Clearwire’s often-unclear “network management” policies are the subject of a lawsuit filed yesterday in Seattle seeking class action status.

Angelo Dennings vs. Clearwire Corporation was filed in the Western District of Washington federal court, and seeks refunds for consumers who were mislead by the company’s failure to disclose its network speed throttling and usage limitations, and charged early termination fees when subsequently canceling service.

Clearwire promises that its high-speed Internet service provides a “fast” and “always on, always secure” Internet connection allowing users to “[d]ownload pictures, music and videos.” But Clearwire does not provide an “always on,” “high-speed” connection as it promises. Clearwire purposefully slows the connection of its users because it cannot accommodate the high volume of traffic. Clearwire engages in a practice known as “throttling,” which is the intentional delay and/or blocking of Internet communications. This practice deprives Clearwire customers of the ability to “[d]ownload music and videos,” and leads to slow connection speeds.  Clearwire engages in throttling at times when demand for Internet use is highest, beginning at approximately 7:30 p.m. and ending at about 1:00-to-2:00 a.m.

If users attempt to cancel their service, Clearwire claims that, pursuant to its “contract” with them, it is entitled to collect an early termination or a re-stocking fee. The “contract” referred to by Clearwire is not a contract between it and its customers. The contract between Clearwire and its customers is simply that the customers will pay for, and Clearwire will provide, “unlimited” Internet usage at certain speeds, depending on the speed and payment plan selected in Clearwire’s stores, kiosks, or online.

The remaining “terms” invoked by Clearwire at its convenience are embedded in a document that consumers never see prior to subscribing to Clearwire’s service. Clearwire sells its services in its stores, kiosks at shopping centers, and online. Clearwire’s stores and kiosks do not have copies of this “contract” on hand for potential subscribers to read before they “agree” to its terms. Users who subscribe through Clearwire’s website never see the contract either because the link to it is at the bottom of a page, in substantially smaller font and lighter shade than all of the other text on the page. The text states: “Want to read the fine print (and who doesn’t read the fine print?) It’s all there in the CLEAR Legal Index.” No one wants to read fine print legalese and almost no one does. The statement is obviously and sharply ironic, and mocks anyone who may have been fussy enough to have considered continuing.

Despite not showing its terms to consumers, Clearwire refuses to allow users to cancel their service without paying the unconscionable fees it claims it is owed under this “contract.” These fees include an early termination fee (“ETF”), which penalizes consumers that want out before the end of the two-year term. Although Clearwire breached its contract with its customers, Clearwire insists on the payment of this ETF when customers realize they are not getting what they bargained for.

The suit argues that Clearwire has oversold its wireless broadband network, and allegedly quotes a company representative at one point telling Dennings, “Clearwire had signed up more customers than its cell towers could accommodate, and that therefore it was ‘managing’ users’ accounts.”

Attorney Clifford Cantor argues in the filing that Clearwire reduces customer speeds to 300kbps or lower when their network is congested, making the service unsuitable for most broadband applications.  Dennings, who lives near Ft. Worth, Tex., was outraged to learn Clear sold him a home and mobile broadband account that was advertised as a replacement for wired cable or DSL broadband, but was left with service he considered largely useless when throttled.  Even more upsetting, the suit alleges, Denning was asked to pay a $219 early contract termination and restocking fee when he tried to cancel service over the matter.

Cantor is asking for a court ruling declaring Clear’s policies to be unconscionable, attorneys’ fees of at least $5,000, and refunds for all impacted subscribers.

Thanks to Stop the Cap! reader Michael in Chicago for sending along a copy of the lawsuit.  He runs the “Clear/Clearwire internet not as advertised” Facebook group.

Average measured connection speed (All graphics courtesy: Akamai)

America is marching backwards with a gradual decline in broadband speeds, according to a new report issued today.

Akamai’s State of the Internet Report for the final quarter of 2009 (report only available with permission from Akamai) rates America 22nd fastest in broadband connections, averaging 3.8Mbps, and declining.  Speeds dropped 0.9 percent for the quarter, 2.5 percent for the year.

Still on top are South Korea, Hong Kong, and Japan, now joined by former Soviet bloc countries Romania, Latvia, and the Czech Republic — all rapidly improving broadband speeds by double digit percentages.

Within the United States, among the top 10 individual states — five rated increased speeds and five measured lower speeds.  Some attribute this to network congestion, others suspect some customers have downgraded service in a poor economy.  But the biggest reason for the speed drop comes from wireless broadband.  Some Americans are increasingly relying on broadband service delivered to smartphones or other wireless devices over slower speed networks.

Overall, 31 states saw average connection speeds increase in the fourth quarter – up from 25 in the prior quarter. Notable gains included South Dakota’s 18 percent jump to 4.5 Mbps. Fourth quarter decreases in average connection speeds were seen in 19 states and the District of Columbia, and included Virginia’s 13 percent drop to 4.0 Mbps. Akamai believes that the significant decline in Virginia was likely due, in part, to increased traffic seen from lower-speed mobile connections that entered the Internet through gateways within those states.

Increased speeds year over year were seen in 29 states, with Hawaii growing 33 percent to 4.7 Mbps.

South Korea’s introduction to the iPhone drove their average speeds down by a whopping 24 percent.  KT (formerly Korea Telecom) is at fault here — the national wireless carrier has slow wireless Internet speeds.

Stop the Cap! readers  in Rochester and Austin should notice both cities made the top ten fastest list, measured by Akamai.

[Thanks to Stop the Cap! reader Rob who sent us details.]

Fastest American Broadband Cities by Unique IP

Fastest Broadband States

Best Average Measured Connection Speeds (not suprisingly most are college towns)

Top 10 States

America's Broadband Emergency Plan Allows Up to Three Cat-Chasing-Laser-Pointer videos per day

The mainstream media loves a scare story.  Suggestions that a national H1N1 pandemic could bring the Internet as we know it to its knees is a surefire way to get plenty of attention.

The Chicago Tribune, among others, reports that a nationwide outbreak of virus forcing 40% of American workers to remain housebound could result in too many people sitting at home watching Hulu, bringing the entire Internet to a screeching halt.

The answer? Shut down video streaming sites and throttle users during national emergencies.

Of course, even more interesting is what never turns up in these kinds of stories — the news behind the sensationalist headlines.

The report on which this story is based comes courtesy of the General Accounting Office.  The GAO doesn’t simply issue reports willy-nilly.  A member or members of Congress specifically request the government office to research and report back on the issues that concern them.  In this instance, the report comes at the request of:

• Rep. Henry Waxman
• Rep. John D. Dingell
• Rep. Joe Barton
• Rep. Barney Frank
• Rep. Bennie G. Thompson
• Rep. Rick Boucher
• Rep. Cliff Stearns
• Rep. Edward J. Markey

The congressmen weren’t worrying exclusively about your broadband interests.  The GAO notes the study came from concern that such a pandemic could impact the financial services sector (the people that brought you the near-Depression of 2008-09).  The Wall Street crowd could be left without broadband while recovering from flu, and that simply wouldn’t do.

“Concerns exist that a more severe pandemic outbreak than 2009’s could cause large numbers of people staying home to increase their Internet use and overwhelm Internet providers’ network capacities. Such network congestion could prevent staff from broker-dealers and other securities market participants from teleworking during a pandemic. The Department of Homeland Security (DHS) is responsible for ensuring that critical telecommunications infrastructure is protected. GAO was asked to examine a pandemic’s impact on Internet congestion and what actions can be and are being taken to address it, the adequacy of securities market organizations’ pandemic plans, and the Securities and Exchange Commission’s (SEC) oversight of these efforts,” the report states.

Putting aside my personal desire that a little less broadband for deal-making, bailout-demanding “kings of the world” might not be a bad idea, the GAO’s report concludes what we already know — the business model of residential broadband is based on sharing connections and when too many people stay home and use them, it’s slow and doesn’t work well.

Providers do not build networks to handle 100 percent of the total traffic that could be generated because users are neither active on the network all at the same time, nor are they sending maximum traffic at all times. Instead, providers use statistical models based upon past users’ patterns and projected growth to estimate the likely peak load of traffic that could occur and then design and build networks based on the results of the statistical model to accommodate at least this level. According to one provider, this engineering method serves to optimize available capacity for all users. For example, under a cable architecture, 200 to 500 individual cable modems may be connected to a provider’s CMTS, depending on average usage in an area. Although each of these individual modems may be capable of receiving up to 7 or 8 megabits per second (Mbps) of incoming information, the CMTS can transmit a maximum of only about 38 Mbps. Providers’ staff told us that building the residential parts of networks to be capable of handling 100 percent of the traffic that all users could potentially generate would be prohibitively expensive.

In other words, guess your customer demand correctly and 200-500 homes can all share one 38Mbps connection.  Guess incorrectly, or put off expanding that network to meet the anticipated demands because your company wants to collect “cost savings” from reduced investment, and everyone’s connection slows down, especially at peak times.

One way to dramatically boost capacity for cable operators is to bond multiple channels of broadband service together, using the latest DOCSIS 3 standard.  It provides cable operators with increased flexibility to meet growing demands on their network without spending top dollar on wholesale infrastructure upgrades.  Many operators are already reaping the rewards this upgrade provides, by charging customers higher prices for higher speed service.  But it also makes network management easier without inconveniencing existing customers with slowdowns during peak usage.

The GAO didn’t need 77 pages to produce a report that concludes broadband usage skyrockets when people are at home.  Just watching holiday shopping traffic online spike during deal days like “Cyber Monday,” after Thanksgiving would illustrate that.  Should 40 percent of Americans stay home from work, instead of browsing the Internet from their work machines, they’ll be doing it from home.  That moves the bottleneck from commercial broadband accounts to residential broadband networks.

The GAO says such congestion could create all sorts of problems for the financial services sector, slowing down their broadband access.

Providers’ options for addressing expected pandemic-related Internet congestion include providing extra capacity, using network management controls, installing direct lines to organizations, temporarily reducing the maximum transmission rate, and shutting down some Internet sites. Each of these methods is limited either by technical difficulties or questions of authority. In the normal course of business, providers attempt to address congestion in particular neighborhoods by building out additional infrastructure—for example, by adding new or expanding lines and cables. Internet provider staff told us that providers determine how much to invest in expanding network infrastructure based on business expectations. If they determine that a demand for increased capacity exists that can profitably be met, they may choose to invest to increase network capacity in large increments using a variety of methods such as replacing old equipment and increasing the number of devices serving particular neighborhoods. Providers will not attempt to increase network capacity to meet the increased demand resulting from a pandemic, as no one knows when a pandemic outbreak is likely to occur or which neighborhoods would experience congestion. Staff at Internet providers whom we interviewed said they monitor capacity usage constantly and try to run their networks between 40 and 80 percent capacity at peak hours. They added that in the normal course of business, their companies begin the process to expand capacity when a certain utilization threshold is reached, generally 70 to 80 percent of full capacity over a sustained period of time at peak hours.

However, during a pandemic, providers are not likely to be able to address congestion by physically expanding capacity in residential neighborhoods for several reasons. First, building out infrastructure can be very costly and takes time to complete. For example, one provider we spoke with said that it had spent billions of dollars building out infrastructure across the nation over time, and adding capacity to large areas quickly is likely not possible. Second, another provider told us that increasing network capacity requires the physical presence of technicians and advance planning, including preordering the necessary equipment from suppliers or manufacturers. The process can take anywhere from 6 to 8 weeks from the time the order is placed to actual installation. According to this provider, a major constraint to increasing capacity is the number of technicians the firm has available to install the equipment. In addition to the cost and time associated with expanding capacity, during a pandemic outbreak providers may also experience high absenteeism due to staff illnesses, and thus might not have enough staff to upgrade network capacities. Providers said they would, out of necessity, refrain from provisioning new residential services if their staff were reduced significantly during a pandemic. Instead, they would focus on ensuring services for the federal government priority communication programs and performing network management techniques to re-route traffic around congested areas in regional networks or the national backbone. However, these activities would likely not relieve congestion in the residential Internet access networks.

It’s clear some broadband providers are not willing to change their business models to redefine congestion from measurements taken during peak usage when speeds slow, to those that anticipate and tolerate traffic spikes.  That means making due with what broadband providers are delivering today and developing technical and legal means to ration, traffic shape, or simply cut access to high bandwidth traffic during ‘appropriate emergencies.’  Right on cue, the high bandwidth barrage of self-serving provider talking points are on display in the report:

Providers identified one technically feasible alternative that has the potential to reduce Internet congestion during a pandemic, but raised concerns that it could violate customer service agreements and thus would require a directive from the government to implement. Although providers cannot identify users at the computer level to manage traffic from that point, two providers stated that if the residential Internet access network in a particular neighborhood was experiencing congestion, a provider could attempt to reduce congestion by reducing the amount of traffic that each user could send to and receive from his or her network. Such a reduction would require adjusting the configuration file within each customer’s modem to temporarily reduce the maximum transmission speed that that modem was capable of performing—for example, by reducing its incoming capability from 7 Mbps to 1 Mbps. However, according to providers we spoke with, such reductions could violate the agreed-upon levels of services for which customers have paid. Therefore, under current agreements, two providers indicated they would need a directive from the government to take such actions.

Shutting down specific Internet sites would also reduce congestion, although many we spoke with expressed concerns about the feasibility of such an approach. Overall Internet congestion could be reduced if Web sites that accounted for significant amounts of traffic—such as those with video streaming—were shut down during a pandemic. According to one recently issued study, the number of adults who watch videos on video-sharing sites has nearly doubled since 2006, far outpacing the growth of many other Internet activities. However, most providers’ staff told us that blocking users from accessing such sites, while technically possible, would be very difficult and, in their view, would not address the congestion problem and would require a directive from the government.

Enjoy up to one Hogan's Heroes episode per day during the H1N1 flu pandemic

You have to love some of the players in the broadband industry who trot out their most-favored “network management” talking points to handle a national emergency.  It’s interesting to note providers told the GAO they were concerned with violating customer agreements regarding speed guarantees, when most providers never guarantee residential service speeds.  Their first solution is the Net Neutrality-busting traffic throttle, to slow everyone down to ration the “good enough for you” network in your neighborhood.  Shutting down too-popular, high bandwidth websites like Hulu (no worries – you can watch your favorite shows on our cable TV package) is apparently someone’s good idea, but considering providers admit it wouldn’t actually solve the congestion problem, one’s imagination can ponder what other problems such a shutdown might solve.

One provider indicated that such blocking would be difficult because determining which sites should be blocked would be a very subjective process. Additionally, this provider noted that technologically savvy site operators could change their Internet protocol addresses, allowing users to access the site regardless. Another provider told us that some of these large bandwidth sites stream critical news information. Furthermore, some state, local, and federal government offices and agencies, including DHS, currently use or have plans to increase their use of social media Web sites and to use video streaming as a means to communicate with the public. Shutting down such sites without affecting pertinent information would be a challenge for providers and could create more Internet congestion as users would repeatedly try to access these sites. According to one provider, two added complications are the potential liability resulting from lawsuits filed by businesses that lose revenue when their sites are shutdown or restricted and potential claims of anticompetitive practices, denial of free speech, or both. Some providers said that the operators of specific Internet sites could shut down their respective sites with less disruption and more effectively than Internet providers, and suggested that a better course of action would be for the government to work directly with the site operators.

A very subjective process indeed, but one many providers have sought to keep within their “network management” control as they battle Net Neutrality.  One would think “potential claims of anti-competitive practices” would represent an understatement, particularly if cable industry-operated TV Everywhere theoretically kept right on running even while Hulu could not.  As long time net users already know, outright censorship or content blockades almost always meet resistance from enterprising net users who make it their personal mission to get around such limits.

Expanding broadband networks to provide a better safety cushion during periods of peak usage is looking better and better.

Providers could help reduce the potential for a pandemic to cause Internet congestion by ongoing expansions of their networks’ capacities. Some providers are upgrading their networks by moving to higher capacity modems or fiber-to-the-home systems. For example, some cable providers are introducing a network specification that will increase the download capacity of residential networks from the 38 Mbps to about 152 to 155 Mbps. In addition to cable network upgrades, at least one telecommunications provider is offering fiber-to-the home, which is a broadband service operating over a fiber-optic communications network. Specifically, fiber-to-the-home Internet service is designed to provide Internet access with connection speeds ranging from 10 Mbps to 50 Mbps.

Hello.

Sounds like a plan to me, and not just for the benefit of the Wall Street crowd sick at home with the flu.  Such network upgrades can be economical and profitable when leveraged to upsell the broadband enthusiast to higher speed service tiers.  During periods of peak usage, such networks will withstand considerably more demand and provide a better answer to that nagging congestion problem.

The alternative is Comcast or Time Warner Cable, in association with the Department of Homeland Security, having to appear on Wolf Blitzer’s Situation Room telling Americans they have a broadband rationing plan that will give you six options of usage per day.  Choose any one:

• Up to three videos of cats chasing laser pointers on YouTube
• One episode of Hogan’s Heroes
• Up to six videos of your friends playing Guitar Hero on Dailymotion
• Unlimited access to Drugstore.com to browse remedies
• Five MySpace videos of your favorite bands
• Up to 500 “tweets” boring your followers with every possible detail of your stuck-at-home-sick routine

The Communications Workers of America released their 2009 Report on Internet Speeds in All 50 States, and the results show the United States continuing to lag well behind other nations in providing citizens with advanced, fast, and affordable connections to the Internet.  Little improvement has been made in the past year, when CWA released its 2008 findings. (Stop the Cap! reader Dave passed along word the report was in.)

The average download speed for the nation was 5.1 megabits per second (mbps) and the average upload speed was 1.1 mbps. This was only a nine-tenths of a megabit per second increase (from 4.2 mbps to 5.1 mbps) since last year. At this rate, it will take the United States 15 years to catch up with current Internet speeds in South Korea. And when compared to the rest of the world, the United States ranks 28th in average Internet connection speeds.

The CWA does have an interest in this fight.  It’s a labor union whose members work for many of the nation’s telecommunications providers.  CWA seeks a national broadband strategy that just happens to fall in line with the interests of consumers — increased speeds, more rural broadband expansion, more affordable access, and Net Neutrality protections.  CWA doesn’t take a formal position on Internet Overcharging schemes like usage caps, at least not yet.

The report measured broadband speed based on more than 400,000 Americans who voluntarily participated in a speed test offered on the Speed Matters website.  The results were collected and covered a significant part of the country, illustrating real world results of ordinary consumers, not simply the speeds touted by broadband providers in marketing materials.

The CWA report calls out the inadequacy of the deregulated free market approach to deliver broadband service consistently to all Americans.  In fact, the disparity of access and the tiny incremental upgrades in speed suggest it will take at least 15 years for the United States to match the speeds enjoyed today in South Korea, which can rightly be called a world leader in broadband even while this country cannot.

South Koreans enjoy an average connection speed of 20.4Mbps (four times faster than the United States).  Japan provides residents with 15.8Mbps, Sweden offers 12.8Mbps, the Netherlands 11Mbps, and 24 others who do a better job at delivering speedy broadband than their American counterparts.

Broadband remains too expensive for the slow service we enjoy today.  That promotes a digital divide between those affluent enough to afford broadband service and those who are struggling to make ends meet (88% of those earning more than $100,000 a year have service in their homes, while just 35% of those earning under $20,000 subscribe).

Another problem highlighted in the report is the ongoing problem of rural broadband access.  While 67% of urban and suburban residents subscribe to broadband, only 46% of rural households do, assuming they can even obtain service.

Rural areas are by far the most likely to encounter slow service, typically 1-3Mbps provided by DSL from the local phone company.

Until 2009, the United States was the only industrialized country in the world without a national broadband plan.  The Federal Communications Commission is expected to release one shortly, but only time will tell whether the plan will primarily benefit consumers or the special interests, including providers seeking to protect their monopoly or duopoly market position, and get taxpayer dollars to finance broadband projects that provide slow and expensive service to consumers.

The CWA has some recommendations:

Governmental action — in partnership with the private sector — is essential to stimulate broadband investment and adoption. Other countries are far ahead of us. It is time for the United States to take action.

• Universality.  Just as government policies helped bring affordable telephone service to everyone, our policies should ensure that every individual, family, business, and community has access to and can use high speed Internet at a price they can afford — regardless of their income or geographic location.
• High Speed.  Speed matters on the Internet. U.S. policies should promote higher Internet speeds and higher capacity networks. The United States should adopt policies to get us to 10 megabits per second upstream and 1 megabit per second downstream by 2010. New benchmarks in succeeding years should expand the number of households capable of sending and receiving multiple channel high-definition video and reach the global standard of 100 mbps.
• Open Internet.  We must protect free speech on the Internet so that people are able to go to the websites they want and download or upload what they want when they want on the Internet. There should be no degradation of service or censoring any lawful content on the Internet. At the same time, reasonable network management is necessary to preserve an effective and open Internet. Most important, building high-capacity networks will ensure that all Americans have fast, open access to all content on the Internet.
• Consumer Protections and Good Jobs.  Public policies should include consumer and worker protections, should support the growth of good, career jobs, and require the public reporting of deployment, actual speed, price, and service.

Below the jump, we’ve assembled a selection of maps and graphics showing where broadband is today in three of states with our largest reader base — New York, Texas, and North Carolina.

… Continue Reading

The Communications Workers of America (CWA) has been running a project I have subscribed to for awhile now, called Speed Matters. Today I received this e-mail from them:

What’s next for SpeedMatters? Growing our movement.

Dear Jason,

Time’s up. Pencils down.

How did you do on the SpeedMatters.org speed test?

Believe it or not, you had one of fastest connection speeds in the country – and you’re probably paying a pretty penny for it. The majority of people who took the test didn’t come close to scoring as high as you did.

But fact is, even some of the fastest internet connections in the United States pale in comparison to many of our global competitors like Korea, Sweden, and Japan. These countries have average speeds that are almost ten times faster than the United States — at about 1/12 the cost to the consumer.

FCC Commissioner Michael J. Copps has admitted “America’s record in expanding broadband communication is so poor that it should be viewed as an outrage by every consumer and businessperson in the country.”

It’s time to fix this problem, and the first step is determining exactly where our current high speed networks reach — and who is getting left behind.

You’ve already helped us begin to gather this crucial data by testing your Internet speed.

So what’s next? Now you can help grow our movement and educate as many people as possible about the importance of improving our country’s high speed Internet access. That way, when we demand our elected representatives take action, they’ll hear us loud and clear.

Forward the message below to everyone you know, and ask them to join you in getting the U.S. up to speed.

Thank you,

Beth Allen
speedmatters.org Online Mobilization Coordinator

P.S. Don’t forget to sign up for our weekly SpeedMatters.org blog update email to stay up-to-date on the nationwide effort to expand high speed Internet access and the amazing things that people are doing with the improved technology.

Dear Friend,

Americans are charged more for slower internet speeds, and our current high-speed networks don’t even reach millions of households. It’s time for that to change — and you can play a part. Testing your own speed will help make our new community research project, SpeedMatters.org, a success.

We’re falling behind in the global economy because we won’t invest in the technology to bring the benefits of this telecommunications revolution to most of our population. We’re the only industrialized country without a national policy to promote high- speed Internet access.

That’s why you’re getting this email. Testing your connection’s speed now will help us better understand the American average — and craft an effective public policy and awareness campaign.

Take the speed test:

High speed Internet means more than smooth web videos or fast downloads.

Advanced high capacity communications networks can increase democratic and civic participation, improve the delivery of health care, education, job training, public safety and other vital services.

What are we waiting for? It’s time to close the digital divide.

Thanks!

What I found interesting was the quote from FCC Commissioner Michael Copps, “America’s record in expanding broadband communication is so poor that it should be viewed as an outrage by every consumer and businessperson in the country.”

Commissioner Copps is right. It is an outrage. When the rest of the world is moving on average 10 times faster and at 1/12 the cost to consumers, I am a little more then outraged. Speed does matter and I urge you all to join and spread the word about Speedmatters.org.  They have a lot of useful information at their site, including speed by state and listing of broadband initiatives.

I took the speed test here in Greensboro, North Carolina, using Time Warner Cable’s Road Runner Turbo and my results were 11.114Mbps download and 4.85Mbps upload.  What is your speed?

I know here in Greensboro, the CWA had tried to to unionize the local Time Warner Cable workers and the company pushed back and won. Now a lot of those same TWC employees have been pink slipped in favor of non-union contract workers or demoted to lesser positions with less pay. I am sure this isn’t the only city this is happening in.  Just goes to show that TWC isn’t just effecting your families with their greed, but their own workers’ families too.

The only downside to this organization I see is that they have a partnership with Connected Nation, which is the cable/telecom industries mapping group.  I would urge the good folks at the CWA to tread lightly with Connected Nation.  They are Time Warner, Comcast, AT&T, Verizon, and the other companies in disguise.  They have their own interests at heart.  This is what Connected Nation is doing here in North Carolina.