Despite a recognition that customers are using more data than ever as they cut traditional cable television in favor of streaming, Comcast’s data cap remains stubbornly fixed at 1 TB a month.

The nation’s largest cable operator last week completed a significant speed upgrade in 14 states in its Northeast and Mid-Atlantic service areas from Maine to Virginia. Some plans are getting as much as a 60% speed boost, but Comcast is not budging a megabyte on its fixed data cap that amounts to 1,000 MB of usage per month.

Comcast acknowledges the speed upgrades are designed to meet the exponential increase in demand for high-bandwidth video streaming in households that now average at least ten devices connected to the internet. Many of those devices are now streaming 4K video, which takes double the bandwidth of traditional HD video.

The speed upgrades:

• Performance Starter: was 15 Mbps, now 25 Mbps
• Performance: upgrades from 60 Mbps to 100 Mbps
• Performance Pro: up from 150 Mbps to 200 Mbps
• Blast: A slight upgrade from 250 Mbps to 300 Mbps
• Extreme: This premium plan used to provide 400 Mbps, but it is now 600 Mbps.

Comcast faces significant competition in this part of the country from Verizon’s FiOS fiber to the home network. That may explain why it is also the only significant part of Comcast’s service area that remains exempted from the cable company’s data caps. Verizon has no data cap of consequence, although the company has shut down some customers that were likely using their residential internet connection as a server, running up many terabytes of usage a month.

For now, Comcast’s speed upgrades come with no price hike.

The speed increases are likely to be welcomed by most customers, but Comcast’s pervasive data cap for most of its nationwide footprint is not. In November, that data cap will be tested like never before as Google launches its Stadia cloud-based video game service. Up to six million broadband customers are expected to blow through their provider’s monthly data cap while using the service, which replaces traditional home game consoles. That is because Stadia will consume an enormous amount of bandwidth — as much as 15.75 GB an hour at 4K resolution.

An article published by Vice Media warned video game enthusiasts they could easily face steep overlimit usage penalties on a future bill:

According to data from The NPD Group, America’s estimated 34 million gamers play 22 hours per week on average. Were those gamers to all shift to Stadia as their primary game platform at 4K, they’d burn through 1,386 GB of data monthly. And that’s just the bandwidth consumed by gaming; it doesn’t include music and video streaming or other activities.

The result will be an even higher broadband bill for US consumers who already pay some of the highest prices in the developed world for bandwidth. For many this will be a surprise. Of the 943 gamers surveyed by the company, only 17 percent were certain they had a broadband cap. 21 percent say they weren’t sure one way or the other whether their broadband was metered.

Most providers set their overlimit penalty at $10 per 50 GB of excess usage. Some offer to waive data caps for a monthly additional charge of $50. That makes Google’s $10 video game service much less of a bargain than many initially thought.

When questioned about the impact data caps could have on Stadia, Google vice president Phil Harrison hoped the nation’s ISPs would do the right thing by their customers.

“ISPs have a strong history of staying ahead of consumer trends and if you look at the history of data caps in those small number of markets…the trend over time, when music streaming and download became popular, especially in the early days when it was not necessarily legitimate, data caps moved up,” he said. “Then with the evolution of TV and film streaming, data caps moved up, and we expect that will continue to be the case.”

Except Harrison’s utopian world view is not accurate. In fact, most broadband providers have set data caps and left them unchanged for years, even as those same companies promote frequent speed upgrades. In effect, more and more customers are running over their usage allowances and either paying steep penalties, reducing usage, or agreeing to pay another $50 a month to dispense with the cap altogether.

Vice author Karl Bode reminds readers “broadband caps are complete nonsense.”

“Experts say the real purpose of such limits is to covertly jack up your already expensive broadband bill—and punish customers looking to cut the cord on traditional cable TV services,” Bode added.

Gov. Newsom

California’s efforts to address the state’s ongoing rural broadband problems made little headway in 2019, as Democratic Gov. Gavin Newsom in the past week vetoed (or allowed to expire) the only two broadband measures surviving the treacherous journey through the California legislature.

Assembly Bill 1212 would have made rural broadband a priority for Caltrans — California’s Department of Transportation and the Department of Water Resources, including broadband on recommended lists of projects for funding consideration by two of the state’s largest pension investment funds: the California Public Employees Retirement System and the California State Teachers Retirement System. Current state law only allows pension boards to invest in in-state infrastructure projects that meet certain fiduciary responsibilities. By expanding investment projects to include telecommunications, funding from two major pension funds might have been unlocked and made available to future rural internet projects.

Assembly Bill 417, also known as the Agriculture and Rural Prosperity Act, included several measures targeting rural farming. Two passages in the bill would have included broadband expansion as a new priority for the California Department of Food and Agriculture (DFA):

Due to the central role of agriculture in rural California, it is necessary to achieve a detailed understanding of the economic value that agriculture brings to rural communities and to identify opportunities to improve agricultural productivity, including by increasing broadband access, advancing agricultural innovation, technology, and education, and supporting a well-trained, productive rural workforce, to benefit rural communities.

[…] Making recommendations to the secretary on actions to further the development of rural agricultural economies, including, but not limited to, increasing broadband access, providing technical, resource, and regulatory compliance assistance, advancing agricultural innovation and technology, establishing programs for education and workforce development, and evaluating recreation and tourism opportunities.

Several other proposed measures, including AB 1409 which would have created a fund for providing wireless hotspots for students and Wi-Fi service on school buses was killed last spring behind closed doors in the California Assembly’s Appropriations Committee. The annual attempt by AT&T and other telecom companies to write their own laws to deregulate themselves (this time AB 1366), was suddenly pulled from committee consideration by its author back in September.

That the two mild measures made it through the legislature to the governor’s desk was not surprising considering the sheer number of minor bills that pile up on Newsom’s desk. But for both to suffer quiet deaths through veto or expiration despite almost no public opposition speaks to the power of Sacramento insider politics.

Newsom’s explanation for killing AB 1212 was hardly compelling, as he explained he felt the measure was “unnecessary” because “existing law already encourages public retirement systems to invest in state infrastructure.” But that explanation ignores decades of state government bureaucracy, where agencies zealously guard their funding and protect their own existing project priorities to the hilt. AB 417 would have expanded the mission of the DFA, something the governor argued should only be done in the state budget and only within the specific context of the broader mission of the department, whatever that means. The head of the DFA was likely thrilled anyway.

Telecom consultant Steve Blum notes Caltrans and other state agencies were unlikely to ever consider rural broadband a funding priority, unless it was intended for their own use. Blum also believes the most likely suspects responsible for convincing the governor to kill both bills were the heads of the departments themselves.

“The simplest explanation for Newsom’s vetoes is that Caltrans, DWR and/or DFA staff asked him to do it, because those are jobs they don’t want to do,” Blum wrote on his blog. “That sort of opposition was why a Caltrans dig once policy bill was watered down in 2016.”

Blum believes the state’s largest phone companies will benefit the most from the outcome of the 2019 legislative session.

“Newsom’s vetoes bolster AT&T’s and Frontier’s rural monopoly business model, which redlines poorer and less densely populated communities and leaves them with low speed DSL service, if they’re lucky enough to get anything at all,” he wrote.

The loss of AB 1212 and 417 won’t change much for Californians waiting for rural broadband. Neither measure would have led to any immediate improvement in internet access in the less populated areas of the state. But the measures would have set a foundation to bring two more state agencies into the fight to tackle rural broadband issues.

Ultimately, just as in other states, a large amount of money will have to be found to wire those still without internet access. Governments and regulators can either make rural internet expansion a contingency of future merger deals or other business-government transactions or find suitable funding to subsidize the cost of internet expansion by for-profit companies, rural co-ops, or local governments willing to tackle the problem on the local level.

Frontier residential customers in Nevada could receive a refund and improved service after a court filing from the Nevada Attorney General’s Bureau of Consumer Protection (BCP) found Frontier’s internet services lacking.

Since 2017, BCP has collected scores of complaints about Frontier’s internet service and its performance, mostly regarding slow service, frequent outages, and ongoing billing problems.

The BCP found Frontier liable under NRS Chapter 598 which forbids providers from misleading consumers about internet speed and service performance in marketing and advertising. An Assurance of Discontinuance filed with the court allowed Frontier to settle while avoiding admitting any wrongdoing and agreeing to correct service deficiencies.

The state found Frontier repeatedly did not disclose limitations of broadband service availability and knowingly marketed its DSL service at speeds the company could not provide customers.

According to the court document:

• Frontier is required to “clearly and conspicuously” disclose in its print and broadcast advertising the actual internet speeds available to customers in terms of minimum and maximum speed.
• Customers that sign up for a high-speed plan that Frontier cannot provide may switch to a lower speed plan or discontinue service incurring no penalties or early cancellation fees.
• Existing customers that do not receive at least 90% of the highest speed their current plan advertises will receive a service credit of 50% of the internet charge for each month Frontier did not provide such speed. Credits will begin in 2020 and end three years after the date the court accepts the Assurance.
• Frontier has also agreed to invest at least $1 million to improve internet service in Elko County.

Jeff Kagan is a name familiar to anyone that follows the cable industry. For over 30 years, Kagan has been tracking consumer perceptions about the telecom industry and offering insight into the challenges these and other businesses were likely to face in the future.More recently, Kagan has been fretting about the growing trend of retail businesses paying more attention to cultivating their relationships with Wall Street while targeting their customers for abuse.

“I have been noticing how in recent years, retail is becoming increasingly unfriendly to the customer. This is a mistake,” Kagan offers in a new opinion piece on Equities.com. “New technologies and new ideas may be good for the bottom line in the short-term. They may solve problems like shoplifting, and that may make investors happy today. However, in the long-term, these customer unfriendly trends will take their toll as customers will shop where they feel appreciated, respected and wanted. Customers shop at stores they love. Love is an emotion. So, we must think of winning the customer with emotion. This is difficult for most businesspeople to understand.”

‘My way or the highway’-type attitudes from retailers come from all sorts of businesses. Warehouse clubs make you pay for the honor of shopping there. Chains like Walmart are beefing up security teams and in some places now demand to see receipts from customers exiting the store. But nobody has abused customers better and longer than the telecom industry. Not even the cattle car-like airlines.

Kagan

After literally decades of almost bragging about their “don’t care” customer service while throwing attitude and intransigence at customers unhappy with service or pricing, the nation’s biggest cable and phone companies are now experiencing long-overdue customer revenge. Kagan notes that cord-cutting is not just about switching to a competitor for service. Many customers are literally thrilled to see the back end of their long hated provider.

Decades of monopoly service made abusing customers a risk-free and very profitable strategy for companies like Comcast, AT&T, Charter, Cox, Mediacom, and Verizon. In fact, someone turned the concept of the “cable guy” into a horror movie. Did you stay home from work to wait for a service call that never materialized? Tough luck. Don’t like yet another rate increase? Too bad.

“The reason they did this was, they had no competition in their market area. That meant the customer could not leave them,” Kagan noted.

After years of getting a bad reputation, only two things threatened to scare telecom companies straight — the fear of imminent regulation, such as what happened in 1992 when reregulation of cable companies turned out to be the only bill that year to be vetoed by President George H. W. Bush and overridden by the U.S. Senate to become law.

The other, much more scary fear is competition. In the mid-1990s, the nation’s biggest phone companies including what we now know as AT&T and Verizon were contemplating getting into the video business. This proved far more threatening than the much smaller home satellite dish business, which attracted around three million Americans at the time. The cable industry spent years taking shots at satellite competitors, including sticking dishowners with the cost of buying a $300 descrambler box up front, and charging as much (or even more) for programming than cable customers paid, despite the fact homeowners had to purchase and service their own dish, often 6-12 feet wide and not cheap to install.

The cable industry feared phone companies would charge ratepayers to subsidize their entry into the television business and sought protective legislation prohibiting the same cross-subsidization the cable industry would later rely on to introduce broadband and phone service.

More recently, after the country reached “peak cable” — the year the highest number of us subscribed to cable TV, the industry recognized it was likely all downhill from there. Comcast, in particular, specialized in empty lip service gestures to improve the customer service experience. For years, it promised to do better, only to do worse. The company even attempted to shed its bad reputation by changing the brand of its products from Comcast to “XFINITY.” Customers were not fooled, but that did not stop Charter from following Comcast’s lead, introducing the “Spectrum” brand to its products and almost burying its corporate name, which it barely references these days.

Kagan notes not following through on the customer service experience made cable companies ripe for stunning customer losses as new competitors for video service emerged. Comcast and Charter are among the biggest losers of cable TV customers, but their bad attitudes persist. Their latest ideas? Keep raising prices, rely on tricky Broadcast TV surcharges that are soaring in cost, end customer retention offers for dissatisfied video customers, and make up the difference in lost revenue by jacking up the price of broadband service, which is already nearly all-profit.

“The bottom line for any business is always focus on the customer. If they are happy, your business will remain strong and growing,” Kagan warned.

At some point, customers will get more choices for broadband service. Community owned broadband solutions have been very successful in communities that have experienced the worst abuse AT&T, Comcast, and Charter can deliver. In the future, fixed 5G wireless may provide perfectly respectable internet service if it is not data capped. Next generation satellite providers, interloping independent fiber to the home providers, and mesh wireless providers may offer consumers a number of options that can deliver suitable service and perhaps finally put cable and phone companies in their place.

The next standard for cable broadband is now due by 2020.

For over a year, the cable industry has been stalled after deciding to slash investment in broadband while enduring indecision and confusion over the next generation of cable broadband.

At issue is a simmering disagreement — rare for the usually unified cable industry — about the next generation of cable broadband, dubbed DOCSIS 4.0.

Two sides have emerged. Cable giant Comcast has spent years gradually preparing its network for perhaps the last iteration of coaxial copper-delivered cable internet service. It has spent at least five years gradually pushing optical fiber closer to its customers, retiring additional coaxial cable and the amplifiers and other equipment associated with that technology. The result is a company ready to embrace Full Duplex DOCSIS, known as “FDX.”

FDX is designed to allow upload and download traffic to share the same spectrum, letting cable companies put internet service bandwidth to full use with maximum efficiency. Comcast wants FDX to be a central part of DOCSIS 4.0. The company has been working through a long-term plan to offer much faster internet service, including symmetrical broadband — unified upload and download speeds. This would erase the cable industry’s broadband Achilles’ heel: download speeds much faster than upload speeds.

To achieve FDX, cable companies have to push fiber much deeper into their networks, sometimes right up to the edge of neighborhoods. It also means eliminating signal amplifiers that help keep signals robust as they travel across older coaxial cable infrastructure. Engineers call this concept “Node+0” architecture, which means a network with zero amplifiers.

FDX gives the cable industry the opportunity of running a more robust broadband network, easily capable of 10 Gbps with an upgrade path to 25 Gbps later on. The downside is that it can be very expensive to implement, especially if a cable company has under invested in upgrades and not incrementally laid a foundation for FDX. Wall Street may balk at the upgrade costs. The logistics of readying degrading older infrastructure to launch FDX may be so onerous, some cable systems may find it more cost effective to scrap their existing hybrid fiber-coaxial (HFC) networks and switch to a state-of-the-art fiber to the home network instead. That is precisely what Altice USA is doing with its Cablevision/Optimum system in New York, New Jersey, and Connecticut.

Charter Communications, along with many other smaller cable operators, have been pushing an alternative to FDX that is likely to cost much less to implement. Extended Spectrum DOCSIS (ESD) is designed to work over existing cable systems, including those that still rely on amplifiers and aging coaxial cable. Instead of allowing internet traffic to share bandwidth, ESD follows the existing standard by keeping upload traffic on different frequencies than download traffic. It simply extends the amount of bandwidth open to both types of traffic, which will allow cable systems to raise speeds. ESD will dedicate frequencies up to 3 GHz (and higher in some cases) for internet traffic. DOCSIS 3.1, the current standard, only supports internet traffic on frequencies up to around 1.2 GHz. ESD will also allow cable companies to raise upload speeds and should support up to 10 Gbps downloads. But there are some questions about how well ESD will support 25 Gbps speed and the condition of the cable company’s existing coaxial network will matter a lot more than ever before. A substandard network will cause significant speed degradation and could even disrupt service in some cases.

Despite the limitations of ESD, many cable companies consider its low implementation cost a principal reason to support it over FDX.

For much of this year, cable companies have put upgrades on hold as the industry sorts out which direction DOCSIS 4.0 will take. Equipment manufacturers and vendors have resorted to layoffs and cutbacks and have signaled neither Comcast nor other cable companies are big enough to justify different DOCSIS standards supporting FDX or ESD.

Comcast and Charter are the two largest cable companies in the United States.

Therefore, the cable industry has informally decided DOCSIS 4.0 will need to support both FDX and ESD under a single specification, with next generation cable modems and equipment capable of supporting either technology. At a joint pre-Cable-Tex Expo conference held on Monday, executives from Comcast and Charter appeared to support the new unified approach to DOCSIS 4.0.

John Williams, vice president of outside plant engineering and architecture at Charter Communications, told attendees cable companies need to support both FDX and ESD and stop taking an “either/or” approach.

“In order to do this, we need to look at the synergies and embrace ESD and FDX as the next generation of HFC,” Williams said. “It’s all about scale.”

Charter has been significantly challenged historically because its own legacy cable systems were often behind the times and sometimes dilapidated. Its 2016 acquisition of Time Warner Cable and Bright House Networks only complicated things further, because neither operator had a reputation for using state-of-the-art HFC technology. Costly upgrades have been underway at many Charter-owned cable systems since the merger closed, some still ongoing.

Robert Howald, part of Comcast’s network upgrade team, called the emerging DOCSIS 4.0 standard a “perfect complementary pair” of FDC and ESD. He noted both approaches will allow cable systems to boost speeds to at least 10/10 Gbps, with faster speeds in the future.

Howald pointed out Comcast is already testing FDX technology in Connecticut and Colorado, working out bugs and unexpected technical challenges.

“We feel like we’ve significantly de-risked some of the technology components of FDX,” Howald said. “We felt really good about what we saw in the field.”

What is Full Duplex DOCSIS? This video from CableLabs explains the technology and how it differs from other DOCSIS cable broadband technology. (1:58)