Frontier Communications has quietly begun testing an Internet Overcharging scheme in Minnesota designed to charge confiscatory prices to residents who exceed the company’s usage allowances, demanding customers pay up to $249.99 a month to keep their broadband service running.

Stop the Cap! has learned Frontier has begun measuring customers’ broadband usage, and for those in Minnesota who exceed 100GB of usage during a month, Frontier is dispatching e-mail messages telling them they’ll have to agree to pay more — much more — or their service will be cut off in 15 days.

Two e-mail messages are being sent to customers who break the 100 and 250GB usage barriers.  Both reference Frontier’s 5GB usage allowance that Stop the Cap! has strongly and repeatedly criticized the company for implementing in the first place.  Using that usage allowance as a baseline, Frontier calls out its customers using more demanding they switch to a higher priced service plan if they want to continue service with the company.

• For those achieving 100GB of usage, the new monthly rate is $99.99 per month
• For those achieving 250GB of usage, the new monthly rate is an incredible $249.99 per month

Sources tell Stop the Cap! the Internet Overcharging scheme Frontier is running is an experiment to gauge customer reaction.  If the furious customer e-mail reaching us is any indication, it’s another public relations disaster for Frontier Communications.  One customer didn’t even realize there was a 5GB usage allowance to begin with, much less a vastly higher new monthly price if he wants to stay with Frontier DSL.  He’s not.

"You can earn this much money just from overcharging Minnesotans for their Internet service!"

Ironically, the experimental pricing plan comes at a time when Frontier is still trying to get state regulators to approve its deal with Verizon to assume control of landline and broadband service in several states.  Residents in West Virginia and a dozen other states might be a bit concerned that their unlimited Verizon DSL broadband service, often the only service provider available, could be replaced with a company that is willing to punish its customers with $250 in monthly charges once a customer hits 250GB in usage.  Even worse, Frontier takes the overlimit penalty concept to a whole new level, telling customers that new high price represents their new monthly rate plan, not just a temporary penalty.

To add insult to injury, Frontier continues to mislead its customers about the experimental pricing on its own website.  As of this writing, Frontier’s Acceptable Use Policy still states:

Customers may not resell High Speed Internet Access Service (“Service”) without a legal and written agency agreement with Frontier. Customers may not retransmit the Service or make the Service available to anyone outside the premises (i.e., wi-fi or other methods of networking). Customers may not use the Service to host any type of commercial server. Customers must comply with all Frontier network, bandwidth, data storage and usage limitations. Frontier may suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period. The Company has made no decision about potential charges for monthly usage in excess of 5GB.

For customers receiving Frontier’s Scare-o-Gram, it sure sounds like they made up their minds… to charge a lot more for the exact same level of service.

For state regulators, watching Frontier charge ludicrous pricing for broadband service that would make most providers blush should be more than enough evidence that approving Frontier’s plans to take over Internet and landline service in their state is not in the best interests of consumers.  For many, it saddles them with a broadband provider that can charge these kinds of prices knowing full well many customers have nowhere else to go.

Copy of E-Mail Sent to Minnesota Customers Exceeding 100 GB of usage a month [emphasis in bold is ours]:

Dear [Customer]:

Frontier is focused on providing the best possible internet experience across our entire customer base.  We bring you a quality service at a fair price, dependent upon an average monthly bandwidth usage of 5GB.  Over the past months, your account is in violation of our Residential Internet Acceptable Use Policy.

Our policy states that Frontier reserves the right to suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period.

We realize there are times when our customers use the internet for services such as video and music downloads, however your specific usage has consistently exceeded 100GB over a 30 day period.

We would like to provide you with the option of keeping your Frontier internet service at a monthly rate of $99.99 which is reflective of your average monthly usage.  Please call us within 7 days of the date of this email at 1-877-273-0489 Monday – Friday, 8AM – 5PM CST to review your options.  If you do not wish to switch to this new rate plan, you can have your service disconnected.  If we do not hear from you within 15 days, your internet service will be automatically disconnected.

We continue to manage our network to ensure all of our customers have equal access to the internet and the ability to enjoy all of its available content, at our committed level of service quality.

Sincerely,

Frontier Communications

Copy of E-Mail Sent to Minnesota Customers Exceeding 250 GB of usage a month [emphasis in bold is ours]:

Dear [Customer]:

Frontier is focused on providing the best possible internet experience across our entire customer base.  We bring you a quality service at a fair price, dependent upon an average monthly bandwidth usage of 5GB.  Over the past months, your account is in violation of our Residential Internet Acceptable Use Policy.

Our policy states that Frontier reserves the right to suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period.

We realize there are times when our customers use the internet for services such as video and music downloads, however your specific usage has consistently exceeded 250GB over a 30 day period.

We would like to provide you with the option of keeping your Frontier internet service at a monthly rate of $249.99 which is reflective of your average monthly usage.  Please call us within 7 days of the date of this email at 1-877-273-0489 Monday – Friday, 8AM – 5PM CST to review your options.  If you do not wish to switch to this new rate plan, you can have your service disconnected.  If we do not hear from you within 15 days, your internet service will be automatically disconnected.

We continue to manage our network to ensure all of our customers have equal access to the internet and the ability to enjoy all of its available content, at our committed level of service quality.

Sincerely,

Frontier Communications

Phillip "Don't over-complicate this" Dampier

Promises made during election campaigns that are later dropped for political expediency are broken promises.

Those are wise words for both the Obama Administration and the FCC as they ponder what to do about broadband regulation.  President Obama campaigned on developing an effective National Broadband Plan and preserving the integrity of the Internet with Net Neutrality policies.  Both will now be tested in how they respond to a recent court decision which has thrown a wrench into broadband policy initiatives.  At issue:

• How Americans access the Internet;
• What kind of Internet they find once they access it;
• How much money is it going to cost at the end of the month for what kind of service.

These are all laid on the table of FCC Chairman Julius Genachowski with a big bow attached, courtesy of Comcast.  The nation’s largest cable company threw a hissyfit when the FCC rebuked them for throttling the speeds of their Internet customers.  They sued and won more than they bargained for when the DC District Court ruled the Commission lacked the authority to regulate broadband as an “information service,” a dubious premise cooked up by former FCC chairman Michael Powell.  The concept was akin to a police officer placing you under arrest on the authority of a bottle of green tea.  Of course you could get away with that too as long as nobody challenged it in court.

Chairman Genachowski could choose to kick the ball down the field to be played another day by appealing the court decision or trying to get Congress to pass new legislation.  Or he can strike decisively and effectively by declaring broadband to be what it actually is — a “telecommunications service.”  Under that declaration, the FCC can implement its National Broadband Plan, which will dramatically improve access for rural America and promote better broadband service for those who already have it.  The Commission can also move forward on common sense Net Neutrality policies that tell providers not to interfere with online traffic for monetary reasons.  It can even give the Commission the authority to keep a watchful eye for the next clever scheme that benefits providers at the customer’s expense.

But that depends on Chairman Genachowski standing up to the broadband industry, their friends in Congress, and the inevitable industry-funded BS Festival from astroturfers designed to sucker people into supporting industry positions.

The threats and concern trolling are already parading across the Beltway:

• “The industry would declare war on the FCC“: That war has been underway ever since the litigious broadband industry first started running to friendly courts whenever it encountered a regulatory nuisance just waiting to be overturned on “free speech for corporations”-grounds.  Chairman Genachowski needs to borrow from President George W. Bush and declare, “bring ’em on!” He can fight industry propaganda about “lost jobs” and “investment” with facts found in every provider’s quarterly financial reports showing bountiful harvests of profits, while spending and costs decline.  It’s not the FCC’s fault Verizon fired more than 13,000 employees in the past few years.  The FCC didn’t tell Verizon to stop upgrading its copper wire network to fiber optics to remake traditional landline phone service into something far better and eventually even more profitable.
• “Congress would be upset by an overreaching Obama Administration”: That would mostly be the same Republican members who reflexively oppose every aspect of the Obama Administration’s legislative agenda.  Considering warmed-over health care reform is still being called “socialist” and an “apocalypse” by these people, there isn’t a Pick-Me-Up Bouquet in the world that could get them to support this administration.  Ordering a ham sandwich and leaving the Swiss cheese off would probably result in some members of Congress reciting Glenn Beck’s declaration the omission is proof Obama is working with lactose-intolerant high officials of the Chinese Communist regime.
• “Verizon, AT&T, and others will step up spending on Astroturf Campaigns”: If a consumer like myself can sniff out an industry-funded campaign to convince consumers to support policies directly challenging their own wallets, why can’t Washington policymakers?  The industry talking points rarely change anyway, and those shouting the loudest usually try to obscure who paid for the megaphone.  When in doubt, simply ask “is there any industry money funding your organization?”  If they won’t say, you have your answer.
• “But they’ll sue”: When are they not suing?  Of course the industry will challenge the legality of any policy that puts their quest for unlimited profits at a disadvantage.  We live in a system of checks and balances between private enterprise and public oversight and regulation.  The struggle for the perfect balance between the two will persist forever, but after an era of reckless deregulation and abdicated oversight responsibility, the resulting Great Recession should provide strong evidence the pendulum needs to swing in the opposite direction.

FCC Chairman Julius Genachowski

USA Today today published a piece on Genachowski’s coming decision which hit all the aforementioned bases.

Astroturf Campaigns and Legal Threats: “If the FCC changes the way it treats high-speed Internet, then “everybody in the industry would sue,” says Scott Cleland, chairman of NetCompetition.org, an Internet forum supported by cable and phone companies. “It would be like an 8.0 earthquake under the sector,” he adds. “Hundreds of billions of dollars have been invested (in broadband) in the belief that there’d be a market rate of return, not a regulated rate.”

Cleland is a notorious industry mouthpiece, but at least he openly acknowledges his strings are pulled by the industry that generously funds his anti-consumer, pro-provider rhetoric.

Republicans: The FCC’s two Republican commissioners have said they’d fight a move to reclassify broadband.

No surprises there, and you can expect most Republicans in Congress to also take the industry’s position on these matters.  Guess what?  They still won’t vote for you even if you compromise with the broadband industry.

USA Today, itself headquartered in suburban Washington, delivers up the beltway solution always pressed on pliable Democrats – compromise away your principles and split the difference:

If Genachowski wants to defuse the issue, he could try to engineer a compromise. For example, he could agree to take broadband reclassification off the table as long as providers make legally binding promises to offer consumer protections called for in the National Broadband Plan and to agree to treat all Web services equally. But it will be hard to please everybody as advocates gear up for a fight.

That’s the understatement of the year.   It’s also a classic case of reinventing the wheel.  What USA Today‘s reporter suggests is exactly what the FCC used prior to the Comcast case to regulate broadband — an “understanding” with the industry without clear-cut regulatory authority.  That lasted until the three judge panel laughed it out of court.  The FCC has no authority in its current form to make legally binding promises with an industry that contemptuously dismisses the notion it should have any in the first place.  Without reclassification, the judge certain to hear the next court case challenging the “understanding” will almost certainly throw that out as well.

Declaring regulatory authority does not, as the industry likes to pretend, mean that your Internet Service Provider will be saddled with 1930s telephone rules.  It merely gives the FCC the authority to move forward on its agenda to improve broadband, protect its integrity, and help coordinate a plan for the future that first takes your interests to heart, not simply those on Wall Street.

For a change of pace, let’s choose the clearly marked road of reclassification and avoid the deregulatory dead end of broken promises offered by the broadband industry or the equally awful decision to build a new road in a futile effort to win bipartisan brownie points.

[Article Correction 4/15/2010: The original piece laid blame for the classification of broadband as an “information service” on former FCC Chairman Kevin Martin.  In fact, the classification was made by former FCC Chairman Michael Powell, who served during the first term of the Bush Administration.  We regret the error.]

“It’s FairPoint Communications all over again,” writes Stop the Cap! reader Jenna who is mad as hell with Verizon Communications who first locked her out of her e-mail account, and then accidentally deleted it, along with all of her e-mail, in preparation for the handover to Frontier Communications.

Jenna is referring to similar debacles which caused billing and service nightmares for residents in northern New England who lost their Internet access for days, along with e-mail accounts, followed by months of inaccurate bills when FairPoint moved away from Verizon’s internal systems.

Her problems started the last weekend of March, when Verizon notified Jenna and other Fort Wayne, Indiana residents who use Verizon Yahoo! e-mail service that they would have to take steps to convert their e-mail accounts.

Verizon Yahoo!: Service No Longer Available in Some Areas

Starting March 27, 2010, Verizon Yahoo! for Broadband will be discontinued in the following areas:

AZ, ID, IL, IN, MI, NV, NC (except Knotts Island), OH, OR, SC, Crows-Hermatite (VA), WA, WI, and the following communities in California that border AZ, NV and OR–Big River, Blythe, Coleville, Crescent City, Desert Center, Eagle Mountain, Earp, Felicity, Fort Dick, Gasquet, Klamath, Kneeland, Markleeville, Merced, Needles, Orick, Parker Dam, Ripley, Smith River, Topaz, Trinidad, Vidal and Winterhaven.

These changes will not impact your Verizon Internet service access plan or pricing, and your Verizon.net email primary and sub-account User names and passwords will stay the same.

“They told us we would have to use this service called Verizon TrueSwitch in order to convert our e-mail box and that all of our contacts and existing e-mail would be transferred from the old Yahoo! webmail account to the new Verizon one,” Jenna writes.

But her experience with Verizon TrueSwitch turned into a TrueNightmare when attempts to use the service resulted in error messages.

“First it popped up with ‘unable to authenticate’ error messages, and then we were locked out of our Yahoo! e-mail account.  The Verizon e-mail account worked, but was empty,” she writes. “I tried to use Verizon’s ‘in-home agent’ online support but it suddenly told me it was ‘only available to Verizon customers.’  Apparently they can’t wait to get rid of us.”

Jenna then did what most customers of a phone company might do — she picked up her phone and called customer service.

“That was the second nightmare — I waited on hold 49 minutes the first time before a representative came on the line, sneezed, and then disconnected me.  The second call was a real marathon — over two hours on hold waiting for someone to help me,” Jenna notes.

When a representative did finally speak to Jenna, she apologized for the delay and candidly admitted their call center was swamped with calls regarding the e-mail conversion.

“When she thought she put me on hold, I was able to overhear her talking with someone else about getting word from a supervisor that the problem was somewhere on their end, and she felt bad because she had spent a good part of the morning blaming TrueSwitch, which I later found out was not even owned by Verizon — it’s a service sold by Esaya, a private third-party company,” Jenna says.

Jenna was transferred to a supervisor when attempts to correct her e-mail account lockout were not working.

“The guy they transferred me to wouldn’t listen to me and kept telling me he knew what the problem was, claiming I had ‘sub-accounts’ and they were messing up their systems,” said Jenna. “But Mr. Expert ended up permanently deleting the account, along with all of my e-mail, contacts, and everything else Verizon claimed I was able to store online.  Years of e-mail and contacts — gone.”

Jenna was right when she noted Verizon’s call centers were jammed with customers experiencing similar problems.

Verizon’s own customer support forum is hot with angry customers who are going through the same thing:

• Verizon/Yahoo! ‘Devilish Switch’
• Verizon Sold Everything to Frontier
• I’m Not Able to Receive E-Mail
• New Set-Up
• Verizon E-Mail Has Been Down for a Week

Verizon spokesman Harry Mitchell acknowledged the significant e-mail conversion issues were partly in preparation for the pending transition some customers face to Frontier Communications.

“The systems realignment will facilitate the closing of the transaction with Frontier, which we expect at the end of the second quarter, subject to conditions including regulatory approval,” Mitchell told the Fort Wayne Journal-Gazette.

Mitchell released a statement to the paper regarding the problems:

“In advance of a planned systems conversion over the weekend of March 27-28, Verizon online users who maintain e-mail accounts with Yahoo were notified that a customer-initiated service change would be required following the systems conversion in order to maintain their e-mail service,” he said in an e-mail.

“Customers were given instructions to use a ‘Trueswitch’ service to migrate their existing e-mail and contact information from Verizon Yahoo to Verizon servers in order to maintain e-mail access. Some customers have experienced difficulty when trying to initiate the service change. We’re working to address this as quickly as possible with those customers.”

Mitchell stressed that customers should make sure they validate their passwords in both the Verizon.net e-mail system and the Verizon Yahoo e-mail system. And they should “take extra care to write down those passwords so that, if they want to migrate their old e-mail and contact information, it will go smoothly through the Trueswitch process.”

Unfortunately, that won’t help Jenna.

A supervisor contacted her this week to apologize for the problems and the loss of her e-mail, which may not be gone for good if Verizon and Yahoo! can figure out a way to get the deleted account back, but for Jenna the damage has been done.

“I have read Stop the Cap! since 2008 and followed the misadventures of FairPoint Communications and the endless promises from Frontier they won’t repeat the mistakes the others have made, but it’s a case of ‘here we go again,’ and Frontier isn’t even in the picture yet,” she says.  “Verizon clearly can’t wait to get rid of us and Frontier will probably make us wish we had Verizon back, which should tell you the people of Fort Wayne now live on the corner of Rock Avenue and Hard Place.”

A survey released this week by Arbitron Inc. and Edison Media Research found, for the first time, that Americans are more willing to give up TV than the Internet.

Asked to choose the ”most essential” medium, 42 percent of the survey’s 1,753 respondents picked the Internet, 37 percent picked TV, 14 percent said radio and 5 percent said those dead-tree format newspapers.

That represents more evidence that major telecommunications companies will need to lasso control of the Internet before the cable television profit train derails.  That’s because the Internet delivers the prospect of a two-for-one deal.  Enjoy your online web surfing -and- stream your favorite television shows online at the same time — no more ever-increasing cable-TV bill for channels you never asked for and don’t watch.

Even more worrying for big cable — young people are increasingly never bothering to sign up for cable television in the first place.  In the 18-24 age group, 74 percent said they would quit TV before surrendering the Web, and many never bothered with subscription television to begin with.

The last time Arbitron and Edison posed this question in a survey was in 2001, back when dial-up access still predominated.  Back then, 72 percent of respondents said they could do without Internet and 26 percent said they’d give up TV.

“The shift over these nine years has been steady and profound,” said Edison Research president Larry Rosin.

Some consumers don’t want to watch television over their computers and would prefer to be entertained in a comfortable chair in the living room.  But Internet video innovation is increasingly solving that problem by coupling your television or DVD player to the web.  Several providers like Netflix even deliver their streaming video service through video game consoles.

How do cable companies stop the herd mentality to broadband video, leaving those big cable TV bills behind?  Stick a meter on broadband service, and charge consumers for every TV show they watch or simply put a limit on their broadband service.  The broadband usage cap or meter can, indeed, kill the online video star.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/WJW Cleveland The Download Internet More Important Than TV 4-9-10.flv[/flv]

WJW-TV in Cleveland reports that more people are ready to ditch their televisions than being willing to part with their Internet connection.  (3 minutes)

How would you like to open your AT&T bill and discover you were overcharged more than $1,000?

An AT&T-admitted “computer glitch” is routinely overbilling customers in Tennessee several hundred dollars a month for charges that are supposed to be included in their service plan at no additional cost.

One Clarksville woman has been getting bills nearing $1,000 a month every month since January, and AT&T is well aware of its mistake, crediting her bill each times she calls.

But Belinda Horton wonders what happens to other customers, especially the poor and elderly, who may not be up to scrutinizing their phone bills every month and aggressively pursuing credits from the phone company.

“This is crazy. This keeps happening over and over,” Horton told WSMV-TV in Nashville. “When I got the next bill, it was $921.”

Now she’s fed up.

“At this point, they can correct my bill, and then they can just keep AT&T,” said Horton. “Everyone needs to check their bills.”

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WSMV Nashville Customer’s Phone Bill Severely Overcharged 4-12-10.flv[/flv]

WSMV-TV in Nashville tells the story of Belinda Horton, a resident of Clarksville who is routinely overbilled by AT&T up to $1,000 every month since January.  She isn’t alone.  (3 minutes)