John Linton, CEO Exetel

Australia’s planned National Broadband Network (NBN) delivering the country access to broadband speeds up to 1Gbps face many of the same criticisms American municipal providers hear when incumbent commercial providers face imminent competition from fiber broadband.

But nobody can top the venomous spray of Exetel’s CEO John Linton, who called the entire concept of public broadband for the public good “a load of crap” and those behind it a mix of ‘thugs,’ ‘pretenders,’ and generally incompetent and stupid.

Linton’s Internet Service Provider delivers broadband to most of its customers over Telstra landlines, using DSL.  But the company has grudgingly agreed to participate in the NBN project, even while still despising it to the core.

Exetel’s pricing on NBN’s fiber network charges for speed and usage.  Much like cable broadband, Exetel delivers much faster downstream speeds (up t0 100Mbps), with upload speeds maxing out at 8Mbps. The higher the speed, the higher the monthly access fee.  Users receive no usage allowance, paying fees per gigabyte for all of their usage.  Exetel still reserves the right to throttle customer speeds for certain online applications, and “traffic shape” users based on their usage.

In Tasmania, Exetel has introduced a 25/2Mbps broadband plan with no usage allowance — but no monthly access fee either — charging a flat $2 per gigabyte of usage.

Exetel Fiber Pricing In Tasmania

Linton spews most of his angry commentary on his personal blog, which he closed to non-Exetel customers unless they made a $20AUS contribution to the company’s endangered wildlife protection programs.  But he rarely pulls punches in public either.

Is this Australia's broadband future?

A sampler:

With wireless broadband waiting in the wings, those excited by NBN’s 1Gbps speeds are “unthinking and just plain stupid, pretty much along the same lines as the stone age cargo cult dwellers in the jungles of New Guinea are excited about the next ‘goods drop’ from the strange colored bird.”

Australia’s aging population, “who don’t play computer games or get a surrogate sex life from pornography” have zero interest in getting terabyte broadband speeds, making the whole endeavor a giant waste of money.

“The number of people who want 100Mbps are almost none today and aren’t going to be very many in five years time.   Probably 40-50% of people today will never want to use a piece of fiber […] and they’re certainly not gamers playing, or those other things.  They’re the other half of Australia that has a life rather than a half life.”

On the results of the recent election and the decision to move forward with the NBN: “God help us all.”

On Communications Minister Stephen Conroy (Australia’s version of FCC Chairman Julius Genachowski): “He was his usual mixture of bewilderment, ignorance and barely concealed thuggery, but I was amused at his reference to Exetel (not by name).” Linton wrote on his blog. “While I’m grateful for the ‘free plug’ I thought it was an obvious example of “straw clutching” if it wasn’t based on appallingly bad briefing, which I would doubt, because for him to have been aware of any actual pricing would have required some sort of briefing,” added Linton.

On NBN co-chief Mike Quigley, who will help manage NBN service: “Is [Mike Quigley] god? Can he reverse 100 years of telecommunications going one way and say, ‘Oh, I’m Mike Quigley, and I haven’t worked here in 30 years, I know nothing about running major networks, but someone has paid me $2 million a year so I can pretend I can’.  The only one who can do it is Telstra. It would do it cheaper than a bloody government.”

Linton blames all of the talk about a publicly-owned broadband network for the decrepit state of Australia’s commercial broadband market, claiming it dried up private investment in new ADSL products: “The situation as I see it is that the suppliers — Telstra, Optus, AAPT — are not really investing in anything new, especially when you’re referring to ADSL type broadband products. The current suppliers are holding on to the margins they have at the moment, and if anything they will seek to increase them rather than reduce them,” says Linton.

Since nearly every broadband user in Australia knows Linton hates fiber broadband, what technology does he believe represents Australia’s future?

Or this?

3G wireless.

“Most people that I know, including me, put a much higher priority on mobility than they do on speed,” he told ZDNet. “The average person needs a 100Mbps internet connection about as much as they need to have their arms amputated.”

While mobility is important, his critics charge, there is no way 3G wireless can deliver Australia its broadband future.  Service is not ubiquitous across the country, speeds are far below even what DSL offers, streaming multimedia is challenging at best, and the usage fees and limits that accompany wireless service plans in the south Pacific would create an even greater divide between those who can afford wireless broadband, and those who cannot.

A report released yesterday by the Bureau of Statistics shows Australians are downloading more data than ever before, increasing more than 50 percent in the second quarter compared to the same period last year. The amount of data downloaded every three months is now 11 times higher than March 2005 and 126 times higher than March 2002.

Australia’s National Broadband Network is open to all Internet Service providers that wish to participate, reselling their broadband plans using NBN’s infrastructure.

Almost two years to the day Frontier Communications quietly introduced language in its customer agreements providing a monthly broadband usage allowance of just 5GB per month, the company has quietly removed that language from its terms and conditions.

The 5GB usage allowance was deemed generous by Frontier CEO Maggie Wilderotter.  Frontier claimed most of its 559,300 broadband subscribers (2008 numbers) consumed less than 1.5 gigabytes per month.  But news of the cap angered customers anyway, particularly in their biggest service area — Rochester, N.Y.  In fact, Frontier’s usage cap was what sparked the launch of Stop the Cap! in the summer of 2008.

While never universally enforced against the company’s DSL customers, Frontier has used that portion of its acceptable use policy to demand up to $250 a month from some “heavy users” in Mound, Minn.

Frontier’s usage limit language also played a role in a major controversy in April, 2009 when Time Warner Cable planned usage limits of their own for western New York customers already faced with Frontier’s 5GB usage limit.

The phone company used Time Warner’s planned usage cap as a marketing tool to switch to Frontier DSL service.

Frontier used Time Warner Cable's usage cap experiment against them in this ad to attract new customers in the spring of 2009.

This website has pounded Frontier for two years over its continued use of the 5GB language as part of its broadband policies.  We raised the issue with several state regulatory bodies as part of Frontier’s purchase of Verizon landlines in several states.  Several state utility commissions raised the usage cap issue with Frontier as a result, deeming it negative for rural broadband customers who would effectively endure rationed broadband service from a de facto monopoly provider.

We also criticized Frontier for promoting its MyFitv service, little more than a website containing Google ads and embedded videos already available on Hulu, while not bothering to tell its customers use of that service on a regular basis would put them perilously close to their 5GB allowance.

In the end, Frontier itself denied they would strictly enforce the 5GB limit, making its continued presence in the company’s terms and conditions illogical.

Now, the company has returned to the earlier language it formerly used, reserving the right to shut you off if you use the service excessively or abusively.  This resembles similar language from most broadband providers.  While not absolute in defining those terms, Frontier doesn’t commit to a specific number either.  Today’s “generous usage allowance” is tomorrow’s “rationing.”

If Frontier cuts off customers for using only a handful of gigabytes a month, deeming it excessive, we want to know about it.

Stop the Cap! opposes all Internet Overcharging schemes like usage caps, speed throttles, and so-called “consumption billing.”  We believe such limits retard the growth and potential of broadband service and are unwarranted when considering the ongoing decline in costs to provide the service.  We do not oppose providers dealing with customers who create major problems on their networks, but believe those issues are best settled privately between the company and the individual customer.

Providers must also be honest in recognizing that broadband is a dynamic medium.  They have a responsibility to grow their networks to meet demand, especially at current pricing which provides major financial returns for those offering the service.  We also believe broadband tiers should be limited to speed, not consumption.  Customers with higher data demands will naturally gravitate towards higher-priced, faster-speed tiers, providing higher revenue to offset the minimal costs of moving data back and forth.

Broadband customers will be loyal to the providers that treat them right.  We applaud Frontier Communications for finally removing the last vestiges of its infamous 5GB usage allowance.  Hopefully, going forward, Frontier will spend its time, energy and money improving its broadband service instead of trying to convince customers to use less of it.

Cricket, the regional wireless carrier that claims to offer “unlimited” data plans that really are not, has jacked up prices on its wireless broadband plans and reduced wireless data usage allowances.

Cricket used to charge $40 a month for 5GB of monthly usage, $60 for 10GB.  No more.

Now the company wants you to pay more for less:

2.5GB for $40, 5GB for $50, and 7.5GB for $60 is hardly "respeKting" your wallet

Thankfully, existing Cricket customers are grandfathered into their existing $40 for 5GB plan, so they do not face the price hike and allowance cut.

Cricket’s claimed speeds up to 1.4Mbps are fiction — in our own tests we found service never exceeding 650kbps, and often averages 500kbps or less in the Rochester, N.Y. area.  When Cricket cell sites become congested, as they have in the southeastern part of the city, speeds can drop to 56kbps or less, making the service completely unusable.  While web page browsing and audio streaming are acceptable using Cricket, video streaming is not.  YouTube and other video multimedia was too painful to watch.

Cricket’s best advantage in the wireless broadband market was its pricing.  Customers accepted dramatically reduced coverage areas (don’t expect Cricket to work outside of the city, nearby suburbs, and adjacent major highways), slower speeds, and a “Fair Access Policy” that throttles your connection to dial-up speeds (or less) once you exceed your monthly allowance, all in return for service priced $20 less than most of the competition.  The modem is usually free or deeply discounted, and there is no contract requirement.

But at Cricket’s new pricing, consumers should take a look at Clearwire’s new 4G service, Comcast High Speed 2Go, or Road Runner Mobile instead.  Clear’s 4G-only plan offers unlimited access for $40.00 a month without a “Fair Access Policy” throttling your service to dial-up speeds, and much faster service than Cricket can provide.  The only downsides are the up front cost of the modem and being sure 4G is available in your area.

Clear, Comcast High Speed 2Go and Road Runner Mobile offer 4G service plans with a fallback option to 3G coverage for about $55 a month.  Clear and Comcast do not limit 4G usage, but do limit 3G access to 5GB per month before overlimit fees apply.  Road Runner Mobile offers unlimited access to both 3G and 4G service.

Cricket likes to claim it “respeKts your wallet.”  Raising prices and reducing usage allowances isn’t exactly a sign of respect.

The Internet video revolution will increasingly be blocked by Internet Service Providers who will leverage their duopoly markets with restrictive usage limits to keep would-be video competitors from ever getting their business plans off the ground.

William Kidd, industry forecaster for iSuppli, an industry analyst group, sees a future of Internet Overcharging schemes like usage caps, overpriced pay-per-use pricing, and other limitations designed to erect roadblocks for online video content, which increasingly threatens the cable-TV products of both cable and phone companies.

The latest scheme to limit usage of streaming media come not from concerns about bandwidth costs but rather the “unknown risks” online video could have for cable and phone companies’ other products.

Such risks, Kidd believes, will compel broadband providers to increasingly implement caps in order to mitigate any long-term gambles that providers might have to take to make streaming media available to home and mobile environments.

At present, content can be streamed over TV from online service offerings such as Hulu and Netflix, or accessed through a device such as the PlayStation from Sony Corp. In addition, new-media business models continue to emerge with the introduction of new platforms that circumvent services currently provided by traditional cable or satellite pay-TV providers.

The caps planned for implementation will sink virtually all of the video streaming services that are not partnered with cable and phone companies.  Kidd notes the caps he’s seen offer limited viewing — as little as three hours for wireless 200kbps video streams or standard definition video streamed on wired networks for up to 25 hours per month.  True HD viewing is simply not going to happen with caps on many providers planned to cut off viewing after only seven hours.

Business plans and would-be investors must take notice of what providers have in store for would be competitors, Kidd argues.  Since the phone and cable companies maintain a near-monopoly on broadband, they ultimately control what Americans can do (and see) on their broadband accounts.

Rogers reduced usage allowances on several of its broadband plans days after Netflix announced a streaming service for Canadians.

One need only look to Rogers Communications in Canada for a timely example.  Rogers promptly lowered usage limits on some of its broadband plans just days after Netflix announced a video streaming service for Canadians that could directly compete with the cable giant’s video rental stores and cable pay per view services.

“These new-media business models imagine that they don’t have to pay the network through which their data traverse,” he said. “However, such a theory is directly at odds with the ambitions of cable and satellite-TV operators, which increasingly are unwilling to provide heavy data access through their networks for free—especially if a way can be found to monetize ongoing data traffic into viable revenue streams.”

In addition, new Internet-born content providers wrongfully take for granted that the way their largely free content has been consumed now also will apply in the future to premium services. The assumption is a bad one, Kidd observed, because in order for consumers to consider the Internet as a true substitute for their big-screen TV, content would need to be comparable in both technical quality and entertainment value. And to achieve the same level of value, such content necessarily would be extremely bandwidth intensive.

As a result, for any number of these emerging TV-substitute models to work someday, one has to assume that the picture quality being proffered is acceptable for viewing on large-screen TVs.

But providers have a trick up their sleeves by implementing seemingly tolerable usage caps as high as 250GB per month, which seem generous by today’s usage standards.  But they will be downright paltry tomorrow, especially if they do not increase over time, as online video increases in quality and size.

“By implementing caps now that don’t impinge on the way subscribers use the Internet today, cable and telco operators are able to create for themselves an advantageous situation,” Kidd said. “Under these circumstances, emerging media competitors must work more directly with the network owners before getting their services off the ground—as opposed to around them, as they may have previously hoped.”

That means giving them exactly what they want — a piece of the action and control over the content that crosses over their wires to broadband consumers.

Rogers Cable: Setting the Bar Lower Than Ever

Just a day after Netflix announced they are coming to Canada, Rogers Cable has responded by announcing it is lowering the usage allowances of its customers.  Stop the Cap! reader Munly writes to inform us Rogers Lite service plan, intended for occasional users, has dropped its 25GB usage allowance to 15GB per month, making it suitable for even less usage.

New customers on Rogers’ popular Extreme plan will find their usage limit cut from 95GB to just 80GB per month.  But if you accept the cut in your allowance, Rogers will increase the speed on that tier from 10Mbps to 15Mbps, allowing customers to blow through that usage limit that much quicker.

Existing customers may be grandfathered in, at least temporarily, but Rogers is notorious for eventually terminating grandfathered plans and moving customers to higher-priced alternatives.

All this from a company that claims it offers its customers “abundant usage.”

Rogers buries in the fine print the fact customers can stay with their current higher allowance if they forego the speed increase.

AND AN EVER INCREASING BILL

With the new lowered usage allowances, Rogers offers tips for customers to reduce their usage, including our favorites:

Use medium quality photos when sending them through e-mail. Your family’s cherished memories don’t deserve high resolution, even if you want to send them to a digital photo lab for printing.  Maybe you could get the kids together and have them draw copies of those vacation pictures with crayons.  At least they won’t be online using up your Rogers Internet ration.

Be aware of how others in your home use your Internet connection.  If you are not spying on your family’s online usage, it’s your own fault if we send you an enormous bill.  In the time it took you to read these tips, your kids could have downloaded over 20 e-mails, looked at more than three web pages, or watched almost a minute of online video.  Don’t make us bill you for that.

Turn off Peer-to-peer programs when you’re not downloading. Better yet, since we know you are using them to steal the content we’d like to sell or rent you, stop using them altogether… or else.

Try the tools. No, we’re not talking about us, silly.  If you are doing more than reading your e-mail or browsing web pages, look out because we’re coming for your wallet.  You can try and outwit our overcharging ways by using our usage notifications service, which will flash messages to you that we’re about to cash in on your over-usage.  Hey, don’t say we didn’t warn you!  Remember, if you use Rogers Internet to download files, stream video or music or play online games, we own you.

Does this mean I should use the Internet less to avoid paying more? Is Sarah Palin American?  You betcha.  We want to get the most out of our customers who use their Internet service too much, which is why we expose them to up to $5.00 per gigabyte if they exceed our ever-dwindling usage allowances.  Our goal is for you to feel free to use the Internet as you always have, just so long as you recognize it’s not free and that you’ll need to pay us for every web page your read, more if you dare to watch cable programming online you should be watching on our cable TV service.  The only surprise you’ll have about your bill is that we haven’t found a way to charge you even more… yet.

What About Netflix? Seriously? You weren’t really thinking of using that service on Rogers were you?  A word to the wise — we can cut your allowance down even further.  Go outside.  Read a book.  Rent a movie from Rogers Plus or enjoy some great Rogers Cable TV.

Rogers Cable’s Internet Packages

A Before And After Comparison

Rogers Old Pricing and Usage Allowances

Rogers All-New Pricing and Usage Allowances, Effective July 21, 2010