AT&T warns DSL customers they can watch 10 High Definition movies per month... and use their Internet connection for absolutely nothing else, unless they want to incur an overlimit fee of $10.

AT&T has released a phoney baloney video for their customers purporting to “explain” broadband usage and the company’s completely arbitrary usage limits on DSL and U-verse customers: “A single high-traffic user can utilize the same amount of data capacity as 19 typical households. Lopsided usage patterns can cause congestion at certain points in the network, which can slow Internet speeds and interfere with other customers’ access to and use of the network.”

Too bad these claims are not verified with actual facts.

Meaningless statistics

AT&T’s claim that less than two percent of their customers use 20 percent of available bandwidth is frankly meaningless to the company’s DSL and U-verse hybrid fiber-copper networks.  For years, phone companies made a marketing point that unlike cable broadband’s shared network, their DSL service was never shared with anyone else in a neighborhood.  Therefore, running it at a trickle or full speed ahead should have no impact on any other customer.  The only exception to this rule comes from phone companies that under-invest in their middle mile and backbone networks.  For AT&T, that means trying to serve too many customers on inadequate equipment ranging from a poorly planned network of D-SLAMs, which connect individual customers with a fatter pipeline back to the central office, or an inadequate network between the central office and AT&T’s regional backbones.  Fiber, such as that used by AT&T’s more modern U-verse system, completely solves any capacity issues.  Broadband traffic is only a tiny percentage of the bandwidth consumed by AT&T’s IPTV video service — the one that delivers U-verse TV to your home.  AT&T imposes no viewing limits on customers, of course.

Any actual capacity crunch would only show up during peak usage periods — when AT&T customers of all kinds pile on their broadband connection at the same time. AT&T’s usage cap regime does next to nothing to mitigate that kind of congestion.  Here’s why:

Since AT&T and other broadband companies routinely claim the average use per customer is well under 20GB per month, and only 2 percent of customers are currently deemed “heavy users” by AT&T, that tiny percentage of customers cannot create sufficient drag on AT&T’s DSL network even if they opened up their connections to full speed traffic.  In reality, the 98 percent of “average” users piling on the network during prime time would be the only thing capable of the kind of critical mass needed to create visible congestion.  What uses more capacity?  Two customers using their 7Mbps DSL lines to stream online videos concurrently or 98 customers all using their 7Mbps DSL lines at the same time for virtually any online activity?

The math simply doesn’t add up.

The Congestion Myth

AT&T targets their broadband customers with an unwarranted, arbitrary Internet Overcharging scheme they cannot effectively explain to customers.

As two week’s of hearings this month have demonstrated, Bell Canada’s similar arguments for its usage caps simply come without any evidence of actual congestion.  In fact, company officials modified their position to talk more about peak usage congestion, a problem that cannot be controlled with a usage cap well in excess of the average consumer’s usage.  In fact, only a speed throttle could control network congestion at the times it actually occurred.  AT&T also ignores when its customers are using its network.  Is a heavy user downloading files at 3 in the morning creating a problem for other users?  No.  Are the majority of their average-usage customers all jumping online after school or work creating a problem?  Perhaps, if you believed AT&T even had a congestion problem.

Industry maven Dave Burstein does not, and Burstein talked to two chief technology officers at AT&T who told him wired broadband congestion is a “minimal” problem for the phone company.

Upgrades and Cord-Cutting, Delayed

Two things usage caps can do is help your company delay necessary upgrades to meet customers’ broadband needs, whether they are “heavy users” or not.  AT&T has shown itself historically to be slow to invest, and cheap when it does.  AT&T’s wireless network is bottom-rated by consumers thanks to inadequate network capacity.  The company elected to upgrade on-the-cheap to an IPTV platform that still relies on copper phone lines to deliver service that simply cannot compete in quality and capacity with Verizon’s FiOS fiber to the home network.  But investors love the fact the company counts every penny, even if it means inconveniencing and overcharging customers for their services, usually offered in duopoly or monopoly markets.

AT&T’s usage caps on U-verse are even less credible than those imposed on their DSL service.  U-verse is a fiber to the neighborhood network with near limitless capacity for broadband and video.  In fact, the only “congestion” comes from the copper phone lines that limit how much bandwidth can be supplied to your individual home.  But no matter how much you use, you will not affect your neighbors because your copper phone line is shared with nobody else.  In fact, the biggest chunk of U-verse’s bandwidth is reserved for their video services, which makes arguments about excessive Internet usage on that pipeline un-credible.

What AT&T’s usage cap does assure is that you will not drop that video package from your U-verse service anytime soon.  That lucrative revenue from expensive video packages cannot be forfeit without a fight, and a nice deterrent in the form of an arbitrary usage cap does wonders to keep that cord cutting to a minimum.

Meters That Don’t Measure

One of the worst ongoing problems with Internet Overcharging schemes like AT&T’s is the broken usage meter.  Stop the Cap! has received hundreds of e-mails from AT&T DSL and U-verse customers who report AT&T’s usage meter is either unavailable, broken, or is wildly inaccurate.  With absolutely no independent oversight, and no consistently accurate usage measurement, charging anyone overlimit fees with a broken meter doing the counting is unconscionable.  Yet AT&T may well try.  The company has already been sued by one law firm for what it alleges is an unfair usage meter on the company’s wireless service — a meter that consistently overcounts usage in AT&T’s favor.

AT&T admits they cannot even accurately measure their own customers' usage.

Once getting over the broken meter, customers are directed to a pointless usage-estimator — the ones that tell you about how many tens of thousands of e-mails you can send and receive under AT&T’s cap regime.  In fact, these statistics are irrelevant for the vast majority of customers who never think of sending 10,000 e-mails or exchanging 2,000 pictures or songs.  That’s because customers do not use the Internet to exclusively do those things.  Even with the guestimator, they are left checking a broken usage meter to ponder whether or not they can watch one more show or download another file without incurring a $10 overlimit penalty (or more).  That “generous” limit AT&T touts suddenly doesn’t look so ample when the company gets to the wildly popular activity of streamed video.  AT&T’s own video warns you can only watch 10HD movies a month over your broadband connection — and absolutely nothing else.  No web browsing, e-mail, or photos or music.  Ten movies a month.  Still thinking of dropping your U-verse video subscription now?

Yet AT&T has the nerve to claim, “Our goal is to provide you with the best Internet service possible.”  Really?

Thankfully, not every member of the investor class is thrilled with nickle-and-diming broadband consumers for usage that costs the providing company next to nothing.

The Economist excoriated AT&T for its unwarranted usage limits on its blog earlier this year:

The use of caps allows providers to dish out bandwidth with one hand and take it away with the other. The companies have vastly increased the capacity of various copper, coaxial and fibre lines, but artificially separate out a portion—at least half and often much more—for video which a set-top box or a broadband modem spits out as an apparently distinct service. Cable firms simultaneously push out hundreds of digital channels, while telecoms firms rely on multiple digital streams from live broadcast or cable TV or on-demand pay-per-view. It is as though the water main were divided as it entered the home and a steady, modest stream was made available for showers and at the tap, while most of it was always at the ready for a coin-operated washing machine.

Increasing speed on the internet portion, which would allow consumers to give up on TV subscriptions, is balanced by capping volume. If a consumer does not monitor usage, his internet access can be withdrawn or, in AT&T’s case, overage fees of $10 charged for every additional 50 GB of usage. […] [That] $10 charge applies whether the limit was breached by 1 MB or a smidgen under 50 GB.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT Usage.flv[/flv]

AT&T’s new video on broadband usage is based on facts not in evidence and only adds to consumer confusion about arbitrary Internet Overcharging schemes.  (4 minutes)

Comcast's touch control panel delivers alarm functions, home automation, and even weather updates.

Verizon Communications, Bright House Networks, Comcast/Xfinity, and Time Warner Cable are all on the verge of making a major new push to get customers to consider signing up for home security through their respective bundled offerings.  It’s just the latest new way telecommunications companies are responding to Wall Street’s insatiable quest for growth in the average revenue earned from each customer.  But how good are these services, and how much are they going to cost?

Time Warner Cable has offered security monitoring in a number of legacy markets inherited from their former owners.  But now the company is beta testing an entirely new suite of home security applications in cities like Rochester, N.Y., with the hope of introducing the service later this year in additional markets.

Time Warner Cable and Bright House seem to be jointly testing a similar system, designed to compete with 24/7 home alarm monitoring providers like ADT or GE Home Security.  Although price points have not yet been announced, Stop the Cap! has learned the cable company intends to test a basic package of home monitoring including a limited number of monitored doors and windows for between $25-30 a month, not including upfront costs and installation.

Like other alarm providers, additional services and protected points of entry will cost extra.  The next generation of home security from Time Warner Cable will be controllable from apps for iPad and smartphones, in addition to a touchscreen control panel supplied with the system.  By integrating the system with your home broadband connection, you can stream video from security webcams and configure alerts for any number of events.

Bright House’s proposed system, for example, would let you set a text message alert when the kids got home from school.  Want to know if someone sneaked out of the house in the middle of the night?  The security system can alert you to that as well.

Comcast/Xfinity has been rolling out a similar system in some of their markets. XFINITY^® Home Security also delivers monitoring services, and provides remote access over the Internet.  It will also let you remotely control home appliances, lighting, and any installed web cameras.  Away from home and want to see if your spouse is up to no good?  Now you can quietly spy on anyone in your home while you are away.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Comcast Home Security.flv[/flv]

XFINITY Home Security System from Comcast is explained in this promotional video from Comcast.  (3 minutes)

Comcast’s basic monitoring package doesn’t include many of the coolest add-ons like video monitoring and access to a modern touch-based control panel that also serves up weather forecasts and even sports scores.  Many customers end up with the “Preferred Package” because it delivers a much wider range of protective services.  The service tested successfully in Houston and is now also available in Philadelphia, Portland, Jacksonville, Sarasota/Naples, Chattanooga and Nashville.

Comcast didn’t reinvent the wheel with their security system.  They rebranded iControl Networks’ Open Home automation and security platform.  Pricing?  $199 for the “basic package” that didn’t impress us, or $299 for the “preferred” package which comes with the bells and whistles.  Installation is sometimes included in those prices, but a $50 “activation fee” also applies.  Expect to pay $30 for basic monitoring, $40 for “preferred” monitoring each month for a minimum of three years — an early termination fee applies if you cancel early.  Also expect to pay more for any optional extras you add.

Verizon's alarm system was promoted at this year's Consumers Electronics Show.

Verizon Communications’ new ominously-named “Home Monitoring and Control” system is powered by its fiber to the home FiOS service.  Introduced at this year’s Consumer Electronics Show, Verizon has teamed up with lock-maker Schlage, who manufactures the “smart door locks,” and Motorola, which throws in 4Home, their home automation platform.  Trane even includes a smart-thermostat, remotely controllable.

Unlike systems sold by cable competitors, Verizon’s is budget-minded, priced at just $9.99 per month.  But the system package at that price is not remotely monitored and was designed to be sold to the do-it-yourself type. For ten bucks, you get to control everything through your television set top box, smartphone, or tablet computer.  If you want more, you pay more.  An upgraded package includes remote door locking/unlocking and remote controllable webcams that you can pan and zoom.

The deluxe package throws in the remote monitoring service and a smart-home energy use suite that let’s you monitor and control energy consumption of your home appliances.

“The more services they can get someone to sign up for, the stickier that customer is to them,” said Bill Ablondi, director of home systems research for the Parks Associates market research firm.

Most systems will come with a term contract of 12-36 months, and many could fetch discounts for heavily-bundled customers.  Most insurance companies also provide up to a 15 percent discount on homeowner policies for remotely monitored burglar and fire detection systems.

For the cable and phone companies, home security could easily bring another $40 a month in revenue and put many cable bills north of $200 a month in combined services.  Since virtually all of the systems were developed by third parties, development costs are low, and since existing broadband service in most homes provides ready connectivity to an alarm monitoring center, the costs to provide the service are minimal.

For existing security companies, the pending threat of big cable and phone companies eating their business for breakfast isn’t one they are taking lying down.

ADT is developing its own suite of home automation and security monitoring, and didn’t waste anytime taking a swipe at the cable companies.

“We’ve been in this business for 135 years,” said ADT spokesman Bob Tucker, starting with telegraphs and personal security. As for Bright House and Verizon, he said, “Would you really want to trust the security of your home and family to the same people that install HBO?”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Verizon Makes a Connected Home a Reality.flv[/flv]

Verizon’s forthcoming home security and automation system is promoted in this company-supplied video.  (1 minute)

Cable Montana is now Optimum West, Cablevision’s marketing name for the cable systems it acquired from Bresnan Communications.

Earlier today, customers in Billings, Laurel, Park City and Columbus were able to start using upgraded cable, phone, and broadband equipment on the updated cable system.  More than 2,200 Montanans were introduced to the Optimum name in a mailing sent to neighborhoods where service has been upgraded.  But all of the new equipment that comes with the service has created considerable confusion for long-standing Bresnan customers who have been using older Bresnan equipment for years.

The changes have been overwhelming for those used to Bresnan’s modest level of service for more than a decade.  Cablevision, best known for its Optimum service in suburban New York City, Connecticut, and New Jersey, has brought an enormous increase in programming, and improvements in broadband service, for many customers.

“All existing customers in Laurel, Park City and Columbus will be upgraded to Optimum TV by July 20, which will deliver many more channels, including access to more than 100 channels of free HD (high definition), thousands of titles of video on demand and other benefits like faster high-speed Internet and a better phone service with lower prices and more features than are available from any other provider,” says a Cablevision spokesperson.

When it works properly.

The Laurel Outlook reports some customers frustrated with the changeover have found themselves at local cable stores trying to sort out all the problems:

One Laurel customer installed his modem, but was not receiving service. A visit to the Laurel office did not provide answers to his satisfaction, so he drove to the Billings office on Monad Road, where he received two telephone numbers to call for tech support. He called one of the numbers, followed a menu, and was able to troubleshoot with a technician to get his Internet up and running.

A second customer installed her set-top box but was not receiving Optimum TV channels. She called the 1-800 number provided in the mailing packet, but technicians were unable to walk her through the necessary steps to receive service. Frustrated, she drove to the Laurel walk-in center on West First Street and made an appointment for a technician to come to her home. She discovered that not only must she program her television with the new Optimum channel numbers, she must also program the TV-top box with the correct numbers. After doing so, she was able to receive the new channels.

Many customers are likely going to need to reprogram their televisions more than once.  When the upgrades are complete, Cablevision says it plans to unify channel lineups across the area.

A Boston firm believes broadband is something best shared, and plans to put that notion to the test by bringing free access to wireless broadband to anyone in range of its equipment.

NetBlazr starts with gigabit fiber from Cogent Communications, and then delivers free or low-cost access to any customer that is willing to do two things:

1. Spend $299 for their basic installation kit, which includes a high speed router, three antennas, and some cabling;
2. Use the included equipment to receive service from NetBlazr and agree to share it with anyone in range of the wireless antennas included in the kit.

Reception of the wireless broadband signal, comparable to Business Class DSL, comes with no ongoing fees.  If you want dedicated, guaranteed speeds, NetBlazr will sell them to you at an added cost.  The more customers exchanging signals, the more robust and faster the network becomes, says NetBlazr CEO Jim Hanley.

Although the service is currently designed to operate for business customers in downtown Boston, Hanley sees the possibility of crowdsourcing a broadband platform eventually large enough to cover residential homes and businesses across the country, at almost no expense.

The venture is new, however, and the company’s FAQ warns businesses not to depend entirely on NetBlazr for dependable broadband just yet.

Because it’s still new, the quality and level of service is highly dependent on what kind of signal one can receive from the next nearest business that belongs to the cooperative.  If you are the only one for blocks around, the signal could be marginal to non-existent.

Such communal networks only work when they reach a critical mass of cooperative members to blanket areas with coverage.  At the moment, that means Boston’s Back Bay and downtown, where high-rise buildings help get the signals around densely populated neighborhoods.

NetBlazr’s marketing brochure touts the service can deliver symmetrical speeds up to 60Mbps for free, and is particularly suited to offices that need additional broadband resources, but don’t want to sign a pricey upgrade agreement with incumbent providers like Verizon.

NetBlazr’s competitors like the aforementioned phone company are reacting with a shrug of the shoulders so far.

Verizon spokesman Phil Santoro: “Competition is always healthy and the market for Internet service is already highly competitive.”

“We aren’t familiar with this company’s business proposition, but I can tell you that Comcast already offers secure and reliable high speed Internet,” spokesman Marc Goodman told the Boston Herald.

Earlier efforts to share Internet services in neighborhoods through Wi-Fi ran into trouble when Internet Service Providers found out.  Virtually all providers specifically prohibit customers from sharing their residential service with non-paying customers beyond the property line.  But since NetBlazr arranges for its own access, this stumbling block is overcome.

Company officials say they have enough connectivity to support the demand, although business users don’t traditionally pound networks with peer-to-peer file requests or lots of online video, so how NetBlazr will ultimately perform in a residential setting remains to be seen.

The company has impressed technology mavens at the Massachusetts Innovation & Technology Exchange.  NetBlazr won this year’s “Best Bootstrapped Start-up” award.  It was also a finalist for the $1 million MassChallenge competition held earlier this year.

Hanley’s ultimate goal is to provide cheap, commodity Internet access, and thinks within five years his idea will be a major game-changer for how broadband service is delivered in the United States.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/NetBlazr.flv[/flv]

netBlazr CEO Jim Hanley indicts America’s broadband duopoly and says direct action through new competition will solve the problem faster than public policy can.  Hanley also explains how his service works. (10 minutes)

Meigs County, Ohio

Connect Ohio, one of the many state chapters working with telecommunications industry-backed Connected Nation, has released its 2011 Technology Assessment about how the state is adopting broadband technology.

Despite celebrating improvements, large parts of rural Ohio still do not receive any kind of broadband service, especially from the state’s dominant provider AT&T, one of the companies that has traditionally backed Connected Nation.

The friendly relations these broadband groups maintain with their sponsors results in reports that strenuously avoid any direct criticism of providers for ignoring rural Ohio, particularly in the southeastern part of the state where broadband is especially difficult to obtain.

Connect Ohio’s findings, mostly provided by voluntary data from Internet Service Providers and respondents to various surveys, downplays rural Ohio’s broadband drought:

Statewide, 5% of Ohio residents report that broadband is not available where they live, 85% say with certainty that broadband is available, and 10% do not know whether broadband service is available.  By comparison, Connect Ohio’s provider-validated Broadband Service Inventory found that 1.7% of households do not have terrestrial fixed broadband service access.

The disparity in Connect Ohio’s numbers is especially apparent in rural Meigs County, located in southeastern Ohio.

“Geographically speaking, nearly two-thirds of Meigs County does not have easy access to affordable broadband,” Meigs County Economic Development Director Perry Varnadoe told The Daily Sentinel. “In terms of infrastructure, access to broadband is just as important as water and sewer service to businesses.”

Varnadoe thinks the few major providers that do offer service in the county are basically done expanding their service areas, and Varnadoe believes broadband adoption has reached a ceiling in Meigs County.

With much of the county bypassed for DSL or cable modem service, the only exception to this is fixed wireless service from New Era Broadband.  Unfortunately, it’s a costly alternative to traditional DSL.

New Era Broadband of Coolville is a Wireless ISP

New Era delivers up to 1.5Mbps service for $60 a month with a $200 installation fee and a two-year service agreement, and provides service in the vicinity of the community of Racine.

The company is still waiting on a $2.9 million grant to expand service to an additional 3,000 residents, mostly in the area of Five Points, which only has access to dial-up Internet.

Only about half the residents of Belmont, Jefferson, Monroe and Harrison counties have broadband connections at home, the study also found.  The Intelligencer/Wheeling News-Register placed most of the blame for that on residents not being particularly interested in the Internet, but service and cost are likely more important factors, as cable and DSL service is also spotty in those counties as well.  If there is a computer in the home, there is a demand for broadband service, especially in households where children find Internet access increasingly important to complete study work.

For most residents, it has become a waiting game to see who will deliver access, if anyone will.  In most of Ohio, customers look to the phone or cable company for access.  Rural Ohio lacks good cable broadband coverage, and DSL from the phone company first requires an interest in providing the service, and AT&T has not proven to be aggressive in rural communities in the state.

In fact, the phone company has been seeking approval to discontinue providing rural landline service at a time and date of its choosing.  If the landline goes, the chance for wired DSL goes with it.