CenturyLink will begin a usage-based billing trial in Yakima, Wa., starting July 26 that will combine usage caps with an overlimit fee on customers that exceed their monthly usage allowance. The trial in Washington state may soon be a fact of life for most CenturyLink customers across the country, unless customers rebel.

Already at a speed disadvantage with its cable competitors, CenturyLink will likely alienate customers with a new 300GB usage cap on DSL customers who can manage speeds up to 7Mbps, and 600GB for those lucky enough to exceed 7Mbps. Customers will be given a browser-injected warning when they reach 65% and 85% of their allowance. If a customer exceeds it, they will have overlimit fees forgiven twice before the usual de facto industry overlimit penalty rate of $10 for 50 additional gigabytes will be added to their bill, not to exceed $50 in penalties for any billing cycle.

DSL Reports received word from readers in Yakima they had the unlucky privilege of serving as CenturyLink’s first test market for hard caps and overlimit fees, and was the first to bring the story to the rest of the country.

CenturyLink hasn’t wanted to draw much attention to the usage-based billing change, quietly adjusting their “excessive usage policy FAQ” that takes effect on July 26. But it has begun directly notifying customers who will be enrolled in the compulsory trial.

“Data usage limits encourage reasonable use of your CenturyLink High Speed Internet service so that all customers can receive the optimal internet experience they have purchased with their service plan,” states the FAQ.

But counterintuitively, CenturyLink will exempt those likely to consume even more of CenturyLink’s resources than its low-speed DSL service allows by keeping unlimited use policies in place for their commercial customers and those subscribed to gigabit speed broadband.

CenturyLink’s justification for usage caps with customers seems to suggest that “excessive usage” will create a degraded experience for other customers. But CenturyLink’s chief financial officer Stewart Ewing shines a light on a more plausible explanation for CenturyLink to slap the caps on — because their competitors already are.

“Regarding the metered data plans; we are considering that for second half of the year,” Ewing told investors on a conference call. “We think it is important and our competition is using the metered plans today and we think that exploring those starts and trials later this year is our expectation.”

CenturyLink’s new overlimit penalties (Image courtesy: DSL Reports)

In fact, CenturyLink has never acknowledged any capacity issues with their broadband network, and has claimed ongoing upgrades have kept up with customer usage demands. Until now. On the west coast, CenturyLink’s competitors are primarily Comcast (Pacific Northwest) and Cox Communications (California, Nevada, Arizona). Both cable operators are testing usage caps. In many CenturyLink markets further east, Comcast is also a common competitor, with Time Warner Cable/Charter present in the Carolinas. But in many of the rural markets CenturyLink serves, there is no significant cable competitor at all.

Usage Cap Man is back, protecting high profits and preserving the opportunity of charging more for less service.

As Karl Bode from DSL Reports points out, for years CenturyLink has already been collecting a sneaky surcharge from customers labeled an “internet cost recovery fee,” supposedly defraying broadband usage and expansion costs. But in the absence of significant competition, there is no reason CenturyLink cannot charge even more, and also enjoy protection from cord-cutting. Customers who use their CenturyLink DSL service to watch shows online will face the deterrent of a usage cap. Customers subscribed to CenturyLink’s Prism TV will be able to access many of those shows on-demand without making a dent in their usage allowance.

For years, American consumers have listened to cable and phone companies promote a “robust and competitive broadband marketplace,” providing the best internet service money can buy. But in reality, there is increasing evidence of a duopoly marketplace that offers plenty of opportunities to raise prices, cap usage, and deliver a substandard internet experience.

As Stop the Cap! has argued since 2008, the only true innovations many phone and cable companies are practicing these days are clever ways to raise prices, protect their markets, and cut costs. Consumers who have experienced broadband service in parts of Asia and Europe understand the difference between giving customers a truly cutting-edge experience and one that requires customers to cut other household expenses to afford increasingly expensive internet access.

We recommend CenturyLink customers share their dislike of CenturyLink’s style of “innovation” in the form of a complaint against usage caps and usage-based billing with the FCC. It takes just a few minutes, and adding your voice to tens of thousands of Americans that have already asked the FCC to ban usage caps and usage pricing will keep this issue on the front burner. It will help strengthen our case that providers must stop treating internet usage as a limited resource that has to be rationed to customers. Wall Street believes the FCC has given a green light to usage caps and usage pricing, and the risk of attracting regulator attention by imposing higher broadband prices on consumers is pretty low. We need to change that thinking so analysts warn providers against being too greedy, out of fear the FCC will impose a regulatory crackdown.

The community of Pinetops, N.C. has finally got 21st century gigabit broadband, but no thanks to a state legislature so beholden to Time Warner Cable, it let the cable giant write its own law to keep potential competitors away.

The passage of H129 was almost a given after Republicans regained control of both chambers of the state legislature in 2011 for the first time since 1870. The bill made it almost impossible for any of the state’s existing community-owned broadband networks to expand out of their immediate service areas. It also discouraged any other rural towns from even considering starting a public broadband network to solve pervasive broadband problems in their communities.

It was not the finest moment for many of H.129’s supporters, who had to explain to the media and constituents why the state’s largest cable operator needed protection from potential competition and more importantly, why public officials were catering to the corporate giant’s interests over that of the public.

“I wish you’d turn the camera off now because I am going to get up and leave if you don’t,” said Rep. Julia Howard

Rep. Julia Howard (R-Davie, Iredell) found herself losing her cool when WNCN reporters in Raleigh caught up with her and confronted her with the fact her campaign coffers had been filled by the state’s largest telecom companies. She didn’t have an answer for that. Moments later, she appeared ready to flee the interview.

“I wish you’d turn the camera off now because I am going to get up and leave if you don’t,” Howard told the reporter.

Rep. Marilyn Avila was so close to Marc Trathen, then Time Warner Cable’s top-lobbyist in the state, we decided five years ago it would be more accurate to list Time Warner Cable as her sole constituent. Avila’s name appeared on the bill, but it was readily apparent Time Warner Cable drafted most of its provisions. The nearest city in Avila’s own district wanted no part of H129, and neither did many of her constituents.

The bill managed to pass the legislature and after becoming law effectively jammed up community broadband expansion in many parts of the state.

It would take the Federal Communications Commission to pre-empt the legislation on the grounds it was nakedly anti-competitive and prevented broadband improvements in communities major telecom companies have ignored for years.

As a result of the FCC’s actions, the community of Pinetops now has access to gigabit broadband, five years late, thanks in part to Rep. Avila who got a $290 dinner for her efforts and was honored as a guest speaker at a cable industry function in recognition of her service… to Time Warner Cable.

Rep. Avila with Marc Trathen, Time Warner Cable’s top lobbyist (right) Photo by: Bob Sepe of Action Audits

Greenlight, Wilson’s community-owned fiber to the home provider, switched on service in the community this spring to any of the 600 Pinetops homes that wanted it, and many did.

“We just love it!” said Brenda Harrell, the former acting town manager.

In fact, Greenlight is now delivering the best broadband in Edgecombe County, and deploying fiber to the home service was hardly a stretch for Greenlight, which was already installing fiber optics to manage an automated meter infrastructure project. The only thing keeping better broadband out of the hands of Pinetops residents was a law written by an industry that loathes competition and will stop it at all costs. Time Warner Cable didn’t bother to offer service in the community even after its bill became law and residents endured years of unreliable DSL or dialup access instead. Talk about a win-lose scenario. Time Warner Cable got to keep its comfortable cable monopoly while many families had to drive their children to businesses miles away just to borrow their Wi-Fi signal to finish homework assignments.

Faster broadband is likely to be transformative for the quiet rural community. Current town manager Lorenzo Carmon sees more than nearby fields of sweet potatoes and soybeans. With gigabit fiber and cheap local housing, Pinetops could become a bedroom community for upper income professionals now living in Greenville, a university town heavily populated by doctors, students, and high-tech knowledge economy workers. If and when they arrive, they’ll find a tech-ready community, right down to the local Piggly-Wiggly supermarket, which now has fiber fast internet service too.

Pinetops offers proof of the obscenity of bought-and-paid-for-politicians supporting corporate protectionism that harms people, harms education, harms jobs, and leaves rural communities with no clear path to the digital economy of the 21st century. Legislation like H129, which continues to be enforced in more than a few U.S. states, needs to be pre-empted nationwide or even better repealed by state legislators.

But North Carolina’s legislature still isn’t getting the message. They are outraged the FCC outsmarted Time Warner Cable and them, and are now wasting time and resources to have the FCC’s pre-emption overturned in court, evidently so that rural North Carolina can continue to tough it out with DSL indefinitely. That’s political malpractice and North Carolina voters need to show the door to any elected representative that cares more about the interests of a giant cable company than what is good for you and your community. Reps. Avila and Howard don’t have to live with 3Mbps DSL, so why should you?

“If the private sector is not providing the services, the government has to step in,” said Carmon. “The internet is just like electricity. You can’t live without it.”

We couldn’t agree more.

Altice’s ongoing efforts to cut expenses and boost profits at Suddenlink will cost an unspecified number of call center workers their jobs in three states and customers will soon pay a fee to receive their cable bill in the mail.

In three separate announcements, Suddenlink has begun notifying employees at three separate offices that many will be out of their jobs by this fall as the company shutters call centers and sales offices in Greenville, N.C., St. Joseph, Mo.,  and Parkersburg, W.V.

“We are migrating call center activities to some of Suddenlink’s larger call centers in the U.S. based on call volume, and where we have the greatest number of business partners,” said a company news release.

All of Suddenlink’s sales jobs will now be in Texas, and that means sales employees in the company’s Parkersburg office were given two choices: move to Texas, or take a different job in the Parkersburg office.

St. Joseph area employees were told their jobs will be relocated to larger call centers elsewhere where Altice has spent money to improve customer care.

“We have invested in advanced customer-care technology in those locations, and based on that believe this new structure will enable us to provide a superior service experience to all of our customers,” said Suddenlink spokeswoman Lisa Anselmo.

This summer Suddenlink is also continuing incremental rate hikes for customers not already subject to them. Parts of North Carolina are the latest to face a new $1 billing fee, which began July 1. New customers already pay the fee, but now current customers will also face the extra charge if they want a paper statement mailed to them.

“This fee covers the handling and postage costs associated with providing a paper statement,” said spokesman Gene Regan, senior director of corporate communications.

Notification of the new fee went out in the company’s May and June billings. To avoid the fee, customers must opt-in to electronic billing by visiting the company’s paperless billing web page and logging in to their Suddenlink account.

“What we are finding is more and more people in recent months have gone to electronic billing. A lot of customers have made the change in recent months,” Regan told The Daily Reflector. “Today so many people are online, more and more people are online, and a lot of people don’t like to deal with paper mail. They like the convenience and the opportunity to use other ways to pay.”

August

But many customers would prefer the option of a lower cable TV bill.

In Louisiana, Lake Area residents continue to complain about Suddenlink’s business practices, especially rates, channel options, and equipment fees. City councilwoman Luvertha August told American Press she is inundated with complaints about the cost of cable television in particular.

“All of these comments are from senior citizens. They’re on fixed incomes and they have limited budgets,” August told the newspaper. “They’re concerned with what they deem are constant changes with the Suddenlink cable company.”

Seniors have been confronted with cable TV bills that have soared from $20 two decades ago to over $80 in many cases today. This month Suddenlink completed its all-digital transition in southern Louisiana, which requires customers to attach equipment to every cable-enabled television in the home, at an additional cost.

The Leichtman Research Group, which specializes in research on broadband media and entertainment, found today’s average cable-TV bill is just under $100 after fees, surcharges, and taxes are included. Seniors who have seen no significant increase in their Social Security checks for several years are hard-pressed to pay for channels they don’t want or watch.

Last year, August attempted to involve the state’s legislative delegation to coordinate a message that consumers want more options, including a-la-carte for cable television. Her effort found almost no interest from state and federal lawmakers representing Louisiana, many who receive substantial campaign contributions from telecom companies. Sen. David Vitter (R-La.) did respond, but falsely claimed cable television is a state matter and the “federal government had nothing to do with the issue.”

In fact, many members of Congress have asked the FCC to get involved in the issue and others have supported efforts to increase competition and push for mandatory a-la-carte channel choices for consumers. AT&T U-verse has a franchise in southern Louisiana and may offer some consumers a choice, but after AT&T completed its acquisition of DirecTV, many consumers report AT&T is marketing satellite television more aggressively than its own U-verse TV option.

The European Union believes every home in the bloc should have ready access to at least 100Mbps broadband speeds within the next decade.

Regulators in Brussels want uniformly fast broadband across the continent according to a report from the Financial Times, and is expected to adopt new telecom rules in September to get it. It is part of the EU’s ambitions “Gigabit Society” initiative that will assure every school and business will have access to gigabit speeds, while homes will now receive at least 100Mbps.

Private telecom companies are skeptical Brussels will kick in substantial aid to finance broadband upgrades, despite assurances it would be a public-private initiative. An initial estimate pegs the cost to upgrade the continent at $171 billion. At least 80 percent of that budget will cover the infrastructure installation costs, such as stringing fiber on poles and underground and bringing connections to homes and businesses.

A potential issue for Brussels is dealing with one of Europe’s most powerful telecom companies – Germany’s Deutsche Telekom, which wants to use vectoring technology to improve copper-based DSL service in Germany instead of upgrading to optical fiber technology.

This morning, Brussels gave partial approval for DT to go ahead with vectoring upgrades, so long as it doesn’t inhibit competition. As a result, the German phone company will offer DSL upgrades as fast as 100Mbps and offer all of its rivals access to the same network, allowing consumers to choose different ISPs delivering service over the same copper network.

Like in North America, analysts say there is little interest among companies to build rival networks, especially in areas already served by a cable and telephone company. The alternative is to open those networks to competitors, who can use them to reach customers with their own internet service plans.

If you live in parts of the Hudson Valley (N.Y.) or Ohio where Frontier Communications provides phone service, Vantage TV may be coming to your neighborhood soon.

Frontier’s cable television solution for customers still served by its legacy copper wire telephone network appears to be an IPTV service similar to AT&T’s U-verse. Vantage TV is already available to around 200,000 Connecticut customers served by Frontier, inherited from AT&T. Frontier also offers Vantage in Durham, N.C. and has applied for a statewide video franchise in Ohio (granting authority to offer service anywhere in the state it chooses) and another to serve Middletown, N.Y., a community of 28,000 in the Hudson Valley.

Frontier claims over the next four years it will offer Vantage in as many as 40 of its markets, many still served by legacy copper wiring. That represents about three million homes. After a second phase of buildouts, Frontier claims it will to provide video service to about half of the 8.5 million homes in its service area.

In late June, Frontier applied for a video franchise agreement in Middletown, where it expects to compete against Charter Communications (formerly Time Warner Cable). It will be the first time Frontier offers video service in New York.

Vantage TV offers up to 300 channels typically bundled with phone and internet service. Customers are provided a “total-home DVR” with 1TB of storage that can record up to six shows at the same time and played back on up to four wireless cable boxes attached to different televisions. An upgraded version 3.0 of Ericsson’s Mediaroom platform offers advanced set-top box features like improved visual search and the ability to watch up to four channels at once in a mosaic. Another feature lets customers bring up a small video screen showing another channel, useful if you are channel surfing during an ad break.

Multichannel News interviewed several Frontier executives about the service, which the company is confident will give it a competitive video product to market to customers. Until Frontier bought AT&T’s Connecticut customers (and its U-verse fiber-to-the-neighborhood system), its only experience selling cable television came from its acquisition of Verizon FiOS systems serving Fort Wayne, Ind., and parts of Oregon and Washington. Frontier quickly learned the value of Verizon’s volume discounts for video programming, which it lost soon after acquiring the systems. In 2011, customers faced massive price hikes for video service and an unusual effort to convince them to switch to satellite TV instead — quite a downgrade from fiber to the home service.

Connecticut, in contrast, is served with a mix of fiber and old copper wiring that has been in place for decades, since the days the state was served by the independent Southern New England Telephone Company. Learning how to deliver reasonable video quality over copper wires in Connecticut gave Frontier experience to go ahead with targeted upgrades that can boost broadband speeds and deliver HD video over an internet connection as low as 2.6Mbps in other states.

In short, Frontier’s business plan for video may work if it can keep network expansion and technology costs as low as possible. Video programming costs are likely to be another matter, however. As programming costs increase in contract renewals, some cable operators are playing hardball and dropping channels that get too expensive for comfort. But many of those channel drops alienate customers. Frontier appears to be following an opposite formula — making sure potential customers know they are still carrying networks the cable operator in the area dropped. Comcast dropped Yankees regional sports channel YES, but Frontier still offers it to its Connecticut customers and goes out of its way to promote its availability.

Hallmark Channel and Hallmark Movies & Mysteries — two networks popular with older viewers who are among the most loyal to cable television, got the axe in 2010 on AT&T U-verse in Connecticut. After Frontier acquired the Connecticut system, it put the two networks back on the lineup.

The more customers Frontier can show it has at the negotiating table, the better position Frontier is in to secure discounts for the video programming it carries. Volume, volume, volume makes all the difference when competing against giant cable conglomerates like Comcast and Charter. Even if Frontier finds it eventually has to drop overpriced channels, it has a much more friendly relationship with over-the-top online video services like Netflix to offer customers as an alternative. Vantage customers can find Netflix’s main menu as a traditional TV channel on the Vantage lineup, allowing subscribers to choose any Netflix show to watch on their television. In the future, Frontier might offer customers other network’s apps as well, making it easy to stream on demand video without having to use a Roku or other similar device.