Wood

Roku CEO Anthony Wood told a cable trade publication he is not worried that providers will kill the market for his online video set-top box with Internet Overcharging schemes.

Wood told Multichannel News the broadband industry faces enough competition to prevent one or both traditional providers from implementing usage caps and metered pricing for broadband service.

“What we see from a practical point of view in the marketplace is that there’s enough competition from cable, telcos and wireless so that in every market there’s an unlimited option — and the price is competitive,” he said.  “Unlimited sells — it’s just a good marketing strategy.”

Wood may want to inform broadband providers of that, because several American phone and cable companies are experimenting with slapping usage limits on their customers, making his web-streaming set top box an expensive proposition.  For customers of Frontier Communications in Elk Grove, Calif., using too much Roku could mean broadband bills as high as $300 a month.

With some HD movies consuming 2-4 gigabytes per title, some companies experimenting with usage limits as low as 5GB per month would make online video the primary culprit for consumers blowing through their monthly usage allowance.  After one bill with overlimit fees arrives, the Roku box will be the first thing to go.

Netflix, a major investor in the Roku box, could see its plans to shift to online distribution of its massive DVD rental business stymied by large phone and cable providers, many of whom see Netflix and other online video services as competitors who use their broadband service to send movies to consumers.  Some cable and phone companies contend Roku, Netflix, and other online video streamers are freeloaders — using their networks “for free” and demanding additional compensation to keep carrying their content.

Wood discloses another reason why cable and phone companies could potentially adopt a hostile position towards his 100-employee operation — “cord cutting.”

Wood told Multichannel News about 12% of Roku customers say they have canceled cable or satellite TV after buying the set-top while another 12% said they reduced their service level.

The cable industry is trying to retain customers by putting an increasing amount of cable content online for subscribers who maintain their cable-TV package.  Roku gives subscribers one more reason to downgrade or cancel service, a problem that could be stopped with an Internet Overcharging scheme that makes using the product an expensive proposition.

Some Roku watchers believe Wood is making a mistake underestimating the telecom industry’s willingness to protect its turf.

Two years ago Roku VP Tim Twerdahl said the company was not worried about Comcast’s 250GB download cap.  But since then, other providers have proposed far lower caps.

Roku is best known for letting Netflix subscribers stream the video rental firm’s online titles direct to television sets.  But Roku also delivers access to Hulu, Amazon video, and a growing number of new “channels” delivering classic movies, music/music videos, news, and user-created programming.

The company offers three set-top models: HD ($60), which delivers up to 720p video; XD ($80), which adds support for up to 1080p and 802.11n Wi-Fi; and the XDS ($99), which offers dual-band 802.11n and component video and optical audio outputs.  The top model occasionally sells for as little as $79.99 when on sale from Amazon.com or direct from the manufacturer.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Introducing Roku.mp4[/flv]

A brief video introduction to Roku.  (1 minute)

Hammer Time: MetroPCS introduces 4G/LTE service plans that establish pay walls for familiar web content.

Want a sneak preview of America’s Internet experience without real Net Neutrality?  Look no further than MetroPCS which has managed to turn the clock back to the early days of “mobile web,” where carriers pre-selected content and blocked much of the rest.  Want access anyway?  Then spend some time with a spreadsheet to figure out what service plan you’ll need and start counting out some ten dollar bills because MetroPCS promises a Long Term Expensive 4G  experience.

The business press focused on MetroPCS’ new pricing — delivering what the company calls “a selection of data access levels to meet customers’ lifestyles.”  But some public interest groups considered today’s announcement the first gauntlet thrown in the Net Neutrality war since the FCC voted to approve a watered down version of the open Internet policy last month.

MetroPCS called their new plans a boon to customers.

“Our customers told us they wanted more video, more sharing of their content and more Web browsing capabilities – they want to have it all with the value and no annual contract that only MetroPCS can deliver,” said Roger D. Linquist, president, CEO and chairman of MetroPCS. “Our 4G LTE network can deliver unlimited voice and mobile broadband data services and, with these new service plans, consumers are in the driver’s seat on how much additional data access and real-time entertainment content they want to pay for on a monthly basis.”

But many customers will discover the company’s road to good intentions pitted with potholes, toll booths, roadblocks, and diversions.

Just getting on this data highway to hell could be very confusing to customers who will need to think about what websites and services they need, want, or can live without, and then finding the corresponding service plan that makes it all work.

MetroPCS says it has three new pricing levels to consider:

• The $40 service plan offers unlimited talk, text, 4G Web browsing with unlimited YouTube access.
• The $50 service plan includes the same unlimited talk, text, 4G Web services and unlimited YouTube access as the $40 plan. Additional features include international and premium text messaging, turn-by-turn navigation with MetroNAVIGATOR™, ScreenIT, mobile instant messaging, corporate e-mail and 1 GB of additional data access, with premium features available through MetroSTUDIO™ when connected via Wi-Fi, including audio capabilities to listen and download music and access to preview and trial video content.
• The $60 service plan provides the same premium features as the $50 plan, plus unlimited data access and MetroSTUDIO premium content such as 18 video-on-demand channels and audio downloads.

You'll need a smart phone to figure out what pricing plan actually delivers the services you need.

A customer could be forgiven if they assumed the $40 plan provided “unlimited web browsing,” which will be interpreted to mean they can access all of the content contained on those websites, but they would be wrong.  Beyond YouTube, MetroPCS customers will need to spend at least $10 more to access embedded video and audio, play online gaming, and access other rich media services.  Want to view videos from a website that isn’t among the carrier’s “preferred content partners?”  Forget it.

What about Skype, Netflix and other popular services?  Nuh uh.

Only the $60 monthly plan delivers unlimited data, along with pre-selected video and audio you can access… or not.

Free Press Policy Counsel M. Chris Riley called MetroPCS’ foray into the toll highway business a profit padding scheme.

“In December, the FCC chose to disregard wireless protections in its Net Neutrality order, and MetroPCS’s new scheme is a preview of the wireless future in a world without protections on the mobile Web. Such blocking of websites, services or applications would clearly be prohibited and deemed unreasonable on a cable or DSL network. Are these the kinds of restrictions the FCC really wants to promote on wireless networks?

“The open Internet order approved in December stated that the FCC was not implicitly approving practices on the mobile Web that violate its rule against unreasonable discrimination – and now we’ll see whether the agency is willing to do anything about such practices. Silence in the face of ongoing violations is no different from outright approval. If MetroPCS is allowed to engage in rampant discrimination and blocking of Internet applications and services, will Verizon be next? Will AT&T extend its history of blocking services like VoIP and Sling on its LTE network in the future?

“MetroPCS’s plan will restrict consumer choice and innovation in a developing mobile market, all for the sake of further padding its bottom line. The FCC must not stand idly by while carriers are engaging in anti-consumer and anti-competitive behavior, and we urge the agency to investigate.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/MetroPCS 1-4-10.flv[/flv]

It’s too bad the company that regularly lampooned their wireless competitors in witty commercials has now adopted the same “gotcha” tricks and traps that will leave customers trying to figure out why they can’t access the web content they thought they paid to receive.  Watch a series of amusing MetroPCS ads and a brief review of the company’s new 4G phone courtesy of TheStreet TV.  “Hello. Hello. Hello.”  (7 minutes)

The Public Interest Advocacy Centre just released a report that found deregulation in Canada's telecommunications marketplace delivered most of the benefits to providers, leaving consumers holding the higher bill.

Four years after Canada deregulated its telecommunications industry with the promise it would bring competition, better service and lower prices, Canadian consumers are instead paying too much for broadband service that delivers too little.

That is the conclusion of a new report from the Public Interest Advocacy Centre, a non-profit consumer protection organization that compared provider promises with the bills ordinary Canadians ultimately pay for their Internet service.

Michael Janigan, the report’s author told CBC News that deregulation has brought “super-normal” profits for Bell, Telus and Rogers — among Canada’s largest telecom companies — while those same providers continue to increase prices and, in some cases, reduce the amount of broadband usage customers can access before overlimit fees kick in.

“We still have three big players with over 90 per cent of the market, and they’re pretty fat and happy,” Janigan said in an interview with CBC News. “We’re still seeing the incredible clout of the big telcos in relation to their ability to swing competition in their favor.”

Bell, Canada’s largest telecom company, stands to gain even more power over the broadband marketplace with a ruling from Canada’s telecommunications authority that has direct implications for Canada’s independent service provider market.  Most third party providers obtain their Internet connectivity from Bell at wholesale pricing.  Thanks to a now-approved-request from Bell to charge wholesale customers usage-based pricing, providers are now forced to pass along those artificially high prices to Canadian consumers.

“The days of unlimited Internet service are about to become extinct in Canada,” says Stop the Cap! reader Giles in Trois-Rivières, Quebec.  “How surprised can you be that the company that sells access to competitors has managed to find a way to price that competition out of business.”

For one such competitor, Primus, the effect of Bell’s usage-based pricing will have an immediate impact on their customers’ monthly bills.

The company is now notifying customers that effective Feb. 1, the unlimited service plans that appealed to those opposed to usage-limited broadband will be now limited to just 25GB of usage per month.  Primus directly implicated both Bell and the the Canadian Radio-television and Telecommunications Commission (CRTC) for the pricing changes.

Those who exceed the limit face overlimit fees of $2.00 per gigabyte, up to a maximum of $60 per month.

Here today, gone tomorrow: Primus is discontinuing its unlimited use services. Effective Feb. 1, overlimit fees of $2/GB kick in after just 25GB of usage.

Those limits could put Primus at a competitive disadvantage with larger providers delivering lower cost plans with higher usage allowances.

“Why would you still be a Primus customer after this,” asks Giles.

Primus will not be alone among third party DSL service providers — almost all will be forced to adopt similar pricing.  The result? More expensive service for Canadian broadband customers, and major troubles for third party competitors whose new pricing could turn customers away.

The price increase is a direct result of a recent decision by the Canadian Radio-television and Telecommunications Commission (CRTC) to approve Bell Canada’s request to introduce Usage Based Billing on wholesale Internet services. Over the last four years, critics charge the CRTC with abandoning its watchdog role to protect Canadian consumers from unfair and uncompetitive practices and kowtowing to the interests of large telecom companies.

“In 2006 and 2007, the government stepped in to tell the CRTC to deregulate as a priority and to deregulate local telephone service faster promising better deals for consumers. As a our report notes, this did not happen despite all the hype”, said Janigan, author of the report, Waiting for the Dream, The Consumer Brief for Telecom Reform 2010.

In fact, the report concludes that Canada’s performance in telecommunications services such as broadband and wireless has been less than impressive, and the results for customers of cable and satellite services from deregulation of basic service has been the opposite of what should be expected in competitive markets.

“It is one thing to try a course of action that doesn’t work out: it is another to ignore the results and simply try more of the same,” said Janigan. “It doesn’t now make sense to have a government Policy Direction in place that hampers both competition and consumer protection”:

This report concludes that the failure of the regulatory reform of the last two decades to deliver the goods for ordinary residential consumers is not one that has its roots in theory, but in practice. Here, the interests of powerful stakeholders have affected the service landscape. In the same way that incumbent players used their political and economic influence and regulatory capture to get their way in the monopoly era of regulation, the winners have used the market- based system to their advantage. Neither regulation nor deregulation will engineer a thriving telecommunications industry producing innovative and efficient products and services with resultant economic growth for Canada if the decision making processes for each are skewed by conditions and assumptions that favour some stakeholders over others.

Most importantly, the governance and regulation of the telecommunications industry in Canada must respond to results. For the most part, the restructuring of telecommunications has been guided by untested economic theories, largely provided by experts engaged by the largest stakeholders. The relatively poor performance of telecommunications service for ordinary consumers should have long ago engendered a review of the  regulatory framework and market structure that is producing the same. In the last five years, the only acknowledged measure of success has been how fast telecommunications services have been deregulated with predictable market results.

The solution is not a return to old regulation but new models. First of all, there are a variety of consumer issues associated with basic rights for information, quality of service, security of service, disconnections, privacy etc. that should be met by all carriers whether they are incumbent or not. Basic service, obligations to serve, complaints resolution, and burdens of service in uneconomic areas have to be in place for all across the board. The best way to ensure that this occurs is for mandatory licensing for all carriers, with appropriate codes of conduct and enforcement with meaningful force in the form of administrative monetary penalties. The Telecommunications Act should be amended to reflect these improvements.

Interconnection with essential telecommunications facilities should be available for competitors at rates that are fair to users and suppliers. We cannot let abstruse theories supposing innovation and duplication in the absence of access to govern this important issue.

Media excitement about recent iterations of allegedly “4G” networks aside, no currently available wireless broadband service will replace the need for traditional wired broadband so long as providers limit consumption to 5GB (or less) per month.

As average consumption per household is now at least three times that level, wireless broadband customers will be faced with three choices:

1. Supplement a wireless broadband account with an unlimited, wired broadband service;
2. Be prepared to pay overlimit fees or purchase additional accounts or “usage packs;”
3. Reduce usage to remain within plan limits.

Sprint currently remains the largest carrier offering unlimited access to its 4G network, also sold independently under the Clearwire brand.  But as Clear subscribers found out, “unlimited” comes with “unlimited hassles” if Clear’s “intelligent network management” software catches you using it “too much.”  Speeds are quickly throttled downwards, well below even Sprint’s slower 3G network.

Many of Clear’s customers signed up in response to ads promising the 4G wireless service as a “home broadband replacement.”  Ditch your cable modem or DSL service for a wireless alternative!  Some salespeople even dared to suggest Clear was faster than cable or DSL.  Only for most it is not.

Every carrier has their own version of “4G” here or on the way, most of which can deliver better and faster service than the 3G alternative, but wireless providers are hellbent on ensuring customers never get used to the concept of truly unlimited service.

Glenn Britt, CEO of Time Warner Cable, admits the wired broadband industry erred when it got people used to all-you-can-use broadband.

“We made a mistake early on by not defining our business based on the consumption dimension,” Britt told investors back in 2009 when the company was contemplating its own metered usage trials.

4G networks can bring out the "data hog" in everyone if you actually take advantage of the faster speeds to stream multimedia.

Wireless providers are working hard not to repeat that mistake.

AT&T found usage caps anger customers, but got away with implementing a 2GB monthly wireless usage cap tied with the introduction of the wildly popular newest iPhone (and helped by grandfathering existing unlimited customers until their next phone upgrade.)

“If I had a baby in my hand and my iPhone and I had to drop one, I’d drop the baby,” laughed Dallas iPhone owner Luisa Benton.  But Benton’s love for her Apple phone does not extend to AT&T’s network, noting she has dropped calls and had poor reception in certain areas.

Many iPhone owners retain their cable or DSL broadband service because AT&T’s wireless usage cap limits what they can manage online, and the company’s network problems only adds insult to pocketbook injury.  With many locked into two year contracts, few are going to brave early termination fees to find an alternative.

As providers upgrade their networks, they are also upgrading their prices.  Verizon’s new LTE network, for example, carries a premium price tag for those wishing to use it.

Customers looking for a faster wireless experience will pay $50 for 5 GB or $80 for 10 GB of data on Verizon’s new network.  Run over those limits and an overlimit fee of $10 per gigabyte kicks in.

“People are never going to use wireless networks the way you see them on the commercials,” writes Stop the Cap! reader Jo-Anne in Seattle.  “They are always watching movies or TV shows — services you absolutely don’t want to risk at those prices.”

J0-Anne asked a Verizon representative if new 4G smartphones would be permitted to use unlimited data plans.

“‘Don’t bet on it,’ was the reply I got — Verizon may keep unlimited around for 3G network users only,” she said.

If true, Verizon will deliver overpriced, inadequate service for any customer looking to leave their home broadband account behind.  As soon as multimedia gets involved, usage caps rapidly become a dealbreaker.

Verizon recently contracted with Bridgewater Systems Corporation to supply it with data management software.  Bridgewater is also a major supplier of network throttling solutions to ferret out heavy users and impede their speed, as part of “fair use policy” regimes.

Some wireless companies are trying to have their cake and eat it too — selling “unlimited” wireless broadband service hampered by an aggressive “policy control” network management scheme.  You’ve seen the ads promising unlimited access, but probably missed the fine print warning the provider will throttle your wireless broadband speed to something comparable to dial-up once they deem you a data hog.

Cricket and Clear are both notorious for throttling customer speeds and delivering disclosures of the practice more impenetrable than North Korea.

A Clear blog entry tried to simplify the legalese:

During times of high network utilization our network management system may limit speeds, but we never limit the amount of data a customer with an unlimited data plan may use. The algorithm in place reviews several factors including long and short-term usage, current network capacity, and network demand to determine if network management needs to be applied.

The end result is that a few heavy users temporarily give up some speed during limited times of high demand so that everyone can have a good experience. A majority of customers are having a positive experience and experiencing faster speeds during times of greatest demand since these enhancements were enacted.

The “positive experience” Clear’s blogger reports may be wishful thinking, however, after reading the company’s support forums.  They’re overloaded with thousands of angry customers and probably many more ex-customers.  An “unlimited” broadband experience is meaningless if customers endure speeds well below the minimum acceptable definition of “broadband,” often for days on end.

Cricket is no better:

Cricket sets usage levels on the amount of data a customer can upload and download within stated periods of time. If you exceed your rate plan usage levels, Cricket will temporarily reduce the speed at which you can send and receive data over the Cricket network. You will still be able to use the service but your speed will be slower. Cricket may use other traffic management and prioritization tools to help ensure equitable access to the Cricket network for all customers. Your service speed is not guaranteed and is subject to this Fair Use Policy.

Cricket has set a data usage level (“Usage Level”) per customer. As shown in your rate plan brochure or on www.mycricket.com, this Usage Level varies based on the rate plan you’ve selected. Every day, we measure your upload and download data usage (“Actual Usage”) to determine if your total Actual Usage, as aggregated over your bill cycle (“Usage Total”), exceeds the Usage Level for the rate plan you selected. During hours of operation, you can inquire about your Usage Total versus your monthly Usage Level by calling 1-800-Cricket and speaking with a Care representative.

Once you begin a new bill cycle your rate plan Usage Level upload and download speeds will be restored.

The average Cricket customer is unlikely to grasp anything beyond the fact their speed sucks if they are targeted by Cricket’s throttle.  It’s not as simple as breaking through your monthly usage allowance.  Cricket can and does throttle customers who seem like they could exceed the limit, based on their daily account activity.

In the end, most wireless customers pay more for less service.  The primary benefit is portability, and carriers consider that worth the premium prices charged.  But as the Internet’s love affair with all things multimedia continues, none of these providers will provide a suitable alternative to the traditional home-wired broadband account.

[flv width=”432″ height=”260″]http://www.phillipdampier.com/video/WFAA Dallas iPhone Frustration 11-30-09.mp4[/flv]

Last year like this year, WFAA-TV in Dallas reports frustrations continue with AT&T’s wireless data network.  The company’s response?  Limit customers’ use of it and push more of them off to Wi-Fi alternatives.  (2 minutes)

Just in time for New Year’s Eve, AT&T is pushing revelers off its 3G network onto a newly expanded Wi-Fi hotzone that encompasses Times Square.

It’s all part of AT&T’s plans to improve connectivity for smartphone customers enduring the company’s overburdened 3G network.  A year ago, it could take 10 minutes or more for an AT&T smartphone user in a crowd to bring up a single web page.  That’s because too many other AT&T customers were trying to do the same thing at the same time.

In Times Square, where an estimated one million people are expected to ring in the new year, it’s a safe bet more than 200,000 AT&T customers will try and upload photos and send New Year greetings to friends and family back home.  They’ll have a better chance of success using AT&T’s Wi-Fi.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/ATT Expands Wi-Fi Hotzones Connections in United States 12-28-10.flv[/flv]

An AT&T social media representative introduces the new hotzone in Times Square.  (1 minute)

AT&T has been installing hotzones, accessible by their customers, in large gathering spots in cities like New York, Chicago, and San Francisco to address complaints from customers about network congestion.

“Our initial AT&T Wi-Fi hotzones have received great customer response and supported high data traffic,” says John Donovan, AT&T’s chief technology officer. “The pilot demonstrated the clear benefits of having fast and readily-available Wi-Fi options for our customers and our network, and so we have decided to deploy hotzones in more locations.”

AT&T’s outdoor hotzones typically deliver a signal across several city blocks and are intended for those on the go.  They join more than 20,000 indoor Wi-Fi hotspots already accessible to AT&T customers.

A strong Wi-Fi signal means reduced battery consumption and faster speeds.  And unlike AT&T’s 3G network, using Wi-Fi won’t eat into your monthly usage allowance, a major issue for those facing AT&T’s Internet Overcharging scheme on the wireless side, which delivers only 2GB of service per month before overlimit fees kick in.

But Wi-Fi alone cannot work miracles, and AT&T has no idea whether the hotzone in Times Square will have enough capacity to meet customer needs.  But the company is satisfied that it will certainly help, which is why it plans to continue installing the outdoor networks in other high volume areas.

Verizon Wireless already operates its own Wi-Fi network in Times Square for many of the same reasons.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT Wi-Fi.flv[/flv]

AT&T explains how to use their Wi-Fi network.  (5 minutes)