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Comcast Backs Off Charging Customers Double for Gigabit Speed in Chicago

comcast gigabitTo be a Google Fiber city or not to be a Google Fiber city. It could make a big difference to your wallet if Comcast upgrades broadband speeds in your neighborhood before Google Fiber finally arrives in your “fiberhood.”

When Comcast first announced a major trial of DOCSIS 3.1 gigabit broadband service in Chicago, it confirmed it would cost $139.95 a month — double the price Comcast charges customers in cities where Google Fiber has expressed an interest in providing gigabit service as well. With Chicago nowhere on the Google Fiber upgrade list, it seemed Comcast was prepared to prove the point that competition can really make a difference in broadband pricing, at least until stories appeared headlining Comcast’s pricing policies. Within hours, Comcast “clarified” it was prepared to sell gigabit service in Chicago for $70 a month as well, with a three-year contract.

“We are now able to deliver gigabit speeds over the existing lines that already reach millions of homes in the Chicago area,” Comcast spokesman Jack Segal told the Chicago Tribune. “This is a major step in the evolution of high-speed broadband.”

This is not Comcast bringing a new fiber line to your home or business. This is gigabit download speed over Comcast’s current cable/fiber network — the same one that delivers your current broadband service. DOCSIS 3.1 allows Comcast to bond additional channels together to boost speeds, at least on the downstream side. This technology will not deliver gigabit speed in both directions, at least for now. Comcast’s DOCSIS 3.1 gigabit plan delivers 1,000Mbps download speed, but just 35Mbps upstream. Customers looking for something faster can pay dramatically more for Comcast’s Gigabit Pro fiber to the home service, offering 2,000Mbps speeds. But it will cost up to $1,000 to install and is priced at $300 a month with a two-year contract.

Comcast’s 1TB usage cap (with up to $200 in overlimit fees) will apply to Comcast’s DOCSIS 3.1 plans, unless you opt for unlimited service… for another $50 a month. Comcast gracefully includes unlimited with its Gigabit Pro service.

gigabit comcast

Chicago residents can sign up for either gigabit plan at www.xfinity.com/gig. A $50 installation fee applies and a service call is required. Customers signing up will need a new cable modem that supports DOCSIS 3.1, and there are only a handful on the market so far. Many more will be available in 2017.

GCI’s Stingy Caps About to Get a Boost

gciBroadband life in Alaska is usually a choice (if you live in Fairbanks, Anchorage, Juneau, or another significantly sized city) between usage-capped cable operator GCI or slow-speed DSL (if you can get it) from Alaska’s two telephone companies – ACS, where unlimited service is still available, or MTA, where a 10Mbps Internet plan starts at $50 and offers up to 50GB of usage a month.

GCI has traditionally been the fastest option, but the company’s usage caps and high prices have brought scores of complaints from customers over the years. A basic 10/1Mbps internet plan costs $59.99 a month and only includes 40GB of usage. Many Alaskans who want faster access with a more reasonable allowance have to spend $84.99 a month for 50/3Mbps access to get a 150GB usage allowance or $134.99 for 100/5Mbps service with 300GB of included usage.

Late last week, GCI announced it was boosting the usage allowance for just one of its plans, the premium-priced, limited availability 1,000/50Mbps plan ($174.99), which until recently included a 750GB usage allowance. The new usage allowance is 1TB (1,000GB).

“In today’s connected society, people are demanding more and more access to data at incredibly fast speeds,” said Paul Landes, GCI’s senior vice president/general manager of consumer services. “GCI is proud to have a product that keeps our customers connected in ways people in Boston and LA can’t even receive. Even better, we are able to provide these upgrades at no additional cost to our loyal customers.”

Alaskans face high prices for internet access from GCI, the state's largest cable company.

Alaskans face high prices for internet access from GCI, the state’s largest cable company.

Gigabit customers like Stop the Cap! reader Dave Langhorn certainly hoped so.

“This is long overdue,” said Langhorn. “For $175 a month, there shouldn’t be any data caps, considering unlimited gigabit plans in the lower-48 often sell for $70-80 a month, which is less than half what we pay and still get capped.”

Our reader Michael Horton is incensed that GCI managed a usage allowance boost for its most premium internet plan, while leaving everyone else with the same old service.

“We shouldn’t be allowing any ISPs to restrict usage on their networks,” said Horton. “You should be paying for the speed that you use and nothing more.”

Horton considers data caps anachronistic at a time when the digital economy is moving towards online distribution of products and services like movies, games, software, and other digital products. Even Windows 10 has been more often installed from a download than from physical media.

GCI has promised to address at least one of Horton’s concerns, stating they are planning speed boosts and allowance upgrades for all of their internet plans at an unspecified time later this year.

GCI says the allowance boost comes in response to customer requests from surveys and “listening sessions.”

Horton and Langhorn both believe that those voices would be heard much louder if GCI had more significant competition.

“ACS is the only alternative if you want unreliable speed,” Horton writes.”They don’t have bandwidth caps, but you will be unable to use their service efficiently if you are a gamer or watch Netflix a lot.”

 

Blue Ridge Communications Rations Internet Usage With Hard Usage Caps

blue-ridgeA tiny cable company serving communities around the Blue Mountain in eastern Pennsylvania has a big appetite for rationing Internet usage by imposing data caps and overlimit fees on their 170,000 customers.

Effective Sept. 1, Blue Ridge dropped off-peak unlimited use service and imposed a 24-hour rationing plan on its customers, including a familiar overlimit fee of $10 per 50GB of excess usage — the same fee created by AT&T and adopted by several other cable and phone companies.

Customers on the lowest priced plans are most at risk of encountering overlimit fees, which most providers claim are designed to make heavy users pay more for access. In the past, the company maintained rarely enforced “soft caps” and off-peak unlimited usage starting at 5pm. The “hard caps” arrived Sept. 1 with claims the company generously doubled the allowance for some customers, without mentioning it also eliminated off-peak unlimited usage. In terms of “fairness,” the heaviest users signed up to the fastest speed tiers get the most generous allowances while those at lower-price tiers are most likely to encounter an overlimit penalty fee:

  • Web Surfer $42.95 (1.5Mbps Download/384kbps Upload) – 150GB per month (no change)
  • G5 $52.95 (5Mbps/384kbps) – 300GB per month (was 250GB)
  • G10 $57.95 (10Mbps/800kbps) – 400GB per month (was 250GB)
  • G15 $67.95  (15/2Mbps) – 500GB per month (was 250GB)
  • Dream 60 $84.95 (60/3Mbps) – 600GB per month (was 250GB)
  • Dream 100 $124.95 (100/5Mbps) – 700GB per month (was 250GB)
Blue Ridge Communications is headquartered in Palmerton, Pa.

Blue Ridge Communications is headquartered in Palmerton, Pa.

To avoid a higher bill, customers will have to check a company-sponsored, unverified usage meter on Blue Ridge’s website and be ready to upgrade to a more costly Internet plan. Blue Ridge customers already pay substantially more for Internet service than other customers pay in the region. A Comcast subscriber in eastern Pennsylvania now pays $29.99 a month for the first 12 months of 25Mbps service, after which the price increases to as much as $66.95 a month. A less expensive 6Mbps tier costs $49.95 from Comcast, and a much faster 150Mbps tier is also available for $78.95, $46 less than what Blue Ridge charges for service that is 50Mbps slower.

“It’s no dream at 60 or 100Mbps, it’s a straight up gouging nightmare wrapped in greed and lies,” says Stop the Cap! reader Thomas, who lives in Palmerton and calls Blue Ridge’s parent company a local media and entertainment dictatorship. “My friends and relatives are stunned when I tell them one local company controls cable, telephone, wireless, the newspaper and the local news channel. It’s all Pencor through and through.”

Pencor Services, Inc., (Pennsylvania ENtertainment, COmmunications and Recreation) holds a unique position in eastern Pennsylvania. The rural character of the region has allowed Pencor to own and operate a large number of media and telecommunications companies. Pencor owns both Blue Ridge Communications — the cable operator and two local phone companies — Palmerton Telephone and the Blue Ridge Telephone Company. DSL service is offered, but it is “powered by” PenTeleData, another Pencor-owned operation. Wireless service is provided by Pencor-owned Pencor Wireless. In certain other markets, phone companies like Frontier Communications offer some competition, mostly low-speed DSL.

Pencor and its businesses have a substantial presence throughout the Blue Mountains region.

Pencor and its businesses have a substantial presence throughout the Blue Mountain region.

Residents get much of their local news from BRC TV-13, the local news channel on the Blue Ridge system serving Carbon, Monroe, Wayne & Pike counties and parts of Lehigh, Schuylkill, Northampton and Berks counties. BRC TV-11 provides local news on the Blue Ridge system serving Northern Lancaster County. Both stations are also owned by Pencor. So is the Lehigh Valley Press and the Times News newspaper operations.

A Facebook group has been organized to fight Blue Ridge on its new data caps.

A Facebook group has been organized to fight Blue Ridge over its new data caps.

Coverage of the usage cap imposition and customer reaction to it, best characterized as hostile, came from media not owned by Pencor.

Milfordnow! reported “when analyzing similar cap programs that have been implemented by other cable companies, it is apparent that bills may be rising substantially for heavy users.”

The cable company countered it expected only 3% of customers to affected by the new caps, which has some customers wondering why they need them at all.

“You have to wonder if caps affect almost nobody, why do companies spend so much time and energy imposing them,” said Thomas.

“Everything from downloads to YouTube, Netflix and even online gaming count against their new 24-hour cap,” Milford resident John Ferry III told the Pocono Record, reporting his latest bill was about $46 over previous charges. “They are telling people they have doubled the cap, but this is not true. By removing the off-peak time, which was essentially a free period, there is no math that makes it double.”

Blue Ridge customers have begun to organize a pushback against the data caps through a new Stop Blue Ridge Cable Data Caps Facebook page.

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.

CNBC (Comcast)’s Magic Box of Tricks and Traps: The Hit on Tumblr Founder David Karp Debunked

Uh oh... deer in headlights moment for Tumblr founder David Karp.

Uh oh… deer in headlights moment for Tumblr founder David Karp.

Net Neutrality opponents today made hay about an underwhelming, sometimes stumbling debate performance by Tumblr founder David Karp, who was inexplicably CNBC’s go-to-guy to explain the inner machinations of the multi-billion dollar high-speed Internet connectivity business.

TechFreedom, an industry-funded libertarian-leaning group spent much of the day hounding Karp about his “painful, babbling CNBC interview.”

“Those pushing #TitleII have NO FREAKING CLUE what it means,” tweeted TechFreedom’s Berin Szoka.

BTIG Research devoted a whole page to the eight minute performance, where Karp faced interrogation by two CNBC hosts openly hostile to Net Neutrality and another that expressed profound concern the Obama Administration would over-enforce Net Neutrality under Title II regulations. CNBC is owned by Comcast, a fierce opponent of mandatory Net Neutrality.

“Given the importance of Net Neutrality and the central role played by Tumblr’s Karp in getting us to this point, we thought it was very important for everyone to watch his interview earlier today on CNBC in its entirety,” wrote Rich Greenfield, noting the “best parts” (where Karp appeared like a deer frozen by oncoming headlights) were encapsulated into an extra video clip.

Greenfield referred to a Wall Street Journal piece in February that suggested access means everything when it comes to D.C. politics:

“In a lucky coincidence, Tumblr Chief Executive David Karp, who attended the meeting in New York, found himself seated next to Mr. Obama at a fundraiser the following day hosted by investment manager Deven Parekh.

Mr. Karp told Mr. Obama about his concerns with the net-neutrality plan backed by Mr. Wheeler, according to people familiar with the conversation. Those objections were relayed to the White House aides secretly working on an alternative.”

That was sufficient for some to imply Karp was a powerful influence over the president’s sudden pronouncement last November that strong, all-encompassing Net Neutrality was the was to go.

CNBC’s hosts grilled Karp, asking him to prove a negative, set up false premises for Karp to defend, and repeatedly cut his answers off. At the same time, Karp was clearly unprepared and often did not have his facts in order.

Stop the Cap! sorts it all out.

Nobody’s shining moment on the Net Neutrality debate on CNBC featuring an unprepared David Karp, founder of Tumblr vs. the B-team at CNBC – lackeys with an agenda who can’t wait to interrupt. Truth comes in last place. (8:18)

CNBC Claim: “If you talk to AT&T’s Randall Stephenson, he will say right now they have more capital expenditures than any company in America … and if you turn it into a utility it will not be profitable to continue investing like that.”

Fact: AT&T does invest heavily in its network but also enjoys very healthy returns on that investment. In 2014, AT&T was expected to end the year spending about $21 billion, primarily on its highly profitable wireless network. Last week, USA Today published a list of the top 12 companies in the Standard & Poor’s 500 that boosted capital spending by 40% or more in the past 12 months and spent at least 15% of revenue on capital expenditures. AT&T was not on it. Outside of claims from telecom companies and their lobbyists, there are no plans by the FCC to turn broadband into a regulated utility.

Karp Claim: “There is a tremendous amount of throttling going on right now.”

CNBC Question from Alternate Universe of Fair, Balanced Journalism:

CNBC Question from Alternate Universe of Fair, Balanced Journalism: “In general, do you think heavy-handed government regulation is a good thing or a bad thing for an industry?”

Fact: “Throttling” is not well-defined here. There is intentional throttling among certain wireless companies, usually under the guise of “fair access policies” and usage caps, and there is throttling as a side effect of congestion in two areas: backbone connectivity among certain ISPs and wholesale traffic handlers and last mile congestion among providers, especially those offering DSL in rural areas, where multiple customers share access to a limited capacity middle mile network. There is no evidence that any significant wired providers are intentionally throttling the speeds of services except as part of a fair access policy or a purposeful lack of investment in network upgrades.

CNBC Claim: “You have a monopoly because it is really expensive to build the pipes so you have not had multiple people who will build pipes to the door.”

Fact: The capital cost required to offer wired broadband service to each home is a clear deterrent for many providers, but not an insurmountable one as Google and community-owned providers have demonstrated. The cable industry won early protection from competition in exclusive franchise agreements that calmed investor fears that the enormous cost of wiring communities for cable might not be repaid if a competition war broke out. AT&T later fought for and won statewide franchising agreements and considerable deregulation in many states where it provides U-verse, arguing regulatory burden reduction would enhance competition. But the same large cable and phone companies that achieved deregulation for themselves have lobbied heavily to regulate and banish community-owned providers from getting off the ground by encouraging the passage of restrictive state laws making such competition nearly impossible.

CNBC Question: “In general, do you think heavy-handed government regulation is a good thing or a bad thing for an industry?”

Our reply: Really?

Karp: I think a bright line rule that sort of spells out these foundational principles that we believe in… I think the Bill of Rights is a good thing… even without getting into the weeds, spelling out something like the First Amendment that says this is a truth that we believe… (cut off).

CNBC: I don’t see how that is an answer at all comparing this to the Bill of… I understand the Bill of Rights but… has there been a problem up to this point where you feel that people… that Net Neutrality has been violated.

Karp: We’ve had instances where companies like Comcast have tried to block whole protocols and shut off consumers access to new innovative parts of the Internet.

Traffic congestion problems on many major ISPs were limited to Netflix traffic, until Netflix began paying for peering connections with problem ISPs.

Traffic congestion problems on many major ISPs were limited to Netflix traffic, until Netflix began paying for peering connections with problem ISPs.

Fact: In 2007, Comcast installed new software or equipment on its networks that began selectively interfering with some of Comcast’s customers’ TCP/IP connections. The most widely discussed interference was with certain BitTorrent peer-to-peer (P2P) file-sharing communications, but other protocols were also affected. The case led to an effort by the FCC to introduce open Internet traffic rules in 2010 which Comcast later defeated in court. At no time did Comcast completely block access – it simply impeded it, reducing customer speeds only while using those services.

A CNBC host then challenged Karp to prove a negative on AT&T’s plans to pull back investment in its network expansion.

“How has it been disproven that he’s not actually going to pull in on his buildout of more infrastructure?”

Fact: On Nov 7, 2014 – a week before President Obama unveiled his support for strong Net Neutrality policies – AT&T announced at least $3 billion in capex reduction (or “pull in” to quote CNBC) for 2015 in a press release on its acquisition of Mexico Wireless Provider Iusacell:

AT&T’s VIP-related capital investment levels will peak in 2014, as the company has said previously. As a result, AT&T expects its 2015 capital expenditure budget for its existing businesses to be in the $18 billion range. This will bring the company’s capital spending as a percent of total revenues to the mid-teens level — consistent with its historical capital spending levels.

Even after AT&T CEO Randall Stephenson was announcing cutbacks in capex, his office was releasing press releases claiming a major expansion of AT&T’s gigabit fiber upgrades for U-verse, claims Stop the Cap! have found to be grossly exaggerated.

Stephenson made the mistake of putting the cart in front of the broadband horse, making it impossible to credibly claim he was reducing his capex budget because of a Net Neutrality policy that had not even been announced yet.

CNBC Claim: “It doesn’t mean someone will pay for it if they are losing money as a result.”

Fact: None of the providers mentioned by CNBC have lost any money provisioning broadband service. In fact, broadband is becoming the new profit center of the industry, netting higher revenue after adjustments for cost than any other part of the cable package.

Another exchange:

CNBC: “If you look at Netflix traffic, sometimes it is 80 percent of the network’s nighttime load.”

Karp: “The consumers are paying for it and Netflix is already paying for it.”

CNBC: “I am not a Netflix user and it ticks me off I have to subsidize everybody that is doing that. Why do I have to pay for that?”

Fact: The CNBC host is being disingenuous and inaccurate. Although Netflix traffic can constitute 80% of the evening traffic load, the customers accessing Netflix paid both Netflix and their ISP for that traffic. Whether or not the CNBC host uses Netflix or not is irrelevant. Assuming she is a Comcast or Time Warner Cable customer, last mile congestion that could impact her enjoyment of the Internet was never an issue under DOCSIS 2, has been rendered a non-issue under the current DOCSIS 3 standard, and will remain a non issue going forward.

The traffic dispute between Comcast and Netflix only affected Netflix viewing. The CNBC host need not subsidize Netflix or anyone else. Netflix offers free peering services and equipment to any ISP that wants it. Comcast refused to take part, demanding financial compensation instead. It then raised rates on customers anyway. Her beef is with Comcast, not Netflix.

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