Gary McCallum, a Shaw customer in Edmonton, Alberta, has received word his broadband service is about to get more expensive — a lot more expensive.

“Holy crap, it’s like text messaging [bill shock] all over again when your broadband bill arrives and you are now looking at hundreds of dollars instead of the $40 or $50 you used to pay,” McCallum told CTV News.

McCallum, and other designated “heavy users,” are receiving letters in the mail from Shaw notifying them they have been exceeding the company’s declining usage limits imposed on its broadband service.  If they exceed the limits again, they may be subject to penalty fees of as much as $2 per gigabyte.

“I’m upset about the backdoor tactics,” McCallum complains.  “They keep it secret and then lambaste you later.”

Most Shaw customers will be forced to confine their usage to 60GB per month, the limit on the company’s most popular broadband plan.  If they don’t, after some warning, they’ll pay a stiff fine.  Just 20GB of overlimit usage will more than double the average customer’s broadband bill, currently around $37 a month.

A house full of teenagers watching Netflix or downloading files could cost far more than that.

Company officials deny the potential revenue bonanza is unjustified.

Customers who use more will pay more, admits Terry Medd, vice-president of operations for Shaw Communications in Calgary.

“It’s video over the Internet that’s driving a lot of this cost,” he said. However, most Shaw Internet customers won’t hit their caps, Medd claims, suggesting it should affect fewer than 10 per cent of customers.

“The average user consumed about one-third of what the cap is. In other words, we’ve set the caps at three times the average usage. For the average user, there’s no concern here,” Medd said.

However, Shaw recently reduced their usage caps on virtually all of their Internet plans, making it more likely customers will be snagged by overlimit fees.

Some customers want to know what they will get if they use far less than their plan allowance.

Don McGregor believes Shaw’s plan to charge Internet users for the data they use is fair and equitable, so long as those who use less than the allowance get a break on their bills.

“Shaw should plan on refunding fees for any use of data below the contracted amount,” the Edmonton resident wrote in a letter to the editor published in the Edmonton Journal.  “Since 90 per cent of Shaw’s subscribers use less than the full GB capacity they pay for, I am sure these subscribers’ refund cheques are in the mail.”

Don, like other Canadians, is about to learn Internet Overcharging is never about fairness or saving customers money.  It’s about charging customers more for the same service they used to receive for less, without any improvements.  ISPs will not provide true “usage pricing” for consumers because it would slash revenue from their broadband service.

But western Canadians need not be victims of Shaw’s overcharging.  Telus, which sells landline-based DSL service in British Columbia and Alberta says it has upgraded its facilities to accommodate usage demands and won’t expose customers to overlimit fee bill shock.

Although Telus’ website does show usage limits, company officials claim they are rarely enforced, and not at the subscriber’s expense.

Telus could make a significant dent in Shaw’s customer base by dropping them altogether, which will save the phone company from these kinds of  silly legal gymnastics in their FAQ:

Why do you call your service unlimited, when my monthly usage is limited?
We refer to TELUS High Speed as being unlimited because you get unlimited hours of monthly access.

If you do not want to play Shaw’s Internet Overcharging game, perhaps spending time with a new Xbox 360 would be better?  Telus is giving them away to qualified new customers signing up for service.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/CTV Edmonton Shaw Internet Overcharging 1-7-11.flv[/flv]

CTV News in Edmonton informs Alberta’s Shaw customers their broadband service could get a lot more expensive.  (2 minutes)

While Time Warner Cable trumpets upgraded broadband services in many of the states it provides service, South Carolina and some other southeastern areas are the exception.

Stop the Cap! reader Brett writes Time Warner’s broadband experience in South Carolina is so four years ago.

“Check out the paltry speeds that Time Warner Cable offers in Columbia. As far as I can tell we are the slowest region around.  The very best package they offer, with PowerBoost, is 10Mbps for downloads, 512kbps for uploads,” Brett writes.  “How sad.”

Most Columbia customers get less than that.  The standard Road Runner package has been stuck at 7Mbps down and 384kbps for some time.

While broadband speeds have not changed, the rates have.  Time Warner Cable announced rate increases throughout the Carolinas in December, boosting prices for many services.

Time Warner Cable spokeswoman Rose Dangerfield said needed upgrades were part of the reason for the rate increase.

“The company spent $380 million in the past year to upgrade equipment in South Carolina and North Carolina,” she said.

A review of Time Warner Cable’s speeds in the Carolinas and the states of Virginia and Alabama makes one wonder where the money went, because Brett shares company with other customers across most of the region.

Last year, Stop the Cap! told you the story of Mark Williams, the Lee, Massachusetts resident that was quoted an installation fee of $12,000 from Time Warner Cable.

The town intervened, claiming the cable company was violating its franchise agreement by not providing standard cable installation for any customer who also received electric and phone service.  Time Warner agreed to reduce the fee to $4,000 — still unacceptable to Williams.  Months later, and after a threat of sanctions from the Board of Selectmen, Williams got his cable-TV, broadband, and phone service installed for $35 — the same rate other Berkshire customers pay.

Williams did have to spend around $1,500 to bury an underground cable that runs some 600 feet from the nearest utility pole to his home.  Williams wasn’t interested in overhead wiring and didn’t mind paying the additional fee to have the cable buried where he wanted it.

Cable companies routinely deny cable television services to customers who live in sparsely populated areas, where the company is not expected to earn back its wiring investment within a short period of time.  In such cases, either the customer (and other interested neighbors) split the wiring costs or they go without service.  But Lee’s franchise agreement insisted the cable company wire any customers in its franchise area who also have access to other utilities, which includes nearly everyone.

Other communities trying to get their outlying residents cable service could find providers amenable if they insist on similar clauses during franchise renewal negotiations.

Williams tells The Berkshire Eagle he is grateful for the support of his town government, especially patent attorney Malcolm Chisholm of the Lee Cable Advisory Committee for taking on Time Warner on his behalf.

“He’s a real terrier and sinks his teeth into something until it’s done right,” Williams told the newspaper.

If you are a Time Warner Cable “digital phone” customer living in New York or western Massachusetts, you can get a few dollars of your money back thanks to serious outages that have plagued the cable company for the past two weeks.

The worst problems occurred yesterday, when customers across the entire region couldn’t make or receive calls in many instances.

“My wife said it was like the whole system crashed,” reports Stop the Cap! reader Marcus, who lives near Syracuse.  “A lot of people here are very upset.”

Marcus reports he couldn’t even work around the outage by trying to set up call forwarding to send calls to his cell phone or another Voice Over IP provider.

“I tried to forward my Time Warner calls to a Vonage number I have and that didn’t work either,” Marcus writes.

We heard from several readers in Rochester, Albany, Syracuse, and even into western parts of Massachusetts that calling a Time Warner Cable customer from a cell phone or a landline from Verizon or Frontier was nearly impossible without getting a recording or busy signal.

Small business customers using Time Warner’s phone service were also impacted in some cases.

Lakeview Deli in Saranac Lake posted a message on its Facebook page just before noon, advising its customers to call in their lunch orders using a cell phone number because of the problems with its main phone line. Owner John Van Anden said he normally gets 30 to 40 calls around the lunch hour; he got only four on Tuesday.

“It hurt (business) quite a bit just because you can’t get phone calls from customers,” he said.

The outage, which lasted more than 12 hours, was reportedly finally fixed by the cable company last evening at around 11pm.  No explanation for the outage was given by Time Warner Cable.

This is the third major service problem for Time Warner’s phone service this month:

1. Time Warner misdirected 911 emergency service calls to a call center in Colorado;
2. Time Warner underestimated call volumes, leaving customers in central New York with “all circuits are busy” recordings or busy signals;
3. Yesterday’s collapse of Time Warner’s phone network.

“Wow, this is starting to make Frontier look good again,” says our Rochester reader Kevin.  “I’ll be dropping my phone service with the cable company when my promotion ends and sticking with my Verizon cell phone.”

With all of these service outages, you know what that means — it’s time to go grab those service credits.  Customers in central New York can apply for at least a week of service credits because of the ongoing problems the company faces handling call volumes.  Everyone else in the region with “Digital Phone” service qualifies for a day’s worth of credit.  But you won’t get it unless you ask.  We’ve made asking simple, with our cut and paste process:

Stop the Cap! Presents Your Easy Service Credit Request Menu

Customers in the northeast can request one day of credit for yesterday’s phone outage.  Residents in central New York, including Syracuse — can ask for one week of credit for ongoing call congestion problems.

Sample Request You Can Cut and Paste:

I am writing to request one day service credit for the phone service outage that occurred in my area yesterday, Tuesday Jan. 18th. Please credit my account.

[Central NY Residents ONLY]: I am writing to request a credit for one week of telephone service to cover the company’s ongoing intermittent call connection problems in our area as well as yesterday’s (Jan. 18) more widespread service disruption.  I am concerned about the repeated problems Time Warner seems to be having in correctly servicing my telephone needs.  Please credit my account.

Use the Online E-Mail form, select Billing Inquiry, and send a message requesting credit.

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WSYR-TV in Syracuse is spending plenty of time covering Time Warner’s phone outages and other problems.  Here’s the fourth report this month, covering yesterday’s widespread problem. (Warning: Loud Volume) (2 minutes)

The wedding of Comcast and NBC-Universal was given the blessings of two federal agencies today that all but seals the multi-billion dollar deal.

In a 4-1 decision, the Federal Communications Commission approved the merger.  It’s chairman, Julius Genachowski, claimed it would ultimately be good for consumers as the company promised to add at least 1,000 hours of news and information programming and a new ultra-budget “lifeline” broadband tier priced at $9.95 per month for low-income families.

The lone dissenter, Democratic commissioner Michael Copps, rejected notions that a combined company the size of Comcast, which controls more than a quarter of all cable subscribers, and NBC-Universal, a major media company, would deliver anything to consumers.

“It’s too big. It’s too powerful. It’s too lacking in benefits for American consumers,” Copps said after the FCC vote to approve the merger. “And it continues us down a road of consolidation we’ve been on for a couple of decades now.  And the most threatening part about it is that this is not just traditional media, but it’s new media, too. It touches just about every aspect of our media environment.”

National Public Radio’s ‘All Things Considered’ gave measured coverage to today’s Comcast-NBC merger developments, and how it will impact consumers. (3 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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Indeed the combined Comcast-NBC will own or control one of every seven television channels and networks seen by Americans.  Copps worries that kind of media concentration is sure to reduce diversity in programming and on-air voices.

Even worse, some analysts predict the merger could trigger a new wave of media consolidation as other players try to maintain their positions in the media marketplace.  Second-place Time Warner Cable could begin looking for merger opportunities with smaller cable companies, such as Cox, for example.

Just about an hour after the FCC gave approval, the Justice Department and five states’ Attorney General announced a tentative settlement that could resolve concerns that the transaction was anti-competitive.

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WNYW-TV in New York reported on today’s merger decision and explained how Comcast customers, and online video fans, could be impacted.  (3 minutes)

The Terms & Conditions

Two different federal agencies insisted on Comcast’s agreement to several terms and conditions before agreeing to the deal.  Many of them presented no problem for Comcast, who had voluntarily agreed to several of them early on in negotiations.  But the Justice Department delivered one of the strongest conditions, and a first for online video protection — it insisted the new combined entity of Comcast-NBC bow out of its voting rights in Hulu, the online video service.

√ No Playing Favorites: Comcast has to agree that if it carries its own news and business channels, it has to include competitors on the same tier.

Since Comcast-NBC has ownership interests in so many news, sports, and weather channels, making space for the competition was considered crucial by federal regulators.  The cable company can’t bury its competitors in Channel Siberia, or stick them on “digital tiers” that are priced higher than standard cable service.  Who wins?  Bloomberg News, rarely found even by cable viewers who go looking, and the very low-rated Fox Business Channel, which can’t attract 30,000 viewers on a good day.  Both will find prominent positions on Comcast Cable going forward, even if nobody watches.

√ Cheap Internet Access for Qualified Families: Comcast has agreed to provide a “lifeline” broadband service, but only for families pre-qualified by federal eligibility for free school lunches.

No word on what speeds these customers will receive, and Comcast estimates the program will barely make a dent in its bottom line.  It is expected to reach only around 400,000 homes nationwide, and only as long as those subscribers remain eligible under federal guidelines.  No free lunch for broadband.

√ Standalone Internet Service Must Be Provided: Comcast must sell at least a 6Mbps broadband plan without cable or telephone service for $49.99 a month for three years.

Since Comcast already routinely sells standalone broadband service to customers at around this price, this was hardly a concession.  Comcast can still pile on extra fees, such as their overpriced cable modem rental, and any other charges that could be mandated by federal, state, or local government in the future.  They can also keep their usage caps.

√ Comcast must agree to the FCC’s Homeopathic Net Neutrality Rules:  Comcast has to agree to the FCC’s heavily-watered down definition of Net Neutrality… the ones Comcast itself suggested.

Since the FCC largely caved-in to Big Telecom’s lobbying against Net Neutrality, Comcast’s agreement to adhere to what the FCC calls Net Neutrality won’t present any problems, because those terms were similar to what Comcast had asked for all along.  Their “digital phone” service is exempted, which means Comcast can “manage” competing Voice Over IP services at its pleasure.

√ Evidence That PBS Has A Lobbyist, Too — Special Favors for Public Broadcasting: Public television stations win carriage protection from Comcast “for several years.”

In an effort to free spectrum, PBS stations could be pressured to give back some channels or reduce their transmitter power to free up UHF frequencies for more wireless broadband.  Should this happen, Comcast has agreed to keep those stations on their cable systems as if nothing changed at all.  It assures stations that even if their broadcast coverage areas are reduced, their cable carriage will stay the same.

√ Binding Arbitration Comes to Buyers of Comcast-owned Networks:  If a cable system or other provider runs into trouble getting an agreement with Comcast, the FCC offers help.

To protect other cable systems, telco-TV, and satellite companies from uncompetitive pricing or access blockades to Comcast-controlled networks, the cable company agrees to come to the table and submit to binding arbitration over carriage disputes.  Unfortunately for Comcast subscribers, the cable giant can’t force broadcasters or other cable networks to the same table to settle their own carriage wars.

√ Online Access to Programming Comes to Existing Players, Unless Something Big Changes: Everyone loves the status-quo, and this agreement assures it.

The Department of Justice provisions protecting access to online video programming were carefully crafted by lawyers with one eye on Washington and the other on Wall Street.  It effectively provides “stability” in the marketplace and avoids the kinds of competitive surprises Wall Street hates.  Effectively, the agreement grants access to Comcast-owned programming to ventures that existed prior to the agreement reached today.  Existing players have the government’s assurance carriage contracts are secure.  Those with a pre-existing relationship to Comcast can also purchase the entire bouquet of Comcast-controlled programming (no a-la-carte) at prices similar to those charged to other cable and satellite customers.

But brand new players that threaten to turn existing business models on their heads?  Forget it.  The agreement says nothing that would require access to Comcast programming for upstart services like ivi, or even Google TV for that matter.  The only potential, real-world competitive scenario comes if an existing player (say Time Warner Cable, Verizon FiOS, or AT&T U-verse) decided to start a national virtual online cable company open to any American, anywhere.  What are the chances of that happening?  How many of you can choose Time Warner -or- Comcast? Verizon FiOS -or- AT&T U-verse?  Would AT&T risk its U-verse revenue selling Time Warner Cable customers the same channel lineup, knowing it can’t also easily bundle broadband and phone packages with it?

√ No Voting Rights for Hulu: Comcast agrees to limit its role in one of the biggest potential reasons some consumers are prepared to cut cable’s cord.

The Justice Department’s requirement that Comcast effectively butt-out of the day to day decisions affecting Hulu may protect consumers, but Hulu’s partners don’t want to devalue their programming by giving it away for free forever, either.  Nothing prohibits the birds-of-a-feather-partners in Hulu to put the service under a full ad load or behind a pay wall, reducing its value and interest to consumers.  Or, the whole project could be terminated at the behest of News Corp. and Disney.

Whatever consumer protections the FCC and Justice have included, they won’t last forever.  Virtually all expire within three to seven years, at which point Comcast might be humbled by the culmination of a bad business decision the likes of AOL-Time Warner, or become Comzilla, ready to trample its competition (and consumers) into the dirt.

Was This a Commission Cave-In or a Foregone Conclusion?

Although Commissioner Copps calls today’s decision a “dangerous” deal, some ex-regulators suggest the package presented to federal regulators was effectively a foregone conclusion.

Bruce Gottlieb was formerly Chief Counsel of the Federal Communications Commission, and offered his take on today’s developments for The Atlantic:

How mergers at the FCC will play out is notoriously hard to predict, but the ultimate result is not. The historical truth is that, in virtually every instance, the commission will approve any major proposed transaction. The only time in recent memory that the commission declined to do so was the proposed merger of the two leading satellite-TV providers (Echostar and DirecTV) — and that marriage was running into problems with other agencies long before the FCC put the final nail in the coffin.

(Yes, then-Chairman Reed Hundt also famously ended rumors of an AT&T and Southwestern Bell merger in 1997 by preemptively declaring it “unthinkable.” But those companies simply had to wait until 2005, when a different FCC chairman let it go through.)

The real action at the FCC involves what “conditions” the agency will put on a merger. These are supposed to be narrowly tailored to address specific harms raised by the merger at issue. But, regardless of who is in charge at the agency, it’s all relative.

Often, the conditions applied to a particular merger have more to do with what the chairman and commissioners at the time want to achieve on an industrywide basis. It’s just easier to get these things done when you have the extraordinary leverage of controlling the timing of a multibillion-dollar transaction that the parties are desperate to consummate.

[…]  The FCC’s rules, as described in the press release announcing the merger, appear to be aimed at ensuring that “over the top” providers have fair access to programming (which the NBCU part of Comcast-NBCU will provide), as well as to consumers (which the Comcast part of Comcast-NBCU will provide).

This is, by far, the strongest statement yet from the commission about the importance of over the top video competition. But the business and regulatory stakes in this fight are only going to increase over time. Indeed, the two Republican commissioners (Robert McDowell and Meredith Attwell Baker) issued separate statements saying they have concerns over whether the FCC should be writing rules to encourage over the top video. So this is likely to be the first skirmish in what will surely be a long and bloody war.

In the weeks ahead, the lawyers will be able to parse the specific provisions to see where the loopholes are and how it will all play out in practice. The details surely matter. But years from now, the specifics of what was decided in this merger may mean a lot less than the fact that the FCC is now deeply involved in the multifront war to decide who will win online video.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/PBS Newshour Comcast Merger Announced 12-3-09.mp4[/flv]

More than a year ago, PBS’ ‘The Newshour’ explored the reasons why Comcast and NBC-Universal would want to join forces.  Now, after millions of dollars of Comcast subscribers’ money has been spent lobbying for approval, will consumers ultimately pay an even higher price later on?  (12/3/2009 — 11 minutes)