Rottenchester, a Stop the Cap! regular reader, discovered an impenetrable recipe for comprehension disaster in an online essay entitled, The Government, Road Runner, and David Letterman: A Farce in Three Acts.  Written by Susan Edelman, who has a Ph.D. in Economics from Stanford University and was an economist at the Federal Communications Commission (FCC) and the Department of Defense, the essay remarkably tries to present a broader point about government involvement in broadband, Road Runner Internet Overcharging, outrage at David Letterman for his comments about Sarah Palin, and government intrusion in our lives.

It’s a taffy pull thesis I don’t have the courage to attempt, and I was left completely mystified about what the takeaway message was.

WHAT IT ALL COMES DOWN TO, AND ARE YOU SURE YOU WANT THIS?
The assertion that Americans having a right to reasonably priced Broadband service.  This might be a good idea, and is in accord with the treatment of other types of transmission lines.  But do not kid yourself:  this would be the creation of another government-enforced right.  Only government can create and enforce rights.  But isn’t government incompetent?  And doesn’t private business do everything right without government meddling?. (And while you are thinking about this, keep in mind that all Americans do not have the right to reasonably priced health care. )

Edelman rapidly risks losing her argument by default, because most readers are likely not to understand it.  Having been involved in the Road Runner Affair since it began in April, she has lost me, and I have lived and breathed this issue for months.  One potential interpretation of her argument might be is the apparent irony of many conservative Rochester residents calling out the Obama Administration in the pages of the local newspaper with reflexive government=bad and free market=good arguments.  Perhaps in her eyes, many of these same people called out in those same pages for regulatory government relief from abusive broadband pricing.

If so, two points:

1)  I honestly believe most people will not ponder her piece long enough to ferret out a takeaway message.

2) There is no evidence the “free marketeers” were the ones reacting with outrage over Time Warner Cable’s experiment gone wild (and then shelved for now.)  In fact, as soon as Senator Charles Schumer (D-NY) got involved, the editorial feedback pages in the local media from conservatives, along with some local conservative talk radio, rapidly turned the issue of Internet Overcharging into a Senator Schumer Bashing Party.  I have no doubt some of those not closely following the issue automatically adopted the opposite position Schumer had just because of their passionate dislike of him.

Most consumers, in my experience, rightly treated this issue as above the usual right-left tug of war.  That’s because overcharging for broadband isn’t a right or left issue.  It’s a consumer issue.  The conservative thinkers appreciate the strong push towards forcing additional competition in the marketplace.  Those with a politically liberal philosophy aren’t opposed to competition, but want the extra security of government oversight and/or regulation where competition does not exist.

It’s my personal view that telecommunications policy is complex enough without dragging David Letterman and Sarah Palin into it.

Richard Greenfield, Pali Research

Wall Street media analyst Richard Greenfield of Pali Research is telling investors that the era of quick cash from “digital phone” service customer additions is probably coming to an end.

Greenfield penned a research note last week pointing out that despite the blizzard of postcards, mailers, and wall-to-wall advertising cable operators do to promote their “digital phone” services, it’s getting tougher to sign up new customers.  Mike Farrell in Multichannel News condensed the marketspeak down:

In a research note, Greenfield noted that industry-penetration leader Cablevision Systems, which has telephony in 40% of its homes passed and more than 60% of its basic-video base in a triple-play bundle, took six years to reach those milestones. Time Warner Cable after five years has about 15% penetration (27% of subs in a bundle); Comcast, four years into telephony, has 13% phone penetration and 24% of its subs in a triple-play bundle.

The year 2008, the analyst noted, was the first that net telephony additions fell for both Comcast and Time Warner Cable.

“While Cablevision is way ahead of its peers in telephony, the question is now becoming, will its peers be able to get to even 25% penetration, let alone the 40%-plus levels Cablevision has achieved or is the opportunity to further cement the bundle simply dwindling by the day?” Greenfield asked.

For the uninitiated:

• “Homes passed” refers to homes where cable service is available;
• “Triple play bundle” refers to customers who take three services – cable TV, Internet, and telephone service in a bundled package from a provider;
• “Penetration” refers to market share.  In the case of Time Warner Cable, only 15% of their subscribers sign up for “digital phone” service, but the number is higher for those with a bundled package.

Greenfield, who often annoys cable companies and instigates angry press releases from some cable trade associations, represents the Wall Street investor types, who are not pro-company or pro-consumer.  They are simply pro-money for investors.

Investors are very concerned this year about cable company stock value.  They worry customers are starting to cancel cable television packages (or at least downgrade their service to get fewer channels), and are now also concerned telephone revenue will not grow at the traditional rate it has since “digital phone” service was introduced.

Broadband service is the exception.  It remains highly profitable and is continuing to grow even during hard economic times.

Stop the Cap! believes that cable operators will look more and more to broadband profits to help prop up their stock price, making it imperative that broadband service deliver as much profit as possible, while operators crack down on costs.  Internet overcharging schemes, such as limiting and discouraging access, raising prices, or a combination of both can reduce costs even further while maximizing profits, particularly in markets where limited or no competition exists.

Suddenlink Usage FAQ:

On June 1, 2009, we notified residential Internet customers in our Clovis, New Mexico cable system of a new online tool to help them monitor their Internet usage each month and determine if they are in the typical usage range.

If they are well above the typical range, it could mean several things. For instance: a virus or “spyware” application might have infected a customer’s computer and started generating high levels of Internet traffic, or someone else might be using a customer’s Internet connection without his or her knowledge. To help guard against those issues, we are offering customers a list of steps they can consider, to help make sure their computers and Internet accounts are protected and secure.

We introduced this Internet usage summary tool in Clovis, to evaluate its usefulness, after which we will consider expanding it to all of Suddenlink’s residential Internet customers.

Longtime Stop the Cap! readers will recognize this trick only too well.  When a small cable operator spends its time, talent, and resources on “measuring tools” to help customers “determine if they are in the typical usage range,” it’s only a matter of time before that ‘experiment’ will turn into typical Internet Overcharging activity — usage caps, consumption-based pricing, overlimit fees and penalties, or service termination for those outside of that “typical usage range.”

Suddenlink, one of the nation’s smaller multiple cable system owners serving 1.3 million customers in mostly rural areas, is among the worst-rated providers in the country, based on actual customer reviews.  Its journey towards Internet Overcharging schemes will do its ratings no favor when customers find out.

Suddenlink’s approach is less brazen than earlier Internet Overcharging attempts consumers have fought back.  The company attempts to leverage the usual talking points about Internet activity into a justification for measurement tools, and cleverly tries to suggest the impetus for doing so is to protect customers who might have been hacked or have family members engaged in online activities unknown to others in the home.  But the road that measurement tools provided by a cable company pave today lead to limits and higher pricing tomorrow.

Suddenlink’s contribution to the “education campaign” consumers are being subjected to before the pickpocketing begins does bring some useful information to the table, however.  This small, mostly rural provider, turns in stunning statistics about average customer consumption:

Suddenlink 'Typical Usage' Statistics - Clovis, New Mexico (Suddenlink website 7/23/2009)

Those numbers represent one of three things:

1. Suddenlink is the first provider in a long list of providers producing honest statistics about broadband usage, not the low-ball estimates others have provided to make consumers feel guilty for exceeding them;
2. Suddenlink’s statistics are wrong;
3. People in Clovis download A LOT.

Just about every other major provider, and many small ones, have spent the past year telling the media and the public “the average user” consumes far less than what Suddenlink reports for Clovis, New Mexico:

• Frontier Communications: “Today, the average residential customer on Frontier’s network uses 1.5 gigabytes of bandwidth each month.” — Ann Burr 10/10/2008
• Time Warner Cable: “Our usage data show that about 30% of our customers use less than 1 GB per month.” — Landel Hobbs, COO 4/9/2009
• Time Warner Cable Austin: ‘Users download between 5-6GB per month on average.’ — Scott Young, senior director of digital systems  10/2008
• Comcast: “The average customer uses two to three gigabytes a month.” Jennifer Khoury, Comcast spokeswoman 10/29/2008
• Sunflower Broadband: “Our average users, about 77%, use 6 gigabytes or less of bandwidth per month. Our high-end subscribers, about 2%, use 50 gigs or more.” Sunflower Broadband Website 7/23/2009
• Bell (Canada): “Usage has increased… to more than 10GB (per average user) in 2008.” Bell Internet Usage Tutorial 7/23/2009

For the benefit of Suddenlink subscribers joining Stop the Cap! for the first time, here’s a road map for where things have traditionally gone among every other Internet provider that has introduced “measurement tools” for “your benefit” that were not beaten back by angry subscribers:

… Continue Reading

Netgear’s Rangemax™ Dual Band Wireless-N Gigabit Router – Premium Edition (WNDR3700) will be Netgear’s first router to include usage monitoring capability built-in.

For many consumers asked, “how many gigabytes do you use on your Internet connection each month,” the answer is often a question: “what is a gigabyte?”

Because of efforts of Internet Service Providers to try and implement Internet Overcharging schemes, consumers who have no interest watching a company-provided web page “gas gauge,” will at least be given an independent way of assessing their monthly usage – through the router that often connects a cable or DSL modem to a home computer.

Netgear will introduce a new router this August that will include built-in usage monitoring tools.  The Netgear Rangemax™ Dual Band Wireless-N Gigabit Router – Premium Edition (WNDR3700) will sell for $190, and is targeted to high end users.  Netgear promises to introduce the feature on new router models going forward, eventually becoming a standard feature on every router sold by the company.  Software upgrades will be available to introduce the measurement tool to older equipment already in use.

Usage monitoring tools aren’t actually new.  Replacement “firmware” such as Tomato and DD-WRT, already measures usage, typically with a monthly consumption total.  That makes it much easier than some software measurement tools, which can only measure usage when left running (and only on a single computer).

Similarly, in the realm of website monitoring, the integration of log analysis tools has seen a parallel evolution. While Netgear’s upcoming router brings usage monitoring tools into the spotlight for network management, log analysis tools have long been at the forefront of web administrators’ toolkits. Just as Netgear plans to make usage monitoring a standard feature, log analysis tools have become an indispensable standard for dissecting website traffic patterns and ensuring optimal online performance. These tools offer a comprehensive view of website activity, surpassing the capabilities of basic software measurement tools, and have proven their value as essential assets in maintaining web functionality and security.

Most consumers are not interested in measuring usage, but with the threat of overlimit fees and penalties or service termination, router manufacturers have begun to include measurement tools to help consumers keep track just in case.

Some providers, like Comcast, provide a monthly allowance of 250GB and only actively pursue the top 1% of customers who wildly exceed that.  Others, as have been regularly documented on Stop the Cap!, create very low limits, and then overcharge consumers with penalty fees when they exceed them.  Time Warner Cable met extremely hostile opposition to their roundly-attacked “tier experiment” in April, and quickly shelved the proposal until a company “education” campaign can be run.  The importance of checking usage will vary depending on how draconian of a limit one’s provider sets for its customers.

Netgear’s announcement can be read both positively and negatively.  It’s positive because it allows customers to independently measure their monthly usage and expose any providers who “play with the numbers” and overbill customers for usage never consumed.  It’s negative because it plays into industry arguments that measurement tools are a necessary element to conduct business, and helps establish a foundation to implement Internet Overcharging schemes.  Critics call such schemes unnecessary, considering the highly profitable returns providers enjoy at current pricing.

Cisco Systems, which owns Linksys, another major router manufacturer, is also considering bandwidth measurement tools for its router line in the future.

There is bad, and then there is REALLY, REALLY BAD.

CableOne punishes you if you exceed your daily usage allowance.

CableONE’s new residential broadband Internet Overcharging pricing achieves new lows among American broadband providers – low caps that is.

The company has boosted the speed of its residential broadband services, and lowered the allowance you receive each month to use it.  The “Economy” package, if used to any degree for anything beyond e-mail and a smattering of web page viewing each month, will wreak havoc on any household budget.  Providing just 1.5Mbps downloads and 150kbps uploads for $26 a month, your monthly usage allowance is just ONE gigabyte.  Exceed that at your financial peril.  The overlimit penalty is a whopping $10/GB, and that full $10 is billed whether you exceed your allowance by one byte or 999 megabytes.  CableONE graciously limits their Money Party to a maximum $50 in overlimit penalties, putting your broadband service you thought you paid $26 for at the “reasonable” price of up to $76 a month.

But there is a way to steer clear of the overcharging, if you are a night owl.  The company turns the “meter” off from 12 midnight until 12 noon the following day.

CableONE’s other residential plans now also have lower consumption allowances, designed to limit your day to day use of your broadband service.  Instead of adopting a monthly maximum allowance, the company imposes daily limits that do not “roll over” from day to day.  If you use your connection heavily one day, but not at all the next three, you could still find yourself over the limit.

Standard Service: 5Mbps/500kbps – $49/month – 3 GB Daily Usage Limit
Premium Service: 10Mbps/1Mbps – $59/month – 5 GB Daily Usage Limit

Going over your limit between one and 14 days per month will result in an automatic downgrade in your broadband speed to the next lowest tier.  Exceed it more than 15 days per month, and your account will be terminated.

The company has suggestions for customers who want to reduce their usage to stay compliant.  Right on top: stop watching those online videos.

Suggestions for Reducing Bandwidth

CableONE’s service counts bytes used during the peak usage period which is defined as 12 noon to 12 midnight.

The following types of usage consume high amounts of bandwidth and should be avoided during peak usage period:

• Movie downloads
• Streaming Video
• Picture downloads or uploads
• Leaving your browser open on pages that “refresh” automatically

Some of the programs you have installed will try to update themselves periodically by downloading files. You can typically set your program to schedule updates during off-peak times. Windows software can be set to update overnight as well. Updates and large downloads done between midnight and 12 noon do not count against your allocation.

Subscribers, particularly in southern Mississippi, have had an increasingly difficult relationship with CableONE.  In March, a subscriber announced a lawsuit against the cable operator for gouging customers on set top boxes, required for digital cable viewing.  CableONE charges its customers $11 a month for a regular Motorola cable box and $23 for its HD-DVR box.  In June, a suspicious white powder was found in the Biloxi CableONE office, that was later determined to be harmless.

An unintentionally amusing CableONE ad follows the jump below.

… Continue Reading