TelstraClear serves New Zealand

Some broadband customers in New Zealand are treating their monthly usage allowances as usage targets, dedicated to ringing every last penny of value out of the Internet Overcharging schemes.  That means bandwidth usage increases just because customers don’t want to leave their remaining allowance on the table at the start of a new month.

PC World New Zealand notes “caps are essentially stupid” because your allowance resets at the end of every billing cycle:

If I’m away for a month and use zero bytes, it costs just the same as if I’d used my full 20GB. This wouldn’t be so galling if some allowance were made for under-utilising my capacity. It doesn’t have to be a 1:1 thing or roll over from month to month, but some concession would be nice. Perhaps a 1:2 ratio that must be used within the next billing period; in this case an allowance to go up to 30GB in the next month seems reasonable.

That would also get around the other irritating thing about data caps, the punitive charges if you go a single byte over your limit. In the case of TelstraClear it’s $2.95 per GB or part thereof.

TelstraClear - The Internet. Overcharged.

Readers shared their two cents:

I have a 40GB cap which I regularly go over. Telscum charge $20/Gb so it hurts like hell. I tried [switching] to TelstraClear but after three months all I had from them was a bill for services I didn’t receive.

We have 20Gb shared between the three of us and it is rare to go over but we do try like you to use it all up simply because we have paid for it. There is a company in NZ that allows you to roll it over it is Trust power Kinect. A friend uses them and roughly every three months he reckons he can save a month. You do need to have your power and phone with them though and for us it would actually work out more expensive but for others it might not. I do think caps suck though and wish they could be scrapped as I think we would actually use less bandwidth.

I think this part of the world and UK is an exception when it comes to data caps. In Europe data caps are very rare (except in UK which is not typical for Europe in any aspects). Being from Sweden I was a bit surprised moving to NZ and discovered data caps as well as very slow and expensive Internet. Sweden is similar to NZ (e.g. size, population) so it’s a fair comparison. You are being ripped off!

Advertising Age this week predicted online TV could be about to undergo a transformation — into the online equivalent of advertising-packed traditional television.

Starting as early as this fall, that 47 minute “hour long” show you’ve watched with a handful of commercial interruptions may become a 59 minute show, with almost 15 minutes of additional advertising piled on your viewing experience.  Worst of all, if your service provider wants to stick you with a usage allowance or “consumption billing,” you will effectively be paying to watch commercials.

Imagine after receiving your monthly pay television bill, a company representative arrives to install a coin meter on the side of your TV.  Your monthly fee just gives you access to the channels, he explains.  Actually watching them costs more.

Why introduce more advertising?

Nielsen, a ratings measurement service, will start providing its subscribers ad viewing information regardless of whether the viewer sees it on a traditional television or online.  The catch is the advertising must be the same across platforms.  That means online video could run the same ads your local station or cable network carries.

“The financial models used for the current large video hubs in the online space are not sustainable,” said Jack Wakshlag, chief research officer for Time Warner’s Turner Broadcasting. One way to make online viewing more financially lucrative, several TV executives suggested, is to use it to aggregate viewing of popular shows across TV, online and other emerging media — and then use that rating as a means of negotiating for the cost of an ad against the program.

What’s lending traction to the idea of increasing the number of commercials in online TV runs is the “TV Everywhere” concept currently embraced by industry players Time Warner and Comcast, among others. Under the plan, cable subscribers would be able to watch their favorite shows via broadband for no extra fees, while non-subscribers would be blocked. If the media companies can use this idea to control how consumers watch TV programming, they may also be able to force a more traditional amount of advertising on them, too.

Even worse, many online video providers like Hulu are considering charging viewers their own fees, leaving consumers paying three times – twice in money for broadband service and a subscription fee, once in time wasted sitting through unstoppable ads.

Some consumers don’t mind the trade-off as long as viewing remains free.  But with Internet Overcharging schemes, online video ads count against your allowance.

One TV executive told the trade magazine research suggests that 80% to 90% of people would rather watch TV online with the same load of ads as a traditional TV show if it meant doing so for free. “People don’t want to pay more subscription fees on top of their cable subscription fee,” this executive said.

It is likely testing of full commercial loads will precede any large scale rollout, if only to gauge consumer reaction.  If people refuse to pay to watch commercial advertising, the industry will have to go back to the drawing board to come up with other ideas to monetize online video.

While several American broadband providers contemplate limiting customer’s broadband usage or launching usage-based billing, Australia is headed in the other direction with today’s introduction of the country’s first truly unlimited and unthrottled broadband plan for a flat monthly price.

AAPT, part of the Telecom New Zealand Group, claims its new Entertainment Bundle will revolutionize broadband in Australia as its competitors are forced to adopt unlimited plans of their own to compete.

For $88US per month, AAPT offers ADSL2+ 20Mbps service that has no usage limits, no throttled speeds, and no metered billing.  The plan also includes free home phone line rental and a monthly $50 voucher good for downloading from the AAPT In Song music store, offering one million songs.  A Wi-Fi modem is also included in the plan.

AAPT's unlimited plan is the first to dispense with usage allowances, speed throttles, and metered billing for Australian broadband users

AAPT CEO Paul Broad said the company’s new unlimited plans would deliver Australians better broadband.

“You go to the United States and there’s no such things as caps – you get online and get an unlimited download,” he said. “Consumers don’t know what these caps mean.”

Broad

The plan requires a two year service contract.  Australian broadband pricing always includes a total cost of the plan over the length of the contract.  For this particular plan, it’s $2,129.34US for two years of service.

Previously, AAPT offered unlimited downloading only between the hours of 2am-8am local time.  Daytime usage was limited to a maximum of 60GB per month, with speeds throttled to 64kbps for the remainder of the month if you exceeded your plan allowance.

“We were first to market with 2am-8am unlimited [service], then 8pm–8am unlimited, and now 24/7 Unlimited Broadband downloads plus music streaming,” Broad said.

The company still reserves the right to terminate service for grossly excessive usage, not specifically defined, but that is a common right reserved by virtually every service provider.

Would-be customers are finding AAPT’s website and broadband plans confusing because AAPT’s broadband plans page does not yet contain details of the truly unlimited plan, which can be found here.

AAPT invites those with questions to call them on 132 082.

Frontier's headquarters in Rochester, N.Y.

Frontier Communications has dismissed the proposition of Google constructing a 1Gbps fiber-to-the-home network, telling readers of the Rochester Democrat & Chronicle that most users don’t need ultra-fast Internet access.

Ann Burr, chairman and general manager of Frontier Communications of Rochester made the remark in response to news that citizens and business leaders are excited about promoting Monroe County as a potential test location for Google’s fiber network experiment.

Frontier, which serves Rochester and most of the 585 area code, accused Google of having “a poor track record of following through on such proposals and that creating a fiber-optic network from scratch would be enormously expensive.”

Pot to kettle.  Frontier’s illusory promises for fiber optic connectivity in states like West Virginia, where it seeks to take over the majority of the state’s phone customers from Verizon, never seem to include specific assurances such projects will reach customer homes.

“If Google built its own network, we estimate it would cost $5,000 per household,” Burr told the newspaper.

That’s as exaggerated as Frontier’s DSL speed claims.

Verizon Communications, which is in the business of providing fiber connectivity to the home, disclosed the true costs are far lower than that, and continue to decline.  In the summer of 2008, Verizon’s Policy Blog noted:

Capital Costs
– We said our target per home passed was $700 by 2010, and we are ahead of plan to achieve that objective. In fact, we’ve already beaten the target.
– We said our target per home connected was $650 by 2010, and we’re on plan to hit that target.

No wonder Frontier doesn’t contemplate providing fiber service to customers.  It created its own sticker shock.

Still, the local phone company didn’t want to slam the door entirely on Google’s foot, suggesting it would be willing to talk about leasing space on Google’s network if it launched in the Flower City.

Frontier’s claim that customers don’t believe fast broadband service is important is a remarkable admission, particularly for a company that increasingly depends on broadband service to stop revenue loss from customers dropping traditional phone lines.  That philosophy should be carefully considered by state officials and utility commissions reviewing Frontier’s proposal to take over Verizon phone lines in several states.  Do communities want to receive broadband from a company that dismisses faster broadband speed as irrelevant for the majority of its customers?

Perhaps the remarks came with the understanding Frontier isn’t capable of delivering 21st century broadband speeds over its antique network of copper telephone wire anyway.

That’s the point Time Warner Cable has made repeatedly, especially in the Rochester metro area.  The cable operator routinely promotes its Road Runner cable modem service’s speed advantages over Frontier’s DSL product.  Frontier promises up to 10Mbps, but often manages far less (3.1Mbps was my personal experience with Frontier DSL last April.)  Time Warner Cable promises up to 15Mbps, and often exceeds that with its “PowerBoost” feature.  In rural areas, the phone company tops out at “up to 3Mbps.”  Time Warner Cable notes most of its new broadband customers come at the expense of phone companies like Frontier.  DSL customers switch because they do care about broadband speed.

Judging from the excitement in Rochester over Google’s proposal, Frontier’s dismissal of a fiber optic future seems out of touch, and potentially a drag on the local community’s economic future.

Rochester increasingly will become a broadband backwater because of anemic broadband competition from Frontier Communications.  Its reliance on ADSL technology, more than a decade old, to deliver distance-sensitive broadband service looks out of place compared with the rest of New York State.  Major cities throughout New York are being wired with fiber optic service by Verizon Communications.  Verizon FiOS delivers up to 50Mbps service.  Frontier maxes out at far lower speeds and defines an acceptable amount of broadband usage on its DSL service at just 5GB per month. Using Verizon’s FiOS fiber network, you’d exceed Frontier’s entire month’s ‘allowance’ in less than 15 minutes at Verizon’s speeds.

Rochester is one of many communities challenged by the transition away from a manufacturing economy towards a high technology future.  A world class fiber optic network doesn’t just benefit big business.  It spurs revolutionary growth in medicine, education, software development, telecommunications, and more.  That means good paying jobs.  For consumers with fiber to the home, it opens the door to telecommuting on a whole new level, distance learning opportunities, new ways to access information and entertainment, and allows home-based entrepreneurs to develop new businesses.

With Verizon FiOS unavailable to Rochester indefinitely, and Frontier unwilling to make appropriate investments to keep this city competitive with the rest of upstate New York, those jobs and economic benefits can go to Buffalo, Syracuse, Albany, Westchester County, and metropolitan New York City.  We’ll be held back on the frontier with Frontier and its ideas of rationed broadband service.

[flv width=”360″ height=”260″]http://www.phillipdampier.com/video/WROC Ontario County Makes Bid for Super Fast Internet 2-11-2010.flv[/flv]

WROC-TV in Rochester reports that Ontario County, to the southeast of Rochester, may have a built-in advantage with an already-installed fiber loop covering much of the county.  The county has a team working on a formal application to Google to provide service in communities like Geneva and Canandaigua.  Frontier’s claims that consumers don’t care about fast broadband speed are belied by the excitement of residents of both counties. (2 minutes)

Suddenlink broadband customers in Lubbock and Midland, Texas will soon have a new option to boost their broadband speed to 36Mbps.  Dubbed MAX36, the new tier leaps over the cable company’s former top broadband speed of 20Mbps.  Upload speeds get a boost as well — to 2Mbps.

Multichannel News reports pricing for the new tier depends on how many other Suddenlink services you have.  Standalone pricing is $75 per month.  Bundle it with television or telephone service and the price drops to $65.  Take all three services and MAX36 costs $60 a month.

Suddenlink serves portions of these Texas communities

If that is too rich for your blood, Suddenlink next week will be providing existing broadband customers in Lubbock and Midland free speed upgrades:

• 1Mbps service increases to 1.5Mbps
• 8Mbps upgrades to 10Mbps service
• 10Mbps service becomes 15Mbps

The new speeds are possible because of DOCSIS 3 upgrades underway at the nation’s ninth largest cable operator.  Suddenlink has focused on DOCSIS 3 upgrades for many of its Texas systems, including Abilene, Bryan/College Station, Georgetown, Lubbock, Midland, San Angelo and Terrell.  The operator also deployed the technology in Beckley, Charleston and Parkersburg, West Virginia, as well as Jonesboro, Arkansas, Humboldt County, California, and Nixa, Missouri.  The company hopes to upgrade 90 percent of its cable systems within the next two years.  Nationwide, Suddenlink reaches 1.3 million subscribers.

Last summer Suddenlink introduced a usage meter for subscribers in Clovis, New Mexico and included a chart of what constituted average usage for its customers.

Suddenlink's national service area

The company openly admits it limits customer use of its broadband service is several communities where bandwidth upgrades have yet to occur, but at least drops communities from the usage limit list after expansion is complete.  As of February 4th, communities impacted by usage limits include:

• Arkansas: Charleston, Hazen, Mt. Ida, Nashville
• Kansas: Anthony, Fort Scott
• Louisiana: Ville Platte
• Missouri: Jefferson City, Maryville
• Oklahoma: Fort Sill, Healdton, Heavener, Hughes, Idabel
• Texas: Albany, Anson, Brenham, Burkburnett, Caldwell, Canadian, Center, Claredon, Crane, Dimmitt, Eastland, Electra, Hamlin, Henrietta, Junction, Kermit, Monahans, Nocona, Olney, Paducah, Rotan, San Saba, Seymour, Sonora, Trinity, Vernon, Wellington

Suddenlink also admits it engages in “network management” techniques which may spark controversy with the ongoing Net Neutrality debate, despite its declaration it “allows customers to access and use any legal Web content they prefer, thus honoring the principles of network neutrality.”

In addition to “mitigating network congestion, which can interfere with customers’ preferred online activities,” Suddenlink also discloses it “prioritizes certain latency-sensitive traffic such as voice traffic.”

Still, performing system upgrades to put a stop to usage limits and allowances is a move in the right direction, one that other providers seeking to monetize broadband traffic with Internet Overcharging schemes are loathe to take.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Suddenlink Ads.flv[/flv]

Watch some of Suddenlink’s more creative and amusing advertising. (2 minutes)