Panera Bread installed free Wi-Fi years before Starbucks got around to it, trying to boost customers in between breakfast, lunch, and dinner.  The experiment worked, according to USA Today, but now Panera has a new problem: their Wi-Fi networks are clogged and customers won’t leave to make room for others.

Panera executives say the company connects 2.7 million sessions a month at its 1,565 locations nationwide.  The result is Wi-Fi that slow to a crawl, overloaded with dozens of customers trying to get online at the same time. The problem has gotten even worse since wireless phone companies began usage capping and throttling their customers. That brings data-hungry people to Panera for the free Wi-Fi, but they don’t always stay for the food.

Now Panera is considering rationing its Wi-Fi service and giving priority to its most-frequent visitors who belong to the company’s MyPanera loyalty program, rewarding them with extra time on the network or prioritized traffic that forces non-members onto slower connections.

That could discourage casual visitors and those not purchasing food to look elsewhere.  JiWire, which sells ads on Wi-Fi networks, estimates 55% of those using free in-store Wi-Fi are searching for a faster connection than their wireless phone company provides. If Panera forces them to use slower speed connections, they may go somewhere else.

Panera, like coffee shops and other eateries, all face the same challenge: how to discourage the freeloaders who spend hours occupying tables and seats without buying anything while not alienating the customers that do buy and appreciate the wireless Internet connection as a free perk.

As wireless carriers continue to charge more for less service, those challenges are expected to only grow in the coming months.

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USA Today visited Panera Bread to find out whether customers went for the food or the free Wi-Fi.  (2 minutes)

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Ben Silverman, founder of Electus and former co-chairman of NBC Entertainment, talks on Bloomberg TV about the migration of entertainment programming delivery to web-based outlets, and how the “big boys” like Comcast will have considerable control about how, where — and how much you will pay to watch. (5 minutes)

Comcast today announced it was incrementally increasing its 250GB usage cap by 50 additional gigabytes per month as part of a new trial, the first allowance increase since the company started the cap in 2008.

But before so-called “heavy users” celebrate, the company is also announcing it will test overlimit fees for customers who exceed the new 300GB cap.

Cathy Avgiris, Executive Vice President and General Manager, Communications and Data Services, Comcast Cable:

We’ve decided to change our approach and replace our static 250 GB usage threshold with more flexible data usage management approaches that benefit consumers and support innovation and that will continue to ensure that all of our customers enjoy the best possible Internet experience over our high-speed data service. In the next few months, therefore, we are going to trial improved data usage management approaches comparable to plans that others in the market are using that will provide customers with more choice and flexibility than our current policy. We’ll be piloting at least two approaches in different markets, and we’ll provide additional details on these trials as they launch. But we can give everyone an overview today.

The first new approach will offer multi-tier usage allowances that incrementally increase usage allotments for each tier of high-speed data service from the current threshold. Thus, we’d start with a 300 GB usage allotment for our Internet Essentials, Economy, and Performance Tiers, and then we would have increasing data allotments for each successive tier of high speed data service (e.g., Blast and Extreme). The very few customers who use more data at each tier can buy additional gigabytes in increments/blocks (e.g., $10 for 50 GB).

The second new approach will increase our data usage thresholds for all tiers to 300 GB per month and also offer additional gigabytes in increments/blocks (e.g., $10 per 50 GB).

In both approaches, we’ll be increasing the initial data usage threshold for our customers from today’s 250 GB per month to at least 300 GB per month.

In markets where we are not trialing a new data usage management approach, we will suspend enforcement of our current usage cap as we transition to a new data usage management approach, although we will continue to contact the very small number of excessive users about their usage.

Tell Comcast to drop the padlock on your broadband connection altogether.

The change comes at the same time Comcast is under fire for allegedly giving preferential, cap-free treatment to its own video content through an Xbox video game console app.

Comcast has followed AT&T’s pricing, testing a new overlimit fee of $10 for each 50GB increment customers exceed their allowance.  While not outrageous on a per gigabyte basis, the minimum charge of $10 is steep, especially considering Comcast pays only pennies per gigabyte to move traffic.

Stop the Cap! urges Comcast customers to use the occasion to demand the company suspend its unnecessary and arbitrary usage cap altogether.

The best approach for consumers is the one Comcast plans for markets not subject to a trial of their latest Internet Overcharging schemes. Namely, leaving the overwhelming majority of Comcast customers alone while informally reaching out to the tiny minority of customers the company feels are consuming data at levels that create significant problems for other customers on their network. With Comcast’s near-universal adoption of DOCSIS 3 technology, those problems are rarer than ever.

What capacity crisis? This is about the money.

Yesterday’s news that Verizon Wireless plans to terminate the grandfathered unlimited data plans of their existing customers, forcing them to choose from a range of potentially more expensive shared data plans, would seem to be part and parcel of the cell phone industry’s need to move away from all-you-can-eat data to preserve what little spectrum they have to handle wireless data growth.

AT&T’s Randall Stephenson is on record stating AT&T has been hiking prices because of the imminent spectrum crisis and its inability to manage it with a buyout of T-Mobile:

“We’re running out of the airwaves that this traffic rides on,” Stephenson said. “There is a shortage of this spectrum. The more competitors you have, the less efficient the allocation of spectrum will be. It’s got to change. I don’t think the market’s going to accommodate the number of competitors there are in the landscape.” Stephenson noted AT&T’s data prices have increased 30% since the deal was killed.

“In a capacity-constrained environment we will manage usage-based data plans, increased pricing and managing the speeds of the highest volume users. These are all logical and necessary steps to manage utilization,” Stephenson said about AT&T’s rationing plans.

Over at Verizon Wireless, the announced end of unlimited data carried no such warnings of imminent wireless spectrum doom.  In fact, chief financial officer Fran Shammo on Wednesday said Verizon was just fine with spectrum and capacity for at least the next two years, if not longer (underlining ours):

“Well, I think prior to the deal that we announced with the cable companies and the acquisition of spectrum, we were saying that we were going to need a spectrum — we were going to need more spectrum by 2015. With the approval of this deal now, with the AWS, we think we are in very good shape here beyond 2015.

“In addition, the way our 3G spectrum is in individual slices, it is going to be very efficient for us to take slices out and re-appropriate that to the 4G technology. So I think that through that spectrum efficiency, also I think that there will be some help from the manufacturers in getting more equipment out there that utilizes spectrum more efficiently, although I don’t think that solves the problem, the industry is going to need more spectrum in the future because of the way that we see the guide path of consumption. But I think right now, we are in pretty good shape for at least the next several years.

[…] “So from a spectrum perspective, I think we are absolutely fine.”

Verizon's banking on more revenue when "unlimited data" is banished for good.

In fact, Verizon Wireless plans to reduce its spending on infrastructure projects designed to expand and enhance its wireless network, starting with its 3G service. Frammo (underlining ours):

“And now what you’re seeing is, if you will, a discontinued investment in 3G. Now we will have to continue to invest in that 3G from a maintenance and reliability perspective because we still have 90 million customers on that, but no more capacity or expansion of the 3G network. Our effort is going into 4G now and what I would say to you is look at Verizon on a total capital basis and I would say flat to slightly down. If you look at the components, what you will see is wireless decreased $850 million in the first quarter and that was because of the 3G buildout last year and not this year. But I think on a year-over-year basis, you could look to flat to down and that trend should continue.”

So what are Verizon’s primary goals in the near future? Increasing revenue. Frammo (underlining ours):

“So obviously, our goal is to increase cash flow. We came out of the first quarter with a $1.7 billion increase in our cash flow year-over-year, managing that CapEx. Our dividend policy is extremely important to us.“

Verizon Wireless handed out this statement this morning regarding the imminent demise of unlimited data:

“As we have stated publicly, Verizon Wireless has been re-evaluating its data pricing structure for some time, Customers have told us that they want to share data, similar to how they share minutes today. We are working on plans to provide customers with that option later this year.

“We will share specific details of the plans and any related policy changes well in advance of their introduction, so customers will have time to evaluate their choices and make the best decisions for their wireless service. It is our goal and commitment to continue to provide customers with the same high value service they have come to expect from Verizon Wireless.”

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WWLP in Springfield, Mass. explains to viewers the end of “unlimited data” from Verizon Wireless is near.  (1 minute)

Rogers Communications has following up its “Next is Now” corporate video from 2010 with a sequel: “Next is Now… More Than Ever,” which highlights how Canadians are increasingly relying on mobile communications for news, entertainment, social life, work, and education.

While Rogers wanted the video to promote how the company would be a part of that telecommunications transformation, many of their customers can’t help but reflect on the fact the revolution is well-tempered with Internet Overcharging schemes like usage caps.

Stop the Cap! reader Alex is among them, noting the video says nothing about the company’s restrictive usage limits on home broadband and the even harsher caps on its mobile services.

Rogers, like most telecommunications companies, repeatedly tells investors there is real money to be made attaching meters to monetize megabytes.  Charging for broadband usage is a growth industry, and with the company’s own projections for data growth, they are well-positioned to be in the money for years.

With broadband dependency being as pervasive, if not more so, in Canada as in the United States, the barely regulated services on offer in both countries often come at a steep (and increasing) price — all for something even Rogers hints is becoming a utility — one as important as electricity, gas, and clean water.

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Rogers Communications’ “Next is Now… More Than Ever” has broader implications than the company realizes. (3 minutes)