Remember when Bell’s head of government affairs Mirko Bibic told Parliament usage-based billing was necessary because he didn’t think it fair that all Canadians should pay for “heavy users” of the company’s Internet service?  That was a few months ago.  This is April — time for a rate increase that will jack Bell broadband service rates up an additional $3 a month, effective in May.  That’s a rate increase every customer will pay, and comes with Bell’s everyday Internet Overcharging scheme — usage caps and overlimit fees.

Stop the Cap! reader Alex in Quebec sent a copy of his bill showing Bell’s “Price Update.”  They don’t even want to call it a rate increase.

Bell's notification to customers in Quebec their bills are going up.

“Bell Canada will increase their Internet rates by as much as 15% (for Québec ”Essential” users),” Alex says. “Although $3 may seem like a negligible charge, it especially affects those with budget Internet plans, such as Essential, E Plus, and Performance ‘Fibe’ 6.”

Bell’s website cannot even get the story straight, originally telling customers their overlimit fees would now be rounded to the nearest gigabyte, instead of megabyte.  A Bell spokesperson tells Stop the Cap! that is a typo — they really still mean megabyte.

Bell is one of the few phone companies out there actually increasing their long distance calling rates as well, Alex tells us.  The original announcement came around the same time as the earthquake in Japan, underlining how essential long distance can be during natural disasters.  Many cable companies have waived long distance fees to Japan altogether.  Not Bell.

The rate increases mean customers like ‘Jackorama’ in Hamilton will pay $56.90 for “up to 7Mbps” ‘Performance DSL’ service.  After HST fees, he’ll pay $64.30 just for broadband service, with a 60GB monthly usage limit.  If he exceeds that, he’ll pay even more — $2.50 per gigabyte, or, if he knows he’ll exceed the cap in advance: $5/month for 40 GB, $10/month for 80 GB, or $15/month for 120 GB.

That also assumes Bell can count usage correctly, and there is every indication they cannot.  The company has admitted its usage meter is prone to errors — misreads they are still prepared to bill their customers.

One of Canada’s largest phone companies is willing to admit it is prepared to launch an Internet Overcharging scheme on its broadband customers now, while western Canada’s largest cable company would prefer to wait until after the next election to spring higher prices on consumers.

When Shaw’s president Peter Bissonnette told investors and the media he believes users who use more should pay more, all that needs to be put in place is exactly how much more Shaw customers will pay for already-expensive Internet access.  With Shaw making noises about usage-based billing, Telus felt it was safe enough to dive right into their own usage cap and overlimit fee pricing scheme.

Shawn Hall, a spokesperson for Telus, told CTV News that the phone company was ready to begin overcharging customers as soon as this summer.

Shawn Hall (CTV BC)

“It’s only fair that people pay for how much Internet capacity they use,” Hall told CTV.

Telus doesn’t seem to be too worried about the fact usage-based billing has become a major issue in the upcoming elections.  A review of the pricing scheme by the Canadian Radio-television and Telecommunications Commission is due within months, but the phone company isn’t going to wait.

Shaw is being more cautious.  After the pretense of a “listening tour,” and with federal officials breathing down their necks, Shaw wants to wait until the elections are over before moving forward on their own price gouging, according to Openmedia.ca.

As Stop the Cap! has told our readers repeatedly, corporate “listening tours” about Internet Overcharging are about as useful as lipstick on a pig.  Providers don’t actually listen to their customers who are completely against these pricing schemes — and every survey done tells us that represents the majority of customers.  Instead, they only hear what they want to hear, cherry-picking a handful of useful statements in order to make it appear they are responsive to customer needs.

Shaw heavily redacted their own meeting minutes on their website, completely ignoring a large number of customers unalterably opposed to usage-based billing of any kind.  Instead, statements that fit their agenda were repeated in detail, especially those that suggested average users don’t want to pay for heavy users.

Shaw executives discuss with investors how they will stick customers with usage-based billing, despite customers telling them they don’t want these schemes. April 13, 2011. (7 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

It’s like arguing marathon runners should pay extra for the oxygen they consume because others don’t breathe as much.  It’s all a lot of hot air.

Broadband traffic costs providers only a small percentage of the amount they charge customers, and that number is dropping.  Yet providers want to raise prices, restrict usage, and charge punitive fees for those who exceed their arbitrary usage limits.

The power of the duopoly in place across most of western Canada has given providers little to fear from overcharging consumers.

Shaw CEO Bradley Shaw told investors they know few customers will switch providers if usage-based billing is imposed.

“We are of the mind that we still have a tremendous upside in terms of pricing power on our Internet services,” Shaw said.

The fact many Shaw customers have no other choice other than Telus does not escape Shaw’s notice either.

Telus’ Hall even had the nerve to call their Internet Overcharging pro-consumer.

Bissonnette

“It’s going to be really customer friendly,” he said. “You’d be forgiven for the first month you go over. You’d get lots of warning, lots of notice that you were going over with options of moving to other plans.”

Except an unlimited one — that is not available.

Openmedia.ca is trying to hold politicians’ feet to the fire on the issue of Internet Overcharging, demanding answers from every major party in Canada about how they will keep providers from imposing these pricing schemes.

Every major party, with one exception — the Conservative Party of Canada, has answered.  That’s the party currently in power.

Liberal Leader Michael Ignatieff has spoken out against usage-based billing, while NDP Leader Jack Layton has promised to ban it outright if elected to power.

Nearly a half-million Canadians have signed a petition opposing usage-based billing, and providers are showing once again they are not open to listening to anyone but their bean counters, intent on extracting as much cash as possible from Canadian customers’ wallets.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CTV British Columbia – Shaw planning to revive metered internet billing critics 4-25-11.flv[/flv]

CTV in British Columbia covers Shaw’s plans to revive metered Internet billing later this year.  (2 minutes)

(Source: JVC)

The National Association of Broadcasters (NAB), a trade association and lobbying group representing many of the nation’s television stations, says claims by wireless carriers of a nationwide spectrum crisis are troubling and counterfactual.  That conclusion comes in a new report issued by the NAB this morning that wants the FCC to keep its hands off UHF broadcast channel spectrum the agency wants to sell off to improve mobile broadband.

The paper, “Solving the Capacity Crunch: Options for Enhancing Data Capacity on Wireless Networks,” written by a former FCC employee, suggests claims by wireless carriers that they will “run out” of frequencies to serve America’s growing interest in wireless services are simply overblown.

Many wireless companies own spectrum they are not using, the report argues, and other licensed users are holding onto spectrum without using it either, hoping to make a killing selling it off at enormous profits in the future.  Besides, the federal government holds the largest amount of underutilized spectrum around — frequencies that could easily be allocated to wireless use without further reducing the size of the UHF broadcast TV band.

Many of the ideas in the NAB report emphasize the need for carriers to deploy innovative technology solutions to increase the efficiency of the spectrum they are already using.  Those ideas include additional cell towers to split traffic loads into smaller regional areas, and improving on network channel-bonding, caching, and intelligent network protocols.

But the NAB report has some obvious weak spots the wireless industry will likely exploit — notably their recommendations that seek a reduction in wireless traffic — ideas that would suggest there is not enough spectrum to handle every user.  Among those recommendations:

• Implementing Internet Overcharging schemes like “fair use” policies and consumption-based pricing to discourage use;
• Migrating voice traffic to Internet Protocol;
• Migrating data traffic to a prolific network of “femtocells” — mini antennas that provide 3G service inside buildings, but deliver that traffic over home or business wired broadband connections;
• Offering wider access to Wi-Fi networks in public areas;
• Encouraging the development of bandwidth sensitive devices and applications.

The National Broadband Plan’s conclusion of a spectrum shortage is based on little more than a wish list by wireless carriers, says the paper. Its author, Uzoma Onyeije, cites contradictory statements by high-ranking corporate officials to show the Plan’s calls for making 500MHz of spectrum available for broadband in ten years is a gross overestimate of the actual need.

“There is no denying that the corporate imperative of mobile wireless carriers is to obtain as much spectrum as they can,” Onyeije wrote. “However, the fact that wireless carriers cannot find a unified voice on the amount and timing of their spectrum needs suggests that this advocacy is more strategic gamesmanship than factual reality.”

The NAB has heavily lobbied Washington officials on the issue of spectrum because their members — broadcast television stations — are facing the loss of up to 120MHz of what’s left of the UHF dial, already shrinking because of earlier reallocations.  The FCC proposal would resize the UHF dial to channels 14-30 — 16 channels.  In crowded television markets like Los Angeles, up to 16 stations would be forced to sign-off the public airwaves for good, because there would be insufficient space to allow them to continue a broadcast signal.  Instead, the FCC proposes they deliver their signal over pay television providers like cable or telco-provided IPTV.  Or they could always stream over the Internet.  But that would mean the decline of free, over the air television in this country.

Considering the millions of dollars many stations are worth, it’s no surprise broadcasters are howling over the proposal.

Onyeije’s report suggests AT&T and Verizon, among others, are grabbing whatever valuable spectrum they can get their hands on.  What they don’t use, they’ll “warehouse” for claimed future use.  By locking up unused spectrum, potential competitors can’t use it.  The proof, Onyeije writes, is found when comparing claims by the wireless industry with the FCC’s own independent research:

AT&T predicts 8-10 times of data growth between 2010 and 2015 and T-Mobile forecasts that data will have 10 times of growth in 5 years. Yet, the Commission’s assessment that 275MHz of spectrum is needed to meet mobile data demand is premised on data growth of 35 times between 2009 and 2014.

The Data Tsunami Debunked

Some providers are sitting on spectrum they already own.

The NAB also takes to task the “evidence” many providers use to claim the zettabyte era is at hand, where a veritable exaflood of data will force America into a widespread data brownout if more capacity isn’t immediately made available.

[…] The [industry claims rely] on suspect data. In arriving at its conclusion, OBI Technical Paper No. 6 relies heavily on forecast data from Cisco that is both wildly optimistic about data growth and unscientific. In a blog entry entitled, Should a Sales Brochure Underlie US Spectrum Policy?, Steven Crowley states that “[t]here is overlap between the people who prepare the forecast and the people responsible for marketing Cisco’s line of core-network hardware to service providers. The forecast is used to help sell that hardware. Put simply, it’s a sales brochure.”

Onyeije takes apart the oft-repeated claim that a data explosion will be unyielding, unrelenting, and will be the wireless industry’s biggest challenge for years to come.  It also speaks to issues about broadband use in general:

In particular, the paper appears to be premised on the highly suspect assumption that the high demand curve for mobile data will not slow. While smartphone growth is significantly increasing now, it will no doubt plateau and slow. It has been widely accepted for decades that the process of technological adoption over time is typically illustrated as a classic normal distribution or “bell curve” where a phase of rapid adoption ends in slowed adoption as the product matures or new technologies emerge.

As recently reported, Cisco now projects that U.S. mobile growth will drop by more than half by 2015. As Dave Burstein, Editor of DSL Prime, explains: “The growth is clearly not exponential.”  Mr. Burstein went on to say “Every CFO and engineer has to plan carefully for the network upgrades needed, but the numbers certainly don’t suggest a ‘crisis.’” Jon Healey of the Los Angeles Times Editorial Board similarly explains that “Much of the growth in the demand for bandwidth has come from two parallel forces: a new type of smartphone (epitomized by the iPhone) encourages people to make more use of the mobile Web, and more people are switching from conventional mobile phones to these new smartphones. Once everyone has an iPhone, an Android phone or the equivalent, much of the growth goes away.” AP Technology writer Peter Svensson echoes this concern and explains “AT&T’s own figures indicate that growth is slowing down now that smartphones are already in many hands.” Thus, the assumption that data demand will continue to grow unabated is deeply flawed.

Internet Overcharging is About Rationing and Reducing Use

Although the NAB favors Internet Overcharging to drive down demand for use, Onyeije’s report inadvertently provides additional evidence to the forces that oppose data caps, meters, and speed throttles: they are designed to monetize usage while driving it down at the same time:

While unlimited data plans on mobile phones were once the standard, there is now more focus on using pricing as a network management tool. As AT&T Operations President John Stankey put it, “I don’t think you can have an unlimited model forever with a scarce resource. More people get drunk at an open bar than a cash bar.”  In the past year, AT&T and Virgin Mobile abandoned unlimited data plans. In 2010, T-Mobile announced that it would employ data throttling and slow the download speeds of customers that use more than five GB of data each month. And Bloomberg reported on March 1, 2011 that “Verizon Communications Inc. will stop offering unlimited data plans for Apple Inc.’s iPhone as soon as this summer and switch to a tiered pricing offering that can generate more revenue and hold the heaviest users in check.” Usage-based smartphone data plans substantially reduce per-user data traffic. As a result, data growth is likely to slow over time. And companies, including Cisco, are marketing products to carriers to help make tiered data plans easier to implement and help carriers “increase the monetization of their networks.”

While many AT&T residential customers continue their exodus from the company’s forthcoming Internet Overcharging scheme, there are many rural Americans who have just one choice for broadband service — AT&T DSL.  For them, escaping usage caps is not as easy as calling the local cable company and arranging for new service.

While consumers continue to register their displeasure with AT&T over capping Internet usage at 150GB for DSL or 250GB for U-verse, there appears to be a way to get away from the usage limits while still maintaining your AT&T DSL service — switch to a usage-cap-free business account.

AT&T sells business broadband service to at-home, small, and medium-sized businesses at a substantial discount for the first year — $30 a month for up to 6Mbps.  A one year term commitment is required, but that likely won’t present any problems for customers who don’t have any other option for service.  With an AT&T modem/router already in place, making the change should just require a phone call to AT&T.

The company may offer different pricing and service plans depending on the region where you obtain service.  Former BellSouth customers may get different promotions than former Ameritech customers do.  We also found a few customers who still were able to access AT&T’s “usage measurement tool” on their business accounts, but business customers have not been notified usage caps apply to them, and we suspect that will continue to be the case.  AT&T promotes business class service at $25-30 a month in one offer we found, and service was even available to those who don’t want a business phone line.

After the first year, rates increase substantially, but we’re hopeful AT&T will learn the error of their ways and rescind their unjustified usage limits before the year is up.

Thanks to Wayne in Madison, Wisconsin for capturing these screen shots from AT&T's website.

If you are going to switch to AT&T’s business class service, share your experiences in our comment section to help other readers.

One of America’s largest midwestern cities is being victimized by not one, but two major Internet Service Providers with Internet Overcharging schemes that will limit broadband use by customers.

Charter Communications, which calls St. Louis home, delivers cable service to much of the city, and has lightly enforced arbitrary usage limits on its cable broadband customers since last November.  AT&T, the major telephone provider, plans to limit its DSL and U-verse customers starting in early May.

“Now we get to choose between Charter’s usage cap or AT&T’s,” says Reginald, a Stop the Cap! reader in St. Louis.  “As usual, AT&T is always the bigger ripoff — this company hasn’t done one consumer-friendly thing in at least a decade.”

Reginald is currently a U-verse customer who fled Charter around the time the cable company went bankrupt.

“Charter was, is, and will always be abysmal in providing good service and accurate bills, and I was not about to pay for their business mistakes,” Reginald writes.  “When U-verse became available I told AT&T I was signing up because they were offering unlimited use plans and Charter was playing games with their usage cap.”

When AT&T’s cap is in place, St. Louis residents will get to choose between the lesser of two evils:

Usage Limits

• AT&T DSL Customers:  150GB per month
• AT&T U-verse Customers:  250GB per month
• Charter Lite/Express: 100GB per month
• Charter Plus/Max: 250GB per month
• Charter Ultra 60: 500GB per month

AT&T will deliver three warnings and then a higher bill — $10 for each 50GB of “excess usage.”  Charter sends out occasional warnings, then reserves the right to terminate your service.

“It stinks, and if I had my way I would not do business with any provider who has a usage cap,” Reginald says.  “I would rather pay a few dollars more a month and not have to worry, and I can’t imagine I’ve ever used over 100GB in a month.”

Jess, another St. Louis resident, pulls the plug on AT&T U-verse May 2nd.

“I almost wanted them to charge me an early cancellation fee so I could pound them with their sudden change of terms,” Jess says.  “I am switching back to Charter on May 2nd, the day AT&T starts their crap.  AT&T acted all surprised about why I would possibly ever not do business with them over this issue.”

Jess says she would rather deal with warning letters from Charter than a higher AT&T bill.

“Every penny more AT&T gets from us goes right into their lobbying to screw consumers more, and here are the results for everyone to see,” Jess says.  “If Charter wants to pull their games with me and my family, the next step is to declare war on the politicians who let this stuff happen.”

Bill says AT&T offered him a discount to stay with the company — he is canceling his U-Verse service May 1st.  But he refused, telling AT&T he will not do business with a company that engages in Internet Overcharging.

“I’m not too worried about Charter,” Bill writes Stop the Cap! “If they try and threaten me, I’ll let them cut me off and then we’ll sign up under my wife’s name, and bounce from account to account.”

Your money = Their Money

For all three of our readers, none of whom claim they will exceed the allowance, it’s a matter of principle.

Reginald, Jess, and Bill all feel strongly usage caps and overlimit fees are unjustified, and are more about protecting video packages than “unclogging” providers’ networks.

Bob Zimmermann, an AT&T customer in Richmond Heights, tells the Post-Dispatch he doesn’t like the new limit either. He watches an occasional Internet movie, and sometimes downloads video to his iPad. He doubts he’ll exceed the cap, but he doesn’t want to worry about it.

He is shopping for alternatives.

“I’ll see if I can negotiate a better deal,” he told the newspaper.

Jess wishes him luck finding someone else in St. Louis.  She suggests customers like Zimmermann play AT&T and Charter off each other to get a lower bill, at least temporarily.

“What is most important right now is to tell AT&T you are leaving them because they are abusive, and then sign up with a new customer discount with Charter,” Jess suggests.  “Then if and when Charter cuts you off, go back to AT&T and see if you can get them to waive any fees after the third warning or else you are switching back to Charter.”

Another alternative is to sign up for Charter’s business service, which has no usage cap, but comes at a significantly higher price than residential service.  Their starter package includes unlimited Internet at 16/2Mbps speeds, a domain name, and a business phone line with unlimited long distance and calling features.  It runs a steep $120 a month.

“If Charter didn’t offer a 500GB allowance on their 60Mbps tier, I might consider a business package if I used my connection a lot,” admits Bill.  “Isn’t it ridiculous when someone wants to sell you a super fast package you cannot really use because of usage limits?”

Bill partly blames the state legislature for letting AT&T get abusive with customers.

“AT&T shows up with a lot of cash to dole out in the Missouri legislature and in return they get to abuse customers,” Bill notes.  “You notice Verizon cannot get away with this in the more consumer-protection-friendly northeast.”

Jess says the whole thing is a mess.

“It really shows how the midwest is getting screwed once again — this time for Internet access,” she notes. “There is no Verizon fiber here, and even Google showing up in Kansas City won’t be enough to shame the likes of AT&T.”