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Verizon Discontinues FTP Access for “Security,” But Paying Another $6 a Month Gets It Back

Phillip Dampier August 29, 2011 Consumer News, Data Caps, Verizon 4 Comments

'Hurricane Verizon' blows more money out of customers' pockets.

Verizon Communications customers who use the ISP’s personal storage space for running small personal websites have run into a problem: Verizon has banned customers using FTP to manage and update those pages.

Customers are being told the file transfer protocol has been suspended for “security reasons,” but those sobering concerns magically disappear if you agree to pay Verizon an additional $6-10 a month for a “pro hosting plan,” which restores FTP access.

Even more irritating, Verizon customers already pay the company $20 a year for 100MB of space that used to be manageable by FTP, but no more.

“Verizon claims they sent an e-mail notifying me they were shutting off FTP access on Aug. 21, but I never received it,” says Jim Elger, a Verizon DSL customer in Watertown, N.Y.  “I discovered this over the weekend when I couldn’t connect to their FTP server any longer.”

Elger thought Hurricane Irene might have been responsible, but now blames ‘Hurricane Verizon’ for trying to suck more money from his wallet.

“It’s bad enough we pay $20 for what many ISP’s include for free, but now that is rendered money blown out the door because the company wants you to pay for an ‘upgraded’ plan just to update your website,” Elger says.  “There are people in Verizon’s forums who can’t even capture what is already online to move their content somewhere else.”

Elger called Verizon and was also told the change was implemented for security reasons, an explanation he questions.

“How does the security problem go away when you hand over another six dollars a month?”

More Tricks and Traps from Usage-Based Billing: Pay A Penalty for Not Using Enough Service

Phillip Dampier August 25, 2011 Consumer News, Data Caps, Video 3 Comments

The telecommunications industry better not take a tip from some Texas power companies that have found new ways to increase profits: charging customers a penalty when they do not use enough electricity during the month.  Imagine if broadband providers with Internet Overcharging schemes followed suit.

After Texas deregulated electric utilities, an increasing number of companies are using their freedom to find new, creative ways to tack on additional fees and surcharges that might normally be considered the cost of doing business.

CenterPoint Energy, a Fortune 500 corporation providing service in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas would like to introduce you to its Minimum Usage Penalty — a $9.95 fee applied to Texans caught using too little electricity from the company.

While most utility companies set a basic customer charge applicable to everyone, which covers the cost of your electric meter, power lines and their upkeep, billing, and other administrative expenses, many Texas power companies are billing consumers a monthly fee for conserving too much electricity.

The concept flies in the face of common sense, especially as the state contends with dozens of 100+ degree summer days and pleas from utilities for customers to cut back on energy use.  But if some do, especially low-consumption customers in apartments or those who maintain part-time residences, they’ll pay a penalty for doing so.

The Texas Electricity Ratings Blog found more than a dozen power companies with similar policies, with penalties as high as $12.96 for using less than 1,000 kWh per month:

Ambit Energy: $9.99 for less than 1000 kWh per month
Amigo Energy: Depending on the plan it is $9.95 of $6.95 for less than 1000 kWh per month
Bounce Energy: $4.95 for less than 1000 kWh per month for almost all of their plans, except intro plans are $6.96 per month for less than 1000 kWh.
Champion Energy: $4.95 for less than 500 kWh per month
Cirro Energy: $5.25 for less than 1000 kWh per month
Direct Energy: I couldn’t find a Monthly Fee in their Terms of Service or EFLs
Dynowatt: $6.95 for less than 1000 kWh per month
First Choice Power: $5 for less than 650 kWh per month, plus a $4.95 base charge
GEXA Energy: Seems to simply use a sliding rate per plan for different usage w/o a minimum charge
Green Mountain Energy: Didn’t seem to see any minimum usage charge in the EFL or Terms of Service
Mega Energy: $12.96 for less than 1000 kWh per month
MX Energy: Seems to simply use a sliding rate per plan for different usage w/o minimum charge
Reliant Energy: $9.95 for less than 800 kWh per month
Southwest Power & Light: I didn’t see minimum usage but they had a $7.95 monthly meter fee.
Spark Energy: $8.99 for less than 1000 kWh per month
StarTex Power: $4.99 for less than 500 kWh per month
Tara Energy: $6.95 for less than 500 kWh per month
Texas Power: $10.00 for less than 1000 kWh per month
TXU Energy: TXU uses a base $4.95 charge and sliding rates for less or greater than 1000 kWh, per plan.

[flv width=”600″ height=”358″]http://www.phillipdampier.com/video/KTRK Houston Higher Bills for Not Using Enough 7-11.flv[/flv]

KTRK in Houston provides surprising information about Texas utility usage-based-billing rates — power companies will charge you a penalty for not consuming enough electricity.  Better hope broadband providers angling for UBB don’t catch on.  (3 minutes)

Dollar-a-Holler News: Former Congressmen-Turned-Industry-Hacks Attack Unlimited Internet

Ford, Jr.: Making his former public service pay-off with dollar-a-holler advocacy on behalf of Big Telecom.

Former U.S. Senator John Sununu and former U.S. Congressman Harold Ford, Jr., share several things in common:

  1. Voters tossed them out of their elected offices (or refused to elect them to higher ones) for poorly representing their interests;
  2. Both are honorary co-chairs of Broadband for America, the country’s largest Big Telecom-industry-funded astroturf effort;
  3. They don’t understand the concept of content provider traffic-hosting, and the traffic expenses they already pay.

Both jointly penned a letter in the San Jose Mercury News accusing Netflix of enjoying undeserved streaming profits, “subsidized” by large cable and phone companies that deliver broadband Internet service to paying customers:

Netflix’s current pricing model allows unlimited downloads for $7.99 per month. Netflix saves, with every download, approximately 40 cents that would otherwise be paid to the U.S. Postal Service. If the average customer downloads 10 movies and TV shows a month, Netflix will save $4 a month for each of its 23 million customers.

Obviously these massive transmissions over the Internet are not really free. Someone is paying for them. That “someone” is the millions of broadband subscribers, whether or not they are Netflix customers.

How is that fair?

Netflix argues that the marginal cost to the network providers of streaming a half-hour TV show to a residential customer is “one penny.” This ignores the hundreds of billions of dollars in sunken network investments needed to create that one-penny marginal cost efficiency at the customer’s end.

[…] It hardly seems fair to make users of these services pay more in order to subsidize Netflix’s costs of delivering their videos online.

This call for a fairer pricing model and a more realistic long-term investment strategy has bipartisan support. In 2010, the FCC said government policy should not discourage “broadband providers from asking subscribers who use the network less to pay less, and subscribers who use the network more to pay more.”

Neither former elected official comes to the debate with any direct experience as a telecommunications specialist, but since when does that matter.  They know how to deliver talking points-on-demand.

Sununu: New Netflix Math

Netflix, like every content producer on the Internet, pays hosting and content delivery fees to place their content online.  Netflix hires a content delivery network to regionally distribute its video streaming to ensure the best, and most efficient route to ensure an uninterrupted viewing experience.  While Netflix’s incremental costs may seem low, they still amount to millions of dollars annually in transport costs.  And the online video streamer already pays extra additional fees to some of the largest broadband providers in the country, including Comcast.

The other factor Ford and Sununu ignore is the bill at the other end — the inflated cost for broadband service consumers already pay.  For $40+ per month, consumers pay for service precisely to obtain the content of their choosing, and millions choose Netflix.  That monthly broadband fee, far in excess of the actual cost to provide the service, more than compensates providers for the “network investments” that are now declining at a rapid rate, even as broadband bills keep rising.

No doubt part of your broadband bill goes to pay for industry astroturf operations like Broadband for America, which doesn’t represent a single consumer, even though you are paying for it.  Of course, the marginal cost to hire industry lobbyists and their former legislative friends who today represent their interests (not yours), is pretty low on a per subscriber basis.  It hardly seems fair to us that subscribers should be footing the bill for groups like Broadband for America, who regularly advocate against consumers’ best interests.

If providers are looking for more money to improve their networks, perhaps they can start by cutting off Broadband for America, an industry mouthpiece that cannot even get its core arguments anywhere near actual facts.

Cornell University Students Up in Arms Over Internet Overcharging on Campus

Phillip Dampier August 24, 2011 Competition, Consumer News, Data Caps, Online Video, Verizon 4 Comments

Cornell University students pay an average of $37,000 a year (before housing, student fees, and other expenses) to attend one of America’s most prestigious universities.  When they arrive on-campus, it doesn’t take long to learn the college has one of the nastiest Internet Overcharging schemes around for students deemed to be using “too much Internet.”

For years, Cornell limited students to less than 20 gigabytes of Internet usage per month, only recently increasing the monthly allowance to 50GB this summer.  Cornell’s overlimit fee starts at $1.50 per gigabyte, billed in megabyte increments.  Now some students are pushing back, launching a petition drive to banish the usage limits that curtail usage and punish the 10 percent of students who exceed their allowance.

Christina Lara, originally from Fair Lawn, N.J., started the petition which has attracted nearly 300 signatures over the past few weeks.

“Cornell students, along with students across the world, rely on the Internet to pursue their academics, independent research, and leisure activity,” Lara writes. “We should not be subjected to charges for our Internet usage, particularly because our curriculums mandate we use the Internet. Despite this, Cornell University continues to adopt NUBB (Network Usage-Based Billing), which charges students for exceeding the 50 gigabyte per month ‘allowance.'”

Lara incurred bills as high as $90 a month in overlimit fees last year, thanks to regular use of Netflix and Skype for online video chats with friends and family back home.

Internet fees for on-campus housing are included in the mandatory student services fee.  Although Time Warner Cable has a presence on campus, most residence halls don’t appear to be able to obtain service from the potential competitor, which sells unlimited Internet access in the southern tier region of New York where Cornell is located.  Instead, Cornell students on campus rely on the university’s wireless and Ethernet broadband network, and DirecTV or the university’s own cable TV system for television.

Lara

The apparent lack of competition makes charging excess-use fees for Internet usage easy, critics of the fees charge.

“It’s much easier if you live off-campus or in one of the apartment complexes students favor,” says Neal, one of our readers in the Ithaca area who used to attend Cornell.  “The only complication is getting access to the University’s Intranet, which is much easier if you are using their network.”

Neal says Verizon delivers landline DSL to off-campus housing, but not on-campus.  Because the service maxes out at 7Mbps, most who have other options sign up for Time Warner Cable’s broadband service instead.

“It’s cheaper on a promotion and much faster, and it’s still unlimited,” Neal says. “Hasbrouck, Maplewood and Thurston Court were the only residential buildings that offered the chance for Time Warner Cable on-campus, and only if the wiring was already in place.”

Neal notes many apartment complexes off campus have contracts with Time Warner Cable, which means cable TV and basic broadband are included in your monthly rent.  Some Cornell students who live on or near campus try to make do with a slower, but generally free option — the Red Rover Wi-Fi network administered by the University.  Others reserve the highest usage activities for computers inside university academic buildings, where the limits come off.

Lara complains Ithaca, and the southern tier in general, is hardly an entertainment hotbed, making the Internet more important than ever for leisure activities.

Time Warner Cable provides the rest of Ithaca with unlimited Internet.

“If Cornell was situated in a major metropolitan area with a vast nightlife that could accommodate the interests of most, if not all, our undergraduates, then many Cornellians wouldn’t be so inclined to stay in their rooms and get on the Internet,” Lara says. “But that’s not the case. Cornell’s Greek life dominates the social scene, making ‘nightlife’ a dividing factor in the community.”

Tracy Mitrano, Cornell’s director of information-technology policy, told The Chronicle the vast majority of students will never hit the cap, and those that do cannot be charged more than $1,000 a month in overlimit fees, regardless of use.  Those that do exceed the limit typically find a monthly bill for “overuse” amounting to $30.

“The approach that Cornell uses offers transparency and choice,” said Mitrano. She noted that Cornell provides students with clear information regarding their network usage by alerting them by e-mail when they are about to hit the limit and by setting specific rates for overuse fees.

“The choice seems to be using the university network or moving off-campus to buy Verizon or Time Warner Cable broadband to avoid the usage cap,” counters Neal. “I am not sure their ‘choice’ argument flies if students don’t have the option of signing up for Road Runner in their rooms on their own, bypassing the Internet Overcharging altogether.”

Both Neal and Gregory A. Jackson, vice president of Educause, seem to be reaching consensus on whether or not universities should be charging students for Internet separately from room and board.  Jackson notes it is a discussion being held at an increasing number of universities.  Neal thinks having a wide open access policy to deliver competition could solve this problem in short order, and students should make the decision where to spend their broadband funds themselves.

“If Cornell’s IT bureaucracy faced unlimited-access competition from Verizon and Time Warner Cable, do you think they’d still have a 50GB usage cap, considering only a small percentage of their captive customers exceeded it,” Neal asks.  “Of course not.”

[Thanks to PreventCAPS for the story idea.]

Sprint’s iPhone? Company Rumored to Introduce Iconic Phone in October

Phillip Dampier August 24, 2011 Broadband Speed, Competition, Consumer News, Data Caps, Sprint, Video, Wireless Broadband Comments Off on Sprint’s iPhone? Company Rumored to Introduce Iconic Phone in October

Rumors are swirling Sprint will begin selling Apple’s iconic iPhone this October, bringing the number of carriers supporting the wildly popular phone to three.  Sprint shares soared 10 percent on the news.  But while Sprint customers and shareholders are celebrating the potential imminent arrival of iPhone, launching the phone on the Sprint network is no simple matter, especially for the last remaining carrier delivering truly unlimited data.

On the Plus Side

Apple’s iPhone has become a must-have for a significant number of consumers.  They won’t leave the phone behind to switch carriers, not even for Verizon Wireless, until they introduced the phone earlier this year.  Now Sprint can win its own share of iPhone devotees.

Sprint’s iPhone promotions could draw customers away from larger carriers, especially enticed by Sprint’s worry-free unlimited data plan that has become extinct at other wireless companies.

The iPhone locks customers into new two-year contracts with Sprint, helpful security at a time when AT&T threatens to further consolidate the wireless industry in its efforts to acquire T-Mobile.

On the Down Side

Sprint’s phone subsidy expenses will skyrocket with Apple’s iPhone, which commands the highest subsidies in the industry.  Analysts suspect AT&T currently shells out up to $425 for iPhone 4 and $375 for iPhone 3GS.  Then AT&T sells the phone to consumers for $200 or less, making the subsidy back over the life of the two year contract.  That hits AT&T’s cash on hand hard.  For Sprint, regularly accused by Wall Street of spending too much on customer promotions, it will only increase those costs.  Sprint pays less than $150 for its top of the line Evo phones in comparison.

One guarantee the iPhone always delivers: Lots of data hungry users.  The introduction of the iPhone may ultimately threaten Sprint’s unlimited usage experience because of demand placed on an already burdened 3G network.  There is also no guarantee the first Sprint iPhone will support Sprint’s 4G network.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/KMBC Kansas City Sprint May Sell iPhone in October 8-24-11.mp4[/flv]

KMBC in Kansas City talked with customers looking forward to Sprint’s iPhone.  Sprint is a major employer in Kansas City.  (2 minutes)

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