Hours before the deadline imposed by the Canadian Radio-television and Telecommunications Commission, Rogers Communications responded Tuesday evening to the CRTC, which demanded Rogers correct malfunctioning speed throttle technology that slowed certain online gaming traffic to a crawl, because is mistook it for peer-to-peer file sharing traffic.

In a four-page letter to the Commission, Rogers essentially rehashed the Commission’s original concerns and then attempted to explain why the company throttles broadband traffic in the first place:

We manage P2P upload traffic because if we did not, this traffic would grow to occupy the capacity available on our network and so impact our customers’ experience. The vast majority of P2P upload traffic is being sourced by non-Rogers customers. Without our traffic management practices, our customers, including online gamers, would experience difficulty uploading traffic. The traffic management we do slows down the upstream delivery of P2P file sharing but does not prevent it. Since P2P file sharing is not as time sensitive as other forms of traffic, we believe managing it has little impact on customer satisfaction.

Remarkably, unthrottled peer-to-peer traffic on other Internet Service Providers in places like the United States does not seem to threaten the viability of those networks, but evidently Rogers is a special case.

Our ITMP policy does not target any customer group or content: it is designed to allow us to manage traffic to maximize our customers’ overall experience. Online gamers, in particular, need a responsive upstream network. In an effort to provide the best service for all of our customers, Rogers’ ITMPs limit only P2P file sharing applications to a maximum of 80kbps of upstream throughput. Our traffic management deploys specialized network appliances to classify traffic and apply our policy where appropriate.

That explains why the Canadian Gaming Organization (CGO) was so upset about Rogers’ throttling technology malfunctions which can slow game traffic to a crawl. But Rogers decided in light of the evidence exposing the gaming traffic throttling problem, the best thing to do was to blame someone else. Getting the right kind of server with the right Keywords can be helpful:

The technology and software in use at Rogers is provided by a leading network equipment vendor: Cisco. This is the same technology that is in place in hundreds of other ISPs worldwide, and Rogers does not believe the problems we have experienced are unique to our network.

Most traffic, such as web browsing or email, can be clearly identified by our Cisco equipment with very little chance of error. In very rare situations, traffic that is not P2P file sharing may be misclassified, such as was the case with World of Warcraft (WoW). Rogers has experienced a small number of cases of gaming traffic being misclassified as P2P file sharing traffic. In these cases, gaming customers have only been affected when running P2P file sharing simultaneously with a misclassified game. The typical game requires less than 80 kbps and so would not be affected even if a misclassification were to occur. It is only when the games are running in conjunction with P2P file sharing that our ITMP would be deployed. This has been confirmed by repeated testing in our lab. We have currently resolved all of these cases.

In other words, if customers shut off the offending peer to peer software, gaming traffic won’t be impacted by the throttle which reduces file sharing speeds to around 80kbps, which is just above dial-up.

Rogers’ “Rube Goldberg” Throttled Traffic Resolution Flow Chart. (All you wanted to do was play your online game in peace.)  Our suggestion for improvement: turn off the broadband traffic throttle and upgrade your network and the problems go away for everyone.

Rogers denies there is a problem worth getting upset about, because in their view, game traffic doesn’t need anything faster than 80kbps anyway.  Rogers’ attitude and response were both hotly contested by CGO co-founder Jason Koblovsky, who says his members are still directly and clearly affected by Rogers’ throttle.

“Rogers is stating here that they are actively dealing with throttling issues, and suspecting throttling when connection problems are being reported to them.  Quite frankly we are seeing quite the opposite,” Koblovsky says.  “They are actively refusing to even acknowledge that throttling might be taking place, and evidence of this has been submitted to the Commission in previous complaints proving what Rogers is claiming with this flowchart is false.  Hopefully the CRTC can read flowcharts and connect the dots.”

Rogers says it will take a two-step approach to make further corrections to reduce the impact of its errant broadband throttle, but did not provide any timeline.

“In the few cases where we have determined there has been a misclassification of an online game, we have used a two-stage solution to fix the problem. In the short term, we whitelist the game manufacturer’s servers. Whitelisting means creating a policy that will not apply ITMPs to packets going to and from a game manufacturer’s servers no matter how the traffic is classified. This can usually be accomplished in a very short period of time. Whitelisting is effective where the game manufacturer’s server can be located. The second stage is a long term solution that involves a software upgrade created by Cisco and deployed on our network that will correct the misclassification. We note that we did not use whitelisting until recently. Using whitelisting allows us to resolve problems much more quickly than was the case with WoW.”

Whitelisting, according to CGO, is not a sufficient solution to the problem because game manufacturers often change or add additional servers that Rogers will not initially be aware of, requiring constant tweaking to keep the whitelist up to date.

CGO co-founder Teresa Murphy added that “World of Warcraft traffic isn’t safe until the final fix from Cisco is applied to all Rogers-controlled Deep Packet Inspection systems.  Until that happens, if Blizzard moves any of their servers (as they did last summer), the whitelist will no longer apply to World of Warcraft traffic, and we’ll be back in this same situation all over again.  We’re also curious as to the current status of the other games users reported to Rogers back in March which were experiencing the same problems as World of Warcraft, but which didn’t get as much user outcry as World of Warcraft garnered.  There has been no update from any Rogers employee regarding these other games, which we find concerning.  Updates were sparse on the World of Warcraft issue before the CRTC complaint went in, but updates to users on the forums became non-existent after Rogers was forced to admit their practices with WoW.”

Rogers also promises to begin testing the top-ten most popular gaming titles on an ongoing basis to make sure game traffic for those applications goes unaffected.  Woe to those who don’t make the top-ten list, however.

CGO calls Rogers’ response wholly inadequate.

“The way the CRTC has put this to Rogers is that the CRTC expects a plan with dates to have this misclassification issue resolved. This just simply hasn’t happened here,” Koblovsky added.  “The CRTC has been pretty clear to Rogers they want no possibility of misclassification here on any programs, games etc.”

Cox Communications is telling customers if they exceed the company’s usage caps three times over the lifetime of an account, they either must upgrade to a more expensive service plan, make sure they never exceed plan limits again, or face an indefinite loss of their Internet service if they exceed Cox’s limits a fourth time.

Stop the Cap! reader Adam found out about Cox’s Three Strikes Program for himself in an online chat with Claudia, a Cox customer service representative:

Adam: I am concerned with the messages I got about a usage cap. I was told by the salesman that there was no bandwidth cap on our Internet, however this message is very troubling. Please explain this cap to me.
[…]
Claudia: I am really sorry for the lack of information provided to you by our Sales representative.
Adam: Is there a hard cap coming? Is that why we’re getting these messages?
Claudia: That is correct.
Claudia: At the fourth message your services will be blocked, on the previous one they will suggest you to upgrade your plan.
Adam: Fourth monthly, or fourth cumulative?
Claudia: Your Data Usage is reset each month, so it will be your fourth monthly message if exceeding the allowance.
Adam: So four months of going over. Does that counter ever reset?
Adam: Like if I’m bad three months, then good for three. Is it reset?
Claudia: Unfortunately, it is not reset.

Cox, like Comcast, does not charge overlimit fees, but the company does encourage customers who want to use the Internet more than their arbitrary allowances permit to upgrade to a more costly service plan.

Cox’s limits are detailed in an earlier piece Stop the Cap! brought readers a few weeks ago.

Internet Service Providers claim usage caps are important to protect the customer experience from “excessive users” slowing down service in your neighborhood, but as companies like Cox upgrade to DOCSIS 3, the broadband pipeline that results has increased so exponentially, it eliminates the excuse that came with the limits.

Now, ISPs increasingly see another reason to retain usage allowances: fatter profits from tiered usage plans that inevitably drive video-hungry Internet customers into costly upgrades.

Konrad Von Finckenstein

Konrad von Finckenstein, the head of Canada’s telecommunications regulator who initially rubber-stamped a Bell proposal to force Internet providers in Canada to charge usage-based pricing will not be back for a second term.

Von Finckenstein broke the news himself in a memo sent to staff at the Canadian Radio-television and Telecommunications Commission, stating he would end his leadership of the CRTC when his five-year term concludes in January.

The CRTC has made uncomfortable headlines for Canada’s Conservative government, primarily by approving an Internet pricing plan submitted by Bell that would require virtually every Internet provider in Canada to end unlimited, flat rate pricing for broadband service.

The CRTC is hardly a hotbed of headline news for most Canadians.  The sleepy agency regulates telephone, broadband, television, and radio in the country with an increasingly light touch.  Ten years ago, the CRTC was regularly accused by some broadcasters of meddling in their private business.  These days the Commission, packed with members who formerly worked for the companies they now oversee, has gotten considerably more friendly with those they regulate.

That policy blew up in their faces when Bell got most of what it wanted in a wholesale pricing change that was so wide-reaching, it would potentially impact every Canadian Internet user.  Nearly a half-million of them registered their displeasure in a petition sponsored by Openmedia.ca.

Von Finckenstein’s resolute attitude towards the correctness of that decision was soon tempered when Industry Minister Tony Clement found himself overruling the CRTC in a Twitter message, telling Canadians the decision to impose usage-based billing “would not be allowed to stand.”

Opposition members in Parliament had a field day over Clement’s repeated distancing of the government from CRTC policies, particularly the one involving Internet pricing.

Liberal MP Marc Garneau seized on the fact Clement tweeted his intentions to the public at large before sharing them with von Finckenstein himself.  That, Garneau claimed, was the latest example of the government’s lack of clear policy on issues such as usage-based billing that has left the CRTC in what he called a “giant policy vacuum.”

The announcement by the CRTC chairman comes at the same time the Commission is finalizing a re-evaluation of its earlier decision on usage-based billing.

While hundreds of thousands of Canadians upset with the CRTC may be glad to see the back of von Finckenstein, his colleagues were considerably more generous with their praise:

Former CRTC executive Richard French credits Von Finckenstein, saying he sped up the commission’s decisions, improved the atmosphere around the offices and rarely left anyone guessing what he thought, “which I think is a virtue in a regulator.”

“He balanced the desire for more market forces with a recognition that for most of the industries in question, the Canadian market is sub-economic, it’s just not big enough to sustain enough players in this capital intensive business to create real competition so regulation is required,” French said Monday.

“He’s done an excellent job and he deserves the respect and appreciation of the industry and of the population,” French said.

Heritage Minister James Moore’s office issued a statement thanking von Finckenstein for his service as CRTC chair and said a process to select a new chair would be announced in the coming weeks.

AT&T, Verizon, Time Warner Cable, and nine other giant corporations selling cigarettes, shoes, shipping services, and jet aircraft have formed a new group demanding major cuts in the corporate tax rate that would allow some of them to repatriate billions in cash reserves stuffed in overseas banks to dodge U.S. taxes.

RATE — the Reducing America’s Taxes Equitably Coalition, says cutting the corporate tax rate is key to increased spending of accumulated corporate dollars in the United States.

“In a global economy where capital is highly mobile, it is simply harder to compete from America,” the companies’ executives wrote in a letter. “A lower corporate tax rate will boost investment in the U.S., bringing more American jobs, innovation and growth.”

But many of these corporations already pay less taxes than you do as a percentage of income.  Take Verizon, which shovels substantial profits through its British wireless partner Vodafone through Luxembourg, at an effective tax rate of around 10%.

Forbes reports last year Verizon had sales of $108 billion.  It’s pretax income was $11.8 billion.  The company paid just $1.2 billion in income taxes thanks to its $42 billion wireless joint venture with Vodafone, which Forbes reports “draws off much of Verizon’s income.”  But that is hardly a bad thing for Verizon.  Its effective tax rate: 10.5%.  Most middle class Americans pay twice or more that rate.  Verizon itself was surprised it only paid that much, because it ended up getting a federal tax refund for an overpayment amounting to $705 million.

In 2010, AT&T got hit harder, but still managed to eke out a winning year for shareholders.  AT&T enjoyed sales of $123 billion.  Its pretax income: $19 billion.  The company ended up paying $6.2 billion in income taxes for an effective tax rate of 32.4%.  But their executives got the benefit of every tax loophole available for their personal tax returns, made possible by AT&T’s generous subsidy of up to $14,000 a year for each executive officer to hire the best tax accountants around.

American companies already pay the second lowest taxes in the developed world, once all of the loopholes and deductions in the corporate tax code are accounted for. American corporations are sitting on record amounts of cash, so its unclear why more cash (in the form of tax breaks) would lead to more hiring, unless it involves adding more Washington, D.C. lobbyists, of course.

Company-owned store or third party reseller?

Customers who see the logo of their favorite wireless phone company on a storefront might do better to look a little closer to determine if they are doing business with a company-owned store, or a third-party reseller.  A Bakersfield, Calif., man quickly learned the difference when he bought a mobile broadband service plan from Go Wireless that Verizon says no longer exists.

Allan Fox found out the hard way when his first bill arrived with a steep overlimit fee attached, and without the broadband plan he signed up for.

Fox purchased the discontinued plan from Go Wireless, a third party reseller of Verizon Wireless services.  Fox thought he was purchasing a 3GB plan for $35, with a two-year service contract.  Verizon thought otherwise, and so began weeks of a runaround between Fox, Go Wireless, and Verizon.

It turned out that Verizon no longer offered the plan Fox bought from what he thought was Verizon Wireless itself.  Go Wireless is one of several independent third party companies that resell Verizon Wireless service, often with their own terms and conditions that include early termination fees owed not just to Verizon, but also to Go Wireless.

Go Wireless’ retail stores prominently feature Verizon Wireless’ logo, with their own logo appearing in reduced size, next to a message indicating they were a “premium retailer.”  That presumably sounds better than “third party reseller.”

After several attempts to straighten out the mess, Fox wanted to cancel his contract and just move on.  But then he discovered Go Wireless would charge him a $175 early cancellation fee, even though Fox’s predicament was their fault.  That’s when Fox called a local television newscast for help.

Wirefly is a major online reseller of Verizon Wireless

KBAK-TV news waded into the middle of the dispute that had gone on for nearly six weeks.  Verizon Wireless told the station it was willing to cancel Fox’s service penalty-free, but since Fox purchased the phone from a third-party reseller, and not from a company-owned store, Go Wireless would have to credit their own cancel fee.  Go Wireless, experiencing some turnover in local management, finally agreed to waive the fee, but only after the TV station got involved.

Customers must be careful when purchasing phones or signing contracts with third party sellers — both online and in traditional stores.  Most company-owned stores display their respective carrier logos and nothing else.  Words that usually provide a clue you are dealing with a reseller include: “authorized retailer,” “authorized dealer,” “Service provided by: (name of third party company),” “authorized agent,” and a dead giveaway is a signed contract with anyone other than the cell phone company you are using for service.

Third party resellers make their money on generous commissions earned when a customer signs a new contract or renews an existing one.  That commission can be forfeit if a customer returns the phone or cancels service early, which is why third party dealers protect themselves with their own contracts that include early termination or cancellation penalties owed to them, not the wireless provider.  Some customers can find themselves exposed to $500 or more in total cancellation penalty fees owed between the wireless phone company and the reseller.

So why do people purchase phones from these resellers?  Convenience and savings.

In smaller communities, company-owned stores may be few in number (or non-existent), and in-person help can be a godsend for customers who need to figure out their phone or obtain a warranty replacement.  Online, resellers like Amazon.com, Newegg, Wirefly, and others often charge substantially less than wireless carriers charge themselves for phones.  That savings can often be more than $100.  But these resellers are not for those who are unsure about the phone they want (or the provider).  Returning a phone or canceling service means dealing with two parties — the carrier and the reseller, to end service.  The cost of doing so can be very steep, so always read the terms and conditions before buying.

[flv]http://www.phillipdampier.com/video/KBAK Bakersfield Man has Internet billing trouble 9-26-11.mp4[/flv]

KBAK-TV’s Investigation Bakersfield unit helped a local man untangle a major billing mess that began when he was sold a mobile broadband plan that no longer existed.  (3 minutes)