While several American broadband providers contemplate limiting customer’s broadband usage or launching usage-based billing, Australia is headed in the other direction with today’s introduction of the country’s first truly unlimited and unthrottled broadband plan for a flat monthly price.

AAPT, part of the Telecom New Zealand Group, claims its new Entertainment Bundle will revolutionize broadband in Australia as its competitors are forced to adopt unlimited plans of their own to compete.

For $88US per month, AAPT offers ADSL2+ 20Mbps service that has no usage limits, no throttled speeds, and no metered billing.  The plan also includes free home phone line rental and a monthly $50 voucher good for downloading from the AAPT In Song music store, offering one million songs.  A Wi-Fi modem is also included in the plan.

AAPT's unlimited plan is the first to dispense with usage allowances, speed throttles, and metered billing for Australian broadband users

AAPT CEO Paul Broad said the company’s new unlimited plans would deliver Australians better broadband.

“You go to the United States and there’s no such things as caps – you get online and get an unlimited download,” he said. “Consumers don’t know what these caps mean.”

Broad

The plan requires a two year service contract.  Australian broadband pricing always includes a total cost of the plan over the length of the contract.  For this particular plan, it’s $2,129.34US for two years of service.

Previously, AAPT offered unlimited downloading only between the hours of 2am-8am local time.  Daytime usage was limited to a maximum of 60GB per month, with speeds throttled to 64kbps for the remainder of the month if you exceeded your plan allowance.

“We were first to market with 2am-8am unlimited [service], then 8pm–8am unlimited, and now 24/7 Unlimited Broadband downloads plus music streaming,” Broad said.

The company still reserves the right to terminate service for grossly excessive usage, not specifically defined, but that is a common right reserved by virtually every service provider.

Would-be customers are finding AAPT’s website and broadband plans confusing because AAPT’s broadband plans page does not yet contain details of the truly unlimited plan, which can be found here.

AAPT invites those with questions to call them on 132 082.

Your Bill from MTN - Internet Overcharging Gift Wrapped

South Africans using the wireless services of MTN may be in for quite a shock in the coming weeks as the company attempts to collect for customer data usage charges it forgot to bill last fall.  Some customers have discovered the company automatically debited their checking accounts for thousands of dollars of “back usage” customers deny using.  Once again, when choosing whether to believe a faulty usage meter and billing system or the customer, Internet Overchargers believe the meter that fills their pockets with customer cash.

Benzi Kornizer is one customer impacted by the data discrepancy.  Despite using MTN’s data service for several months without incident, the company is trying to withdraw R10000 ($1,321 US Dollars) from Benzi’s checking account.  Kornizer pays R600 ($79) per month for 3GB of wireless data usage.  MTN’s usage meter, after the installation of a new billing system, claims he used more – more than $1,000 more.

“I received a letter from MTN, with no reference number, no date, no details of the problem and now I am having trouble getting my problem resolved,” Kornizer told ITWeb.

MTN believes in their usage meter, which it is using as justification to back-bill customers, despite admissions of ongoing billing problems.  Affected customers are receiving letters signed by customer relations executive Eddie Moyce admitting prior under-billing.

“MTN is in the process of re-processing the used data and customer call data records and will debit the affected customers’ accounts accordingly,” the letter states.

MTN’s billing practices, now a story in the South African media, resulted in a statement released by the company.

“We are extremely sensitive to the fact that billing errors have had an impact on the pockets of our subscribers. We will not suspend any voice or data contracts as a result of this error, and MTN will credit the accounts where double-billing errors occurred. MTN subscribers will also retain their loyalty points accrued over this period. MTN will investigate and evaluate every query on a case-by-case basis,” says Moyce.

He explains that the trouble stems from an upgrade of the billing system the company is using. “We have invested millions in a new billing system, which went live at the end of 2009 and is proving to be successful. However, we are still working hard to rectify the fallout from the previous system.”

The company admits the complete transition to the new billing system may take years to complete.  That leaves customers like Kornizer playing broadband usage roulette, never certain what the company’s meter will finally read, even months after the billing cycle ends.  Although MTN claims their meter is “proving to be successful,” customer complaints are pouring into consumer protection agencies and websites.

Kornizer is threatening to sue MTN in court.

Eddie Moyce, customer relations executive, spoke with MoneyWeb about the billing problems experienced by MTN. (5 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

<

p style=”text-align: center;”>

A sampling of the complaints from just the last 48 hours about MTN’s Usage Meter on consumer site HelloPeter, which has logged more than 9,000 customer complaints thus far against MTN:

“My December bill for my MTN Data Contract suddenly hits R3000 despite an normal usage of +-R320. I call the Autopage Accounts only to be told that there is a billing problem. However, any reply from MTN that this is a backbilling issue can be refuted. On my itemised billing, it shows that on Christmas day I used 1.2GB of data in 2 sessions a few minutes apart! Now, my modem is a 1.8Mbps but downloading 600MB in seconds is absolutely incredible!”

“Last month I received a data usage bill for R1901 which I thought was insane as it has always been R249 per month.  I queried it and a itemised bill was sent though, which showed the ‘usage’, so I could not argue, then on the 23rd I received an SMS saying MTN incorrectly billed customers for that period and we would get a full credit for the incorrect amount. Then I check my account and another R2693 was debited from my account.”

“My average monthly MTN bill for internet access via a modem is R271.27 which was boosted by a November bill for R521.20. I paid this amount even though it looked very high. I was astounded by my December bill for R 5395.48! I spoke to [customer service] who tells me that I must wait 25 working days for my query to be assessed! In the meantime I must pay the R5394.48 or else my [service] will be suspended! MTN insists I must pay before they audit my account.”

“I migrated my internet from a 500 meg to a 3 gig package, completed the paperwork and was assured that everything is in place and will be faxed through for the migration. After receiving an account for over R11000,  I was informed that the migration was never made. I do not have the forms, but the personnel remembered the transaction and called the accounts department. Answer, ‘Sorry, we made a mistake and did not do the migration for you, but you did use the data so you must pay the account’.”

“Since October 2009 I’ve been billed R 16000 mostly for data use. My account was suspended three times without notice….  [The company won’t send me] proof of the amount used.”

“My bill from MTN ranges between R1200 and R1400 a month – In October, November and December 2009, I received bills between R11 000 and R14 000 a month! When I queried these bills the answer was always the same: These are amounts that were not billed ‘forgot’ to bill me this amount and ‘there was an error’ on their system and this usage was not billed for. When asked for proof of some kind – seeing as I have not been using the account in December 2009, they told us they could not provide this. Nor would the call centre agent put me through to a Manager to discuss or sort it out. The last time we spoke to someone, they told us to ‘just pay it’ or make a payment plan to pay it off. I have no intention on paying any amounts due to their system faults and without proof of how I could use between R11 000 to R14 000 a month. Inconsistent billing, no service, no response to messages left, no responses to emails and faxes. I had no choice but to change service providers.”

“I am presently on the 500MB package for internet service, cost; R239/Mth. Yet my bill arrives stating just over R1400. I know I have not exceeded my allowance as I check it before and after each session and I only use it to Skype family back home, plus some VERY minor surfing on the odd occasion. This has been raised twice now with MTN, both times I have been greeted by a ‘it happens often’ mentality, told they can not find a reason why the bill is so high and the billing dept will get back to me in 21 days. This is going to be AFTER the money is taken out of my account. Evidence on this website indicates that grossly overcharging their clients is hardly an isolated occurrence here and there, but a standard procedure. This they seem to find an acceptable way to treat their customers. I wonder how they would feel if their clients all decided to settle bills in 21 days or at their leisure, through no fault of their own. To the present time this problem remains unresolved and not taken seriously by MTN.  TOTALLY UNACCEPTABLE.”

Phillip Dampier

While reviewing coverage on Comcast’s new usage meter, I ran across a disappointing quote from an article in The Hill newspaper from Gigi Sohn, president of public interest group Public Knowledge:

But as more consumers are downloading movies and streaming TV shows on their computers, bandwidth use is inching up. Imposing caps on consumers can become a form of discrimination, said Gigi Sohn, president of Public Knowledge, this morning at a panel I moderated about copyright and net neutrality.

“Public Knowledge doesn’t oppose usage-based pricing,” she said. “But if you set the cap low enough you discriminate against high-bandwidth applications. “If consumers have a finite amount of bandwidth each month, they could be forced to stay away from bit-hogging sites, like video high-quality video streaming services.

Sohn seems to grasp the very real risk of rationed broadband, but drops the ball completely in not opposing the scandal that “usage-based pricing” represents for broadband users.  It was a real disappointment to see a group fail to understand the implications of these kinds of Internet Overcharging schemes.  As the industry seeks to further monetize broadband usage, these pricing changes guarantee fatter profits and reduced costs for providers, and a higher bill for rationed broadband for consumers.

Comcast’s two year old 250GB usage cap seems generous by today’s standards, but note it has remained the same, despite growing overall broadband usage.  What was generous two years ago is slightly less so today, and could be downright stingy a few years from now.

For customers stuck with providers with a different definition of “generous,” it is even more worrisome.  Rochester, New York faced the prospect of a 5GB usage allowance from the local phone company’s DSL service, or a 40GB allowance from the local cable operator.  The latter called their experiment fair, consumption-based pricing, but in reality it would have tripled the cost of broadband service for residents seeking to maintain the same level of service they enjoyed previously.  There should be plenty to oppose in a $150 monthly broadband bill.

Usage-based billing makes providers very happy counting your money

Internet Overcharging schemes involve all the ways a profitable broadband industry, enjoying record revenue and declining costs, could force consumers to pay more for the exact same service they receive today:

• The arbitrary usage cap, which ranges incredibly from 5GB-250GB per month, depending on the provider.
• The false “consumption/usage-based pricing” model which doesn’t actually charge consumers for what they use, but rather confines them into ranges of data allowance plans that carry stiff penalties for consumers who exceed their limit.  Think cell phone plan for broadband, only markup the penalty fee by several thousand percent above cost.
• The overlimit penalty or fee, which seeks to punish and monetize usage at the same time.  Customers, most of whom don’t have a clue about what a “gigabyte” is, will pay a stiff price for not intuitively knowing how much they’ll use month to month, and pay an overlimit penalty of $1-5 per gigabyte for excess usage.  That’s far above the pennies per gigabyte large providers pay, but it’s a great way to make consumers think twice about daring to use high bandwidth services like online video.
• The overlimit insurance policy, which Bell Canada introduced to protect consumers from their own rapacious pricing.  They pocket the proceeds from the “insurance” as well, picking customer pockets at every opportunity.
• The usage meter, not subject to independent scrutiny or verification.  What they say you used, you used, even if you didn’t.  Customers have learned these meters aren’t as accurate as providers suggest they are.

The fact is, customers pay for access based on speed, which has its own natural built-in usage limits.  You can’t exceed certain consumption thresholds if your service doesn’t deliver the speed required to do so.  Heavier users naturally gravitate towards faster speed, often premium-priced tiers.  Lighter users often choose “lite” plans (when the provider makes them aware they exist) which deliver lower speed service perfectly adequate for web page browsing and e-mail.  Current pricing models remain highly profitable for providers, even more so than some of the other components of their “triple play” packages.  It’s the service consumers cancel last.

With a duopoly for wired broadband service in most American communities, tolerating “usage-based pricing” that isn’t (or will be overpriced even when offered) repeats the terrible mistake Canada made which today lives with the results — pricey, slow-speed broadband and a decline in broadband rankings.  Canadians are livid about handing over considerably more of their money for throttled, usage-limited Internet access.

Public Knowledge advocates for Net Neutrality.  In terms they might better understand, advocating for Net Neutrality while also not being opposed to the industry’s definition of “network management,” defined to create an exploitable loophole, makes Net Neutrality protection meaningless.

Without a ban on such pricing schemes, providers will keep their best possible tool to stop the threat of broadband video competing with their pay television offerings, and can favor certain content partners over others with exemptions from the dreaded cap ‘n tier system.

Matthew Henry, Internet Policy Counsel for Data Foundry, a database company, said on the panel that usage-based pricing presents serious “conflicts of interest” for cable companies that provide both cable TV and Internet services.

As people watch more cable content online, as both Comcast and Time Warner are pushing with their TV Everywhere services, more demands are placed on their broadband networks.

“Companies have a real incentive to force consumers to turn off the computer and pick up the remote,” he said.

Public Knowledge should carefully consider what happens in a Net Neutral world with onerous data caps and consumption pricing that exists for some, but not all online services.  It’s an end run around the kind of open Internet we all support.

A survey conducted by International Data Corporation on behalf of Zeugma Systems, a company that makes an edge router for broadband networks, shows that consumers simply hate bandwidth caps and will likely switch to another carrier if they have the option

Over the last year, over 600 articles here have documented the abuse of consumers’ wallets from such schemes.  We’ve also shown the real world consequences this pricing has in retarding development of new multimedia applications and higher bandwidth features.  Innovative high bandwidth services seeking funding in a usage-capped world are deemed untenable if usage limits or overpriced broadband make customers think twice about using them.  In the south Pacific, online video services have been literally shuttered simply because of data caps.  Australian broadband, littered with caps and consumption billing, has become so bad the government is proposing its own National Broadband Plan to provide relief to those down under.  Public Knowledge’s position would bring that broadband backwater to America if it became commonplace here.

Make no mistake — consumers are overwhelmingly opposed to such pricing, already pay higher-than-average costs for broadband, and are threatened with even higher bills if such schemes are imposed.

Public Knowledge needs to carefully reconsider its position and get on the side of consumers who recognize highly profitable broadband providers don’t need another major payday at their expense.  Free Press understands the implications.  We respect and appreciate Public Knowledge’s hard work for consumers on other issues.  We invite them to join the consumer movement to retain fair broadband pricing.

New Zealand Telecom

New Zealand’s Telecom is the latest company caught with a defective broadband usage meter that overbilled 150,000 of their 500,000 customers for Internet usage never utilized.  The problem was tracked to a “technical problem” involving the company’s network upgrade in preparation for the introduction of TiVo.  Telecom’s engineering partner Juniper was held responsible for introducing the error which resulted in more than one hundred thousand customers finding their broadband speeds reduced for “excessive usage” to near-dial-up or billed steep overlimit penalties for the months of November and December.

On December 23, Telecom sent out letters to around 150,000 customers informing them of the error.

“Our reports show us that you will have experienced slowed internet speeds earlier than expected in your billing months,” said the letter, signed by Telecom’s general manager of broadband, Ralph Brayham.

Telecom spokeswoman Emma-Kate Greer told the New Zealand Herald all customers who had been affected by over-charging or slowed internet speeds had been identified.

They had been refunded and credits had been given to “customers who may have been incorrectly slowed.”

Customers shocked by their November and December bills were initially stuck taking Telecom’s word for the overbilling, resulting in lots of finger-pointing in New Zealand households.  The Herald reported:

Sarah Broughton, from Herne Bay in Auckland, said she had been frustrated by the slow broadband, and had accused one of her flatmates of downloading too many movies.

“There are six people living in our house. We all suspected everyone else was downloading heaps,” she said.

“We were blaming other people.

“I never suspected it was Telecom. You think when you give them money they are going to use it properly.

“It’s just been so annoying.”

Usage meters, a vital component of Internet Service Providers seeking an enhanced payday from Internet Overcharging schemes that bill customers based on how much data they consume, have been controversial because of questions regarding the accuracy of their measurements.  Most providers do not permit independent verification of the accuracy of their meters, despite their accounting for a significant portion of a customer’s monthly broadband bill.

It took a concerted, organized effort by members of the Geekzone website to “out” Telecom’s erroneous billing practices and get the company to issue compensation to impacted customers.

Several staff members working for the Washington Utilities and Transportation Commission (WUTC), the regulatory agency reviewing the proposed Frontier purchase of Verizon territories in Washington state, have reversed their opposition to the Frontier-Verizon deal because of concessions they believe will better serve consumers impacted by the deal.  But the provisions don’t come close to protecting consumer rights and do not sufficiently protect local telephone and broadband service.

The WUTC must be told that broadband expansion from a service provider that insists on a 5 gigabyte usage limit in its Acceptable Use Policy makes such expansion barely worth the effort.  The WUTC must insist on a permanent exemption from any usage limits for Washington state consumers, especially because many may find Frontier DSL to be their only broadband option for years to come.  To allow a company with such a paltry limit to be the monopoly provider of broadband puts Washington residents and small businesses at a serious economic disadvantage in the digital economy.

Would you choose to reside or locate your business in a community with one broadband provider offering a limit so low, your broadband usage will be limited to web page browsing and e-mail?

High Speed Internet Access Service

Customers may not resell High Speed Internet Access Service (“Service”) without a legal and written agency agreement with Frontier. Customers may not retransmit the Service or make the Service available to anyone outside the premises (i.e., wi-fi or other methods of networking). Customers may not use the Service to host any type of commercial server. Customers must comply with all Frontier network, bandwidth, data storage and usage limitations. Frontier may suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period. The Company has made no decision about potential charges for monthly usage in excess of 5GB.

Frontier will be a part of the lives of almost 500,000 state residents, including those in Wenatchee and other parts of North Central Washington.  That covers a lot of rural residents with no hope of cable competition or other broadband options.  Verizon is the second-largest local telephone service provider in Washington, serving cities such as Redmond, Kirkland, Everett, Bothell, Woodinville, Kennewick, Pullman, Chelan, Richland, Naches, Westport, Lynden, Anacortes, Mount Vernon, Newport, Oakesdale, Republic and Camas-Washougal.  Currently, Verizon has approximately 1,300 employees in Washington, who would be transferred to Frontier once the deal is complete.

Frontier’s concessions don’t come close to assuring residents they can get the kind of broadband service they need in the 21st century, especially from a company that could easily find itself swamped in debt.  Let’s look at what Frontier has offered:

• Invest $40 million to expand high-speed Internet access in Washington.
• Submit quarterly financial reports to identify merger savings.
• Branding and transition costs to be paid by stockholders, not ratepayers.
• Increase financial incentives to prevent a decline in service quality.
• Adopt Verizon’s existing rates and contracts for at least three years.

Frontier would also be required to pay residential customers $35 for missed service repairs or installation appointments. That’s $10 more than Verizon now pays. Current Verizon customers would also have 90 days after the transition to choose another provider without incurring a $5 switching fee. Low-income customers who qualify through the Washington Telephone Assistance Program will also receive a one-time $75 credit if the company fails to offer appropriate discounts or deposit waivers.

Our take:

• Investing $40 million in low speed DSL service with a 5GB usage allowance saddles residents with yesterday’s technology with a usage allowance that rations the Internet.
• Customers don’t care about merger cost reductions because they’ll never enjoy those savings, but they’ll feel their impact if they include layoffs and reduction in investment.
• Consumers will be more concerned about what happens to their phone and broadband service when the “transition” results in service and billing problems.  Will stockholders pay inconvenienced customers?
• Vague promises of increased financial incentives for a company to do… its job, without declines in service quality, exposes just how unnecessary this deal is.  Why not offer incentives for Verizon to stay?
• Freezing rates for three years doesn’t prevent massive increases to make up the difference in year four and beyond.

The WUTC staff had it right the first time when it opposed the deal.  A healthy, financially secure Verizon is still a better deal than a smaller independent company saddled with debt.  Frontier seals the fate of Washington state residents from the benefits of fiber optics wired to the home, delivering high speed broadband for the future because Frontier doesn’t do fiber to the home on its own.  With a tiny usage allowance, just waiting for the company to decide to enforce it means you won’t be using your broadband account too much anyway.

The WUTC is accepting comments and you need to start calling and writing.  Make sure to tell the Commission it must secure a permanent exemption for Washington from any Internet Overcharging schemes like consumption/usage-based Internet billing and any usage limits Frontier defines in its Acceptable Use Policy.  Better yet, tell them Frontier’s concessions don’t come close to making you feel good about Verizon turning over your phone service to a company that is traveling the same road three other companies took all the way to bankruptcy.

Customers who would like to comment on the provisions can call toll-free: (888) 333-9882 or send e-mail to [email protected]. The deadline for comments is January 10th.