More drive-by reporting on Comcast’s usage caps.

When the media covers Internet Overcharging schemes like usage caps and consumption billing, it is often much easier to take the provider’s word for it instead of actually investigating whether subscribers actually need their Internet usage limited.

Comcast’s planned reintroduction of its usage caps on South Carolina customers begins Friday. Instead of the now-retired 250GB limit, Comcast is graciously throwing another 50GB of usage allowance to customers, five years after defining 250GB as more than generous.

The Post & Courier never bothered to investigate if Comcast’s new 300GB usage cap was warranted or if Charleston-area customers wanted it. It was so much easier to just print Comcast’s point of view and throw in a quote or two from an industry analyst.

In fact, the reporter even tried to suggest the Internet Overcharging scheme was an improvement for customers.

The newspaper reported Comcast was the first large Internet provider in the region to allow customers to pay even more for broadband service by extending their allowance in 50GB increments at $10 a pop. (Actually, AT&T beat Comcast to the bank on that idea, but has avoided dropping that hammer on customers who already have to be persuaded to switch to AT&T U-verse broadband that tops out at around 24Mbps for most customers.)

Since 2008, the company’s monthly limit has been capped at 250 GB per household. When customers exceeded that threshold, Comcast didn’t have a firm mechanism for bringing them back in line, other than to issue warnings or threaten to cut off service.

“People didn’t like that static cap. They felt that if they wanted to extend their usage, then they should be allowed to do that,” said Charlie Douglas, a senior director with Comcast.

Charleston is the latest in a series of trial markets the cable giant has used to test the new Internet usage policy in the past year. As with any test period, the company can modify or discontinue the plan at any time.

During the trial period in Charleston, customers will get an extra 50 GB of monthly data than they’re used to having. If they exceed 300 GB, they can pay for more.

“300 GB is well beyond what any typical household is ever going to consume in a month,” Douglas said. “In all of the other trial markets with this (limit), it really doesn’t impact the overwhelming super-majority of customers.”

The average Internet user with Comcast service uses about 16 to 18 GB of data per month, Douglas said.

Customers who use less than five GB per month will start seeing a $5 discount on their bills.

“We think this approach is fair because we’re giving consumers who want to use more data a way to do so, and for consumers who use less, they can pay less,” Douglas said.

Data caps are designed to stop content piracy?

The Charleston reporter asserts, without any evidence, “data-capping is a trend many Internet service providers are expected to follow in the next few years as the industry aims to reduce network congestion and to find safeguards against online piracy.”

Suggesting data caps are about piracy immediately rings alarm bells. Comcast and other Internet Service Providers fought long and hard against being held accountable for their customers’ actions. The industry wants nothing to do with monitoring online activities lest the government hold them accountable for not actively stopping criminal activity.

“It’s not about piracy, per se,” said Douglas. “We don’t look at what people are doing. The purpose is really a matter of fairness. If people are using a disproportionate amount of data, then they should pay more.”

Comcast’s concern for fairness and disproportionate behavior does not extend to the rapacious pricing and enormous profit it earns selling broadband, flat rate or not.

MIT Technology Review’s David Talbot found “Time Warner Cable and Comcast are already making a 97 percent margin on their ‘almost comically profitable’ Internet services.” That figure was repeated by Craig Moffett, one of the most enthusiastic, well-respected cable industry analysts. That percentage refers to “gross margin,” which is effectively gravy on largely paid off cable plant/infrastructure that last saw a major wholesale upgrade in the 1990s to accommodate the advent of digital cable television and the 500-channel universe. Broadband was introduced in the late 1990s as a cheap-to-deploy but highly profitable, unregulated ancillary service.

How things have changed.

Just follow the money….

Customers used to being gouged for cable television are now willing to say goodbye to Comcast’s television package in growing numbers. Today’s must-have service is broadband and Comcast has a high-priced plan for you! But earning up to 97 percent profit from $50+ broadband isn’t enough.

A 300GB limit isn’t designed to control congestion either. In fact, had she investigated that claim, she would have discovered the cable industry itself disavowed that notion earlier this year.

In fact, it’s all about the money.

Michael Powell, the head of the cable industry’s top lobbying group admitted the theory that data caps are designed to control network congestion was wrong.

“Our principal purpose is how to fairly monetize a high fixed cost,” said Powell.

Powell mentioned costs like digging up streets, laying cable and operational expenses. Except the cable industry long ago stopped aggressive buildouts and now maintains a tight Return On Investment formula that keeps cable broadband out of rural areas indefinitely. Operational expenses for broadband have also declined, despite increases in traffic and the number of customers subscribing.

[flv]http://www.phillipdampier.com/video/CNBC Internet v. Cable 8-20-10.flv[/flv]

Don’t take our word for it. Consider the views of Suddenlink Cable CEO Jerry Kent, interviewed in 2010 on CNBC. (8 minutes)

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” said Suddenlink CEO Jerry Kent. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Unfortunately, Charleston residents don’t have the benefit of reporting that takes a skeptical view of a company press release and the spokesperson readily willing to underline it.

If Comcast seeks to be the arbiter of ‘fairness,’ then one must ask what concept of fairness allows for a usage cap almost no customers want for a service already grossly overpriced.

More than 5,000 residents and businesses living on the island Bailiwick of Jersey now have a choice of two Internet Service Providers – both supplying gigabit fiber optic broadband.

Jersey Telecom, a government-owned provider, has been removing obsolete copper wiring and replacing it with fiber to the home service that should reach the entire island by 2015. The fiber network is open to all competitors. JT charges £59.99 ($97.25) per month for gigabit speeds, but now caps usage at just 100GB a month. Overlimit fees are around 50c per GB between the hours of 8am-midnight. Usage is unlimited during off-peak hours.

In addition to JT, Jersey customers who live on the remote Channel Island, a British Crown Dependency off the coast of France, can now also choose Sure Jersey, a privately owned ISP that offers unlimited use plans.

The fiber optic network is spreading to other Channel Islands, with significantly populated parts of Guernsey set to receive a fiber upgrade next.

Using traditional Return On Investment standards, Jersey would barely qualify for basic DSL service. The island has a population of just 100,000 residents, some spread far and wide in remote locations. Basic DSL service was supplied to customers in more densely populated communities, but speeds were often slow and congestion became a major problem, especially at night.

The local government determined Jersey’s broadband needs could best be met by upgrading to government-owned infrastructure that private businesses could lease to sell service. Much like public roads benefit private companies that use them to transport goods, JT’s fiber network is designed to help bolster the island’s digital economy.

Since the introduction of gigabit fiber, new digital startups have launched on the island and others have moved their digital businesses to the fiber-enabled island. FeelUnique, launched from Jersey, has now become Europe’s largest online beauty retailer, employing over 150. Other businesses on the island have launched software ventures for the health care and education markets, banking/investment products and services, and 3D printing ventures. Having a wide broadband pipe has helped anchor digital businesses to the island because moving elsewhere leaves many with little better than substandard DSL or an enormous price tag for a customized new fiber build.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/JT Fiber Has Arrived 2013.mp4[/flv]

Residents of Jersey talk about how fiber broadband has changed their online experience. (2 minutes)

 [flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Digital Jersey Limited – Vision 2014 from Digital Jersey.mp4[/flv]

Digital Jersey released this video showing the group’s vision on how to leverage gigabit fiber broadband to boost the island’s digital economy in 2014. (3 minutes)

Verizon Voice Link

Verizon’s wireless solution for landline infrastructure damaged during last year’s Hurricane Sandy has not been a runaway success for the phone company, only attracting 120 customers on New Jersey’s barrier island.

After Hurricane Sandy damaged the telephone network on the peninsula, Verizon announced it would reinstate telephone service using Verizon Voice Link — a wireless landline replacement that works over Verizon Wireless’ network. The announcement was not well received by New Jersey residents — customers don’t want the service and after Verizon Wireless experienced a major service outage in Ocean County, N.J. in September, many don’t trust the service to be as reliable as the landlines it replaced.

Mantoloking resident Peter Flihan thinks Verizon delivered its own blow to the island, post-Sandy. Flihan has Voice Link, but after using it he says he wants his old landline back and is very unhappy with the performance of Verizon’s wireless replacement.

“They told us this was the greatest thing in the world,” Flihan told the New York Times.

But the service takes away more than it provides, argue consumer groups including the AARP. Flihan’s old landline worked during power outages, Verizon Voice Link only has two hours of backup battery talk time. Landlines reliably reach 911. Verizon is less confident about Voice Link, going out of its way to disavow any responsibility if a customer cannot reach the emergency number because of technical problems or network congestion. Data services of all kinds don’t work with Voice Link either, even the venerable old dial-up modem. Neither will fax machines, medical monitoring equipment, or home security systems.

Flihan complains Verizon’s Voice Link can’t even reliably manage the function it was designed for — making and receiving voice phone calls.

Flihan told the newspaper roughly 25 percent of the calls he makes through the landline replacement do not go through the first time he dials, or sometimes the second or third. Other times, calls are disturbed with unusual clicking sounds, static, and other voices breaking into the line.

Fire Island residents report Voice Link also misses incoming calls, refuses to ring phone lines and often sends callers straight to voice mail. Others get recordings or busy signals.

Verizon disclaims legal responsibility for failed 911 calls in its Voice Link terms and conditions.

Verizon’s attempt to retire landlines in high cost areas has proven to be a public relations debacle for the phone company. More than 1,700 negative comments have been received by the New York Public Service Commission about Voice Link’s performance on Fire Island. Politicians also delivered repeated lashings to the phone company, claiming Verizon was abdicating its responsibilities by seeking to offer second-rate phone service.

In New Jersey, residents at least have a choice. Verizon maintains a monopoly on Fire Island, but in New Jersey it competes with Comcast, which also provides phone service.

Lee Gierczynski, a Verizon spokesman, noted Verizon’s landline business suffered even before Hurricane Sandy arrived. The FiOS-less island has left Verizon with a 25 percent market share. Verizon Voice Link’s numbers are even lower. Gierczynski admitted Verizon Voice Link has only 120 (out of 540 affected customers) signed up on the island.

While Verizon has refused to invest in an upgraded network for impacted customers, Comcast issued a press release announcing major upgrades for the New Jersey shore.

Comcast upgraded 144 miles of infrastructure supporting the hardest hit communities, reopened renovated service centers with increased staffing and extended hours, increased the number of available service technicians, and provided free access to an expanded Wi-Fi network.

“We know that Hurricane Sandy complicated life for millions of people, and many of our employees and facilities were affected by the storm,” said LeAnn Talbot, senior vice president of Comcast’s Freedom Region. “We were here for the Jersey Shore during and immediately after Sandy, we have been here to support since then and will remain as a partner tomorrow and beyond as people and communities work to rebuild.”

This summer, Comcast introduced its X1 set-top platform, rolled out a new Wireless Gateway, added a home security option, and opened thousands of additional Wi-Fi hotspots across coastal New Jersey. Customers were also given a dedicated phone number to reach Comcast regarding its rebuilding efforts.

Comcast invited Verizon customers to switch to its telephone service and noted it works fine for faxing, security systems and medical devices.

But Mantoloking resident Christine Wilder still isn’t happy.

“I didn’t want Voice Link,” Wilder told the Asbury Park Press last summer. Wilder signed up for Comcast, but would rather have her copper landline back.

Unfortunately for Flihan and Wilder, although Fire Island residents’ loud displeasure drowned Verizon’s plans for Voice Link in New York, those affected in New Jersey are fewer in number. To date, their criticism of Voice Link has not made Verizon uncomfortable enough to change course as they have on Fire Island and bring a FiOS fiber network solution to Mantoloking and other affected boroughs.

That face “troubles” New Jersey Rate Counsel Stefanie A. Brand.

“I am not sure why New Jersey is not getting the same level of service as New York from Verizon,” Brand told the newspaper in September. “It’s not enough to simply say there is cable in Mantoloking; therefore we don’t need to meet our obligation. Why are they not willing to do it for similarly situated customers in New Jersey?”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Verizon Voice Link A Reliable Alternative 10-3-13.mp4[/flv]

Verizon produced this video defending Voice Link as a reliable alternative to customers experiencing persistent problems with their landline service. (2 minutes)

Some Clearwire customers remain unhappy when speeds are throttled to “manage” the network.

Clear (formerly known as Clearwire) has announced a general rate increase of about 10 percent for customers using its legacy 4G WiMAX broadband service.

As a result, most customers will pay about $5 more per month for fixed wireless or “on the go” broadband service.

“We instituted this to remain competitive and manage our costs,” a Sprint representative told Broadcasting & Cable. “Like our competitors, we must respond to customer trends, and provide a good user experience, and as a result we will make adjustments to fees and services from time to time. Our offer is still comparable to other offerings in the marketplace.”

Some customers would argue with Sprint’s definition of a “good user experience,” as complaints continue about heavy-handed throttling of Clear’s service that makes high bandwidth applications painful or impossible to use in the evening.

Stop the Cap! reader Akos contacted us this week to complain Clear still advertises and contracts for “unlimited data and top speeds,” while not exactly being upfront about targeting certain traffic for a prime time speed throttle that effectively keeps customers from streaming video.

“They openly admit their service is being throttled by software at each tower site that activates when it detects streaming video services like Netflix, reducing speed from 1.3Mbps to as little as 20kbps, rendering it unusable,” said Akos.

The speed throttle is usually active from 8pm-1:30am daily, when traffic is anticipated to be highest. Clear speaks about its network management speed throttle in the fine print: its Acceptable Use Policy.

Akos complains Clear’s speed throttle makes it easy to blame the streaming service, not Clear itself, because customers running speed tests will not see throttled speeds.

“It fools people to think the problem is on their end or with the streaming service, so customers don’t complain to Clear,” says Akos.

As a result, people using streaming video services get about 30 seconds of uninterrupted video before the throttle kicks in bringing extensive buffering delays.

Clearwire’s Speed Throttle Subject of Lawsuits

Clear’s own 2010 marketing promises unlimited usage with no speed reductions, like those “other” providers.

Clearwire’s speed throttle has been a part of life with the wireless service since 2010. Clearwire had significant legal exposure over its choice of network management because the company routinely advertised “unlimited service” with no speed throttles or overlimit fees. At least three lawsuits were filed against the company for its undisclosed throttling practices, eventually condensed into a single class action case that was finally settled last month.

Under the terms of the settlement, Clear admits no wrongdoing, but will clearly disclose it uses “network management” practices — a term that generally means usage caps and/or speed throttles — and will give customers information about the speeds they can expect when the throttle is active. As of today, Clear has not done that. Clear also volunteered to suspend term contracts and waive early termination fees for customers complaining about speed issues.

At least seven law firms handling the case will split a total award fee of $1,887,792.91 and expenses of $62,207.09. Individual representative plaintiffs each receive up to $2,000. Everyone else identified as part of the class action case that returned a claim form prior to Jan. 3, will receive an average of less than $30:

• a 50% refund of any early termination fee charged after a customer canceled service because of speed throttling;
• a rebate of $14 for customers signing up for Clearwire before Sept. 1, 2010 and experiencing speed throttling or a rebate of at least $7 for Clearwire customers signing up on or after Sept. 1, 2010;
• plus varying amounts for each month of service prior to Feb. 27, 2012 during which Clearwire’s records show it throttled a customer’s Internet speed. Customers throttled at 0.25Mbps will receive $5.00 for each month throttled, 0.60 Mbps: $3.00, and 1.0 Mbps: $2.00.

Court documents reveal of the 2,733,406 customers identified in Clearwire’s records as being speed throttled, only 83,840 submitted timely claims as part of the class action case. This represents a claims rate of about 3.1%. Of those, 76,199 were for speed throttling, 2,331 were requests for reimbursement of early termination fees.

The Future of Clear’s WiMAX and Sprint’s 4G

Sprint purchased the assets of Clearwire Corporation in July, rebranded the network “Clear,” and as of the end of August, stopped selling WiMAX devices to customers. Although Clear will still activate existing equipment, potential new customers are being marketed broadband plans on the Sprint network instead.

Former Clear dealers have received word Sprint plans to eventually decommission its acquired WiMAX network as early as 2014, most likely by gradually converting portions of the 2.5GHz spectrum Clear’s WiMAX service now uses in favor of Sprint’s 4G LTE service in urban and high congestion areas. Clearwire itself was in the process of adopting a variant of 4G LTE technology that would gradually replace the outdated WiMAX standard when Sprint acquired the company.

Although Sprint runs its own 3G network, it partnered with Clearwire to provide 4G WiMAX for Sprint customers. In 2011, Sprint announced it would stop selling devices with built-in support for WiMAX and announced it would launch its own 4G LTE network. Sprint will adopt the same version of LTE other North American carriers are using: FD-LTE, or Frequency Division LTE, which requires one transmit channel and one receive channel. But it will also support and continue Clearwire’s upgrade to TD-LTE, or Time Division LTE, a slightly different standard that supports receiving and transmitting signals on a single frequency at slightly different time intervals, providing enhanced spectrum efficiency. At least 5,500 towers should be active with TD-LTE service by the end of this year. End users will care only to the extent their devices support one or both standards.

Sprint’s 4G LTE rollout will depend primarily on higher frequency spectrum that is disadvantageous indoors and over extended distances. Sprint’s competitors AT&T and Verizon Wireless primarily depend on lower 700MHz frequencies that penetrate buildings better and can serve a larger coverage area. But a combination of Sprint and Clearwire’s spectrum assets give Sprint the most wireless spectrum of any U.S. carrier, which means potentially faster speeds and more capacity.

• 1900MHz: Sprint’s primary 4G FD-LTE service is now available in 151 cities on more than 20,000 cell towers;
• 2500MHz: Now used by Clear’s legacy WiMAX network, will see a transition towards Sprint’s TD-LTE service which will be targeted to urban and high congestion areas from “small cell” sites;
• 800MHz: The former home of now-shuttered Nextel, Sprint will eventually launch FD-LTE service on this band which will offer better indoor and marginal area reception.

Customers can expect devices that support both FD-LTE and TD-LTE in 2014.

…fiction into “fact.”

Although America’s perennially worst-rated cable company is advertising “always faster Internet,” it is also moving “full speed ahead” to enforce usage limits to make sure customers don’t take too much advantage of those speeds.

Broadband Reports notes Mediacom is preparing notices stating effective Sept. 7 usage limits and overlimit fees that used to only apply to new customers or those changing plans will now be enforced for all customers.

A member of their social media team blamed bandwidth hogs for the caps.

“We have a small subset of customers that are using a very large portion of the available bandwidth, which can have a negative impact on the other Internet users in the surrounding area,” said Mediacom’s Social Media Relations Team. “By curbing this behavior, other customers can benefit with faster speeds.”

Actually, Mediacom will benefit from lower usage and higher revenue it will collect from the $10 overlimit fee for each additional 50GB of usage. Neighborhood congestion issues are largely a thing of the past because of upgrades to DOCSIS 3 technology.

Although the usage caps for higher priced tiers are generous by current standards, the company can adjust the caps up or down at any time. Mediacom traditionally serves rural areas or small cities that lack significant telephone company competition, so customers may have few alternatives. Both CenturyLink and AT&T have their own usage caps, barely enforced. Frontier Communications, another common provider in Mediacom territory, has tested the water with usage caps in the past but does not regularly impose them.

Broadband Reports assembled the pricing and caps for each Mediacom broadband tier: