When broadband customers sign up for service under a “price protection agreement,” also known as a “term contract,” “minimum commitment,” or “price-lock guarantee,” few consumers realize their broadband provider will typically renew the contract for an additional one to three year term automatically “for your convenience.”

These Automatically Renewable Contracts (ARCs) require customers to notify their ISP, typically in writing, at least 30 days before their term commitment expires to prevent the provider from renewing the agreement, subjecting customers to stiff early cancellation fees if they want to change providers.

Now the independent UK regulator and competition authority Ofcom has ruled those agreements deliver few benefits to the consumers locked into them and plans to ban them effective Dec. 31.

Richards

Ofcom’s chief executive Ed Richards said: “ARCs raise barriers to effective competition by locking customers into long-term deals with little additional benefit.”

At least 15 percent of British broadband consumers are currently signed to renewable contracts, which have been used by BT, Adept Telecom, Axis Telecom, Eze Talk and iTalk.

“Our research, in particular the econometric analysis that we commissioned on the switching behaviour of BT customers, indicates a clear causal link between ARCs and reduced levels of consumer switching,” Ofcom said in a statement. “We believe this effect stems from the opt-out nature of the process for contract renewal and that any example of such a contract is likely to be harmful to consumers and to effective competition.”

Providers love the auto-renewing contract because most customers long forget about them until they call to cancel service, at which point they face a stiff cancellation fee that can run into the hundreds of dollars.  Faced with that kind of exit fee, many consumers opt to stay with their existing provider, despite better offers from a competitor.

The contracts are also popular in North America, particularly with telephone companies who face increased competition from cable providers.  If a telephone company DSL product loses the speed war with an area cable competitor, holding customers in place with term contracts assures phone companies consumers will stay put.  The more services bundled into a customer contract, the higher the termination fee, especially if a signup bonus was provided.  Phone companies have tried offering free netbook computers, free satellite television, and free HD televisions as part of contract bundles that can last as long as three years.  Some have cancellation fees of up to $500 if a customer leaves early.

Ofcom hopes the retirement of these contracts will encourage consumers to shop around for the best possible broadband and landline deals that serve their specific needs.

Last Tuesday, Bright House Networks suffered the worst outage in the company’s history, knocking out cable, broadband, and telephone service for over one million Tampa Bay-area customers.

Bright House customers from the beachfront to Lakeland to Spring Hill were forced to rely on cellphones for much of the day.  The company’s own 24-hour news channel, Bay News 9, couldn’t keep their Florida viewers informed about the outage, because that channel went dark as well.

Company officials blamed a software glitch for the series of progressive failures which began after 10:30am and were not repaired until later that evening.

Although Pinellas County’s 911 system remained in operation, Bright House customers couldn’t call the number from their Bright House “digital phone” line.

While customers without broadband or cable TV service were left bored during the outage, Bright House’s business customers without telephone service incurred real losses, unable to process credit card transactions or receive business calls.

Bright House has no plans to issue automatic refunds for the day without service, but WTSP-TV reports customers can directly request three days’ credit for the outage:

1. Send an e-mail to Bright House Networks using their online form.
2. Cut and paste the following into the “Describe your issue or concern” box: I am writing to request credit for Tuesday’s (9/6/11) service outage affecting phone, Internet, and cable-TV.  As seen on WTSP-TV and Facebook, I am requesting three days’ credit that Bright House representatives have offered other customers. Please credit my account.
3. Hit submit.  A credit should be issued within 48 hours, to appear on your next billing statement.  The amount of the credit will vary, depending on the number of services you receive.

[flv width=”540″ height=”380″]http://www.phillipdampier.com/video/Bright House Outage 9-6-11.flv[/flv]

Bright House Networks’ worst-outage-in-history was a major news story in the Tampa Bay-St. Petersburg area.  Watch a selection of stories from WFTS, WTVT, WFLA, and WTSP-TV.  (9 minutes)

Shamrock Museum

The city of Shamrock, Okla. may not be a city for much longer, facing unincorporation and liquidation of its remaining assets, which include the abandoned police cars that used to earn the city enough ticket revenue to keep the doors open.  But fast (and free at the local community center) Internet prevails (with competition, too) in a city with fewer than 100 remaining citizens.  It’s all thanks to a federal broadband grant and an existing Wireless ISP.

Shamrock’s unlucky predicament comes at the expense of the boom-and-bust oil business that launched dozens of small towns in rural Oklahoma, only to leave them largely abandoned when the oil dried up, or the cost to access it becomes too prohibitive.  Once a community numbering 10,000, Shamrock, located nearly halfway between Oklahoma City and Tulsa, had recently been surviving on revenue earned from writing traffic tickets in infamous speed traps set up along Highway 16.  Shamrock, along with Big Cabin, Caney, Moffett, and Stringtown, became so notorious for their dependence on traffic ticket revenue to keep the towns afloat, at one point the state government publicly designated them “speed trap towns” and banned them from writing tickets on state and federal highways. When Creek County officials learned the city was using non-commissioned officers to write tickets, they shut down the whole operation.

Soon after, residents found the city hall padlocked, with coffee cups still on the desks and police evidence lockers still stuffed with property from active criminal cases (although seized marijuana and beer has since disappeared.)

In fact, the only service now in operation at the city hall, now converted into a “community center,” is Internet access on 10 computers made possible by @Link Services LLC, an Oklahoma City-based Wireless Internet Service Provider (WISP) that provides service in rural areas, with the help of a broadband grant from the U.S. Dept. of Agriculture.

The broadband grant, amounting to $536,000, with matching funds of $134,000 kicked in by @Link, covers the costs of running the community center for two years and extending wireless access with the construction of a new wireless radio tower in Stillwater, which allows the company to reach Shamrock residents.

In addition to providing free access at the former city hall, @Link also sells Internet access to area residents (the only remaining business in town is a diner):

“This is going to be the last place anyone would provide Internet without government funding because there is no chance of turning a profit,” Kerry Conn, chief financial officer of @Link Services told The Oklahoman. “But if you don’t have Internet services, your town is going to die.”

@Link CEO Samual Curtis says their wireless Internet access sells itself.

“Broadband is a very easy sell where there is no broadband,” Curtis told the newspaper.

The only problem with that is Shamrock currently does receive service from another Wireless ISP — OnALot, a service of HDR Internet Services, Inc.  OnALot operates from 70 systems in more than 25 cities and communities across rural Oklahoma.  @Link’s arrival in town, with the assistance of a federal broadband grant, came as a surprise to some Shamrock residents who already had Internet service from OnALot.  Now those customers have two choices — both wireless — for Internet service.  OnALot, the incumbent, is often cheaper, too:

OnALot does not sell traditional speed tiers.  Instead customers share access points rated at speeds of 11 and 54Mbps.  Customers do not actually see anything close to those speeds, because they are theoretical maximums and each access point is shared by several users.  But since many residential customers do not have a firm understanding of what different speed levels represent, it has proven workable for HDR Internet to sell services based on price, not speed.

OnALot does sell dedicated, private wireless circuits to customers who don’t want to share, but they are comparatively expensive:

OnALot.com operates both standard Line-of-Sight and Near-Line-of-Sight systems on the 80' tall water tower on the west side of Shamrock.

One Oklahoman reader, Bobbi, wondered why @Link received federal grant money to provide Internet service in a community that already had access.

“Why this company didn’t do their homework before they used government money to provide a service to a town that had that service,” Bobbi asked. “Wouldn’t that be a misuse of the grant money?”

Broadband grant funding has come under criticism at times for funding projects that incumbent providers accuse of duplicating services.  A study funded by the National Cable & Telecommunications Association, the cable industry’s top lobbyist, found several instances of grants that would deliver broadband service to areas already served by other providers.

“While it may be too early for a comprehensive assessment of the [government]’s broadband programs, it is not too early to conclude that, at least in some cases, millions of dollars in grants and loans have been made in areas where a significant majority of households already have broadband coverage, and the costs per incremental home passed are therefore far higher than existing evidence suggests should be necessary,” the study says.

Thus far, much of the funding for rural Oklahoma seems to be directed towards wireless Internet access projects, which typically serve sparsely populated areas cable and phone companies have traditionally ignored.

The NCTA’s criticism, in particular, was directed against its would-be competitors.  The lobbying group suggests the price of competition was too high.

Based on the cost of the direct grants and subsidizing the loans, the NCTA study estimated that the cost per incremental home passed would be $30,104 if existing coverage by mobile broadband providers was ignored, and $349,234 if mobile broadband coverage was taken into account.

Wireless ISP operators have told Stop the Cap! many of their projects are self-financed and do not receive government assistance.  Some WISP operators have accused the government of making broadband grants to wireless operators a cumbersome, if not impossible prospect because incumbent telephone companies are often most likely to meet the government’s grant criteria.

For Shamrock residents, one piece of good news: @Link Services and OnALot both have no Internet Overcharging schemes like usage caps.  However, OnALot prohibits the use of peer-to-peer software (torrents) and @Link Services maintains the right to curtail speeds for those who create problems for other users on their shared wireless network.

OnALot’s usage policies are among the most frank (and common sense) we’ve seen, because they are up front with customers about the impact certain traffic can have on their wireless network:

1. You are paying us to download from the Internet. We do not limit you on that. You can download anything you want 24/7. Games, email, web pages, radio stations, and so on – we don’t care, downloading is what you are paying us for. That said, we would prefer that you do not leave an active game un-attended, or run a radio station continuously, as these eat up bandwidth that others could be using. When you’re done with your game, please turn it off.
2. We do have restrictions when it comes to uploading TO the Internet. P2P or Peer-to-Peer programs are NOT allowed. These limitations apply primarily to file sharing programs. We do NOT allow music or video sharing programs, bit torrent programs or other programs where outside users can extract files from your computer with or without your express consent. And seriously, do you actually WANT others to have full access to your computer? That’s what you’re giving to file sharing programs! Please call us if you are unsure if the program you are using is a file sharing program.
3. Yes, you can upload to your favorite website, send big emails, and transfer any size files that are under your control. That’s OK with us – these are intermittent in nature and under your full control. It’s the unattended uploading that sharing programs do that we do not allow.
4. If your computer has a virus and is “spewing” out onto the Internet, we expect you to have it cleaned. Causing others to become infected is wrong, and we may take steps to disable your Internet connection. We will call you first, explain what is going on and ask that you have your machine cleaned. If you decide not to do this, we will then cut you off until you do.

Frontier Communications customers in North Escambia have spent a very frustrating summer trying to use Frontier’s Internet service.  The phone company has left their Internet customers in Walnut Hill, Bratt, Molino and Atmore (Ala.) offline from at least six major outages since June, often lasting as long as 12 hours at a time.

“This is happening way too often, with no reimbursement for not having the service,” says Frontier customer Susan. “It is crazy to pay as much as we do for dinosaur equipment. I was being charged for High Speed Max for over three years and was actually only getting 756kbps. When we found this out, they only gave me credit for half of what they were overcharging me.”

Frontier Communications blamed AT&T for the latest outage, which lasted nearly eight hours.

Escambia County, Fla.

Karen Miller, spokesperson for Frontier, said the outage occurred when an AT&T fiber line was cut near Bay Minette, interrupting the connection between Atmore and Atlanta.

Miller admitted Frontier has just a single strand of fiber optic cable for their Panhandle customers.  When something happens to that fiber, there is no backup and service goes offline… for everyone.

Without redundancy, Internet customers are at the mercy of AT&T, and any contracting work done between Atlanta and Atmore.  That’s a major problem for some Frontier customers.

“If Atmore and Northwest Florida is managed with only a single cable and the [connection] point of this service is at Bay Minette, Atmore is in bigger trouble than they know,” writes JimD.

Bay Minette is vulnerable to serious Gulf hurricanes.

Customers were also not happy to learn Frontier was largely blaming AT&T, particularly as some customers pay Frontier upwards of $50 a month for less than 1Mbps service that has failed them at least a half-dozen times in the past 90 days.

“Frontier routinely gives high cost deficient service and holds a monopoly on the local market,” writes one local customer. “It is nearly impossible for businesses to find another option. It’s a case of mind over matter: they don’t mind so we don’t matter.”

Miller says Frontier is currently conducting an engineering study to get a backup fiber route from Atmore to Atlanta, but for some customers it is too late.

“We switched to Bright House Networks for both Internet and landline service,” says another customer. “It’s better quality, less expensive and it works. No more Frontier-anything for us.”

Cable, satellite and telco-TV subscribers around the country can now watch most of the hit shows on Turner’s TBS and TNT Networks for free, assuming two things are true:

1. You pay for a package of television channels from Comcast, DirecTV, Dish Network, Cox Communications, Cablevision Systems, Suddenlink Communications, Verizon FiOS, or AT&T U-verse.
2. You are not a Time Warner Cable subscriber.

The new TV Everywhere app, available for phones and tablets, comes free of charge.  Once authenticated as a legitimate pay television subscriber, users can watch hit series and some older shows from both networks.

Once again, Time Warner customers are on the outside, looking in.  The nation’s second biggest cable operator has not been a TV Everywhere team player, preferring to launch its own live streaming iPad application and steering clear, so far, from on-demand, online viewing from most of its partner networks, including HBO.  Time Warner Cable executives have, in the past, alluded to licensing fees and user authentication complications for not launching TV Everywhere on-demand viewing for its customers, but the company has not explained why it has not signed on for Turner’s app.

TV Everywhere, a concept on the drawing board for almost two years, is an attempt by the pay television industry to lock down online video programming for paying customers, in an effort to slow down “cord cutting” by consumers trying to save money on their cable TV bill.  The concept delivers unlimited access to popular cable programming, but only to those who already pay to subscribe.

Many TV Everywhere projects have been soft-launched without much publicity, but that is not true for Turner’s app.  The network has commissioned several clever advertisements featuring various network stars promoting the app, and now Turner wants to educate consumers about how to use it to watch shows online.

The most complicated part of the process is getting “authenticated” by the application for authorized viewing.  Some cable companies like Time Warner want customers to launch access to TV Everywhere programming from the cable company’s website, where customers have already been authenticated when they sign up for an online account.  Other companies are using customer account numbers, PIN codes, or passwords printed on monthly bills to let customers register directly for access.  When the application matches a customer account number or PIN code, the content becomes accessible.  It is typically a one-time-only hassle, but there have been cases where customers have had to grab a recent bill more than once to re-authenticate themselves.

Not every show will be made available for online viewing.  Many rerun off-network shows shown on TNT and TBS don’t currently include streaming rights.  So while users can watch past episodes of Conan O’Brien, they’re out of luck if they want to watch Friends.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Turner App.flv[/flv]

Watch a selection of spots from the new advertising campaign for Turner’s ‘TV Everywhere’ app.  (4 minutes)