AT&T Internet Rationing Board - Do More With Less!

Today should be your last day for doing business with AT&T’s DSL and U-verse services.  If you feel strongly about your broadband usage being counted and limited, it’s time to bail out of AT&T’s Internet Overcharging scheme, which took effect earlier today.

From this day forward, AT&T DSL customers are limited to 150GB of usage and U-verse customers top out at 250GB before the overlimit fee kicks in — $10 for every 50GB customers exceed the cap, billed in $10 increments. It’s classic AT&T Math, where $1.01 of usage is rounded up to $10.00.

AT&T certainly got off on the wrong foot on day one.  We’ve received more than a dozen messages today from customers who find AT&T’s usage meter offline, showing this message:

“We’re sorry, but we’re unable to display your Internet usage at this time.”

Do you think AT&T would accept that excuse if you enclosed a note telling AT&T you are unable to pay your Internet bill at this time?

On an ongoing basis, we intend to hold AT&T’s feet to the fire until they rescind this unwarranted overcharging scheme.  While company officials claim it is intended to protect their customers from a handful of “heavy users,” they also argue they have plenty of capacity for everyone.  The company cannot have it both ways.

Therefore, this week’s message to be shared with your friends and family is:

AT&T’s Broadband Network Is Not Good Enough to Handle Your Broadband Needs: Shop Elsewhere

AT&T’s wired broadband network, just like their bottom-rated wireless service, cannot handle their customers’ broadband needs.  The company proved that today by having to introduce a broadband rationing scheme, limiting customer usage.  Despite being America’s largest telephone company ISP, AT&T apparently cannot handle the traffic, telling DSL customers to lay off after 150GB and their “advanced” U-verse network customers to get offline after 250GB of use.  Evidently the company isn’t willing to invest some of their enormous profits to provide an ongoing level of broadband service their customers deserve to get, especially when compared with their closest cousin: Verizon.

“While Verizon is installing fiber optics to many of their customers’ homes and providing unlimited, blazing fast Internet service, AT&T admits through their own actions their network isn’t good enough to provide that same level of service to their customers — so now they are limiting the use of it,” says Phillip Dampier, editor at consumer group Stop the Cap! “If I was an AT&T customer, I’d shop around for an alternative provider that has a network robust enough to actually deliver the service customers pay good money to receive.”

AT&T’s U-verse service was touted to customers as delivering a next generation of broadband and television service that could provide healthy competition to cable television.

“AT&T wants U-verse to compete with the big cable companies, but usage caps tell us they can’t manage to do that,” Dampier says. “If their network is so great, why do they need to slap limits on customers?”

AT&T’s representatives claim the limits are intended to reduce congestion from a handful of heavy users, a claim that does not make sense to Stop the Cap!

“AT&T’s existing terms and conditions allow them to deal with any customers who create problems for other users on their network,” Dampier said. “Instead of expanding capacity or dealing with the so-called ‘handful’ of troublesome users, they have slapped an Internet Overcharging scheme on all of their customers.”

Stop the Cap! points out the irony AT&T has plenty of capacity for hundreds of television channels, but doesn’t have enough capacity to provide a worry-free High Speed Internet experience.

“AT&T’s U-verse has no problems finding space for more shopping channels, foreign language networks, and niche channels, but can’t find their way clear to leave customers’ unlimited Internet accounts alone,” Dampier adds.  “Their priorities are all wrong — giving you channels you didn’t ask for while taking away the service you do want.”

Should any family have to fight over the monthly Internet bill?

One of the side effects of Internet Overcharging is the one-two punch of the usage cap combined with a steep overlimit penalty.  While usage capping providers pay pennies for your Internet traffic, they can charge you up to $10/GB if you dare exceed your plan allowance.

Making sure you don’t… too much… is the job of the provider who will helpfully educate you on how to use your service less, how to establish an in-home Ministry for State Security — tracking down those malfeasant family members who want to deny running the bill up, and providing inaccurate monitoring tools designed to make you think twice about everything you do online.

Far-fetched?

Not really.  Just ask Mathew Ingram, a Rogers Cable customer in Ontario who tells Techdirt he spends much of his free time trying to figure out who is doing what with the family broadband account:

I have three teenage daughters who also download music, TV shows and so on. I figured someone had just gone a little overboard, and since it was close to the end of the month, I thought it wasn’t anything to be worried about. The next day, however, I went online and checked my usage (Rogers has an online tool that shows daily usage), and it said that I had used 121 GB more than my allotted amount for the month. In other words, I had used more than 100 GB in less than two days.

I just about spit my coffee all over the computer screen. How could I possibly have used that much? According to Rogers, I owed $181 in overage charges. Luckily there is a maximum extra levy of $50 a month (just think what it would cost if I was subject to usage-based billing).

With the help of Rogers (who also helped themselves to $50 of Ingram’s money for overlimit fees), an employee identified security holes in his wireless router which could have let all the neighbors join the broadband usage party at his expense.  But in reality, after considerable family tension and drama, one of Ingram’s daughters confessed to downloading some TV shows and forgot to close the file sharing software used to grab them.

Ingram learned a $50 (this month) lesson — he is not free to sit back and enjoy his broadband account that costs him much more than American providers charge for the same thing (without a usage cap).  He serves at the pleasure of Rogers Cable, who wins if Ingram succeeds in keeping his family’s usage under the limit — costing Rogers less money, or by pocketing the overlimit fees charged when he fails.

What scares many Canadians are plans by some providers to eliminate the monthly maximum overlimit fee.  That would have left Ingram paying a $181 penalty instead of $50.  As far as cable companies like Rogers are concerned, it’s his own fault for not keeping his family under control, and now he will pay the price.

New Zealand’s Commerce Commission is planning to study Internet Overcharging schemes from Internet Service Providers as part of a review of the government’s planned investment of $1.35NZD billion to construct a state-subsidized fiber broadband network.

At issue is whether the government’s investment in broadband will not deliver value for money if broadband providers sell heavily usage-capped broadband services over the country’s new network.

The Commerce Commission serves as New Zealand’s antitrust regulator, charged with finding marketplace abuses and correcting them, especially in the absence of competition.  Included in the wide-ranging review:

• Network peering: Allowing broadband traffic to flow freely between Internet Service Providers without interference or punitive expense;
• Data caps: Whether ISPs will continue to limit broadband usage on a network paid for by public funds, pocketing the proceeds;
• Net Neutrality: Ensuring that content over the network is treated fairly and equally.

“Our aim is to promote competition in telecommunications markets for the long-term benefit of end-users of telecommunications services in New Zealand,” Telecommunications Commissioner Ross Patterson said in a statement. “The study will result in a report which will identify any factors which may inhibit the uptake of ultra-fast broadband services.”

Most of the investigation will likely target New Zealand’s dominant phone company – Telecom New Zealand.  The former state-owned monopoly has rebuilt part of its market dominance pitching broadband service across the country over its landline-based DSL network, by which most New Zealanders obtain broadband.  While the company competes with other providers who resell service over Telecom phone lines, many critics charge the phone company position as the owner of the infrastructure gives it a powerful position in the market.

The New Zealand government hopes to retire its aging copper-wire telephone network and replace it with a combination of fiber optics in cities and towns and fixed wireless service in rural areas.  A discussion paper is expected from the commission by June, with a final report due in December.

Phillip Dampier

I could spend all day refuting sloppy ‘accepted as true with no fact-checking’-reporting done by news organizations on the issue of Internet Overcharging.  Facts not in evidence:

• Assumptions that what is “fair” in wireless must be fair on wired networks;
• Everyone is doing it around the world so North America should do the same;
• People are not paying “their fair share” for the growing amount of usage.

It’s all a big bucket of wrong, and the only thing getting rolled over month after month are consumers.

Yesterday, it was GigaOM telling us “Comcast DSL” (?) had no usage caps at all.  (They do — 250GB per month, and they sell cable broadband, not landline DSL.)

Today, it’s ComputerWorld‘s Matt Hamblen, who blows it right in the first paragraph:

Data caps on nearly all wireless and wired networks in the U.S. seem likely to be in place soon, despite the latest unlimited data offers from Verizon Wireless and Sprint.

Impressive crystal ball gazing there.  Nearly all networks will be capped?  Even though Sprint is banking its near-future on selling unlimited use plans and the economics of wireless are considerably different than wired broadband, Hamblen boldly predicts near-universal usage caps, even as most providers have no formal caps at all.

Hamblen’s journey starts with a survey of capped broadband offerings on the wireless side.  Spectrum issues and the nature of wireless technology makes providing unlimited use plans more challenging, especially when users consider their mobile broadband service a home broadband replacement.  Some have even left peer-to-peer software running in the background 24 hours a day.  It was this, according to Clearwire, that did in that provider’s unlimited service, which is now heavily speed-throttled in many areas.

Stop the Cap! has argued repeatedly current generation wireless broadband will never be a suitable replacement for traditional wired broadband, unless your use is confined to web browsing, e-mail, and occasional multimedia.  The capacity isn’t there and the technology is susceptible to serious speed loss in congested areas.  That is not to say future wireless technology might not change this reality.  The political debate over re-purposing unused UHF television channel frequencies for wireless broadband is just getting underway in Washington.

But trying to draw arguments from the wireless world for usage caps across wired broadband networks is where the line ends.

Hamblen predicts because AT&T wants to gouge its wired broadband customers (many who are now cancelling service and heading back to the cable company, when possible), now everyone will be going to the Internet Overcharging party:

Data caps on both wired and wireless customers are widespread, even if they annoy some smartphone early adopters in the U.S. Ars Technica listed the policies of 11 different wired network data caps for several different countries.

Hamblen’s report isn’t simply false — it’s sloppy.  Wired broadband usage limits are not widespread in the United States, and despite Ars Technica‘s sampler, the trend globally is away from usage-capped wired broadband, not towards it.  Evidently Hamblen didn’t bother to read Matthew Lasar’s piece, which includes references to BT in the United Kingdom moving towards unlimited use service in the near future, Canadian consumers’ victories against usage-based billing preserving unlimited use plans from resellers, and Australia’s own ever-increasing usage allowances.

In fact, even Lasar missed the fact several Australian ISPs now sell unlimited use plans themselves — something unheard of just a few years ago.  As in Britain, some users who consume over 300GB in a month may find their speeds reduced at peak usage times, but only until capacity improvements allow the throttles to be removed.  Even South Africa, one of the most challenging places to deliver 21st century broadband, has providers delivering unlimited use service.

Hamblen then moves on to another inaccurate argument — consumers will simply reserve their high bandwidth downloads on smartphones for the office Wi-Fi network, that will also face usage caps.

Except virtually every usage cap that does pop up in the United States applies to residential accounts only.  Commercial accounts are exempt, as are the Wi-Fi networks powered by them, especially for cable broadband-based service that is increasingly popular with small and medium sized companies.

Although Wall Street wants usage caps and regularly says they are inevitable, that does not make them reality.  Consumers certainly do not want them and will cancel service with a provider if an uncapped alternative exists.  While certain providers, their backers on Wall Street, and some dollar-a-holler groups defending them all have a financial interest in pushing memes about Internet Overcharging, members of the media should not.

Imagine if your electric utility billed you for service based on a meter that was developed by the company, had no third party verification, no oversight by a Bureau of Weights and Measures, and wrote provisions into the company’s terms and conditions that allowed the company to terminate your service if you complained too much about the resulting bills.

Rethink possible.  AT&T.

When America’s largest phone company implements its arbitrary and unjustified Internet Overcharging scheme this May, it will bring its controversial usage meter to bear on every one of its broadband customers — a meter implicated in wild over-measurements of customers’ broadband usage — usage that will put customers perilously close to, or over the limits AT&T wants to establish.  The result?  Fat additional profits in the form of $10 overlimit penalties for every 50GB AT&T says you consumed for broadband traffic that costs them pennies to deliver.

The broadband usage meter is no stranger to controversy and lawsuits over accuracy issues.  Despite reflexive denials that a particular provider’s usage meter couldn’t be wrong, far too many have had to backpeddle and confess that the meter that should have measured $40 in usage and resulted in $4,000 bills instead “was in error.”

Whether providers are developing meters that are just flat inaccurate or are quietly putting a virtual finger on the scale to increase the opportunity of overlimit profits is unknown, but past history shows the meters typically overmeasure usage, not undercount it.

Without independent verification and ongoing oversight, some customers wonder if AT&T is sticking a virtual finger on AT&T's usage scale.

Some recent past history:

• Telstra is Australia was implicated in December for a wireless usage meter that occasionally reported more than three times the usage measured by wireless phone owners’ built-in usage measurement tools.  Company representatives ended up crediting some customers as much as $3500AUD in inappropriate overlimit fees that should never have been charged.  Complaints continue to arrive as late as February about overbilling;
• Telecom New Zealand’s usage meter overmeasured usage this month resulting in overcharges and throttled speeds under the ISP’s “fair use policy.”  One customer was billed for 27GB of usage during one overnight period, despite the fact the computer was switched off;
• BT in the United Kingdom confirmed it overbilled some of their broadband customers in February when their usage meter measured usage for customers who had switched their computers off or took them away on holiday.  As far as BT was concerned, those computers were still at home and still racking up web usage.  Only last week, the company finally confessed their meter was inaccurate — overmeasuring usage that never happened;
• AT&T’s counterpart in Canada — Bell, cannot manage to measure customer usage correctly either, so it suspended its usage tracker tool temporarily.  In February, one customer tired of overbilling proved a point when he took his computer to the United States just to guarantee it could not go near Bell’s network.  The result?  Bell said he used 500MB anyway;
• In February, a class action lawsuit was filed against AT&T for “overmeasuring” wireless usage in some instances by up to 300 percent;
• Last fall, Verizon was forced to refund $25 million dollars for phantom data usage charges for service many customers claimed they never used.

In virtually all of the prior incidents, a common pattern emerges, usually ending when providers fall on their swords, admit error and issue refunds:

• Phase 1: Initial denials from providers there is a problem with the meter, usually blaming the customer, the customer’s measurement tool, or the process used instead;
• Phase 2: Once proven to be an issue, an effort to downplay its significance and impact with claims that only a “tiny” percentage of customers were affected;
• Phase 3: Refusal to submit usage meters, wholesale costs, and other components of Internet Overcharging to third-party verification;
• Phase 4: Refusal to allow an independent audit of customer accounts to verify overbilled customers were properly refunded every penny of excess charges;
• Phase 5: Class action lawsuit or government investigation commences;
• Phase 6: Settlement reached with refunds or low value coupons to customers who take the time to request one;
• Phase 7: Report excess profits from unclaimed refunds on balance sheet.

In too many cases, multi-billion dollar telecom companies that rely on those meters to measure and bill customers for their usage were implicated not for undermeasuring usage, but overmeasuring it — often substantially.

Some AT&T customers are already disturbed with what could be history repeating itself.  A reader of Broadband Reports in Skokie, Ill., compiled his own detailed analysis and found AT&T’s measurement tool grossly overmeasured his usage, and even worse, couldn’t do simple math and overmeasured him again when adding up his daily usage totals:

AT&T said that I had used 361GB in a single month! Surely this couldn’t be right. I’m a heavy user, but every time I even so much as glanced at my usage stats they’ve always been in the 200GB range. Surely something was amiss, so I decided to dig deeper.

It’s an old habit, but the first thing I do when I suspect something is wrong with any bill is enter all the line items into a spreadsheet and add them up myself. It sounds like busywork, but sometimes you’ll catch unlisted charges that have been phantomly added to your bill, or occasionally an outright math error. I couldn’t believe what I found. AT&T’s usage meter results insist I had used 341.39GB down, and 20.18GB up. But when I added all the daily detail entries (the DSL equivalent of a call log), only 332.8GB down and 0.72GB up are accounted for.

AT&T is claiming that I used 361.57GB of data, but according to their own daily data I only used 333.52GB, an 8.5% overcharge.

This AT&T customer discovered AT&T overmeasured his usage far more than it undercounted it. (Lines above the baseline show downstream traffic AT&T overmeasurement; lines below show undercounted usage. Click to enlarge.)

In total, this particular customer reports his usage was overmeasured by a whopping 33 percent. He is not alone.  A robust thread of similar results is active on Broadband Reports.

AT&T’s response to the early criticism follows the same path taken by other providers, starting with denials.

“We’re addressing ways we can make the labels and information on the online metering tool more clear for customers between now and May (when the new policy goes into effect),” said AT&T spokesperson Seth Bloom.  “I can also assure you our team is performing checks everyday to ensure accuracy.  That said, we believe we have an accurate tool.”

“Other tools may measure at different 24-hour periods than we do, and most likely do not take into account the standard network protocols (e.g. Ethernet, IP) that are used to provide applications and content to our customers via the Internet.  As you know, this is fairly standard to incorporate when measuring broadband traffic and is applied by other ISPs who measure usage.”

Customers and columnists alike are worried about AT&T's new data limits. This Milwaukee Journal-Sentinel columnist is not thrilled, and neither are customers who overwhelmingly want unlimited broadband access.

“In the end, AT&T expects the caps to impact only the aforementioned 2% [that comprise its heaviest users].”

With the right level of over-measurement, virtually anyone can be a member of the “2% Club.”  One customer told Connected Planet AT&T was already overmeasuring her DSL account by as much as 4,700%.

How can you measure your usage to compare against AT&T?

“It’s not hard to maintain independent usage statistics to double-check AT&T’s numbers,” says the Broadband Reports reader in Skokie. “If you have a DD-WRT compatible router, it will keep your upload and download history automatically. If you don’t have a compatible router, you can still run WallWatcher or MRTG to get the total bandwidth used by your router. Finally, if your computer is connected directly to your DSL modem without a router, you can run software like Net Meter to track your internet usage.”

Customers inconvenienced by unnecessary usage meters which threaten to expose them to unjustified overlimit fees is just one more reason why we call out these Internet Overcharging schemes.  Call AT&T and let customer service know you intend to switch providers if AT&T implements their usage cap scheme in early May.  Tell them regardless of what kind of usage you incur each month, you cannot afford the chance AT&T’s apparently inaccurate usage meter could expose you to a higher bill.  Tell them you don’t want the hassle, and the only way you will remain as a customer is if they do away with the entire scheme.