History repeats itself. In 1889, it was railroads, steel, iron, and energy. Today it is telecommunications.

My first introduction to the concept of corporate doublespeak — designed to cushion the blow of bad news behind a wall of barely-comprehensible babble came in October 1987 when I heard one Wall Street analyst refer to the great stock market crash that had just befallen the financial district as a “fourth quarter equity retreat.”

Holy euphemism, Batman!

You weren’t fired — you were “made redundant.”  The bankruptcy of Detroit automakers and the layoffs that followed were not as bad as they looked. It was merely “a career-alternative enhancement program.”

And, no, Verizon and AT&T are not engaged in should-be-illegal marketplace collusion on pricing and services. They are just practicing some harmless “price signaling.”

That’s the awe-struck view of management consultant Rags Srinivasan, who just gushes over the marketing “stroke of genius” that threatens to give customers a stroke when they open their monthly bill.

Srinivasan’s piece, worthy of the Wall Street Journal editorial page, turns up instead on GigaOm, where it gets some pretty harsh treatment from tech-lovers who hate the rising prices of wireless service.

Price signaling has always existed between the number one and number two players in any market. Agreeing to not engage in a price war is truly a win-win for the market leaders. Since outright price fixing is illegal, market leaders resorted to signaling to tell the other company their intentions or send a threat about their cost advantages.

But traditionally, it was more like flirting — ambiguous enough that the underlying intentions could be denied. Why are these two not shy about admitting to flirting now? The simple answer is the iPhone.

Not too long ago we worried about running out of talk minutes and paying overage. Service providers offered us tiered plans that offered more minutes for a higher price and unlimited minutes for an even higher price. With the additional revenue flowing directly to their bottom line, these higher priced plans were real cash cows.

For those who have any doubt about the profits from unlimited plans, I’d point out that the costs of a mobile service provider are sunk with zero marginal cost for additional minutes. And texts don’t even consume traffic channels — they piggyback on control channels.

[…] In another genius pricing move, Verizon Wireless is presenting this $100 mobile service plan to customers in a bundle — talk minutes plus data. In the past, around $70 was allocated to talk because consumers valued it more. Now subscribers pay only $40, but they still pay the same $100 total price. This is nothing short of pricing excellence, protecting customer margin while also using strong price signaling to make sure that the next biggest market share leader follows suit.

What Srinivasan calls “business at its best” and “pricing excellence” we call collusion at its most obvious. The GigaOm author says he does not want the government tinkering with this kind of marketplace “signaling,” and it does not appear likely he has much to worry about. AT&T and Verizon executives have grown increasingly brazen (and obvious) with their near-identical pricing and “me-too” plans which leave little to differentiate the two carriers from a pricing perspective. The likely result will be at least 100 million cell phone customers eventually stuck paying for unlimited voice and texting services they neither want or need.

Wireless Wonder Twins Powers Activate: Shape of anti-competitive marketplace for consumers; form of collusion.

True, AT&T charges Cadillac prices but has the customer service image of a used 1995 Kia… but they did have the original exclusive rights to the Apple iPhone and Apple devotees proved they will endure a lot. Verizon Wireless has a better network and has always charged accordingly.

Unfortunately for consumers, the also-rans Sprint and T-Mobile (and the smaller still) depend on AT&T and Verizon for roaming off the city highway and into the countryside, and they are often stuck with devices that are a step down from what the bigger two can offer.

Srinivasan would have a better argument if the wireless marketplace had not become so consolidated. Had AT&T had its way with T-Mobile, America would have just a single national GSM network — AT&T. Verizon does not consider its CDMA competitor much of a bother either, and Sprint Nextel CEO Dan Hesse has to divide his time between fighting with Wall Street over why the company has not already sold out to the highest bidder (and now wants to spend a fortune upgrading its network) and customers who consider Sprint too much of a trade-off in coverage and its dismal “4G” Clearwire WiMAX network too slow for 2012.

Srinivasan is probably too young to understand AT&T and Verizon never invented “price signaling.” A century ago, the railroad robber barons did much the same, leveraging their anti-competitive networks-of-a-different-kind to maximize prices in places that had few alternatives. Where competitors did arrive, they were typically bought out to “maximize savings and eliminate market inefficiencies.” The same was true in the steel and energy sector of the early 20th century.

The result is that consumers were turned upside down to shake out the last loose change from their pockets. Eventually, government stepped in and called it marketplace collusion and passed antitrust laws that began a new era for true competition.

How soon some forget.

Stop the Cap! has suddenly started receiving a larger number of complaints about AT&T’s Internet Overcharging scheme in the past two weeks, indicating to us the company has started cracking down more forcefully on usage cap “violators.”

Those who purchased AT&T U-verse in an effort to avoid usage caps from their local cable company are particularly upset, because the phone company still markets its U-verse service as being ‘bandwidth-limit-free.’

AT&T advertises its U-verse service to this day as bandwidth limit free.

“We don’t limit your bandwidth to a particular amount,” promises AT&T in prominent language on its website. The fine print says something very different — AT&T limits the amount of usage customers get before being exposed to overlimit fees — 150GB for DSL, 250GB for U-verse. It is part of what the company calls wired “data plans.”

AT&T U-verse has a 250GB usage cap hidden in the fine print.

“It’s false advertising,” counters AT&T customer Don Brown. “Anyone who reads their promise of ‘no bandwidth limitations’ is going to assume that means no limits, but when I questioned company representatives about the promise, they pull out every trick in the book.”

Brown says one customer service representative told him ‘bandwidth limits’ refer to broadband speed — AT&T does not throttle its customers. Another said the ad claim meant that customers could keep paying AT&T additional money for as much usage as they want or need. But Brown believes AT&T knows better than that.

“When I signed up for service, I asked the salesperson who took my order if there were limits and they said there were none, period,” Brown says. “Not a word was spoken about 250GB limits or overlimit fees. I’m not buying their excuses — what wired ISP throttles customer speeds?”

In fact, AT&T itself defines “bandwidth” much the same way Brown does (underlining ours):

The term bandwidth can take on many meanings. In the case of AT&T U-verse products and services, the term bandwidth is commonly used when referring to computer networking and measuring Internet usage.

The amount of Internet usage is displayed in upload and download amounts. This would commonly be known as the amount of bandwidth the User used during a particular time.

Brown also has no access to any usage monitor or measurement tool, and AT&T told him he “can relax” because the company would send warnings when it noticed his usage was coming perilously close to the limit. But that makes planning around monthly usage limits difficult, because he has no idea what his usage is from day to day.

A week ago, he received his first warning in an e-mail message from AT&T, which was the first indication he was living under a usage cap.

“They are in a real hurry to collect more money from me but they don’t have their ducks in a row on an accurate meter I can depend on,” Brown says. “Would the local power, water, or gas company get away with that? I don’t think so.”

Brown decided AT&T’s “dishonesty,” as he puts it, made him cancel his service. He does not trust the phone company to accurately measure anything.

“At least I know the cable company is a pocket-picking crook so I can be on guard for their next move,” Brown says. “AT&T is more like the thief in the night that robs you blind while you are upstairs, asleep in bed.”

Chris Savage discovered AT&T’s “stealthy” 150GB usage cap on his DSL account when he received an e-mail warning of his own. He gets one more, after which AT&T will “bill shock” him with overlimit fees.

You have exceeded 150GB this billing period.

[…] The next time you exceed 150GB you’ll be notified, but not billed. However if you go over your data plan in any subsequent billing period, we’ll provide you with an additional 50GB of data for $10. You’ll be charged $10 for every incremental 50GB of usage beyond your plan.

AT&T DSL service has a sneaky 150GB usage cap in the fine print.

AT&T really isn’t interested in hearing questions or concerns about their “data plan,” telling customers at the bottom of the message:

Please do not reply to this email. This address is automated, unattended and cannot help with questions or requests.

Savage never knew AT&T implemented an Internet Overcharging scheme:

“This e-mail seemed to say to me, ‘We changed the rules on you without telling you and now you’ve broken them, so we’ll let you off this time, but consider yourself warned!'”

Savage has already cut cable’s cord and watches his television shows online, exactly what big phone and cable companies do not want their customers doing.

The bottom line is that 150GB is not enough for people like me who work at home, rely on Netflix for any kind of TV/Movies (since I don’t have cable or any other TV), have gamers in the house and run a website. What this means for me is that, once again I will have to cancel Netflix because watching just one movie or show per day would mean I would reach my cap about 2/3 of the way into the month. And that is if nobody else in the house watches anything on it, plays any online games or downloads anything.

In the end, it appears AT&T won and Netflix lost. Savage reports after going over AT&T’s limit two months in a row, he canceled his Netflix account — the only television service he had. AT&T DSL cannot even support one movie a night and one or two streamed cooking shows here and there without pushing the family over the limit AT&T imposes.

Earlier this week, Time Warner Cable unveiled its new 5GB limited-use broadband plans in Austin, Tex. The company told customers it would be “listening” to their concerns on the cable operator’s “TWC Conversations” website, and many Stop the Cap! readers shared with us copies of their own two cents, submitted as comments on that website.

But so far, the conversation seems very one-sided. To date, here is Time Warner’s presentation of the opposing point of view:

This reminds us how Time Warner Cable treated customers sending in their views of the 2009 (failed) experiment, when earnest writers like “De” eventually received this in response:

Reinventing the two way conversation.

Well I eventually submitted an email to TWC about the caps on April 14th. To prove they pay attention to their customers, they sent me this reply today (Over a month later) LMAO:

To: RealIdeas
Subject: Greedy Bandwidth Caps. The truth!?
Sent: Tue, 14 Apr 2009 04:22:52 -0400<  >

was deleted without being read on Sun, 31 May 2009 01:49:12 -0400

Just goes to prove they don’t care if the consumer wants the per byte billing or not – it’s coming anyway.

Our opinions and views are nothing to TWC — all that matters is the $$$$. The whole PR about them listening is just to ease media and political pressure. They have made their mind up already.

Lowering the bar on customers by increasing the maximum overlimit fee. It’s another example of Rogers’ Broadband Limbo Dance.

Rogers Communications is quietly notifying its broadband customers it is doubling the overlimit fee for excessive use of its broadband service from $50 to $100, effective Aug. 16, 2012.

The company characterizes the new maximum fee as “protecting you from unexpected high charges,” but of course does nothing of the sort. Rogers’ charges eastern Canada some of the continent’s most expensive prices around for usage-limited broadband. Its Internet Overcharging scheme has relied on all of the classic tricks of the trade to get consumers to pay higher and higher prices for broadband service, while assuring investors the company can rake in additional profits at will just by adjusting your allowance and overlimit fee.

Companies that introduce usage caps and consumption billing are monetizing broadband usage. By adjusting prices upwards and reducing usage allowances, customers can find themselves paying confiscatory overlimit fees. But until recently companies in Canada capped the maximum overlimit penalties. Over the last three years, those maximum fees have increased dramatically, and some companies like Cogeco have removed the maximum limit altogether.

While Rogers’ cost to deliver service continues to decline, these kinds of policy changes can cause broadband bills to soar, especially when customers are in overlimit territory.

Rogers (with thanks to Broadband Reports readers who shared the text):

“To protect you from unexpected high charges, we currently cap the maximum monthly amount you can be charged for additional internet usage at $50 in addition to your Hi-Speed Internet plan’s monthly service fee, modem rental fee (if applicable) and taxes. Effective August 16, 2012 this monthly limit will be increased to $100 in addition to your plan’s monthly service fee, modem rental fee (if applicable) and taxes. If you exceed the monthly usage allowance included in your Hi-Speed Internet plan you will begin to see charges up to the new limit beginning on your first invoice on or after September 16, 2012. All other aspects of your Rogers service(s) will remain the same. Remember, you can track your internet usage online by signing into My Rogers at rogers.com/myinternetusage. For more information or questions please contact us in any of the ways listed on page 2 of this invoice. Thank you.”

Customers can use the occasion of Rogers’ contract changes to potentially switch providers without paying early cancellation fees. This process is more straightforward in Quebec, according to the company’s terms and conditions.

Quebec Residents Only

Unless otherwise specified in the Service Agreement, we may change, at any time, but upon no less than 30 days’ prior written notice to you:

• a) with respect to a  plan or Service not subscribed to for a Commitment Period (as defined below), any charges, features, content, functionality, structure or any other aspects of the plan or Service, as well as any term or provision of the Service Agreement, and
• b) with respect to a plan or Service subscribed to for a Commitment Period, any aspect of the plan or Service, as well as any term or provision of the Service Agreement, other than essential elements of the plan, Service or Service Agreement.

If the change entails an increase in your obligations or a decrease in our obligations and if you do not accept such a change, you may terminate your Services without an ECF (as defined below) by sending us a notice to that effect no later than 30 days after the amendment takes effect.

Rogers’ Customers Elsewhere in Canada

Unless otherwise specified in the Service Agreement, we may change, at any time, any charges, features, content, functionality, structure or any other aspects of the Services, as well as any term or provision of the Service Agreement, upon notice to you. If you do not accept a change to the affected Services, your sole remedy is to terminate the affected Services provided under the Service Agreement, within 30 days of your receipt of our notice of change to the Services (unless we specify a different notice period), by providing us with advance notice of termination pursuant to Section 34. If you do not accept a change to these Terms, your sole remedy is to retain these Terms unchanged for the duration of the Commitment Period (as defined below), upon notice to us within 30 days of your receipt of our notice of change to these Terms.

While Quebec residents have a clear path to avoid Rogers’ ECF, customers elsewhere may be subject to an early cancellation fee because of Section 9 of Rogers’ agreement:

Unless otherwise set out in the Materials, if you agree to subscribe to one of our plans or Services for a committed period of time (the “Commitment Period”), you may be subject to an early cancellation fee (“ECF”) for each Service. Any decrease in your Commitment Period may be subject to a fee. If your Service is terminated prior to the end of the Commitment Period, you will pay us an ECF as specified in the Service Agreement, plus taxes.

Customers outside of Quebec may want to check with Rogers directly to determine if an early cancellation fee will apply when canceling service because of the change in maximum overlimit fees.

Customers leaving Rogers can find better deals for broadband services from independent ISPs like TekSavvy or Start.

Fido puts per-second billing into the doghouse.

Canada, home of the three-year mobile phone contract, “service access fees,” high activation fees, unlock phone fees, $10 for 10MB of data, and $8 extra for “caller-ID” has had one thing going for it that American cell phone companies don’t offer — per-second billing.

Not anymore.

Our regular reader Alex writes to inform us that Fido (owned by Rogers Communications) has joined the parade of Telus’ Koodo and Bell’s Virgin Mobile Canada eliminating the money-saving billing feature for all new activations starting yesterday.

These prepaid customers will now pay by minute when they start new service or change an existing plan.

Mobile Syrup reached out to Rogers and obtained official confirmation and their explanation:

“Fido will adopt the common billing practice in Canada: per-minute billing beginning July 4th. This means that calls are rounded up to the nearest minute. This change will apply to new customers signing up with Fido. All customers who are on current plans with per second billing will retain this feature unless they change their monthly plan. The majority of customers should not notice any impact to their monthly bills. Fido offers several great plans with various call, text and data allowances that are designed to meet any need.”

The billing change further discourages Canadian consumers looking for a better deal in the prepaid market. It is the best alternative available from the handful of national carriers that charge considerably higher prices tied to an extra-long service contract and expensive data pricing.

Maybe not

Alex notes per-second billing was one of the great advantages Telus’ Koodo offered, and other competitors were initially forced to match that innovative pricing.

“Koodo’s new plans are simply the old plans, but with a $5/month increase for two calling features,” Alex notes. “Koodo found another way to gouge their customers: per-minute billing. They also removed 50 minutes from the $30/month (previously $25) plan, which used to have 150 minutes. At a time when Internet is the main demand, while talk and text cost virtually nothing to provide, Koodo is gouging.”

Koodo, Fido, and the other carriers are probably noticing that cell phone customers are talking on their cellular phones less than ever, and per-second billing can save an average of 25% off per-minute billing, especially for short conversations.

Alex has a petition up on Koodo’s website asking them to reconsider, but we’re doubtful they will. Rogers’ is not well-known for responding to customer desires for better, more cost-effective service.