Nathan Gray woke up one morning this month and received an alarming notification from Comcast, his internet provider, claiming he had exceeded his Comcast terabyte data cap and was being billed an additional $10 for a 50 GB allotment of extra data.

“This has never happened before and I was only six days into my monthly billing cycle, so I assumed it must be a mistake,” Gray told Stop the Cap! “But Comcast told me it wasn’t a mistake.”

Gray was hardly alone. One month earlier, “Bogreenwoo” discovered his family had blown the roof off their internet usage, exceeding 1 TB by the middle of the billing cycle, with more usage piling up hour after hour.

“Xfinity was adding 50 GB blocks every day at $10 each and calls to tech support were no help,” he shared on Comcast’s customer support forum.

Similar complaints are brought up on that forum at least weekly, if not more often. Comcast counterclaims that usage exceeding 1 TB a month is so rare, it represents only about 1% of its customer base. But customers with huge internet bills from Comcast who stumble their way to the company’s support forum strongly dispute that notion.

“Well good luck with finding a solution or even finding anyone at Comcast who cares or anyone anywhere else as far as that goes,” shared “Amaasing.” “I have had this issue more than once and have talked with every vice president of customer service and had discussions with the security department and even filed a complaint with the FCC and nothing happened at all.”

Some users, like Amaasing, have received so many bills stung with overlimit fees they now turn their computers off in the evening and unplug their cable modems. In many cases the usage keeps rising anyway.

“Today when I logged in, I had apparently used 196 GB yesterday,” Amaasing wrote. “196 GB in 24 hours?  Seriously?”

For most customers in this predicament, Comcast is quick to blame customers for the usage and leave the detective work up to them. Customer support will not entertain suggestions their usage meter is inaccurate. In their view, it is more likely someone is illicitly connected to your Wi-Fi and stealing your service or you are running some bandwidth-heavy application or your computer has been hijacked by hackers or pirates.

While you are left to investigate which of these might be true, Comcast is free to continue billing your account overlimit fees.

Comcast claims it will forgive customers who exceed their data allowance twice ‘a year’:

“We’ll provide you with two courtesy months, so you will not be billed the first two times you exceed a terabyte while you are getting used to the new data usage plan. This means that you will only be subject to overage charges if you use more than a terabyte for a third time in a 12-month period. If you use more than a terabyte two times or less in a 12-month period, your courtesy month balance will reset to two at the end of these 12 months. However, if you use more than a terabyte three times in a 12-month period, no more courtesy months will be given.”

After “courtesy months” expire, you are on the hook for whatever excess usage Comcast determines you have consumed. Some Comcast customers assume the courtesy month counter resets each calendar year, but in fact it only resets after 12 consecutive months of staying within your allowance limit.

What causes “excess usage” is anyone’s guess. Comcast customers have documented several recent causes why they have mysteriously started blowing through their 1 TB data allowance:

1. The growing prevalence of 4K video, the highest streaming video quality available through online video streaming services can be responsible for a sudden spike of usage. Netflix and other services that support 4K video content with high dynamic range can eat up 7 GB to 10 GB of data per hour. Many services allow you to downgrade your video settings with minimal quality loss. We recommend trying settings typically labeled 720 or 1080 — the lower the better if you are running up against your allowance.
2. Third party backup and cloud storage tools: That online backup or cloud storage service you are using may be malfunctioning. There are several reports about Amazon Drive having problems recently, causing files to be repeatedly transferred and driving up usage to several hundred gigabytes a day in some cases. If you use Amazon Drive and have seen a huge spike in usage, try uninstalling or turning off the service for several days and see if usage falls dramatically. Other file and computer backup services that store your data in the cloud can consume a lot of data, especially when installing them on a new computer for the first time. Even some cell phone backup services designed to store your photos in the cloud can malfunction and repeatedly try to send the same photos over and over. Disable these tools for several days and check your usage levels.
3. Third party usage: Family members doing something bandwidth intensive can also be responsible for dramatic usage spikes. Although downloading video game updates can consume very large amounts of data, game play itself typically has little impact on your data usage. Check with family members to see if they are watching high bandwidth video or have installed a file backup service. Less common is an uninvited guest on your Wi-Fi network. Comcast often points to Wi-Fi security as a major problem when a neighbor gains access to your internet connection to download huge numbers of files. You can change your Wi-Fi password to help lock down your network. Make sure not to use plain word passwords — use a mixture of letters, numbers, and symbols.
4. Comcast’s meter is simply inaccurate. There is no independent third-party verification or government oversight of Comcast’s usage meter. Most ISPs hire a third-party contractor to design and implement their data measurement meters, but those contractors are ultimately answerable to the provider — not to you, giving little peace of mind to consumers who are forced to trust their cable company to be honest. Our country’s Founding Fathers placed great importance on accurate measuring and weighing tools, so much so it is addressed in Section VIII of Article I of the U.S. Constitution. That section gives authority to Congress to establish accurate and regulated measurement tools. Each state has their own way of managing this, often with a bureau of weights and measurements that independently verifies and certifies — with a tamper-evident sticker, the accuracy of the food scale at your local grocer or the gas pump at a nearby service station. Comcast has resisted similar third-party oversight for its usage meter. But considering the company’s overlimit fees can add a substantial sum to customer bills, having this kind of oversight seems appropriate.

Avoiding the usage cap: Comcast ironically provides its own insurance plan to protect customers from its own arbitrary data allowance. For peace of mind, Comcast collects an extra $50 a month ($20 for gigabit speed DOCSIS 3.1 plans) if you wish to waive the data cap altogether. Data caps are completely under the control of Comcast and are especially prevalent in regions of the country where a lack of competition exists. But Comcast’s arguments in favor of data caps don’t wash at the nation’s second largest cable company – Charter Communications, which markets its internet service as having no data caps at all. In fact, Charter CEO Thomas Rutledge never saw much use for data caps at Charter or Cablevision, the company he used to head.

Debunking arguments for usage caps at Comcast and other ISPs. (5:46)

Comcast is on track to lose more than double the number of cable-TV cancellations it experienced in 2017 due to cord-cutting, predicted a Wall Street analyst.

“We now expect Comcast to lose 400,000 video subscribers in 2018 while video revenue falls 1.4%,” UBS analyst John Hodulik said in a note to clients. Hodulik raised his original estimate of 320,000 customer losses as the cable TV customer loss trends grow worse.

Comcast lost 150,000 video subscribers last year, despite company executives touting its X1 set-top box platform as a tool to increase customer satisfaction and reduce disconnects. The X1 appears to no longer be a factor preventing customers from dropping cable television in favor of online streaming services and apps. Hodulik doesn’t believe Comcast is losing video customers to its traditional competitors either, because he predicts video subscriber losses will also grow at AT&T and Verizon.

Hodulik also forecasts a 67% increase in subscribers to services like Hulu, Netflix, and streaming platforms like DirecTV Now to 9.2 million in 2018, up from 5.5 million last year. By 2020, he predicts streaming services will have 15 million subscribers and 16% of the pay television market. As video losses mount, he predicts companies like Comcast will accelerate rate hikes on broadband service to make up for the revenue shortfall. There is little competitive pressure not to increase broadband prices further.

Charter Communications is raising rates for its dwindling number of Earthlink customers still subscribed to Earthlink’s legacy internet plans in an effort to avoid Spectrum’s entry-level $65 internet service.

Charter has started to notify customers grandfathered on an Earthlink plan that they are going to be gradually stepping rates up, starting with a $5 increase. Stop the Cap! reader Christopher Rzatkiewicz shared a copy of the bad news on his recent Spectrum bill.

Charter Communications terminated its agreement allowing Earthlink to sell its service over its cable broadband network after completing its merger deal with Time Warner Cable and Bright House Networks. That left an undetermined number of Earthlink customers paying $41.95 a month for Standard Earthlink 15/1 Mbps service, considerably cheaper than Time Warner Cable’s identical, $59.99 15/1 Mbps plan.

This last loophole allowed some customers to avoid switching to Spectrum’s more costly $65 entry-level 100/10 Mbps plan (200 Mbps in select areas). But now Spectrum is gradually taking away Earthlink’s price advantage. The new rate is $46.95 a month, and is likely to continue increasing in similar increments at least twice a year, until its price reaches about $60.

To help convince customers still holding on to older service plans to switch to Spectrum plans and pricing, Charter will continue raising rates on older legacy plans from Time Warner Cable, Bright House, and Earthlink to remove any price advantages those plans may have originally had. That will allow Charter to eventually claim its plans are always cheaper and better.

Charter Communications/Spectrum Standard Broadband Plans

• $46.95 Earthlink Standard¹ (15/1 Mbps)
• $59.99 Time Warner Cable Standard² (15/1 Mbps)
• $44.99 Spectrum Standard New Customer 1-Year Promotion³ (100/10 Mbps⁴)
• $65 Spectrum Standard for Existing Customers (100/10 Mbps⁴)

¹ Earthlink service is no longer available to Charter/Spectrum customers. If you cancel your grandfathered Earthlink plan, you cannot return to this plan in the future.
² Time Warner Cable internet service is grandfathered and no longer available to new customers. If you switch to a Spectrum plan, you cannot return to a Time Warner Cable plan.
³ To qualify as a new customer, either cancel service in your name and enroll as a new customer under another household member’s name or cancel existing service and wait 30 days to re-qualify as a new customer.
⁴ This plan offers 200 Mbps download speed in select areas.

CenturyLink is ready to capitulate in its competitive war with the cable industry, conceding its residential broadband business is a money loser that will no longer get broad-based upgrades and investment under the management of incoming CEO Jeff Storey, who will refocus CenturyLink on its larger business/enterprise customers.

The independent phone company has sent strong signals it is going to focus only on residential customers that are cheapest and easiest to reach, promising to fund broadband urban and suburban upgrades only where costs are low and the chances of a significant return is high. In rural areas, CenturyLink will depend heavily on capital made available by the FCC’s Connect America Fund when choosing areas worthy of upgrades.

“We’ll focus more on return on investment, which includes rural capital from the CAF II program,” said Sunit Patel, CFO of CenturyLink.

Patel, along with CenturyLink’s incoming CEO, originally worked for Level 3 Communications, a business and enterprise internet company acquired by CenturyLink in 2016. Now top Level 3 executives, at the behest of Wall Street and shareholders, are gradually taking over the top management positions of CenturyLink, pushing out current CEO Glen Post III with an early retirement this spring. With Post leaving, there is clear evidence CenturyLink is embarking on a transformation away from low return residential phone and broadband service and towards the kind of high profit business and enterprise connectivity Level 3 has provided for years.

Wall Street increasingly sees CenturyLink’s residential business as costing the company a lot of money for network upgrades that simply don’t deliver shareholder expectations of return on that investment, especially as the cable industry continues to aggressively deploy faster speed service to its customers.

In the fourth quarter of 2017, CenturyLink lost another 105,000 broadband subscribers, bringing internet subscriber numbers down to around 5.7 million nationwide. That represents a 4.8% reduction year over year, despite repeated promises of upgrades to stem those customer losses.

Last November, Post blamed those losses on customers served by CenturyLink’s legacy copper/DSL service areas where speeds and performance are lowest.

Soon to be CenturyLink Ex-CEO and President Glen F. Post

“We saw a much higher than expected loss of customers at the 20 Mbps and below speeds in a lot of the markets where we have that,” Post said during a late fall earnings call, according to a Seeking Alpha earnings transcript. “We had a much higher loss there. I think a couple of reasons, first of all, you see cable rolling out more with more aggressive offers, higher speeds and just the demand for bandwidth in those markets.”

Last fall, Post emphasized his broad-based residential and commercial broadband upgrade transformation plan to stop those losses. Post committed CenturyLink would provide 90% of homes with at least 40 Mbps, 70% of homes and businesses with 100 Mbps and over 20% with 1 Gbps or higher no later than 2020.

That was before activist shareholders and Wall Street joined forces to successfully push CenturyLink’s board to replace Post with business-oriented Level 3 CEO Jeff Storey. CenturyLink stock had been down by about one-third of its value over the last nine months, which only aggravated investors to push harder for dramatic management changes at the phone company. Activists argued CenturyLink shouldn’t be devoting much attention to its legacy businesses. In their eyes, only “strategic/success” businesses are worthy of investment, and those include commercial and enterprise broadband, metro ethernet, and cloud/backup services. The revenue eating “legacy” businesses, namely residential landline and DSL service, represent a drain on profits and threaten the company’s shareholder dividend. About two-thirds of CenturyLink customers are commercial enterprises.

(Blue) CenturyLink (Orange) Level 3

On March 6, 2018 the company announced Post’s retirement effective the day of its annual shareholder meeting in May. Post had originally planned to leave at the end of 2018, but some shareholders were unwilling to wait that long.

Strategic changes in CenturyLink’s future were previewed at the Morgan Stanley Technology, Media & Telecom conference earlier this month, where Patel outlined the company’s new vision.

“On the consumer side, the focus will be on enabling higher broadband speeds,” Patel said, but added a caution. “We won’t be spending capital on 5-20 Mbps connections, but rather on 100 Mbps and higher speeds. In urban areas we want to make sure we’re spending the capital where the returns make sense so focusing on multi-dwelling units make more sense in urban areas.”

Since the company is now going to target upgrades only in areas that “make more sense,” Post’s goal of better broadband for all by 2020 seem doomed

Another key piece of evidence is the retirement of CenturyLink executive Duane Ring, who announced he is leaving after 34 years despite a recent promotion. Ring, who led CenturyLink’s 12-state midwest region, was also behind much of CenturyLink’s residential broadband enhancement effort, including the 2005 launch of Prism TV — CenturyLink’s cable-TV alternative, as well as deploying gigabit speed services in several midwestern states. In 2016, he oversaw the deployment of 500 Mbps service for multi-dwelling units in 44 Platteville, Wisc. buildings that included nearly 800 apartments.

Broadband industry analyst Dave Burstein already sees the writing on the wall.

“Their fiber and G.fast plans, modest already, have been cut,” he noted. “They simply aren’t competitive with cable, which by 2020 will have a gigabit to 90% [of customers]. I look at the network and say if they don’t cut the dividend, trouble is near. Depreciation was $3 billion more than capex the last three years. Dividends were higher than income.”

As cable broadband speeds increase and customers defect from CenturyLink, few may choose to come back, making investments in broadband upgrades even more questionable.

“The rumor is they will virtually abandon much of the wireline network,” Burstein noted. “They will temporarily draw cash out to upgrade where they have better prospects,” referring to areas Patel identified as worthy targets for upgrades.

Mediacom Business reports the company will be increasing broadband speeds for its commercial customers around the country beginning April 1st without a change in rates.

The new speed tiers are:

• 10 Mbps ($69.95) customers will be upgraded to 60 Mbps
• 20 Mbps ($129.95) customers will be upgraded to 100 Mbps
• 50 Mbps ($199.95) customers will be upgraded to 300 Mbps

Mediacom undertook a three-year network upgrade project starting in 2016, spending $1 billion to increase its fiber backhaul network and boost internet speeds and network capacity for its residential and commercial customers in 22 states where Mediacom operates. Mediacom offers gigabit speed across its footprint and claims it was the first major cable company in the country to offer universal access to gigabit speed. Commercial customers pay $349.95 a month for gigabit service.

Mediacom is also perennially rated the worst cable company in the country by its subscribers, according to Consumer Reports. Many of the complaints regard Mediacom’s internet service not meeting advertised speeds and suffering from overselling — placing too many customers on a shared connection which can drastically lower speeds during peak usage times. It isn’t known how much Mediacom’s upgrades have corrected these problems. Mediacom’s primary service areas are small and mid-sized towns and cities.