They're in your neighborhood, just waiting to break into your home network, according to WXYZ-TV in Detroit

The biggest security threat most broadband users will encounter doesn’t come from identity thieves or kiddie porn rings roving neighborhoods looking for unsecured computers to exploit — it’s from your neighbors looking for free access to your broadband service.

Local newscasts have recently been running sensationalist stories of mysterious cars parked on neighborhood streets driven by ne’er-do-wells barging onto unsecured home wireless networks.

In fact, the most common threat isn’t from drive-by crime rings, but right next door.  With most broadband accounts providing flat rate service, the occasional uninvited guest ‘borrowing access’ probably goes unnoticed.  But should Internet Overchargers have their way, the consequences of account sharing in a world with paltry usage limits and usage-based-billing could show up on your monthly bill.

In countries where these overcharging schemes already have taken firm root, reports of customers receiving enormous broadband service bills are common.  In Australia, rarely a week goes by without someone reporting a hacked wireless network incident.  Consumers have been forced to become watchdogs, constantly checking usage statistics to ensure someone in the neighborhood hasn’t been “borrowing” their Internet account and blowing through their monthly usage allowance.

One customer, who lives in an apartment complex, shares a too-common story:

Over the past 24 hours someone (or something?) has been sucking the life out of my internet connection and chewed up 10Gb of my quota. How do I troubleshoot the cause of this? I have a Buffalo WHR-G54S Wireless Router and my network is secured.  I live by myself in a small block of apartments; I have had no visitors either.

Another customer discovered when it’s your word against your provider’s, the provider wins:

Yesterday, I was checking my broadband bill and was surprised to find out that they had charged me for downloading an extra 4 GB of data. I checked my usage online for the current month and it was already 8GB! This is despite the fact that I have been on holiday for ten days, and my normal usage involves casual browsing and downloading e-mails.

Furthermore, I never exceeded my download limit since I started with my ISP. My ISP also confirms that this is quite unusual and against my normal usage pattern. I have asked them to provide me some usage statistics but they can only give me the data that I already see on my account online.

The cost of exceeding the limit can be enormous.  BigPond in Australia, for example, has a few Internet plans that charge a $0.15 per megabyte overlimit penalty.  That’s $150AUD per gigabyte.

[flv]http://www.phillipdampier.com/video/WXYZ Detroit Open Wi-Fi Risks 1-26-10.flv[/flv]

WXYZ-TV in Detroit ran this sensationalist report on drive-by hackers breaking into wireless networks. (3 minutes)

The solution suggested by most Internet Service Providers is to enable built-in wireless security.  How much protection that provides and whether customers will be able to understand how to configure security remain open questions.

Some phone companies providing DSL service have plenty of older equipment still in customer homes that only supports the older WEP security standard.  That’s insufficient to protect consumers from intrusion because WEP security has been seriously compromised.

“WEP as a security measure is so broken that your (and everyone else’s) kid sister can easily circumvent it,” computer security researcher Ralf-Philipp Weinmann told the BBC.  Weinmann is co-author of the aircrack-ptw tool that can crack WEP in minutes.

Anyone caring about their privacy, said Weinmann, should not use WEP to stop others using their wi-fi hotspot.

Current generation wireless routers typically provide both WEP and the more secure WPA standard. But now there is evidence WPA can also be compromised, with a little help from “cloud computing,” which puts several high powered computers together to quickly work on cracking your password. A service has even been launched to let would-be crackers rent time on the “cloud” to “test” network security passwords, starting at just $17. In as little as 20 minutes, those with relatively simple passwords will find their network security compromised.

You can protect yourself by at least making sure your router is “secured” with a password.  Most every router comes with instructions or software that make this process as simple as possible.  When you have a choice of security standards, aim for WPA2, if available.

Thus far, most reported WPA network break-ins occur because the user is relying on a simple password — often a common word, name, series of numbers, or something similar that is much easier to break. Try to use a password that is not a word in a dictionary, doesn’t correspond to information anyone could mine off your Facebook page (city/town, school, birthday, parents or siblings names, etc.), and would be impossible to guess off-hand.

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How to secure your wireless network (6 minutes)

While the United States argues over broadband speeds, pricing, and usage limits, a broadband speed war is breaking out in Mexico which could deliver millions of Mexicans better broadband service at lower prices than what providers in the United States and Canada offer many of their customers.

The first shot came from Telmex, owned by media tycoon Carlos Slim.  They announced a more than doubling of their company’s DSL speed from the current 2-4Mbps to more than 10Mbps.

Telmex is Mexico’s leading Internet Service Provider, and typically bundles its broadband service with a calling package.  Telmex currently sells up to 5Mbps service, bundled with a phone line with unlimited local and long distance calling, plus 200 minutes of free calling to the United States, other calling features, free wi-fi access in more than 120,000 locations, and a free wireless modem/router for approximately $78 a month.  New subscribers get a bond worth approximately $39 when they sign up for service.

Televisa’s Cablevision, a cable provider, announced over the weekend it would match Telmex.

“Cablevision will offer this year more than 10Mbps service across Mexico City and surrounding areas at very affordable prices,” Televisa Executive Vice President Alfonso de Angoitia tweeted.

Televisa has been playing catch-up to Telmex, but the cable company’s “triple-play” phone, broadband, and video package has been attracting considerable attention.  The Mexican authorities currently prohibit Telmex from offering video to customers because of market domination fears.

Cablevision standalone pricing for their current 2Mbps service is about $23 a month with a term contract.  Additional discounts are provided for bundled service — $40.33 a month for both broadband and telephone service.

The price war broke out because of anemic growth in the landline telephone business, and the potential revenue expanded broadband service packages could bring Mexican providers.

[flv]http://www.phillipdampier.com/video/Mexico Cablevision Telmex Ads.flv[/flv]

A selection of ads from Cablevision and Telmex. (3 minutes)

New Zealand Telecom

New Zealand’s Telecom is the latest company caught with a defective broadband usage meter that overbilled 150,000 of their 500,000 customers for Internet usage never utilized.  The problem was tracked to a “technical problem” involving the company’s network upgrade in preparation for the introduction of TiVo.  Telecom’s engineering partner Juniper was held responsible for introducing the error which resulted in more than one hundred thousand customers finding their broadband speeds reduced for “excessive usage” to near-dial-up or billed steep overlimit penalties for the months of November and December.

On December 23, Telecom sent out letters to around 150,000 customers informing them of the error.

“Our reports show us that you will have experienced slowed internet speeds earlier than expected in your billing months,” said the letter, signed by Telecom’s general manager of broadband, Ralph Brayham.

Telecom spokeswoman Emma-Kate Greer told the New Zealand Herald all customers who had been affected by over-charging or slowed internet speeds had been identified.

They had been refunded and credits had been given to “customers who may have been incorrectly slowed.”

Customers shocked by their November and December bills were initially stuck taking Telecom’s word for the overbilling, resulting in lots of finger-pointing in New Zealand households.  The Herald reported:

Sarah Broughton, from Herne Bay in Auckland, said she had been frustrated by the slow broadband, and had accused one of her flatmates of downloading too many movies.

“There are six people living in our house. We all suspected everyone else was downloading heaps,” she said.

“We were blaming other people.

“I never suspected it was Telecom. You think when you give them money they are going to use it properly.

“It’s just been so annoying.”

Usage meters, a vital component of Internet Service Providers seeking an enhanced payday from Internet Overcharging schemes that bill customers based on how much data they consume, have been controversial because of questions regarding the accuracy of their measurements.  Most providers do not permit independent verification of the accuracy of their meters, despite their accounting for a significant portion of a customer’s monthly broadband bill.

It took a concerted, organized effort by members of the Geekzone website to “out” Telecom’s erroneous billing practices and get the company to issue compensation to impacted customers.

New Zealand, along with Australia and Canada are often cited by broadband providers as examples of places where broadband usage limits are commonplace.  With dreams of Internet Overcharging schemes in their heads, Time Warner Cable, among several others, have routinely pointed to Internet service abroad to justify limiting your usage at home.

But providers always ignore the fact customers despise the limitations on their service, in several cases ranking it among the biggest problems they have with their Internet Service Provider.  Internet rationing plans that barely budge in broadband allowances are a major factor in broadband mediocrity, and government officials are increasingly taking notice.  In some countries, national broadband policies seek to expand infrastructure where private providers won’t.

In New Zealand, the push for better connectivity comes through expansion of the undersea fiber cables that connect the country with the rest of the online world.  In the south Pacific, it is that connectivity problem which directly impacts consumer pricing of broadband and bring limits on service.

Today, the only major connection New Zealand has with the world is through Southern Cross Cable Networks, which have cables stretching from Auckland in New Zealand to Sydney, Australia and between Auckland and Hawaii.

Now, a second company hopes to dramatically expand connectivity with an expanded capacity cable to be laid between Auckland and Sydney.  Kordia, a state-owned enterprise, which plans to run the 2,350km cable, says this expansion will dramatically lower broadband pricing for New Zealand and allow providers to vastly expand or discontinue broadband usage caps.

Kordia says the cable, costing between $112-149 million dollars US, will be operational by the end of 2011 if all goes according to plan.

“Our proposed cable will take the most direct, quickest and least expensive route for New Zealand customers.  OptiKor is a better proposition for New Zealand than any other cable project – we are the most direct route to Australia and through our partners, we can deliver New Zealand traffic all the way to the United States,” Kordia Chairman David Clarke says.

Prices are already dropping in New Zealand just from the threat of competition.  Southern Cross Cable slashed prices on its cable 75 percent in anticipation of Kordia’s future competition.  Kordia claims that price cutting is designed to help drag down the company’s efforts to obtain contracts with telecommunications companies in advance of construction.

Still, should the cable be laid, in addition to the prospect of ending aggravating usage caps, Kordia estimates New Zealanders will save almost $1.5 billion US on Internet access between now and 2020.

FairPoint Communications’ performance in New England, finally leading to bankruptcy, harms not only itself but also smaller local Internet companies providing jobs and service across the region.  That’s the gist of a report in this morning’s Kennebec Journal outlining a dispute between FairPoint and Great Works Internet, a Biddeford, Maine Internet Service Provider caught between FairPoint’s fiber optic network and a billing dispute that demands GWI pay more than $3 million dollars by December 19th, or face service termination by FairPoint.

GWI leased fiber optic cables with FairPoint’s predecessor Verizon back in 2005.  As part of the Communications Act of 1996, designed to spur competition, GWI obtained access at special interconnection rates, lower than the prices charged for retail customers.  Verizon felt the price was too low, and went to court in 2005 to seek the right to charge “market rates” for access, but the issue was never settled before Verizon sold its landline network to FairPoint last year.  In March of this year, FairPoint stopped accepting new orders from GWI for fiber service, which has kept the company from growing beyond its current fiber network agreements, costing the company plenty in new business.  Then, in September, FairPoint back-billed GWI for $3,085,025, representing the price FairPoint felt GWI should have been paying since 2006.  If the Maine-owned ISP doesn’t pay up, it has been threatened with having its service cut off altogether.

Fletcher Kittredge, GWI’s founder and chief executive officer, has been around the ISP business a long time.  The company was founded in 1994, before Internet access became common, and he has grown the company into a locally owned business serving 18,000 customers with phone and Internet connections.  At risk are the loss of up to 75 local jobs and a significant part of $13 million in annual revenues earned by what the Journal calls one of Maine’s leading Internet providers.

“For us, it’s vital that this be settled soon,” Kittredge told the newspaper. “FairPoint has been threatening us with some pretty draconian action.”

FairPoint’s threat has already cost the company customers, Kittredge said, and the uncertainty makes it hard to go after new business accounts.

But growth has been trimmed by FairPoint’s actions, according to Kittredge. For instance: The company signed a contract with the Skowhegan school system for high-speed access and set up equipment. But the connections it needed from FairPoint were never made, Kittredge said, and he had to cancel the school contract. That has had a chilling effect on efforts to go after new accounts.

“We can’t go out and solicit new businesses,” he said. “We can’t say, ‘This is going to be great, but we may not be able to deliver it to you.’ ”

Great Works hasn’t wanted to make a big deal in public of its fight with FairPoint. It’s concerned that the news will cause existing customers to worry that they could lose their Internet connections.

“It’s a threat I’m going to watch,” said Mitch Davis, chief information officer at Bowdoin College in Brunswick.

Bowdoin gets phone service from FairPoint, but most of its Internet access is from Great Works. Davis was aware of the initial court dispute, but didn’t realize FairPoint was threatening to cut line access. He hopes the bankruptcy judge will let the case go forward and get settled.

GWI told the Journal the company may just be trying to steal Great Works’ lucrative business customers.  That might come to pass if the circuits are cut.  Despite Davis believing FairPoint probably wouldn’t make good on their threat because of the bad publicity it would generate, he admits if they do, he might be forced to transfer the college account to FairPoint.

“I would do what I need to do to keep the college running,” Davis said.

One Journal reader characterized the dispute as just one more consequence of approving FairPoint Communications’ takeover of Verizon service in Maine.

“I would like to thank the governor of Maine for letting such a strong stable company like FairPoint in this state. You really did your homework.  I thought we had a Public Utilities Commission that watched out for public interest.  Boy are they on the ball.  I am glad to see […] they are not running my business.”