Frontier Communications has quietly begun testing an Internet Overcharging scheme in Minnesota designed to charge confiscatory prices to residents who exceed the company’s usage allowances, demanding customers pay up to $249.99 a month to keep their broadband service running.

Stop the Cap! has learned Frontier has begun measuring customers’ broadband usage, and for those in Minnesota who exceed 100GB of usage during a month, Frontier is dispatching e-mail messages telling them they’ll have to agree to pay more — much more — or their service will be cut off in 15 days.

Two e-mail messages are being sent to customers who break the 100 and 250GB usage barriers.  Both reference Frontier’s 5GB usage allowance that Stop the Cap! has strongly and repeatedly criticized the company for implementing in the first place.  Using that usage allowance as a baseline, Frontier calls out its customers using more demanding they switch to a higher priced service plan if they want to continue service with the company.

• For those achieving 100GB of usage, the new monthly rate is $99.99 per month
• For those achieving 250GB of usage, the new monthly rate is an incredible $249.99 per month

Sources tell Stop the Cap! the Internet Overcharging scheme Frontier is running is an experiment to gauge customer reaction.  If the furious customer e-mail reaching us is any indication, it’s another public relations disaster for Frontier Communications.  One customer didn’t even realize there was a 5GB usage allowance to begin with, much less a vastly higher new monthly price if he wants to stay with Frontier DSL.  He’s not.

"You can earn this much money just from overcharging Minnesotans for their Internet service!"

Ironically, the experimental pricing plan comes at a time when Frontier is still trying to get state regulators to approve its deal with Verizon to assume control of landline and broadband service in several states.  Residents in West Virginia and a dozen other states might be a bit concerned that their unlimited Verizon DSL broadband service, often the only service provider available, could be replaced with a company that is willing to punish its customers with $250 in monthly charges once a customer hits 250GB in usage.  Even worse, Frontier takes the overlimit penalty concept to a whole new level, telling customers that new high price represents their new monthly rate plan, not just a temporary penalty.

To add insult to injury, Frontier continues to mislead its customers about the experimental pricing on its own website.  As of this writing, Frontier’s Acceptable Use Policy still states:

Customers may not resell High Speed Internet Access Service (“Service”) without a legal and written agency agreement with Frontier. Customers may not retransmit the Service or make the Service available to anyone outside the premises (i.e., wi-fi or other methods of networking). Customers may not use the Service to host any type of commercial server. Customers must comply with all Frontier network, bandwidth, data storage and usage limitations. Frontier may suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period. The Company has made no decision about potential charges for monthly usage in excess of 5GB.

For customers receiving Frontier’s Scare-o-Gram, it sure sounds like they made up their minds… to charge a lot more for the exact same level of service.

For state regulators, watching Frontier charge ludicrous pricing for broadband service that would make most providers blush should be more than enough evidence that approving Frontier’s plans to take over Internet and landline service in their state is not in the best interests of consumers.  For many, it saddles them with a broadband provider that can charge these kinds of prices knowing full well many customers have nowhere else to go.

Copy of E-Mail Sent to Minnesota Customers Exceeding 100 GB of usage a month [emphasis in bold is ours]:

Dear [Customer]:

Frontier is focused on providing the best possible internet experience across our entire customer base.  We bring you a quality service at a fair price, dependent upon an average monthly bandwidth usage of 5GB.  Over the past months, your account is in violation of our Residential Internet Acceptable Use Policy.

Our policy states that Frontier reserves the right to suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period.

We realize there are times when our customers use the internet for services such as video and music downloads, however your specific usage has consistently exceeded 100GB over a 30 day period.

We would like to provide you with the option of keeping your Frontier internet service at a monthly rate of $99.99 which is reflective of your average monthly usage.  Please call us within 7 days of the date of this email at 1-877-273-0489 Monday – Friday, 8AM – 5PM CST to review your options.  If you do not wish to switch to this new rate plan, you can have your service disconnected.  If we do not hear from you within 15 days, your internet service will be automatically disconnected.

We continue to manage our network to ensure all of our customers have equal access to the internet and the ability to enjoy all of its available content, at our committed level of service quality.

Sincerely,

Frontier Communications

Copy of E-Mail Sent to Minnesota Customers Exceeding 250 GB of usage a month [emphasis in bold is ours]:

Dear [Customer]:

Frontier is focused on providing the best possible internet experience across our entire customer base.  We bring you a quality service at a fair price, dependent upon an average monthly bandwidth usage of 5GB.  Over the past months, your account is in violation of our Residential Internet Acceptable Use Policy.

Our policy states that Frontier reserves the right to suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period.

We realize there are times when our customers use the internet for services such as video and music downloads, however your specific usage has consistently exceeded 250GB over a 30 day period.

We would like to provide you with the option of keeping your Frontier internet service at a monthly rate of $249.99 which is reflective of your average monthly usage.  Please call us within 7 days of the date of this email at 1-877-273-0489 Monday – Friday, 8AM – 5PM CST to review your options.  If you do not wish to switch to this new rate plan, you can have your service disconnected.  If we do not hear from you within 15 days, your internet service will be automatically disconnected.

We continue to manage our network to ensure all of our customers have equal access to the internet and the ability to enjoy all of its available content, at our committed level of service quality.

Sincerely,

Frontier Communications

A survey released this week by Arbitron Inc. and Edison Media Research found, for the first time, that Americans are more willing to give up TV than the Internet.

Asked to choose the ”most essential” medium, 42 percent of the survey’s 1,753 respondents picked the Internet, 37 percent picked TV, 14 percent said radio and 5 percent said those dead-tree format newspapers.

That represents more evidence that major telecommunications companies will need to lasso control of the Internet before the cable television profit train derails.  That’s because the Internet delivers the prospect of a two-for-one deal.  Enjoy your online web surfing -and- stream your favorite television shows online at the same time — no more ever-increasing cable-TV bill for channels you never asked for and don’t watch.

Even more worrying for big cable — young people are increasingly never bothering to sign up for cable television in the first place.  In the 18-24 age group, 74 percent said they would quit TV before surrendering the Web, and many never bothered with subscription television to begin with.

The last time Arbitron and Edison posed this question in a survey was in 2001, back when dial-up access still predominated.  Back then, 72 percent of respondents said they could do without Internet and 26 percent said they’d give up TV.

“The shift over these nine years has been steady and profound,” said Edison Research president Larry Rosin.

Some consumers don’t want to watch television over their computers and would prefer to be entertained in a comfortable chair in the living room.  But Internet video innovation is increasingly solving that problem by coupling your television or DVD player to the web.  Several providers like Netflix even deliver their streaming video service through video game consoles.

How do cable companies stop the herd mentality to broadband video, leaving those big cable TV bills behind?  Stick a meter on broadband service, and charge consumers for every TV show they watch or simply put a limit on their broadband service.  The broadband usage cap or meter can, indeed, kill the online video star.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/WJW Cleveland The Download Internet More Important Than TV 4-9-10.flv[/flv]

WJW-TV in Cleveland reports that more people are ready to ditch their televisions than being willing to part with their Internet connection.  (3 minutes)

Here is how DataJack was marketing themselves back in January

DataJack, the 3G mobile broadband service that was promising unlimited wireless broadband service for $39.99 a month is back — with an all-new 5GB monthly usage cap, a new provider, and hassles for existing customers who must swap out their existing wireless modem.

Stop the Cap! first covered DataJack back in January, when customers were howling about the company’s lousy customer service and its tendency to “stretch the truth” about its coverage area, speeds, and even the availability of the product itself.

Rumors about a major spat between its original data service provider, presumably T-Mobile (based on the fact DataJack and T-Mobile had identical coverage maps back in January) and DataJack led the company to stop signing up new customers.  Since January, DataJack’s website has told would-be customers that the wireless modem necessary to use it was “out of stock.”

DataJack remained in limbo until the first week of April, when the company began e-mailing updates to dealers and customers about major changes to the company and its marketing:

1. “Unlimited” service is history, not that DataJack ever really offered it.  Many customers who used the service in excess of 5GB per month were notified their account would be closed at the end of the month’s billing cycle.  “Companies like DataJack have an English language comprehension problem,” writes Stop the Cap! reader Kevin. “The word ‘unlimited’ means ‘without limit,’ — a concept DataJack routinely ignored when throwing people off their service.”  New customers will be subject to a formal 5 GB usage cap.
2. Customers who did manage to get modems from DataJack may find they may no longer work after this Thursday.  The company is dropping GSM-based network service and moving to a CDMA network (either Sprint or Verizon — most believe the former), which means obtaining a new modem.  At least that will be offered free of charge to inconvenienced current customers.
3. The price for new customers is going up $10 per month — to $49.99 for 5 GB of service.  Existing customers get to retain service for $39.99 a month, albeit with the new usage cap.  The DataJack website has still not been updated to reflect the new pricing.

Kevin is taking a walk far away from DataJack:

“These people don’t have the first clue how to run a business.  Their entire marketing plan just a few months earlier was based on the premise of unlimited service.  They apparently got into trouble with their provider, another sign that doesn’t inspire confidence, and now they’re e-mailing customers telling them they literally have days to complete an equipment swap or lose service?  In the end, they were punishing people for actually believing their marketing nonsense about “unlimited” service and now they want people to believe a $10 price hike for less service is good news?  After everything that has happened with these people since January, who knows what will happen next month.  I’m not about to wait around to find out.”

Dealers were the first to be notified about the company changes.  Stop the Cap! obtained this copy of a message sent to DataJack retailers:

Dear DataJack Dealer,

Please note that Effective April 2, 2010, the following changes were made to our terms and conditions:

Service Usage. We reserve the right to safeguard our network from abuse, excessive bandwidth consumption or any activity that compromises the performance of our network. We may limit throughput speeds, control the amount of data transferred, and suspend, modify or terminate service, without notice, if your usage adversely impacts our network or exceeds 5 GB in a given month. We may monitor your compliance with the above but will not monitor the content of your transmissions except as otherwise expressly permitted or required by law.

Prohibited Uses. The service may not be used in a manner that violates any law (including without limitation, copyright and intellectual property laws); or the Service Usage clause.

We have found it necessary to implement these measures to ensure our DataJack customers are given the opportunity to access reliable, high speed, wireless internet service at a reasonable price.

95% of our customers will not be impacted by these new provisions; however, if a customer who is impacted visits your store and requests a refund due to no longer having access to the service, please direct them to the DataJack customer support team at 1-888-693-4522. Our team will work directly with the customer to resolve the issue.

Additionally, we are in the process of rolling out a new and improved Dealer Portal. Benefits of this portal include a more user friendly interface, virtual training videos, and enhanced functionality. Our systems will be down for a short period of time while making the transition. Please refer to customer service to process pins and activations for your customers.

If you have any questions, please feel free to contact [email protected].

The "unlimited service" so prominently mentioned in January is gone from today's marketing of DataJack (click to enlarge)

Existing customers were next to be notified by this e-mail message sent last week:

Dear Valued Customer,

To address recent quality and connectivity issues, DataJack is migrating our service on April 15, 2010 to a new Tier 1 network which delivers faster data speeds and an expanded coverage area. The move to this new network means that DataJack must replace your existing device by April 15th to ensure uninterrupted service. Realizing this could be an inconvenience to you, DataJack is offering our customers a FREE MIFI unit for use as your replacement device at absolutely no extra charge (M.S.R.P. $299.00).

To ensure we get your replacement device to you in a timely manner, it is imperative that you verify the name and address we have on file for you as soon as possible by replying to this email. The name and address on file is as follows:

(address removed)

Upon verifying your address, we will send your new WIFI unit and a postage paid return envelope so you may mail back your current DataJack device. We ask that you please return the used device within 10 business days. South Florida customers also have the option of exchanging their device on April 14th, 15th, and 16th from 10AM – 9PM EST at the following location: 6365 NW 6th Way Suite 160 Fort Lauderdale, FL 33309.

If you do not want to take advantage of the FREE MIFI unit offer, please contact customer service at 1-888-693-4522 to discuss alternative equipment options.

Please note that new customers will be required to pay $49.99 per month for service. This price increase will not affect you, your service fee will continue to be $39.99 per month. Additionally, we have changed our terms and conditions to include service usage and prohibited uses clauses. The terms and conditions apply to all customers.

Again, time is of the essence. We must get your new unit to you by April 15th to avoid service interruption. Thank you for your patience and we look forward to serving you on our new and improved network.

Best Regards,

The DataJack Team

Here is how DataJack dispenses with customers who use their “unlimited” service “too much”:

Dear DataJack Customer,

In accordance with our terms and conditions, more specifically the Service Usage and Prohibited Usage clauses, we are unable to renew your service upon expiration.

We regret that we can no longer provide service and wish you the best in finding a new provider for your wireless internet access needs. Our customer service representatives are available 8AM – 5PM Monday through Friday to address any questions you may have.

Best Regards,
DataJack, Inc.
888-693-4522

Under Terms & Conditions

Effective April 2, 2010

Service Usage. We reserve the right to safeguard our network from abuse, excessive bandwidth consumption or any activity that compromises the performance of our network. We may limit throughput speeds, control the amount of data transferred, and suspend, modify or terminate service, without notice, if your usage adversely impacts our network or exceeds 5 GB in a given month. We may monitor your compliance with the above but will not monitor the content of your transmissions except as otherwise expressly permitted or required by law.

Phillip "The only New Deal my cable company brought to the table was a $150 monthly broadband bill for exactly the same level of service I had when paying $50" Dampier

Joe, a regular Stop the Cap! reader noticed the National Review this morning published another one of their “in the pocket of big telecom” editorials proclaiming Net Neutrality is “anti-consumer.”  Right into the first paragraph, it was clear the editors either fundamentally misunderstand the reality of today’s broadband industry or honestly didn’t care as long as it suited their business-friendly agenda.

Readers, you need not go along with the charade.  While the publishers of National Review can probably afford to buy their way around anything the phone and cable industry can dream up, you probably cannot.  What those opposed to Net Neutrality frame as “freedom from government intrusion” is in reality an attempt to keep your broadband provider from screwing around with your connection in hopes of charging you more for the same service you used to have.

Turn on your TV these days and within minutes you are likely to see several commercials from your local cable, satellite, or telecommunications company trying to convince you that their cable, DSL, or mobile broadband services are superior to those of their competitors. That’s because the market for broadband service is robustly competitive: If service providers didn’t advertise, they would lose business.

Actually, most of the advertising I see on my television comes from free ad inserts Time Warner Cable hands themselves during ad breaks on national cable channels.  My local phone company, Frontier Communications, hasn’t advertised on television for quite awhile.  The mobile broadband advertising I see fights over coverage and who has the coolest new device.  They aren’t advertising on price because they almost all charge exactly the same $60 for 5 GB of usage per month.

None of this represents “robust competition” when one of the players on the wired side is absent from the airwaves and the wireless folks have convenient cartel-like pricing for wireless broadband.

They would also lose business if they did something that made their customers unhappy, such as slowing or blocking the delivery of popular content over the Internet. Or they might gain customers if they created a model that, for a fee, guaranteed uninterrupted high-speed access to certain services, such as telemedicine, video conferencing, or some other use of the Internet we have yet to imagine. This competition directs broadband toward its most efficient uses. It is pro-consumer in that it allows for the proliferation of choices and pressures companies to offer a variety of pricing options.

Of course, the editors who wrote this did not have to fight back a 300 percent rate increase with an Internet Overcharging scheme that would have limited broadband access in at least five cities to start.  Let’s test their theory by asking a few questions.  First, did anyone ask for this kind of pricing to begin with?  Answer: No.  Second, did the plan make customers unhappy?  Answer: Emphatically yes.  Third, upon hearing from customers that they did not want this kind of pricing, did they discard the plan?  Answer: Not on your life.  Fourth, did it take two members of Congress to drive the company to finally pull back their plan?  Answer: You bet.

Now ask the same types of questions about slowing down your web connection to make room for the neighbor up the street willing to pay more to get more while you enjoy less for the same price you’ve always paid.

Lesson learned: when you effectively have a duopoly or monopoly in your market, you don’t have to listen to customers — they have to listen to you.  Indeed, even where competition exists, there is every indication the competitors would themselves increase prices or limit service to rake in additional revenue.  That happens routinely even in more competitive industries like the airlines — something you realize when you try and check bags and are asked for a credit card.  In Canadian broadband, foreshadowing a non-Net Neutral USA, when one player limits usage and throttles connections, the competitor more often than not joins in.

The other fallacy raised in this useless editorial is that Net Neutrality somehow bars companies from offering all of those wonderful innovative Internet applications.  It’s a common talking point straight out of the industry’s playbook.  Nothing precludes the broadband industry from expanding and improving their networks to offer all of these services.  Under Net Neutrality, they simply wouldn’t be allowed to do it on the backs of their other Internet customers, whose connections are automatically impeded to make room for that “innovation.”  The saddest part is that the only innovation at work here is price-gouging customers instead of upgrading networks.

It would be a huge mistake to impose by fiat a single business model on the carrier side of the Internet.

Tell that to AT&T and Verizon who have exactly the same pricing in their business model for mobile broadband service.  Is it a huge mistake for them?

Specifically, they want the government to prohibit broadband providers (such as Comcast) from discriminating against content providers (such as Google) by, for instance, charging them different rates for different levels of network service. They argue that, in the absence of such regulation, broadband providers can act as self-appointed censors, slowing down or blocking content they don’t like. Keep in mind that in no instance has this actually happened. So far, broadband providers have acted only to slow down noisome bandwidth hogs in order to manage traffic and ensure a high quality of service for the majority of their customers. Net-neutrality proponents counter that other customers — those unhappy about the slowdowns — lack meaningful options; that is, that the market for broadband service is not sufficiently competitive.

It is -shocking- the government would want to make sure broadband providers don’t block or discriminate against other people’s content.  We can’t have that!

The National Review needs to consider studying up on history.  The cable industry, for example, is notorious for blocking competitor access to its content.  To this day, the industry is fighting to keep the cable networks they own off competitors’ lineups.  The same company that provides your broadband service wants to make sure their telephone competitor cannot show a regional sports channel they own.  At least one broadband provider in the United States tried to block competing Voice Over IP phone companies from being used on their broadband service.  The same “blocking” mentality popped up in Canada where a broadband provider purposely blocked a website critical of that company.  Want access to cable programming online but don’t have a cable-TV package?  Good luck.  TV Everywhere projects are specifically designed to block non-cable TV customers from accessing that programming online.

National Review‘s afterthought admission that providers like Comcast were diddling with customers’ Internet speeds is waved away as somehow the fault of bandwidth piggies, another common meme in the talking points packet provided by the broadband industry.  Never mind the company had effectively spied on customers to determine what they were doing with their connections, that they first denied reports they were throttling, effectively throttled everyone — piggies or not — and then quickly stopped when the FCC protested.  If Comcast wasn’t doing anything wrong, why not inform customers first?  After all, the “majority of customers” would want throttling to preserve their “high quality of service,” right?

Of course they don’t, and when customers found out the company charging them good money to provide a service was also trying to systematically reduce its value with speed throttles, they howled in protest.  Who knows what online application would fall next to the throttle?

This would effectively mean applying to broadband providers the rules designed for landline telephone companies in the 1930s. We know Obama wants to emulate FDR, but this is getting ridiculous.

Oh now see how they tried to be funny with the slap against Obama and FDR?  The National Review would have been the magazine defending the railroad robber barons and utility trusts — unregulated monopolies — back during FDR’s day.  They’d be just as wrong then as they are now.  The only New Deal my cable company brought to the table was a $150 monthly broadband bill for exactly the same level of service I had when paying $50.

The current regulatory framework for broadband was constructed by Michael Powell’s Republican-majority FCC, classifying broadband as an “information service.”  It was bureaucratic incompetence because it relied on vaporware authority that a court found, to nobody’s surprise, didn’t exist.  The court does recognize the FCC’s authority to regulate “telecommunications services,” so by simply reclassifying broadband as such, the basic question of authority is solved.  The National Review pretends this will automatically mean 1930s-like regulations as applied to copper wire-phone companies, but that’s not true.  The National Review simply doesn’t want the FCC to have any authority in the first place.

But the FCC’s authority to reclassify broadband to suit its desires is also open to legal challenge. As a result, we are sure to hear louder calls for Congress to regulate the Internet or to grant the FCC the explicit authority to do so. These calls should be ignored. The Internet has thrived in the absence of homogenizing federal regulations, and this organic development should be allowed to continue so long as competition can act as a check on anti-consumer practices.

The calls to enshrine Net Neutrality, stop Internet Overcharging, and force open broadband markets and expand service all do not come in a vacuum.  They are ideas born from past provider abuses that have demanded consumer protections in response.  Who would have dreamed up Net Neutrality if AT&T’s Ed Whitacre didn’t insist Internet traffic could not use his pipes for free.  What about when the industry started toying with developing premium tiers of service that relied on slowing down the connections of their other paying customers.  Why worry about forcing markets open to additional competition?  Oh yeah, because of statements like those from Landel Hobbs (Time Warner Cable COO) who told investors Time Warner Cable could use its market position in broadband to jack up prices whenever they chose.  And they did.

The National Review‘s “hands off” attitude is the same one they’ve had towards banks, and now every American is paying for that mistake.  Let’s not repeat it.

Besides, as it stands these companies compete vigorously against one another in a way that is beneficial to consumers. If one of them makes an unpopular business decision, its customers can go elsewhere. If, however, an unelected FCC chairman dictates uniformity in the services these companies provide, then there is nowhere Americans can turn for innovations the government may have strangled in the cradle.

Where exactly do consumers in rural areas go for alternative broadband when their monopoly phone company provider limits their service or charges them confiscatory pricing?  Where do residents go when both providers limit service?

Consumers have far more power to deal with the “unelected FCC Chairman” than dealing with intransigent phone and cable companies.  Elections every few years have consequences.  There are no elections for Comcast, Verizon, Cox or AT&T.  They’re effectively Providers-for-Life in the communities they serve.

The National Review has little to fear from a broadband dark ages where innovation disappears.  Somehow, an industry that rakes in billions in revenue every year will manage to get by living under basic guidelines that require them to earn their money fairly and spend some of those profits to keep up with very profitable demand.  They’ll sue anyway, of course.  But that could buy us enough time to spur additional competitive choices in a duopolistic market for broadband, helping put to work those free market principles of fierce competition the National Review believes in.

[Article Correction 4/15/2010: The original piece laid blame for the classification of broadband as an “information service” on former FCC Chairman Kevin Martin.  In fact, the classification was made by former FCC Chairman Michael Powell, who served during the first term of the Bush Administration.  We regret the error.]

The 'Prince of Wales,' one of Inter-Island Ferry Authority's boats that connect the island to the mainland (Courtesy: Inter-Island Ferry Authority)

Providing broadband to 6,000 residents of Prince Wales Island, located along the western strip of Alaska that borders on British Columbia, Canada is the ultimate challenge.  Parts of the island don’t even have access to traditional landline phone service, relying instead on fixed wireless service.

Residents have complained loudly about the poor quality of phone service on the island for years, particularly when it is provided to the 1,000 residents of Klawock, Craig, and several adjacent communities served by Alaska Communications Systems (ACS).  Ten percent of ACS customers are stuck with fixed wireless, which guarantees no Internet access, and sub-standard phone service.  What perturbs many of them is the fact another phone company’s landlines are within the sight of their homes and communities, but they can’t get service from that company.  Those lines are owned by ACS competitor Alaska Power & Telephone (AP&T), an employee owned utility that serves many areas ACS doesn’t.

Friends and neighbors served by AP&T are happy with their telephone service.  Residents served by ACS are not.

The Alaska Dispatch tells the story:

Every three months Ron Fitch drives five miles down a state highway so he can use a friend’s telephone to monitor his pacemaker.

Fitch, who lives on Price of Wales Island, has a phone at home, but he gets his service via fixed wireless, which is similar to a cell phone signal but is routed through a box mounted in the house. Since you can’t recalibrate a pacemaker over a wireless signal, Fitch makes the drive four times a year.

“Times have changed, and it doesn’t seem right that we can’t get Internet or a fax or anything over our phones,” said Eric Packer, a builder who lives outside Klawock. “It’s like living in the dark ages.”

ACS customers on the island have been complaining about their phone service for years, and for some the frustration is sharpened by the view of lines — owned by ACS competitor Alaska Power and Telephone — running near their homes. Two years ago the Regulatory Commission of Alaska opened an investigation into ACS service on the island, citing numerous customer complaints and a request from Sen. Lisa Murkowski.

With all of the negative press focused on ACS, the company relented, telling the Regulatory Commission it will offer to connect those fixed wireless customers to landline service, but will only pay for up to 1,000 feet of wiring between the nearest ACS junction box and the customer’s home.  ACS will bill customers the balance of costs beyond 1,000 feet if a customer insists on landline service.

ACS is a major recipient of universal service funds which subsidizes phone service in rural areas to keep it affordable.  ACS receives about $4 million a year.  ACS fixed wireless customers on the island pay about $26 a month.

ACS customers perennially without broadband have complained to the Regulatory Commission, according to the Dispatch, suggesting it hurts the island’s economic development.  Some customers have managed to switch to cell phone service and dropped landline/fixed wireless service, and a select few are trying to rely on satellite Internet service, which customers characterize as expensive and slow.

Pricing for landline DSL service from either ACS or AP&T is itself slow and expensive, and AP&T service is usage limited:

ACS promotes the fact their service is unlimited.  Includes local and long distance telephone service.  One year contract term required.  Pricing may be higher in rural areas not specified on the ACS website.

The 1Mbps service tier is currently available in select areas dependent upon local infrastructure.  Each additional gigabyte of usage is pro-rated at $5.00/GB.  AP&T provides wireless broadband in selected rural areas.