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.

Frontier Communications is trying to enforce an Internet Overcharging scheme it deleted from its Acceptable Use Policy months earlier, telling customers the company generously extended them an allowance “well above our usual 5GB monthly limit,” but using 100GB per month is “just too much.”

Customers in suburban Sacramento are the latest recipients of letters some are calling “extortion,” giving them seven days to call the company with a promise to cut back or move up to “the next price tier,” priced at $99.99 per month.

Ironically, some of Frontier’s customers receiving the letter say it’s the company’s own fault — they’ve been watching Frontier’s heavily promoted online video website, ‘my fitv.’

“You may not be aware that your specific usage has consistently exceeded 100GB over a 30-day period.  This is excessive for residential usage and more represents the amount of bandwidth usage of a typical business,” the letter says.  “If you wish to maintain your current pricing plan, you may work with us to reduce your Internet usage.  Another option is to move to the next price tier of $99.99 per month, which reflects your current average monthly usage.”

The letter adds if the customer does not make a decision, the company will terminate the account in 20 days.  No word if the customer is on the hook for an early termination fee amounting to more than $100 in most cases.

The customer who received the letter, who lives in Elk Grove and wishes to remain anonymous, was highly annoyed.  He sent Stop the Cap! a screenshot of Frontier’s new “Flexnet/Account Editor,” poorly documented on Frontier’s own website, which shows over the last three months, he only broke the invisible 100GB Frontier barrier once, by just 38GB.  For that, Frontier wants to more than double his monthly Internet rate for its DSL service.

The monthly usage limit was news to him… and us… and everyone else.

A well-placed source at Frontier tells Stop the Cap! the company is making the rules up as it goes.

“There is no set plan here — Frontier’s corporate office is testing the waters in different communities to see what kind of response they get,” our source says. “We have been quietly collecting usage statistics on our customers for a year now, and here and there we are chasing those outliers using far above the norm in order to keep our costs as low as possible.”

Our source adds the company wants to keep bad publicity to a minimum, so these kinds of Overcharging schemes are not publicized, and unless customers make a federal case out of it, most will simply reduce usage to avoid the overlimit rates.

“They absolutely do not want a big political stink over this, because it creates headaches and leaves customers with a negative impression about the company and that usually means a disconnect order will follow, usually taking all of their business somewhere else.  That’s why we usually are strictest in places where the customer has nowhere else to go.”

Our reader was perplexed by the letter, the policy, and his options, especially since Frontier does not disclose either a usage limit or a $99.99 plan on their website.

“The [representative] from Frontier told me that the monthly usage limit is 5GB. I told him this is not enough for checking e-mail and surfing the web and reading news.” our reader writes. “He did not answer [when I challenged him about this].”

But no worries, the representative told the Elk Grove customer. If he exceeded 100GB of usage again, he’d automatically be billed the $99.99 rate — no decision needed.

Our reader adds when he signed up, nobody told him about a monthly limit, and there is none disclosed on the website.  Stop the Cap! fought to remove Frontier’s 5GB usage limit from its Acceptable Use Policy for more than a year, finally succeeding earlier this year.  But now it appears Frontier wants to enforce limits anyway, with no disclosure and little recourse for customers who don’t have access to a competing provider.

Before our reader started watching online video, he used about 16GB per month just web browsing, checking e-mail, and downloading the usual software updates.

Didn’t that put him over Frontier’s invisible 5GB cap already?

“The representative told me if I kept it under 50GB a month, I’d be safe,” our reader writes.

So is the usage cap 50 or 100GB per month?

Our customer exceeded Frontier's arbitrary, unpublished usage cap just once in the last three months (click to enlarge)

Stop the Cap! called Frontier customer service three times this morning as a potential new customer.  The responses we received:

• “There is no usage cap I am aware of.”
• “We don’t limit your Internet service.”
• “I don’t understand what you mean when you say limit?  We don’t censor websites.”

Sandy, who also contacted Stop the Cap! also received a letter, and ironically blames Frontier for the usage.

Frontier's own video website was responsible for one customer using "too much" Frontier Internet service.

“I received a warning letter from Frontier for using too much Internet, but get this — all of the growth in my usage came after the company started promoting its new online video website, which my family has fallen in love with,” Sandy writes. “We hooked up a video box on our television, something Frontier helped us with, and we’ve been streaming my fitv a lot.”

“That is extortion plain and simple and is illegal under California state law, especially because the representative told us we’d be charged $99.99 the moment we went over the limit again, and we are on a two-year ‘price protection agreement’ Frontier says locks in our price, which is a lie,” Sandy says.

Her next call was to the California State Attorney General.  Sandy was told the office has already received more than a dozen complaints from Frontier customers in the Sacramento area alleging violations of California contract law.

Jeff, a Broadband Reports reader, also received a letter from Frontier and was told the company was getting plenty of pushback from angry customers.

“The tech guy said they just started metering and have been getting a ton of calls regarding the letters being sent out. He then asked if I got the 100GB or the 250GB letter, as apparently the 250GB warning letters were more severe stating to pay up or get cut off.  The 100GB letter stated they’d work with you to help ease usage or recommended a business plan. They said the “work with you to help with usage” was new and just added if you call within 7 days or else get cut off after 20 days.”

Jeff’s response to all this?

“Comcast is looking better every day now.”

So far, Frontier has not imposed its usage cap on its ex-Verizon FiOS customers.

“Putting a 5, 100, or even 250GB cap on a fiber optic connection would just be plain greed,” says our reader Ajai. “But of course, Frontier needs as much cash as possible to pay out those high dividends to shareholders that often exceed the company’s earnings.  There is nothing to like about this company, period.”

Frontier’s letters sound suspiciously similar to the enforcement letters sent to some of their customers in Mound, Minn. Those letters stopped after Stop the Cap! distributed copies to a wider national audience.  Our source at Frontier says the company doesn’t appreciate our help one bit.

“The higher ups on the corporate level despise your website, but they also pretend to dismiss you as an angry blogger that nobody reads,” our source says.  “I get a laugh out of that whenever I get another memo from the executive office basically delivering talking points to counter your arguments, so they very much do care what you and your readers say and apparently read Stop the Cap! regularly.”

For our source, it’s all “so stupid.”

“Trust me, a lot of guys who deal with customers every day want nothing to do with their usage caps which do nothing but infuriate customers,” he says. “They wonder why people are disconnecting Frontier landlines and taking their Internet business elsewhere — it’s policies exactly like these combined with pretty low speed DSL service which makes our customers easy pickings for our competitors.”

But not every customer has a choice.

“Where we own the broadband market, it’s too bad for customers — either ration your use, pay us double, or go without.  It is as simple as that.”

Verizon prepaid customers can buy this basic phone from Walmart for just $15.88. But if you want to use this phone on a postpaid plan, Verizon charges up to $200 for the same phone unless you renew your contract.

As AT&T and Verizon discover an increasing amount of their revenue and profits come from their respective wireless divisions, they’re testing the waters to determine just how much more consumers are willing to pay for cell phone and wireless broadband services.

Verizon Wireless has spent the past year closing loopholes of various kinds and herding an increasing number of customers into mandatory data plans which can add up to $30 a month per phone to your monthly bill.  AT&T wants more if you plan on early upgrades for your cell phone.  A quick review:

Verizon Wireless Locks Down Prepaid Phone Models: Anyone who has shopped for a prepaid phone has probably noticed them dangling from hooks in Walmart and other stores at prices starting around $20.  Most of these prepaid phones are basic models or those deemed cutting edge a few years ago.  Take the LG 5600 — the Accolade.  It’s a phone your father would be comfortable with, covering the basics and designed primarily for making and receiving phone calls.  Verizon Wireless’ retail price for its “postpaid” customers (those who get and pay a bill every month) is $199.99 for the Accolade.  Of course, if you sign a new two-year contract, the phone is free.  But you can find the exact same phone, labeled for Verizon’s prepaid service at prices as low as $15.88.

Verizon claims the deep, deep discounts on prepaid phones are made back from the higher prices prepaid customers pay for airtime.  Some enterprising Verizon postpaid customers have sought these models out to replace or upgrade a worn out or broken phone without having to sign a new two-year contract.  Some other prepaid companies have also activated Verizon’s prepaid phones on their own network, including Page Plus.

Verizon has put the kibosh on both practices.  Customers seeking to activate a prepaid phone on a postpaid account must first use the phone in prepaid mode for a minimum of six months prior to its conversion to postpaid use.  Until very recently, some customers discovered a loophole around this requirement — registering a prepaid phone first on Verizon’s website and then activating it by dialing *228.  So long as a phone had never been activated, it often could be used on a postpaid account from the date of purchase.  But now Verizon tracks which phones are intended for postpaid and prepaid use, and that loophole has been closed.

Page Plus, which resells Verizon’s network, also had to stop activating Verizon prepaid phones almost a year ago.

As a result, those who want discounted cell phone service but keep Verizon’s robust network coverage have been forced to buy handsets at retail pricing, purchase one of several mostly refurbished phones direct from Page Plus, or activate an older phone no longer in use.

Avoiding the Data Plan: What drives an increasing number of Verizon off-contract customers towards “creative solutions” for upgrading their more than two year old phones is resistance to the expensive data plan required for most of their newest and best phones.  For these customers, renewing a contract means a plan change that includes $30 a month extra for data services or a phone downgrade to a basic model to avoid a data plan. Verizon’s remaining data-plan exempt handsets are:

• Verizon Wireless CDM8975
• LG Accolade™
• LG Cosmos™
• Pantech Jest™
• Samsung Gusto™
• Verizon Wireless Salute™
• Verizon Wireless Escapade®
• Samsung Haven™
• Samsung Intensity™
• Samsung Convoy™
• Motorola Barrage™

Would you renew a two-year service contract if you had to downgrade your next new phone to a basic model to avoid a mandatory data plan?

For large families accustomed to mid-level phones, the prospect of being stuck with a Jitterbug-like-downgrade or a $30 data plan has kept many from renewing their contracts, sticking with what they already own.

When AT&T announced the end of its flat rate smartphone plan, it said the lower pricing on smaller allowance data packages would represent “savings” for consumers reluctant to upgrade.  It’s hard to accept the same company that set prices so high for data usage in the first place has consumer interests at heart with usage-limited alternatives, especially when they no longer offer an unlimited option for customers who want one.

Verizon also plans to drop its unlimited plan in the near future.  Also on tap is a gradual shift away from so-called “mid-level” phones that consumers can purchase with a reduced rate, but still-mandatory $10 data plan.  Verizon increasingly will push customers between two stark choices — a high-powered, battery-eating smartphone that will give you a heart attack if you drop it or a very basic, stripped down phone with features commonly found on handsets five years ago.

This kind of pricing is driving some cash-strapped consumers to prepaid alternatives, such as Page Plus and Straight Talk on Verizon’s network and Wal-Mart’s new family prepaid plan on T-Mobile.  This is especially true if customers just want to talk and text.

AT&T’s Increases ‘Early Upgrade Price’ for Data-Friendly Smartphones by $125

Boy Genius Report obtained a copy of an AT&T memo to its sales force notifying them the price for “Early Upgrade Pricing,” traditionally charged customers who must have the latest and greatest, or accidentally lose or destroy their existing phone, is going up — way up, from $75 to $200:

Beginning Oct. 3rd, Early (Exception) Upgrade pricing for Smartphones will increase from the two-year price plus $75 to the two-year price plus $200.  This change does not apply to iPhone or Basic and Quick Messaging Phones.

Example: BlackBerry Torch $199.99 two-year price + $200 Early Upgrade fee = total price $399.99, a savings of $100 off the No-Commitment price of $499.99.

In return for just a $100 discount, customers sign a new two-year contract that begins with the phone’s replacement.  That contract includes the usual early termination fee of $325, which decreases by $10 per month.  AT&T watchers speculate the price change was designed to stop resale of relatively new phones on sites like eBay or Craigslist, where sellers charge near-retail prices and eat the formerly low penalty for an early upgrade.  It also makes the price of getting the very newest phones that much higher.

Courtesy: Boy Genius Report

Cell Phone Lobby Resists Requirement for Early Warnings Alerting Customers Their Data Allowance Is Almost Gone: “It Will Cause Customer Confusion and Frustration”

Liz Szalay had to dip into her 401(k) retirement account to pay the family’s $2000 Verizon Wireless bill, gone wild with data fees her 14-year old son ran up searching for and downloading songs.

“I would never have allowed my son to accrue such charges, if I had known,” Szalay, a secretary in Niles, Michigan, told Bloomberg News. “What I did to prevent this from happening in the future was have his Internet access completely blocked by Verizon, but not before they made off with a boatload of money.”

Had Szalay received a text and/or e-mail message warning her one of the phones on her account was approaching 80 percent of its monthly data allowance, or was already at risk of racking up huge fees, it would have been possible to stop the damage before it began.

Sen. Udall wants legislation to warn consumers before they run up enormous wireless bills. The industry calls such warnings "confusing and frustrating" for consumers.

Senator Tom Udall, a New Mexico Democrat, wants to make sure she gets that warning.  Udall drafted legislation that would require companies to warn customers when they have used 80 percent of their allotment.

“It’s difficult for the carriers to get up and argue against greater transparency on bills and notifications,” Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore told Bloomberg. “It’s becoming an issue on the front burner of regulators’ minds.”

The industry’s lobbyists are trying to block the legislation anyway.

The CTIA, the wireless industry lobbying group, is fiercely trying to kill Udall’s bill, claiming warnings will cause “customer confusion and frustration” and that carriers already offer customers the opportunity to check their usage by visiting carrier websites or via a text message.

The lobbyist solution requires consumers to be vigilant and check daily to make sure they don’t exceed any limits.  Udall’s idea puts the onus on phone companies to warn customers, who often have family members that have no idea what kind of cash bonanza they can provide a wireless provider just by using data features built into their phones.

Szalay’s son has a phone that doesn’t require a data plan, but incurs an enormous $1.99 in charges for every megabyte accessed online.  Verizon’s own website notes customers can consume 183 megabytes of data streaming music just five minutes a day for a month.  That’s $364 in data charges.  Five minutes downloading games — 440 megabytes or $875 in data fees.  One need not use their phone for hours a day to incur enormous fees for data usage.  Szalay’s son could have managed the $2,000 bill he caused using his phone for less than 15 minutes each day.

Verizon does not allow customers hit with these bills to retroactively sign up for a data plan to cover the costs, which are the same to Verizon whether a consumer incurs them on an unlimited $30 monthly data plan, or on a pay per use plan with a stinging penalty rate.

And the company objects to any government official telling them to warn customers before the overlimit fees kick in.

“We have several measures in place that allow our customers to monitor their usage and protect against overages — this is a proactive approach on Verizon’s part,” Verizon’s Smith told Bloomberg in an e-mailed statement.

How to Protect Yourself

Both Verizon and AT&T are masters of extracting a maximum amount of money from customers’ pockets.  Verizon is increasingly risking its high rating for customer service and quality by finding new ways to nickel and dime even long time customers to death.  AT&T already has earned a bad reputation and can’t drop much further unless it adopts Sprint’s old strategy of driving its own customers away.  Only through education and careful consideration of your family’s actual usage can you safely navigate around these shark-like wallet biters.

1.  Avoid cell phone company insurance plans unless you are concerned about theft.  With “early upgrade” plans, even at AT&T’s $200 price, it may not be worth paying an expensive monthly fee for insurance.  Also consider Squaretrade, a third party warranty/replacement provider.  They charge considerably lower prices than most (Google around for coupon codes offering up to 30 percent off).  If your phone breaks or is damaged, and you are not on a contract, you might find a suitable refurbished replacement through websites like eBay.  Just make sure the phone wasn’t designated for prepaid service to avoid activation hassles.

2.  If you want Verizon network quality, but don’t want to pay Verizon’s diamond-platinum pricing, consider doing business with one of the new prepaid providers offering month-to-month service that uses the same network as Verizon itself.  Walmart sells Straight Talk, but also consider Page Plus, which offers 1,200 minutes of call time, 1,200 texts, and 50MB of data use for $29.95 per month.  The only downside is that most prepaid providers don’t sell family plans, meaning each user pays the same price.  Walmart’s new prepaid plan changes that with the introduction of a shared family plan, with additional lines given discounted pricing.  But the discounts are not as good as postpaid plans offer, and the service relies on T-Mobile, which is not well-regarded for coverage outside of metropolitan areas.

3.  Smartphones, in addition to being expensive, often deliver horrible battery life.  Some won’t even make it through an entire business day.  Before seeking out one of these premium phones, consider whether you will actually use their features.  Is it worth the price of a $30 a month data plan if you only occasionally use the phone for wireless Internet?  Bragging rights come with a $200 up front price tag and a two year contract that will run up to $720 just for the data plan over two years.  If you drop it, lose it, or it gets stolen, the retail price for most of these phones is north of $500.

4.  Carriers design “gotcha” data pricing into their assumed revenue models.  They know even with online tools, nobody wants the hassle of checking their allowance for data every day, especially when most stopped checking their voice minutes allowance years ago.  While carriers occasionally waive gigantic bills, especially when the media gets involved, you can restrict data access on some or all of your phones if you do not have a data plan and don’t care about this feature.  You should support Senator Udall’s bill as well.  Carrier excuses that a warning message will cause confusion and frustration are laughable.  Getting a $2,000 wireless bill in the mail will cause far more of both.  That the industry objects to even this common sense approach illustrates just how rapacious wireless companies are for additional profits.

5. Educate everyone on your plan about the implications of using the phone to download music and games or watch video.  Unless you are on a flat rate plan, you may want to simply tell your family not to use their phones for these kinds of services without asking permission first.  This gives you an opportunity to check your allowance before Verizon gets a chance to reduce your bank balance.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Cell Phone Savings 10-12-10.flv[/flv]

We have four reports covering consumer news on cell phones that can save you money:  KSHB-TV in Kansas City takes a look at Walmart’s new prepaid family plan using T-Mobile’s network, WIVB-TV in Buffalo reports Sen. Kirsten Gillibrand (D-N.Y.) wants carriers to stop international roaming charges when customers end up making and receiving calls on a Canadian provider’s network from the American side of the border, WFTS-TV in Tampa provides tips on getting lower rates from your cell phone company and WTEV-TV in Jacksonville helps customers analyze cell phone bills for savings.  (6 minutes)

Clear made itself unclear about its speed throttle.

Clear, the 4G wireless broadband service backed by Sprint, Comcast, and Time Warner Cable is under fire for selling customers an unlimited use/”no speed limit” service plan that is heavily throttled to as low as 250kbps once customers are deemed “heavy users” by the provider.

Stop the Cap! reader Kevin in Rochester dropped us a note to share his frustration at Clear’s bait and switch marketing that promises one thing and delivers another.

It’s becoming common knowledge – but not common enough – that Clear is throttling their in-home broadband subscribers. For $30 a month, Clear delivers “unlimited 3Mbps” download speed, but after 8-10GB of usage in a month, they cut your speed to 250kbps as a punishment.

Scores of customers share Kevin’s problems, with complaints pouring in on broadband forums and on Clear’s customer support website (which crashed earlier today).  It is not known whether these usage limitations are also imposed on Comcast and Time Warner Cable’s branded 4G wireless services, which are also delivered by Clear’s network.

Remarkably, Clear’s website has marketed its broadband service as free from classic Internet Overcharging schemes like usage caps and speed throttles/network management:

Clear's own marketing promises unlimited usage with no speed reductions, unlike those "other" providers, which now also includes Clear itself. (Courtesy: Michael46)

Despite the marketing, Clear’s Rob Lenderman today admitted the company implemented a speed throttle system on Wednesday, Sept. 29 and placed the blame for doing so on peer-to-peer torrent traffic:

Last Wednesday we deployed a new automated algorithm that tries to even the playing field for all users. Essentially we tried to take users that were downloading large amounts of data over a week’s period of time and limit their top speeds during periods of high tower utilization. This system is based on a tower’s current utilization, GB’s downloaded in the past 7 days and current download speeds in the past 15 minutes. it recalculates your max D/L speed every 15 minutes based on these factors. All in there are 48 buckets of max D/L speeds based on these factors.

The expected results of these changes was that a small percentage of users would be slowed down for short periods of time but only during high utilization times on the tower.

Theoretically the very slow speeds would only last for 15 minutes and then readjust based on tower usage and the last 15 minutes of slower speeds.

The reality is that a very small percentage of users are being set at very low D/L speeds for hours at a time.

We are gathering more data as I write this and we are looking at adjustments to the policy so that the connection becomes more usable. Expect further details this week.

One thing I want to stress is that this algorithm does not apply to towers that have a low utilization which is a large percentage of the towers. Since high utilization is usually at night most users that are seeing slower speeds at night would see increases at other times of the day. We realize this is not ideal but using the system for large downloads outside normal usage hours(evening) will allow you to get higher speeds. This rule applies even if you are not being slowed. Fewer users = Higher speeds.

Expect more details in the next few days as we drill into the details and let you know what changes we will be making to make the experience better.

In the short term you can increase the speeds of your experience by reducing the number of GB sized downloads that take place. Our data shows that running a torrent is one of the reasons that people start to experience slower speeds.

[…]I use the word limit when talking about D/L speeds. Not in terms of amount of data you can download. I can assure you this is being handled at a very high level in the organization as some of the experiences some of you are having is not in the spirit of the program. As for using a P2P you will improve speeds if you run them at off peak hours. As tower utilization drops during those hours the algorithm will release more bandwidth and the apps will pick up speed. In addition fewer users will also yield an increase since the algorithm does not affect low utilization tower at all. So you get a double benefit from using off peak hours for large downloads.

We are looking at how to set the speed limits to ensure things like web browsing and youtube are useful even though large downloads may be limited in terms of speed during peak hours.

We are meeting every day to go over new data and determine a longer term solution instead of just throwing new solutions out there without putting some thought into them.

We apologize for this but we need to get it right and not just change for the sake of change.

RobL

Of course, customers promised repeatedly they would receive lightning-fast, unlimited wireless broadband from the company were unimpressed with the company’s argument that artificially slowing their speeds after as little as 20 minutes viewing Hulu or Netflix to 250kbps for several days qualified as ensuring the subscriber experience.  Many customers report Clear’s throttling is hardly limited only to peer to peer torrent traffic.  Online video streaming, in particular, routinely triggers the speed throttle for customers, something Lenderman admitted might be an issue:

We are looking at the impact of the new policy as we speak and will be reevaluating it shortly to determine what changes might need to be made.

The algorithm we use is complicated and is not intended to shut down users that use the service in a normal manner. It was intended to slow down usage from users that have bit torrents, etc running all day long.

For some of the customers that have complained we have researched it in detail and they were not being slowed by the algorithm. We have to make sure that everything is running properly as it makes no sense for us to limit users so much that the service becomes unusable.

We should have more info on what we plan to change in the next few days as we evaluate the data.

Clear becomes just the latest provider poster child for Net Neutrality in the United States.  While there may be reasonable capacity issues at stake on wireless networks not designed to accommodate 24/7 peer to peer traffic, throttling online video is another matter entirely — it’s one of the services Clear has promoted as possible using their higher speed network.  Artificially slowing a network the company sells as not being hampered by such traffic control measures is a classic case of false advertising.

One vocal Clear customer created this avatar

Customers have noticed and have attacked the company for dishonest business practices, bait and switch marketing, and violating their own internal policies.

Stop the Cap! has not seen any reports of company officials attempting to enforce early termination fees for those exiting contracts early.  Kevin noted his service was turned off as he was on the phone with a representative to process the disconnect request.  The representative also demanded Kevin return his modem.

Most who are dropping service are resuming service with their old providers, mostly cable broadband and telephone company DSL providers.  If online forum posts and Twitter tweets are to be believed, the company is losing hundreds of customers per day over their Internet Overcharging scheme.

Most likely, Clear has turned to vendors like Sandvine for “usage management” equipment that can automatically slow service for those who actually utilize the service they pay to receive.

“It is no longer about the broadband-connected home but about the broadband-connected individual,” said Tom Donnelly, EVP marketing and sales, Sandvine. “Service providers worldwide are looking for tools that enable their subscribers to stay within their service plans regardless of when, where or how they connect to the network.”

Sandvine’s products detect network conditions that trigger policies within the network to help service providers control subscribers’ Internet experience.  The latest version integrates with 3G and 4G networks to throttle speeds based on time of use or volume of data transferred.  A provider sets the parameters and the “network management” solution does the rest, automatically.

Stop the Cap! intends to monitor this situation carefully over the coming days to learn what the company intends to do with its network management scheme.  If they continue to use it, we will do our part and file a formal complaint against Clear with New York State Attorney General Andrew Cuomo for false advertising and misleading business practices.

It is only a matter of time before a law firm begins a class action against the company for similar reasons.  Stop the Cap! encourages Clear customers to use the company’s forum to vocally demand an end to all Internet Overcharging schemes or else you will take your business elsewhere.  You should also demand full credit for the days you experience artificially slowed speeds, and please let us know if you are asked to pay any early termination fee for exiting a Clear term contract.

AT&T wireless broadband customers who thought they could survive a smartphone data plan with only a 200MB usage allowance are discovering $15 overlimit fees applied to their bill because of mystery data usage consumed while they were asleep.

Stop the Cap! reader Pat dropped us a note to say she accumulated a whopping $45 in overlimit fees on her August bill for her family’s three iPhones because they exceeded their 200MB usage allowances while the family was unconscious:

At around 2AM most mornings, our phones regularly show usage of around 5-10MB each even though they are being charged and are not used by anyone in the family.  At first my husband thought an application on the phone was automatically exchanging data so we tried switching off 3G access and relied exclusively on Wi-Fi access, to no avail.  Sure enough, for the next seven days in a row, the phones all used between 5-10MB of usage.  We tried disabling and removing various applications and told others only to communicate manually.  That didn’t work either.  The mystery usage remained.

We contacted AT&T multiple times about this issue, because this usage easily put us over the limit, at which point AT&T bills a $15 penalty to buy you another 200MB of usage.  We got a lot of excuses, one month’s credit, but no answers.  One representative used the opportunity to try and upsell us on the 2GB plan to “avoid this from happening.”  It sounds like a nice scam.

Pat, it turns out this has been a significant issue for many AT&T customers dating back to the June introduction of the usage-limited smartphone data plans from AT&T.  We found threads on both AT&T and Apple’s websites running well into the dozens of pages, with nobody getting a definitive, consistent answer as to why this keeps happening.

In late July, the folks at Gizmodo got a statement from AT&T about the problem:

This is a routine update of your daily data activity on your device to ensure the accuracy of your data billing. Customers are not charged for data usage, given that no data session is generated. It’s not uncommon for devices that are ‘always on’, like iPhone, to process data event records for billing purposes after a certain amount of inactivity or after long periods of time. It’s also separate from how our system lets you monitor your data consumption.

Unfortunately, it’s also apparently inaccurate because subsequent comments indicate customers were, in fact, billed for that usage.

Customers have been told a variety of things to justify AT&T’s usage billing:

1. It’s an application on your phone polling for data and/or updates;
2. Your phone is sending and receiving e-mail;
3. If your phone goes “to sleep” it switches away from Wi-Fi and back to AT&T’s 3G usage, incurring data usage fees;
4. In the early morning, AT&T communicates with phones to exchange updates and data;
5. The usage reports represent cumulative usage made during the day but only later reported to AT&T;
6. It’s iTunes diagnostic information you agreed to share with Apple being sent to them every night;
7. It’s Apple’s fault.

The biggest problem? AT&T’s stingy usage allowances.  Many customers do not understand what a megabyte represents, but 200 of them sounds like a lot… until you browse to a page with multimedia content or utilize an application that exchanges a lot of data during the day.  AT&T has really not addressed the problem, other than to throw $10 credits to customers who complain the loudest.  Many just upgrade to the higher priced 2GB plan and hope the problem goes away.

AT&T’s Internet Overcharging scheme for wireless has trained customers to use less of a service they pay good money to receive:

• Customers think twice before installing and using data applications that could consume too much of their allowance;
• Customers train themselves to jump off of AT&T’s 3G network and switch to Wi-Fi wherever possible, despite paying for AT&T’s wireless data network;
• Customers quickly learn paying more for a more “generous allowance” is a “better value,” saving them the time and hassle of worrying about overlimit fees;
• Customers can complain all they like, but in the end they’ll grumble and pay the bill, facing exorbitant early termination fees if they want out of AT&T’s fee maze.

Unfortunately, without a team of lawyers or regulatory agencies breathing down AT&T’s neck to deliver a credible response to these overcharges, they are very likely to continue.  Although AT&T claims the 200MB usage plan was designed to save customers money and attract new users to smartphones, it’s no mistake the cheapest plan delivers a minuscule allowance.

The company knows very well that smartphone data usage increases as the phones and the software that runs on them become more sophisticated.  Customers delivered a tasty sample of 3G usage are likely to enjoy it and find themselves upgrading to a more profitable data plan with a comparatively larger allowance.  If they don’t, AT&T wins again because customers face paying at least $30 for 400MB of usage, even though a 2GB plan would have only set them back $25.

For now, the best we can recommend is completely powering off the phone overnight and seeing if it still incurs any phantom charges.  You should also complain, regularly and loudly, to AT&T each time it happens.  Contact your state Attorney General and file a complaint if AT&T’s answers are unsatisfactory and urge their office to begin an investigation.

As Stop the Cap! has said from day one, Internet Overcharging schemes force customers to spend time and energy doublechecking usage gauges that may or may not be accurate and make you think twice about everything you do online, wondering what it will ultimately do to your bill at the end of the month.  It’s all a win for service providers, who get the benefit of conservative usage from the “think-twice” mindset and revenue enhancing overlimit fees from those who never worry.  You lose either way.