Communications and Information Technology Minister Hon. Steven Joyce

New Zealand, long ranked near the bottom of the barrel in broadband according to OECD rankings, will embark on a $1.5 billion (NZD) national broadband initiative, with a publicly-owned fiber network as its hallmark.

The plan, which will give urban and suburban New Zealand residents access to speeds faster than commonly available in the United States, will reach three-quarters of the population within the next ten years.  New Zealand has discarded the “wait around for the private sector” approach, which has left the country with stiflingly slow and heavily capped broadband at high prices.  Instead, it will create an open access fiber optic network on which private providers can compete and offer consumers the speeds they desire.  Communications and Information Technology Minister Steven Joyce issued a statement explaining why the government was getting involved:

Private sector companies have decided, on behalf of their shareholders and as a commercial decision, not to invest in a nationwide network of fibre-to-the-home at this point in time.  The government understands this, and so wishes to assist and work with the private sector in improving the business case for ultra-fast broadband.

The government is also getting involved in order to encourage the provision of widespread open access dark fibre services, which will facilitate the best possible competition outcomes in emerging markets and encourage innovation in wholesale and retail services.

For residents in 33 communities across the country targeted for access to the new network, it cannot come soon enough.  For many of them the most important issue, even beyond speed, is an end to what one Henderson resident called “the current crap called ‘data caps.'”

“The speed of the broadband is meaningless compared to the tiny data caps involved.  On the current slow broadband, I use up my 50GB data cap 12-15 days into the month.  Ultra fast broadband would only be useful with no data caps involved, because the existing broadband speed is twice as fast as the cap already,” Lucy in Auckland told the New Zealand Herald.

Rose in Glenfield agrees:

“We have a 20GB data cap that we chew through in about 10-14 days, and then we are stuck on 64kbps or we have to pay another $30 for another 20GB to get through the rest of the month. When are they going to address these kinds of issues,” she asks.

New Zealand has seen the impact of Internet Overcharging schemes for years.  Providers originally introduced ‘data caps’ to reduce the usage on their networks, but have since relied on them, and consumption billing also as a way to collect revenue.  Most residential customers endure usage caps of 20-50GB per month.  After that, some providers dramatically reduce their connections to just above dial-up speed, while others have found new revenue by charging customers $2/GB or more in overlimit penalties and fees.  Some offer additional usage allotments, but at high prices, such as $30 for 20GB of additional usage.

The result has been a dramatically lower adoption of broadband in New Zealand, and many don’t think it’s worth the money.

John Rutter in Howick suggests speed is secondary to dealing with the issue of loathed usage caps.

“I like the idea of a ultra-fast broadband investment initiative but I hope Internet service providers like Vodafone, Slingshot, and Orcon will provide unlimited Internet soon. Unlimited Internet should come first, then ultra-fast broadband,” he said.

The government has received public support for its broadband initiative.  The public benefit is a much faster “public highway” on which private providers can offer service to individual customers.  By constructing a fast pipeline publicly that no provider is willing to provide privately, it creates additional value for consumers who find faster, more reliable service, preferably on better terms.

“Already a number of companies have shown interest in the government’s broadband initiative,” Joyce said in a statement. “It’s time to get on with finding the right partners to build these networks.”

The government “is prepared to accept a less than commercial return” from the partners. It aims to hold less than 25 per cent in the partnered investment vehicles and will resist contributions of more than 50 per cent.

For rural New Zealand, the answer generally won’t come from a fiber-based strategy, Joyce says.  Instead, the government estimates $300 million will be needed from public and private sources for a rural broadband plan.  Significant portions of New Zealand are difficult to reach with traditional broadband networks, and many New Zealand residents in even medium sized outlying towns find themselves on long waiting lists for what service is available.

Steve in Wellington told the Herald “a lot of towns (like Richmond, Tasman and Rolleston – not just remote areas) have issues where due to lack of exchange space many people cannot get broadband or are on ‘port waiting lists’ waiting for ports to become available. I think the main issue should be ensuring access to broadband full stop. Not just faster for those lucky enough to already have it.”

Rural broadband through wireless is one initiative under consideration.  WiMax technology can deliver fast broadband to rural area, often at faster speeds than traditional telephone company DSL in rural communities.

All-you-can-eat buffets, steak dinner vs. salad check splitting, electric and water service meters, toll highways with trucks vs. Mini-Coopers….  The justifications for Internet Overcharging representing “fairness” in broadband pricing have involved just about every analogy the broadband industry can come up with, all designed to make you think sticking a bigger bill to someone else down the street will somehow make your broadband bill smaller.

To convince sucker people into “billing fairness” that doesn’t actually reduce your pricing but could dramatically increase it is a tricky proposition.  To make it work, they have to convince you of a broadband boogeyman up the street who is using up all your Internet and making you pay for it.

As the Re-Education effort continues among the astroturfer and industry PR crowd, the one service broadband providers strenuously avoid comparing themselves to is your local telephone or cell phone provider.  That’s ironic, considering telephone companies move your calls around much the same way Internet traffic moves from point to point.  It’s the closest comparative service around, but your Internet provider doesn’t dare use it in their analogies, because the entire argument for Internet Overcharging schemes falls apart when they do.

While some in the broadband industry want to take your flat rate pricing away, the telephone and cell phone industry is working harder and harder to move to flat rate pricing. Many traditional phone companies now peddle their own unlimited nationwide calling phone plan for $20-40 a month.  Even some of the same broadband providers that want to take away your unlimited broadband service continue to mail blizzards of postcards and saturate the airwaves with marketing for their “talk all you want” unlimited phone plans.

In the mobile phone industry, an all-out price and feature war has erupted, as providers offer practically unlimited local and long distance calling.  No more buckets of minutes to count, no more overage penalties, no more worries about putting off calling until the evening or weekends to protect your minute allowance.

In the past week, major providers have fallen all over themselves with new unlimited calling plans.  Let’s take a look at today’s mobile calling landscape:

AT&T: Last Wednesday, AT&T launched A-List, primarily in response to Sprint’s new Any Mobile, Anytime (see below).  A-List lets customers add up to five numbers on an individual plan or up to 10 shared numbers on a FamilyTalk plan for unlimited calling to and from any phone number in the United States.  The new feature begins September 20, and customers can change their A-List members at any time.  Since customers often make the vast majority of their calls to a select group of people, it’s easy to get virtually unlimited calling that doesn’t exhaust your minute allowance.

Boost Mobile: Back in January, Boost Mobile, the prepaid mobile phone service using the Nextel system (certain areas also provide Boost on Sprint’s network), launched a $50 unlimited calling plan that also includes unlimited handset data use, unlimited text messaging, unlimited walkie-talkie use, no roaming, no hidden fees, no contract and no credit check.

Cricket: Cricket has always had a business plan catering to the prepaid user looking for generous or unlimited calling.  The company heavily emphasizes its package bundles, such as their $45 monthly plan that offers unlimited calling, unlimited text, video and picture messaging, unlimited mobile web browsing, and free 411 service.  The downside is their more limited coverage area, operating primarily for customers in urban and adjacent suburban areas, and providing almost no rural coverage at all.

MetroPCS: Similar to Cricket, MetroPCS aggressively prices unlimited calling plans and bundles in its more limited service areas.  For $40 a month, customers enjoy unlimited long distance calling, unlimited text and picture messaging, and web access.  That pricing is comparable to many wired phone lines with a package of phone features without unlimited long distance.  MetroPCS operates with a similar approach to Cricket – provide good coverage in the urban and suburban areas they focus service on, but usually ignores rural or more distant suburban areas.

PlatinumTel: Operating on the Sprint network, PlatinumTel is another prepaid provider offering unlimited calling, but with some important differences.  For $50 a month, customers enjoy unlimited calling to any domestic phone numbers, unlimited text messaging, etc.  But the service also provides unlimited roaming off their network, so if you get outside of Sprint’s coverage area, but are able to get a signal from another provider, you can still make and receive calls without incurring huge roaming fees.  You also get 100MB of included data (a small additional fee adds more data).

Straight Talk (from TracFone): If you’ve been to Walmart, you have probably seen TracFone phones and prepaid top-up cards at their stores.  TracFone is another provider that operates on someone else’s cellular network.  Their Straight Talk service operates on the robust Verizon Wireless network, providing excellent coverage in most areas except most of Kansas, Nebraska, Nevada, Mississippi and western Texas.  A $45 monthly fee brings unlimited minutes and text messages, but only 30 megabytes of data for data-enabled phones.

Sprint Nextel: Already offering unlimited calling to other Sprint mobile customers, the third largest national mobile phone company last week introduced Sprint Any Mobile, Anytime. It allows you to call and receive calls from any cell phone on any network in the USA unlimited for free. You’re not limited to just one network or one calling circle. The feature is now automatically added to the Sprint Everything Data plans starting at either the $69.99. The plan also comes with unlimited text messaging and data. The new Any Mobile, Anytime will be especially popular with younger people who have already abandoned traditional landline telephone service and rely exclusively on mobile phones.  You literally cannot exhaust your minute allowance calling these people.  In fact, the only way to burn your minutes under this plan is to roam outside of Sprint’s network or call people on traditional wired phone lines.

T-Mobile: T-Mobile offers the myFaves Minutes plan, which gives customers unlimited minutes to any five numbers of your choice on any network, mobile or landline (excludes toll-free/900 numbers).  It’s easy to use T-Mobile as an unlimited wireless phone provider assuming the majority of your minutes are spent talking to up to five numbers every month.

Verizon Wireless: Already offering unlimited free calling to other Verizon Wireless customers (there are a ton of those), the company also introduced Friends & Family in February. With an eligible plan, customers have unlimited calling to a select group of numbers outside their standard mobile-to-mobile calling group, including landlines. This gives single line accounts up to 5 numbers to choose from on plans with 900 or more minutes, and family plan accounts up to 10 numbers to choose from on plans with 1,400 or more minutes.

Virgin Mobile: Virgin Mobile relies on Sprint’s network, and with Sprint Nextel’s planned purchase of Virgin Mobile, which the company hopes to complete this November, it may soon become Sprint Nextel’s in-house prepaid service.  Virgin Mobile introduced its Totally Unlimited calling plan on April 15.  For $50 a month, customers get unlimited calling.  For an additional fee, unlimited texting is added, along with mobile data options.

It’s difficult, at best, to make the kind of analogy the broadband industry wants to regarding “paying for what you use” when one of their closest cousins is competing hard to give you “all that you want for one price.”

Update: 9/15 — Jayne Wallace, a representative for Sprint Nextel, wrote to clarify “Sprint Nextel has not yet purchased Virgin Mobile…we do expect the deal to close in November. As of now, we are publicly held. Also since you mention broadband, we’ve also applied the pay as you go pricing here with Broadband2Go, the only nationwide prepaid broadband product available.”  The article text under Virgin Mobile has been adjusted to reflect the planned purchase.

Just like FairPoint Communications, the Towering Inferno of phone companies haunting New England, Frontier Communications is making a whole lot of promises to state regulators and consumers, if they’ll only support the deal to transfer ownership of phone service from Verizon to them.

This time, Frontier is issuing a self-serving press release touting their investment of some $4 million dollars in its broadband networks in Charles Town and Princeton, West Virginia.  But the best part was the claim the upgrades would “offer customers fast broadband speeds and near-unlimited bandwidth capacity.”

In Princeton, 44 miles of fiber-optic cable will connect all Frontier High-Speed Internet (HSI) equipment to the exchange`s main switch, and 37 additional miles of fiber cable are being installed in the Charles Town exchange. These upgrades will allow Residential HSI speeds of up to 6 Meg and Business HSI speeds of up to 12 Meg. The upgrades will allow provisioning of Metro Ethernet service of up to 100 Meg, resulting in very high data speeds for private networks among multiple business locations.

These upgrades are all well and good, and are perhaps more than urban-focused Verizon was willing to do in the state, but before West Virginians get too excited by the words “fiber cable” and “near-unlimited bandwidth capacity,” it might be wise to consider the implications of transferring an entire state’s telephone business to a company that still insists on defining an “appropriate amount of usage” on that near-unlimited network at a piddly 5GB per month.

The company also promoted their “computer giveaway” program:

Recognizing that the lack of a personal computer is a barrier for many families, since 2006 Frontier has provided more than 10,000 free computers to qualifying customers in West Virginia. A large percentage of the computers went to first time computer households, who also benefited from free on-site installation.

To the uninitiated, that may suggest a benevolent phone company handing out free computers to the needy with no strings attached.  In fact, this was a Frontier customer acquisition promotion.  Customers signing up for a bundle of telephone and broadband and/or satellite service could qualify for a free basic Dell Netbook (valued at under $400), if they are in good standing with the company, agree to a “price protection agreement” holding them to the company for two years (or facing a nasty early termination fee running several hundred dollars), and also pay a handling fee:

Customer pays handling charges and taxes totaling $45. Customers must subscribe to a new package of Frontier residential local service with features, Unlimited Nationwide or Statewide Long Distance voice-calling and qualifying High-Speed Internet service. Requires a two-year Price Protection Plan on Frontier services (excludes satellite TV) with a $300 early termination fee. Offer available while supplies last. Frontier reserves the right to substitute a comparable Mini Laptop. Other offers available for existing High-Speed Internet customers. Applicable taxes and surcharges apply. Electronic or other written contract signature for Frontier services is required. Some Frontier services are subject to availability. Installation charges may apply. Unlimited U.S. Long Distance minutes are for residential voice usage and exclude 900, international, directory assistance and dial-up Internet calls.

For a whole lot of West Virginia, broadband service means one thing – DSL from the phone company.  Satellite broadband is costly, capped, and has terrible customer satisfaction ratings.  Cable television is a dream for significant parts of the mountainous state.  Do West Virginians want to risk their broadband future on a company that insists on an Acceptable Use Policy with a 5GB usage limit in it?

Residents of Rochester, New York know Frontier Communications all too well.  They’ve been our local telephone company since being absorbed by Citizens Communications after the colossal downfall of Global Crossing, which took ownership of the formerly independent Rochester Telephone Corporation.

Don’t let dreams of fiber dance too much in your head.  Frontier routinely installs fiber, but only between their central offices and remote equipment that helps reduce the distance between telephone switch equipment and the copper wiring out on the telephone poles.  It does help provide the potential of speed increases for DSL service by reducing the length of copper wire DSL travels on, but by no means should imply West Virginia will see fiber to the home in their near future.

If Frontier Communications lacks the means and the will to wire New York’s second largest economy and third largest metropolitan area with more than 1,000,000 residents with fiber to the home, don’t think for a moment they’re going to be any hurry to light up the state of West Virginia.

Indeed, for many residents of the Flower City, the bloom is well off Frontier’s rose, trapping this community in a broadband backwater with a telephone company unwilling and/or unable to provide the kind of 21st century broadband service that is presently being provided in several other upstate cities as Verizon installs its FiOS fiber network.  For Rochester, and for too many other cities, the broadband superhighway from the phone company has little more than tumbleweeds blowing across.

This site was founded last year when Frontier introduced its 5GB usage cap, and we coordinated a consumer response which forced the company to pull back from its enforcement.  But the threat still looms over the heads of their customers from coast to coast as long as it remains a part of their Acceptable Use Policy.

The time has come for Frontier to banish the 5GB language from its Acceptable Use Policy once and for all and stop toying with Internet Overcharging schemes altogether, especially as it seeks to bring the threat of those schemes to millions of Americans that may find their only realistic broadband option coming from this provider.  Otherwise, it’s time for consumers to get on the phones and tell their elected officials and public utility commissions how they feel about getting broadband service from a phone company that tells them:

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.

It’s bad enough when service providers overcharge us for service we use, but it’s even worse when they bill you for services you don’t.

Verizon Wireless may be looking at millions of dollars in refunds for customers who got dinged $1.99 monthly fees on their Verizon Wireless bills labeled mysteriously as “Usage Charges, Data.”

Two dollars on a phone bill that typically exceeds $50 or more is likely to be missed by a lot of consumers skimming the fees, surcharges, taxes and other impenetrable charges that get tacked on to your monthly service.  Even worse, since Verizon charges a fee for a printed bill, most customers never even bother to look at the electronic online bill beyond the general e-mail notification received each month letting you know it has arrived.  But some Cleveland-area residents did bother to take a look, and they didn’t like what they saw:

The Money Matters column chronicled the writer’s six-month ordeal with $1.99-per-month data charges and the possible causes given by Verizon’s customer service workers. All, it turned out, were wrong or only partly true.

More than 400 Plain Dealer readers responded to the newspaper with complaints similar to the ones in the column. The readers collectively pay for more than 1,000 phone lines. In addition, calls to customer service and visits to Verizon stores increased noticeably after the column.

Take a look at your bill

Where to look for the data usage charge: The first page of your bill should have a section labeled “Quick Bill Summary.” Look under the summary for “Usage Charges, Data.”

What to do if you spot an error
Call Verizon customer service (800-922-0204) or visit a full-service store to investigate the charges and ask for a credit.

If Internet usage is the issue, ask technical support to track down the Web sites visited, and dates and times.

If premium text messages are the issue, determine whether you have applications that are downloading information automatically. Go to your “menu,” then click “media center.” You may need Verizon’s help determining what applications cost money.

You can block features you don’t use and don’t want to be charged for by accident, such as Internet access or the weather forecast. Access your account online, call customer service or visit a store.

At a minimum, thousands of customers apparently have been charged $1.99 per month for Internet “data usage” even though they had not tried to go online. In some cases, customers were charged when their phones were off, the batteries were dead, the phone’s Internet access was blocked or even when the phones didn’t have the software to go online.

One clue might be customers who inadvertently accessed the Internet browser just for a few seconds by mistakenly pressing the wrong keys on the phone.  Even a momentary activation of a Mobile Web service could generate the access fee, even if you hit the “end” key on the phone within seconds.

Frustrated customers catching the charge on their bills each month then have to pursue the ordeal of contacting customer service to have the charge removed, and frequently run into misinformed customer service representatives who argue the fees are valid for services customers don’t even have, or are offered free of charge by Verizon Wireless.

Some readers say they’ve been battling the charges for more than a year. Most said they’re tired of calling Verizon month after month. Some were irate because they’d punished their children because they wrongly believed the kids had gone on the Internet. One reader said his mom’s phone was charged for Internet access – weeks after the mother had died and her phone sat idle in her empty home.

Karen Fullerman of Twinsburg is typical of customers who complained to The Plain Dealer last week.

Fullerman has three phone lines; two are for her 23-year-old twin daughters. Fullerman has been charged $1.99 on one or two phones every month. And sometimes there’s an extra $9.99 download fee. Fullerman, who recently lost her job, said every dollar counts these days.

She insists that none of the three has gone on the Internet. And she said Verizon has told her repeatedly that the company has blocked the phones’ ability to go on the Internet – yet the Internet charges continue.

The same is true for James Grega of Brunswick, whose four phone lines with Verizon have been getting charged sporadically for about four months.

“The phones are still being charged after I had them blocked,” Grega said. “Their assurance that the $1.99 charges would stop has been a joke.”

Now, some customers who have repeatedly been credited for erroneous charges are being denied for future requests, and that is partly what prompted The Plain Dealer to get involved.

Verizon Wireless claims to be investigating the problem and promises customers full credit, assuming they specifically request it.  Therein lies a major problem for consumers, one that benefits providers with billing problems.  Consumers frustrated by long hold times or the aggravation of requesting credits may forego doing so, providing a windfall for the service provider based on a billing error.

Roger Tang, a regional vice president for Verizon, told The Plain Dealer it would resolve accidental web browser access when consumers hit the wrong buttons on their phones.  The default home page for most Verizon phones is Verizon’s own web page.  The company will make visits to that page exempt from Internet time charges “as soon as possible.”

[flv width=”320″ height=”240″]http://www.phillipdampier.com/video/WMAR Baltimore Verizon Wireless 199 Mystery Fee 9-8-09.flv[/flv]

WMAR Baltimore ran a Scam Alert on Verizon Wireless Overcharging (9/8/09)

ABC - Australia's National Public Broadcaster

The Australian Broadcasting Corporation has called on the federal government to have its online video service exempted from Internet Service Provider usage caps.

Mark Scott, ABC’s Managing Director, called on the government to intervene as part of Australia’s development of a National Broadband Network (NBN).  In comments directed to legislators drafting the regulatory framework for the NBN, Scott argued that “publicly-funded content and services carried over the NBN, including those of the ABC, should be available free to the Australian people.”

Scott is referring primarily to the ABC’s iView portal, which allows Australians to watch ABC-TV programming online.  Scott is worried that without an exemption, Australians simply won’t take advantage of the service, fearing they’ll exceed their monthly usage allowance.

The majority of Australia’s ISPs have strict usage limits on their services, blaming the expensive and limited underseas fiber connections Australia has with the rest of the global Internet.  Scott argues that since ABC content will be domestically distributed, there is no valid argument to cap it.

Only a small handful of ISPs, iiNet, Internode, iPrimus, Westnet and Adam Internet among them, provide the content without it counting against your usage allowance.