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Cable Operators Told to Get Ready for a Gigabit, But Will Rationed Usage Make It Meaningless?

Phillip Dampier: A cable trade publication is lecturing its readership on better broadband the industry spent years claiming nobody wanted or needed.

Phillip Dampier: A cable trade publication is lecturing its readership on better broadband the industry spent years claiming nobody wanted or needed.

Remember the good old days when cable and phone companies told you there was no demand for faster Internet speeds when 6Mbps from the phone company was all you and your family really needed?

Those days are apparently over.

Multichannel News, the largest trade publication for cable industry executives, warns cable companies gigabit broadband speeds are right around the corner and the technological transformation that will unleash has been constrained for far too long.

Say what?

Proving our theory that those loudest about dismissing the need for faster Internet speeds are the least equipped to deliver them, the forthcoming arrival of DOCSIS 3.1 technology and decreasing costs to deploy fiber optics will allow cable providers to partially meet the gigabit speed challenge, at least on the downstream. Before DOCSIS 3.1, consumers didn’t “need those speeds.” Now companies like Comcast claim it isn’t important what consumers need today — it’s where the world is headed tomorrow.

Comcast 2013:

Comcast executive vice president David L. Cohen writes that the allure of Google Fiber’s gigabit service doesn’t match the needs or capabilities of online Americans.

“For some, the discussion about the broadband Internet seems to begin and end on the issue of ‘gigabit’ access,” Cohen says, in a nod to Google Fiber. “The issue with such speed is really more about demand than supply. Our business customers can already order 10-gig connections. Most websites can’t deliver content as fast as current networks move, and most U.S. homes have routers that can’t support the speed already available to the home.” Essentially, Cohen argues that even if Comcast were to deliver web service as fast as Google Fiber’s 1,000Mbps downloads and uploads, most customers wouldn’t be able to get those speeds because they’ve got the wrong equipment at home.

Comcast 2015:

“We’ve consistently offered the most speeds to the most homes, but with the current pace of tech innovation, sometimes you need to go to where the world is headed and not focus on where it is today.”

“The next great Internet innovation is only an idea away, and we want to help customers push the boundaries of what the Internet can do and do our part to inspire developers to think about what’s possible in a multi-gigabit future.  So, next month we will introduce Gigabit Pro, a new residential Internet service that offers symmetrical, 2-Gigabits-per-second (Gbps) speeds over fiber – at least double what anyone else provides.”

Nelson (Image: Multichannel News)

Nelson (Image: Multichannel News)

Rich Nelson’s guest column in Multichannel News makes it clear American broadband is behind the times. The senior vice president of marketing, broadband & connectivity at Broadcom Corporation says the average U.S. Internet connection of 11.5Mbps “is no longer enough” to support multiple family members streaming over-the-top video content, cloud storage, sharing high-resolution images, interactive online gaming and more.

Nelson credits Google Fiber with lighting a fire under providers to reconsider broadband speeds.

“Google’s Fiber program may have been the spark to light the fuse — Gigabit services have fostered healthy competition among Internet and telecommunications providers, who are now in a position to consider not ‘if’ but ‘when and how’ to deploy Gigabit broadband in order to meet consumer’s perceived ‘need for speed’ and maintain their competitive edge,” Nelson wrote.

But the greatest bottleneck to speed advances is spending money to pay for them. Verizon FiOS was one of the most extravagant network upgrades in years among large American telecom companies and the company was savaged by Wall Street for doing it. Although AT&T got less heat because its U-verse development costs were lower, most analysts still instinctively frown when a company proposes spending billions on network upgrades.

Customer demand for faster broadband is apparent as providers boost Internet speeds.

Customer demand for faster broadband is apparent as providers boost Internet speeds.

The advent of DOCSIS 3.1 — the next generation of cable broadband technology — suggests a win-win-win for Wall Street, cable operators, and consumers. No streets will have to be torn up, no new fiber cables will have to be laid. Most providers will be able to exponentially boost Internet speeds by reallocating bandwidth formerly reserved for analog cable television channels to broadband. The more available bandwidth reserved for broadband, the faster the speeds a company can offer.

Many industry observers predict the cable line will eventually be 100% devoted to broadband, over which telephone, television and Internet access can be delivered just as Verizon does today with FiOS and AT&T manages with its U-verse service.

The benefits of gigabit speeds are not limited to faster Internet browsing however.

Nelson notes communities and municipalities are now using gigabit broadband speeds as a competitive tool selling homes and attracting new businesses to an area. According to a study from the Fiber to the Home (FTTH) Council, communities with widely available gigabit access have experienced a positive impact on economic activity — to the tune of more than $1.4 billion in GDP growth. Those bypassed or stuck in a broadband backwater are now at risk of losing digital economy jobs as businesses and entrepreneurs look elsewhere.

The gigabit broadband gap will increasingly impact the local economies of communities left behind with inadequate Internet speeds as app developers, content producers, and other innovative startups leverage gigabit broadband to market new products and services.

The Pew Research Center envisioned what the next generation of gigabit killer apps might look like. Those communities stuck on the slow lane will likely not have access to an entire generation of applications that simply will never work over DSL.

But before celebrating the fact your local cable company promises to deliver the speed the new apps will need, there is a skunk that threatens to ruin your ultra high speed future: usage-based pricing and caps.

At the same time DOCSIS 3.1 will save the cable industry billions on infrastructure upgrade costs, the price for moving data across the next generation of super high-capacity broadband networks will be lower than ever before. But cable operators are not planning to pass their savings on to you. In fact, broadband prices are rising, along with efforts to apply arbitrary usage limits or charge usage-based pricing. Both are counter-intuitive and unjustified. It would be like charging for a bag of sand in the Sahara Desert or handing a ration book to shoreline residents with coupons allowing them one glass of water each from Lake Ontario.

skunkCox plans to limit its gigabit customers to 2TB of usage a month. AT&T U-verse with GigaPower has a (currently unenforced) limit of 1TB a month, while Suddenlink thinks 550GB is more than enough for its gigabit customers. Comcast is market testing 300GB usage caps in several cities but strangely has no usage cap on its usage-gobbling gigabit plan. Why cap the customers least-equipped to run up usage into the ionosphere while giving gigabit customers a free pass? It doesn’t make much sense.

But then usage caps have never made sense or been justified on wired broadband networks and are questionable on some wireless ones as well.

Stop the Cap! began fighting against usage caps and usage pricing in the summer of 2008 when Frontier Communications proposed to limit its DSL customers to an ‘ample’ 5GB of usage per month. That’s right — 5GB. We predicted then that usage caps would become a growing problem in the United States. With a comfortable duopoly, providers could easily ration Internet access with the flimsiest of excuses to boost profits. Here is what we told the Associated Press seven years ago:

“This isn’t really an issue that’s just going to be about Frontier,” said Phillip Dampier, a Rochester-based technology writer who is campaigning to get Frontier to back off its plans. “Virtually every broadband provider has been suddenly discovering that there’s this so-called ‘bandwidth crisis’ going on in the United States.”

That year, Frontier claimed most of its 559,300 broadband subscribers consumed less than 1.5 gigabytes per month, so 5GB was generous. Frontier CEO Maggie Wilderotter trotted out the same excuses companies like Cox and Suddenlink are still using today to justify these pricing schemes: “The growth of traffic means the company has to invest millions in its network and infrastructure, threatening its profitability.”

Just one year later, Frontier spent $5.3 billion to acquire Verizon landline customers in around two dozen states, so apparently Internet usage growth did not hurt them financially after all. Frankly, usage growth never does. As we told the AP in 2008, the costs of network equipment and connecting to the wider Internet are falling. It still is.

“If they continue to make the necessary investments … there’s no reason they can’t keep up” with increasing customer traffic, we said at the time.

We are happy to report we won our battle with Frontier Communications and today the company even markets the fact their broadband service comes without usage caps. In many of Frontier’s rural service areas, they are the only Internet Service Provider available. Imagine the impact a 5GB usage cap would have had on customers trying to run a home-based business, have kids using the Internet to complete homework assignments, or rely on the Internet for video entertainment.

So why do some providers still try to ration Internet usage? To make more money of course. When the public believes the phony tales of network costs and traffic growth, the duped masses open their wallets and pay even more for what is already overpriced broadband service. Just check this chart produced by the BBC, based on data from the Organization for Economic Co‑operation and Development. Value for money is an alien concept to U.S. providers:

_70717869_countries_with_high_speed_broadband

The usual method of combating pricing excess is robust competition. With a chasm-sized gap between fat profits and the real cost of the service, competitors usually lower the price to attract more customers. But the fewer competitors, the bigger the chance the marketplace will gravitate towards comfort-level pricing and avoid rocking the boat with a ruinous price war. It is one of the first principles of capitalism — charging what the market will bear. We’ve seen how well that works in the past 100+ years. Back in 2010, we found an uncomfortable similarity between broadband prices of today with the railroad pricing schemes of the 1800s. A handful of executives and shareholders reap the rewards of monopolistic pricing and pillage not only consumers but threaten local economies as well.

special reportThe abuses were so bad, Congress finally stepped in and authorized regulators to break up the railroad monopolies and regulate abusive pricing. We may be headed in the same direction with broadband. We do not advocate regulation for the sake of regulation. Competition is a much more efficient way to check abusive business practices. But where an effective monopoly or duopoly exists, competition alone will not help. Without consumer-conscious oversight, the forthcoming gigabit broadband revolution will be stalled by speed bumps and toll booths for the benefit of a few giant telecommunications corporations. That will allow other countries to once again leap ahead of the United States and Canada, just as they have done with Internet speeds, delivering superior service at a lower price.

China now ranks first in the world in terms of the total number of fiber to the home broadband subscribers. So far, it isn’t even close to the fastest broadband country because much of China still gets access to the Internet over DSL. The Chinese government considers that unacceptable. It sees the economic opportunities of widespread fiber broadband and has targeted the scrapping of every DSL Internet connection in favor of fiber optics by the end of 2017. As a result, with more than 200 million likely fiber customers, China will become the global leader in fiber infrastructure, fiber technology, and fiber development. What country will lose the most from that transition? The United States. Today, Corning produces 40% of the world’s optical fiber.

Global optical fiber capacity amounted to 13,000 tons in 2014, mainly concentrated in the United States, Japan and China (totaling as much as 85.2% of the world’s total), of which China already ranked first with a share of 39.8%. Besides a big producer of optical fiber, China is also a large consumer, demanding 6,639 tons in 2014, 60.9% of global demand. The figure is expected to increase to 7,144 tons in 2015. Before 2010, over 70% of China’s optical fiber was imported, primarily from the United States. This year, 72.6% of China’s optical fiber will be produced by Chinese companies, which are also exporting a growing amount of fiber around the world.

John Lively, principal analyst at LightCounting Market Research, predicts China could conquer the fiber market in just a few short years and become a global broadband leader, “exporting their broadband networking expertise and technology, just like it does with its energy and transportation programs.”

Meanwhile in the United States, customers will be arguing with Comcast about the accuracy of their usage meter in light of a 300GB usage cap and Frontier’s DSL customers will still be fighting to get speeds better than the 3-6Mbps they get today.

Microsoft’s Windows 10 Updates Cost Some Users Hundreds of Dollars in Internet Overlimit Fees

badbillAbbes Nacef was not very happy when he opened his web browser a few days ago to see a message inserted at the top of his screen.

“Your Internet service has reached the maximum limit of allowable overage charges. If you wish to continue service, please contact our business office to discuss your account.”

Nacef, who lives in Monastir, a Tunisian city best known for its tourism, was surprised because it was the first sign his Internet account had gone over the limit.

“While you can get uncapped DSL in Tunisia, it is not very good service and in my area it is not offered,” Nacef told Stop the Cap!. “Most in our neighborhood rely on a wireless ISP service which is less costly than 3G or 4G mobile service, but is capped and charges roughly $25 for each extra gigabyte allotment.”

Nacef’s call to his provider was not pleasant. He had already accumulated almost $180 in charges for the month of August, most in overlimit fees. The culprit was quickly identified — Microsoft Windows 10, which took several attempts to reach Nacef’s computer over a challenging Internet connection. But Nacef also learned his computer was repeatedly requesting updates from Microsoft, including three software patches that would not complete and were sent over and over for almost two weeks.

“It was the fifth call my ISP had received about this problem, and they were very annoyed also because Microsoft Windows 10 assumes you will use their Edge browser which defeats the early warning messages from my ISP that usage limits are approaching,” Nacef said. “When I switched back to my old browser the bad news was there, but it was too late.”

Windows-10His ISP has agreed to cut the charges in half and has warned all of its customers if they want Windows 10, the ISP will offer them a copy on a returnable USB memory device for free.

Nacef thinks the huge multiple download attempts to receive Windows 10 itself was responsible for most of the extra usage, but he is wary about the frequent software updates and the fact they are shared with other users by default.

That is what may have tripped up Rob DuGrenier who paid an exorbitant $150 this month for 1.5Mbps Internet service just to get a 75GB usage allowance for his immediate family in far northern Québec. The alternative was an overlimit fee of $20 for each 5GB allotment of usage over the usual 30GB allowance granted to “Power” users.

“Internet is not an option for our family for medical reasons, but this hurts,” DuGrenier writes. “It is definitely Windows 10 and there is something wrong with it because our ISP reports we are sending a lot more data than we are receiving, and there are no viruses or malware on the computers.”

Internet access is northern Québec is slow and costly.

Internet access is northern Québec is slow and costly.

His ISP now suspects Microsoft is using his connection to distribute software updates to a number of other users across northern Canada. When DuGrenier’s family disabled the option that opted them in to distributing Microsoft updates to other customers, upstream traffic dropped 98%.

“Were we sending Windows 10 itself all over northern Quebec and Nunavut? We just don’t know and Microsoft has not responded,” DuGrenier reports. “They have billions, I do not. They should be paying my Internet bill this month.”

The worst of the reported problems of bill shock are occurring in remote areas where Internet service can be a mixture of wired and wireless connections that are often slow and usually usage-limited. Windows 10 was designed to reduce bandwidth demand on wireless connections, assuming they would be metered. But how Microsoft detects which networks are wireless and metered and which may only partly be so is apparently a work in progress.

This morning, the Sydney Morning Herald reports at least one customer on a Pacific island was slammed with a catastrophically high Internet bill. Maureen Hilyard in the Cook Islands owes her ISP $390 this month, all because of automatic updates from Microsoft for Windows 10.

“In this context, where Internet access is both painfully slow and seriously expensive, these forced updates are almost literally forcing people off the Internet and are resulting in massive excess data charges,” EFA executive officer Jon Lawrence told the newspaper.

cook islands

The Cook Islands

Hilyard is a customer of Bluesky, primarily a satellite Internet Service Provider that dominates the Cook Islands, which have no other options for Internet access. A basic account costs $31.50 a month, but that provides just 3.5GB of data for the entire month. Automatic overlimit charges of $0.03 per megabyte accrue after the allowance is used up.

The most likely victims of Windows-induced bill shock subscribe to usage-limited wireless or satellite Internet services. While many providers throttle the speeds of customers who reach the usage limit, others charge penalty rates. Microsoft has no way to know which is true. Instead, the company claims it looks for evidence of a wireless connection before performing updates and when it finds one, it assumes it to be metered. But wired connections stay firmly in the unmetered category, whether they are usage-capped or not. Customers are invited to choose by digging through confusing settings menus.

Even more problematic is the built-in peer-to-peer technology that gives Microsoft’s servers a break and uses your Internet connection to share the latest Windows software updates with other Windows users across town and beyond. Microsoft has offered no provision to track this usage, but users can opt out with this advice from the Sydney Morning Herald:

Users can tweak their Windows 10 system settings by enabling a “metered connection” by searching for “Change Wi-Fi settings” in the start menu, clicking on “Advanced Options” and enabling “Metered connection.” This lets Windows 10 know the Wi-Fi connection you’re on is capped, so instead of forcing a software update onto your PC or tablet, it will notify you first. You can then choose to delay the upgrade until you are on an uncapped connection, or until you’ve rolled over into a fresh month of data.

This workaround only applies to Wi-Fi connections, however, not Ethernet connections.

A second workaround actually comes in an update which Microsoft itself released. It’s a bit more fiddly though, as it involves manually uninstalling driver updates and then downloading a special troubleshooter app to prevent them from installing again automatically. The full instructions are available online.

Uproar Over Eastlink’s 15GB Usage Limit Brings Call to Ban Data Caps in Rural Canada

EastlinkLogoA plan to place a 15GB monthly usage cap on Eastlink broadband service in rural Nova Scotia has led to calls to ban data caps, with a NDP Member of the Legislative Assembly of Nova Scotia leading the charge.

NDP MLA Sterling Belliveau is calling on the Liberal government to prohibit Eastlink from placing Internet data caps on rural broadband.

“This newly announced cap really sends us back to the 1990s when it comes to technology,” Belliveau said in a news release Tuesday. “The province paid $20 million to bring this service to rural communities, and as such, the Minister of Business needs to tell Eastlink this can’t stand.”

Belliveau’s office is being flooded with complaints from residents and business owners upset about Eastlink’s data cap, which includes a $2/GB overlimit fee, up to a maximum of $20.

“Only rural customers get penalized for using the Internet,” complained Angel Flanagan on Twitter. “We can’t have Netflix or YouTube. Eastlink, stop this cap and upgrade your services and give us better Internet. We don’t need to use it less.”

“I am so angry about the Internet capping,” said Emma Davis. “Eastlink you are out of your goddamn minds. Rural Nova Scotia is entering the Dark Ages.”

rural connect

Eastlink’s Rural Connect package is a wireless service, delivering speeds up to 1.5Mbps at a cost of $46.95 a month. The service is provided where wired providers are generally not available, including Annapolis, Hants, Digby, Yarmouth, Queens, Lunenburg, Shelburne and Kings counties. Eastlink says its new usage cap was designed to accommodate “intended usage like surfing the web, reading/sending emails, social media, e-commerce, accessing government services, etc. — and NOT video streaming, for which the service was not intended.”

Belliveau

Belliveau

Eastlink’s continued dependence on a low capacity wireless network platform has conflicted with the changing needs of Internet users, who increasingly use high bandwidth applications like streaming video that can quickly clog wireless ISP traffic.

When the service was designed, the popular video streaming service “Netflix was shipping DVDs by mail,” says Eastlink spokesperson Jill Laing.

The cap was implemented to “address Internet traffic, which we believe will help provide equal access to the service and deliver a better overall rural Internet experience for customers,” Laing wrote.

Eastlink says the average customer uses about 12GB of traffic, excluding video streaming. Setting a usage cap at 15GB should not be a problem for customers who stay off Netflix, argues the ISP.

“Those who are using the service as it was intended to be used should not be impacted by monthly usage,” she wrote.

The fact Eastlink labeled some traffic legitimate while video streaming was discouraged did not go over well with customers.

“Who made them Internet Gods when our provincial tax dollars helped finance their Internet project,” asks Al Fournier. “The very fact they would suggest a 15GB cap with a straight face in 2015 should be ringing alarm bells in Ottawa about the rural broadband crisis in Canada.”

nova scotiaFournier suspects Eastlink has not invested enough to keep up with a growing Internet because the service originally advertised itself as a way to listen to online music and watch video. But he also wonders if the data cap is an attempt to force the government to fund additional upgrades to get Eastlink to back down.

“This is why wireless ISPs suck for 21st century Internet,” Fournier argues. “They are incapable of keeping up with growing traffic and bandwidth needs and need to be retired in favor of fiber.”

But at least one wireless provider in Nova Scotia does not understand why Eastlink is making a fuss over data caps.

Cape Breton’s Seaside Wireless Communications offers Internet access in Antigonish, Cape Breton, Colchester, Cumberland, Guysborough, Inverness, Pictou, Richmond and Victoria counties, along with rural parts of Halifax County, and has no data caps.

“It is not even on our radar,” said Loran Tweedie, CEO of Seaside Wireless. “This is a differential we are proud of.”

Some Nova Scotians are also questioning why their Internet service is being capped while rural Eastlink customers in Newfoundland, Labrador and Ontario can continue to use the Internet cap-free, at least for now. Others are suspicious about the future of Eastlink’s maximum cap on overlimit fees, currently $20. Canadian providers have a history of raising the maximum cap, subjecting customers to greater fees.

“It’s hard to speak to what will happen over time. We’ll certainly evaluate where we’re at later in the fall,” said Laing.

Liberal provincial Business Minister Mark Furey said he was aware of Eastlink’s rural broadband data cap but only promised to monitor the situation for now.

Starting next month, Eastlink’s rural Internet packages will be capped at 15 gigabytes of usage per month. CBC Radio Nova Scotia’s “Information Morning” program speaks with Eastlink and Port Royal resident Gary Ewer about the impact the usage cap will have. (10:15)

You must remain on this page to hear the clip, or you can download the clip and listen later.

Charter Communications Starts Advertising Blitz: Its Internet Service Has “No Data Caps,” AT&T U-verse Does

No data caps.

No data caps.

Charter Communications is now heavily advertising the fact its Internet service “has no data caps,” in an attempt to leverage customers away from AT&T DSL (150GB cap) and AT&T U-verse (250GB cap).

Charter quietly shelved its softly enforced usage caps several months ago and is now using its cap-free experience as a marketing tool to convince customers to switch from AT&T and other phone company broadband options that often include usage limits.

“They used it with me to convince me to drop U-verse for Charter,” writes Stop the Cap! reader Jennifer in Tennessee. “I hate usage caps.”

Charter is also using its cap-free broadband as a key argument in favor of its merger deal with Time Warner Cable and Bright House (which have no usage caps either).

“Charter’s slowest speed tier (60Mbps downstream) is considerably faster and less expensive than TWC’s comparable tiers, with no data caps or usage based pricing,” Charter argued in its merger presentation this morning.

AT&T has unevenly enforced usage caps on its DSL and U-verse services. A standard overlimit fee of $10 for each 50GB applies, but only in some markets.

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.

Source: FCC Will Get Serious About Data Caps if Comcast Moves to Impose Them Nationwide

fccA well-placed source in Washington, D.C. with knowledge of the matter tells Stop the Cap! the Federal Communications Commission is prepared to take a hard look at the issue of Internet data caps and usage-based billing if a major cable operator like Comcast imposes usage allowances on its broadband customers nationwide.

Comcast introduced its usage cap market trial in Nashville, Tenn. in 2012 but gradually expanded it to include Huntsville and Mobile, Alabama; Atlanta, Augusta and Savannah, Georgia; Central Kentucky; Maine; Jackson, Mississippi; Knoxville and Memphis, Tennessee; Charleston, South Carolina; and Tucson, Arizona.

“Two and a half-years is exceptionally long for a ‘market trial,’ and we expected Comcast would avoid creating an issue for regulators by drawing attention to the data cap issue during its attempted merger with Time Warner Cable,” said our source. “Now that the merger is off, there is growing expectation Comcast will make a decision about its ‘data usage plans’ soon.”

In most test markets, Comcast is limiting residential customers to 300GB of usage per month, after which an overlimit fee of $10 per 50GB applies. Despite that, Comcast’s forthcoming premium gigabit speed plans are exempt from usage caps, the company announced.

Comcast sustomers in market test cities have not been happy with the usage caps, some confronted with inaccurate usage measurement tools or “bill shock” after claiming to find surprise charges on their cable bill. One federal employee offered his own story of bill shock — $200 in overlimit fees on his April Comcast bill. The customer spent $70 a month on broadcast basic cable television and Comcast Internet service. As an almost cord-cutter, he could instead rely on one of several alternative online video providers like Netflix or Hulu, but watching video that did not come from Comcast’s cable TV package contributed to eating his monthly usage allowance and subjected him to hundreds of dollars in extra fees.

cohen“I’ve reviewed [the] account to see and can confirm the charges are valid,” responded a Comcast representative who defended the company’s usage cap trials. “Please understand that we are not here to take advantage of customers. We are here to provide a great customer service experience.  After researching [the] account, at this time no matter what level of service you obtain, the Internet usage [allowance] will remain the same.”

To date, the Federal Communications Commission has left the issue of data caps and usage-based billing on the back burner, despite a Government Accounting Office report that found little justification for usage limits or compulsory usage allowances on broadband.

In 2012, former FCC chairman Julius Genachowski defended the practice, claiming it would bring lower prices to light users, spur “innovation” and enable consumer choice. But Comcast customers have found little, if any savings from Comcast’s so-called “data usage plans.” The only savings comes from enrollment in Comcast’s Flexible Data Option, which offers a $5 discount if a customer keeps usage under 5GB a month on just one plan — Comcast’s 3Mbps $39.95/mo Economy Plus tier.

“We don’t see much innovation coming from Comcast’s usage limit trials because Internet pricing continues to rise and the plans have the side effect of discouraging customers from using competing video providers, which can consume a lot of a customer’s usage allowance,” our source adds.

You're over our arbitrary usage limit!

You are over our arbitrary usage limit!

As far as enabling consumer choice, Comcast’s own representative put the kibosh on that, unless a customer wants to pay higher Internet bills.

Net Neutrality and issues surrounding Title II have consumed much of the FCC’s attention in the residential broadband business during the first half of the Obama Administration’s second term. Usage billing and data caps are likely to become bigger issues during the second half if there is a decisive move towards compulsory usage limits and consumption billing by large operators.

“An operator the size of Comcast absolutely will draw scrutiny,” said our source. “If Comcast decides to impose its currently tested market trial plans on Comcast customers nationwide, the FCC will take a closer look. Under Title II, the agency is empowered to watch for attempts to circumvent Net Neutrality policies. Usage caps and charging additional fees to customers looking for an alternative to the cable television package will qualify, especially if Comcast continues to try to exempt itself.”

Cable industry officials have also become aware of the buzz surrounding usage caps and growing regulator concern. Some reportedly discussed the possibility of FCC intervention behind closed doors at the recent cable industry conference in Chicago. Multichannel News reported (sub. req.) cable industry executives increasingly fear federal officials will ban usage pricing for wired broadband service on competitive grounds. Online video competitors rely on large cable and phone companies to reach prospective customers, many that may think twice if usage allowances are imposed on consumer broadband accounts.

Zimbabwe: Fast Broadband is a “Basic Human Right”; Victoria Falls Going Fiber-to-the-Home: 100Mbps Service

zol-logo-newThe two largest telecom companies in Zimbabwe believe broadband access isn’t just an essential utility — it’s a basic human right and they are responding with major upgrade projects that will deliver speedier broadband, sometimes even faster than what most customers in North America can access.

Anything less than fiber-to-the-home service won’t do, according to Tom Tudor, chief marketing officer at Liquid Telecom. The company is expanding its fiber project in Zimbabwe with popular tourist destination Victoria Falls getting a major upgrade. Liquid Telecom believes data caps are incompatible with the concept of bringing the Internet to more people to “participate in, and benefit from, the digital revolution.” Liquid Telecom’s fiber service – Fibroniks, doesn’t have usage limits or hidden gotcha fees.

“Every day we lay new fiber which enables us to deliver what we refer to as ‘The Real Internet’, a superfast service which transforms how people access and share information,” Tudor said.

superfast-fibreAt the outset in Victoria Falls, Fibroniks will offer unlimited use packages up to 100Mbps, with a commitment customers can access whatever they want, whenever they want, at a guaranteed fixed monthly price. Liquid Telecom already supplies fiber service in the capital city of Harare, but Tudor believes getting into smaller communities in the country is essential.

“We believe that internet connectivity is a basic human right and so it is our mission to provide quality broadband to every person and business in Africa,” said Tudor.

It will bring a broadband revolution to Victoria Falls, a community of over 35,000 that has languished with ADSL and last generation wireless services like WiMAX and 3G, which offer speeds typically no higher than 512kbps.

Fibroniks also includes telephone service, which will cost a fraction of what Tel•One, Zimbabwe’s sole fixed landline provider, charges for service. Tel•One has focused most of its investment improving and expanding ADSL service over its existing landline network. Although Tel•One may end up reaching more Zimbabwe citizens faster that Liquid Telecom, the speeds Tel•One provides will be much slower than Liquid Telecom’s Fibroniks.

Liquid Telecom’s other fiber to the home projects are in Zambia, with plans to expand to Kenya, Rwanda, and two other African countries yet to be announced.

Stop the Cap! Calls on Comcast to End Its Usage Caps/Usage Billing Trials, Restore Unlimited Service

Phillip "Comcast lost its case for usage caps" Dampier

Phillip “Comcast lost its case for usage caps” Dampier

With today’s announcement Comcast intends to bring unlimited 2Gbps broadband to as many as 18 million homes across its service area, one thing is clear — if Comcast is not worried about the impact of that many potential customers consuming 2Gbps of bandwidth, there is absolutely no justification to impose usage caps and allowances on any Comcast customer.

A frequent justification for usage caps and usage billing is to guarantee fair access for all customers on a shared, congested network. Another is to help defray the cost of broadband expansion. But Comcast’s new super-speed tier will have no usage cap and customers are invited to use it as much as they like for a fixed price. Clearly, a customer maxing out a 2Gbps connection to upload and download enormous amounts of content, say on a peer-to-peer network, will have a far greater impact on Comcast’s infrastructure than a user with a basic 25Mbps Internet connection. Yet today in Atlanta, Comcast is asking its 25Mbps customers to stay within a 300GB usage allowance, if they want to avoid an overlimit penalty of $10 for each 50GB block of additional usage.

Comcast does not like Stop the Cap! calling Comcast’s “data usage trials” what we believe them to be: “usage caps.”

In response to our testimony before the New York Public Service Commission last year regarding its application to acquire Time Warner Cable, Comcast objected to our claim it was placing usage allowances or limits on its broadband customers.

“Comcast does not have ‘data caps’ today,” Comcast told the PSC in its filing. “Comcast announced almost two years ago that it was suspending enforcement of its prior 250GB excessive usage cap and that it would instead be trialing different pricing and packaging options to evaluate options for subscribers—options that reflect evolving Internet usage and that are based on the desire to provide flexible consumption plans, including a plan that enables customers who want to use more data the option to pay more to do so as well as a plan for those who use less data the option to save some money.”

Yet Comcast’s desire to offer “flexible” usage plans becomes very inflexible when customers ask for unlimited service. Comcast has refused to offer such an option in several trial markets where usage caps are once again being tested.

courtesy-notice-640x259Last May, Comcast vice president David Cohen emphatically stated usage caps and usage-based billing were all about “fairness,” telling investors: “People who use more should pay more, and people who use less should pay less.”

Those signing up for 2Gbps service will be in a position to use far more bandwidth and data than any other Comcast customer subscribing to a lower speed broadband tier, yet will not be asked to pay more for using more or pay less for using less. They will be signing up for a simple to understand unlimited usage plan most Comcast customers want that will carry no billing surprises. At the moment, that is the only unlimited tier residential plan a Comcast customer in Atlanta will be able to buy.

Also turned on its head is the idea that customers who use the most bandwidth or cost Comcast the most should be contributing more to help Comcast pay for network upgrades, but once again this will not be the case for 2Gbps customers in Atlanta. They will cost Comcast a fortune as the company rips out its existing HFC (coaxial cable) infrastructure and replaces it with fiber to the home service. Yet the 25Mbps customer still using decades-old coaxial cable is effectively being asked to limit their Internet usage to avoid additional charges while the 2Gbps modern fiber customer is not.

It clearly makes no sense, but will rake in dollars for Comcast as usage continues to grow.

If Comcast’s network can sustain up to 18 million 2Gbps users with no usage cap, it has more than enough capacity to take the limits off every Comcast broadband customer. Comcast must shelve its usage billing trials immediately and remove all usage allowances from residential broadband customers in various test markets where they have been in place for more than a year. Google, Verizon, Time Warner Cable, Cablevision, Charter, and many other broadband providers have found no defensible reason to slap usage limits on their broadband customers. If they can provide comparable speeds and service without a cap, so can Comcast.

Comcast should clearly state it is in the business of providing the best possible customer experience using 21st century infrastructure more than robust enough to sustain usage demands, and compulsory usage caps and consumption billing are incompatible with the company’s goal to provide top-quality, worry-free Internet access.

If Comcast wants to test voluntary discount programs for light users, we have no objection. But customers should always have access to an affordable unlimited option without having to watch usage meters or worry about bill shock.

Comcast needs to do the right thing today and end all compulsory data usage trials across the country and commit to providing unlimited, allowance-free broadband service.

Nashville Comcast Customer Paying for Business Service to Avoid Usage Caps Faces $2,789 Cancelation Fee

Phillip Dampier November 19, 2014 Comcast/Xfinity, Consumer News, Video No Comments

comcast business cancelA Nashville web developer who signed up for usage-cap exempted Business Class service in one of Comcast’s usage-based billing trial cities received a bill for nearly $3,000 in early termination fees after he was unable to transfer his Comcast Internet service to his new address.

Adrian Fraim followed the lead of other savvy Comcast customers who have managed to avoid the company’s usage caps by signing up for cap-free Business Class service. For years, Comcast has offered small businesses a commercial service for only slightly more than residential service, without any usage limits. But any customer is free to sign up.

Fraim thought he was getting a good deal and was happy with his broadband service, but Comcast took him to school when he tried to move service from Antioch to his new address in Clarksville, which he later discovered was outside of Comcast’s service area. The cable company treated his move as a violation of his three-year service contract and billed him an early termination fee of $2,789.

“I was just blown away,” Fraim told WSMV-TV. “That’s way too much money for somebody like me to be able to pay. They kept telling me the same thing, ‘you’re under contract, that’s what the contract says.'”

Only Fraim has never seen a printed Comcast contract. The company only offers its general service agreement and acceptable use policy online and it implies commercial customers are under a one-year contract.

In fact, Comcast’s terms require early-canceling customers to pay 75% of the amount they would have paid on their monthly bill under contract and 100% of any waived custom installation fees. A customer with a $100/mo broadband bill would owe a termination fee of $75 a month for each of up to 36 months of service.

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“I didn’t think that was fair, to pay an early termination fee, because I wanted to keep their service,” Fraim said. “And due to them not offering it in my area, I feel like I was being punished because they don’t offer the service here.”

Comcast didn’t seem to care about Fraim’s predicament until reporters called the cable company.

Faced with the prospect of leading the local evening news, Comcast turned Fraim’s frown upside down and finally relented.

Spokesman Alex Horwitz said Comcast does have early termination fees, but because of the extenuating circumstances, “the new location is not serviceable by Comcast,” they will waive the fee.

Comcast has not modified its contract to offer that “get out of penalty jail free”-card to other customers, so be certain to carefully consider the term length of your contract and be sure you have no plans to move outside of a Comcast service area before signing it, unless you have very deep pockets.

http://www.phillipdampier.com/video/WSMV Nashville Man questions 3000 Comcast bill 11-17-14.mp4

WSMV talks with Nashville web developer Adrian Fraim who discovered a nasty surprise when he moved outside of Comcast’s service area – a $2.789 early termination fee. (2:08)

Alaska’s GCI Boosts Speeds But Leaves Its Caps and Overlimit Fees Intact

redAlaska-based GCI has rolled out a free upgrade for customers in Anchorage, Fairbanks, Juneau, Ketchikan, Mat-Su Valley, and Sitka that delivers broadband speeds up to 250/10Mbps.

GCI’s re:D broadband used to max out at 200Mbps, but thanks to channel bonding on the cable system, download speeds will be upgraded to 250Mbps in re:D service areas by the end of this year.

But getting 250Mbps broadband is not cheap in Alaska. The service is priced at $174.99 a month when part of a service bundle. Broadband-only customers also pay a $11.99 monthly access fee. Both come with 24-month contracts at that price. Customers who don’t want to be tied down can choose month-to-month service for $5 more per month.

At those prices, one might hope GCI would drop its usage cap, but customers can forget it. A 500GB monthly usage cap applies, with overlimit fees up to $30/GB on some plans.

GCI also announced it would deliver 1Gbps next year over a fiber to the home network under construction in Anchorage, promising “no limits with what you can do with broadband” without mentioning whether it planned usage limits for its fiber service as well.

GCI is asking customers to vote support for their neighborhoods getting fiber upgrades. The more red this map of Anchorage shows, the more customers who have shown support for fiber broadband.

GCI is asking customers to vote support for their neighborhoods getting fiber upgrades. The more red sections of this map of Anchorage shows, the more customers who have shown support for fiber broadband.

For most GCI customers, however, broadband will continue to arrive over the company’s HFC coaxial cable network. To better manage speeds, the company’s DOCSIS 3 platform is bonding eight cable channels, but in re:D areas the company bonds up to 24 cable channels, with plans to increase to 32 channels.

acs logoThe speed increases come after its competitor Alaska Communications announced speed increases of its own. ACS sells unlimited access broadband service at speeds up to 50Mbps. ACS has beefed up its copper infrastructure to support faster Internet speeds, starting with 15Mbps introduced across the state in May. Now customers in Anchorage can subscribe to faster tiers including 30 and 50Mbps.

“Alaskans asked for faster Home Internet, and we’ve responded with these increased speeds, delivered with great customer service and without overage charges,” said ACS president and CEO Anand Vadapalli. “In addition to faster download speeds, customers choosing our product get the highest upload speeds that are so important for sharing videos and gaming.”

ACS has found its unlimited broadband offering attractive to customers who don’t want to worry about GCI’s overlimit fees. ACS also claims its customers get broadband over a dedicated line, not shared infrastructure like GCI, resulting in no speed slowdowns at peak usage times.

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  • Ol Dave: Comcast isn't the only company with data caps - Cox has them, even tiny little ComSouth (formerly Billy Bob's Cable) has them where we live, and we ha...
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  • Mack: You are the lucky ones in Tucson. At least you are tiered, meaning the caps are 300, 350, 400 depending on what service you have. I used to live in Ph...
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  • BillXperts.com: Hello tacitus, Our team's mission is to help people lower their monthly bills. Therefore we are totally outraged when we see such practices from th...
  • tacitus: This issue has nothing to do with Net Neutrality. T-Mobile isn't creating a fast lane for certain web sites and they don't throttle or cap the data ba...
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