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10% of Homes Now Exceed Comcast/AT&T/Cox’s 1 TB Usage Cap; Average Use Now 402.5 GB

Phillip Dampier May 4, 2020 Broadband "Shortage", Broadband Speed, Consumer News, Data Caps Comments Off on 10% of Homes Now Exceed Comcast/AT&T/Cox’s 1 TB Usage Cap; Average Use Now 402.5 GB

Note that data usage is slightly higher for users with “flat rate billing (FRB)” plans vs. those stuck with “usage-based billing (UBB).” (Source: OpenVault)

A record 10 percent of U.S. households now exceed 1 TB of data usage per month, putting some customers at risk of overlimit fees for exceeding data allowances that are usually enforced by AT&T, Comcast, Cox, and other telecom companies. Those caps are temporarily suspended because of the COVID-19 pandemic.

OpenVault, which collects average data usage from several service providers, reports a dramatic increase in the number of homes it designates as “power users” that consume at least 1 TB of data each month. In the first quarter of 2019, 4.2% of customers regularly exceeded 1 TB of usage. During the same period this year, that number shot up 138% to 10% of customers. “Extreme power users” that consume 2+ TB of data increased a record 215% from just one year ago, now representing 1.2% of broadband households. Last year it was 0.38%.

Overall total broadband usage across all users increased 47% in the first quarter of 2020, reaching an average of 402.5 GB a month. But that number mostly comprises average usage before the COVID-19 pandemic forced many to work from home. OpenVault originally predicted in January 2020 that monthly usage would reach 425 GB by the end of 2020. But with most Americans sheltering at home, measurements now suggest average broadband usage already exceeds that, reaching a record high of 460 GB in April.

“Nearly all the growth in broadband usage we would have expected for 2020 has now been achieved in the first quarter, with much of it concentrated in the last two weeks of the quarter,” OpenVault reported.

Despite usage growth, broadband providers in the United States are universally confident their networks are more than capable of sustaining the increased traffic. In fact, many providers report a spike in new customers, upgrades to higher speed tiers, and at least one — Spectrum, is confident enough of its network capacity to give away two months of broadband service to households with school-age children for free.

NCTA–The Internet & Television Association reports the biggest increases in broadband traffic are occurring on the upstream side, likely because of video teleconferencing. Although downstream traffic also spiked after the pandemic forced many businesses to close their offices, that traffic has flattened out and most recently has even decreased slightly.

Source: NCTA

Broadband providers may have lost key arguments to support reimposing data allowances and usage caps after the pandemic eases. Not only have broadband networks managed dramatic spikes in traffic with no significant difficulties, there are no signs of any “data tsunamis” in the future, even as broadband usage growth exceeds predictions. NCTA reports that 99.8% of the time broadband providers had “ample” or “excess” capacity available, not only to sustain current traffic levels but also potential future spikes in traffic. Peak traffic usage reaching levels where reduced capacity was available was identified just 0.2% of the time, causing a “minor impact on performance and customer experience.”

The current crisis is likely to bring a flood of new revenue to many broadband companies, even without usage overlimit fees. Since the pandemic began, OpenVault reports a 3.75% growth in premium-priced gigabit speed upgrades, up 97% from the same time last year.  In the New York City area, gigabit service subscriptions at Altice/Optimum increased 56% as many workers began to telecommute.

The biggest challenge the cable broadband industry faces as a result of this year’s usage growth is a need to accelerate plans already under development to increase upload speeds. Much of the recent traffic growth came from upstream traffic, which is cable broadband’s biggest Achilles’ Heel. Cable broadband networks devote most available bandwidth to downloads, with only a small fraction devoted to upload speed. Cable companies are expected to modestly increase upload speeds in a few months and will eventually deploy the next DOCSIS standard, supporting far faster upload speeds, beginning sometime next year.

C-Spire Introduces Unlimited 120 Mbps Fixed Wireless for $50/Month in Mississippi

For residents of 10 Mississippi communities, an alternative broadband option is now available delivering up to 120/50 Mbps speed with no data caps or throttling for a flat $50 a month, taxes and fees included.

C Spire 5G Internet” is as described, except it doesn’t use the official 5G standard and will require the installation of a “dinner plate”-sized antenna on one’s home to get the service.

C Spire is using an 802.11 variant with equipment developed by Mimosa and Siklu, leveraging C Spire’s existing 8,400 route miles of fiber infrastructure to extend service wirelessly to each customer without the cost of wiring a fiber optic cable to the home.

Siklu’s EtherHaul products work in conjunction with its point-to-point and point-to-multipoint radios that operate in the 60 and 70-80 GHz millimeter wave bands. Because of the vast amount of spectrum available on these uncongested frequencies, C Spire can provide connections up to 10 Gbps from each small cell site.

C Spire is using Siklu’s EH-600 mmWave backhaul equipment for its fixed wireless internet service in Mississippi.

Mimosa supplies short-range MicroPoP architectures and in limited tower deployments including Mimosa A5 and A5c access devices, Mimosa C5 client devices, and Mimosa N5-360 beamforming antennas.

“Our service is backhauled by Siklu’s carrier grade solutions enabling us to deliver high-speed internet access without the arbitrary data caps usually associated with LTE or satellite services,” said C Spire president Stephen Bye.  “With a flat rate of $50 a month, which includes taxes and fees, our customers can now easily get all of the content they want and need.”

C Spire said it is quickly working to introduce the service in “dozens” of markets in Mississippi, in addition to its earlier plans to offer fixed wireless to over 90,000 locations across its service area. The “5G” fixed wireless service being introduced in Mississippi is not the same as C Spire’s earlier fixed wireless initiative.

Customers report wireless speeds are within a reasonable range of what is advertised, but antenna placement can be critical to get the best speed. It isn’t known how many customers are currently sharing each small cell site, and C Spire has protected itself with a contract clause allowing it to begin data caps, usage based billing, or targeted suspensions for customers deemed to be consuming too much data if network congestion becomes a problem.

Mississippi is broadband-challenged because many of its rural locations are populated with some of the country’s poorest citizens. AT&T, the state’s largest phone company, has shown little interest expanding fiber into many of these areas, especially in northern Mississippi, and the state’s cable companies include Cable One, notorious for being expensive and data-capped. As a result, the state is ranked 49th out of 50 for broadband availability.

C Spire is a regional mobile provider — the sixth largest in the country — and directly provides its own cell service in Memphis, Tenn., Mississippi, Alabama, and the Florida Panhandle.

C Spire introduces 120 Mbps fixed wireless internet access for a flat $50 a month in Mississippi. No data caps or throttling. This company produced video introduces the service. (1:23)

The Return of the Verizon Wireless Unlimited Data Plan Provokes Wall Street Anxiety

The days of wine and roses from wireless data profits may be at risk, according to some Wall Street analysts, after Verizon Wireless on Monday brought back an unlimited data plan it vowed was dead for good in 2011.

The “Cadillac” wireless network reintroduced unlimited data, phone, and texting this week at prices that vary according to the number of lines on your account:

  • $80 a month for one line
  • $70 a line for two lines
  • $54 a line for three lines
  • $45 a line for four lines

Verizon Wireless last enrolled customers in its old unlimited data plan in 2011, and a dwindling number of customers remain grandfathered on that plan, which began increasing in price last year and has since been restricted to no more than 200GB of “unlimited” usage in a month.

Verizon’s new unlimited data plan is a response to pressure from increasing competition, especially from T-Mobile and Sprint. All of Verizon’s national competitors have unlimited data plans with varying restrictions, and Verizon’s lack of one is likely to have cost it new customer signups last year. The company only managed to add 2.3 million postpaid customers in 2016, down from 4.5 million signed up in 2015.

CEO McAdam swore unlimited data was dead at Verizon

Causing the most irritation is T-Mobile, which near-constantly nips at Verizon’s heels with innovative and disruptive plans designed to challenge Verizon’s business model. BTIG Research analyst Walter Piecyk noted Verizon’s claims it does not need to respond to T-Mobile’s marketing harassment just don’t ring true any longer.

“Verizon has a long history of rebuffing T-Mobile’s competitive moves as non-economic or unlikely to have an impact on the industry for more than a quarter or two, only to later replicate the offer,” Piecyk said. “That was true for phone payment plans, ETF payments for switchers, overage etc. We can now add unlimited to that list. How long will it be until Verizon offers pricing that includes taxes? Despite those delayed competitive responses, T-Mobile has maintained industry leading growth while Verizon’s has declined.”

Piecyk believes Verizon Wireless rushed their unlimited data plan into the marketplace and its introduction seemed not well planned.

“We asked Verizon what has changed to explain such an abrupt reversal, but have yet to receive a response,” Piecyk said. “They had recently been running an advertisement promoting the 5GB rate plan that argued why customers do not need unlimited. The rate plan remains, but it is not clear if the advertisement will. The launch of unlimited seemed rushed, coming a week after the exposure they could have secured with a Super Bowl advertisement. The ad run last night during the Grammy’s did not appear to have taken much to produce.”

Verizon Wireless executives have argued for years customers don’t need unlimited data plans and Verizon would no longer offer one:

  • With unlimited, it’s the physics that breaks it. If you allow unlimited usage, you just run out of gas. — Lowell McAdam, Verizon CEO (September, 2013)
  • At this point, we are not going to entertain unlimited. Promotions come and go. We can’t react to everything in the marketplace.” — Fran Shammo, former Verizon CFO (January, 2016)
  • “I’ve been pretty public saying the unlimited model does not work in an LTE environment. Unlimited is a very short-term game in the LTE market. Eventually unlimited is going to go away because you have to generate cash to reinvest.” — Fran Shammo, former Verizon CFO (March, 2016)
  • Unlimited data plans were “not something we feel the need to do.” — Matthew Ellis, Verizon CFO (January, 2017)

Shammo: Unlimited doesn’t work on LTE networks.

The impact of not having an unlimited data plan appears to have convinced Verizon to change its mind, and that comes as no surprise to Roger Entner of Recon Analytics.

“In three to five years, unlimited plans will come back,” Entner predicted in 2011. He claimed back then wireless carriers were initially unsure how to predict data usage growth on their networks and placing limits on usage gave carriers more predictable upgrade schedules. But after several years of data, Entner said carriers can now better predict the amount of data an average subscriber will use in a month, giving them confidence to remove the caps.

Verizon Wireless’ unlimited plan includes several fine print limitations that provide additional network protection for Verizon and manage any surprise usage:

  • Unlimited use is only provided on Verizon’s 4G LTE network. Limits may apply to customers using older 3G networks, which are less efficient managing traffic;
  • Unlimited not available to Machine-to-Machine Services;
  • Customers with unlimited data plans may find their traffic deprioritized on congested cell sites after 22GB of data consumption during a billing cycle. This speed throttle can reduce network speeds to near-dial up in some circumstances, at least until site congestion eases;
  • Mobile hotspot tethering on this unlimited plan is limited to 10GB per month on Verizon’s 4G LTE network. Additional usage will be provided at 3G speeds. This is designed to discourage customers from using Verizon Wireless as a home broadband replacement;
  • Verizon’s ultimate 200GB monthly limit is also presumably still in place. If you exceed it on Verizon’s legacy unlimited data plan, you were told to shift to a tiered data plan or had your account closed.

Piecyk thinks Verizon’s unlimited data plan may have been rushed out.

Although consumers clamoring for an unlimited data plan from Verizon are happy, Wall Street is not. Analysts are generally opposed to Verizon’s return to unlimited, with many suggesting it is clear evidence the days of high profits and predictable revenue growth are over. That is especially bad news for AT&T and Verizon Wireless, where investors expect predictable and aggressive returns. Verizon has already warned investors it expects revenue and profits to be flat this year.

Jeffrey Kvaal with Instinet believes Verizon’s traditionally robust network coverage is no longer an advantage as competitors catch up and unlimited data is the final nail in the coffin for wireless revenue growth. That means only one thing to Kvaal, AT&T and Verizon must pursue growth outside of the wireless industry. Verizon, in particular, is facing investor expectations it will do something bold in 2017, such as making a large acquisition like a major cable operator.

Evercore ISI’s Vijay Jayant believes unlimited data is bad news for all carriers from the perspective of investors looking for revenue growth.  Jayant told investors in the short term, unlimited data may help Verizon’s revenue because the plans are expensive, but in the long run Verizon is sacrificing the revenue potential of monetizing growing data usage in return for a high-priced, flat rate option. That guarantees “customers won’t see their bills rise, even as their usage does,” Jayant said.

Some analysts point out Verizon’s unlimited data plan is expensive, limiting its potential attractiveness to customers considering jumping to another carrier. While Verizon charges between $80-180 (for one to four devices), AT&T charges between $100-180 for unlimited plan customers, who must also sign up with DirecTV to get an unlimited data plan. T-Mobile charges between $70-160 and Sprint charges between $60-160. The cheapest is T-Mobile, because its plans are all-taxes/fees inclusive. All four carriers have soft limits after which customers may be exposed to a speed throttle. AT&T can temporarily throttle users at 22GB, Sprint can throttle above 23GB and T-Mobile after 28GB.

The Wall Street Journal discusses Verizon’s unlimited data plan and its caveats. (4:55)

Cox’s Data Limbo Dance: Slashes “Ultimate” Allowance in Half, Lies About Why

Cox's data plan limbo dance. How low can they go?

Cox’s data plan limbo dance. How low can they go?

Cox Communications has cut by half the data usage allowance of one of its fastest broadband plans targeting so-called “heavy users,” exposing unsuspecting customers to expensive overlimit fees, while claiming usage caps are now mandated by law.

Stop the Cap! reader John C. wrote to tell us he discovered his allowance for Cox’s “Ultimate” Plan, delivering 200/20Mbps, has been slashed from 2,000GB to 1,000GB, with little warning except in an obscure support FAQ.

“About 95% of Cox customers are currently on a data plan that more than adequately meets the monthly needs of their household,” Cox claimed. “However, some households, particularly those with multiple Internet users that enjoy streaming TV or movies, may want to select an Internet package with a larger data plan. That is why we offer plans for all types of users so you can choose what is best for your household.”

The plan that most customers want is a flat rate, unlimited-use plan, one that Cox has unilaterally decided to stop offering. Just as bad: targeting the most widely available premium plan for a major usage allowance cut with no explanation whatsoever. It’s bad news for John, who says after paying Cox their asking price for Ultimate service, he cannot afford to also pay overage fees on top of that (currently $10 for each 50GB allotment, charged only in the Cleveland, Oh. area for now).

Customers who contact Cox and complain about their usage caps or allowance changes are being told false fables by Cox’s customer service specialists, who claim data caps are now the law in the United States.

Here is an example of an actual support session with Cox employees, (emphasis ours, edited (…) for brevity):

cox say noYou: I also learned that you have internet data cap?

Jenna: Data limits were implemented by the FCC in 2011. By law, we have to have them. If you exceed the limit for 3 consecutive months, you will be contacted to discuss your options for upgrading.

You: FCC? can you send me details about that

[…]

Jenna: As I mentioned, there’s no fee for exceeding those limits. If you exceed the limit for 3 consecutive months, you will be contacted to discuss your options for upgrading. You can save a copy of this chat transcript for your records if you wish.

Jenna: I can also get you over to Customer Care for more information.

You: so why would you mention FCC rules then?

Jenna: Because you asked about our data limits.

Jenna: That’s why we have them.

You: Sure so can you tell me what FCC rule from 2011 you are referrind to?

Jenna: Sure, I’ll get you the link to the FCC website.

[…]

Jenna: Sure thing. Allow me a moment to get you over to Customer Care chat for further information about our Data Caps policies, and why we have them.

[…]

Christian O.: I see, well our Internet packages have a data usage limit however if you exceed that limit we won’t downgrade your speed or restrict your access to Internet or charge you more.

Christian O.: I think I found some information on the date usage and the FCC on 2011. One moment, please.

You: but it says right there that you will cahrge $10 for 50GB after I reach data cap

You: And FCC is very strict about data caps

Christian O.: Give me a moment to check something.

You: ok thanks

Christian O.: If you exceed your data plan, Cox may notify you by email to alert you. Your service will not be interrupted if you choose to stay on your existing package except in the rare cases of excessive usage. In those extremely rare situations, Cox may suspend service after attempting to resolve the issue.

Christian O.: Cox is conducting a limited data usage trial in Cleveland, Ohio. In all other markets, Cox does not currently charge additional fees if your data plan is exceeded.

You: what you are doing with data caps / usage is illegal

You: But please send me the FCC rule from 2011 that Jenna and you mention

You: “Jenna: Data limits were implemented by the FCC in 2011. By law, we have to have them.”

Christian O.: I don’t have such rule that talks about that. Do you have the rule where it says that is illegal?

Christian O.: Just asking.

[…]

Christian O.: Honestly I don’t have any idea about the rule that Jenna was speaking about. Let me go ask my supervisor. One moment, please.

[…]

Christian O.: Unfortunately we couldn’t find any information about that rule established by the FCC.

To clarify, the FCC neither has rules for or against data caps. It has remained neutral on the subject, although FCC chairman Thomas Wheeler recently advocated imposing a moratorium on data caps or usage billing for up to seven years as a condition of approving Charter Communications’ acquisitions of Time Warner Cable and Bright House Networks.

Here are Cox’s current data plans, which are effective for all residential customers. However, only customers in Cleveland will face penalties for exceeding them at this time.

Package Monthly Included Data Speeds

Download / Upload

Starter 200 GB 5 Mbps / 1 Mbps
Essential 250 GB 15 Mbps / 2 Mbps
Preferred 350 GB 50 Mbps / 5 Mbps
Premier 700 GB 100 Mbps / 10 Mbps
Ultimate 1000 GB 200 Mbps / 20 Mbps
Gigablast (Where Available) 2000 GB 1 Gbps / 1 Gbps

Bell Acquires Manitoba Telecom for $3.9 Billion; Cell Phone Rates Expected to Rise

Phillip Dampier May 2, 2016 Bell (Canada), Canada, Competition, Consumer News, Data Caps, MTS (Manitoba), Public Policy & Gov't, Wireless Broadband Comments Off on Bell Acquires Manitoba Telecom for $3.9 Billion; Cell Phone Rates Expected to Rise

bell badBCE, Inc., the parent company of Bell Canada, has acquired Manitoba Telecom Services, Inc. (MTS), in a deal worth $3.9 billion, further enlarging Canada’s largest telecommunications company.

“Under the terms of this transaction, MTS will achieve much more than it could have as an independent company,” Manitoba Telecom president and CEO Jay Forbes said in a conference call with analysts. “BCE’s commitment to invest $1 billion over five years into Manitoba’s telecommunications infrastructure will also contribute greatly to the prosperity of our province and the quality of our customer experience.”

Many MTS customers and consumer advocates disagree with Forbes’ assessment, noting the deal will further consolidate Canada’s wireless marketplace by eliminating the province’s largest wireless carrier – MTS. The wireless business has nearly 500,000 customers – by far the largest provider in the region. Under the deal, BCE will sell off about one-third of MTS’ customers and retail storefronts to competitor Telus in a separate transaction.

Manitoba and neighboring residents in Saskatchewan pay some of the lowest prices for telecom services in Canada. MTS offers unlimited, flat rate Internet plans for both its broadband and wireless customers — plans likely to disappear or become more expensive after Bell takes over. The result, according to one Canadian telecom expert, will be higher rates.

“With MTS out of the way — and Bell and Telus sharing the same wireless network — prices are bound to increase to levels more commonly found in the rest of the country,” lawyer Michael Geist wrote on his blog.

The deal is also likely to deliver a death-blow to a government commitment assuring Canadians of at least four competing choices for wireless service. If Bell’s buyout is approved by regulators, Manitoba will be served by just three competitors — all charging substantially more than MTS.

...but soon we'll be with Bell.

…but soon we’ll be with Bell.

“Compare Bell’s wireless pricing for consumers in Manitoba and Ontario,” offered Geist. “The cost of an unlimited nationwide calling share plan in Manitoba is $50. The same plan in Ontario is $65. The difference in data costs are even larger: Bell offers 6GB for $20 in Manitoba. The same $20 will get you just 500MB in Ontario. In fact, 5GB costs $50 in Ontario, more than double the cost in Manitoba for less data. The other carriers such as Rogers and Telus also offer lower pricing in Manitoba. The reason is obvious: the presence of a fourth carrier creates more competition and lower pricing.”

That Manitoba Telecom would be up for sale at all came as a result of its controversial privatization in 2006 under a previous Conservative provincial government. The decision to privatize came despite a commitment from then-Premier Gary Filmon that Manitoba Telecom should remain a provincially-owned telecom company. Critics point to one possible reason for the flip-flop. Shortly after leaving politics, Filmon was appointed to the board of directors of the privatized company and was given $1.4 million in director fees and compensation over ten years, along with company shares with hundreds of thousands of dollars.

Economist Toby Sanger compared costs and returns of Manitoba Telecom and SaskTel, Saskatchewan’s publicly-owned telecommunications company. After two decades, the cost of a basic landline with SaskTel is $8 less per month than MTS, and SaskTel paid $497 million in corporate income taxes to the citizens of Saskatchewan – SaskTel’s shareholders – over the past five years, compared to $1.2 million paid by MTS over the same time period. In 2014, the CEO of SaskTel earned $499,492 compared to $7.8 million paid to the CEO of MTS for managing a very similar sized operation.

The acquisition will be reviewed by the Canadian Radio-television and Telecommunications Commission, the Competition Bureau and Industry Canada, and could be approved later this year or early 2017.

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