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AT&T, Verizon, Time Warner Cable Implicated In Content Delivery Network Slowdowns

fat cat attIf your YouTube, Netflix, or Amazon Video experience isn’t what it should be, your Internet Service Provider is likely to blame.

A consumer group today implicated several major Internet providers including Comcast, AT&T, Time Warner Cable and Verizon in an Internet slowdown scheme that prevented customers from getting the broadband performance they are paying for.

A study* of 300,000 Internet users conducted by Battleforthenet found evidence some of America’s largest providers are not adequately providing connectivity for Content Delivery Networks (CDNs) that supply high-capacity traffic coming from the Internet’s most popular websites.

Significant performance degradation was measured on the networks of the five largest American ISPs, which provide Internet connectivity for 75% of U.S. households.

“For too long, Internet access providers and their lobbyists have characterized Net Neutrality protections as a solution in search of a problem,” Tim Karr from Free Press told the Guardian newspaper, which had advance notice of the study. “Data compiled using the Internet Health Test show us otherwise – that there is widespread and systemic abuse across the network. The irony is that this trove of evidence is becoming public just as many in Congress are trying to strip away the open Internet protections that would prevent such bad behavior.”

freepressThe study revealed network performance issues that would typically be invisible to most broadband customers performing generic speed tests to measure their Internet speed. The Open Technology Institute’s M-Lab devised a more advanced speed test that would compare the performance of high traffic CDNs across several providers. CDNs were created to reduce the distance between a customer and the content provider and balance high traffic loads more evenly to reduce congestion. The shorter the distance a Netflix movie has to cross, for example, the less of a chance network problems will disrupt a customer’s viewing.

If technicians controlled the Internet, the story would end there. But it turns out money has gotten between Internet engineers with intentions of moving traffic as efficiently as possible and the executives who want to be paid something extra to carry the traffic their customers want.

That may explain why Comcast can deliver 21.4Mbps median download speeds for traffic distributed by a CDN Tier1 IP network called GTT to customers in Atlanta, while AT&T only managed to squeeze through around 200kbps — one-fifth of 1Mbps. It turns out AT&T’s connection with GTT may be maxed out and AT&T will not upgrade capacity to a network that sends AT&T customers more than twice the traffic it receives from them without direct compensation from GTT.

Internet traffic jam, at least for AT&T customers in Atlanta trying to access content delivered by GTT.

Internet traffic jam, at least for AT&T customers in Atlanta trying to reach content delivered by GTT.

An AT&T U-verse customer in Atlanta would probably not attribute the poor performance depicted in M-Lab’s performance test directly to AT&T because Internet responsiveness for other websites would likely appear normal. Customers might blame the originating website instead. But M-Lab’s performance results shows the trouble is limited to AT&T, not other providers like Comcast.

AT&T: Slow down, you move too fast.

AT&T: Slow down, you move too fast.

The issues of performance and peering agreements that provide enough capacity to meet demand are close cousins of Net Neutrality, which is supposed to prevent content producers from being forced to pay for assurances their traffic will reach end users. But that seems to be exactly what AT&T is asking for from GTT.

“It would be unprecedented and unjustified to force AT&T to provide free backbone services to other backbone carriers and edge providers, as Cogent et al seek,” AT&T wrote in response to a request from several CDNs to disallow AT&T’s merger with DirecTV. “Nor is there any basis for requiring AT&T to augment network capacity for free and without any limits. Opponents’ proposals would shift the costs of their services onto all AT&T subscribers, many of whom do not use Opponents’ services, and would harm consumers.”

* – When a copy of the study becomes publicly available, we will supply a link to it.

Correction: It is more accurate to describe GTT as a “Tier1 IP network” which supplies services to CDN’s, among others. More detail on what GTT does can be found here.

AT&T Slapped With $100 Million FCC Fine for Deceiving Customers About “Unlimited Data”

fccAT&T violated the transparency rules of the Federal Communications Commission not less than a million times by allegedly deceiving customers about an unlimited data plan that was speed throttled to unusability after as little as 3GB of usage a month. As a result, the FCC today fined AT&T $100,000,000.

“Consumers deserve to get what they pay for,” said FCC chairman Tom Wheeler. “Broadband providers must be upfront and transparent about the services they provide. The FCC will not stand idly by while consumers are deceived by misleading marketing materials and insufficient disclosure.”

From the Notice of Apparent Liability:

Based on the facts and circumstances before us, we find that AT&T apparently willfully and repeatedly violated Section 8.3 of the Commission’s Rules by:

  1. using the term “unlimited” in a misleading and inaccurate way to label a data plan that was in fact subject to prolonged speed reductions after a customer used a set amount of data; and
  2. failing to disclose the data throughput speed caps it imposed on customers under the MBR policy.

In short:

“Unlimited means unlimited,” said FCC Enforcement Bureau chief Travis LeBlanc. “As today’s action demonstrates, the Commission is committed to holding accountable those broadband providers who fail to be fully transparent about data limits.”

This is the largest proposed fine in FCC history, according to a senior FCC official. The official told the Wall Street Journal AT&T made billions of dollars off the practice.

Wheeler

Wheeler

Thousands of AT&T customers have complained about the practice and feel misled about the company limiting an unlimited use plan.

“A provider cannot announce something in large type that it contradicts in fine print; such practices would be inherently misleading to consumers, and, therefore contrary to both the spirit and letter of the Open Internet Transparency Rule,” the FCC notice states.

The FCC’s two minority Republican commissioners strongly disagreed with the action against AT&T. Ajit Pai used his dissent to cut and paste large sections of AT&T’s website in defense of the company.

“Because the Commission simply ignores many of the disclosures AT&T made; because it refuses to grapple with the few disclosures it does acknowledge; because it essentially rewrites the transparency rule ex post by imposing specific requirements found nowhere in the 2010 Net Neutrality Order; because it disregards specific language in that order and related precedents that condone AT&T’s conduct; because the penalty assessed is drawn out of thin air; in short, because the justice dispensed here condemns a private actor not only in innocence but also in ignorance, I dissent,” Pai wrote.

att-logo-221x300Commissioner Michael O’Rielly dissented because he felt the FCC was overreacting to AT&T’s throttling program and assumed harm was done to every customer affected by it.

“I firmly believe that the Commission must take the necessary steps to enforce its regulations,” O’Rielly wrote. “But, it is equally important that the Commission’s enforcement procedures be fair and equitable. Licensees must have faith in the process and trust that the government is working in a sound and just manner, instead of vilifying them, or demanding that they incriminate themselves.”

“We will vigorously dispute the FCC’s assertions,” said Michael Balmoris, an AT&T spokesman. “The FCC has specifically identified this practice as a legitimate and reasonable way to manage network resources for the benefit of all customers. We have been fully transparent with our customers” and exceeded FCC disclosure requirements, Balmoris said.

AT&T only imposes its speed throttle on unlimited data plan customers who exceed 3GB of usage. Customers on usage-based billing plans do not face a speed throttle after exceeding 3GB of usage.

No More Subsidies on iPhones at Verizon or AT&T: Buy Your Own Phone on a Payment Plan

next edgeAT&T and Verizon Wireless are ditching subsidies for the popular (and expensive) Apple iPhone in favor of straight installment payment plans.

9to5Mac reports Apple has sent a memo to employees outlining major changes in how iPhones will be sold to AT&T and Verizon Wireless customers.

Apple iPhones sold via AT&T and both Apple’s retail and online stores will shift exclusively to AT&T’s Next financing plans this month and end device subsidies. AT&T Next allows customers to buy a device at retail price and pay it off in 20, 24, or 30 installments on their AT&T bill. The primary benefit of the Next plan is it permits customers upgrade to a newer device after 12, 18, or 24 installment payments. For now, customers transitioning away from their existing plan to Next will be able to keep their unlimited AT&T data plan.

iphone6Verizon Wireless is also planning to drop its two-year subsidy programs, perhaps entirely across all devices, as early as the end of this summer. That will force Verizon Wireless customers onto the Edge installment payment program unless they are willing to pay for a device upfront.

But Verizon will tighten the screws even more on iPhone users by blocking the Edge Up feature for Apple phones. Instead of being eligible for an early upgrade after 18 months, Verizon will commit its iPhone customers to a full two-year waiting period or until the phone is completely paid off. Magnanimously, Verizon will let the customer keep the phone after they pay it off completely. It is unclear if Verizon will allow their legacy unlimited data customers to participate in the Edge program without forfeiting their unlimited data plan.

For many customers, this will represent a distinction without much difference. Phone subsidies have always been effectively paid back to the wireless carrier through artificially high service plan rates charged over the length of a two-year contract. The installment payment plan brings the cost of the phone subsidy out into the light where a customer will see (and pay) a separate installment payment for their device instead of having the subsidy’s recovery buried in the price of service. But Verizon has clearly sought constraints on its iPhone customers who aggressively pursue upgrades at the appearance of any new iPhone model. Going forward, they will have to pay off any remaining installments owed on their old phone before upgrading to a new one.

AT&T’s Acquisition of DirecTV Will Likely Be Approved With a Number of Conditions

att directvWhile consumer groups were busy fighting the Comcast-Time Warner Cable merger, AT&T’s $49 billion purchase of DirecTV has largely flown under the radar, with no comparable organized consumer opposition to the deal. But that does not mean the FCC will approve it as-is.

Negotiations with federal regulators and an exchange of regulatory filings and comments between AT&T, the FCC, and deal critics have apparently forced AT&T to agree to several concessions to make regulators amenable to approving the transaction.

The Washington Post reports that chief among those concessions is AT&T’s willingness to voluntarily abide by certain Net Neutrality rules regardless of any court challenges, including banning the slowing or blocking of websites and agreeing not to accept payments from website operators to speed up their content. AT&T has not said how long it intends to keep that commitment.

Deal opponents are also seeking other concessions from AT&T:

No paid interconnection deals: AT&T must route incoming content to customers without any fees charged to the companies originating the traffic. This became a hot button issue when Netflix felt it was forced to pay Comcast a fee to assure its streamed video content would reach Comcast customers without buffering or other errors. AT&T is expected to fiercely oppose this condition and says it should have the right to make private deals with content delivery firms.

AT&T must offer standalone broadband: With AT&T’s acquisition of DirecTV, more than ever it will have an incentive to sell customers a television bundle with Internet service. Regulators want AT&T to assure broadband-only service remains readily available. AT&T has offered 6Mbps DSL for $34.95 a month as its standalone option. Content delivery firms like Cogent want AT&T to offer 25Mbps service in all of AT&T’s markets for $29.95 a month for at least seven years. The FCC recently defined 25Mbps the minimum speed to qualify as broadband.

No end runs around Net Neutrality with data caps and exemptions: AT&T wants the right to exempt its preferred partners from its usage caps and claims that is beneficial to consumers. But cap opponents claim that is simply another way to collect money from content companies for preferential treatment — an end run around Net Neutrality rules. Opponents of these cap exemptions, known as “zero-rating” claim all content should be treated the same. AT&T could resolve this by removing data caps from its DSL and U-verse services altogether.

No Patriot Act? Snuggly the NSA Security Spy Bear Might Just End Up Working for Verizon or AT&T

snuggly

http://www.phillipdampier.com/video/United States of Surveillance.mp4

United States of Surveillance: Don’t Worry… We’re Watching You… ALL OF YOU. (2:29)

http://www.phillipdampier.com/video/Mitch McConnell and Snuggly the Security Bear Beg to Spy.mp4

“After tracking your every move and spying lovingly on each and every one of you, I feel like I know you all personally, because I do!”

Is this the end of our domestic spying pal, Snuggly the Security Bear? Most likely not. Snuggly will probably still be in business and up to his usual tricks, he just may have to work with Verizon or AT&T or some kind of NSA-corporate partnership. (1:27)

Competition Works: América Móvil Plans $50 Billion Fiber to the Home Network in Mexico

infinitum-telmexWith AT&T’s arrival in the Mexican wireless marketplace with its purchase of Iusacell and Nextel, América Móvil is responding with plans to build a new state-of-the-art $50 billion fiber-to-the-home network for Mexican consumers.

According to El Economista, América Móvil has a five-year plan to construct a 311,000 mile fiber network that will offer phone, broadband, and television service. The move comes in response to media reports AT&T is exploring delivering a video package over its acquired wireless networks within the next two years. The network will support broadband speeds that are faster than what most Americans along the border with Mexico can receive from AT&T and CenturyLink’s prevalent DSL services.

In comparison, U.S. phone companies like Verizon have stopped expanding its FiOS fiber to the home network and AT&T largely relies on a less-capable hybrid fiber/copper network for its U-verse service.

Competition in Mexico has forced providers to upgrade their networks to compete for customers while those in the United States tend to match each other’s prices or advocate for industry consolidation to maximize revenue and keep their costs as low as possible.

América Móvil’s broadband service Infinitum Telmex has already attracted 22.3 million broadband customers — a number likely to rise once it can enhance its online video streaming service Clarovideo.

Wireless Lobby Head Hints No 5G Service in United States Unless Industry Gets ‘Exclusive Use’ Spectrum

The CTIA is the wireless industry's lobbying group

The CTIA is the wireless industry’s lobbying group

The wireless industry is threatening to withhold upgrades to 5G service unless the United States adopts a spectrum policy that provides wireless carriers with more frequencies.

CTIA president Meredith Baker told attendees at the Accenture conference that the wireless industry wants a new national spectrum plan to clear more frequencies for the exclusive use of mobile providers.

“When and how we introduce 5G in the United States depends, in part, upon whether we keep our spectrum policy as forward-looking as our industry,” Baker said. “The question we face is will the U.S. continue to embrace licensed spectrum – the approach that has made us the global leader in 4G.”

Baker is frustrated with the FCC’s ongoing effort to create “shared-use” spectrum that can be cleared for mobile use in certain sections of the country while still being used for other purposes elsewhere. In some cases, spectrum identified for possible dual-use is used by various government agencies, but only in certain parts of the country. The wireless industry generally does not favor shared-use spectrum policy because it can complicate wireless network buildouts.

Baker

Baker

Baker continues to advocate a more forceful approach of “spectrum clearing,” which can force users off existing frequencies to clear it for mobile exclusivity.

“Clearing spectrum will never look easy, particularly years before an auction,” she said. “To be fair, it will never be easy. But it can be done and needs to be done if we are to remain the global leader in mobility.”

The FCC is currently involved in an effort to repack the UHF television dial into a smaller space to make room for more spectrum for the wireless industry. Some companies, notably AT&T, are growing impatient about the process and want faster exclusive use of those frequencies after an incentive auction is held in 2016.

In a filing sent to the FCC, AT&T objects to creating more spectrum rights for secondary and unlicensed users and applications on the frequencies they intend to use. Once the auction is complete, it could take three years or more for AT&T and other spectrum winners to upgrade their networks to use the new frequencies in the 600MHz band. In the meantime, the FCC has proposed allowing low-power television stations and translators, wireless microphones, and other similar unlicensed equipment to continue using those frequencies until the new license holders are ready to become operational.

attAT&T considers that an intrusion on its spectrum and has told the FCC it strongly objects allowing any secondary or unlicensed user to use their spectrum “without so much as [paying AT&T] a lease” or getting consent from AT&T. AT&T wants everyone off their frequencies no later than 39 months after the issuance of a Channel Reassignment Public Notice that will identify new channel assignments for full power and Class A television stations that have been reassigned to different channels. AT&T also wants the right to jump ahead of the proposed three years of transition for licensed stations and make it possible to start kicking off all unlicensed users of its frequencies within 120 days notice.

The wireless industry argues without wireless-friendly policies, there will be insufficient incentive to invest in 5G network upgrades.

Critics contend that is just another of the wireless industry’s empty threats. Opponents contend AT&T will invest in network upgrades the moment the company believes it will generate additional profits.

AT&T Introduces U-verse GigaPower Gigabit Service in Nashville, If You Can Find It

In Search Of... AT&T U-verse with GigaPower

In Search Of… AT&T U-verse with GigaPower

AT&T’s gigabit broadband project has appeared in the greater Nashville area, but Stop the Cap! volunteers in the country music capital report you have a better chance getting struck by lightning than finding the service available to your home or business.

AT&T officially unveiled the upgrade in “parts of Clarksville, Lebanon, Murfreesboro, Nashville, Smyrna and surrounding communities located throughout the metro area,” but quickly warned with three asterisks the service was “not available in all areas.”

“That is the understatement of the year,” said Nashville resident Chris Jensen who can’t wait to ditch Comcast for 15 years of bad service and billing errors. “Unless you live in an upscale apartment complex, a new housing development, Walmart or have a country album on the charts you are probably going to be stuck with traditional U-verse speeds from AT&T.”

Jensen is part of Stop the Cap!’s In Search Of… AT&T GigaPower, our new project using volunteers to pelt AT&T’s qualification tool with addresses (and follow-up phone calls) looking for AT&T’s elusive gigabit speeds in the cities where the service has been introduced.

“Forget it Nashville, it’s another AT&T fiber to the press release and payback to the very friendly state politicians that rubber stamp AT&T’s agenda,” said Jensen.

Despite GigaPower’s rarity, AT&T is the first company to bring gigabit speeds to the Nashville residential market.

AT&T Tennessee president Joelle Phillips is surrounded by her political friends from around the state. (Photo: The Tennessean)

AT&T Tennessee president Joelle Phillips is surrounded by AT&T’s political friends from around the state. (Photo: The Tennessean)

Joelle Phillips, president of AT&T Tennessee, used a news release to share the company’s spotlight with a number of local and state politicians identified as supporters of AT&T’s public policy advocacy effort, which includes deregulating AT&T’s business in the state and attempting to keep restrictions on the books to block competing public broadband network expansion in Tennessee.

“We were able to deploy network enhancements fast – in less than a year since we announced our U-verse with AT&T GigaPower plans for Nashville,” said Phillips. “Smart, pro-investment policies, championed at the state level by Governor Haslam and legislative leaders like Speaker Harwell and Lt. Governor Ramsey – as well as streamlined local permitting processes that Mayor Dean and our Metro Council members have embraced – were key in speeding our work.”

Nonsense, says Jensen.

“Tennessee is about as friendly a state AT&T can find — our legislature allows AT&T to basically write its own pieces of legislation, yet the fastest way to get gigabit speeds is to move to Chattanooga where EPB is providing the service without asking to gut consumer protection laws or wait for AT&T to get around to bringing faster service to your home,” said Jensen.

Critics contend AT&T maintains ties with state and local politicians that are too close for comfort, potentially hurting consumers in Tennessee.

uverse gigapowerAccording to the National Institute of Money in Politics, telecommunications industry interests wrote at least $643,000 in campaign contribution checks to Tennessee politicians during the two-year 2014 election cycle. AT&T alone put $211,000 into the pockets of legislators. The Tennessee Registry of Election Finance reports AT&T contributed $20,000 during the last election cycle to Republican Lt. Gov. Ron Ramsey’s leadership political action committee, RAAMPAC. AT&T President Joelle Phillips personally gave another $2,000.

House Speaker Beth Harwell benefited from at least $17,000 in AT&T money over the last two years. AT&T spends another $1.3 million on as many as 13 full time lobbyists that devote all of their attention to Tennessee.

Gov. Bill Haslam doesn’t really need AT&T’s money. He is now worth an estimated $2 billion, making him the richest elected official in the country, according to an analysis by Forbes.

In return for this largesse, AT&T is routinely praised by all three state officials, which is returned when AT&T sends out press releases gushing over Tennessee’s ‘AT&T-Friendly’ deregulation policies.

AT&T will charge a range of prices for U-verse GigaPower service in Nashville, which all include AT&T’s right-to-spy on your browsing behavior. If you want to opt out of AT&T’s “Internet Preferences” customer monitoring program, add $29 a month to these prices:

  • U-verse High Speed Internet Premier: Internet speeds up to 1Gbps starting at $120 a month, or speeds at 100Mbps as low as $90 a month, with one-year contract required;
  • U-verse High Speed Internet Premier + TV: Internet speeds up to 1Gbps and qualifying TV service starting at $150 a month, or speeds at 100Mbps and qualifying TV service as low as $120 a month, with a one year contract;
  • U-verse High Speed Internet Premier + TV + Voice: Internet speeds up to 1Gbps with qualifying TV service and Unlimited U-verse Voice starting at $180 a month, or speeds at 100Mbps with qualifying TV service and Unlimited U-verse Voice as low as $150 a month, with a two-year term commitment.

AT&T imposes a 1TB monthly usage cap on its gigabit broadband service. Overlimit fees of $10 per 50GB will apply to customers exceeding that usage allowance.

Cable Stock Fluffer Craig Moffett Encourages Cable Operators to Add Usage Caps Before Title II Takes Effect

"More Caps" Moffett

“More Caps” Moffett

If you are a cable executive looking to further gouge customers captive to your “only game in town” broadband speeds, now is the time to slap around customers with usage caps and overlimit fees, because your company may no longer be able to do that after June 12, when the FCC’s new Title II regulations officially take effect.

“If you’re a cable operator, you might want to strike while the iron is hot,” said MoffettNathanson principal and senior analyst Craig Moffett, who has shared his love for all-things-cable with investors for years.

Moffett regularly asks cable industry executives about when they plan to introduce usage limits or usage-based billing for customers who often have no other choice for 25Mbps service, the lowest speed that now qualifies as broadband.

But tricking customers into accepting industry arguments about “fair pricing” must be handled carefully, because making a mistake with customers could cost your executives their summer bonuses if the pocket-picking policies cause a revolt.

Multichannel News reminds its cable industry readers Time Warner Cable failed to start their usage cap experiment in 2009 due to a “furor” by customers (often led by us). Instead of filling their coffers with the proceeds of overlimit fees, “the cable giant [was forced] to rethink its pricing strategy, keeping prices the same for heavy users of bandwidth but offering discounts to customers whose usage was lighter.”

Image: schvdenfreude

Image: schvdenfreude

Unable to get its definition of “fairness” across to customers, Time Warner Cable never had to look back, raking in greater and greater unlimited broadband profits quarter after quarter, even as their costs to deliver service continued to drop.

Faced with the prospect of a newly empowered FCC to keep cable industry abuses in check, Multichannel News tells cable executives the money party may be over before it begins if they wait too long:

Title II regulations, which reclassify broadband as a common- carrier service, are about to take effect June 12, and the Federal Communications Commission has said it would look closely at any usage-based pricing plans to determine if they discriminate against online video providers. That could force some Internet service providers to move to implement their version of usage-based pricing before the deadline.

To “soften the blow,” the trade journal reported Cox significantly increased usage caps and are setting the overlimit fee at $10 for each 50GB of excessive usage, much lower than wireless plan overlimit fees. Multichannel News suggests this will help customers “get accustomed to overage charges.”

But Cox customers in the Cleveland area may be able to turn the table on Cox.

“Let them get accustomed to the fact I am dumping them for WOW! the moment I receive official notification about the caps,” said Stop the Cap! reader Dave, who has a choice between Cox, AT&T, and WOW! — a competing cable operator without usage caps. “AT&T isn’t enforcing its cap around here either, so I am definitely canceling my service and have two other choices. People have to be willing to send a clear message usage caps are an absolute deal-breaker.”

Although usage caps are not affected by Net Neutrality regulations, the fact the cable industry faces added regulator scrutiny under Title II allows the FCC to put an end to practices it considers to be anti-competitive. Introducing usage caps for customers trying to find an alternative to Cox’s cable television package by watching online video instead may qualify.

AT&T Adding Hulu for Its U-verse and Mobile Video Customers

Phillip Dampier May 13, 2015 AT&T, Competition, Consumer News, Online Video 1 Comment

AT&T and Hulu today announced a deal to bring Hulu to AT&T’s U-verse and mobile video customers.

“We know that our customers want to be able to access video on multiple devices,” said Andrew Goodman, associate vice president, AT&T content acquisition. “So we’re excited to be able to expand our relationship with Hulu and make its innovative and vast video selections available to AT&T customers on multiple screens.”

AT&T customers will be able to view basic Hulu service programming for free on their mobile devices or an AT&T U-verse website for Internet viewing. Hulu visitors typically have to pay for Hulu Plus premium service to view content away from a home computer or device. The deal with AT&T removes this restriction and builds on a current contract AT&T has with Hulu — co-owned by NBCUniversal, Disney and Fox — for its free content.

AT&T and Hulu also are exploring the possibility of bringing a Hulu app to TV.

Last month, Cablevision became the first pay-TV provider to distribute Hulu’s service to its set-top customers.

The expanded Hulu offering will become available to AT&T customers later this year.

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  • Darrin Evans: I somehow think that markets with google fiber such as Atlanta will be cap free, but hey it's all about network capacity right Comcast?...
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  • Eric: So... It's official. I got an email from Comcast stating I'm going to be part of a 'trial' and capped at 300GB. I reached out to Sara/Sarah at Comca...
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