Canadians are demanding a better deal from their cable and phone companies and they are forced to respond.

As the United States battles back against the introduction of usage caps and rising prices for broadband service, increased competition and regulated open wholesale access to some of Canada’s largest broadband providers have given Canadians an advantage in forcing providers to cut prices and improve service.

Canadians can now easily get unlimited broadband access from one of several independent ISPs that piggyback service on cable and phone networks. Some large ISPs have even introduced all-you-can eat broadband options for customers long-capped by the handful of big players. As customers consider switching providers, cable and phone companies have been forced to cut prices, especially for their best customers. Even cell service is now up for negotiation.

The more services a customer bundles with their provider, the bigger the discount they can negotiate, say analysts who track customer retention. Bell, Rogers, Telus, and others have a major interest keeping your business, even if it means reducing your price.

“It’s far more lucrative for the telecom company to keep you there for the third or fourth service,” telecom analyst Troy Crandall told AP. It cuts down on marketing, service and installation calls, he added.

Getting the best deal often depends on your services, payment history, and how long you have been a customer. Cellphone discounts are the hardest to win, but customers are getting them if they have been loyal, carry a large balance and almost never pay late.

Bigger discounts can be had for television and Internet service — cable television remains immensely profitable in Canada and broadband is cheap to offer, especially in cities. Americans often pay $80 or more for digital cable television packages, Canadians pay an average of $60.

Internet service in Canada now averages $45 a month, but many plans include usage caps. It costs more to take to the cap off.

Because of Canada’s past usage cap pervasiveness, online video is not as plentiful in Canada as it is in the United States. There has been considerably less cord-cutting in the north. Despite that, Canadians are ravenous online viewers of what they can find to watch (either legally or otherwise). As usage allowances disappear or become more generous, online video and the Internet will continue to grow in importance for service providers.

Customers should negotiate with their provider for a better deal, particularly if Bell’s Fibe TV is in town. Bell has been among the most aggressive in price cutting its fiber to the neighborhood television service for new customers ready to say goodbye to Rogers or Vidéotron.

Shaw and Telus battle for market share in the west and also have room to cut customer bills and still make a handsome profit.

AT&T has returned fire in a price war with T-Mobile designed to keep its customers and attract new ones.

AT&T Mobility has cut $40-100 a month off the price of plans targeting some of its most lucrative customers — families with multiple phone sharing a lot of data.

Under its newest offer announced Saturday, a family with four smartphones sharing a 10GB data allowance will see their bill cut from $200 to $160 a month effectively immediately. Any family plan customer with 10GB or higher usage allowances will also see their bill cut by $40-100 a month.

The price cut comes in response to fierce competition from T-Mobile, which has repeatedly bashed AT&T in its advertising campaigns. Now a customer with three smartphones will find AT&T’s new plan price just $5 more than what T-Mobile charges, although T-Mobile’s offer includes unlimited data.

“This is about being competitive,” said David Christopher, chief marketing officer for AT&T Mobility. “We feel we have the best network and the best value in the marketplace,” Christopher said.

AT&T is also offering a $100 bill credit for each new line added or for activating each new tablet, mobile hotspot, or AT&T’s wireless home phone service until March 31.

The contrast in pricing between AT&T, hounded by T-Mobile, and Verizon Wireless, which has largely ignored the price war, is striking. Verizon Wireless charges up to $125 more a month for its family plans with identical data allowances and features.

The new offer requires no contract, and phones must be purchased at full price either up front or in installments. Existing, on-contract customers with subsidized phones will pay more.

AT&T has also stepped up customer retention efforts, handing out hundreds of dollars in service credits to some threatening to leave for T-Mobile.

Customers are receiving an average of $55 a month in service credits over the next year by tweeting complaints to AT&T’s social media team: @ATTCustomerCare and @ATT

Those on family share plans with several lines of service complaining that AT&T is charging too much and are planning to switch to T-Mobile are being offered discounts such as $70 a month in service credits for the first six months and $40 a month for the next six months after speaking to an AT&T representative arranged through Twitter.

Customers get a less charitable response in AT&T stores where some employees have dared customers to switch to T-Mobile claiming they will be unhappy with the slow data service and coverage areas. In short, no service credits or retention offers are available from in-store representatives. Customers must appeal to AT&T’s social media team to get a discount.

[flv]http://www.phillipdampier.com/video/ATT New Mobile Share Value Plan for Families 2-1-14.mp4[/flv]

AT&T explains the new pricing for their Family Share plans. (1:27)

More than two dozen NorthwesTel customers in Canada’s north are contemplating a class-action lawsuit against their Internet provider after being charged hundreds, if not thousands of dollars in overlimit charges for phantom traffic nobody can seem to identify.

Kyle Jennex of Whitehorse has always checked his usage, particularly because NorthwesTel charges very high prices for access and has a low usage cap. Running over a plan limit can prove costly at $5 per gigabyte. In November, Jennex discovered NorthwesTel’s usage meter was registering between 5-7GB of mysterious upload traffic every night even after the computer was physically disconnected from his Internet connection.

Despite complaining to NorthwesTel, the company billed him for nearly $1000 in overlimit fees, claiming he exceeded his allowance by nearly 200GB.

“I depend on the Internet for our lifestyle,” Jennex told Yukon News. “We like our music and our movies and our TV, so I download a lot of stuff. I also believe that if I’m paying for 150 gigabytes, I’m going to use that up. So because of that I monitor our usage carefully so I can spread it out throughout the month and to make sure we don’t go over.”

NorthwesTel has never suspected their meter of being responsible for the phantom usage measurements. To Curtis Shaw, NorthwesTel’s vice president of marketing, excess usage is entirely the customer’s responsibility. The company told Jennex his high usage was likely caused by torrent/peer-to-peer network traffic or a neighbor who had hacked into his password-protected Wi-Fi network. But neither explanation can account for usage that continued to rack up with nothing connected to his Internet modem.

Shaw recommends NorthwesTel customers shut down their computers when not in use, particularly overnight, to avoid excess charges. He also advises customers to change their passwords, regularly check usage, and install and update anti-virus software on their computers.

Bill Shock

Shaw also says users can sign up for e-mail that notifies customers when they approach their limit, “really to protect people from receiving a surprise bill.” He adds the company does monitor customer usage and has called customers in the past when their accounts show an unusual amount of activity.

But NorthwesTel didn’t bother to call a customer in Whitehorse who reports he was billed an extra $990 for the extra 198GB of usage he claims he never used. Nor did the company call the woman in the Northwest Territories bill shocked with $3,000 in overlimit fees in a single month.

The company says there have been repeated cases of neighbors “sharing” Wi-Fi connections which can quickly run up usage. But Jennex, who says he well understands the danger of unprotected Wi-Fi, believes he has taken the necessary precautions and has been overbilled anyway.

“The way they’re talking, it’s like every second neighbor is hacking into your wireless,” Jennex said. “I have passwords that are completely random that would take some pretty sophisticated equipment to hack into. We even tried disconnecting all our devices from the router and it still kept happening. The only way I could get them to stop was to physically unplug my modem.”

The company cannot or will not trace Jennex’s mysterious web traffic to identify the source, confident their meter is accurate. Besides, the company says, customers often underestimate the amount of traffic they consume using file sharing programs or watching video online. The company claims it worked hard on its usage meter and it received industry approval for its high degree of accuracy. But providers need not submit their meters for independent verification or subject them to periodic audits to verify meter accuracy.

NorthwesTel does not have a good record on meter accuracy. In 2010 the company was forced to admit it had overbilled hundreds of customers over a “meter glitch” when usage monitors were not reset. As a result, customers found enormous overlimit fees attached to their bills. In one example, a customer was charged a $2,500 overlimit fee on top of his usual bill of $88.

A glitch may indeed be part of the problem as one Yukon customer successfully confronted NorthwesTel for erroneous overlimit fees for consumption of data that was impossible to accrue at the speed of his Internet connection.

Angry customers complain that with so little competition, NorthwesTel has every incentive to play fast and loose with its meter, either because customers will cut their usage, upgrade to a higher cost tier with a bigger allowance, or pay the overlimit fees.

Customers who believe they were unjustly billed overlimit fees should take their case first to the Office of the President. Failing that, they should appeal to the Commissioner for Complaints for Telecommunications Services, an independent agency that has a good track record of winning relief.

Some customers fear the expensive overlimit fees so much, they are following NorthwesTel’s advice and keeping their computers switched off when not being used, but that isn’t a good enough answer for Jennex, who plans to continue the fight.

“There’s no need to rip us off because we live so far North,” he told CBC North.

Millenicom customers have had their ups and downs over the last two weeks coping with e-mail notifications they would lose, keep, and once again lose their unlimited wireless data plan.

Just a day after Millenicom heard that Sprint would allow them to continue selling Unlimited and Bring Your Own Device plans, the wireless carrier best known for its “unlimited for life” offer changed its mind:

We are very sorry to report that Sprint has reversed their decision from yesterday and terminated their agreement with the gateway for our Unlimited and BYOD accounts.

We are not certain how long until the accounts will be closed.

We will be shipping out Hotspot devices to those clients who had opted for that solution and BMI.net is ready to fulfill orders for those choosing to go with them.

We have attempted to keep you informed every step of the way and avoid any abrupt transition. We apologize that we weren’t able to come through.

Thank you for allowing us to be of service and please accept our sincere wish for your future success.

Dennis Castle
Owner

It is not the first time Millenicom has had problems with Sprint, which has proved to be a difficult carrier to deal with with respect to unlimited use plans.

Sprint’s decision is a major blow to rural Americans who lack access to cable or DSL broadband and are forced to consider satellite-delivered Internet access or pay even more for wireless data plans that come with puny usage caps, overlimit fees or speed throttles.

There are a few alternatives, but since these providers resell access to Sprint-owned networks, all are potentially vulnerable to Sprint’s evolving views on resellers:

Blue Mountain Internet (BMI) offers an “unlimited plan” that isn’t along with several usage allowance plans. BMI strongly recommends the use of their Mobile Broadband Optimizer software that compresses web traffic, dramatically improving speeds and reducing consumption:

Monthly Plans

• $39.99/Month – 1 Gig Data (** up to 3GB compressed) ($25/GB Overlimit Fee)
• $59.99/Month – 3 Gig Data (** up to 9GB compressed) ($20/GB Overlimit Fee)
• $79.99/Month – 5 Gig Data (** up to 15GB compressed) ($20/GB Overlimit Fee)
• $99.99/Month – 10 Gig Data (** Up to 45GB compressed) ($15/GB Overlimit Fee)

• $79.99/Month – Unlimited (Bring Your Own Device) – BYOD
• $99.99/Month – Unlimited Data (S Network) ***

There is a $100 maximum on overlimit fees, but BMI reserves the right to suspend accounts after running 3-5GB over a plan’s allowance to limit exposure to the penalty rate. The compression software is for Windows only and does not work with MIFI devices or with video/audio streaming. BMI warns its wireless service is not intended for video streaming. Customers are not allowed to host computer applications including continuous streaming video and webcam posts that broadcast more than 24 hours; automatic data feeds; automated continuous streaming machine-to-machine connections; or peer-to-peer (P2P) file-sharing.

EVDODepotUSA offers two truly unlimited use plans starting at $119 a month. The company is only contracted to offer access to Sprint’s woefully congested 3G network and the Clear 4G WiMAX network that typically does not offer much coverage in rural areas. LTE access is not currently available. There is a six month contract obligation, but the company also offers a 10-day free trial.

Their current plans:

Wireless ‘n Wifi offers two partly unlimited plans with no contract commitment. The company charges a refundable deposit on devices, but they become yours to keep after two years:

• Unlimited 4G Sprint/Clear WiMAX with 3G Fallback ($58.99) offers unlimited WiMAX service but has a 5GB cap on Sprint’s 3G network, the network rural customers will encounter the most. Total start-up fee is $194.93 which includes an activation fee, modem deposit (refunded upon modem return or after 24 months of service), the first month of service, and shipping for the wireless device.
• Unlimited 4G LTE with WiMAX and 3G Fallback ($79.99) offers unlimited Sprint 4G LTE and Sprint/Clear WiMAX service with a 35GB cap on Sprint’s 3G network. Customers can select a dual-band device that supports LTE and 3G service for $246.93 (includes activation fee, modem upcharge fee, first month of service, shipping, and refundable $100 modem deposit). Customers looking for access to LTE, 3G, and WiMAX can choose a tri-band device for $315.93 (includes activation fee, modem upcharge, first month of service, shipping and refundable deposit.) Keep in mind Sprint’s 4G LTE network is still very spotty.

More drive-by reporting on Comcast’s usage caps.

When the media covers Internet Overcharging schemes like usage caps and consumption billing, it is often much easier to take the provider’s word for it instead of actually investigating whether subscribers actually need their Internet usage limited.

Comcast’s planned reintroduction of its usage caps on South Carolina customers begins Friday. Instead of the now-retired 250GB limit, Comcast is graciously throwing another 50GB of usage allowance to customers, five years after defining 250GB as more than generous.

The Post & Courier never bothered to investigate if Comcast’s new 300GB usage cap was warranted or if Charleston-area customers wanted it. It was so much easier to just print Comcast’s point of view and throw in a quote or two from an industry analyst.

In fact, the reporter even tried to suggest the Internet Overcharging scheme was an improvement for customers.

The newspaper reported Comcast was the first large Internet provider in the region to allow customers to pay even more for broadband service by extending their allowance in 50GB increments at $10 a pop. (Actually, AT&T beat Comcast to the bank on that idea, but has avoided dropping that hammer on customers who already have to be persuaded to switch to AT&T U-verse broadband that tops out at around 24Mbps for most customers.)

Since 2008, the company’s monthly limit has been capped at 250 GB per household. When customers exceeded that threshold, Comcast didn’t have a firm mechanism for bringing them back in line, other than to issue warnings or threaten to cut off service.

“People didn’t like that static cap. They felt that if they wanted to extend their usage, then they should be allowed to do that,” said Charlie Douglas, a senior director with Comcast.

Charleston is the latest in a series of trial markets the cable giant has used to test the new Internet usage policy in the past year. As with any test period, the company can modify or discontinue the plan at any time.

During the trial period in Charleston, customers will get an extra 50 GB of monthly data than they’re used to having. If they exceed 300 GB, they can pay for more.

“300 GB is well beyond what any typical household is ever going to consume in a month,” Douglas said. “In all of the other trial markets with this (limit), it really doesn’t impact the overwhelming super-majority of customers.”

The average Internet user with Comcast service uses about 16 to 18 GB of data per month, Douglas said.

Customers who use less than five GB per month will start seeing a $5 discount on their bills.

“We think this approach is fair because we’re giving consumers who want to use more data a way to do so, and for consumers who use less, they can pay less,” Douglas said.

Data caps are designed to stop content piracy?

The Charleston reporter asserts, without any evidence, “data-capping is a trend many Internet service providers are expected to follow in the next few years as the industry aims to reduce network congestion and to find safeguards against online piracy.”

Suggesting data caps are about piracy immediately rings alarm bells. Comcast and other Internet Service Providers fought long and hard against being held accountable for their customers’ actions. The industry wants nothing to do with monitoring online activities lest the government hold them accountable for not actively stopping criminal activity.

“It’s not about piracy, per se,” said Douglas. “We don’t look at what people are doing. The purpose is really a matter of fairness. If people are using a disproportionate amount of data, then they should pay more.”

Comcast’s concern for fairness and disproportionate behavior does not extend to the rapacious pricing and enormous profit it earns selling broadband, flat rate or not.

MIT Technology Review’s David Talbot found “Time Warner Cable and Comcast are already making a 97 percent margin on their ‘almost comically profitable’ Internet services.” That figure was repeated by Craig Moffett, one of the most enthusiastic, well-respected cable industry analysts. That percentage refers to “gross margin,” which is effectively gravy on largely paid off cable plant/infrastructure that last saw a major wholesale upgrade in the 1990s to accommodate the advent of digital cable television and the 500-channel universe. Broadband was introduced in the late 1990s as a cheap-to-deploy but highly profitable, unregulated ancillary service.

How things have changed.

Just follow the money….

Customers used to being gouged for cable television are now willing to say goodbye to Comcast’s television package in growing numbers. Today’s must-have service is broadband and Comcast has a high-priced plan for you! But earning up to 97 percent profit from $50+ broadband isn’t enough.

A 300GB limit isn’t designed to control congestion either. In fact, had she investigated that claim, she would have discovered the cable industry itself disavowed that notion earlier this year.

In fact, it’s all about the money.

Michael Powell, the head of the cable industry’s top lobbying group admitted the theory that data caps are designed to control network congestion was wrong.

“Our principal purpose is how to fairly monetize a high fixed cost,” said Powell.

Powell mentioned costs like digging up streets, laying cable and operational expenses. Except the cable industry long ago stopped aggressive buildouts and now maintains a tight Return On Investment formula that keeps cable broadband out of rural areas indefinitely. Operational expenses for broadband have also declined, despite increases in traffic and the number of customers subscribing.

[flv]http://www.phillipdampier.com/video/CNBC Internet v. Cable 8-20-10.flv[/flv]

Don’t take our word for it. Consider the views of Suddenlink Cable CEO Jerry Kent, interviewed in 2010 on CNBC. (8 minutes)

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” said Suddenlink CEO Jerry Kent. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Unfortunately, Charleston residents don’t have the benefit of reporting that takes a skeptical view of a company press release and the spokesperson readily willing to underline it.

If Comcast seeks to be the arbiter of ‘fairness,’ then one must ask what concept of fairness allows for a usage cap almost no customers want for a service already grossly overpriced.