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AT&T’s Lawyers Use Media Reports Critical of Company’s Throttle Policy in Defense of Throttling Customers

AT&T throttles

How low can AT&T go? Customers retaining “unlimited data plans” that were discontinued in 2010 were throttled to as little as 127 kbps after using just 2 GB a month.

AT&T’s lawyers are asking a judge to accept media coverage exposing the company’s allegedly “secret” speed throttling policy for some of its wireless customers as a valid defense in a 2015 class action case that seeks to compensate some AT&T customers for misrepresenting its “unlimited data plan.”

AT&T last month asked the judge to have the long-running case thrown out, claiming AT&T well publicized its new speed throttling policy it imposed on a legacy unlimited data plan the wireless company stopped selling in 2010, but allowed existing customers to keep. By 2011, some customers still subscribed to the grandfathered unlimited plan started noticing data speeds plummeting to near dial-up if they used a lot of data. At first, AT&T appeared to impose a speed throttle on customers using over 10 GB of data per month, but by 2012, AT&T was accused of speed throttling unlimited customers after they used as little as 2 GB of data during a billing period.

The resulting class action lawsuit, filed in California, alleged that AT&T misrepresented its unlimited data plan as ‘unlimited,’ when in fact in practical terms it was not. The plaintiffs are seeking damages from AT&T to discourage the company from engaging in false advertising in the future, and to compensate customers that paid for an unlimited data plan that eventually became almost useless after customers used just over 2 GB a month.

AT&T’s defense partly relies on the company’s claim it extensively publicized changes to its legacy unlimited data plan as early as 2011, and the plaintiffs should have been aware of it. The Federal Communications Commission was aware of AT&T’s actions and just a month before the class action case was filed, the regulatory agency issued a notice of apparent liability to AT&T proposing a $100 million fine for unwarranted speed throttling.

AT&T’s attorneys have worked hard to stop the lawsuit over the last five years. In addition to claiming customers were notified of their excessive data usage through text messages and billing notices, AT&T last month sought to introduce a dozen media reports covering its speed throttling policy into the court record to convince U.S. District Judge Edward Milton Chen the plaintiffs don’t have a case and to get the lawsuit dismissed.

One of the news articles cited in AT&T’s May 14 filing was written by former DSL Reports’ author Karl Bode, who has been roundly critical of AT&T’s data caps for over a decade. Ironically, AT&T’s defense team is arguing Bode’s report, “AT&T Wages Quiet War on Grandfathered Unlimited Users” offers proof AT&T was not keeping its speed throttling policy “secret,” as at least one plaintiff claimed. Bode suggested AT&T had engineered its speed throttling plan to push grandfathered unlimited data plan customers off the plan in favor of more profitable plans offering a specified data allowance and overlimit fees.

Bode

“In other words, pay $30 for “unlimited” service where you’re actually only getting 2 GB of data before your phone becomes useless, or sign up for a 3 GB tier for the same price so you’re in line to get socked with the usage overages of tomorrow,” Bode wrote at the time.

His views have not changed in 2020.

“For nearly a decade AT&T has tap danced around the fact it misleadingly sold an ‘unlimited’ data plan packed with confusing limits. No amount of legal maneuvering can hide the fact that AT&T lied repeatedly to its customers about the kind of connection they were buying,” Bode told Stop the Cap! “Instead of owning its mistake, learning from it, and moving forward, AT&T’s now trying to point to critical news coverage from the era to falsely suggest consumers should have known better. It’s utterly nonsensical and speaks volumes about the lack of ethical leadership at a company that routinely sees some of the lowest customer satisfaction ratings in American industry.”

AT&T’s lawyers are not prepared to concede, however. Since the lawsuit was filed, AT&T’s legal team attempted to force the case into arbitration in 2016. That effort was successful until a 2017 California Supreme Court decision in another case gave the plaintiffs ammunition to claim that it was against California law to force consumers into arbitration. The Ninth Circuit court agreed, and the case reverted to district court, where AT&T immediately began efforts to have the case dismissed outright.

AT&T is not alone throttling so-called “heavy users” that have either legacy or current unlimited data plans. All major cellular companies enforce fine print policies that allow speed throttling after customers consume as little as 20 GB of wireless data during a billing cycle. The fact companies still advertise such plans as “unlimited” irks Bode.

“An unlimited data connection should come with no limits. If giant wireless carriers can’t respect the dictionary, they should stop using the word entirely,” Bode told us.

10% of Homes Now Exceed Comcast/AT&T/Cox’s 1 TB Usage Cap; Average Use Now 402.5 GB

Note that data usage is slightly higher for users with “flat rate billing (FRB)” plans vs. those stuck with “usage-based billing (UBB).” (Source: OpenVault)

A record 10 percent of U.S. households now exceed 1 TB of data usage per month, putting some customers at risk of overlimit fees for exceeding data allowances that are usually enforced by AT&T, Comcast, Cox, and other telecom companies. Those caps are temporarily suspended because of the COVID-19 pandemic.

OpenVault, which collects average data usage from several service providers, reports a dramatic increase in the number of homes it designates as “power users” that consume at least 1 TB of data each month. In the first quarter of 2019, 4.2% of customers regularly exceeded 1 TB of usage. During the same period this year, that number shot up 138% to 10% of customers. “Extreme power users” that consume 2+ TB of data increased a record 215% from just one year ago, now representing 1.2% of broadband households. Last year it was 0.38%.

Overall total broadband usage across all users increased 47% in the first quarter of 2020, reaching an average of 402.5 GB a month. But that number mostly comprises average usage before the COVID-19 pandemic forced many to work from home. OpenVault originally predicted in January 2020 that monthly usage would reach 425 GB by the end of 2020. But with most Americans sheltering at home, measurements now suggest average broadband usage already exceeds that, reaching a record high of 460 GB in April.

“Nearly all the growth in broadband usage we would have expected for 2020 has now been achieved in the first quarter, with much of it concentrated in the last two weeks of the quarter,” OpenVault reported.

Despite usage growth, broadband providers in the United States are universally confident their networks are more than capable of sustaining the increased traffic. In fact, many providers report a spike in new customers, upgrades to higher speed tiers, and at least one — Spectrum, is confident enough of its network capacity to give away two months of broadband service to households with school-age children for free.

NCTA–The Internet & Television Association reports the biggest increases in broadband traffic are occurring on the upstream side, likely because of video teleconferencing. Although downstream traffic also spiked after the pandemic forced many businesses to close their offices, that traffic has flattened out and most recently has even decreased slightly.

Source: NCTA

Broadband providers may have lost key arguments to support reimposing data allowances and usage caps after the pandemic eases. Not only have broadband networks managed dramatic spikes in traffic with no significant difficulties, there are no signs of any “data tsunamis” in the future, even as broadband usage growth exceeds predictions. NCTA reports that 99.8% of the time broadband providers had “ample” or “excess” capacity available, not only to sustain current traffic levels but also potential future spikes in traffic. Peak traffic usage reaching levels where reduced capacity was available was identified just 0.2% of the time, causing a “minor impact on performance and customer experience.”

The current crisis is likely to bring a flood of new revenue to many broadband companies, even without usage overlimit fees. Since the pandemic began, OpenVault reports a 3.75% growth in premium-priced gigabit speed upgrades, up 97% from the same time last year.  In the New York City area, gigabit service subscriptions at Altice/Optimum increased 56% as many workers began to telecommute.

The biggest challenge the cable broadband industry faces as a result of this year’s usage growth is a need to accelerate plans already under development to increase upload speeds. Much of the recent traffic growth came from upstream traffic, which is cable broadband’s biggest Achilles’ Heel. Cable broadband networks devote most available bandwidth to downloads, with only a small fraction devoted to upload speed. Cable companies are expected to modestly increase upload speeds in a few months and will eventually deploy the next DOCSIS standard, supporting far faster upload speeds, beginning sometime next year.

New York Governor’s Boast About Near-100% Broadband Coverage Backfires

Gov. Andrew Cuomo announcing rural broadband initiatives in New York.

When New York Gov. Andrew Cuomo boasted in 2015 that anyone who wanted broadband service in the state would have access to it, he could not have realized that claim would come back to haunt him five years later.

New York’s Broadband for All program claimed to be the “largest and most ambitious state broadband investment in the nation,” with $500 million set aside “to achieve statewide broadband access by 2018,” with “99.9% of New Yorkers” getting access to broadband service.

In 2020, that goal remains elusive, with over 80,000 New Yorkers relegated to heavily data-capped satellite internet access and potentially tens of thousands more left behind by erroneous broadband availability maps that could leave many with no access at all. Now it appears the federal government will not be coming to the rescue, potentially stranding some rural residents as a permanent, unconnected underclass.

The Republican-majority at the Federal Communications Commission has decided to take the Democratic governor at his word and exclude additional rural broadband funding for New York State. The FCC’s recently approved Rural Digital Opportunity Fund (RDOF) is the most ambitious rural broadband funding initiative to date, with a budget of $20.4 billion. As it stands, not a penny of those funds will ever be paid to support additional broadband projects in the Empire State.

“Back in 2016, the governor of New York represented to this agency that allocating the full $170 million in Connect America Fund II support to the state broadband program would allow full broadband buildout throughout the Empire State, when combined with the state’s own funding,” said FCC Commissioner Michael O’Rielly.

That $170 million was originally designated for Verizon to spend in upstate and western New York in areas without high-speed broadband. When Verizon declined to accept the funding, the rules for the program required the money to be made available for other qualified projects in other states, or left forfeit, unspent. An appeal from New York’s Senate delegation to FCC Chairman Ajit Pai to award that $170 million to New York’s Broadband for All program was successful, allowing other phone, cable, and wireless providers to construct new rural broadband projects around the state. That decision was met with criticism, especially by the Wireless Industry Service Providers Association (WISPA), which represents the interests of mostly rural, fixed wireless providers around the country.

O’Rielly

“After robust opportunity for public input, last year the FCC adopted a CAF-II framework that was truly technology-neutral and designed to harness the power of competition to deliver the most broadband to the most Americans, at the lowest overall price,” said Steve Coran, counsel for WISPA, in a statement. “Unfortunately, today’s action appears to deviate from this approach by providing disproportionate support to one state at the expense of others, which will now be competing for even less federal support.”

That criticism was partially echoed by Commissioner O’Rielly, who appreciated the dilemma of rural New Yorkers without access to high speed internet, but felt the FCC was showing favoritism to New York, which he worried was getting a disproportionate share of federal funding.

“These are federal [Universal Service Fund] dollars taken from ratepayers nationwide. They are not New York State funds, and we have the burden of deciding how best to allocate these scarce dollars, as well as the right to demand that they be spent wisely,” O’Rielly said. “At the same time, I am concerned that the funding will not be used as efficiently as possible. It should not be lost on everyone that New York is one of the states that diverts 9-1-1 fees collected to other non-related purposes, as is noted in the Commission’s recent report on the subject. We should have received assurances that New York would cease this disgraceful practice.”

O’Rielly added that offering even more generous funding in New York could lead to overpaying providers to service rural New York communities at the expense of other, cheaper rural broadband projects in other states.

Recently O’Rielly claimed that allowing New York to receive funding under the new RDOF program would almost guarantee dollars would be spent on duplicative, overlapping broadband projects, noting that Gov. Cuomo already considers New York almost entirely served by high speed providers. In fact, he claimed any additional funding sent to New York would be “beyond foolish and incredibly wasteful” and would undermine the rural broadband program’s objective to avoid funding projects in areas already served by an existing provider.

In other words, since Gov. Cuomo has claimed that virtually the entire state is now served with high speed internet access, O’Reilly believes there is no reason to award any further money to the state.

Except the claim that ‘nearly the entire state already has broadband access’ is untrue, and O’Rielly’s arguments against sending any additional money to New York seem more political than rational.

The FCC’s broadband availability map shows significant portions of New York in yellow, which designates no provider delivering the FCC’s minimum of 25/3 Mbps broadband service.

First, the FCC’s own flawed broadband availability maps, criticized for over counting the number of Americans with access to broadband, still shows large sections of upstate and western New York unserved by any suitable provider. Parts of western New York between Buffalo and Rochester, significant portions of the Finger Lakes, Southern Tier, and North Country are all still without access. An even larger portion of upstate New York has either no access or very slow access through DSL. The number of residents without service is significant. The FCC uses census blocks to measure broadband availability, but this methodology is flawed because if even one home within that block has broadband while dozens of others do not, the FCC still counts every home as served. This has angered many New Yorkers stuck without service while a local cable or phone company offers high-speed internet access to neighbors just up the road. Many of these rural residents are not even designated to receive satellite service, Broadband for All’s last catchall option for areas where no wired provider bid to provide service.

Second, long-standing rules in broadband funding programs already deny funding to areas where another suitable provider already offers service. So it would be impossible for RDOF to award “wasted” funding to projects where service already exists.

While Gov. Cuomo’s boastful claims about broadband availability opened the door for discriminatory rules against the state, the FCC itself wrote the rules, and it appears the goal was one part payback for securing earlier broadband funding over the objections of Commission O’Reilly, and one part sticking it to a state that has given the Trump Administration plenty of heartburn since the president took office.

FCC Considering New 5.9 GHz Wi-Fi Band

Pai

Pai

After significant lobbying by the cable industry, FCC Chairman Ajit Pai made a decision to propose splitting up the 5.9 GHz so-called Vehicle-to-Vehicle (V2V) band to open up 45 MHz for unlicensed Wi-Fi services and leave 30 MHz reserved for emerging crash avoidance technology that will allow cars to communicate with each other to reduce accidents.

Pai has been frustrated by the slow development of intelligent vehicle communications, especially as different competing technologies appear to have delayed deployment as carmakers ponder a technology shift. Pai’s proposal would allow auto manufacturers to debate what kind of spectrum division might be appropriate within the remaining band if different technologies are eventually deployed. But Pai would also quickly move to open up much of the rest of the band for cable industry and consumer Wi-Fi services.

“My proposal would do far more for both automotive safety and Wi-Fi than the status quo,” Pai said, noting he was adding his proposal for FCC consideration at a meeting on Dec. 12.

The cable industry, through its national lobbying group NCTA-The Internet & Television Association, quickly applauded Pai’s proposal, which nearly mirrors the plan recommended by the nation’s biggest cable companies.

“We applaud Chairman Pai’s announcement today that the Commission intends to move forward in considering a new plan for 5.9 GHz spectrum band that will chart a constructive path forward in putting these frequencies to better use for consumers,” said NCTA President Michael Powell. “The Chairman’s proposal will enable the fastest gigabit Wi-Fi speeds in America, ensuring that Wi-Fi can keep pace with growing consumer demand and the deployment of next-generation wireless broadband technologies. We also thank Commissioners O’Rielly and Rosenworcel for their tireless efforts in support of unlicensed spectrum, especially enabling Wi-Fi in the 5.9 GHz band.”

Cable operators including Charter and Comcast want to deploy a large network of Wi-Fi hotspots in the new band to support their growing mobile service operations. Both stand to save substantially by offloading network traffic to their own wireless networks instead of relying on Verizon Wireless, which is contracted to provide 4G LTE service.

Consumers will eventually also be able to purchase in-home routers that will support the new 5.9 GHz band, if Pai’s proposal is approved. The new Wi-Fi band, located between 5.85-5.895 GHz is adjacent to the existing 5.9 GHz Wi-Fi band in the United States (5.725-5.850 GHz)

Expanding available Wi-Fi spectrum may help consumers get faster wireless connections, especially in areas where signal congestion from other users is significant. Some proponents suggest that the new band could allow consumers to experience near-gigabit Wi-Fi speeds, but that will largely be dependent on the equipment used, one’s distance from a Wi-Fi hotspot, and any prevailing wireless traffic congestion.

Wall Street Journal Says Faster Internet Not Worth It, But They Ignore Bottlenecks and Data Caps

The Wall Street Journal believes the majority of Americans are paying for internet speed they never use or need, but their investigation largely ignores the question of traffic bottlenecks and data caps that require many customers to upgrade to premium tiers to avoid punitive overlimit fees.

The newspaper’s examination was an attempt to test the marketing messages of large cable and phone companies that claim premium speeds of 250, 500, or 1,000 Mbps will enhance video streaming. A total of 53 journalists across the country performed video streaming tests over a period of months, working with researchers at Princeton University and the University of Chicago to determine how much of their available bandwidth was used while streaming videos from Netflix, Amazon Prime Video, YouTube and other popular streaming services.

Unsurprisingly, the newspaper found most only need a fraction of their available internet speed — often less than 10 Mbps — to watch high quality HD streaming video, even with up to seven video streams running concurrently. That is because video streaming services are designed to produce good results even with lower speed connections. Video resolution and buffering are dynamically adjusted by the streaming video player depending on the quality of one’s internet connection, with good results likely for anyone with a basic broadband connection of 10-25 Mbps. As 4K streams become more common, customers will probably get better performance with faster tiers, assuming the customer has an unshaped connection that does not throttle video streaming speeds as many mobile connections do and the streaming service offers a subscription tier offering 4K video. Netflix, for example, charges more for 4K streams. Some other services do not offer this option at all.

Image: WSJ

WSJ:

For most modern televisions, the highest picture clarity is the “full” high-definition standard, 1080p, followed by the slightly lower HD standard, 720p, then “standard resolution,” 480p. The Journal study found a household’s percentage of 1080p viewing had little to do with the speed it was paying for. In some cases, streaming services intentionally transmit in lower resolution to accommodate a device such as a mobile phone.

When all HD viewing is considered—1080p and 720p—there were some benefits to paying for the very highest broadband tiers, those 250 Mbps and above.

Streaming services compress their streams in smart ways, so they don’t require much bandwidth. We took a closer look at specific services by gathering data on our households’ viewing over a period of months. Unlike the “stress test,” this was regular viewing of shows and movies, one at a time.

Netflix streamed at under 4 Mbps, on average, over the course of a show or movie, with not much difference in the experience of someone who was paying for a 15 Mbps connection and someone with a one gigabit (1,000 Mbps) connection. The findings were similar for the other services.

There is a brief speed spike when a stream begins. Netflix reached the highest max speeds of the services we tested, but even those were a fraction of the available bandwidth.

Users watching YouTube might launch a video slightly faster than those watching Netflix, and at lower resolution, but this is a function of how those services work, not your broadband speed, the researchers said.

Whereas Netflix tries to load “nice high quality video” when you press play and hence has higher spikes, YouTube appears to “want to start as fast as possible,” said Paul Schmitt, one of the researchers.

A spokeswoman for Alphabet Inc.’s YouTube said the service chooses playback quality based on factors including type of device, network speed, user preferences and the resolution of the originally uploaded video. A Netflix Inc. spokeswoman said the company aims to deliver quality video with the least possible bandwidth. Amazon.com Inc. had no comment.

The Journal finds little advantage for consumers subscribing to premium speed tiers, if they did so hoping for improved streaming video. The unanswered question is why customers believe they need faster internet speeds to get those improvements in the first place.

The answer often lies in the quality of the connection between the streaming provider and the customer. There are multiple potential bottlenecks that can make a YouTube video stutter and buffer on even the fastest internet connection. Large providers have had high profile disputes with large streaming companies over interconnection agreements that bring Netflix and YouTube traffic to those internet service providers’ customers. Some ISPs want compensation to handle the increasing amount of incoming video traffic and have intentionally not allowed adequate upgrades to keep up with growing subscriber demand. This creates a traffic bottleneck, usually most noticeable at night, when even a small YouTube video can get stuck buffering. Other streaming videos can suffer from repeated pauses or deteriorate into lower resolution video quality, regardless of the speed of your connection.

Another common bottleneck comes from oversold service providers that have too much traffic and not enough capacity to manage it. DSL and satellite internet customers often complain about dramatic slowdowns in performance during peak usage times in the evenings and on weekends. In many cases, too many customers in a neighborhood are sharing the connection back to the phone company. Satellite customers only have a finite amount of bandwidth to work with and once used, all speeds slow. Some other providers do not pay for a large enough pipeline to the internet backbone, making some traffic slow to a crawl when that connection is full.

Customers are sold on speed upgrades by providers that tell them faster speeds will accommodate more video traffic, which is true but not the whole answer. No amount of speed will overcome intentional traffic shaping, an inadequate connection to the video streaming service, or an oversold network. Too bad the Journal did not investigate these conditions, which are more common than many people think.

Finally, some customers feel compelled to upgrade to premium tiers because their provider enforces data caps, and premium tiers offer larger usage allowances. Cable One, Suddenlink, and Mediacom customers, among others, get a larger usage allowance upgrading. Other providers offer a fixed cap, often 1 TB, which does not go away unless a customer pays an additional monthly fee or bundles video service.

Data caps are a concern for video streaming customers because the amount of data that can be consumed in a month is substantial. As video quality improves, data consumption increases. The Journal article does not address data caps.

Finally, the Journal investigation confined itself to video streaming, but internet users are also increasingly using other high traffic services, especially cloud backup and downloading, especially for extremely large video game updates. The next generation of high bandwidth internet applications will only be developed if high speed internet service is pervasive, so having fast internet speed is not a bad thing. In fact, providers have learned it is relatively cheap to increase customer speeds and use that as a justification to raise broadband prices. Other providers, like Charter Spectrum, have dropped lower speed budget plans to sell customers 100 or 200 Mbps service, with a relatively inexpensive upgrade to 400 Mbps also gaining in popularity.

Does the average consumer need a premium speed tier for their home internet connection? Probably not. But they do need affordable unlimited internet service free of bottlenecks and artificial slowdowns, especially at the prices providers charge these days. That is an investigation the Journal should conduct next.

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