More than 200 Verizon customers in Pennsylvania found their checking accounts balance-challenged when Verizon accidentally withdrew as much as $400 from those already paid in full.

Stop the Cap! reader Chandalee in Pittsburgh sent word her family’s checking account saw a surprise withdrawal from Verizon amounting to hundreds of dollars which helpfully paid for another customer’s past due balance.

“I was outraged when I saw Verizon cleaned us out, and I only learned about it when my debit card was declined at the grocery store — an incredibly embarrassing situation,” Chandalee shares.  “If we didn’t have bank reform, our bank would have probably charged us another $300 in bounced debit transaction fees before we learned about what Verizon did.”

Chandalee logged into her bank’s website when she got home and discovered the surprise charge from Verizon.

“I called them on the phone, they hung up on me twice, then told me they didn’t know what I was talking about,” Chandalee says. “I told them I have nearly 400 reasons they were working my last nerve and if they didn’t want to see my face in theirs, they had better put back my money.”

Verizon accused Chandalee of being rude.

“They don’t know what rude is,” she retorts.  “I asked for a supervisor and the woman — Ms. Jefferson or something, tells me she is the supervisor, and I told her get someone who supervises her ass on the line real quick.”

Finally, someone noticed her account was already paid in full and they couldn’t find evidence of the extra withdrawal, leading to a new series of questions about whether she had a Verizon Wireless account and maybe she meant to call them instead.

“As if Verizon isn’t also Verizon Wireless… it sure looks like the same red “V” to me — besides I have Sprint,” Chandalee said.  “They don’t know who they are dealing with.”

After logging more than two hours on the phone with Verizon, the stalemate ended in a draw.  Verizon wanted copies of the bank statement showing the charges and Chandalee was speed dialing her bank to reverse them.

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Last Thursday, the mystery was solved when WTAE-TV in Pittsburgh reported Chandalee wasn’t the only customer suffering from Verizon Empty Bank Account Syndrome.  It turned out a “system glitch” was responsible for payments being withdrawn from the “wrong accounts,” and Verizon promised a quick fix.  Chandalee wonders if the only way to get Verizon’s attention is to call the local TV station whenever the bill is wrong, because they sure didn’t listen to her when she called.  In the end, her bank reversed the charges and Chandalee told Verizon to delete all auto-debit information on her account.  “I will write these people my own check from now on,” she says.  “People need to watch their bank accounts so this doesn’t happen to them.”  (2 minutes)

[Updated 10:14pm — We received word the 200+ impacted customers were from across the nation, not just in Pennsylvania.]

A consumer group has filed a complaint with the Federal Communications Commission alleging that Verizon Wireless is violating its agreement with federal authorities by attempting to restrict the use of third-party wireless tethering applications.

The basis of the complaint, filed by Free Press, is that Verizon agreed not to “deny, limit, or restrict” customers from accessing the applications of their choosing as part of Verizon’s LTE license spectrum agreement.

“Verizon’s conduct is bad for the public and bad for innovation. It also appears to be illegal under the FCC’s rules that govern Verizon’s LTE network. Users pay through the nose for Verizon’s LTE service, and having done so, they should be able to use their connections as they see fit. Instead, Verizon’s approach is to sell you broadband but then put up roadblocks to control your use of it,” said Free Press policy counsel Aparna Sridhar.  “In 2007, Verizon argued aggressively against the adoption of these basic openness protections. Having lost that policy battle but won the auction for the spectrum licenses, Verizon has adopted a new regulatory strategy: simply ignore the rules on the books. The Commission must move quickly to investigate and stop these harmful practices.”

As Stop the Cap! reported earlier, Verizon has taken measures to try and warn off customers using the third-party tethering apps instead of purchasing the company’s $20 tethering plan, which offers 2GB of data usage per month.  In addition to text warning messages, the company has asked Google to disable access to tethering software in the Android Market for Verizon customers.

From Free Press’ complaint:

Efforts to disable smartphone features and create barriers to this useful, productive, pro-innovation activity should cause concern no matter who initiates them; but when Verizon Wireless interferes with the use of third-party tethering applications, that conduct also violates the rules governing its LTE network. When Verizon purchased the licenses for the spectrum over which it has deployed LTE, it agreed to abide by a set of pro-consumer, pro-innovation openness principles. In particular, Verizon promised that it would not “deny, limit, or restrict the ability of [its] customers to use the devices and applications of their choice.” Verizon’s recent move to limit and restrict access to tethering applications by actively requesting that Google make them unavailable in the Android Market (the Google market for mobile applications) deliberately and unequivocally violates this prohibition. The FCC should immediately open an investigation to assess Verizon’s practices and determine appropriate penalties for this clear breach of the Commission’s rules.

[…] When the FCC auctioned the C Block of the Upper 700 MHz spectrum — the spectrum on which Verizon has deployed its LTE offering — the Commission adopted important license conditions to protect the openness of broadband networks. It provided that licensees using that spectrum “shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice.” In the words of Chairman Kevin Martin, the Commission adopted the conditions to ensure that “[c]onsumers will be able to use the wireless device of their choice and download whatever software they want onto it.”

The more wireless carriers try to impose punitive usage caps on their customers, the more they will shop elsewhere for wireless service or turn to free Wi-Fi alternatives.  Those are the results of an important new report from Devicescape, a Wi-Fi advocate and software creator that allows for seamless Wi-Fi connections.

At the very top of the findings of the latest quarterly report: consumers overwhelmingly continue to despise usage caps and other Internet Overcharging schemes.  At least 73 percent suggest they will take their business elsewhere if their provider cancels their unlimited usage data plan, with 80 percent making changes in how they consume wireless data — especially moving usage to free Wi-Fi networks and off 3G/4G networks.

Almost 90 percent of smartphone users already connect to Wi-Fi at home and on the road, with 64 percent using Wi-Fi hotspots at work and in shops and restaurants at least once a day.

The report also makes it clear consumers want a hassle-free Wi-Fi experience.  It should be free and open access, with no annoying PIN codes or passwords.

Wi-Fi is quickly becoming an expectation more than a treat, and businesses and communities that don’t provide it will increasingly be judged negatively by some consumers.  An even greater negative reaction can be expected from those who treat Wi-Fi access as a profit center.  Customers don’t like paying extra for access at hotels, restaurants, or while browsing around shopping malls or business centers.  Forget about annoying login or customer agreement screens as well.

While many consumers claim they will switch wireless carriers over usage caps, in reality few are currently doing so for several reasons:

1. The alternative providers still offering unlimited use plans are perceived as having lower quality coverage areas (eg. Sprint);
2. Most major carriers have grandfathered their sizable base of “unlimited plan” devotees, allowing them to retain the popular plans even as they discontinue them for new customers;
3. Customers ultimately have few choices for unlimited service.

Where customers are stuck with a usage-capped data plan, they economize wherever possible.  In particular, many rely on Wi-Fi service instead of the wireless service provided by their wireless provider.

Ironically, that’s fine with many carriers, especially AT&T, which has been promoting efforts to offload as much 3G traffic as possible onto local Wi-Fi hotspots instead.

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With the release of a new tablet computer from Samsung, manufacturers are finding an increasingly challenging market as consumers are confronted with buying multiple, expensive data plans to accompany 3G-capable tablets.  Bob O’Donnell, Vice President, Clients and Displays at IDC says peddling extra data plans is hampering the tablet market, as consumers increasingly use these devices on Wi-Fi only to avoid running up yet another bill from their wireless carrier. [From CNBC]  (5 minutes)

An artist rendering of Don River Park, part of the mixed-use spaces that hallmark the Toronto Waterfront revitalization project.

About seven years ago, Rochester’s Fast Ferry offered daily service between Rochester, N.Y. and Toronto’s Waterfront.  Tens of millions of dollars later, the Rochester Ferry Company discovered that nobody in southern Ontario was that interested in a shortcut to Rochester, many locals found driving to Canada’s largest city faster, more convenient, and cheaper, and the point of arrival on the Canadian side was hardly a draw — situated in a rundown, seedy industrial wasteland.

By the end of 2006, the ferry was sold and sent on its way to Morocco, the CBC got a barely used International Marine Passenger Terminal (built for the Rochester ferry) to use as a set location for its TV crime drama The Border, and the rundown waterfront was well-embarked on a major reconstruction effort.

This week, Toronto’s Waterfront learned it was getting a broadband makeover as well, with the forthcoming launch of insanely fast 10/10Gbps fiber broadband for business and 100/100Mbps for condo dwellers along the East Bayfront and West Don Lands.

Best of all, Beanfield Metroconnect, the parent company responsible for constructing the network, promises no Internet Overcharging schemes for residents and businesses… forever.  No usage caps, no throttled broadband speeds, no overlimit fees.  Pricing is more than attractive — it’s downright cheap for Toronto:  $60 a month for unlimited 100/100Mbps broadband, $30 a month for television service, and as low as $14.95 for phone service.  Bundle all three and knock another 15 percent off the price.  The provider is even throwing in free Wi-Fi, which promises to be ubiquitous across the Waterfront.

The project will leapfrog this Toronto neighborhood into one of the fastest broadband communities in the world.

Toronto Waterfront Fiber Broadband Coverage Map

“Having this sort of capacity available to residents will allow for a whole new world of applications we haven’t even conceived of yet,” said chief executive Dan Armstrong.

The rest of Toronto, in comparison, will be stuck in a broadband swamp courtesy of Rogers Cable and Bell, where average speeds hover around 5Mbps, with nasty usage caps and overlimit fee schemes from both providers.  DSL service in the city is notoriously slow and expensive, as Bell milks decades-old copper wire infrastructure long in need of replacement.

The public-private broadband project is a welcome addition for an urban renewal effort that has been criticized at times for overspending. Created in 2001, Waterfront Toronto has a 25-year mandate to transform 800 hectares (2,000 acres) of brownfield lands on the waterfront into a combination of business and residential mixed-use communities and public spaces.  At least $30 billion in taxpayer funds have been earmarked for the renewal project, although project managers say no taxpayer dollars will be spent on the broadband project.

Waterfront Toronto’s efforts have been recognized as bringing Toronto’s first “Intelligent Community” to the city with the construction of the open access fiber network.

Still, the public corporation has its critics.  Earlier this spring Toronto city councilman Doug Ford called the urban renewal project a boondoggle.  Other conflicts rage with the Toronto Transit Commission and the mayor’s office over other redevelopment projects.  But the revitalization project’s broadband initiative has significant support, especially among knowledge workers that could eventually become residents… and paying customers.

The 21st century broadband project is also likely to bring broadband envy across the entire GTA, who will wonder why service from the cable and phone companies is so much slower and more expensive.

For broadband enthusiasts, Toronto’s broadband future looks much brighter than yesterday’s failed ferry service, which proves once again that regardless of the technology — slow, expensive, and inconvenient service will never attract much interest from the value-conscious public.

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Canada’s digital networks are some of the slowest in the world, running between one hundred to a thousand times slower than other countries in the developed world. In this episode of “Our Digital Future – The Need for High-Speed,” Bill Hutchison, Executive Director of Intelligent Communities for Waterfront Toronto describes the sorry state of Canada’s digital infrastructure, stressing the need for major investments in advanced broadband networks.  (4 minutes)