"DVD's are so five years ago!"

Netflix, which has seen its Canadian streaming-only video service welcomed with usage cap reductions by Rogers Cable, has finally started to wake up to the threat its online video business model is one speed throttle or usage cap away from oblivion.

As the video rental company now contemplates launching a streaming-only version of its service in the United States, it has now firmly waded into the Net Neutrality debate.  In a filing earlier this month, Netflix impressed upon the Federal Communications Commission the importance of prohibiting providers from establishing blockades to keep its competing video service from threatening cable-TV revenue:

“The Commission must assure that specialized services do not, in effect, transform the public Internet into a private network in which access is not open but is controlled by the network operator, and innovative Internet-based enterprises are permitted effective access to their consumers only if the enterprises pay network operators unreasonable fees or are otherwise seen by such network operators as not threatening a competitive venture.”

Netflix online video packs a real wallop, as Americans embraces the service as a suitable and cheaper replacement for premium cable movie channels.

Sandvine, which pitches “network management” products to the broadband industry, reported Netflix now represents more than 20 percent of all downstream broadband traffic in the United States during peak usage times between 8-10pm.

The company’s financial results seem to affirm its growing impact as an online video entertainment player.  The Washington Post reports in the third quarter, Netflix saw a 52 percent gain in subscribers to 16.9 million. Revenue increased 31 percent to $553 million. But most interesting: 66 percent of subscribers watched more than 15 minutes of streaming video compared with 41 percent during the same period last year. The company predicted Wednesday that in the fourth quarter, a majority of Netflix subscribers would watch more content streamed from the Web on Netflix than on DVD.

That prompted CEO Reed Hastings to say Netflix should now be considered a streaming company that also offers DVD-by-mail service.

If providers launch Internet Overcharging schemes that limit broadband usage or throttle their competitors to barely usable speeds, that growth could come to an end quicker than the introduction of the next “unfair usage policy.”

Sandvine’s research confirmed something else.  As broadband speeds increase, so does usage.  In Asia where broadband speeds are dramatically higher than in the United States, Sandvine found median monthly data consumption is close to 12 gigabytes per household compared to 4 gigabytes in North America.  And Asians stay very close to their broadband connections, using them on average for almost 5.5 hours per day, compared to just three hours for North Americans.

When one considers the majority of broadband users are only starting to discover online video, those numbers are headed upwards… fast.

GCI delivers unlimited downloads of customers' money.

GCI spokesman David Morris either does not know what his own company does to abuse its customers or he openly lied about it in statements to the media:

GCI said it hasn’t yet charged anyone fees for exceeding the data limits (some customers dispute this), but the company began contacting its heaviest data users this summer to move them to new, limited plans. The company is also upgrading Internet speed for its customers this year at no extra cost.

GCI said it hasn’t decided when to enforce the data limits on everyone else. The crackdown might not happen until next year, according to Morris.

Apparently Morris is living in a time warp, because “next year” is this year.

After our article earlier this morning, Stop the Cap! started receiving e-mail from angry GCI customers with bills showing outrageous overlimit fees running into the hundreds of dollars GCI claims they are not charging.

Our reader Steve in Alaska sums it up:

“GCI is a bad actor that abuses its customers with bait and switch broadband, baiting customers with expensive unlimited bundled plans and then switching them to limited plans with unjustified fees,” he writes. “A legal investigation exploring whether this company is violating consumer protection laws is required, especially after misrepresenting the nature of these overcharges in the Alaskan media through its spokesman.”

GCI is apparently iterating the credit card industry’s tricks and traps.

Our reader Scott’s latest broadband bill shows just how abusive GCI pricing can get:

GCI: the Grinch That Stole the Internet (click to enlarge)

Scott was floored by GCI’s Festival of Overcharging, which turned a $55 a month bill for broadband into nearly $200.  It exemplifies everything we’ve warned about over the past two years with these pricing schemes:

Well it finally happened, I got hit with GCI internet bill shock, $196.58 total for my 8Mbps plan with 25GB usage.

My usage prior to this has always been around 15-20GB/mo according to them — just the usual web surfing/e-mail with a little online gaming over the weekends (Eve Online) but not much.

Something ratcheted up my usage to nearly twice that (I did buy one game off Steam for digital delivery), which still would have been perfectly reasonable given the $75.00/mo plan I chose — that’s double what most people pay for unlimited in the lower 48 states. I only moved to this plan because their $135/mo bundle plan wasn’t affordable due to the required overpriced digital phone + taxes.

I tried calling their customer service and just got the company line about how expensive it was to provide their service, and I must have an open Wi-Fi router or “downloaded” too many YouTube videos, iTunes, or other content. He also stressed five or six times lots of customers go over their limits thanks to Netflix streaming and you really can’t use it with GCI Internet service.

To date I’ve never gotten a straight story from them on how this is managed, or from their marketing material which never mentioned overage until recently, or their reps that used to say you’d get a phone call to warn you if you went over their limits. The rep I spoke to most recently claims you’re supposed to call them daily or every other day – or login to a special portal online to monitor usage.

Either way this company has no sense of customer service, nor does it operate in the interest of Alaskan consumers that are cut off from the lower 48 and need reliable and affordable Internet services.

Stop the Cap! recommends making a copy of David Morris’ comments and notifying GCI you are not paying their overage fees because they are “obviously in error,” at least according to the company’s own spokesman.  Then get on the line with the State of Alaska’s Consumer Protection Unit and the Better Business Bureau and demand your overlimit fees be credited or refunded.  We’ve even got the complaint form started for you.  GCI values its A+ Better Business Bureau rating, so chances are very good they’ll take care of you to satisfactorily close the complaint.

GCI’s claims that with Internet usage limits, the company can deliver its customers faster speeds.  But Stop the Cap! argues those speeds are ultimately useless when GCI allows you to use as little as 3 percent of your service before those overlimit fees kick in.

A Broadband Reports reader ran the numbers before speed upgrades made them even worse:

Get used to seeing this screen because we saw it for minutes on end when testing Time Warner's new Remote DVR service.

Time Warner Cable has launched its free Remote DVR programming service throughout the country, allowing customers to remotely manage their DVRs from the cable company’s website or through a smartphone application.

Stop the Cap! gave the service a test run this morning to see how well it works.

Here are some of our early impressions using the online, web-based interface (we did not test the smartphone application):

1.  The service is in beta and it showed.  Our first attempt to use the system this morning was laboriously slow, taking 30 seconds or more to change pages.  Things worked better as the morning progressed, but it still suffers from sluggish responsiveness.  Several features failed for us occasionally, such as deleting some scheduled recordings remotely.  After two minutes or more of waiting, we gave up.

2.  The application was generally intuitive and we did not need a lot of hand-holding to get started. But at the same time, the usefulness of the application itself was limited.  Scrolling through the online program grid was as tedious as the using the television version.  It’s fine if you know exactly what you want to watch and what channels to check, but terrible for browsing through hundreds of channels.

3.  The search and browse functions are far too limited to be useful.  It is impossible, for instance, to search just for movies.  Categories are too broad to be of much use, and many are missing.  “Drama” and “Action” included everything from a documentary to a series to a movie.  Netflix succeeds where Time Warner fails.  Their search categories are much better — documentaries, TV series, horror, foreign and classic films, and many more make it far easier to drill down to the type of show you want to see.  Netflix even offers sub-categories, helping people find similar programs to watch they never realized were available.

4.  Changing the name of the DVR from its hexadecimal default did not work consistently.  When we tried to rename ours to “Living Room,” sometimes it appeared that way, other times it defaulted back to the cryptic “DVR 00:xx:92.E9.xx.xx” (we replaced some numbers and letters with “x”).

5.  The more scheduled recordings you have, the more ponderous the application seemed to work.  We tried deleting some series (which did not always work either) and it helped responsiveness.  If you use your DVR a lot, you may find using Remote DVR a patience-testing experience.

6.  There did not seem to be an indicator as to how much recording space you have remaining or what is already stored on your DVR.

Time Warner customers who use smartphones and other Web-enabled mobile devices can access “Remote DVR Manager” at mdvr.timewarnercable.com.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/TWC Introducing Remote DVR.flv[/flv]

Time Warner Cable produced this video to help introduce customers to its Remote DVR service, explaining how to register and get started with the free service.  (1 minute)

GCI, an Alaskan Internet Service Provider, is getting pummeled by angry customers as they continue to learn the company has launched an Internet Overcharging scheme that limits their broadband use.  Some customer claim the company is actively trying to trick those previously enrolled in unlimited plans into limited service tiers with tantalizing “free speed upgrades.”

Stop the Cap! reader Thomas was one of more than a dozen readers who complained to the Anchorage Daily News about the broadband ripoff.

He is outraged by the bait and switch tactics employed by GCI that sold customers on expensive bundled service packages that promised “unlimited Internet” service the company is now trying to take away.

Thomas first learned GCI had slapped limits on his broadband account… from Stop the Cap! GCI never bothered to inform him, or many other customers, about the new usage limits.  After he read our earlier story, he called GCI and learned he was a victim of Internet Overcharging.

GCI’s limits range from 40-100GB on plans ranging in price from $45-105 per month.

GCI, like most Internet Overchargers, tries to blame its customers for the imposed limits.

GCI estimates that 5 percent of its Internet customers are consuming 70 percent of the company’s available bandwidth. These users share a portion of their Internet cable with other GCI customers, and they have been slowing down the other households’ Internet speed, GCI spokesman David Morris told the Anchorage newspaper.

In an effort to prove their contention that usage limits improve service, GCI handed out free speed upgrades along with usage allowances and attempted to conflate the two.

In reality, most broadband slowdowns come from overselling access and being unwilling to invest in appropriate capacity upgrades to meet the growing needs of customers.  For companies like GCI, imposing usage limits to scare users away from high bandwidth services is cheaper and more profitable than meeting customer demand.

“Most of the under-30 crowd that I know use Netflix and Hulu streaming services so we can watch what we want, when we want. Cable TV does not give us the flexibility we want,” Sean Hogan, an Anchorage accountant, told the newspaper.

“I’m getting charged $180 per month and I don’t even want the phone or cable,” said Mike White, an Anchorage customer who upgraded his data-usage plan recently because he was worried about violating GCI’s limits.

GCI claims its new limits allow customers to do many things they had no interest in doing under their old unlimited plans, like sending millions of e-mail messages or browsing tens of thousands of web pages.  To make the limits sound generous, they made a chart:

Of course, these limits ignore the reality customers do most or all of these things, and if they use their high speed connection to download files or watch the increasing amount of video content delivered in High Definition, they’ll blow through some of GCI’s limits with little effort.

Despite GCI’s claims of generosity, its customers think otherwise, and many are moving to curb their usage to avoid potential penalty fees or service termination the company could impose with enforcement of their caps:

Morris said that most of GCI’s customers will discover that their Internet usage is far below the new limits. Depending on the plan, the limits range between 50 and 125 gigabytes per month.

Chris Bruns, an Anchorage father and college student, isn’t so sure. “I’m in the high-30 (gigabyte) range every month,” he said.

GCI’s cheapest substitute for an unlimited plan is 40 gigabytes — the equivalent of downloading and watching 60 movies per month on your computer.

Bruns found out recently — after calling GCI to ask some questions about his family’s Internet speed and usage — that his previously unlimited plan, called Ultimate Xtreme, now had a 40 gigabyte ceiling.

“I was pretty miffed. It came as a surprise,” he said.

“When we signed up, we specifically got the unlimited plan because we knew we used it a lot,” he said.

He said he has since curbed the family’s Internet usage to be on the safe side. He said he and his wife regularly download movies for themselves and cartoons for their two children on Netflix to watch on their computer. Using Netflix is a way to keep the kids from seeing “garbage” on TV, Bruns said.

Ed Sniffen, a consumer-protection attorney in the Alaska Department of Law, may a victim of GCI’s bait and switch broadband himself.

Sniffen said he has had an unlimited-data plan with GCI and didn’t know on Tuesday afternoon whether he received a notice about the new policy. He said anyone who has a concern should contact the Law Department’s consumer-protection office.

The story in the newspaper prompted an enormous response — some 265 comments and counting.  A sampler:

GCI provides terrible service compared to companies in the lower 48 at exorbitant prices. They are a monopoly that needs to be tweaked.

GCI’s Network costs are FIXED. They are raping and pillaging us.

“GCI said it hasn’t yet charged anyone fees for exceeding the data limits…” — GCI lies. Just a few months ago I was charged nearly $100 for exceeding the bandwidth limit. Since then, I’ve upgraded my package to a ridiculous amount of bandwidth (at a ridiculous price) just so I can avoid that problem.

This is crazy. You go anywhere in the lower 48 and almost every Internet provider out there has some sort of unlimited plan, and it doesn’t involve payment with an arm, a leg, a kidney, or a first-born child. GCI needs to get this crap sorted out.

I got an offer to double my Internet speed and usage for a few bucks extra, and free cable (the good package, not the basic cable). Two months later, I still haven’t seen anyone show up to do anything, and I’m still getting charged out the tail end for overage charges. I keep requesting to up my Internet (I have a college student who takes some Internet classes) but they never do it. The only reasons I switched from ACS were because when it rained we had no phone OR internet (they said the problem was with our lines – our landlord at the time needed to fix it, but the contractor said it was ACS’s line problem – THEY needed to fix it.)  If there was another alternative to phone/Internet, I would so be there.

I was out and out LIED to by a GCI Rep. I was told if I changed my plan I would receive higher speeds with NO OTHER CHANGE for the same price. I questioned the GCI rep about this in detail several times before agreeing. The next day I no longer had unlimited downloads. I was LIED to and RIPPED OFF by GCI.

GCI’s statement that they have not charged overlimit charges is incorrect as over ten individuals that I know including myself have been hit with bills ranging from $300 to $2000 for one month of service.

Time Warner Cable's office on Mt. Hope Avenue in Rochester, N.Y.

A second major outage is impacting thousands of Time Warner Cable customers in the Rochester metropolitan area, this time taking down cable television service.

It’s the second major outage for the cable operator in the last three weeks.

The outage began at around 2:15pm this afternoon and is affecting several parts of the area.

Time Warner Cable spokeswoman Lara Pritchard says there is an interruption in video service and engineers are working to restore service as quickly as possible.

At this time, no other information is available, and Time Warner Cable’s phone lines are jammed with callers.

Affected cable television customers are now entitled to a day’s credit for lost video service — but only if you ask.

Stop the Cap! Presents Your Easy Service Credit Request Menu

Customers can request one day of credit for cable TV service.

Sample Request You Can Cut and Paste:

I am writing to request one day service credit for the cable-TV outage that occurred in Rochester today, Wednesday Oct. 19th.  Please credit my account.

Methods to Obtain Credit:

1. Use Time Warner Cable’s Online Chat system, select Billing Inquiry, and type to a customer service representative.
2. Call (585) 756-5000 or toll free 1-800-756-7956 and speak with a customer service representative.
3. Use the Online E-Mail form, select Billing Inquiry, and send a message requesting credit.

[Update: The credit request section above was modified.  Customers can request credit for cable television service, not Internet and phone.]