Joe Brown was obviously not the right person for G4TV’s Attack of the Show to talk to about the issue of Internet Overcharging.

As AT&T begins notifying their DSL and U-verse customers they are about to face usage limits on their broadband service, G4TV sought out reaction from the features editor of Gizmodo.com, who was wholly unprepared to inform viewers about the facts behind AT&T’s usage caps and their implications for customers.

While Brown and G4TV were joking about users having to curtail game downloads, for millions of AT&T customers, it’s no laughing matter.

AT&T’s announced 150-250GB limits will eventually cost customers $10 or more for each extra 50GB allotment, on top of their already-expensive broadband service package.

“It really had to happen eventually I think,” Brown told viewers.  “People are using a lot of bandwidth.”

Gizmodo's Joe Brown talks with G4TV's Attack of the Show

But Brown’s observation conflicts with AT&T’s own claim “only a tiny minority of customers” will use more than the company wants to allow, with the average AT&T customer consuming 18GB per month.  AT&T isn’t telling the full story about that either.

For those “heavy users” AT&T wants to restrict first, the implications go well beyond curtailing Netflix and playing online games.

“As a software developer who works under a Linux environment and is forced to telecommute from home one week per month, these caps would absolutely kill me,” writes Joe Stein from Sparks, Nev.  “If you are a retired person using your computer to check e-mail and browse the headlines, you will obviously never exceed AT&T’s caps, but for technology innovators and those like me in the software development field, 150GB is nothing.”

Stein downloads regular updates for Linux, exchanges software back and forth with the office several times a day, and uses video conferencing regularly when he works from home.

“Not all online video is about adult entertainment or downloading movies,” Stein says.  “Usage caps hurt anyone who has to work with large files or business-related video, and after the events this week, AT&T can afford to leave off the caps.”

Brown claims AT&T conducted “a study” in two cities which found that 98 percent of their customers used far less than the usage caps would allow.  What Brown does not know is that those two cities are Beaumont, Texas and Reno, Nevada — hardly superstars in the tech revolution.

“Nobody moves to greater Reno to be a software superstar, which is why I am in San Jose, Calif., all the time,” Stein says.  “But there is more to this area than casinos.”

Stop the Cap! has been helping consumers in both cities avoid AT&T because the company’s “study” came at the same time it was experimenting with an Internet Overcharging scheme that limited customers to as little as 20GB of usage per month — a strong incentive for customers to avoid high bandwidth services,  or better yet AT&T.  So it’s no surprise broadband users who know better chose an alternative provider, including Stein.

“I first became aware of the usage cap debacle a few years ago when AT&T tested usage caps in the Reno area, which covers Sparks,” Stein says.  “I saw the impact first hand when customers started getting notified they would have to pay substantially more for basic Internet service.”

AT&T first limited their broadband customers to as little as 20GB of usage per month, then claimed the average customer only uses 18GB, making their 150GB DSL cap "generous."

Stein left for the cable company — Charter Communications, and they have usage caps too, but they are rarely enforced and much higher than what AT&T offers DSL customers, Stein says.

Brown claims AT&T is trying to “get out ahead of people using too much,” a point in conflict with the fact AT&T is willing to sell consumers additional bandwidth on its “overcongested” network.

Brown’s suggestion that “bandwidth costs money” is partially true, but not in the context of AT&T’s usage limits.  The company that can afford fiber optic upgrades to deliver limitless television and telephone service apparently cannot afford the pennies in bandwidth costs customers consume as part of their broadband service, which can run $50 a month or more.

Pondering broadband usage “fairness” is a losing proposition for consumers… and reporters, too.

Once someone blindly accepts the premise AT&T needs data caps, with no evidence usage presents a technical or financial challenge for the company, the debate is quickly reduced into a numbers game about “how much usage is fair.”

Clearly for Brown and his friends, who admit they are dangerously close to reaching or exceeding AT&T’s limits, the answer to Brown wondering aloud if the caps would “do it for him” should be no.

Stop the Cap! believes no cap is worth living with, especially on AT&T’s enormous-sized broadband network, now increasingly designed to handle the multimedia rich Internet and their U-verse platform.

It is doubtful many will be assuaged by Brown’s comments that “AT&T sounded pretty cool” about how they will deal with those who exceed their arbitrary usage limits.  Why?  Because after the “fair warnings” AT&T will provide customers on its artificially limited network, they will drop the sledgehammer of higher bills on top of customers’ heads.

Brown should know better, especially after finding AT&T unwilling to discuss how often it intends to revisit its usage cap levels.  AT&T’s counterparts in Canada have already foreshadowed the answer.  Once the cap regime is in place, several companies lowered them, sometimes repeatedly, to further monetize broadband usage.  They also raised the prices of overlimit fees, often substantially.

AT&T depends on uninformed consumers and reporters not understanding the true facts about Internet Overcharging schemes.  It’s not too late for reporters like Joe Brown to undo the damage, however.

Stop the Cap! strongly encourages everyone to examine the evidence we have compiled here over the past two and a half years.  It’s not hard to discover AT&T’s usage caps have nothing to do with fairness, are arbitrary and unnecessary, and come as a result of providers seeking higher profits in an undercompetitive marketplace.

If we do not uniformly and loudly oppose usage limits, America’s broadband rankings, digital economy innovation, and high technology jobs are all at risk, just to satisfy AT&T’s insatiable appetite for higher profits.

(P.S. – Joe: How did you miss Comcast has been capping their customers at 250GB for two years now.  Say it ain’t so, Joe!)

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/G4TV Attack of the Show ATT Caps Their Data Usage 3-15-11.flv[/flv]

G4TV’s ‘Attack of the Show’ misses the boat on AT&T’s Internet Overcharging scheme.  They did better covering Time Warner Cable’s attempt at Internet Overcharging in 2009.  It’s time to revisit this issue and get involved in the fight that could hurt the very audience watching this show.  (6 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/UBB is Nonsense.flv[/flv]

François Caron produced this video succinctly smashing the myth that “usage-based billing” and “usage caps” are about fairness or fight congestion.  In this case, Caron refers to Canadian providers, but the story is much the same south of the border.  These Internet Overcharging schemes are nothing more than an effort to control what you can do with your broadband connection.  AT&T wants a 150-250GB usage cap on broadband, but has limitless capacity for television and telephone service.  They also have $39 billion to buy T-Mobile, but need to overcharge you for broadband service.  Bell in Canada wants -every- broadband user in Canada to pay this ripoff pricing.  Share with anyone who thinks paying for usage is anything like paying for water, gas, or electricity.  It’s not!  (6 minutes)

Verizon delivers fiber-to-the-home service over its FiOS network.

Verizon Communications says it will not run an Internet Overcharging scheme on its wired broadband customers.

The company that knows about investment and upgrading their networks like few others — bringing true, fiber-to-the-home FiOS service to customers across several states — says it has no need to impose usage caps or metered billing on its wired broadband customers.

“This is something we have looked at in the past, and we’ll continue to evaluate what’s best to ensure our customers get the best broadband service for the best value,” Verizon spokesman Bill Kula told Broadband Reports. “We have no plans to implement usage-based pricing for our fixed broadband customers,” Kula says.

Verizon’s announcement provides additional ammunition against AT&T’s unjustified 150-250GB usage caps over claims it faces congestion issues.

The company doesn’t share AT&T’s “congestion problem,” probably for two reasons:

1. Because it does not exist.
2. Verizon has upgraded their network to keep up with demand, winning new customers with their top-rated FiOS fiber to the home network.

Karl Bode sees right through AT&T’s arguments:

If you believe AT&T’s claim that the new pricing is about congestion and not about protecting U-Verse revenues from a Internet video — and many don’t — Verizon’s decision to spend $24 billion on upgrading more than half of their network to fiber to the home would make a Verizon decision to follow suit a very tough sell. AT&T has previously stated their last-mile customers see little to no congestion, and Verizon’s seeing even less.

Kula notes Verizon doesn’t oppose the use of usage caps, but their TOS allows them to handle any users they deem particularly gluttonous, and even then — Verizon makes it clear to us they’ve never disconnected one of these users. “Verizon terms of service were written in a way to allow us to terminate users if they violate our acceptable use policy, and excessive use ‘could’ constitute a violation,” says Kula. “However, we’ve not disconnected any consumer, small business or mass market customers to date.”

Stop the Cap! has never objected to terms and conditions which provide an escape clause for a provider that encounters a customer creating significant problems on its network, such as e-mail spamming, illegal activity, or causing serious problems for other users.  These terms and conditions are a part of every Acceptable Use Policy, and responsible providers don’t activate those provisions on a whim.

It’s too bad some AT&T customers can’t choose an alternative to a company who promised great things with U-verse, and then put unjustified limits on customer enjoyment.

In a stretch even the most accomplished Yoga master would never attempt, an industry-funded dollar-a-holler group has told Congress that Internet Overcharging is a useful tool to combat online piracy.

On Tuesday, Daniel Castro, an analyst at the Information Technology and Innovation Foundation (ITIF), testified before the House Judiciary Committee on the issue of combating “rogue sites [that] operate in a low risk, high reward environment.”

In December 2009, ITIF proposed a number of policies to help reduce online copyright infringement, especially in countries that turn a blind eye to copyright enforcement. The purpose of these policies is to establish a robust enforcement mechanism to combat IP theft online. These recommendations include the following:

• Create a process by which the federal government, with the help of third parties, can identify websites around the world that are systemically engaged in piracy;
• Enlist ISPs to combat piracy by blocking websites that offer pirated content, allowing pricing structures and usage caps that discourage online piracy, and implementing notice and response systems;
• Enlist search engines to combat piracy by removing websites that link to infringing content from their search results;
• Require ad networks and financial service providers to stop doing business with websites providing access to pirated content;
• Create a process so that the private sector can consult with government regulators on proposed uses of anti-piracy technology;
• Fund anti-piracy technology research, such as content identification technology;
• Pursue international frameworks to protect intellectual property and impose significant pressure and penalties on countries that flout copyright law.

Castro’s idea of allowing providers to establish “pricing structures and usage caps” stands out like a sore thumb in the context of battling piracy because it is the only recommendation on the list that targets every broadband user with the same broad brush, punishing every customer whether they are engaged in piracy or not.

It would be like setting up roadblocks and searching every vehicle in a city to search for a shoplifter.  Every individual is found guilty before being proved innocent, and will be forced to pay higher prices regardless of the outcome.

The ITIF proposal runs contrary to years of efforts by Internet Service Providers to avoid being involved in the personal business of their customers.  In 2009, major ISPs wanted no part of enforcing a proposal from the record industry for a “three strikes, you’re out” plan.  Verizon, among others, made clear copyright enforcement was not their responsibility to police, although many ISPs are willing to forward copyright infringement notices to individual customers.

Castro’s testimony goes over the top when he blames his own suggested pricing antidote for “hurting law-abiding consumers who must […] pay higher prices for Internet access to compensate for the costs of piracy.”

Of course, no ISP has ever suggested they would use the extra revenue earned from Internet Overcharging to combat another industry’s piracy problem.

His sweeping indictment against consumers extends beyond nipping at their bank accounts on behalf of telecommunications companies who help fund the group he represents.  He also suggests those who oppose his piracy prescriptions are either in league with, or defenders of piracy — or other offenders ranging from criminal enterprises to kiddie porn peddlers.

Castro’s support for usage caps to control illicit online activities leaves collateral damage as far as the eye can see.  It also simply won’t work for many forms of piracy Castro complains about.  ISPs with usage caps go out of their way to note even the most draconian limits still allow thousands (if not hundreds of thousands) of songs to be downloaded — legal or otherwise.  Castro testified e-published books are now increasingly vulnerable to piracy, content compact and easy to obtain even with usage limits.  Combating websites dealing in counterfeit goods with usage limits isn’t even worth trying.

What Castro’s proposal will do is limit access to the growing amount of legitimate online video traffic.  While the author cites statistics that “one in four bits of traffic traveling on the Internet today is infringing content,” (taken from a report commissioned by NBC-Universal, who has a major interest in this battle) he ignores other facts.  Namely, more than three-quarters of all broadband traffic is legal and legitimate.  Nearly 20 percent of primetime broadband traffic is coming from companies like Netflix who are in the business of providing a legal alternative to video piracy.

Castro’s argument on usage caps simply falls apart: ISPs, who have never been particularly interested in being the enforcement divisions for Hollywood studios, should be given the right to limit broadband usage and raise prices to combat piracy even when most of that traffic heads for legitimate websites?

Public Enemy #1 for Content Theft circa 1981: The $1,400 VCR

Online piracy enforcement should not involve Internet Overcharging schemes, and arguments that it should only illustrate why so many consumers and public interest groups get nervous about industry-proposed enforcement mechanisms.  Too often, they ignore presumption of innocence before guilt, browbeat alleged offenders into settlements to avoid costly litigation — guilty or not, and turn over policing to an industry with a long track record of overreach to protect their business interests. The record speaks for itself:

• Demands to ban videotape recorders in the 1970s and early 1980s for “piracy reasons”;
• Tax cassettes and video tapes to cover alleged piracy losses in the 1980s;
• Tax blank digital media in the 1990s because of “rampant piracy”;
• Impose monthly “piracy recovery surcharges” on broadband users in the 2000s;

Now the industry wants to police the piracy problem on its own terms.  As before, the proposed solutions are worse than the problem.

Back to the future.  In 1981, ABC’s Nightline ran this report on the entertainment industry suing a VCR owner, retailers, and manufacturers for piracy over taping a television station with a videocassette recorder.  The concern in 1981 — technology was moving faster than copyright law could keep up.  Many of the yesterday’s players are part of today’s debate, including Universal, the company that purchased research indicting 20 percent of all Internet traffic as “illegal.” (Part 1 of 3 – 9 minutes – Courtesy WEWS-TV Cleveland, ABC News, and ‘videoholic1980s’)

Today’s piracy debate rehashes the same accusations of content theft, only the technology has changed.  One executive tells the Nightline audience he’s offended at being told the industry already earns enough.  The movie and television industry predicted calamity over the VCR more than 30 years ago, saying it would cost them billions in lost profits.  Hollywood eventually lost the argument against the VCR and their businesses turned out fine, earning billions in revenue selling videotapes of movies and television shows to consumers they were willing to sue just a few years earlier. (Part 2 of 3 – 9 minutes)

Before Washington is asked to join the panic-frenzy over online piracy, perhaps they should recall the same predictions of doom and gloom made by many of the same companies — predictions that were overstated.  Imagine if they had succeeded in banning the VCR?  Indeed, just as before, Hollywood stands to earn billions online when they make their content available for easy, legal viewing at a reasonable price.  Slapping usage limits on broadband consumers is the worst idea ever to promote legal viewing of digital content because it discourages customers from shopping for it.  (Part 3 of 3 – 4 minutes)

South Africans won uncapped broadband service one year ago tomorrow when an upstart provider — MWeb — unveiled its “Free the Web” campaign, delivering usage-limit free Internet access to customers across South Africa.

The company’s move to unlimited, flat rate service was heavily criticized by competing providers, who enforce draconian usage limits and have tried to convince customers the global trend was moving towards metered broadband.  But MWeb president Rudi Jansen dismisses the notion limiting broadband is the way to go, suggesting usage caps and meters are more about profits than serving customers.

Today, MWeb’s uncapped broadband is a runaway success, with more than 50 percent of its customers switching to the meter-free service.  It has been profitable, too.

“We are running ahead of our business plan and all our products are profitable,” Jansen tells TechCentral.

Now the nation’s semi-privatized, 39% state-owned phone company Telkom is widely expected to stop the erosion of its own broadband customers by adopting flat rate broadband service itself.

For Jansen, that would represent a welcome move.  The Internet visionary wants to transform South African broadband away from its current expensive pricing model and throw the Internet wide open.

“I’m looking forward to it,” Jansen says. “The sooner they launch it the better.”

The arrival of flat rate broadband made headlines across the country in 2010. (click to enlarge)

South African broadband has coped with challenges few other countries endure.  International connectivity has always been one of the biggest — sustaining traffic on satellite backbone links or underpowered undersea cables first forced providers to limit Internet use because of capacity concerns.  But new fiber-based underseas cables from Seacom and Wacs, including the forthcoming 5.1Tbps West African Cable System project will dramatically increase capacity and slash costs.

Jansen (Courtesy: TechCentral)

Yet several of his competitors want to keep the caps on and prices high, earning lucrative profits on a service Jansen says is becoming less costly to deliver every day.

Jansen admits MWeb is currently forced to traffic shape certain activities on his network, particularly bandwidth-intensive peer to peer traffic, because other providers in the country don’t agree with his wide-open view of the Internet.

He wants every provider in South Africa to agree to “open peering,” a practice that allows providers to exchange traffic with each other without charging transit fees.  He also wants to see wholesale mobile wireless pricing come down.  In Africa, mobile broadband has a strong place in a market where cable infrastructure (and broadband speed) is often lacking.

Telkom, South Africa’s equivalent to AT&T or Bell, is cited by Jansen as the biggest impediment to his plan to deliver truly unfettered, unlimited access.

Some South Africans deride the state phone company as "Hellkom"

In South Africa, broadband customers pay two providers — Telkom for the monthly rental of the telephone line and an ISP for the DSL service that connects through it.  Jansen says Telkom’s broadband line rental prices are too high.  But more importantly, the interconnection fee Telkom charges providers to access its network is “absolutely ludicrous.”

“Those prices are far more than the price of international connectivity,” Jansen says. “Telkom charges us to get access to their last mile and then charges end users to get access to the same last mile, so they make double money on it. And it’s completely mispriced.”

Despite the challenges from other providers, MWeb will celebrate the first anniversary of uncapped broadband tomorrow with a surprise announcement, probably targeting small business clients.