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Netflix Finally Wakes Up to Net Neutrality, Internet Overcharging Threat

"DVD's are so five years ago!"

Netflix, which has seen its Canadian streaming-only video service welcomed with usage cap reductions by Rogers Cable, has finally started to wake up to the threat its online video business model is one speed throttle or usage cap away from oblivion.

As the video rental company now contemplates launching a streaming-only version of its service in the United States, it has now firmly waded into the Net Neutrality debate.  In a filing earlier this month, Netflix impressed upon the Federal Communications Commission the importance of prohibiting providers from establishing blockades to keep its competing video service from threatening cable-TV revenue:

“The Commission must assure that specialized services do not, in effect, transform the public Internet into a private network in which access is not open but is controlled by the network operator, and innovative Internet-based enterprises are permitted effective access to their consumers only if the enterprises pay network operators unreasonable fees or are otherwise seen by such network operators as not threatening a competitive venture.”

Netflix online video packs a real wallop, as Americans embraces the service as a suitable and cheaper replacement for premium cable movie channels.

Sandvine, which pitches “network management” products to the broadband industry, reported Netflix now represents more than 20 percent of all downstream broadband traffic in the United States during peak usage times between 8-10pm.

The company’s financial results seem to affirm its growing impact as an online video entertainment player.  The Washington Post reports in the third quarter, Netflix saw a 52 percent gain in subscribers to 16.9 million. Revenue increased 31 percent to $553 million. But most interesting: 66 percent of subscribers watched more than 15 minutes of streaming video compared with 41 percent during the same period last year. The company predicted Wednesday that in the fourth quarter, a majority of Netflix subscribers would watch more content streamed from the Web on Netflix than on DVD.

That prompted CEO Reed Hastings to say Netflix should now be considered a streaming company that also offers DVD-by-mail service.

If providers launch Internet Overcharging schemes that limit broadband usage or throttle their competitors to barely usable speeds, that growth could come to an end quicker than the introduction of the next “unfair usage policy.”

Sandvine’s research confirmed something else.  As broadband speeds increase, so does usage.  In Asia where broadband speeds are dramatically higher than in the United States, Sandvine found median monthly data consumption is close to 12 gigabytes per household compared to 4 gigabytes in North America.  And Asians stay very close to their broadband connections, using them on average for almost 5.5 hours per day, compared to just three hours for North Americans.

When one considers the majority of broadband users are only starting to discover online video, those numbers are headed upwards… fast.

Finding a Compromise for Net Neutrality: How Many Loopholes Do You Want?

Phillip Dampier October 19, 2010 Broadband "Shortage", Broadband Speed, Data Caps, Editorial & Site News, Net Neutrality, Online Video, Public Policy & Gov't, Video Comments Off on Finding a Compromise for Net Neutrality: How Many Loopholes Do You Want?

With continued inaction at the Federal Communications Commission, some stakeholders in the Net Neutrality debate continue to file comments with the Commission trying to find a “third way” to bring about guarantees for online free speech and access while softening opposition to “network management” technology that allows providers to manipulate broadband traffic.

Among such filers is the Communications Workers of America, which seeks a “middle-ground approach” to protecting a free and open Internet.

The CWA has always maintained its feet in two camps — with consumers looking for improved broadband and with the communications companies that employee large numbers of the union’s members, who will build out those networks and provide service.

The union shares our annoyance with FCC Chairman Julius Genachowski for his complete inaction on broadband policy thus far.  In short, the Commission keeps stalling from taking direct action to reclassify broadband as a telecommunications service, restoring its ability to oversee broadband policy lost in a federal appeals court decision earlier this year.

The CWA used a piece by David Honig from the Minority Media and Telecommunications Council (MMTC) to echo its own position:

MMTC isn’t alone in being frustrated with the FCC’s disappointing attitude toward real action this past year. In a recent interview with the Wall Street Journal, FCC Chairman Julius Genachowski expressed impatience with the glacial pace of policymaking at his Commission. Although he mentioned that the FCC, under his direction, has implemented some notable reforms, he conceded that “there is still a lot to do.”

Unfortunately, regardless of how earnest the Chairman is in his desire to move forward with the business of policymaking, his actions speak much louder than his words. Indeed, his yearlong pursuit of network neutrality rules — first via a traditional rulemaking proceeding and, most recently, via an effort to reclassify broadband as a telecommunications service — has cast a long and almost suffocating pall over many of the items that the Chairman wishes to act upon. His inaction on civil rights issues — especially EEO enforcement — is just one example of how paralyzed the agency has become.

Recent news that Congress will not move forward to address the regulatory questions that currently vex the Commission (e.g., whether the FCC has authority to regulate broadband service providers) could embolden the Chairman to adopt the sweeping regulatory changes for broadband that he proposed earlier this year. Doing so in the absence of Congressional action would only invite immediate legal challenges that would mire the FCC in litigation, appeals, and remands for years to come.

To put it plainly, the FCC is stuck. Although it recently adopted some promising orders related to broadband (e.g., new rules for accessing new portions of wireless spectrum called “white spaces” and for enhancing access in schools and libraries), the Commission has failed to move forward with implementing core provisions of its monumental National Broadband Plan.

The union last week also submitted its latest round of comments requested by the Commission, this time to broaden its position on a proposed compromise.  We’ve delineated which of the proposals we believe are primarily pro-consumer (in green), pro-provider (red), and which fall straight down the middle (blue):

  • First, wireline broadband Internet access providers (“broadband providers”) should not block lawful content, applications, or services, or prohibit the use of non-harmful devices on the Internet.
  • Second, wireline and wireless broadband providers should be transparent regarding price, performance (including reporting actual speed) and network management practices.
  • Third wireline broadband providers should not engage in unjust or unreasonable discrimination in transmitting lawful traffic.
  • Fourth, broadband providers must be able to reasonably manage their networks through appropriate and tailored mechanisms, recognizing the technical and operational characteristics of the broadband Internet access platform.
  • Fifth, the Commission should take a case-by-case adjudication approach to protect an open Internet rather than promulgating detailed, prescriptive rules.

The first and third principles are strongly pro-consumer, although as we’ve seen, providers have a tendency to want to define for themselves what is “harmful,” “unjust,” or “unreasonable” and impose it on their customers.  We’ve seen provider-backed front groups argue that the concept of Net Neutrality itself is all three of these things.  Any rules must be clearly defined by the Commission, not left to open interpretation by providers.

The second principle cuts right down the middle.  Consumers deserve an honest representation of broadband speeds marketed by providers (not the usual over-optimistic speeds promised in marketing materials), and transparency in price — especially with gotchas like term contracts, early cancellation penalties, overlimit fees, etc.  But providers can also go to town with abusive network management they’ll market as advantageous and fair, even when it is neither.  Just ask customers of Clear who recently found their “unlimited” wireless broadband service, marketed as having no speed throttles, reduced in speed to barely above dial-up when they used the service “too much.”  Clear says the speed throttles are good news and represent fairness.  Customers think otherwise, and disclosure has been lacking.

The fourth and fifth principles benefit providers enormously.  Network management itself is neither benevolent or malicious.  The people who set the parameters for that management are a different story.  A traffic-agnostic engineer might use such technology to improve the quality of services like streamed video and Voice Over IP by helping to keep the packets carrying such traffic running smoothly, without noticeably reducing speeds and quality of service for other users on that network.  There is nothing wrong with these kinds of practices. There is also nothing wrong with providing on-demand speed boosts on a pay-per-use basis, so long as the network is not oversubscribed.

But since providers are spending less to upgrade their networks, providers may seek to exploit these technologies in a more malicious way — too stall needed upgrades and save money by delivering a throttled broadband experience for some or all of their customers.  If customers can be effectively punished for using high bandwidth applications, they’ll reduce their usage of them as well.  That’s good for providers but not for customers who are paying increasing broadband bills for a declining level of service.

Some examples:

  • Customers using high bandwidth peer-to-peer applications can have their speeds throttled, sometimes dramatically, when using those applications;
  • Internet Overcharging schemes like usage caps, overlimit fees, and “fair access” policies can discourage consumers from using services like online video, file transfer services, and new multimedia-rich online gaming platforms like OnLive, which can consume considerable bandwidth;
  • Preferred content can be “network managed” to arrive at the fastest possible speeds, at the cost of other traffic which consequently must be reduced in speed, meaning your non-preferred traffic travels on the slow lane;
  • Providers can redefine levels of broadband service based on intended use, relegating existing packages to “web browsing and e-mail” while marketing new, extra-cost add-ons for services that take the speed controls off services like file transfer and online video, or changes usage limits.

The CWA runs the Speed Matters website, promoting broadband improvements.

It is remarkable the CWA seeks to allow today’s indecisive Commission to individually adjudicate specific disputes, instead of simply laying down some clear principles that would not leave a host of loopholes open for providers to exploit.

Big players like Comcast, AT&T, and Verizon have plenty of money at their disposal to attract and influence friends in high places.  If the Commission thought Big Telecom’s friends in Congress were breathing down its neck about telecom policy now, imagine the load it will be forced to carry when these companies seek to test the Commission’s resolve.

Opponents of Net Neutrality claim broadband reclassification will leave providers saddled with Ma Bell-era regulation.  But in truth, the FCC can make their rules plain and simple.  Here are a few of our own proposals:

  1. Network management must be content-agnostic.  “Preferred partner” content must travel with the same priority as “non-preferred content;”
  2. Providers can use network management to ensure best possible results for customers, but not at the expense of other users with speed throttles and other overcharging schemes;
  3. Providers can market and develop new products that deliver enhanced speed services on-demand, but not if those products require a reduction in the level of service provided to other customers;
  4. Customers should have the right to opt out of network management or at least participate in deciding what traffic they choose to prioritize;
  5. Providers may not block or impede legal content of any kind;

In short, nobody objects to providers developing innovative new applications and services, but they must be willing to commit to necessary upgrades to broaden the pipeline on which they wish to deliver these services.  Otherwise, providers will simply make room for these enhanced revenue services at your expense, by forcing a reduction in your usage or reducing the speed and quality of service to make room for their premium offerings.

The industry itself illustrates this can be done using today’s technology.

The cable industry managed to accomplish benevolent network management with products like “Speed Boost” which delivers enhanced, short bursts of speed to broadband customers based on the current demand on the network.  Those speed enhancements depend entirely on network capacity and do not harm other users’ speeds.

Groups like the CWA need to remember that compromise only works if the terms and conditions are laid out as specifically as possible.  Otherwise, the player with the deepest pockets and closest relationships in Washington will be able to define the terms of the compromise as they see fit.

And that’s no compromise at all.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/CWA Larry Cohen on the Open Internet Jobs and the Digital Divide 9-14-10.flv[/flv]

Communications Workers of America president Larry Cohen outlined the union’s position on Net Neutrality before the Congressional Black Caucus Institute on Sept. 14, 2010.  (2 minutes)

Telstra: You Don’t Need Virtually Unlimited Broadband When You Can Have Our Overpriced Service

Phillip Dampier October 11, 2010 Broadband Speed, Competition, Data Caps, Editorial & Site News, Telstra Comments Off on Telstra: You Don’t Need Virtually Unlimited Broadband When You Can Have Our Overpriced Service

Bigpond is Telstra's broadband service

Telstra, Australia’s dominant telecommunications company, is openly concerned about the prospect of Australians finally shedding themselves from Internet Overcharging schemes like low usage caps and throttled speed.  But instead of doing away with these profit-boosting schemes themselves, they’ve decided to argue that consumers don’t need the country’s newest 1TB usage allowance plans, calling them publicity gimmicks.

Of course, Telstra doesn’t offer a 1TB plan.

Heath Gibson tries to explain away Telstra’s Internet Overcharging in a company blog post:

A terabyte is a lot of data. One provider claimed it’s enough to download about 200 DVD quality movies and still have quota left over.  Whilst my inner geek is salivating at the possibilities, the analyst in me is questioning just how many people currently need, or could even use, a terabyte of data each and every month.

Gibson

Gibson believes the average Australian is better off plans like Telstra’s 50GB DSL service, running $49.30US per month on a two-year contract.  When all the charges and fees are totaled, Australians will pay Mr. Gibson’s company $2,364.50US for two years of service that slows to 64kbps once your monthly 50GB allotment is used up.

“Terabyte plans will have appeal to a special niche and demand for these plans will no doubt grow over time,” Gibson wrote. “But for now my advice to most people would be to look past the attention grabbing headline, check how big a plan you really need and keep in mind all the other things that go in to making a great ISP.”

Australians have already made that decision and they have been voting with their feet to other providers.  On the same day Gibson was dismissing the competition, Telstra CEO David Thodey was responding to it, recognizing the company has lost significant market share because of high prices and poor customer service.

He told The Advertiser improvements were underway.

“The focus on customer service is something that is innate within Telstra, but our delivery leaves a lot to be desired,” he said.

So is their pricing.  Gibson’s views defending rationed Internet service are similar to the arguments broadband providers in the States use to defend their failure to keep up in the global broadband speed race.  Only instead of dismissing the need for unlimited service, American providers try and convince customers they don’t need the faster speeds they don’t deliver.

AT&T: We Love the Internet Our Way — Hold the Non-Preferred Traffic, Please

Back in the 1980s, a group of ragtag rural home satellite dishowners with 10 foot dishes took on the cable television industry for forcing viewers to purchase a set top decoder unit ($395) and paying programming prices higher than what cable viewers paid.  It was all part of an effort by the cable industry, which had an ownership interest in most cable networks back then, to discourage consumers from purchasing satellite dishes to escape ever-increasing cable rates.

Back then, these consumers ran into the same kind of Congress we endure today — quick to listen to industry representatives bearing campaign contributions and slow to respond to the needs and interests of their constituents who elected them.  Indeed, in one infamous example, a call placed to then-New York Senator Al D’Amato resulted in a staff member asking “what company are you with?”

Despite the power and influence of corporate interests protecting their turf, earning enormous profits along the way, many satellite dishowners stayed in the fight, and as cable rate increases continued, major reforms were finally enacted in the 1992 Cable Act which made small satellite dish services like DISH and DirecTV possible.

The struggle for Net Neutrality reminds me of that fight, and the fact it would take time to overcome the special interests and obtain important reforms.  Here at Stop the Cap!, we’ve won more battles than we’ve lost thanks to a small army of consumers who despise Internet Overcharging schemes and are tired of paying outrageous high prices for broadband and other telecommunications services.  Giving up the fight is not an option.

As the 111th Congress draws to a close, efforts to enact Net Neutrality through legislation this year have come to naught.

We were also disappointed by Julius Genachowski, the chairman of the Federal Communications Commission.  Despite his promising start at the agency, after more than a year watching his performance he has proven to be far better at making speeches than actually implementing policy.  His indecision and dawdling has resulted in a failure to deliver on his promise to reclassify broadband as — what it is — a telecommunications service.  That leaves standing a federal court decision that swept away the Commission’s authority to oversee broadband and stop abusive behavior.  For providers, that’s a dream come true.  Just consider this week’s story that Clear is throttling their customers despite marketing claims they would never do such a thing.

But not to worry, America.  AT&T is “committed to an open Internet,” proclaims the company in a new, feel-good advertisement.  AT&T’s public policy ad claims the company stands with the Obama Administration on delivering universal access to broadband by 2020.

“The future,” the ad claims, “has always been our business.”

The notion is just so warm and fuzzy, it makes me want to adopt puppies and kittens.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT Public Policy Commercial.flv[/flv]

AT&T’s newest ad promotes the company’s public policy agenda, which opposes Net Neutrality while still claiming to respect its core principles.  (1 minute)

Of course, AT&T is not so warm and friendly in Washington.  This is the company that dwarfs all other Big Telecoms in spending its customers’ money on hardcore lobbying blitzkriegs on Capitol Hill, drowning Washington in cash and fooling consumers with fake front groups pretending to represent their interests.

Suz, a third-year graduate student at Georgetown University’s Communication, Culture and Technology (CCT) program, noticed some of our earlier coverage on the topic of AT&T and wrote this is a company with a history:

The ad really struck me because of its message and because of the medium. In another class I’m currently taking – The Development of Electronic Media – we just came to the chapter on the development of the telephone and the major influence that AT&T held over that field for the majority of the 20th century. In part because of government regulations supporting the idea of “universal service” and in part because of the desire to connect rural areas with urban areas on the same line of service, the federal powers – though they put a little pressure on after AT&T acquired Western Union with the threat of anti-trust lawsuit – eventually support AT&T’s decompetitive nature by insisting on a compatible network and blocking “duplicative” services, giving AT&T the far-and-away lead in the market.

“The future has always been our business – AT&T.”

Now, there was a lot of history between this “golden age” of monopoly for AT&T and its eventual position today. But what I find striking is the similar-sounding stance to then-CEO Vail’s mission statement of universal service. Their motive may not have been as altruistic as the motto was (one way to attain universal service is to place it in the hands of one provider), but it eventually convinced the government that its powers could be used for good, even at the expense of a competitive (and innovative) marketplace.

Welcome to AT&T v2.0.

AT&T’s dominance in landlines is now at an end, but its influence over the telecommunications medium of the 21st century — the Internet, is just beginning.

The timing could not be more ironic, either.  While AT&T supports the goal for universal broadband service, it is fiercely lobbying to abandon a promise it made a generation earlier to deliver universal landline telephone service.  For that earlier commitment to wire every home, it was granted monopoly status for much of the 20th century.

AT&T has promised to be benevolent if it can remain a completely unregulated mega-player in the broadband industry.  It won’t openly censor opposing viewpoints, but it reserves the right to slow them down to make room for its preferred content partners.  AT&T won’t control what you see or do online, but it does want the right to limit how much of the seeing and doing you can do without overlimit usage fees kicking in.  But no worries, America — AT&T promises full disclosure, so at least you will know you’ve been network managed and overcharged for service.

Jeffrey Burnbaum — writing for the Washington Postnotes AT&T was the gold standard of high powered lobbying and little has changed today:

In the 1980s, AT&T was known for having one of the largest and most skilled corporate offices in Washington. Its representatives were everywhere and well-regarded on Capitol Hill. I remember one encounter between a tall AT&T lobbyist and an elegant McLean matron at a congressional cocktail party. The woman pecked the lobbyist on the cheek and then teased him: “I see you’re wearing your sincere blue suit.” He laughed knowingly — as did the lawmakers standing nearby and with whom he held much sway.

But personal respect wasn’t enough to hold back the tide, either. The telecommunications act of 1996 demonstrated the growing clout of the Baby Bells and AT&T made one last stab at restoring its prowess. In 1998 it hired a former White House deputy chief of staff, James W. Cicconi, to reorganize its Washington presence.

The former aide to George H. W. Bush put together what stands to this day as the model of a contemporary lobbying campaign. Under his guidance, AT&T dispensed tons of campaign cash, formed coalitions with sympathetic-sounding organizations, hired some of the biggest names in downtown Washington as lobbyists and spent millions of dollars on television advertising.

Net Neutrality advocates believe broadband reform is essential in the marketplace duopoly that exists today for most Americans.  With limited options, providers must do more than commit to an open Internet — they must be compelled to deliver it.  The industry’s scare tactics of slowed investment, job losses, and lost innovation are as patently ridiculous — and offensive — as similar claims made by the company over its breakup in the early 1980s.  With the power and influence of lobbying, telecommunications deregulation has allowed them to start putting the pieces back together again.  They are richer and more powerful than ever.

But can they be overcome?  Considering the cable industry deeply underestimated the impact of a consumer outcry over the industry’s abusive practices in the 1980s and early 1990s, the answer remains yes.  Just like the speeds of AT&T’s DSL service, it is just going to take awhile.

Clear Admits Throttling Subscribers Despite Marketing Claims; Customers Revolt Over Bait & Switch Service

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.

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