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Wall Street Journal Says Faster Internet Not Worth It, But They Ignore Bottlenecks and Data Caps

The Wall Street Journal believes the majority of Americans are paying for internet speed they never use or need, but their investigation largely ignores the question of traffic bottlenecks and data caps that require many customers to upgrade to premium tiers to avoid punitive overlimit fees.

The newspaper’s examination was an attempt to test the marketing messages of large cable and phone companies that claim premium speeds of 250, 500, or 1,000 Mbps will enhance video streaming. A total of 53 journalists across the country performed video streaming tests over a period of months, working with researchers at Princeton University and the University of Chicago to determine how much of their available bandwidth was used while streaming videos from Netflix, Amazon Prime Video, YouTube and other popular streaming services.

Unsurprisingly, the newspaper found most only need a fraction of their available internet speed — often less than 10 Mbps — to watch high quality HD streaming video, even with up to seven video streams running concurrently. That is because video streaming services are designed to produce good results even with lower speed connections. Video resolution and buffering are dynamically adjusted by the streaming video player depending on the quality of one’s internet connection, with good results likely for anyone with a basic broadband connection of 10-25 Mbps. As 4K streams become more common, customers will probably get better performance with faster tiers, assuming the customer has an unshaped connection that does not throttle video streaming speeds as many mobile connections do and the streaming service offers a subscription tier offering 4K video. Netflix, for example, charges more for 4K streams. Some other services do not offer this option at all.

Image: WSJ

WSJ:

For most modern televisions, the highest picture clarity is the “full” high-definition standard, 1080p, followed by the slightly lower HD standard, 720p, then “standard resolution,” 480p. The Journal study found a household’s percentage of 1080p viewing had little to do with the speed it was paying for. In some cases, streaming services intentionally transmit in lower resolution to accommodate a device such as a mobile phone.

When all HD viewing is considered—1080p and 720p—there were some benefits to paying for the very highest broadband tiers, those 250 Mbps and above.

Streaming services compress their streams in smart ways, so they don’t require much bandwidth. We took a closer look at specific services by gathering data on our households’ viewing over a period of months. Unlike the “stress test,” this was regular viewing of shows and movies, one at a time.

Netflix streamed at under 4 Mbps, on average, over the course of a show or movie, with not much difference in the experience of someone who was paying for a 15 Mbps connection and someone with a one gigabit (1,000 Mbps) connection. The findings were similar for the other services.

There is a brief speed spike when a stream begins. Netflix reached the highest max speeds of the services we tested, but even those were a fraction of the available bandwidth.

Users watching YouTube might launch a video slightly faster than those watching Netflix, and at lower resolution, but this is a function of how those services work, not your broadband speed, the researchers said.

Whereas Netflix tries to load “nice high quality video” when you press play and hence has higher spikes, YouTube appears to “want to start as fast as possible,” said Paul Schmitt, one of the researchers.

A spokeswoman for Alphabet Inc.’s YouTube said the service chooses playback quality based on factors including type of device, network speed, user preferences and the resolution of the originally uploaded video. A Netflix Inc. spokeswoman said the company aims to deliver quality video with the least possible bandwidth. Amazon.com Inc. had no comment.

The Journal finds little advantage for consumers subscribing to premium speed tiers, if they did so hoping for improved streaming video. The unanswered question is why customers believe they need faster internet speeds to get those improvements in the first place.

The answer often lies in the quality of the connection between the streaming provider and the customer. There are multiple potential bottlenecks that can make a YouTube video stutter and buffer on even the fastest internet connection. Large providers have had high profile disputes with large streaming companies over interconnection agreements that bring Netflix and YouTube traffic to those internet service providers’ customers. Some ISPs want compensation to handle the increasing amount of incoming video traffic and have intentionally not allowed adequate upgrades to keep up with growing subscriber demand. This creates a traffic bottleneck, usually most noticeable at night, when even a small YouTube video can get stuck buffering. Other streaming videos can suffer from repeated pauses or deteriorate into lower resolution video quality, regardless of the speed of your connection.

Another common bottleneck comes from oversold service providers that have too much traffic and not enough capacity to manage it. DSL and satellite internet customers often complain about dramatic slowdowns in performance during peak usage times in the evenings and on weekends. In many cases, too many customers in a neighborhood are sharing the connection back to the phone company. Satellite customers only have a finite amount of bandwidth to work with and once used, all speeds slow. Some other providers do not pay for a large enough pipeline to the internet backbone, making some traffic slow to a crawl when that connection is full.

Customers are sold on speed upgrades by providers that tell them faster speeds will accommodate more video traffic, which is true but not the whole answer. No amount of speed will overcome intentional traffic shaping, an inadequate connection to the video streaming service, or an oversold network. Too bad the Journal did not investigate these conditions, which are more common than many people think.

Finally, some customers feel compelled to upgrade to premium tiers because their provider enforces data caps, and premium tiers offer larger usage allowances. Cable One, Suddenlink, and Mediacom customers, among others, get a larger usage allowance upgrading. Other providers offer a fixed cap, often 1 TB, which does not go away unless a customer pays an additional monthly fee or bundles video service.

Data caps are a concern for video streaming customers because the amount of data that can be consumed in a month is substantial. As video quality improves, data consumption increases. The Journal article does not address data caps.

Finally, the Journal investigation confined itself to video streaming, but internet users are also increasingly using other high traffic services, especially cloud backup and downloading, especially for extremely large video game updates. The next generation of high bandwidth internet applications will only be developed if high speed internet service is pervasive, so having fast internet speed is not a bad thing. In fact, providers have learned it is relatively cheap to increase customer speeds and use that as a justification to raise broadband prices. Other providers, like Charter Spectrum, have dropped lower speed budget plans to sell customers 100 or 200 Mbps service, with a relatively inexpensive upgrade to 400 Mbps also gaining in popularity.

Does the average consumer need a premium speed tier for their home internet connection? Probably not. But they do need affordable unlimited internet service free of bottlenecks and artificial slowdowns, especially at the prices providers charge these days. That is an investigation the Journal should conduct next.

NY PSC Clarifies Broadband Speed Requirement Merger Terms

Charter Communications is not obligated to upgrade New York internet customers to a minimum internet speed of 300 Mbps, according to a letter of clarification directed to Stop the Cap! and received today from the New York State Department of Public Service.

DPS:

In the Commission’s 2016 order, Charter was required to offer broadband internet service with speeds up to 100 Mbps to all customers served by its New York networks (including its Columbia County systems) by the end of 2018; and offer broadband internet service with speeds up to 300 Mbps to all customers served by its New York networks by the end of 2019. At the time of the Commission’s decision, although Time Warner operated some systems in New York that were already capable of offering customer speeds up to 300 Mbps, the majority of Time Warner customers in Upstate New York were limited to broadband speeds of 50 Mbps.

Charter was therefore required to upgrade its network to be able to offer broadband service at speeds up to 300 Mbps by the end of 2019 but was not required to increase its minimum service offering to 300 Mbps. Charter has reported that it has complied with this condition ahead of schedule and Department of Public Service Staff has begun the process of independently field-testing Charter’s network to verify compliance with the condition.

Stop the Cap! raised this issue with the Commission as part of the recent settlement agreement between New York State and Charter Communications, and sought an official clarification. Approximately 40% of Charter’s national footprint now receives 200 Mbps download speeds while most New Yorkers receive just 100 Mbps for the same price, putting the state at a disadvantage.

Dampier

“The Commission’s language in the original merger agreement was unclear, because Time Warner Cable had already embarked on a statewide upgrade to its so-called ‘Maxx’ service tiers, which included free speed increases, negating most of the benefits of the state’s condition requiring Charter to upgrade broadband speeds as part of its terms to approve the merger,” said Phillip Dampier, founder and president of Stop the Cap! “In fact, this merger made things worse for New Yorkers because customers would have been getting Time Warner Cable Maxx speeds as much as a year earlier than what Spectrum finally delivered across the state, and customers would have been offered a number of options for less costly internet service that Spectrum dropped.”

Shortly after the merger was approved, Charter placed a moratorium on Time Warner Cable Maxx upgrades and spent months attempting to knit Charter’s existing systems with the much larger Time Warner Cable.

Time Warner Cable Maxx speeds were well on the way throughout Upstate New York before Charter acquired the company and issued an upgrade moratorium.

“Consumers already know from their cable bills that this merger was just another bad deal for New York, and now nearly half of Spectrum’s national service area gets twice the speed Upstate New York gets for the same price, and there is no pressure on the company to deliver any additional upgrades,” Dampier added.

Stop the Cap! also urged the Commission to do all it could to make life easier for customers in the New York City area, where Charter has been trying to rid itself of union technicians that have been on strike for over two years.

“For all the talk by state officials, including the governor, it appears there is no end in sight for this strike and customers are caught in the middle,” Dampier said. “We hear frequently from New York City consumers about substandard repair work and unacceptable installations that suggest the company is not using the best available workforce to take care of customer needs. Charter is making loads of money in profits and can afford to offer a square deal to workers to end this strike and get these technicians back to work.”

What’s Eating Your Comcast Data Cap?

Comcast has put its proverbial finger to the wind to define an “appropriate” data cap it declares “generous,” regardless of how subjectively random that cap happens to be. Although 1,000 GB — a terabyte — usage allowance represents a lot of internet traffic, more and more customers are finding they are flirting with exceeding that cap, and Comcast has never been proactive about regularly adjusting it to reflect the reality of rapidly growing internet traffic. That means customers must protect themselves by checking their usage and take steps if they are nearing the 1 TB limit.

If you do exceed your allowance, Comcast will provide two “grace periods” that will protect you from overlimit fees, currently $10 for each extra 50 GB allotment of data you use. Another alternative Comcast will happily sell you is an insurance policy to prevent any risk of overlimit fees. For an extra $50 a month, they will take the cap off your internet plan allowing unlimited usage. But $50 a month is close to paying for your internet service twice and is indefensible considering how little Comcast pays for its customers’ internet traffic. It is just one more way Comcast can pick up extra revenue without doing much of anything.

Customers that do regularly break through the 1 TB data cap often have a guilt complex, believing they have no right to complain about data caps and should pay more because they must cost Comcast a lot more money to service. In fact, Time Warner Cable executives broadly considered internet traffic expenses as little more than a “rounding error” to their bottom line, according to internal emails obtained by the New York Attorney General’s office. Managing customers’ data usage is far less costly than network plant upkeep, the regularly increasing costs of video content, and expenses related to expanding service to new locations.

One VentureBeat reader investigated what chewed through Comcast’s data allowance the most, and it wasn’t easy:

Xfinity pretends to make this easier for you, but that’s a load of horsesh*t. Its X-Fi app claims to give you usage stats for your connected devices — only nothing appears up-to-date. The phone I was using to look at the X-Fi app doesn’t even appear on the connected-devices list. You also have to look at each device individually. I saw no way to sort a list of devices by data usage, which would obviously help a lot.

Some of the biggest data users are connected households, where multiple family members use a range of devices, often at the same time. Customers with multiple internet-connected computers, video game consoles, and streaming devices are most at risk of exceeding their cap.

Video Games Consoles/PCs

The biggest data consumption does not come from gameplay itself. It comes from frequent software updates, some exceeding 50 GB. If you play a number of games, updates can come frequently. In the case of the VentureBeat author, 17% of daily usage came from the home’s primary desktop PC. Another 12% was traced to the family’s Xbox One. An in-home media server that also runs Steam and auto-updates frequently was also suspect.

Streaming Devices

If you are not into video games and do not depend on cloud storage or large file transfers to move data back and forth, streaming set-top boxes and devices are almost certainly going to be the primary source of your biggest monthly data usage. Video resolution can make a difference in how much data is consumed. If you are regularly approaching or exceeding your monthly cap, consider locking down maximum video resolution for streaming on large televisions to 720p, and 480p for smartphones. Some streaming services offer customized resolution options in their settings menu.

Autoplay, also known as the ‘binge’ option can also consume a lot of video when a service automatically starts playback of the next episode in a series. Some people switch off their televisions without stopping video playback, which can mean you watched one episode but actually streamed six or more. Check the streaming software for an option to not autoplay videos.

Remember that cable TV replacements like DirecTV Now and YouTube TV will continue streaming live broadcasts until you stop them. Do not just switch off the television. Many live/linear TV apps will prompt you every few hours if you have not changed channels to make sure there is someone still watching. If you do not respond, streaming will stop automatically.

Cloud Storage Backups

When customers report staggering data usage during a month, cloud storage backup software is often the culprit. If you are new to cloud storage backup services like Dropbox or Carbonite, your PC may be uploading a significant part of your hard drive to create a full backup of your computer. This alone can consume terabytes of data. Fortunately, most backup services throttle uploads and do not automatically assume you need to backup your entire hard drive. Many offer options to limit upload speed, the total amount of data that can be uploaded each month, and options to selectively backup certain files and folders. 

Your Wi-Fi Network is Insecure

In areas where data caps are pervasive, those who want to use a lot more data and do not want to pay for it may quietly hop on your home Wi-Fi network and effectively bill that usage to you. This is most common in large multi-dwelling units where lots of neighbors are within range of your home Wi-Fi. The best way to reduce the risk of a Wi-Fi intrusion is to create a password that is exceptionally difficult to guess, using a mixture of special characters (!, ^, %, etc.) and mixed case random letters and numbers. Although this can be inconvenient for guests, it will probably keep intruders out and prevent them from running up your bill.

It is unfortunate customers have to jump through these kinds of hoops and compromise their online experience. But where cable and phone companies lack competition, they can charge a small fortune for internet access and still feel it is appropriate to cap usage and ask for even more money when customers “use too much.”

Stop the Cap Asks New York PSC for Clarification About Charter’s Internet Speed Obligations

 

 

July 15, 2019

Mr. John C. Rhodes
Chief Executive Officer, NY State Dept. of Public Service
Three Empire State Plaza
Albany, NY 12223-1350

Re: 15-01446/15-M-0388 Settlement Agreement: Joint Petition of Charter Communications and Time Warner Cable for Approval of a Transfer of Control of Subsidiaries and Franchises, Pro Forma Reorganization, and Certain Financing

cc: Hon. Kathleen Burgess

Dear Mr. Rhodes,

We are writing to receive clarification regarding the “Order Adopting 2019 Settlement Agreement and Reconsidering Other Related Actions” (issued and effective July 11, 2019).

On page 28 of that document, the Commission comments on Stop the Cap’s recommendation that Spectrum customers in New York State benefit from an immediate upgrade in download speed to 200 Mbps, which is presently available in approximately half of Charter Communications’ national footprint.

The Commission rejected our recommendation, commenting in response:

“Moreover, its request for internet speed upgrades are also beyond the scope of the 2019 Settlement agreement, but the Commission notes that Charter is already required to increase its network speed to 300 Mbps by the end of 2019.”

That response suggests the Public Service Commission considers Charter’s original merger obligations not yet achieved, because the current speed received by most Spectrum customers is 100 Mbps, not 300 Mbps.

However, Charter Communications considers its speed obligations to New York complete, and ahead of the scheduled deadline, as noted in its May 20, 2019 “Annual Update” to the PSC[1]:

“Moreover, under Condition I.A.2, by December 31, 2018, Charter was required to offer broadband service with download speeds up to 100 Mbps to all customers served in New York (including Columbia County) and speed levels up to 300 Mbps by the end of 2019. Charter has far exceeded these conditions, through its Spectrum Internet Gig service offering, which provides all customers throughout New York access to download speeds of up to 940 Mbps. Accordingly, Charter is pleased to report that its implementation of network modernization and broadband speed increases have been completed ahead of the specified the Merger Condition deadlines.”

We are writing to receive clarification about the Commission’s interpretation of the Merger Order and its definition of “network speed.”

The Commission made it a requirement that Charter “increase its network speed” to 300 Mbps by the end of 2019. We would like to know what the Commission considers “network speed.” Does that refer to speed a cable system is capable of optionally providing customers (that presumably choose to pay more for a premium service tier) or was that to be the defined minimum base speed of Spectrum’s entry-level residential broadband product (excluding Spectrum Internet Assist)?

Charter has interpreted the Merger Order to mean “download speeds up to 100 Mbps” for all customers and “speed levels up to” 300 Mbps, but only optionally, by the end of 2019.

Time Warner Cable operated cable systems in New York City, Central New York, and parts of the Hudson Valley and Capitol District that were already capable of offering customers the option of 300 Mbps service before the merger between Charter and Time Warner Cable was announced[2].

Does the Commission accept Charter’s interpretation of the Merger Order or does it believe Charter has a yet unfinished obligation to raise the base internet speed to all New York customers to at least 300 Mbps by the end of 2019?

We would greatly appreciate receiving clarification on this point, because it is apparent Charter is currently disadvantaging New York broadband customers with broadband service at half the speed offered in other states.

Very truly yours,

Phillip M. Dampier
President and Founder

[1] Charter Communications, Inc. Annual Update 2019, May 20, 2019 p. 3

[2] https://www.businesswire.com/news/home/20150714005039/en/Time-Warner-Cable-Announces-Expansion-%E2%80%98TWC-Maxx%E2%80%99 (July 14, 2015)

Republican FCC Overrides San Francisco Pro-Competition Wiring Ordinance

It’s a good day to be AT&T or Comcast in San Francisco. The Republican majority on the FCC today voted to protect their monopoly control of existing building wiring, claiming it would inspire competitors to wire buildings separately..

In a 3-2 Republican majority vote, the FCC today decided to pre-empt a San Francisco city ordinance that required multi-dwelling apartment, condo, and office space owners to allow competing service providers to share building-owned wiring if a customer sought to change providers.

“Required sharing of in-use wiring deters broadband deployment, undercuts the Commission’s rules regarding control of cable wiring in residential [multi-dwelling units], and threatens the Commission’s framework to protect the technical integrity of cable systems for the benefit of viewers,” according a news release issued by the FCC.

FCC Chairman Ajit Pai was joined by the two other Republicans on the Commission to block the San Francisco ordinance, which will allow dominant cable and phone companies like AT&T and Comcast to continue reserving exclusive use of building wiring, forcing would-be competitors to place costly redundant wiring in each building before offering service.

Pai said the city’s ordinance chilled competition because it encouraged competitors to re-use existing wiring instead of providing their own. That could harm the business plans of incumbent monopoly providers that depend on deterring or locking out would-be competitors by prohibiting them from using existing building wiring to reach customers. Pai called the ordinance an “outlier” and declared the city went beyond its legal authority by allowing a competitor to re-use building-owned wiring used by one provider to switch a customer to another. Pai added he had no objection to sharing unused wiring.

“By taking steps to ensure competitive access for broadband providers to [multi-dwelling homes and shared offices] while at the same time cracking down on local laws that go beyond the bounds of federal rules, our decision can help bring affordable and reliable broadband to more consumers,” echoed Republican FCC Commissioner Brendan Carr.

But critics contend the FCC’s decision to disallow required shared use of wiring will likely deter new competitors from entering existing buildings, because of the cost of installing redundant wiring. Others object to the FCC regulating the use of wiring owned and installed independently by building owners, not telecom companies. FCC Commissioner Jessica Rosenworcel, a Democrat who voted against the pre-emption, was unimpressed.

“We stop efforts in California designed to encourage competition in multi-tenant environments,” Rosenworcel told her fellow commissioners. “Specifically, we say to the city of San Francisco—where more than half of the population rents their housing, often in multi-tenant units—that they cannot encourage broadband competition. This is crazy.”

The FCC press release trumpeting the Republican majority vote to prohibit the shared use of existing building wiring was sympathetic to incumbent telecom giants AT&T and Comcast, which now dominate as service providers in multi-tenant buildings:

Nearly 30% of the U.S. population lives in condominiums and apartments, and millions more work in office buildings. The FCC must address the needs of those living and working in these buildings to close the digital divide for all Americans. However, broadband deployment in [multi-tenant buildings or ‘MTEs’] poses unique challenges. To provide service, broadband providers must have access to potential customers in the building. But when broadband providers know that they will have to share the communications facilities that they deploy with their competitors, they are less likely to invest in deployment in the first place. For decades, Congress and the FCC have encouraged facilities-based competition by broadly promoting access to customers and infrastructure—including MTEs and their tenants—while avoiding overly burdensome sharing mandates that reduce incentives to invest.

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