One of the principal components of Internet Overcharging is the so-called “usage meter,” a measurement tool designed to help customers keep track of their usage so they don’t exceed arbitrary usage allowances and face overlimit penalties or speed throttles.

But with no government agency or independent watchdog monitoring the accuracy of the meter, providers can claim any amount of usage they wish, and stick customers with the bill.

Telecom New Zealand is the latest ISP forced to admit its usage meter was wildly inaccurate, with nearly 100,000 accounts impacted by faulty meter measurements between November 2010 and June 2011.  At least 47,000 faced punitive measures including substantial overlimit fees or throttled speeds for exceeding usage limits, even though they actually didn’t.  Now Telecom has admitted the meter was wrong, it violated the Fair Trading Act in the process, and is refunding $2.7NZ million dollars in overcharges. It was either that or face substantial fines from the Commerce Commission.

Telecom called the error that forced some customers into more expensive plans to avoid additional overlimit fees “an incorrect perception about […] data usage.”

“We’re pleased to have reached a settlement with Telecom and that they have made prompt refunds directly back to the customers who have lost out,” said Stuart Wallace, Commerce Commission Competition Manager. “Telecom brought this issue to our attention as soon as they were made aware by their customers and have co-operated fully with the Commission. Due to Telecom’s immediate admission of a breach of the Fair Trading Act, followed by appropriate compensation to customers, the settlement is the best possible outcome for those customers and avoids potentially lengthy and costly court hearings paid for by taxpayers.”

It’s the second usage measurement failure announced by the company this month.  In a separate move, Telecom agreed to pay $31.6 million to five of its competitors overcharged for wholesale broadband service.

When technically-savvy customers realize they are being billed for non-existent usage and the media takes an interest, providers eventually disclose their mistaken measurement tools.

“Customers are expected to keep these ISP’s honest,” says Stuart Littlejohn, a Stop the Cap! reader in Wellington. “ISP’s never suggest their meters are anything except accurate until they are caught with their fingers on the scale, and always in their favor.”

Littlejohn has already received a refund from Telecom for illegitimate overcharges he incurred earlier this year.

“It was an absolute nightmare,” he shares. “We thought someone hacked our wireless network or someone in the home was lying about their usage, all theories encouraged by Telecom employees who pointed the finger at everyone but themselves.”

Littlejohn says after Telecom granted one credit as a “goodwill gesture,” subsequent overcharges that went unexplained were his problem, not theirs.

“After the first credit, everything else is your fault,” he says.

Littlejohn caught the company red-handed when storm damage disrupted his service for nearly a week, and Telecom’s usage meter recorded 22GB of usage on his down-and-out service anyway.

“They ultimately couldn’t argue with themselves, but they tried at first,” he says. “Then I told them to call the department responsible for repairing my service and they quickly learned the line they said used 22GB was out of service at the time the usage was supposed to occur.”

“Without that, they would have probably insisted I still owed them for that ‘usage.'”

Littlejohn wasn’t alone.  Other overbilled customers appealed their case to the New Zealand Herald last June, and two weeks later, Telecom admitted their usage measurement tool was faulty.  But by then, customers were already paying for the erroneous charges:

The Herald has received detailed internet usage logs from two Telecom customers – one in Dunedin and the other in New Plymouth – which show over-counting broadband downloads, in one period by as much as 139 per cent. Both have raised the matter repeatedly with Telecom, but have yet to get an explanation.

“We showed Telecom five days of data as early as February 14,” says director Mark Peisker of Dunedin’s CueClub. “There was massive variance between our data and that reported by the Telecom usage meter. I said to them: ‘Your counting has very little to do with what comes down my line to me’.”

CueClub’s data taken from its two internet routers shows an average of 62 per cent over-counting during a three month period – the worst month being May when Telecom counted an extra 118.24 gigabytes (GB) of usage amounting to $203.97 in overcharging.

“They’re crooks, plain and simple, and only when they were caught did they admit their mistakes, and the only ‘penalty’ they are paying is refunding their ill-gotten gains,” Littlejohn says. “Where is the substantial fine to send a message stealing from your customers is wrong?  A strong fine would tell Telecom they made a costly mistake not worth repeating.”

Wildfires can result when overloaded utility poles topple in California's Santa Ana winds.

The California Public Utilities Commission’s Consumer Protection and Safety Division is recommending $99 million in fines against the local power utility and several phone companies for overloading power poles with cables which toppled and started a major wildfire in Malibu Canyon in 2007.

Even worse, the PUC alleges, the power company lied to investigators and destroyed evidence to cover up the cause of the blaze, which burned more than a dozen structures to the ground and destroyed dozens of vehicles.

Named in addition to Southern California Edison are phone companies: Verizon Wireless, AT&T, Sprint, and NextC Networks of California. All are being blamed for loading up phone poles with excessive wiring for both traditional utility service and backhaul wired connections to serve area cell towers. The bulk of the proposed fine is likely to be lodged against Edison because of the evidence tampering allegations, but phone companies are also deemed liable.

At issue are the annual bouts of Santa Ana winds which can create gusts up to 80mph or higher. Most utility poles were designed to support a load of a few power cables, landline phone service, and cable television lines. But in many parts of canyon country, wireless phone companies rely heavily on utility poles to connect to their network of cell towers which are strategically located on ridges and mountains to serve populated valley regions below. While some cell phone companies now rely on fiber connections, many also still utilize a series of copper wire circuits to provide sufficient wireless capacity. In some cases, companies may hang several cables to meet bandwidth needs. The more cables, the more susceptible poles become to wind loads, which can literally snap poles in half or force them out of the ground in high wind gusts.

When electric lines topple, they can start fires that quickly grow out of control in remote areas.

Downed power lines are blamed for a number of wildfires in California, including the 2008 Sesnon fire in the San Fernando Valley. Fire investigators and local officials have pressured utility companies to mitigate the hazards from downed power lines by keeping excess cables and equipment off the poles.

Hans Laetz, a Malibu resident who has lived with what he calls “spindly-looking utility poles” for more than a decade was not surprised when life-threatening wildfires were blamed on downed lines.

“My family and my neighbors in Malibu are being placed at risk,” Laetz told the Los Angeles Times. “I drove under those poles on Malibu Canyon Road for 10 years, and I thought one of these days, one of those poles was going to fall. You could tell this was a disaster waiting to happen…. And then it happened.”

Edison denied the allegations it mislead investigators and called the proposed fine “excessive.”

Rogers Cable lets their customers purchase this cable box outright to avoid rental charges.

Stephen Simonin first came to our attention in January 2010 when he proposed charging cable operators room and board for their expensive cable set top boxes they require subscribers to rent.  Now, the chairman of the Litchfield (Conn.) Cable Advisory Council is back with another salvo — demanding an end to mandatory rental charges for cable TV equipment and access to competing providers:

The biggest industry in the US that has money for jobs is the entertainment industry. Federal law requires Cable to carry local broadcast and public channels in the clear for all. If we contact our Federal representatives and ask them to add: “Must carry adjacent competitors programming” We would add a million USA jobs immediately. Paid for by corporate cable and NOT tax dollars!

Cable has forced all of us to RENT cable boxes. We are not allowed to buy them because this is guaranteed free revenue forever for them. A box costs less than $100 and we pay nearly $10 a month for rental and power each month. Cablevision makes over $1,000,000,000 a year on set top box rentals alone. This is only one company! They have compressed TV to less than 20% of the transport. They use the other 80% for business and not covered under TV franchise (Wi-Fi, data, phone business). However, they use the TV franchise for this monopoly access to our front doors.

Adding this must carry clause will allow up to 5 different cable providers at our front doors for lower costs, higher quality and real competition. Cable will not want to give up that fat 80% business revenue they have today and will need to add a new fiber/co-ax transport across the country on their nickel! Think how many local jobs $1,000,000,000 can pay for. Now remember that we have several cable companies here in CT!

These are American jobs! Please help us get this passed! Call our Federal Congressman and Senators today. Remind them of the details I have sent them on behalf of the People.

Simonin’s proposal, sent to Stop the Cap!, enjoys some precedent… in Canada.

Sky Angel, a Christian television distributor, abandoned satellite in favor of IPTV several years ago. Their subscribers watch Sky Angel's channel lineup over a broadband connection.

Consumers there can purchase cable boxes in stores like Best Buy ranging from $80 for a refurbished unit that works with Shaw Cable to $500 for a cable box with DVR designed for Rogers Cable customers.  Buying your own box puts an end to rental fees, often $7+ per month, which never stop, even after the box is effectively paid for in full.  But for those seeking a built-in DVR, the initial price tag is on the steep side.  The practice of buying boxes has also generated some surprising competition between Rogers and itself.  When customers call to inquire about new service, Rogers often includes discounts including free box rentals, making it unnecessary to purchase the box at all (as long as you remember to re-negotiate an extension of the promotion when it ends).  That’s a savings of nearly $100 a year for some customers.  Buying DVR equipment guaranteed to work with your current provider also makes it easy to upgrade the device with larger capacity hard drives that can store more programming.  Since the failure point for most DVR’s is the hard drive, occasional replacements and upgrades can keep a box running for years.  Many pay providers in the United States charge higher rental prices for higher capacity equipment, with no option to buy.

Simonin’s proposal to open up cable networks to other providers is more novel, and probably a lawyer’s dream come true for the endless litigation it offers.  It’s highly unlikely the courts will side with the notion of forcing cable operators to open their infrastructure to competing providers, and considering the amount of informal collusion between companies today, it’s probably not going to deliver much savings.

A bigger hope on the horizon is the ongoing march to IPTV — television programming delivered using Internet technology.  With strong Net Neutrality policies in place (and a strong position against Internet Overcharging with usage caps or usage-based billing), dozens of new virtual “cable companies” could be launched, delivering their lineups over the Internet, direct to computer and television screens.  That could deliver consumers an endless choice of providers, assuming regulatory oversight is in place to make sure programming is available to all at fair and reasonable prices and that broadband providers are not allowed to block or impede access to the offerings that result.

It’s much easier to do an end run around Big Cable than trying to find a way to get them to change their business plans.

Communications Workers of America president Larry Cohen got himself off script and tangled in the percentages over the weekend when he told German magazine Focus the merger deal between AT&T and T-Mobile that the CWA has been cheerleading since it was first announced had little chance of coming to pass.

Cohen told Focus the chance of the deal getting beyond the current court challenge from the U.S. Department of Justice was around 20 percent. That seemed to signal the union was getting in line with those prepared to throw the current merger deal under the nearest bus.

Soon after that quote came home on the Bloomberg News wires (and reached AT&T), it didn’t take long for a revised quote (that a union spokesperson would later claim to be a “clarification”) to appear in a subsequent story:

There is about a 60 percent chance of a settlement between the companies and the Justice Department, Cohen said in a telephone interview today. Should the case go to court, it would be 50-50 on which way the decision would go, he said.

But the fuzzy math truly got exposed when the Wall Street Journal got this explanation for the discrepancy:

A spokeswoman for CWA said it was mostly a case of fuzzy math. Mr. Cohen’s point, she said, was that there was a 60% chance that the Justice Department’s lawsuit against the deal would be settled out of court.

But in the 40% chance that it didn’t, then there was a 50-50 chance that the company would prevail, which he may or may not have stated as 20 percent.

In reality, he meant to say that it was more likely than not that the case would be settled and the merger would succeed, the spokeswoman said.

“Perhaps it wasn’t the best of use of math,” she said. “Things got lost in the percentages.”

So, did AT&T push for the comments to be clarified? “I had some exchanges with my counterpart at AT&T, yes,” she said. “I sent her our clarification… which is good.”