More evidence arrived this week that Internet Overcharging schemes are becoming a thing of the past for many global broadband users.

Sky has announced it is getting rid of its usage limits and speed throttles for most of its broadband customers.  It’s also giving away a free speed upgrade to up to 20Mbps for its DSL-provisioned broadband service.

“It comes with no usage caps, fair use policies or traffic management, making it ideal for those who want the freedom to download emails, photos, TV programs, movies and games. It’s also ideal for those who want to access live and on-demand TV through Sky Player,” Sky said.

That may be part of the plan.  Sky, a satellite television company serving the United Kingdom, is preparing to launch new video on demand features that will work in conjunction with its broadband service.  Delivering faster access, without limits, could be part of the equation of making their video on demand service a success.

For occasional broadband users who don’t exceed 2 gigabytes of use per month, Sky is giving free usage-limited broadband service to customers who also subscribe to Sky’s telephone service.  For those that don’t, the 2 gigabyte-capped service costs £5 ($7.59US) per month.

For those looking for unlimited service, Sky Unlimited is available for £7.50/$11.38 per month for Sky customers with Sky Talk or £12.50/$18.97 per month for those without.  In the United Kingdom, line charges for the phone line are broken out from broadband pricing and have to be considered towards the total monthly cost for broadband service.  Line rental from BT costs £12.50/$18.97 a month for customers who pay by direct debit and receive paper billing (£11.25/$17.08 with paperless billing).

Sky requires a 12 month service commitment.  These prices and plans take effect June 1st.  New customers can get a promotion offering six months of free broadband service, including line rental, when signing a 12-month service commitment.

New customers can get six months of broadband service for free when signing up

Is there a downside to this offer?  Not as far as usage limits are concerned.  However, the service is dependent on BT-provisioned DSL phone lines, which can create great variability in the maximum actual speeds customers receive.  The further away from a BT exchange office, the slower the maximum speed a customer will achieve.

But for existing Sky satellite customers looking for a discount on bundled service and an end to worries about monthly usage or speed throttles, Sky Broadband is a welcome relief for those tired of Internet Overcharging schemes.

It’s also one fewer example North American providers can point to as an excuse to attempt Internet Overcharging schemes of their own.

Plans by Frontier Communications to clamp down on “excessive usage” of their DSL service and overcharge customers who exceed 100GB of usage per month brought a strong negative reaction from a consumer group, who called Frontier’s limits “divorced from the underlying economics.”

Sources also tell Stop the Cap! the company is actively working on changing language in their Acceptable Use Policy that, as of this morning, is still misleading customers in Minnesota about their service.

A Frontier spokesperson also told an Oregon newspaper Frontier’s acquired FiOS service areas are not guaranteed cap-free service — the company may implement some restrictions there as well.

But first, Frontier Communications’ Acceptable Use Policy no longer matches reality for customers in Mound, Minnesota who are getting notified that their service is at risk of being shut off if they don’t agree to new, dramatically-higher priced service plans.  But such e-mails run contrary to several sections in the company’s own published policies:

Frontier’s Residential Acceptable Use Policy (Last Update: December 23, 2008) (PDF Archived 4/15)

The Company has made no decision about potential charges for monthly usage in excess of 5GB.

Frontier’s Supplementary “5GB” Addendum to their Acceptable Use Policy (PDF Archived 4/15)

Frontier has not implemented tiered usage plans and will continue to evaluate if and when they would be necessary. If and when Frontier implements a tiered usage plan pricing and usage information will be communicated to all High-Speed customers.

Does Frontier plan to limit my use of the Internet?
Frontier is providing (NOT LIMITING) all customers with a minimum of 5GB of usage on a monthly basis. The Company has made no decision at this time to charge for additional usage but wants to start to educate customers about their usage.

If I hit 5GB will my service be interrupted?
No. Your service will not be interrupted at 5Gb. You will continue to use our High Speed Internet service without disruption.

How will I know how many Gigabytes I am using?
Sometime in the future, Frontier will provide to all customers visibility as to what your usage is on a daily, weekly and monthly basis. We will also provide a the ability to estimate bandwidth usage for different types of activities – like streaming video downloads or file sharing. These tools will give our customers the ability to make informed decisions about broadband usage consumption.

Tell that to the customers in Mound who have 14 or fewer days and counting to either pay extortionist broadband pricing, curtail their usage, or go elsewhere for service (if they can).

It’s no surprise some customers in Mound are outraged when receiving the company’s e-mailed notification about paying higher prices for usage because it runs completely contrary to the published policies of Frontier’s broadband service.

That’s just one more mistake in a series of mistakes Frontier has made in marketing its broadband service, especially in areas where consumers can take their business elsewhere and not have to worry about exceeding Frontier’s minuscule usage allowance.

Wendy Davis at MediaPost quotes a statement released by Free Press research director S. Derek Turner: “While there may be a place for discussing reasonable usage-based billing, the scheme Frontier is testing is completely divorced from the underlying economics. Even worse than their price-gouging is Frontier’s assertion that a mere 5 gigabytes per month is a ‘reasonable’ amount of usage when just last month the National Broadband Plan reported that average Internet users with a fixed connection consume 9 gigabytes of data per month.”

Davis also managed to get a Frontier spokesperson on the record about the debacle, telling MediaPost, “the company is only trying to prevent some exceptionally heavy bandwidth users from degrading service for others on the network. She also says that people who received the letters were given an option of decreasing their bandwidth consumption or switching to a different, higher-priced plan.”

Yet the concept of DSL customers degrading the broadband experience of other customers on the network is itself controversial, as DSL providers have always emphasized they do not suffer from slowdowns like shared networks used by cable broadband providers.  While heavy consumption can theoretically congest “middle mile” networks that serve regional areas or connect telephone company switching offices, those congestion issues are not difficult to address when companies use fiber connections to connect them, as Frontier frequently does.  Indeed, Frontier is far more likely to suffer congestion issues when millions of former Verizon customers are piled on Frontier’s network.

Nowhere in Frontier’s e-mail does it tell customers they can reduce usage to retain service.  It only says “if you do not wish to switch to this new rate plan, you can have your service disconnected.”  Mound residents are faced with the prospect of immediately reducing usage from 100GB to just 5GB to stay within Frontier’s terms and conditions.  Under those conditions, they could do better with dial-up.

Meanwhile, those soon-to-be-discarded Verizon customers facing a transition to Frontier Communications may soon find themselves potentially impacted by some sort of usage limit as well, which could also apply to the areas served by FiOS.

Mike Rogoway at The Oregonian talked with Frontier spokesman Steven Crosby about Frontier’s plans:

I talked this afternoon with Frontier spokesman Steven Crosby, who said there won’t be tight bandwidth restrictions after Frontier acquires FiOS — but he indicated that there may be some restrictions.

Currently, Frontier’s user agreement sets a nominal 5 gigabyte cap on monthly bandwidth usage.

“You know, I know and everyone knows that’s a very low number,” Crosby said. “We don’t hold people to that.”

The letters that went out in Minnesota went to a small group of very heavy bandwidth users in one community, Crosby told me. It’s not meant to reflect a broader policy.

As Frontier prepares to take over Verizon’s operations in Oregon and other states — Crosby says the deal is on track and likely to close in late June or early July — Frontier is reviewing its Internet use policies.

I pointed out Comcast’s bandwidth cap, and told Crosby that it seems likely his company will do something similar. He left that possibility open, but said any Internet limits are still under discussion.

“I don’t know what that limit will be,” he said. “The one thing I do know is we don’t want to impact our customers.”

St0p the Cap! responds:

• This is the first time Frontier has hinted that usage limits could eventually apply to the FiOS fiber-to-the-home service it is acquiring from Verizon, a network constructed to manage 21st century broadband traffic Frontier now also seems willing to limit;
• Frontier does hold people to the 5GB usage cap when they are in violation of it, using it as an excuse to expose customers to far-higher-priced service plans or service disconnection.  If Frontier isn’t serious about it, why retain the language in customer agreements?
• If Frontier’s Mound e-mail notifications do not reflect a broader policy, than the only customers who will see a change in the Acceptable Use Policy will be those in the Mound, Minnesota area.  If customers elsewhere see a change, it -does- reflect a broader policy after all.
• As part of Frontier’s “review of Internet use policies,” the company should not defray expenses surrounding the Frontier-Verizon deal by dumping them on broadband customers with outrageously punitive pricing plans.
• As for not wanting to impact customers, our response is “too late.”  Frontier’s original introduction of the 5GB usage allowance in the summer of 2008 impacted customers far and wide, and for its largest service area — Rochester, NY, gave Time Warner Cable happy hunting grounds to experiment with a usage cap of their own.

Wendy Davis at MediaPost offers some food for thought:

Frontier’s letters could well trigger regulatory or judicial scrutiny, especially given the seeming disconnect between the company’s acceptable use policy and its recent actions.

Of course, the underlying problem is the lack of competition. If consumers had more options for broadband providers, a company that threatened to disconnect its customers, or charge $99 or $250 a month for broadband service, might quickly find itself dealing with more pressing problems than public criticism.

Frontier Communications has quietly begun testing an Internet Overcharging scheme in Minnesota designed to charge confiscatory prices to residents who exceed the company’s usage allowances, demanding customers pay up to $249.99 a month to keep their broadband service running.

Stop the Cap! has learned Frontier has begun measuring customers’ broadband usage, and for those in Minnesota who exceed 100GB of usage during a month, Frontier is dispatching e-mail messages telling them they’ll have to agree to pay more — much more — or their service will be cut off in 15 days.

Two e-mail messages are being sent to customers who break the 100 and 250GB usage barriers.  Both reference Frontier’s 5GB usage allowance that Stop the Cap! has strongly and repeatedly criticized the company for implementing in the first place.  Using that usage allowance as a baseline, Frontier calls out its customers using more demanding they switch to a higher priced service plan if they want to continue service with the company.

• For those achieving 100GB of usage, the new monthly rate is $99.99 per month
• For those achieving 250GB of usage, the new monthly rate is an incredible $249.99 per month

Sources tell Stop the Cap! the Internet Overcharging scheme Frontier is running is an experiment to gauge customer reaction.  If the furious customer e-mail reaching us is any indication, it’s another public relations disaster for Frontier Communications.  One customer didn’t even realize there was a 5GB usage allowance to begin with, much less a vastly higher new monthly price if he wants to stay with Frontier DSL.  He’s not.

"You can earn this much money just from overcharging Minnesotans for their Internet service!"

Ironically, the experimental pricing plan comes at a time when Frontier is still trying to get state regulators to approve its deal with Verizon to assume control of landline and broadband service in several states.  Residents in West Virginia and a dozen other states might be a bit concerned that their unlimited Verizon DSL broadband service, often the only service provider available, could be replaced with a company that is willing to punish its customers with $250 in monthly charges once a customer hits 250GB in usage.  Even worse, Frontier takes the overlimit penalty concept to a whole new level, telling customers that new high price represents their new monthly rate plan, not just a temporary penalty.

To add insult to injury, Frontier continues to mislead its customers about the experimental pricing on its own website.  As of this writing, Frontier’s Acceptable Use Policy still states:

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

For customers receiving Frontier’s Scare-o-Gram, it sure sounds like they made up their minds… to charge a lot more for the exact same level of service.

For state regulators, watching Frontier charge ludicrous pricing for broadband service that would make most providers blush should be more than enough evidence that approving Frontier’s plans to take over Internet and landline service in their state is not in the best interests of consumers.  For many, it saddles them with a broadband provider that can charge these kinds of prices knowing full well many customers have nowhere else to go.

Copy of E-Mail Sent to Minnesota Customers Exceeding 100 GB of usage a month [emphasis in bold is ours]:

Dear [Customer]:

Frontier is focused on providing the best possible internet experience across our entire customer base.  We bring you a quality service at a fair price, dependent upon an average monthly bandwidth usage of 5GB.  Over the past months, your account is in violation of our Residential Internet Acceptable Use Policy.

Our policy states that Frontier reserves the right to suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period.

We realize there are times when our customers use the internet for services such as video and music downloads, however your specific usage has consistently exceeded 100GB over a 30 day period.

We would like to provide you with the option of keeping your Frontier internet service at a monthly rate of $99.99 which is reflective of your average monthly usage.  Please call us within 7 days of the date of this email at 1-877-273-0489 Monday – Friday, 8AM – 5PM CST to review your options.  If you do not wish to switch to this new rate plan, you can have your service disconnected.  If we do not hear from you within 15 days, your internet service will be automatically disconnected.

We continue to manage our network to ensure all of our customers have equal access to the internet and the ability to enjoy all of its available content, at our committed level of service quality.

Sincerely,

Frontier Communications

Copy of E-Mail Sent to Minnesota Customers Exceeding 250 GB of usage a month [emphasis in bold is ours]:

Dear [Customer]:

Frontier is focused on providing the best possible internet experience across our entire customer base.  We bring you a quality service at a fair price, dependent upon an average monthly bandwidth usage of 5GB.  Over the past months, your account is in violation of our Residential Internet Acceptable Use Policy.

Our policy states that Frontier reserves the right to suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period.

We realize there are times when our customers use the internet for services such as video and music downloads, however your specific usage has consistently exceeded 250GB over a 30 day period.

We would like to provide you with the option of keeping your Frontier internet service at a monthly rate of $249.99 which is reflective of your average monthly usage.  Please call us within 7 days of the date of this email at 1-877-273-0489 Monday – Friday, 8AM – 5PM CST to review your options.  If you do not wish to switch to this new rate plan, you can have your service disconnected.  If we do not hear from you within 15 days, your internet service will be automatically disconnected.

We continue to manage our network to ensure all of our customers have equal access to the internet and the ability to enjoy all of its available content, at our committed level of service quality.

Sincerely,

Frontier Communications

'Don't worry about our new higher prices.'

AT&T is raising its rates for existing DSL customers.  Stop the Cap! reader Bill writes that his latest bill shows a $3 forthcoming rate hike on his “Elite” DSL service just three months after his one year promotional price expired.

“First, there is nothing ‘elite’ about AT&T DSL.  Their promised 6Mbps speed is really closer to 3Mbps, and worse when the weather is bad,” Bill writes. “Second, I’m going to be paying more than $45 for DSL service that my nearby neighbors pay for 10Mbps cable modem service that actually delivers 10Mbps.”

Bill doesn’t have that option unless he pays $8,000 to his local cable company to install a cable down the street to reach his home.

“I called AT&T and tried to downgrade my service,” Bill adds. “When you call and reach the cancellation department, they’ll offer you all sorts of incentives to stay.”

Bill joined many other AT&T customers who have called the company to complain about the price increase during difficult economic times, and many are getting substantial discounts.

“They gave me another year of service for $24.95, the same promotional price I had before, which saves me $20 a month,” Bill notes.

That’s more meaningful than AT&T’s explanations on customer bills.  Broadband Reports quotes from AT&T: “We’re adjusting our pricing for AT&T High Speed Internet service in an effort to better align our pricing structure across our entire service territory, and to better reflect the value of our broadband service. But don’t worry, even with this adjustment, our pricing is still competitive across the industry.”

Some of our readers are not satisfied with that explanation and have been calling customer service looking for discounts, which they’re finding.  Among the offers:

• Six months of service for $24.95 with a promise of an additional six months at that price if you call and ask at the end of the term;
• Six months of service at $22.95 with a similar six month extension when the first six months are up;
• 12 months of service at $22.95.
• 12 months of service at $19.95 (mostly found in Illinois).

Representatives may first offer to “lower your price” by switching you to a lower speed tier.  Refuse that offer and tell them you simply want a lower price.  Customers who have other competitive options (cable) will find AT&T most amenable to offering a lower price.  Those with no other options may find AT&T less willing to negotiate.  In those cases, some of our readers recommend calling back to speak to a different customer service representative.  If you do not have a standard residential phone line along with your DSL service, getting discounts becomes very difficult.

Trying to negotiate takes less than 30 minutes of your time and often brings you more than $200 in savings over the coming year.  That’s worth the effort.

Today’s quote comes courtesy of Landel Hobbs, chief operating officer of Time Warner Cable.

Speaking at an investor conference in San Francisco, Hobbs said broadband has replaced cable TV as its anchor product, meaning subscribers increasingly refuse to part with it, no matter the price.

“Consumers like it so much that we have the ability to increase pricing around high-speed data,” Hobbs was noted saying by the Wall Street Journal.

Hobbs also reports the cable company continues to grow its Road Runner service at the expense of telephone companies and their lackluster DSL product lines.  Much of Time Warner’s broadband growth these days comes from disaffected DSL customers switching providers.  Broadband remains a profit center for the cable industry even as revenue from cable television flatlines in a difficult economy.

So let the Money Party begin… your broadband bill is going up, especially in areas where subscribers don’t have many alternatives.