TV Everywhere isn’t just for the United States.  Canadian cable operators are also threatened by cable cord-cutters, although their pervasive Internet Overcharging schemes have kept TV addicts from watching too much video online.

Both Shaw Cable (serving western Canada) and Vidéotron (best known in Quebec) have this week introduced their own online video portals providing “authenticated” cable subscribers with access to on-demand movies and television programming as an extension of their cable package.  But neither company is willing to exempt its customers from Internet Overcharging schemes which apply data caps and overlimit fees to broadband accounts.

Of the two services, Shaw Cable’s is bare bones, offering a relative handful of TV shows and a movie library.  No live video is provided, and many titles carry per-viewing fees, even for cable subscribers.  Non-subscribers face even higher fees to view programming.  Vidéotron takes a different approach, offering a video portal called Illico Web that offers on-demand and live streaming feeds of a wide range of cable networks, mostly in French for its Quebec subscriber base.

Shaw positioned its video-on-demand service as an extension of its cable service.  It hopes its announced acquisition of Canwest Global, which runs the Global television network in Canada and 18 cable networks will vastly expand its offerings in the future.

Vidéotron warns its subscribers watching its service eats into monthly broadband usage allowances.

“Technology continues to evolve with the ability to watch content on multi-platforms,” said Peter Bissonnette, President, Shaw Communications. “That’s why Shaw is investing in bringing exceptional content delivered in various ways. Our new broadband VOD Player provides our customers the convenience of watching their favorite movies and television shows when and where they want to.”

Pierre Karl Péladeau, the president and chief executive officer of Vidéotron’s parent Quebecor was more abrupt when he said on Wednesday that its TV Everywhere service would offer “an alternative to piracy.”

But in Canada, there is a catch.  Neither cable provider offers subscribers unlimited broadband service.  Both employ Internet Overcharging schemes ranging from usage caps to consumption billing schemes with overlimit penalties.  Vidéotron reminds its subscribers to “keep an eye on your Internet usage.”  That’s because they don’t exempt their online viewing service from their usage limits.  Vidéotron’s video portal does eat its way through subscriber allowances.  The company provides these estimates to help guess by how much:

[flv width=”432″ height=”263″]http://www.phillipdampier.com/video/Welcome to illico web 6-10.flv[/flv]

Illico Web produced this video introduction to its TV Everywhere service. (French with English subtitles — 3 minutes)

An Associated Press report gave credit to Stop the Cap! for getting first official word that AT&T ended its Internet Overcharging experiment in Beaumont, Texas and Reno, Nevada.

Stop the Cap! reader Scott Eslinger managed to get an AT&T customer service representative to read aloud a confidential memo distributed by the company terminating the experiment effective April 1st.  Because AT&T never disclosed the end of the experiment to impacted customers, the coverage by the wire service should help spread the word to residents that the rationing is over:

The phone company confirmed Tuesday that it is no longer holding DSL subscribers in Reno, Nev., and Beaumont, Texas, to data consumption limits and charging them extra if they go over.

With AT&T’s retreat, no major Internet service provider is championing the idea of charging subscribers for their data usage. Time Warner Cable Inc. was a major proponent of the idea and also conducted a trial in Beaumont, but backed away last summer after its plan to expand metered billing to other cities met fierce resistance from consumers and legislators.

AT&T’s trial started in November 2008 in Reno, and was later extended to Beaumont. It ended on April 1 this year, said AT&T spokeswoman Dawn Benton.

“We’re reviewing data from the trial, and this feedback will guide us as we evaluate our next steps,” Benton said.

AT&T should carefully review feedback from customers who despise usage limits and overlimit fees.  Studies show the overwhelming majority of customers do not like their broadband usage artificially limited with arbitrary allowances and overlimit fees, and customers will dump providers who ignore their wishes.

AT&T’s experiment never saved consumers a penny — the company simply slapped allowances as low as 20 GB per month on existing speed-based tiers.  Customers already face practical usage limits from Internet providers.  Those purchasing slower speed tiers are usage limited by those speeds.  Those who pay for higher priced, faster tiers benefit from naturally greater allowances those speeds provide.  Adding a new layer of limits only discourages customers from using the service they already pay good money to receive.  Besides, as profits explode in the broadband sector, the costs (and investment) to provide the service have declined, wiping out the justification for these schemes.

Stop the Cap! opposes all of these Internet Overcharging schemes.  While many providers seek to demagogue some broadband users as “data hogs” or “pirates,” the fact is today’s “heavy user” is tomorrow’s average consumer.  High speed broadband has the potential to revolutionize education, health care, private business, and entertainment, but not if a handful of major providers decide to end innovation by rationing the service to its customers.

AirRunner Wireless serves a small portion of central Wisconsin from its headquarters in Marathon.

A wireless Internet provider serving central Wisconsin has banned online video streaming from its wireless Internet service, telling its customers WISPs are not designed for it.  To drive home the point, the service is jumping on the bandwagon of AT&T’s mobile network 2 GB usage limit with some stringent limits of its own.

Bill Flood, owner of AirRunner Networks LLC dispatched e-mail to every one of its central Wisconsin customers informing them some are violating the company’s use policies by streaming online video on its service, which it cannot accommodate.  Flood blamed companies like Netflix for forcing him to carry the costs of transporting movies and TV shows to his customers:

Hello! Over the past month we have been seeing an increasing issue on the network during peak times. From our investigation we have determined these problems stem from customers who are streaming Netflix or other ‘instant movie or movie on demand’ type services.

These types of products should not be used on the network for these reasons:

First, a wireless network uses access points, those by design do not handle continuous connections without affecting the other customers of that access point. Because the movie stays connected for a longer period of time, eventually other customers simply get less access and as a result see a severe network degradation.

Our Acceptable Use Policy over the years has grown as a result of new technology.

Not all new technology works well on every type of Internet platform. Although some customers have told me they have been using this type of service in the past, the increased usage spurred on by recent Netflix advertising, a CD for Wii devices and now by one of the satellite TV companies has brought this issue to the forefront.

These companies see the Internet as a means to save their resources and push the load onto the Internet.

Welcome to the Internet circa 2010.  The days of a voice declaring “You’ve got mail” from your AOL account are long gone.  Customers are demanding access to a much richer multimedia experience available online today.  That demand is beginning to regularly collide with the limitations some networks have to deliver the service.

To make sure his customers understand the implications of streaming video, Flood is also introducing one of the most punitive Internet Overcharging schemes we’ve yet to encounter, starting with a monthly usage limit of 5 GB accompanied by some vicious overlimit fees:

All non-business customers will be allotted 5 GB of total aggregate usage.

If the customer exceeds 5GB of total aggregate usage on any given monthly billing cycle, they will be assessed an additional $30.00 to cover their bandwidth use.

If any customer exceeds 10GB of total aggregate usage on any given monthly billing cycle, they will be assessed an additional $60.00 to cover their bandwidth use.

If any customer exceeds 15GB of total aggregate usage on any given monthly billing cycle, they will be assessed an additional $90.00 to cover their bandwidth use.

Although these additional charges seem excessive, we are not alone on making such changes as the rest of the ISP’s [Internet service providers as well as cellular providers] are also implementing similar programs on their networks to deal with network congestion issues caused by ‘on demand’ type products. The good news is, the typical Internet customer never exceeds 5GB of aggregate usage. Only a small percentage of our customers are involved in this ‘on demand streaming activity’. Here is what can be done by the typical customer while not exceeding the 5GB threshold: Our basic residential Internet packages will offer 5GB of usage — that’s the equivalent of 500,000 basic text e-mails, 2,500 photos, 40,000 web pages, over 300 hours of Online game time, 1,250 downloaded songs, or a mixture of the above! 1,000 megabyte (MB) = 1 gigabyte (GB) We will send out a notice to everyone again when we are ready to implement these changes.

Flood’s e-mail doesn’t tell the whole story to his customers, however.

First, his imposed overlimit fees are ludicrously high.  A customer using 16 GB for the month would face an overlimit penalty of $90.  Considering AirRunner’s pricing, that’s a potentially enormous bill:

AirRunner offers six rate plans for residential and small business:

• $15.00 256K/256K, tiered access. New accounts only

The below programs require a contract.

• $19.00 1.0 Mbps/768K, tiered access. New accounts only
• $45.00 2Mbps/1Mbps, tiered access
• $55.00 2Mbps/2Mbps, tiered access Bi-direction connection; useful for working from home.
• $65.00 3Mbps/1Mbps, tiered access
• $75.00 5Mbps/1Mbps, tiered access

Second, “the rest of the ISPs” are not in fact imposing similar programs.  AT&T just abandoned theirs for DSL customers in two cities.  Attempts to ration broadband access typically meets resistance from consumers, if not an outright revolt.  As soon as customers get a bill with a $90 overlimit penalty on it, they will revolt as well.

It is true that wireless providers do face bandwidth challenges, but that’s not always disclosed to customers until after they sign up for service.  In 2010, would you sign a two year contract for a broadband service that banned online video?  Of course, if Flood offers the only service in town, for all practical purposes he can dictate the terms of the service provided.  But many customers have long memories and when another provider does arrive, they’ll take their business elsewhere.

Therein lies a potential problem for Flood.  A considerable part of central Wisconsin has been served by Verizon North, one of the divisions Verizon has sold to Frontier Communications.  Verizon dramatically cut investment in Wisconsin broadband expansion as soon as it became apparent they were leaving.  Frontier Communications is betting its long-term survival on bringing at least 1-3 Mbps DSL service to areas just like central Wisconsin.  It’s a safe assumption at least some parts of Flood’s service area will be challenged by Frontier DSL within the next year.

At that point, perhaps Flood will adopt a less hostile attitude towards his own customers.  Some of those who departed didn’t appreciate Flood’s tone or actions and shared some of his hostile communications on the subject.  Taking an adversarial stance even with former, paying customers never works well.  Among the thoughts Flood has shared:

• If you don’t like his caps, move to the city;
• One customer was told his service was canceled because he just doesn’t get it — besides, Flood wrote, he can do whatever he wants;
• Customers who are caught streaming are gone;
• If you complain too much, watch out.

Third, Flood follows the discredited playbook of trying to convince customers a 5 GB usage limit for the Internet in 2010 is reasonable with generous-sounding e-mail and web page browsing allowances.  Flood himself exposes the real issue — customers want to watch YouTube, Netflix, and Hulu and his network can’t handle it.  Of course, his marketing materials never bother to mention any of this.  Only after customers sign up, many under a two-year contract, does the truth come out (underlined emphasis ours):

In the case of ‘streaming video/movies or on demand type products or services’ recent weeks shows exactly what happens when these types of products are used. Everyone who uses ‘on demand or streaming products or services’ also knows there is an alternative which does not have an affect on any other user. We suggest the alternative as the best solution. We would appreciate everyone’s cooperation in resolving this current issue. If you are streaming movies you are making everyone mad!! Someday you may want to use the Internet and your neighbor will be streaming, then you won’t work. Wireless Internet was not designed to watch TV or movies.

If you are a ‘on demand user’ you may want to look at other options in lieu of streaming movies over the Internet. A basic resolution movie is typically 700Mb of data. So 1000Mb is equal to 1GB. So roughly 3-6 on demand or streamed movies will draw and additional charge to your account. All paying customers have the right to access their Internet connection, however any customer cannot deny any other customer access as the result of their usage. When this occurs policy is made to correct such actions. We make every effort to provide the best service we can, sometimes new Internet based programs and products do not work well on this type of network, that is not the fault of AirRunner Networks LLC and we cannot guarantee that any type of program or product will work properly or as advertised.

At least Flood was finally honest about the implications of watching online video from a provider with a low monthly usage allowance.  Just watching 3-6 online movies blows right through it, even fewer if it’s an HD title.

Unfortunately for Flood and other WISPs with similar network constraints, the evolution of the Internet and its online resources will increasingly place pressure on many networks that were built for a 1990s-era Internet.  As advanced video game streaming technology, online movies and television, online file backup, and other high bandwidth innovations not yet envisioned become increasingly popular, companies like AirRunner will be forced to upgrade their network or add new applications to the ban list, eventually facing obsolescence if a better provider arrives in town.

Customers of Vistabeam in Nebraska and Wyoming who subscribe to the company’s rural Wireless Internet Service are about to discover their online activities are about to be capped… for real this time.

Matthew Larsen, who runs the Wireless Cowboys blog, includes some illustrative examples of Internet Overcharging schemes in action and what they’re all about.  He writes about his experiences at Vistabeam, which serves rural Nebraska and Wyoming with wireless broadband service.  The company started operations with an admittedly-unenforced 3GB usage limit, backed up with a stinging $25/GB penalty overlimit fee to underscore the point.  Today that cap is described by Larsen as “a joke” — too low to be taken seriously.  [Note to Frontier: Are you reading this?]

But the company was determined to monitor and measure its customers’ online activities and developed an in-house tool that is providing daily insights into customer usage, and gives Vistabeam the ability to begin penalizing customers who exceed the limits established by the provider.

Wireless providers, known as WISPs, often provide the only Internet access in rural areas that are too sparsely populated to deliver DSL service and where cable television is a financial impracticality.  For Nebraska and Wyoming residents bypassed by cable and underserved by DSL (if at all), it’s often a choice between dial-up, satellite fraudband service barely capable of 1Mbps service with a punitive “fair access policy,” or an independent WISP.  A number of customers have chosen the latter.

Vistabeam offers service plans for its 2000 customers ranging from 384kbps for $29.95 a month to 4Mbps service for $99.95 a month, with a discount for paying in six month increments.  That’s not cheap by any means.  But rural Americans routinely face higher broadband bills because of the inability of providers to achieve economy of scale.  Fewer customers have to share the expenses to construct, operate and maintain the service.

But those bills could soon grow even higher if customers exceed the new harder-line Vistabeam will take on usage cap offenses.

Larsen’s measurements identified what their customers were doing with their broadband connections and identified Vistabeam’s biggest users:

Out of 2000+ customers, 80 used more than 10 gigs for the month.

One customer – a 1 meg subscriber at the far eastern edge of our network, behind seven wireless hops and on an 802.11b AP – downloaded 140gig.

Another one, on the far western side of our network, downloaded 110gig.   We called them and found out that they were watching a ton of online video.

We discovered a county government connection that was around 100gig – mostly because someone in the sheriff’s department was pounding for BitTorrent files from 1am to 7am in the morning, and sometimes crashing their firewall machine because of the traffic.

One wonders what the sheriff’s department was grabbing off BitTorrent, but the question itself opens the door as to whether or not your provider (and by extension, you and I) should know what they are doing with their broadband connection in the first place.

Larsen says the other subscribers on his list were watching lots of online video, had a virus, or had “mistakenly” left their file sharing programs running.

Larsen’s solution is usage caps and overlimit penalties for his subscribers.

A home equipped with a WISP antenna on the roof

Package                                                               Monthly Download Cap

384k                                                                       10 gigabytes

640k                                                                       10 gigabytes

1 meg                                                                    20 gigabytes

2 meg                                                                    40 gigabytes

3 meg                                                                    50 gigabytes

4 meg                                                                    60 gigabytes

8 meg                                                                    80 gigabytes

Additional capacity over cap                        $1 per gigabyte over the cap

Although Larsen claims the cap and the overlimit fee isn’t “a profit center,” it would be disingenuous to suggest it isn’t about the money (underline emphasis ours):

I feel that these caps are more than generous, and should have a minimal effect on the majority of our customers.   With our backbone consumption per customer increasing, implementing caps of some kind became a necessity.    I am not looking at the caps as a new “profit center” – they are a deterrent as much as anything.    It will provide an incentive for customers to upgrade to a faster plan with a higher cap, or take their download habits to a competitor and chew up someone else’s bandwidth.

Customers upgrading to a faster plan have to pay a correspondingly higher price for that service and taking their “download habits to a competitor” reduces the cost for the provider no longer encumbered with serving the higher-usage-than-average customer now heading for the door.  Among his 2,000 customers, the end effect will be what Larsen himself hopes is a deterrent for customers using increasingly common higher bandwidth applications like online video, file backup, and uploading and downloading files.  Larsen himself admits that one of his customers was a little bit upset to be told he was using too much.

Rural providers do face higher costs to provide service than their urban counterparts.  But before they enjoy any benefits from Universal Service Fund reform or other government-provided stimulus, customer-unfriendly Internet Overcharging schemes should not be part of the deal.