Usage caps for one and all.

Comcast, which insists on placing a 1 TB (1,000 GB) usage cap on most (but not all) of its broadband customers, is predicting explosive growth in broadband usage as customers connect more devices to their internet connections.

“[If] you look at in terms of just overall consumption, just at a high level, you look at the top 10% of our customers, just how much they use, they are using 20 or more connected devices,” said Comcast Cable president and CEO David N. Watson on a company conference call. “And it’s a tremendous amount of consumption that we have. And I think that’s where the market is going. There is going to be more consumption, more connected devices.”

Comcast’s growth forecasts suggest the company schedules regular network upgrades, although it has only adjusted usage allowances three times in the last decade:

• Comcast introduced a 250 GB usage cap in 2008 that carried no overlimit penalty but persistent violators lost their Comcast broadband service.
• Comcast raised the cap 300 GB in 2013 and implemented an overlimit fee.
• Comcast raised the cap to 1 TB in 2016 and began promoting its Unlimited Data Option as an insurance policy against bill shock from overlimit fees.

“It is important to know that more than 99 percent of our customers do not use a terabyte of data and are not likely to be impacted by this plan, so they can continue to stream, surf, and download without worry,” claims Comcast on its website. As of December, 2017, “Xfinity Internet customers’ median monthly data usage was 131 GB per month during the past six months.”

Such claims should make customers wonder why Comcast needs a usage allowance of any kind if these claims are true. A 2016 study suggests Comcast may have more heavy users than it is willing to admit. The research firm iGR found average broadband usage that year was already at 190 GB and rising. There is no third-party verification of providers’ usage statistics or usage measurement tools, but there are public statements from Comcast officials that suggest the company faces a predictable upgrade cycle to deal with rising usage.

“We increase the capacity every 18 to 24 months,” confirmed Watson.

Upgrading is also a crucial part of Comcast’s ability to charge premium prices for its internet service.

“Not all broadband networks are created equal,” Watson said. “If you are providing a better solution in broadband, your pricing can reflect that.”

For Comcast customers using a terabyte or more in a month, after two courtesy months of penalty fees being waived, Comcast will recommend signing up for its Unlimited Data Option, which costs $50 a month. If you do not enroll and exceed your allowance a third time, the company will bill you overlimit fees: $10 for each additional block of 50 GB of usage. The maximum overlimit penalty in any single month is a whopping $200.

Critics of Comcast’s data caps point out that Charter — the nation’s second largest cable operator, has no usage caps at all. Optimum (Altice) also does not impose data caps. Those that do often copy Comcast’s data allowances and overlimit fees exactly — all to deal with so-called “data hogs” that the companies themselves claim represent fewer than 1% of subscribers.

Nathan Gray woke up one morning this month and received an alarming notification from Comcast, his internet provider, claiming he had exceeded his Comcast terabyte data cap and was being billed an additional $10 for a 50 GB allotment of extra data.

“This has never happened before and I was only six days into my monthly billing cycle, so I assumed it must be a mistake,” Gray told Stop the Cap! “But Comcast told me it wasn’t a mistake.”

Gray was hardly alone. One month earlier, “Bogreenwoo” discovered his family had blown the roof off their internet usage, exceeding 1 TB by the middle of the billing cycle, with more usage piling up hour after hour.

“Xfinity was adding 50 GB blocks every day at $10 each and calls to tech support were no help,” he shared on Comcast’s customer support forum.

Similar complaints are brought up on that forum at least weekly, if not more often. Comcast counterclaims that usage exceeding 1 TB a month is so rare, it represents only about 1% of its customer base. But customers with huge internet bills from Comcast who stumble their way to the company’s support forum strongly dispute that notion.

“Well good luck with finding a solution or even finding anyone at Comcast who cares or anyone anywhere else as far as that goes,” shared “Amaasing.” “I have had this issue more than once and have talked with every vice president of customer service and had discussions with the security department and even filed a complaint with the FCC and nothing happened at all.”

Some users, like Amaasing, have received so many bills stung with overlimit fees they now turn their computers off in the evening and unplug their cable modems. In many cases the usage keeps rising anyway.

“Today when I logged in, I had apparently used 196 GB yesterday,” Amaasing wrote. “196 GB in 24 hours?  Seriously?”

For most customers in this predicament, Comcast is quick to blame customers for the usage and leave the detective work up to them. Customer support will not entertain suggestions their usage meter is inaccurate. In their view, it is more likely someone is illicitly connected to your Wi-Fi and stealing your service or you are running some bandwidth-heavy application or your computer has been hijacked by hackers or pirates.

While you are left to investigate which of these might be true, Comcast is free to continue billing your account overlimit fees.

Comcast claims it will forgive customers who exceed their data allowance twice ‘a year’:

“We’ll provide you with two courtesy months, so you will not be billed the first two times you exceed a terabyte while you are getting used to the new data usage plan. This means that you will only be subject to overage charges if you use more than a terabyte for a third time in a 12-month period. If you use more than a terabyte two times or less in a 12-month period, your courtesy month balance will reset to two at the end of these 12 months. However, if you use more than a terabyte three times in a 12-month period, no more courtesy months will be given.”

After “courtesy months” expire, you are on the hook for whatever excess usage Comcast determines you have consumed. Some Comcast customers assume the courtesy month counter resets each calendar year, but in fact it only resets after 12 consecutive months of staying within your allowance limit.

What causes “excess usage” is anyone’s guess. Comcast customers have documented several recent causes why they have mysteriously started blowing through their 1 TB data allowance:

1. The growing prevalence of 4K video, the highest streaming video quality available through online video streaming services can be responsible for a sudden spike of usage. Netflix and other services that support 4K video content with high dynamic range can eat up 7 GB to 10 GB of data per hour. Many services allow you to downgrade your video settings with minimal quality loss. We recommend trying settings typically labeled 720 or 1080 — the lower the better if you are running up against your allowance.
2. Third party backup and cloud storage tools: That online backup or cloud storage service you are using may be malfunctioning. There are several reports about Amazon Drive having problems recently, causing files to be repeatedly transferred and driving up usage to several hundred gigabytes a day in some cases. If you use Amazon Drive and have seen a huge spike in usage, try uninstalling or turning off the service for several days and see if usage falls dramatically. Other file and computer backup services that store your data in the cloud can consume a lot of data, especially when installing them on a new computer for the first time. Even some cell phone backup services designed to store your photos in the cloud can malfunction and repeatedly try to send the same photos over and over. Disable these tools for several days and check your usage levels.
3. Third party usage: Family members doing something bandwidth intensive can also be responsible for dramatic usage spikes. Although downloading video game updates can consume very large amounts of data, game play itself typically has little impact on your data usage. Check with family members to see if they are watching high bandwidth video or have installed a file backup service. Less common is an uninvited guest on your Wi-Fi network. Comcast often points to Wi-Fi security as a major problem when a neighbor gains access to your internet connection to download huge numbers of files. You can change your Wi-Fi password to help lock down your network. Make sure not to use plain word passwords — use a mixture of letters, numbers, and symbols.
4. Comcast’s meter is simply inaccurate. There is no independent third-party verification or government oversight of Comcast’s usage meter. Most ISPs hire a third-party contractor to design and implement their data measurement meters, but those contractors are ultimately answerable to the provider — not to you, giving little peace of mind to consumers who are forced to trust their cable company to be honest. Our country’s Founding Fathers placed great importance on accurate measuring and weighing tools, so much so it is addressed in Section VIII of Article I of the U.S. Constitution. That section gives authority to Congress to establish accurate and regulated measurement tools. Each state has their own way of managing this, often with a bureau of weights and measurements that independently verifies and certifies — with a tamper-evident sticker, the accuracy of the food scale at your local grocer or the gas pump at a nearby service station. Comcast has resisted similar third-party oversight for its usage meter. But considering the company’s overlimit fees can add a substantial sum to customer bills, having this kind of oversight seems appropriate.

Avoiding the usage cap: Comcast ironically provides its own insurance plan to protect customers from its own arbitrary data allowance. For peace of mind, Comcast collects an extra $50 a month ($20 for gigabit speed DOCSIS 3.1 plans) if you wish to waive the data cap altogether. Data caps are completely under the control of Comcast and are especially prevalent in regions of the country where a lack of competition exists. But Comcast’s arguments in favor of data caps don’t wash at the nation’s second largest cable company – Charter Communications, which markets its internet service as having no data caps at all. In fact, Charter CEO Thomas Rutledge never saw much use for data caps at Charter or Cablevision, the company he used to head.

Debunking arguments for usage caps at Comcast and other ISPs. (5:46)

Cable One, the Phoenix-based mid-sized cable operator serving some of the poorest communities in the country is charging some of the nation’s highest prices for broadband service, raking in an unprecedented 47% margin in the fourth quarter of 2017, the highest in the cable industry.

That growth has come courtesy of CEO Julie Laulis, who has doubled down on data caps — automatically enrolling customers in higher priced plans if they exceed data caps three times in any 12-month period, raised prices, and ended most new customer and customer retention promotions in favor of ‘take it or leave it‘ pricing, especially on broadband service. Laulis has also decided to devote most of Cable One’s marketing efforts on selling broadband service, while de-emphasizing cable television. As a result, customers dissatisfied with Cable One’s lineup are encouraged to leave quietly.

Because video programming is costly to provide and broadband is relatively cheap to offer, the more the company can extract from its internet customers, the higher the profits earned. In 2011, cable television represented 49.1% of Cable One’s $779 million in revenue, with residential and commercial broadband comprising 34%. Today, 57% of Cable One’s $960 million in revenue comes from selling internet service. Cable One not only de-emphasized its video business, it also raised prices on internet service to further enhance earnings.

New customers coming to Cable One can subscribe to an entry-level broadband plan of 100 Mbps with a 300 GB monthly data cap for $55 a month. There are no discounts or promotions on this plan. But Cable One also requires customers to lease ($10.50/mo.) or buy an added-cost cable modem, raising the price higher. To prevent customers from taking advantage of promotions on higher speed products, Cable One requires customers to disconnect from service for a full year before being considered a new customer once again.

Laulis

Cable One has been able to raise prices and attach stingy usage caps to customers primarily because there are no good alternatives in the rural markets it prefers. One analyst said 77% of Cable One’s customers are in largely rural areas of Arizona, Idaho, Illinois, Missouri, Montana and Oklahoma. But prices are clearly getting too high for some, because the company lost more video and phone customers that it gained in new broadband subscriptions during the fourth quarter of 2017.

The fact Cable One broadband is now considered by many subscribers to be “too expensive” is also reflected by the extremely anemic broadband growth at Cable One. In 2017, the company added just 1.5% to its residential broadband customer base, despite very limited competition from phone companies.

MoffettNathanson’s Craig Moffett has complained all winter that Cable One is sacrificing broadband subscriber growth in favor of profits from price increases.

“[Cable One has] the most limited broadband competition of any publicly traded operator, and they have the lowest starting penetration,” Moffett told his investors. “Should they not be growing broadband the fastest of anyone? If price elasticity is greater than anyone thinks, how long is the runway, not just for Cable One, but for any operator choosing a strategy of price increases rather than unit growth?”

Cable One is also squeezing its newest customers at its latest acquisition – NewWave, which now features pricing very similar to Cable One. It recently started to turn over past due NewWave customers to collections after going 40 days past due. Previously, it was 90 days before account holders were threatened with cancellation and collections.

For now, NewWave’s introductory offer remains: 100 Mbps High-Speed Internet is $39 for the first three months before these rates kick in:

Cablevision customers get very attractive promotions in the highly competitive northeastern United States, while Suddenlink customers in more rural areas pay more.

The majority of Cablevision and Suddenlink broadband customers want speeds of 100 Mbps or greater from the Altice-owned cable operators, and average monthly data usage by those customers is now reaching 200 GB per month.

Those statistics were part of a quarterly financial results presentation by Altice USA executives about how the company is doing in the United States.

Altice’s cable holdings include Cablevision, serving a generally affluent customer base in and around the New York City area where Verizon FiOS is its biggest competitor, and Suddenlink, which serves in less competitive markets where local economies are often challenged and phone company DSL still has a significant presence.

Regardless of whether customers receive broadband from Cablevision or Suddenlink, Altice USA CEO Dexter Goei made it clear consumers want faster internet service and are consuming exponentially more data than ever before.

Goei said Altice will continue to increase internet speeds over its existing hybrid fiber-coax network (HFC) even as it builds out its fiber to the home replacement network in some areas. At least 95% of Cablevision customers can now subscribe to 400 Mbps broadband on the company’s legacy HFC network. Around 72% of Suddenlink customers can get similar speeds today. Gigabit speed is available to 29% of Altice USA customers.

Goei said 90% of new Cablevision and Suddenlink customers now choose internet plans featuring 100 Mbps or faster broadband. The average data use of those customers “is now reaching about 200 GB” per month, Goei reported. For customers on HFC systems, Goei said the maximum speed Altice’s implementation of DOCSIS 3 can support is around 600 Mbps, depending on how many customers are sharing the connection. As customers transition to fiber service in the northeast, faster speeds are planned. In fact, Goei wants Cablevision to offer speeds even faster than Verizon FiOS, its chief competitor.

“In terms of the speed capabilities, we’ll have the ability to do higher speeds than the competition,” Goei said.

Altice USA’s fiber-to-the-home (FTTH) deployment is “well underway” in New York, New Jersey, and Connecticut, with plans to connect several hundred thousand customers to the new network starting later this year. Goei told investors Altice was accelerating the rollout this year with the hope of further reducing network and customer operation costs related to servicing the older coaxial network.

Cablevision and Suddenlink will gradually be rebranded as Altice, and the company has begun familiarizing customers with the new brand name in various ways, including the rollout of its new deluxe set-top box, called Altice One.

“This is our new entertainment platform with an all in one box, including TV, internet, Wi-Fi, integrated apps such as Netflix and a voice activated remote control,” said Goei. “The service includes an improved Wi-Fi experience […] as many TV boxes double up as Wi-Fi repeaters around the home. This is a key part of our strategy of enhancing the customer experience and we’ll have the capacity for ongoing upgrades and the addition of new apps as they become available.”

But that new platform comes at a cost. Currently, Cablevision customers can pay as much as $10 for each set-top box and $5 for a cable modem. Altice One is regularly priced at $25 a month — $10 more for a customer that has one television set-top box and cable modem. That makes Altice’s box among the most costly in the cable industry. The company is trying to hide the cost of its box by bundling it into promotions targeting price sensitive new customers.

In fact, the cost of service is increasingly becoming a factor, especially for Suddenlink customers. Over the last two years, Altice has been “harmonizing” Suddenlink’s rate plans, which used to be set based on the technical capabilities and performance of each cable system. Goei said Suddenlink comprised “five or six different customer bases” — each served by cable systems with different capabilities and rate plans. In the last two years, Suddenlink customers have been introduced to new rate plans, and some are paying considerably higher rates than before, especially for equipment and surcharges.

“All of that activity was probably more than we ever wanted to or anticipated as harmonizing all the different variables is not that easy,” Goei said. “And so we made a very concerted effort to not implement a usual or industry like price increase at the end of 2017, given all the various changes that happened over both customer bases as we harmonized them.” But Goei added the reprieve from rate hikes won’t last forever, promising a “rate event” strategy sometime this year, different from rate changes in past years.

Altice is emphasizing the progress it is making boosting internet speeds at its Cablevision and Suddenlink cable systems.

What Suddenlink and Cablevision charge for service is very dependent on what the competition is offering in Altice’s various markets. Goei paradoxically noted that some of the most attractive rates go to customers living in the most affluent areas of the New York Tri-State Area because of intense competition from Verizon FiOS. Prices have remained so low historically that, in Goei’s view, “it makes it very difficult for third parties to come into these markets” and compete with attractive offers that can match Cablevision. That also explains why Cablevision customers do not deal with data caps while Suddenlink customers often do.

Goei

Conversely, in Suddenlink service areas where less capable competitors exist, prices can be higher and service is considered less affordable. As a result, financial analysts have noted Suddenlink’s broadband growth has been anemic since Altice bought the company, presumably because would-be customers cannot afford the service or have chosen a more economic package sold by the phone company, even if it less capable.

Goei promised Altice would be more “nimble” in the future about targeting pricing in different service areas, taking current conditions on the ground into account when setting rates.

In more general terms, Altice is dealing with the same challenges most cable operators are facing these days. Cord-cutting continues to result in reduced numbers of video subscribers. The company also recently endured a multi-week programming dispute with Starz that cost the company video subscribers in the Cablevision service area. The dispute eventually ended with a new multi-year affiliation agreement that allows Altice systems to carry Starz and Starz Encore networks, on-demand services, and online access for several years.

But Altice clearly sees broadband as its key product going forward, which is why the company is upgrading its Cablevision and Suddenlink systems to support faster internet speeds.

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

It was called “Broadband for All” — New York Governor Andrew Cuomo’s commitment to bring high-speed internet service to every New York State resident. But it now appears the governor will break that promise and leave more than 72,000 rural New York residents with satellite-delivered internet that does not come close to meeting the broadband speed standard and is infamous for customer frustration, slow speeds, and low data caps.

Ensuring High-Speed Internet Access for Every New Yorker

In today’s world, internet connectivity is no longer a luxury—it is a necessity. Broadband is as vital a resource as running water and electricity to New York’s communities and is absolutely critical to the future of our economy, education, and safety.

In 2015, Governor Cuomo made the largest and most ambitious state broadband investment in the nation, $500 million, to achieve statewide broadband access by 2018. 

The New NY Broadband Program sets as its goal access to speeds of 100 Mbps for all New Yorkers, with 25 Mbps acceptable in the most remote and rural areas. The cost must not exceed $60 and there is a general prohibition of data caps. This goal exceeds requirements of the FCC’s Connect America Fund program and requires that projects be completed on a more accelerated timeline.

Today, the governor announced the state grant winners to split $209.7 million in the third and final round of awards to offer 122,285 additional homes, businesses, and institutions broadband internet service.

“These latest awards through Round III of the New NY Broadband Program will close the final gap and bring high-speed broadband to all New Yorkers in every corner of the state,” the governor’s office claimed.

Except it won’t.

Tucked in among the grant award winners is a $14,889,249 grant to Hughes Network Systems, LLC, targeting 72,163 rural New Yorkers, more than half of the total number of customers to be reached in the third round. Hughes operates the HughesNet satellite internet service, a technology derisively known as “satellite fraudband” for routinely failing to meet its advertised speed claims. It’s also known as “last resort internet” because it is slow, expensive, and heavily data capped.

Complaints about HughesNet are common on websites like Consumer Affairs:

“Extreme false advertising. Over the first 30 days with HughesNet Gen5, I averaged 3 Mbps download when advertised 25 Mbps. I canceled when they couldn’t answer why I used 20 GB of data in less than 24 hours. I am a 55 year old average internet user. No streaming. No music. No videos (YouTube). DO NOT GET THIS SERVICE EVEN IF NO OTHERS ARE AVAILABLE.” — Dennis, Tazewell, Tenn. (1/25/2018)

“HughesNet claims high speed internet in our region. Clearly not available here, 3 service calls, with exchange of equipment, 50 calls – recorded leaves us no choice, we demand that this contract be null/void without stealing $399 cancellation. A despicable Company, uninformed customer service, average speeds with a video; upload speed 0.62 Mbps, the download speed is 1.28 Mbps. Help!!!” — Jeffrey, Kerhonkson, NY (1/21/2018)

“Promised speeds of no less than 25 Mbps. Actual speed received was 5-9 Mbps. Unable to stream anything. Computer programs did not operate and did not update as required. We have cancelled HughesNet at great cost to us. Worst internet service ever.” — Jennifer, Hartsville, SC (1/12/2018)

Pat (last name withheld) lives 1.3 miles from the nearest Charter Communications customer in Niagara County, near Niagara Falls and is very disappointed with recent developments. Charter has quoted an installation fee of $50,000 to extend their cable service and Verizon has refused to provide DSL service, leaving Pat resorting to using an AT&T mobile data plan, which is expensive and gets throttled after using more than ~22 GB a month.

“This was a scam from Jump Street,” Pat said. “Phase 3 has 70,000 out of 120,000 homes getting satellite internet, a technology that was already available. It also gives $70 million to Verizon who declined funds in first place. Five years and $675 million later and still no internet for my kids.”

“This is a huge disappointment for us,” Pat added. “We were counting on this happening. Told numerous times it would. Now we have to debate moving, we can’t continue not having internet. My oldest son just graduated high school never having internet at home.”

“I have written and spoke with New York Broadband Program Office and it was clear to me from the beginning they didn’t understand the problems they faced, namely infrastructure costs,” said Pat. “They didn’t want to hear it. They wrongly assumed that telecoms would bid and everyone would have internet. I knew when announcements were delayed that the bids for last mile didn’t come in. Tragic really. I think they made a mistake accepting that money from the FCC. Satellite was never on the table until that happened.”

Stop the Cap! readers have told us satellite internet is the worst possible option for internet access, and many have reported better results relying on their mobile phone’s data plan. But New York’s solution for more than 70,000 of its rural citizens — many that believed the governor’s commitment of 100% coverage — is to saddle them with satellite internet access starting at $49.99 a month for a paltry 10 GB of usage per month. The top plan on offer costs $99.99 a month and is capped at 50 GB a month before a speed throttle kicks in and reduces speeds to dial-up levels. A 24-month contract is required with a very steep early cancellation penalty.

Another surprising winner is Verizon Communications, a company that originally refused to participate in rural broadband expansion efforts. Verizon will accept more than $70 million to expand its broadband service to 15,515 homes, businesses, and institutions in the Capital Region, central New York, the North Country, and Southern Tier. At press time, it is not known if Verizon will bring FiOS or DSL to these customers.

Because New York State relied on private companies to bid to cover unserved residents, it seems clear HughesNet is the default choice for those New Yorkers stranded without a telecom company bidder. Although that will allow Gov. Cuomo to claim his program reaches 99.99% of New Yorkers, the rural broadband problem remains unresolved for those who were depending the most on New York to help bring broadband to rural farms, homes in the smallest communities, and those simply unlucky enough to live in small neighborhoods deemed unprofitable to serve.