Verizon Wireless and AT&T have invested billions expanding and improving their wireless networks, telling investors that revenue from exploding wireless data usage would more than recoup their investments, but the growing availability of low-cost and free Wi-Fi is threatening to derail those plans.

Business Week reports that as carriers have dropped unlimited use data plans in favor of costly, restricted-usage offers, savvy customers have learned to conserve their data allowance by switching to Wi-Fi wherever possible. Adobe Systems reported this week that more than half of all wireless data traffic from smartphones occurs over Wi-Fi, not 3G or 4G networks. Total Wi-Fi traffic passed mobile data networks more than a year earlier.

AT&T and Verizon’s business plans depend on smartphone users accessing faster 4G LTE networks to consume high bandwidth online applications like video streaming, but that isn’t happening at the rate they expected. Instead, customers are waiting to connect to a Wi-Fi hotspot before watching.

The carriers are partly to blame for the Wi-Fi habit by encouraging customers to switch to Wi-Fi to reduce congestion on their 3G and 4G networks while they were upgraded and expanded. But after carriers completed those upgrades, customers are sticking with Wi-Fi.

“There’s a flavor of too much of a good thing here, where Wi-Fi offloads start to really impinge on the prospects of monetizing all that additional usage,” says industry analyst Craig Moffett. “All the carriers have put their eggs in the basket of incremental usage as the source of revenue growth. It isn’t going according to plan.”

AT&T and Verizon hoped customers would face upgrades to more costly plans with more generous usage allowances as data usage increased. Early efforts to monetize data usage seemed encouraging. Both carriers reported surprising success from in-store marketing efforts to push families to upgrade to deluxe 10GB+ usage plans in larger numbers than anticipated. But customers are now increasingly trying to stay within their budget and current usage allowance, with the help of Wi-Fi.

‘As customers become more aware of the limits on their data plans, they’re more careful about moving to Wi-Fi as often as possible,’ says Tamara Gaffney, an analyst with Adobe’s Digital Index.

Wi-Fi hotspots are easier to find as cable companies provide them for their customers. Major shopping, dining and entertainment venues often offer free access to draw and keep customers.

As carriers began to realize smartphones would not be the data sucking vampires they were expecting, both AT&T and Verizon eagerly dove into the tablet business, hoping to convince customers to buy mobile-ready versions of the devices that would more likely be used for data allowance-killing online video.

But customers outsmarted them again, preferring tablets equipped only with Wi-Fi. Carriers responded by slashing prices, to no avail. Even those who splurged on 3G and 4G-ready tablets rarely use them on AT&T and Verizon’s wireless networks. More than 93% of tablet traffic is done over Wi-Fi, derailing a potential wireless data money train.

Their latest plan is to push the “Internet of Things” — machine to machine communications. Both AT&T and Verizon have invested heavily in wireless utility meter technology and are pushing manufacturers to add 4G capability to all sorts of home appliances from refrigerators, ovens, and dishwashers to home laundry centers, alarm systems, and even pet-webcams. But early efforts have not been promising. Reception in fixed indoor locations, especially basements, is often very poor to non-existent, and manufacturers don’t see much benefit adding mobile network connectivity when traditional Wi-Fi is cheaper and much more reliable.

That hasn’t stopped AT&T, which won a lucrative contract to offer 4G LTE and/or HSPA+ support inside Audi and GM vehicles. To them, the “connected car” is a cash cow waiting to be milked.

“Five or six years ago when we talked to car OEMs, it was about safety and embedded modules and cheap rates,” said Glenn Lurie, CEO of AT&T Mobility.

That was the era of OnStar and other competing telematics systems that can monitor vehicle performance and notify emergency responders in the event of an accident. Verizon Wireless has supported GM’s OnStar system for years and until GM’s bankruptcy reorganization offered Verizon customers the option of adding their OnStar speakerphone to a Verizon Wireless family plan for $9.99 a month, sharing that plan’s voice calling minutes. Starting this year, AT&T has the contract.

AT&T is celebrating the end of cheap rates and see big dollar signs selling in-car connectivity, which will be available in dozens of car models.

Mary Chan from GM committed to offer AT&T 4G access on 33 GM model vehicles by the end of this year.

Customers will get a free sample of the service in promotions lasting from 30-90 days. After that, customers will need to pay:

• OnStar’s data plan (doesn’t include voice calling/emergency response) will cost $10 a month to add the car as a device on your AT&T Mobile Share plan and $10 a month for 200MB of data; $30 a month for 3GB of data, or $50 a month for 5GB;
• Applicable taxes and federal/state universal service charges, regulatory cost recovery charge (up to $1.25), gross receipts surcharge, administrative fees and other government assessments which are not taxes or government required charges are not included in the above-stated prices;
• A $5 day pass will be available for occasional users providing 250MB of access for up to 24 hours;
• All payments must be made in advance of receiving service and will be automatically renewed month-by-month until the customer cancels;
• The built-in Wi-Fi hotspot will support up to seven devices;
• Excessive roaming may result in service termination.

“The connected car will change the entire wireless industry,” said AT&T Mobility’s Ralph de la Vega. AT&T expects as many as 10 million connected cars will be signed up for service in just a few years.

But at AT&T’s prices, Moffett suspects the ingenuity of Silicon Valley and other entrepreneurs will eventually find a much cheaper solution, potentially robbing AT&T of yet another expected cash coup.

Broadband will be critically impacted by any merger of Comcast and Time Warner Cable in New York. The two companies could not be more different in their philosophies regarding access, pricing, and speeds.

This merger will have an especially profound impact on broadband service in upstate New York, largely left behind out from getting Verizon’s fiber upgrades. New York’s digital economy critically needs modern, fast, and affordable Internet access to succeed. Verizon has not only ceased expansion of its FiOS fiber to the home network in New York, it has virtually capitulated competing for cable customers in non-FiOS areas by agreeing to sell Time Warner Cable service in its wireless stores.[1]  In cities like Rochester, served by Frontier Communications’ DSL, Time Warner Cable is the only provider in town that can consistently deliver broadband speeds in excess of 10Mbps.

Time Warner Cable has never been the fastest Internet provider and had a history of being slower than others to roll out speed increases. But it is also the only cable provider in the country that experimented with usage caps and consumption billing and shelved both after subscribers bitterly complained in market tests in cities including Rochester.[2]

Then CEO Glenn Britt announced the end of the usage cap trial just two weeks after it became public.[3] Britt would later emphasize that he now believed there should always be an unlimited use plan available for Time Warner Cable customers who do not want their Internet use metered.[4] In study after study, the overwhelming majority of customers have shown intense dislike of limitations on their Internet usage, whether from strict usage caps Comcast maintained for several years or usage allowances that, when exceeded, would result in overlimit fees.[5] Just this month, the Government Accounting Office confirmed these findings in a new study that reported near-universal revulsion for usage caps on home wired broadband service:[6]

In only two groups did any participants report experience with wireline UBP [usage-based pricing].

However, in all eight groups, participants expressed strong negative reactions to UBP, including concerns about:

• The importance of the Internet in their lives and the potential effects of data allowances.
• Having to worry about data usage at home, where they are used to having unlimited access.
• Concerns that ISPs would use UBP as a way of increasing the amount they charge for Internet service.

Time Warner Cable has learned an important lesson regarding consumer perception of usage-based billing and usage caps on Internet service. In 2012, the company introduced optional usage caps for customers interested in a discount on their broadband service. Out of 11 million Time Warner Cable broadband customers, only a few thousand have been convinced in enroll such programs.[7]

Despite results like that, Comcast has not learned that lesson and has twice imposed unilateral, compulsory usage limits on their broadband customers, starting with a nationwide hard usage cap of 250GB per month introduced in 2008. Violators risked having their broadband service terminated by Comcast.[8] Today, for some that would be comparable to losing electricity or telephone service. The threat has profound implications in areas where Comcast is the only broadband provider.

Comcast temporarily rescinded its cap in May 2012, but has gradually reintroduced various forms of usage-related billing and caps with market trials in several Comcast service areas[9]:

Nashville, Tennessee: 300 GB per month with $10/50GB overlimit fee;

Tucson, Arizona: Economy Plus through Performance XFINITY Internet tiers: 300 GB. Blast! Internet tier: 350 GB; Extreme 50 customers: 450 GB; Extreme 105: 600 GB. $10 per 50GB overlimit fee;

Huntsville and Mobile, Alabama; Atlanta, Augusta and Savannah, Georgia; Central Kentucky; Maine; Jackson, Mississippi; Knoxville and Memphis, Tennessee and Charleston, South Carolina: 300 GB per month with $10/50GB; XFINITY Internet Economy Plus customers can choose to enroll in the Flexible-Data Option to receive a $5.00 credit on their monthly bill and reduce their data usage plan from 300 GB to 5 GB. If customers choose this option and use more than 5 GB of data in any given month, they will not receive the $5.00 credit and will be charged an additional $1.00 for each gigabyte of data used over the 5 GB included in the Flexible-Data Option;

Fresno, California, Economy Plus customers also have the option of enrolling in the Flexible-Data Option.

Comcast customers in these areas do not have the option of keeping their unlimited-use broadband accounts. Despite the fact Comcast executive vice president David Cohen refers to these as “data thresholds,” they are in fact de facto limits that carry penalty fees when exceeded.[10]

Cohen predicts these usage limits will be imposed on all Comcast customers nationwide within the next five years.[11] Time Warner Cable has committed not to impose compulsory limits on its broadband customers. Verizon has never attempted to place limits on its home broadband customers. Frontier shelved a usage limit plan of 5GB per month attempted in 2008 and currently provides unlimited service.

Comcast CEO Brian Roberts sat for an interview with CNBC in June in which he implied usage growth was impinging on the viability of its broadband business, justifying usage caps. At the end of the interview, Time Warner Cable ran advertising emphasizing it has no usage caps.[12] Both companies have highly profitable broadband services, as do other providers across the country.[13]

As our group has found, usage caps and consumption billing on cable Internet and DSL are little more than a transparent rate increase and anti-competitive maneuver to restrict the growth of the industry’s biggest potential competitor: online video. If a consumer can stream all of their video programming over a broadband account, there is no reason to retain a cable TV package. Comcast’s usage cap provides a built-in deterrent for customers contemplating such a move.

While a Comcast representative offered (without any independent verification) that the average Comcast broadband user consumes fewer than 20GB of data per month, Sandvine released evidence in its Global Internet Phenomena Report 1H2014 study that cord-cutters in the U.S. – at least those whose usage indicates the use of streaming as a primary form of entertainment – now consume about 212GB of data per month (with 153GB of that going toward “real-time entertainment usage”).[14]

That would put many customers perilously close to Comcast’s current market tested usage allowance.

Approving the transfer of franchises from Time Warner Cable to Comcast has the potential of saddling the majority of New York residents with usage caps and/or consumption billing with little or no savings or benefit to the consumer while introducing a major impediment to potential online video competition to help curtail cable television pricing.

—

[1]http://www.verizonwireless.com/wcms/page-unavailable.html?e=404&req=/home-services/twc.html

[2]https://www.reuters.com/article/us-timewarnercable/time-warner-cable-shelves-broadband-usage-billing-idUSTRE53F6EQ20090416

[3]http://stopthecap.com/2009/04/16/we-won-time-warner-killing-usage-caps-in-all-markets/

[4]https://newsroom.charter.com/

[5]

[6]

[7]http://stopthecap.com/2014/03/13/time-warner-cable-admits-usage-based-pricing-is-a-big-failure-only-thousands-enrolled/

[8]https://arstechnica.com/uncategorized/2008/08/its-official-comcast-starts-250gb-bandwidth-caps-october-1/

[9] 

[10] 

[11]https://techcrunch.com/2014/05/14/comcast-wants-to-put-data-caps-on-all-customers-within-5-years/

[12]http://stopthecap.com/wp-content/uploads/2014/04/nocaps.png

[13]https://gigaom.com/2014/02/12/comcast-and-time-warner-cable-forget-tv-it-is-all-about-broadband/

[14]http://www.multichannel.com/news/technology/cord-cutters-gobble-down-bits-sandvine-study/374551#sthash.JYFP7o69.dpuf

Comcast is using an offline console game that misrepresents the speed and performance of its Internet service in its latest advertising.

Eagle-eyed game fans were annoyed to find Comcast promoting its speedy Internet service with a mall demo of Ubisoft’s Trials Fusion, a game that has no online multiplayer mode.

“If you’re a real gamer then you need the speed of XFINITY Internet,” advises a Comcast spokesman in the 30-second ad.

“Do you find that when you’re playing games online with your current service that it’s slow, a Comcast representative asks gamers.

“Yes,” says one, they do! “I get some lag,” says another.

“Do you want to try XFINITY Internet,” asks the employee.

“Sure.”

“Do you notice any buffering,” asks the employee.

“No sir.” “There is certainly no lag at all.”

The smooth game play and responsiveness looks impressive, until one realizes the game was never connected to XFINITY Internet. Without an online mode, there is no Internet connection with slow speeds and lag to worry about while playing. Games like บาคาร่าจ่ายจริง, which don’t require high-speed connections for complex graphics or fast reaction times, would run just as smoothly. The game would work just as well in the middle of a Kansas wheat field, 50 miles from the nearest DSL connection.

But Comcast’s Internet service does eventually come into play when game enthusiasts want to download software updates, which can be enormous for many titles.

XFINITY Internet does not come with infinite usage. The company is now testing a return of usage allowances tied to overlimit fees in several cities and a senior vice-president predicted Comcast will be limiting how much Internet usage customers get without paying more within five years. So while you may not notice any buffering issues when using your offline content with XFINITY Internet, the more you do go online, the closer you get to Comcast’s arbitrary usage allowance.

[flv]http://www.phillipdampier.com/video/Xfinity Internet – Gamers Tent May 2014.flv[/flv]

False Advertising: Comcast uses offline game play to prove the speed and responsiveness of their Internet service. Your Keurig coffeemaker is also 50% faster when inside a home powered by XFINITY Internet. So are your cats. (0:30)

Time Warner Cable has introduced a new marketing message to potential customers, promoting the fact its broadband service has “no data caps.”

The new ads, appearing for the first time earlier this month, break from the usual tradition of avoiding telling customers they can use broadband service as much as they like. The cable industry advertised “unlimited access” in its broadband offer for years to compete against dial-up Internet. More recently some have redefined the term to mean “you can use the service anytime day or night,” but not consume unlimited amounts of data.

Of course, with Comcast attempting to claim they have “no data caps” either, only “data thresholds,” Time Warner Cable still has some wiggle room should it impose usage-based billing. Technically, under that scheme users don’t have a “data cap,” just a usage allowance above which they will face overlimit penalties.

Still, it is a nice change for at least one major cable company to be willing to market service without data caps. Time Warner’s most likely intended target for the campaign is AT&T U-verse, which has increasingly cracked down on customers exceeding its own usage caps — 150GB a month for DSL, 250GB a month for U-verse. Customers pay a overlimit penalty of $10 for each 50GB allotment above those allowances.

Telus is notifying customers in Prince George, B.C. and surrounding areas it will begin imposing usage-based billing for Internet service effective April 21.

Despite claims that implementing usage-based charges will save customers money, nearly every Telus broadband user is already paying a higher bill because of a rate increase announced in late January.

Telus’ usage allowances range from 15GB a month for High Speed Lite users to 400GB for Telus Internet 50 users. Telus is also imposing a scaled overlimit fee system based on the total amount of excess usage. Customers face a $5 overlimit fee for up to 50GB of overuse to a maximum of $75 for 350GB and above. A typical customer with a 150GB usage allowance using 250GB would pay the usual $55/month broadband charge plus a $25 overlimit penalty, raising the price of service to $80.

Starting in June, Telus will introduce an Unlimited Internet Usage option (price not disclosed) for any of their Internet plans.

Telus wants to fence in “data hogs” with “fairness.”

“It’s fair that people pay for how much they use, as you would with any other service,” Telus explained. “Our goal is to offer customers a broad spectrum of plans that meet everyone’s needs, and to get customers on the right plan for them.

“Someone who uses their basic Internet service for a bit of email, Skyping with the grandkids, and sharing photos shouldn’t pay as much as someone who games and downloads hundreds of gigabytes of videos every month,” Telus added.

Of course, every customer is already paying more after Telus raised its broadband rates on Feb. 26.

“The cost of managing, expanding and improving our network continues to rise,” Telus explained. “We’re doing our best to keep rate increases as moderate as possible, while still offering great services, flexibility and good value.”

So effectively no customer is actually saving any money with Telus’ usage-based billing. They are actually paying more today and could potentially pay much more when overlimit fees take effect later this month.