”

TDS advises Arch that based on his prior usage, he’s very likely to exceed his cap and face overlimit fees.

“My mother got a similar [letter],” writes Arch. “Mine states I am likely to be affected by the cap and my mother’s letter says she will likely not be affected.”

Of course, customers can make the usage cap less of an issue by agreeing to buy more usage up front:

  • a 500GB Data Allowance runs $10 extra a month;
  • 750GB costs an extra $20 a month;
  • 1TB (1,000GB) is priced at an additional $30 a month.

TDS does not offer any justification for their data caps, but it doesn’t have a lot to fear imposing them.

“TDS has no competition at all in my area except for fraudband satellite,” Arch reminds us.

That is also likely true across many other TDS service areas, where the company’s 1.2 million customers live in more than 150 different communities, many rural or suburban.

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