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Cable ONE Catchup: Free Upload Speed Upgrades, But Usage Caps Persist

THE Internet Overcharger

Cable ONE’s boost in cable infrastructure investment is paying dividends for its broadband customers with new upstream speed upgrades.

“Our customers have expressed a need for faster upload speeds and we’re committed to listening to our customers and delivering the latest products and technical advancements while maintaining the highest level of reliability and customer care,” said Joe Felbab, Cable ONE vice president of marketing.

The details:

  • 50/2Mbps Streaming Plan gets a slight bump to 3Mbps upload speed;
  • 60/2Mbps Premier Plan gets upload speed doubled to 4Mbps;
  • 70/2Mbps Ultra Plan gets a triple boost to 6Mbps.

To activate the new upload speeds, reset your cable modem by briefly unplugging it.

Cable ONE's promotions often only last three months before increasing to the regular, undisclosed a-la-carte price. Modem lease or purchase is extra.

Cable ONE’s promotions often only last three months before increasing to the regular, undisclosed a-la-carte price. Modem lease or purchase is extra.

In June, Cable ONE scrapped its confusing consumption billing scheme and replaced it with standard usage caps that our readers report are unevenly enforced.

cable_one_crewThe 1.5Mbps, 5Mbps, 8Mbps, 10Mbps, 12Mbps, & 50Mbps services (some plans grandfathered for existing customers) have a cap of 300GB per billing cycle, while the 60Mbps and 70Mbps services respectively have 400 and 500GB data caps per billing cycle. Surfing Internet has a 50GB cap.

While 6Mbps upload speed is slightly better than what Time Warner Cable and AT&T U-verse customers get, Cable ONE remains well behind companies like Comcast and Verizon FiOS.

Cable ONE in April announced a two-year, $60 million network upgrade across 42 cable systems in its mostly rural footprint to enhance reliability and deliver faster Internet service. Upstream speeds are the most difficult to increase for cable broadband providers because the DOCSIS standard was designed to deliver fast download speeds.

Earlier this month, Cable ONE adopted TiVo for its new Whole Home DVR, which offers 650 hours of recording time with four built-in tuners and an Advanced TiVo on-screen guide.

In large parts of its national service area, Cable ONE competes with telephone companies AT&T, CenturyLink, and Windstream.

North America Data Tsunami Warning Canceled; Usage Levels Off, Killing Excuses for Caps

(Image: BTIG Research)

The median bandwidth use slowdown (Image: BTIG Research)

Despite perpetual cries of Internet brownouts, usage blowouts, and data tsunamis that threaten to overwhelm the Internet, new data shows broadband usage has leveled off in North America, undercutting providers’ favorite excuse for usage limits and consumption billing.

Sandvine today released its latest broadband usage study, issued twice yearly. The results show a clear and dramatic decline in usage growth in North America, with median usage up just 5% compared to the same time last year. That is a marked departure from the 190% and 77% growth measured in two earlier periods. In fact, as Richard Greenfield from BTIG Research noted, mean bandwidth use was down 13% year-over-year, after the second straight six month period of sequential decline.

Companies like Cisco earn millions annually pitching network management tools to providers implementing usage caps and consumption billing. For years, the company has warned of Internet usage floods that threaten to make the Internet useless (unless providers take Cisco’s advice and buy their products and services).

“Demand for Internet services continues to build,” said Roland Klemann from Cisco’s Internet Business Solutions Group. “The increasing popularity of smartphones, tablets, and video services is creating a ‘data tsunami’ that threatens to overwhelm service providers’ networks.”

Providers typically use “fairness” propaganda when introducing “usage based pricing,” blaming exponential increases in broadband usage and costly upgrades “light users” are forced to underwrite. A leveling off in broadband usage undercuts that argument.

ciscos plan for your futureA Cisco White Paper intended for the eyes of Internet Service Providers further strips the façade off the false-“fairness” argument, exposing the fact usage pricing has little to do with traffic growth, pricing fairness, or the cost of upgrades:

In 2011, broadband services became mainstream in developed countries, with fixed-broadband penetration exceeding 60 percent of households and mobile broadband penetration reaching more than 40 percent of the population in two-thirds of Organisation for Economic Co-operation and Development (OECD) countries.

Meanwhile, traditional voice and messaging revenues have strongly declined due to commoditization, and this trend is expected to continue. Therefore, operators are now relegated to connectivity products. The value that operators once derived from providing value-added services is migrating to players that deliver services, applications, and content over their network pipes.

As if this were not enough, Internet access prices are dropping, sales volumes are declining, and markets are shrinking. The culprit: flat rate “all-you-can-eat” pricing. Such a model lacks stability—sending service provider pricing into a downward spiral—because it ignores growth potential and shifts the competition’s focus from quality and service differentiation to price.

While Klemann was spouting warnings about the dire implications of a data tsunami, Cisco’s White Paper quietly told providers what they already know:

Maximum Profits

Maximum Profits

“[Wired] broadband operators should be able to sustain forecasted traffic growth over the next few years with no negative impact on margins, as the incremental capital expenses required to support it are under control.”

If usage limits and consumption billing are not required to manage data growth or cover the cost of equipment upgrades, why adopt this pricing? The potential to exploit more revenue from mature broadband markets that lack robust competition.

“In light of the forecasted Internet traffic growth mentioned earlier and competitiveness in the telecommunications market, Cisco believes that fixed-line operators should consider gradually introducing selected monthly traffic tiers to sustain [revenue], while a) signaling to customers that “traffic is not free,” and b) monetizing bandwidth hogs more sustainably.”

Cisco makes its recommendation despite knowing full well from its own research that customers hate usage-based pricing.

“The introduction of traffic tiers and caps—especially for fixed broadband services—is not welcomed by the majority of customers, as they have learned to ‘love’ flat rate all-you-can-eat pricing. Most customers consider usage-based pricing for broadband services ‘unfair,’ according to the 2011 Cisco IBSG Connected Life Market Watch study.”

Cisco teaches providers how to price broadband like trendy boutique bottled water.

Cisco teaches providers how to price broadband like trendy boutique bottled water and blame it on growing Internet usage.

But with competition lacking, Cisco’s advice is to move forward anyway, as long as providers initially introduce caps and consumption billing at prices that do not impact the majority of customers… at first. In uncompetitive markets, Cisco predicts customers will eventually pay more, boosting provider revenue. Cisco’s “illustrative example” of usage billing in practice set prices at $45 a month for up to 50GB of usage, $60 a month for 50-100GB, $75 for 100-150GB, and $150 a month for unlimited access — more than double what customers typically pay today for flat rate access.

Usage billing arrives right on time to effectively handle online video, which increasingly threatens revenue from cable television packages.

Sandvine’s new traffic measurement report notes the increasing prominence of online video services like Netflix, YouTube, Hulu, and Amazon Video.

“As with previous reports, Real-Time Entertainment (comprised of streaming video and audio) continues to be the largest traffic category on virtually every network we examined, and we expect its continued growth to lead to the emergence of longer form video on mobile networks globally in to 2014,” Sandvine’s report noted.

Sandvine found that over half of all North American Internet traffic during peak usage periods comes from two services: Netflix and YouTube. YouTube globally is the leading source of Internet traffic in the world, according to Sandvine.

An old excuse for usage caps on “data hogs” – peer-to-peer file-sharing, continues its rapid decline towards irrelevance, now accounting for less than 10 percent of total daily traffic in North America. A decade earlier, file swapping represented 60 percent of Internet traffic.

Cisco’s answer for the evolving world of popular online applications is a further shift in broadband pricing towards “value-based tiers” that monetize different online applications by charging broadband users extra when using them. Cisco is promoting an idea that well-enforced Net Neutrality rules would prohibit.

Citing the bottled water market, Cisco argues if some customers are willing to pay up to $6 for a liter of trendy Voss bottled water, flat rate “one price fits all” broadband is leaving a lot of money on the table. With the right marketing campaign and a barely competitive marketplace, providers can charge far higher prices to get access to the most popular Internet applications.

“Research from British regulator Ofcom shows that consumers are becoming ‘addicted’ to broadband services, and heavy broadband users are willing to pay more for improved broadband service options.”

Wharton School professors Jagmohan Raju and John Zhang concluded price is the single most important lever to drive profitability.

The political implications of blaming phantom Internet growth and manageable upgrade costs for the implementation of usage caps or usage-based billing is uncertain. Even the “data hog” meme providers have used for years to justify usage caps is now open to scrutiny. Sandvine found the top 1% of broadband users primarily impact upstream resources, where they account for 39.8% of total upload traffic. But the top 1% only account for 10.1% of downstream traffic. In fact, Apple is likely to provoke an even larger, albeit shorter-term impact on a provider’s network from software upgrades. When the company released iOS7, Apple Updates immediately became almost 20% of total network traffic, and continued to stay above 15% of total traffic into the evening peak hours, according to Sandvine.

Some other highlights:

  • Average monthly mobile usage in Asia-Pacific now exceeds 1 gigabyte, driven by video, which accounts for 50% of peak downstream traffic. This is more than double the 443 megabyte monthly average in North America.
  • In Europe, Netflix, less than two years since launch, now accounts for over 20% of downstream traffic on certain fixed networks in the British Isles. It took almost four years for Netflix to achieve 20% of data traffic in the United States.
  • Instagram and Dropbox are now top-ranked applications in mobile networks in many regions across the globe. Instagram, due to the recent addition of video, is now in Latin America the 7th top ranked downstream application on the mobile network, making it a prime candidate for inclusion in tiered data plans which are popular in the region.
  • Netflix (31.6%) holds its ground as the leading downstream application in North America and together with YouTube (18.6%) accounts for over 50% of downstream traffic on fixed networks.
  • P2P Filesharing now accounts for less than 10% of total daily traffic in North America. Five years ago it accounted for over 31%.
  • Video accounts for less than 6% of traffic in mobile networks in Africa, but is expected to grow faster than in any other region before it.

Comcast Claims New 300GB Cap is Getting Neutral-Slightly Positive Reaction from Subscribers

Comcast's Wireless Gateway is part of the company's plans to further monetize broadband.

Comcast’s Wireless Gateway is part of the company’s plans to further monetize broadband.

Comcast wants investors to believe customers slightly prefer losing access to unlimited broadband in return for a 300GB usage cap and $10 overlimit fees.

Neil Smit, president and CEO of Comcast Cable Communications this morning told Wall Street analysts Comcast plans to further monetize its broadband product after testing usage caps, consumption billing, and collecting increased in-home Wi-Fi fees collected from a growing number of customers with an XFINITY Wireless Gateway.

Phil Cusick from JPMorgan asked Smit about how broadband tiering trials now underway primarily in southern states were going for Comcast.

“We have a number of trials in place in markets,” Smit responded. “We’re testing different types of usage-based pricing offerings. Thus far the consumer response has been neutral to slightly positive. We’ll continue to monitor it.”

Customers in the affected areas tell Stop the Cap! they have never been asked what they think about Comcast’s usage caps and consumption billing, so they are unsure how Smit can draw conclusions about customer preference.

“I’m canceling Nov. 1 when the caps arrive in South Carolina,” says Dennis Johnson. “I’m heading to U-verse because AT&T isn’t enforcing any caps here. I plan to tell Comcast why they lost me, but it sounds like the company really isn’t interested in what customers think.”

Every research study done on broadband usage caps show customers loathe them and up to 50% are prepared to switch providers if they can find a competitor providing comparable service.

xfinitylogoComcast is also moving forward with plans to share your in-home Wi-Fi with other customers, configuring company-supplied gateways to offer a second, open access Wi-Fi channel. Comcast currently charges customers $7 a month for the XFINITY Wireless Gateway, combining a DOCSIS 3 cable modem, a telephone eMTA, and a wireless router.

Despite the fact Comcast customers regularly complain about the poor Wi-Fi range of the XFINITY Wireless Gateway and the monthly rental fee, Smit believes they are key to further monetizing broadband.

“We’ve rolled out about six million Gateway devices which increased the in-home Wi-Fi fees and we think there’s going to be more people hanging more devices off of their Wi-Fi,” said Smit.

The more devices, the higher the usage. The higher the usage, the closer customers get to exceeding their cap and charged overlimit fees.

Millenicom Customers Lose Unlimited Wireless Data (Again); Sprint Re-Terminates Agreement

muymMillenicom customers have had their ups and downs over the last two weeks coping with e-mail notifications they would lose, keep, and once again lose their unlimited wireless data plan.

Just a day after Millenicom heard that Sprint would allow them to continue selling Unlimited and Bring Your Own Device plans, the wireless carrier best known for its “unlimited for life” offer changed its mind:

We are very sorry to report that Sprint has reversed their decision from yesterday and terminated their agreement with the gateway for our Unlimited and BYOD accounts.

We are not certain how long until the accounts will be closed.

sprintnextelWe will be shipping out Hotspot devices to those clients who had opted for that solution and BMI.net is ready to fulfill orders for those choosing to go with them.

We have attempted to keep you informed every step of the way and avoid any abrupt transition. We apologize that we weren’t able to come through.

Thank you for allowing us to be of service and please accept our sincere wish for your future success.

Dennis Castle
Owner

millenicomIt is not the first time Millenicom has had problems with Sprint, which has proved to be a difficult carrier to deal with with respect to unlimited use plans.

Sprint’s decision is a major blow to rural Americans who lack access to cable or DSL broadband and are forced to consider satellite-delivered Internet access or pay even more for wireless data plans that come with puny usage caps, overlimit fees or speed throttles.

There are a few alternatives, but since these providers resell access to Sprint-owned networks, all are potentially vulnerable to Sprint’s evolving views on resellers:

bmi-logoBlue Mountain Internet (BMI) offers an “unlimited plan” that isn’t along with several usage allowance plans. BMI strongly recommends the use of their Mobile Broadband Optimizer software that compresses web traffic, dramatically improving speeds and reducing consumption:

Monthly Plans

  • $39.99/Month – 1 Gig Data (** up to 3GB compressed) ($25/GB Overlimit Fee)
  • $59.99/Month – 3 Gig Data (** up to 9GB compressed) ($20/GB Overlimit Fee)
  • $79.99/Month – 5 Gig Data (** up to 15GB compressed) ($20/GB Overlimit Fee)
  • $99.99/Month – 10 Gig Data (** Up to 45GB compressed) ($15/GB Overlimit Fee)
  • $79.99/Month – Unlimited (Bring Your Own Device) – BYOD
  • $99.99/Month – Unlimited Data (S Network) ***

evdousaThere is a $100 maximum on overlimit fees, but BMI reserves the right to suspend accounts after running 3-5GB over a plan’s allowance to limit exposure to the penalty rate. The compression software is for Windows only and does not work with MIFI devices or with video/audio streaming. BMI warns its wireless service is not intended for video streaming. Customers are not allowed to host computer applications including continuous streaming video and webcam posts that broadcast more than 24 hours; automatic data feeds; automated continuous streaming machine-to-machine connections; or peer-to-peer (P2P) file-sharing.

EVDODepotUSA offers two truly unlimited use plans starting at $119 a month. The company is only contracted to offer access to Sprint’s woefully congested 3G network and the Clear 4G WiMAX network that typically does not offer much coverage in rural areas. LTE access is not currently available. There is a six month contract obligation, but the company also offers a 10-day free trial.

Their current plans:

evdo

wireless n wifiWireless ‘n Wifi offers two partly unlimited plans with no contract commitment. The company charges a refundable deposit on devices, but they become yours to keep after two years:

  • Unlimited 4G Sprint/Clear WiMAX with 3G Fallback ($58.99) offers unlimited WiMAX service but has a 5GB cap on Sprint’s 3G network, the network rural customers will encounter the most. Total start-up fee is $194.93 which includes an activation fee, modem deposit (refunded upon modem return or after 24 months of service), the first month of service, and shipping for the wireless device.
  • Unlimited 4G LTE with WiMAX and 3G Fallback ($79.99) offers unlimited Sprint 4G LTE and Sprint/Clear WiMAX service with a 35GB cap on Sprint’s 3G network. Customers can select a dual-band device that supports LTE and 3G service for $246.93 (includes activation fee, modem upcharge fee, first month of service, shipping, and refundable $100 modem deposit). Customers looking for access to LTE, 3G, and WiMAX can choose a tri-band device for $315.93 (includes activation fee, modem upcharge, first month of service, shipping and refundable deposit.) Keep in mind Sprint’s 4G LTE network is still very spotty.

Drive-By Shallow Reporting On Comcast’s Reintroduction of Usage Caps in South Carolina

More drive-by reporting on usage caps.

More drive-by reporting on Comcast’s usage caps.

When the media covers Internet Overcharging schemes like usage caps and consumption billing, it is often much easier to take the provider’s word for it instead of actually investigating whether subscribers actually need their Internet usage limited.

Comcast’s planned reintroduction of its usage caps on South Carolina customers begins Friday. Instead of the now-retired 250GB limit, Comcast is graciously throwing another 50GB of usage allowance to customers, five years after defining 250GB as more than generous.

The Post & Courier never bothered to investigate if Comcast’s new 300GB usage cap was warranted or if Charleston-area customers wanted it. It was so much easier to just print Comcast’s point of view and throw in a quote or two from an industry analyst.

In fact, the reporter even tried to suggest the Internet Overcharging scheme was an improvement for customers.

The newspaper reported Comcast was the first large Internet provider in the region to allow customers to pay even more for broadband service by extending their allowance in 50GB increments at $10 a pop. (Actually, AT&T beat Comcast to the bank on that idea, but has avoided dropping that hammer on customers who already have to be persuaded to switch to AT&T U-verse broadband that tops out at around 24Mbps for most customers.)

Since 2008, the company’s monthly limit has been capped at 250 GB per household. When customers exceeded that threshold, Comcast didn’t have a firm mechanism for bringing them back in line, other than to issue warnings or threaten to cut off service.

“People didn’t like that static cap. They felt that if they wanted to extend their usage, then they should be allowed to do that,” said Charlie Douglas, a senior director with Comcast.

Charleston is the latest in a series of trial markets the cable giant has used to test the new Internet usage policy in the past year. As with any test period, the company can modify or discontinue the plan at any time.

During the trial period in Charleston, customers will get an extra 50 GB of monthly data than they’re used to having. If they exceed 300 GB, they can pay for more.

“300 GB is well beyond what any typical household is ever going to consume in a month,” Douglas said. “In all of the other trial markets with this (limit), it really doesn’t impact the overwhelming super-majority of customers.”

The average Internet user with Comcast service uses about 16 to 18 GB of data per month, Douglas said.

Customers who use less than five GB per month will start seeing a $5 discount on their bills.

“We think this approach is fair because we’re giving consumers who want to use more data a way to do so, and for consumers who use less, they can pay less,” Douglas said.

Data caps are designed to stop content piracy?

Data caps are designed to stop content piracy?

The Charleston reporter asserts, without any evidence, “data-capping is a trend many Internet service providers are expected to follow in the next few years as the industry aims to reduce network congestion and to find safeguards against online piracy.”

Suggesting data caps are about piracy immediately rings alarm bells. Comcast and other Internet Service Providers fought long and hard against being held accountable for their customers’ actions. The industry wants nothing to do with monitoring online activities lest the government hold them accountable for not actively stopping criminal activity.

“It’s not about piracy, per se,” said Douglas. “We don’t look at what people are doing. The purpose is really a matter of fairness. If people are using a disproportionate amount of data, then they should pay more.”

Comcast’s concern for fairness and disproportionate behavior does not extend to the rapacious pricing and enormous profit it earns selling broadband, flat rate or not.

MIT Technology Review’s David Talbot found “Time Warner Cable and Comcast are already making a 97 percent margin on their ‘almost comically profitable’ Internet services.” That figure was repeated by Craig Moffett, one of the most enthusiastic, well-respected cable industry analysts. That percentage refers to “gross margin,” which is effectively gravy on largely paid off cable plant/infrastructure that last saw a major wholesale upgrade in the 1990s to accommodate the advent of digital cable television and the 500-channel universe. Broadband was introduced in the late 1990s as a cheap-to-deploy but highly profitable, unregulated ancillary service.

How things have changed.

Just follow the money....

Just follow the money….

Customers used to being gouged for cable television are now willing to say goodbye to Comcast’s television package in growing numbers. Today’s must-have service is broadband and Comcast has a high-priced plan for you! But earning up to 97 percent profit from $50+ broadband isn’t enough.

A 300GB limit isn’t designed to control congestion either. In fact, had she investigated that claim, she would have discovered the cable industry itself disavowed that notion earlier this year.

In fact, it’s all about the money.

Michael Powell, the head of the cable industry’s top lobbying group admitted the theory that data caps are designed to control network congestion was wrong.

“Our principal purpose is how to fairly monetize a high fixed cost,” said Powell.

Powell mentioned costs like digging up streets, laying cable and operational expenses. Except the cable industry long ago stopped aggressive buildouts and now maintains a tight Return On Investment formula that keeps cable broadband out of rural areas indefinitely. Operational expenses for broadband have also declined, despite increases in traffic and the number of customers subscribing.

http://www.phillipdampier.com/video/CNBC Internet v. Cable 8-20-10.flv

Don’t take our word for it. Consider the views of Suddenlink Cable CEO Jerry Kent, interviewed in 2010 on CNBC. (8 minutes)

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” said Suddenlink CEO Jerry Kent. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Unfortunately, Charleston residents don’t have the benefit of reporting that takes a skeptical view of a company press release and the spokesperson readily willing to underline it.

If Comcast seeks to be the arbiter of ‘fairness,’ then one must ask what concept of fairness allows for a usage cap almost no customers want for a service already grossly overpriced.

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