South Africa is the latest country on the way to finally discarding Internet Overcharging schemes like usage caps and usage-based billing.

MWEB, one of South Africa’s largest residential broadband service providers, last week “threw down the gauntlet” and unveiled an unlimited broadband option among its various rate plans.

“We realized there’s a major gap in the market. South Africa doesn’t experience the Internet like the rest of the world does. It’s a fantastic opportunity to change the Internet in South Africa,” MWEB CEO Rudi Jansen told News24.

For a country that has never known anything but expensive, slow, usage-capped Internet, MWEB’s announcement is nothing short of a broadband revolution for 49 million South Africans.

“This is not the end. There are still probably three or four big things that have to change in this market and for us, this is the first step. The other things that have to change are we have to get the mobile operators to offer wholesale data. The more competition there is, the better it is for the market,” said Jansen.

For $73.50US per month, MWEB offers 4Mbps DSL service that is truly unlimited, which is a radical notion in a country used to usage caps averaging 3GB per month.  Customers willing to tolerate slower speeds can reduce their unlimited broadband bill considerably — 384kbps starts at $30 a month; 512kbps is priced at $41 a month.  The company does admit to throttling torrent services, but customers have managed to bypass the throttle by encrypting their torrent traffic.

Although these speeds and prices are terrible in comparison to North American broadband plans, for South Africans, MWEB’s announcement was big news.  That’s because the competition charges far higher prices, often for limited service:

• Telkom, South Africa’s state phone company, wants $35US monthly, five dollars more than MWEB’s lowest speed unlimited alternative, for its DSL service with a 3GB usage allowance;
• Paying $39.50US per month buys you 10GB of usage from Afrihost;
• Using 3G wireless mobile alternatives are for the deep-pocketed only.  Paying $65.50US per month nets you less than a 2GB usage allowance;
• South Africa’s ‘Screamer’ offers a pricey unlimited plan at $54US per month for 384kbps service;
• Neotel offers an unlimited service package, but it’s so confusing few customers can be certain what they’re getting.  (Read this South African blogger’s experience with Neotel.)

MWEB hired marketing firm Quirk to generate buzz about the company’s unlimited service option.  Earlier this month, a Facebook group called Free the Web popped up asking consumers what improvements were needed in South Africa’s broadband service.  It attracted more than 15,000 followers in just two weeks.

What were South Africans complaining about?  Usage caps. Broadband users despise them, especially in a country where 5-10GB allowances are considered ‘generous.’  But the lack of competition for monopoly state-owned phone company Telkom also featured prominently.  Most South Africans rely on DSL service that first starts with renting a line from Telkom.  Telkom prices those in accordance with its monopoly status, and requires consumers to pay line rental fees combining both data and voice services, even if a customer only intends to use the line for data.  Because ADSL broadband speed is totally dependent on the phone company, and Telkom has no incentive to upgrade, few in South Africa can expect to see broadband service exceeding 4-8Mbps.  Most obtain considerably less, often well below 1Mbps.

“Telkom has to allow users of ADSL to split the line rental for the telephone line and the line rental for ADSL. That absolutely has to happen; then this market will grow,” Jansen said.

Jansen

MWEB hopes the unveiling of unlimited broadband will transform South Africans use of the Internet and bring prices down.

“Ubiquitous broadband is what this country needs to grow. We want to do our part in getting South Africa there,” said Jansen. “I hope [our competitors] follow us because I think as a country we desperately need it.”

Jansen may have his wish.  Hours after MWEB announced unlimited broadband, its competitors began to follow suit, meaning South Africans can finally follow Australians and New Zealanders discarding hated Internet Overcharging schemes.

Mybroadband.co.za took note of several broadband package changes coming as a direct result of MWEB’s new service (One South African Rand = 13.6 US cents):

Vox Telecom responded quickly and announced that @lantic will be launching bundled ADSL offerings – which include both ADSL access and an uncapped ISP account.  Pricing starts at R339 for a DSL384 bundle while a 512 Kbps service will cost R589 and a 4 Mbps solution R889.  This undercuts MWEB’s bundled pricing by R10 per month.

Openweb also joined the price war by announcing that they will resell MWEB accounts at the same rates as MWEB.

This is however not where it ends.  Afrihost said that consumers can look forward to their uncapped ADSL services next week, and G-Connect also indicated that they will respond to MWEB’s recent announcement with a competing service.

Even the state monopoly phone company Telkom has started talking about offering unlimited service.

“Uncapped speed-locked ADSL service consumer offerings are in development. However, no time-frames, offering specifications or price points can be disclosed at this stage. In the development process, Telkom is striving for optimal quality, reliability and affordability,” said Ajith Bridgraj, Telkom Senior Specialist for Media Relations.

MWEB expects a surge of new customers, which leads some to worry if the company can sustain its network under the burden of throngs of new customers.  Jansen says they can, noting their connectivity ultimately comes from Seacom, which is an important provider of international connectivity between Africa, Europe, and beyond.

Early tests by Mybroadband appear positive:

MyBroadband got its hands on an uncapped 4 Mbps test account to take the service through its paces – and early test results are very promising.

For basic email and surfing the MWEB uncapped account performed well, and results from Speedtest.net were on par with SAIX and IS based offerings.

Local Speedtest.net downlink speeds ranged between 3.28 Mbps and 4.13 Mbps while local uplink speeds ranged between 0.26 Mbps and 0.42 Mbps.

International Speedtest.net results – tested with servers in London, New York and Brussels – ranged between 2.96 Mbps and 3.61 Mbps while international uplink speeds were fairly steady at between 0.3 Mbps and 0.32 Mbps.

Local latency was fairly consistent and ranged between 17 ms and 41 ms in tests to Johannesburg and Cape Town based servers.  International latency was however less consistent, and ranged between 285 ms and 528 ms to the UK and US.

The MWEB uncapped account performed well with all bandwidth intensive applications.

YouTube videos streamed without any buffering, but some buffering was needed when moving to high definition video streaming (480p and more specifically 720p).

Standard file download speeds were quite consistent at between  2 Mbps and 3.4 Mbps while multi-threaded FTP and HTTP downloads sat at around 3.2 Mbps.

Good news for those keen on torrent services is that the MWEB uncapped account seems torrent friendly.  We selected 10 of the most popular torrents, and total download speeds ranged between 2.8 Mbps and 3.2 Mbps.

American broadband providers contemplating Internet Overcharging schemes of their own often point to usage limits and usage-based billing schemes that exist in other countries, implying they are well-tolerated by consumers abroad and should be likewise domestically.  The truth is, such pricing schemes are as despised abroad as they are domestically, and most countries seeking to improve broadband consider eliminating them a top priority.

[flv width=”448″ height=”356″]http://www.phillipdampier.com/video/Carte Blanche Consumer – No Broader Than a Band.flv[/flv]

South African news program ‘Carte Blanche’ provides this general overview of the current state of broadband in South Africa, and the challenges that must be faced to improve it. (10 minutes)

[flv width=”384″ height=”308″]http://www.phillipdampier.com/video/News24 MWEB Unveils Unlimited Broadband 3-19-10.mp4[/flv]

South Africa’s News24 network reported on MWEB’s unlimited broadband package including an interview with MWEB CEO Rudi Jansen. (3 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/South African Broadband.flv[/flv]

As part of MWEB’s social marketing campaign, ordinary South Africans talk about their broadband experiences, what the Internet has done for them, and the things they hate the most about South African Internet Service Providers. (9 minutes)

The Federal Communications Commission wants to know how fast your broadband connection is.  The federal agency is now offering consumers and businesses a chance to test broadband speeds to raise awareness about broadband.  But the test results also help illustrate the wide variation between speeds promised by providers and those actually experienced by customers.

The FCC wants to collect this information because broadband providers have often refused to provide it themselves, citing customer privacy or an unwillingness to release potentially useful information to competitors.  By asking visitors to supply their street address and general location, the agency can at least develop anecdotal information about the range of speeds Americans experience.

However, the agency is likely to discover wide variations in the accuracy of the results based not on what service providers deliver, but instead what the speed test itself reports.

The FCC is relying on two speed test providers, randomly assigned to those taking the test.

• Measurement Lab (M-Lab), which provides researchers with Internet measurement tools on a collaborative basis, and
• Ookla, a private company that provides web-based network diagnostic applications.

Stop the Cap! used both providers to conduct three individual speed tests from Broadband.gov.  There were dramatic differences in results.  M-Lab consistently reported far slower speeds than Ookla.  Ookla’s results were closest to the advertised speeds from our broadband provider — Time Warner Cable.

This speed test result from M-Lab was the closest to the average of all three speed tests conducted with this service

Ookla's speed test came closest to achieving the marketed speeds for Rochester, New York Time Warner Cable Road Runner Turbo customers. The download speeds reported also include the effects of "PowerBoost," a temporary burst of additional downstream speed.

Both speed test providers rely on different regional servers to deliver potentially more accurate speed test results, less impacted by the additional “hops” traffic must take when traveling outside of a nearby region.  But considering the enormous disparity between the two tests, these real-world results may not actually represent reality.

Which test comes closest to the actual speeds available here?  Ookla.  But even then, your results may vary.  Ookla provides speed tests for both Time Warner Cable and Frontier Communications, our local phone company.  The downstream speeds reported were widely different, despite both test servers being located within a 50 mile radius.

Time Warner Cable's speed test application is also provided by Ookla. (This result comes from a server in nearby Syracuse -- the Rochester location was not working properly)

Ookla's speed test for Frontier Communications delivered dramatically different results for downstream speeds

The FCC seems to acknowledge the potential disparity in results on their disclaimer page:

Please note that the Consumer Broadband Test in its current software based form may not be an accurate representation of connection quality provided by your broadband provider. The results can be impacted by a range of factors — for instance, the test can vary based on the geographical distance of the user from the testing server, end-user hardware, network congestion, and time of day. However, this application can provide a helpful indicator in comparing consumers’ relative broadband connection quality and in understanding the performance metrics of broadband connections.

What results do you get from Broadband.gov’s provided speed tests?  Share your findings in our comment section.

Flag of New Zealand

Despite broadband provider propaganda designed to convince Americans restrictions on broadband usage were “commonplace” and well tolerated overseas, a group of New Zealand and Australian broadband entrepreneurs propose to spend just under $900NZ million to build new fiber capacity to help eliminate them once and for all.

A team of businessmen from the South Pacific today announced they are part of “an early stage” venture to construct a brand new underseas fiber optic cable to connect Australia and New Zealand with the United States, providing five times the capacity of existing service provided by the Southern Cross system.

The new group, Pacific Fibre, went public today and is talking with potential partners about the plan to construct a 13,000 kilometer cable by 2013.

Mark Rushworth, former Vodafone chief marketing officer, told TV New Zealand a full 90 percent of New Zealand Internet traffic is bound for the United States.

“It is using the most direct route. It is one hop from New Zealand to the US, which from a technical perspective is very important because it means it is a lower latency cable, that is, it is faster than other cables,” he said.

Flag of Australia

The primary impetus for the project was the common practice in New Zealand and Australia to limit customers’ usage of broadband service with Internet Overcharging schemes like usage-based billing or restrictive data caps which can throttle speeds just above dial-up for customers for weeks, if they exceed their usage allowance.

Rushworth

Private providers have lived happily on the revenue earned from such schemes and have done little to relax usage limits on their customers, so Pacific Fibre decided to undertake a game-changing new fiber cable themselves to drive prices down and eliminate the caps.

“We desperately need a cable that is not purely based on profit maximization, but on delivering unconstrained international bandwidth to everybody, and so we’ve decided to see whether we can do it ourselves,” said partner Sam Morgan.

“We hope to bring in extra capacity at a low price, which our carriers and ISP customers can end up passing on to their customers,” Rushworth said.

“We all know that in any market as soon as you introduce competition prices tend to drop and volume goes up,” he told TVNZ.

The current proposed cable configuration would have two fiber pairs with 64 wavelengths (lambdas) each at 40 gigabits per second per lambda. The maximum lit capacity initially would be 5.12 terabits per second, but would be upgradeable to over 12 terabits per second as emerging technology became a reality.

A column this week in The Post-Standard falls into the trap of believing usage caps on wired broadband service represent “fairness.”

Al Fasoldt, who writes a technology column for the Syracuse, N.Y. newspaper, told readers they should investigate buying and/or using usage measurement tools in order to protect themselves from a surprising bill at the end of the month.

Caps can make their service fairer to all customers by blocking excessive downloads that clog the network, and those who exceed their caps can be charged a great deal extra for service. This amounts to free money for ISPs.

But there is something counterintuitive about promoting new ways to get entertainment on the Internet — by using Hulu, for example, to stream TV shows to your home computer — while telling customers they can’t use more than a certain amount of data.

[…]

What’s needed is a simple way to measure how much data you use per month. Cable providers sometimes provide a Web page that logs each customer’s transfer totals — call your ISP to find out if your plan has such a feature — but you can easily track usage yourself with data-usage software utilities.

Time Warner Cable headquarters in Rochester, N.Y.

Fasoldt assumes facts not in evidence.  Simply put, there is nothing fair about usage caps, particularly on wired broadband service.  Fasoldt can be partly excused for making the assumption because he lives in Syracuse, where Verizon FiOS and Time Warner Cable compete heavily for customers in the Salt City.  Veterans of actual Internet Overcharging experiments, and those who live under usage caps and usage-based billing can testify about the true implications of such schemes.

They are nothing short of rationing broadband service for fatter profits.

In Rochester, where Fasoldt notes customers successfully fought off Time Warner’s experiment, customers do not have the luxury of two closely-matched competitors.  They have the cable company and a telephone company that stubbornly clings to its own 5 GB usage allowance in its terms and conditions, albeit presently unenforced.  Where competition is at bay, higher prices for limited service are in play.

At least Fasoldt admits it’s also about the money.

There is nothing counter-intuitive about promoting online video services and then slapping usage caps on them when you realize it’s really ALL about the money and not about “fairness.”  Limiting video consumption is critical to protecting cable television packages.  If you can watch it all online, why keep paying for cable-TV?  With a usage cap, there are no worries about that ever happening.

As this website has repeatedly documented, consumers do not need to invest in usage measurement tools that are a nuisance to install and monitor.  They just need a broadband provider that can be happy living off the billions in profits already earned from today’s unlimited broadband service without greedily trying to overcharge consumers even higher pricing for limited service in the future.

Fasoldt would do better by his readers telling them to follow the example of communities who have been exposed to such schemes.  They got involved, threatened to cancel service, and created a sufficiently large enough headache for providers who eventually determined, for now, it just wasn’t worth alienating customers with unwanted pricing schemes.

Charter customers thank the company for the speed increases

Charter Cable has made it clear — no metered billing and no enforcement of its “soft usage caps.”

“We have no plans to introduce metered billing,” Ketzer told Broadband Reports, adding no trials were forthcoming either.

But Charter Cable did say bandwidth consumption is a concern for the company, and a measurement tool to educate customers about their current usage was on the way.

“Right now we are gathering requirements to develop a resource so that customers can monitor and control their bandwidth resources,” said Ketzer. “This was something that our customers have been requesting and we want to meet that need.”

Separately, Charter also announced speed upgrades for many of its broadband customers.  Starting this morning, customers can briefly unplug their cable modems to reset them and enjoy some increased speeds at no additional cost.

Charter's old speed tiers (shown above) got an upgrade this morning. Prices quoted are for new customers. Existing customers: add $15 -- Internet Only customers: add $25

The new speed increases impact three of their broadband plans.  Only “Lite” speeds remain unchanged:

• Lite: Remains the same at “up to” 1 Mbps/128 kbps
• Express: Increases from 5/1 Mbps to 8/1 Mbps
• Plus: Increases from 10/2 Mbps to 16/2 Mbps
• Max: Increases from 20/2 Mbps to 25/3 Mbps

Charter advises Max customers will need to exchange their current cable modem to receive the new speeds.  They come as a result of DOCSIS 3 upgrades, which requires a modem that supports that standard.

Some Charter customers can go even faster with the company’s Ultra60 plan delivering 60/5Mbps service for $139.99 a month.  Customer promotions, typically running six months, can cut the cost to $109.99 during the promotional period.

Increasing speeds and shelving Internet Overcharging schemes like usage limits and usage-based billing build customer loyalty and bring new customers, particularly at the expense of telephone company DSL plans, which cannot compete on speed.  Most DSL providers have stopped increasing speeds beyond the maximum 6-10 Mbps they have advertised for years.  Many barely deliver 3 Mbps.

AT&T, which provides service in many Charter markets, has raised the stakes for competition as it rolls out U-verse, an advanced type of DSL service that can support video, telephone, and faster broadband.  In Reno, where AT&T has conducted usage cap experiments for more than a year, the news that Charter won’t comes as welcome news.

Stop the Cap! reader David canceled AT&T service when he found out the company was testing a usage cap in Reno.

“When we found out they were limiting us (after we signed up), we not only canceled AT&T broadband, but also disconnected our two phone lines as well,” David writes.  “We won’t do business with a company that wants to limit our broadband use and we resented being guinea pigs in the first place.”

David adds a “retention specialist” offered to waive his participation in the trial, but he wasn’t interested and is not looking back.

“Unless you deliver a clear message these ripoffs are unacceptable in a way they understand – money – they will just come back for more once the ‘experiment’ is over,” he said.

David is happy with his Charter Cable service, and estimates AT&T’s experiment cost them nearly $200 a month in revenue they used to earn from his family.

“Their cost control program certainly worked — for me.  I’m saving more money with Charter than what I was paying AT&T,” he adds. “I wouldn’t have switched except for their usage cap.”

Charter itself has some broadband usage limits, but they are almost never enforced.

Charter currently defines “normal” residential usage at around 15 gigabytes per month.  Charter’s usage allowances appear in its “excessive use” clause in the Acceptable Use Policy:

Residential service usage will not exceed 100GB of bandwidth per month for Customers subscribing to Services of 15 Mbps or less per month and 250GB of bandwidth per month for Customers subscribing to Service over 15 Mbps and up to 25 Mbps. Charter reserves the right to revise usage limits or to implement additional usage limits. In the event residential usage exceeds the above-described limits Customer will be notified and required to either limit Customer’s bandwidth consumption to permitted levels/limits or subscribe to a Service with a higher monthly bandwidth limit if a higher limit subscription is available.

Since these limits have not been aggressively enforced, they are known as “soft usage caps.”  Most Internet Service Providers have provisions for such limits in their customer agreements, although they are usually only enforced only when a customer’s usage reaches into the stratosphere (often terabytes of usage are involved) or creates a problem for the provider.

Still, some customers dropped Charter Cable even over the defined “soft caps,” switching to competitors who had no such provisions in their usage policies.  Consumers hate Internet Overcharging schemes, and will readily change providers to avoid them.

[flv width=”500″ height=”380″]http://www.phillipdampier.com/video/Charter Thank You Ad 3-1-2010.flv[/flv]

Charter Cable created this ad from customer recorded submissions sent over their Internet service (1 minute)