While residential customers face the threat of Internet Overcharging schemes designed to ration their use of the Internet with excessive pricing combined with usage limits, business customers are finding the opposite:  providers rolling out several new innovative services designed to control costs and increase broadband flexibility.

Verizon Business‘ Ethernet Virtual Private Line Service customers, who enjoy enormously fast speeds over a fiber-based network, will now have the ability to customize their bandwidth on-demand, through an online control panel.

Verizon EVPL Dynamic Bandwidth enables customers to raise or lower their broadband speeds as needed, and pay for their broadband service based on the speed they select.  The service is designed to maximize savings for businesses that have a periodic need for higher bandwidth, but don’t feel justified paying for a higher tier of service that will go unused at other times.  A customer accesses an online control panel, reviews pricing for different levels of speed, and then selects the option that best meets their needs.

Customers can raise or lower both the upload and download speeds once every 24 hours.  The requested capacity is provided within 60 minutes, and the control panel lets customers schedule bandwidth needs in advance.

The Dynamic Bandwidth service supports speeds between 1Mbps all the way up to 1000Mbps, depending on available facilities in your area.

“There is an insatiable hunger for bandwidth as technologies such as video transmission become more widely adopted by enterprises,” said Blair Crump, worldwide president of sales with Verizon Business.  “Our self-service dynamic bandwidth capability allows our EVPL and Private IP customers to make the most of their networks, at their convenience.”

David Hold, senior analyst, network services with Current Analysis, said: “Verizon Business is delivering a unique value proposition to the Ethernet services market with their new dynamic bandwidth capability.  With the proliferation of sophisticated, bandwidth-intensive applications, most organizations are demanding greater network capacity, and this new capability will help customers improve their return on investment in EVPL by only paying for greater speed when needed.”

Speed-based tiered pricing is familiar to consumers, and does not raise the same level of concern that consumption-based billing schemes do.  It is based on the premise that those heavy users of broadband will naturally gravitate towards higher speed, more expensive tiers of service to enjoy faster speeds.  The provider’s premium pricing also guarantees premium profits.

While residential customers bear the brunt of Internet Overcharging experiments based on data consumption, most business-class customers curiously escape such limits and fees.  Indeed, if the rationale for such pricing is based on demands placed on the network infrastructure, business customers, who face pricing commensurate with their anticipated higher usage, should be the natural first candidates for experimentation, not the ones exempted from it.

Verizon Business’ new speed based tiering demonstrates that there is money to be made providing customers with their choice of speed, without alienating them with unwarranted usage limits and the penalties and fees that follow those who exceed them.

Helping to spur additional competition, AT&T announced the availability of its U-verse service in parts of Corpus Christi, Texas and the communities of Springfield, Champaign, Danville and Decatur, all in central Illinois.

“Today’s launch of AT&T U-Verse reflects our commitment to make the investments necessary to bring consumers across central Illinois a new era of true video competition,” AT&T Illinois president Paul La Schiazza said in a statement.

In Illinois, dissatisfied Comcast customers were tearing up one of the local newspaper’s message boards.  Here’s a sampling:

• Now maybe Comcast will get better service and lower their OUTRAGEOUS prices.
• Comcast: Can you hear the sound of competition and angry customers? Can’t wait to get a cable carrier that actually plays all of the available Cardinals’ games.
• Will they have it in Chatham? I will be ready to sign up to get rid of Comcast! What parts of Springfield will get U-Verse, and what parts will be left out in Comcast’s cold?
• I can’t wait to get rid of Commiecast.

Troy Wolverton had a problem.  He wanted to send 170 pictures to Kodak to arrange to have them printed in time for Father’s Day.  It turned out to be a true labor of love, as he waited hours to send the 800 megabytes of imagery to Kodak’s online processor.

Troy Wolverton writes tech news for the Mercury News in California

As more than three hours passed, Wolverton began to ponder why the upload seemed some poky.  He subscribes to Earthlink, which supplied him with a 3Mbps connection.  Assuming that speed was available for both uploading and downloading, it would have taken less than an hour to get the job done.  But as virtually every customer of an Internet service provider finds, your download speed is many times faster than your upload speed.  In this case, Wolverton was suffering with a 384kbps upload speed to get those photos to Kodak.

In fact, while download speeds have been increasing at a steady clip, many have discovered upload speeds have barely budged, if at all, since broadband service became available in their area, often more than a decade ago.  Rochester, New York is one such example.  Time Warner Cable’s Road Runner service was introduced officially in 1998 with a download speed of around 5Mbps, but the upload was just 384kbps.  Today, standard Road Runner service provides 10Mbps for downloads, but the upload speed has remain unchanged, despite more than a decade having passed.

Networks were originally designed to provide more speed for downloading, and less for uploading, based on the presumption subscribers would take more than they “gave” to the Internet.  That remains essentially true today, but subscribers are increasingly relying on their upload connection to send pictures, movie clips, and other larger files to their friends, family, or work.

But broadband companies seem oblivious to this trend. If you look at the plans offered by the Bay Area’s two main providers, Comcast and AT&T, it’s all but impossible to find one in which the upload speed comes anywhere close to the download speed. To get an upload speed that’s faster than a slow download rate, you have to subscribe to one of the pricier plans, like Comcast’s Extreme 50, which gives you a 10 megabit per second upload connect — at a cost of $100 a month.

Comcast and AT&T officials say they are watching consumer Internet usage trends. They note that as their companies have ramped up download speeds, they’ve tended to increase upload speeds as well and will continue to do so. The download and upload speeds they offer are simply a response to market demand, they say, claiming that the vast majority of their customers still download far more data than they upload.

“We’re designing our products based on how we see consumers using them,” John Britton, an AT&T spokesman, told me.

Wolverton thinks the lack of competition also has a lot to do with it.

In terms of Internet access providers, the Bay Area essentially has a duopoly. There are numerous small players such as EarthLink, but Comcast and AT&T dominate — and duopolies tend to not have a good read on real market demand. People often buy one of their products because they don’t have any other choices — not because they meet their needs.

In other words, if the market were more competitive, a company might be able to build a successful business by catering to people who want faster upload speeds.

Just because consumers use their connections to download more data than they upload isn’t proof that they don’t want to upload more. The slow speeds could well discourage folks from doing more uploading. And they may well find a use for faster upload speeds — if they had them.

I’d love to be able to back up the videos, songs and documents on my computer to a server on the Internet. But with my slow upload connection, that’s not really an option because it would take days of uninterrupted uploading to back up any significant portion of my hard drive.

AT&T Rate Increases Coming

AT&T is jacking up phone rates for residents of Alabama, one year after state officials deregulated the Alabama telephone service marketplace based on the premise that competition would bring about lower rates for consumers, not higher.

Darrell Baker, director of the Alabama Public Service Commission’s telecommunications division, said telephone companies heavily promoted the price deregulation plan by claiming competition would keep rates down.  An industry-friendly deregulation bill was passed in 2005 over PSC objections, and another bill the Alabama Legislature passed this spring expanded deregulation further.

Alabama residents will now pay for that free-market construct in a state with limited local line competition.

AT&T spokesman Hood Harris said customers with Basic Service, a single-line home phone, will see their bill rise 3 percent, from $16.95 per month to $17.45.  Approximately 15 percent of AT&T’s Alabama customers have basic service.

Customers with AT&T’s deluxe plan, the Residence Complete Choice Package, will see an increase of 9.5 percent, from $21 per month to $23.

Harris blamed the increases on inflationary costs.

Baker was unimpressed with the rate increase announcement.  “It doesn’t sound like the competitive market is having much impact,” he said.  Baker expects other telephone companies in the state to quickly follow suit.

AT&T increased rates in 2008 by 4.1%.

No Myth: AT&T Huge Wireless Data Bills

In between the wall-to-wall coverage of the passing of Michael Jackson last week, Stop the Cap! reader Lou discovered Twitter was all-a-tweet about yet another person who got stuck with an enormous mobile data bill from AT&T Mobility.  This time it was Mythbusters’ Adam Savage, who spent five days in Montreal and discovered the most expensive part of the trip was the $11,000 bill from AT&T.

The story here isn’t really about AT&T’s math, or the remarkably expensive Canadian data roaming rate of $0.015 per kilobyte, it’s the fact AT&T will let your bill run into the ionosphere before alerting you, or giving you the option to automatically shut yourself off before you go over a plan limit.

Savage’s tweet to his 50,000 followers all but guaranteed a rapid response (and credit) from AT&T for the $11,000 in fees charged to his account (and they turned his phone back on.)  Unfortunately, company policies remain unchanged, leaving those who encounter similar kinds of overlimit fees who don’t have tens of thousands of followers on Twitter, stuck paying those bills or begging for credit.

AT&T should automatically notify any customer entering into a roaming area with a text message explaining the rates and fees charged when inside that roaming area.  Customers should have the right to choose a setting for their account that best meets their needs:

1. No roaming access/No overlimit fees: This would suspend service on your phone automatically until you contacted AT&T to remove it at your request;
2. No Overcharges: This would turn your service off when your plan limit is reached, requiring the customer to opt-in to any overlimit fees;
3. Free and Open: The current standard — roaming and overlimit rates apply automatically.

AT&T claims it will send a text message and/or contact customers who substantially exceed their normal usage, but there has been scant evidence that policy is applied uniformly.  Customers should have the right to make their own choices about their wireless usage, and the responsibility to select an option that best protects them from the heart attack in the mail, a/k/a the bill.