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AT&T Drops Data Caps for Free if You Subscribe to DirecTV Now

Phillip Dampier December 19, 2018 AT&T, Competition, Consumer News, Data Caps, Net Neutrality 2 Comments

AT&T customers are telling Stop the Cap! the company is emailing their broadband customers to alert them they now qualify for unlimited internet access because they also happen to subscribe to DirecTV Now, AT&T’s streaming service targeting cord cutters.

“Good news about your internet service! Because you also added DIRECTV NOW℠ to your internet service, we’re giving you unlimited home internet data at no additional cost.”

AT&T normally charges customers an extra $30 a month to remove their 1,000 GB data cap.

The move has some net neutrality implications, because AT&T is favoring its own streaming service over the competition, which includes Sling TV, Hulu TV, PlayStation Vue, and other similar services. If a customer subscribes to Hulu TV, the 1 TB cap remains in force. If they switch to DirecTV Now, the cap is gone completely.

AT&T has undoubtedly heard from customers concerned about streaming video chewing up their data allowance. With AT&T’s DirecTV on the verge of launching a streaming equivalent of its satellite TV service, data caps are probably bad for business and could deter customers from switching.

It is yet the latest evidence that data caps are more about marketing and revenue than technical necessity.

Updated 1:15pm EST 12/20: Hat tip to Karl Bode, who got AT&T’s official confirmation the unlimited internet offer that formerly applied to DirecTV satellite customers has now quietly been extended to DirecTV Now streaming customers as well. We are still looking for a screen cap of anyone who received an e-mail from AT&T about unlimited service for streaming customers. If you have one, drop me a line at phil (at) stopthecap.com

A Lukewarm Reception for Vermont’s Plan to Lure Internet Providers

Vermont residents want better internet service and protection for universal access to phone service, even if customers have to pay a surcharge on their bill to make sure the traditional landline is still available in 100% of the state.

In contrast, some residents complain, Vermont regulators want to make life easier for a telecom industry that wants to abandon universal service, fails to connect rural customers to the internet, and has left major cell phone signal gaps around the state.

In 2017, Vermont commissioned two surveys that asked 400 business and 418 residential customers about their telecommunications services. It was quickly clear from the results that most wanted some changes.

Vermont is a largely rural, small state that presents a difficult business case for many for-profit telecom companies. Verizon Communications sold its landline business in northern New England, including Vermont, to FairPoint Communications in 2007. FairPoint limped along for several years until it declared bankruptcy and was eventually acquired by Consolidated Communications, which still provides telephone service to most of the state.

Many rural areas are not furnished with anything close to the FCC’s definition of broadband (25/3 Mbps). DSL service at speeds hovering around 4 Mbps is still common, especially in areas relying on Verizon’s old copper wire infrastructure.

Comcast dominates cable service in the state, except for a portion of east-central Vermont, which is served by Charter Communications (Spectrum). Getting cable broadband service in rural Vermont remains challenging, as those areas usually fail the Return On Investment test. Still, 85% of respondents said they had internet service available in their home. Vermont’s Department of Public Service (DPS) estimates about 7% of homes in Vermont have no internet provider offering service, with a larger percentage served only by the incumbent phone company.

The majority of residents own cell phones, with Verizon (47.5%) and AT&T (31.8%) dominating market share. Sprint has 0.6% of the market; T-Mobile has a 1.2% share, both largely due to coverage issues. But even with Verizon and AT&T, 40% of respondents said cell phone companies cannot deliver a signal in their homes. As a result, many residents are hanging on to landline service, which is considered more reliable than cell service. Some 40% of those relying on cell phones said they would consider going back to a landline for various reasons.

With the FCC ready to cut support funding for rural landline service, residents were asked if the state should maintain funding to assure continued universal access to landline service. Among respondents, 87.8% thought it was either “very important” or “somewhat important.” The study also found 51% would accept a general statewide rate increase to cover those costs, while 29% preferred rate increases be targeted to rural ratepayers only. About 16% did not like either idea, and 4% liked both.

When asked whether residents would be interested in having a fiber connection in their home, 80% of respondents said “yes,” but 30% were unwilling to pay a higher bill to get it.

Ironically, the state’s most aggressive residential fiber buildouts are run by some of the smallest community-owned internet providers, rural electric or telecom co-ops, and small independent phone companies. What makes these smaller providers different is that they answer to their customers, not shareholders.

Comcast and Charter are the two largest cable companies in Vermont.

Recently, the DPS released a 100+ page final draft of its 2018 Vermont Telecommunications Plan, setting out a vision of where Vermont should be a decade from now, especially regarding rural broadband expansion, pole attachment issues, and cell tower/small cell zoning.

The report acknowledges the state’s own existing rural broadband expansion fund is woefully inadequate. In 2017, the Vermont Universal Service Fund paid out $220,000 to assist ISPs with building out networks to rural areas.

“The amount of money available to the fund pales in comparison to the amount of funding requests that the Department receives, which is generally in the millions of dollars,” the draft report states. “With approximately 20,000 unserved and underserved addresses in Vermont, the Connectivity Initiative cannot make a meaningful dent in the number of underserved locations.”

Much of the report focuses on ideas to lure incumbent providers into volunteering to expand their networks, either through deregulation, pole attachment reform, direct subsidies, or cost sharing arrangements that split the expenses of network extensions between providers, the state, and residents.

A significant weakness in the report covered the forthcoming challenge of upgrading a state like Vermont with 5G wireless service:

Small cell deployment has been attempted along rural routes with very limited success and the national efforts to expand small-cell, distributed-antenna systems, and 5G upgrades have focused on urban areas. The common refrain on 5G is that ‘it’s not coming to rural America.’ 5G should come to rural Vermont and the state should take efforts to improve its reach into rural areas.

A small cell attached to a light pole.

To accomplish this, the report only recommends streamlining the permitting process for new cell towers and small cells. The report says nothing about how the state can make a compelling case to convince providers to spend millions to deploy small cells in rural areas.

Where for-profit providers refuse to provide service, local communities and co-op phone or electric providers often step into the void. But Vermont prohibits municipalities from using tax dollars to fund telecommunications projects, which the law claims was designed to protect communities from investing in ‘unprofitable broadband networks.’

The draft proposal offers a mild recommendation to change the law to allow towns to bond for some capital expenditures on existing or starting networks:

Vermont could use a similar program to help start Communications Union Districts as well as allow towns to invest in existing networks of incumbent providers. Limitations on the authority to bond would need to be put in place. Such limitations should include focusing capital to underserved locations only, limiting the amount (or percentage) of tax payer dollars allowed to be collateralized, and setting technical requirements for the service.

Such restrictions often leave community broadband projects untenable and lacking a sufficient service area or customer base to cover construction and operating expenses. Instead, only the most difficult and costly-to-serve areas would be served. The current law also prevents local communities from making decisions on the local level to meet local needs.

At a public hearing last Tuesday in Montpelier, the report faced immediate criticism from a state legislator and some consumers for being vague and lacking measurable, attainable goals.

“This plan does not appear to move Vermont ahead in a way that enables it to compete effectively,” said state Sen. Mark MacDonald (D-Orange). “It doesn’t seem to be moving forward at the pace we’re capable of.”

Clay Purvis, director of telecommunications and connectivity for the DPS, defended the plan by alluding to how the state intends to establish a cooperative environment for internet service providers and help cut through red tape. But much of those efforts are focused on resolving controversial pole attachment fees and disputes, assuming there are providers fighting to place their competing infrastructure on those utility poles.

Montpelier resident Stephen Whitaker was profoundly underwhelmed by the report.

“There is no plan at all here,” Whitaker said at Tuesday’s public hearing. “There is some new background information from the 2014 version, but there’s no plan there. There is no objective to reach the statutory goals.”

N.Y., Charter Spectrum Settle 2017 Internet Speed Lawsuit; Some Customers Getting Refunds

Phillip Dampier December 18, 2018 Broadband Speed, Charter Spectrum, Consumer News 7 Comments

A $174.2 million consumer fraud settlement has been reached between outgoing New York Attorney General Barbara D. Underwood and Charter Communications, delivering $62.5 million in direct refunds to some customers in former Time Warner Cable Maxx territories in New York State and free premium and streaming services for all current New York customers.

The settlement, likely the largest ever reached with an Internet Service Provider (ISP), comes in response to a 2017 lawsuit filed by former Attorney General Eric Schneiderman, accusing Time Warner Cable of short-changing customers on broadband speed and reliability, by knowingly advertising internet speeds it could not deliver. Time Warner Cable was acquired by Charter Communications in 2016.

“This settlement should serve as a wakeup call to any company serving New York consumers: fulfill your promises, or pay the price,” said Underwood. “Not only is this the largest-ever consumer payout by an internet service provider, returning tens of millions of dollars to New Yorkers who were ripped off and providing additional streaming and premium channels as restitution – but it also sets a new standard for how internet providers should fairly market their services.”

The settlement allows Charter to admit no wrongdoing, but the company is required to compensate Spectrum customers in New York and reform its marketing practices. Going forward, Spectrum must offer evidence through regular speed testing that the company can actually deliver advertised speeds. Charter is also required to continue network investments in New York to improve its internet service.

Lawsuit History

Schneiderman

In 2017, the Attorney General’s office filed a detailed complaint in New York State Supreme Court, alleging that Charter had failed to deliver the internet speed or reliability it had promised subscribers in several respects. That includes leasing deficient modems and wireless routers to subscribers – equipment that did not deliver the internet speeds they had paid for; aggressively marketing, and charging more for, headline download speeds of 100, 200, and 300 Mbps while failing to maintain enough network capacity to reliably deliver those speeds to subscribers; guaranteeing that subscribers would enjoy seamless access to their chosen internet content while engaging in hardball tactics with Netflix and other popular third-party content providers that, at various times, ensured that subscribers would suffer through frozen screens, extended buffering, and reduced picture quality; and representing internet speeds as equally available, whether connecting over a wired or Wi-Fi connection – even though, in real-world use, internet speeds are routinely slower via Wi-Fi connection.

The Attorney General’s office prevailed at every major stage of the court proceedings. After Charter sought to move the case to federal court, the Attorney General’s office won a federal court decision returning it to state court. Charter then moved to dismiss the action on various grounds, including federal preemption; the Attorney General’s office successfully opposed that motion, which the trial court denied in full. When Charter appealed parts of that ruling, the Attorney General’s office prevailed again at the Appellate Division.

Underwood

The Settlement

Under the settlement, New Yorkers will be qualified to receive different levels of compensation as a result of the settlement. Here is what customers can expect:

Only current Charter Spectrum internet customers (including those on legacy Time Warner Cable internet plans) can receive benefits under this settlement. If you do not have service today, but had it in the past, you do not qualify for relief.

Cash Refunds

Only customers living in areas upgraded to Time Warner Cable Maxx service can receive cash compensation. At the time of the lawsuit, this included much of New York City area, the Hudson Valley, parts of the Capital Region, and Syracuse-Central New York. Additionally, the customer must have subscribed to a Time Warner Cable legacy speed plan of 100 Mbps or higher. (Customers in non-Maxx areas including Buffalo/WNY, Rochester-Finger Lakes Region, Binghamton, and the North Country will not receive financial compensation.)

If you did subscribe to 100+ Mbps Time Warner Cable service and still subscribe to either your original legacy plan or have since upgraded to a Spectrum plan, you may qualify for:

  • a $75 refund (700,000 subscribers) if you were supplied an inadequate cable modem or Wi-Fi router by Time Warner Cable.
  • an additional $75 refund (150,000 subscribers) if you were leasing an inadequate cable modem for 24 months or longer.

You do not need to take any action to get these refunds. Charter Spectrum will notify eligible subscribers about the settlement and provide refunds within 120 days. (If you previously received a refund for being supplied with an inadequate modem, you are ineligible for this cash refund).

Free Services

Only former TWC Maxx customers qualify for cash refunds.

In addition to the direct refunds detailed above, Charter will offer free streaming services to approximately 2.2 million active internet subscribers (both Spectrum and legacy Time Warner Cable plans qualify):

If you currently subscribe to both Spectrum Internet and TV service, you qualify for three free months of HBO or six free months of Showtime. (If you already subscribe to these premium movie channels, you are ineligible for this part of the settlement. If you subscribe to one, but not both of these networks, select the one you do not currently receive.)

If you currently subscribe to internet-only service from Spectrum, you will receive a free month of Charter’s Spectrum TV Choice streaming service—in which subscribers can access broadcast television and a choice of 10 pay TV networks—as well as a free month of Showtime.

Charter will notify subscribers of their eligibility for video and streaming services and provide details for accessing them within 120 days of the settlement. Receiving the video and streaming services as restitution will not affect eligibility for future promotional pricing.

Pro-Consumer Reform

New York also secured groundbreaking reforms in how Charter Spectrum conducts business. Underwood believes these guidelines could serve as a guide for other states to eventually adopt, delivering consumer benefits to cable subscribers everywhere. For now, New York consumers can expect:

  • Internet Speed Proof of Performance: Charter must describe internet speeds as “wired,” disclose wireless speeds may vary, and mention that the number of concurrent users and device limitations will impact your actual internet speed. These disclosures must be made in all marketing materials and ad campaigns. Additionally, Spectrum must regularly certify through actual speed testing that it can deliver the speeds it advertises or discontinue any speed plan that cannot be substantiated.
  • Truth in Advertising: Charter Spectrum cannot make unsubstantiated claims about the speed required for different internet activities (eg. streaming, gaming, browsing). It also must not advertise internet service as reliable (eg. no buffering, no slowdowns), or guarantee Wi-Fi speed without proof.
  • Equipment Reforms: Charter must provide subscribers with equipment capable of delivering the advertised speed under typical network conditions when they commence service, promptly offer to ship or install free replacements to all subscribers with inadequate equipment via at least three different contact methods, and implement rules to prevent subscribers from initiating or upgrading service without proper equipment for the chosen speed tiers.
  • Sales and Customer Service Retraining: Charter must train customer service representations and other employees to inform subscribers about the factors that affect internet speeds. Charter must also maintain a video on its website to educate subscribers about various factors limiting internet speeds over Wi-Fi.

Today’s settlement has no bearing on the well-publicized dispute between the New York Public Service Commission and Charter that led the Commission to cancel approval of Charter’s acquisition of Time Warner Cable. Last summer, the Commission voted to throw Spectrum out of the state, but ongoing negotiations between the PSC and Charter are also likely to culminate in a similar settlement including cash fines and new commitments from the cable operator.

FCC Panel Recommends Taxing Websites and Giving the Proceeds to Big Telecom Companies

The telecom industry wants a new tax on broadband services to pay for rural broadband expansion.

Nearly two years after FCC Chairman Ajit Pai announced the formation of a new federal advisory committee on broadband development, the telecom industry-stacked panel has recommended implementing a new tax on websites and online subscription services like Netflix, Hulu, and Amazon Prime Video and turning over the proceeds to many of the same companies dominating the Committee.

The proposal is part of a large set of recommendations from the Broadband Deployment Advisory Committee (BDAC) designed to promote and streamline broadband expansion, especially in rural areas. If adopted by the states, the new tax would create a large broadband deployment fund that could be accessed by telecommunications companies like AT&T and Comcast to expand service without having to pay back the funds or give up part ownership of the taxpayer-funded expansion.

What caught many by surprise was the sweeping impact the new tax could have on the internet economy, because online businesses, streaming services, and even many website owners could be subject to the tax, if enacted:

Entities that financially benefit from access to a broadband system located in the state, including advertising providers, shall contribute to the Broadband Deployment Fund.

A comprehensive piece by Jon Brodkin on Ars Technica points out defining the meaning of “entities” and “advertising providers” will be crucial to determine who will have to pay the tax and who won’t:

Article 11 of the BDAC’s model state code would create a Rural Broadband Deployment Assistance Fund, paid for by contributions from broadband providers and “Broadband Dependent Services.”

The definition of “Broadband Dependent Services” is where things get interesting. An earlier version of that definition—available in this document—reads as follows:

“Broadband Dependent Service” means a subscription-based retail service for which consumers pay a one time or recurring fee which requires the capabilities of the Broadband Service which the consumer has purchased and shall also include entities that financially benefit from access to a broadband system located in the state, including advertising providers.

The BDAC met on December 7 and pared that definition back a bit to exclude “entities that financially benefit from access to a broadband system.” Video is available here; the discussion on the definition starts around 2:04:45.

BDAC Chair Elizabeth Bowles, who also runs an Arkansas-based wireless Internet service provider called Aristotle, expressed concern that the original version of the definition “was including every small business in America,” potentially forcing them all to pay the new tax.

Nurse

AT&T has been one of the strongest advocates for the new tax, and argued it should be as expansive as possible.

“It basically is everybody [that should be taxed] because this is a societal objective,” said Chris Nurse, assistant vice president for state legislative and regulatory affairs at AT&T. “Universal service is a societal objective. We want to spread that $20 or $30 billion burden more broadly so the tax is low on everybody.”

Google Fiber policy chief John Burchett objected, claiming under AT&T’s vision, everyone who has an internet connection would be taxed. In his view, AT&T’s proposal was “absurd.”

As the debate raged on, it became clear AT&T was once again looking for a way to be compensated by companies like Amazon and Facebook — using its ‘pipes’ without contributing towards the cost of the network.

“Who are we cutting out and who are we leaving in?” Nurse asked. “Today it’s basically the telephone companies [who pay] and not Google and not Amazon and not Facebook, right? And they’re gigantic beneficiaries from the broadband ecosystem. Should they contribute or not? Someone has to pay.”

Burchett

In the end, the BDAC settled on adopting a compromise over what broadband entities will be subject to the new tax:

“Broadband Dependent Service” means a subscription-based retail service for which consumers pay a one time or recurring fee, and shall also include advertising-supported services which requires the capabilities of the Broadband Service which the consumer has purchased.

This compromise definition primarily targets the new tax on streaming video services — the ones AT&T itself competes with. But it will also cover any websites sponsored with online advertising — like Facebook and Google, ISPs, subscription services delivered over the internet, as well as AT&T’s broadband competitors.

The proposal also seeks to guarantee that rural residents be granted access to affordable broadband, but the industry-dominated Committee chose to define “affordable” as the cost of internet access in urban areas, which some would argue isn’t affordable at all.

The draft proposal has been criticized by many stakeholders, including the National Rural Electric Cooperative Association, representing electric cooperatives. The group implied the new proposal was just the latest attempt to get the telecom industry’s wish list enacted.

“Instead of focusing on solutions for unserved and underserved rural communities, many of the recommendations focus on issues specific to urban areas where broadband is already available,” said NRECA CEO Jim Matheson. “Ignoring the precedent of federal law and laws in 20 states, the state model code would treat co-op poles like those belonging to large investor-owned utilities. The state model code would also cap pole attachment rates in state statute, effectively making those rates permanent. This code, in effect, increases regulatory burdens while giving co-ops less time and less money to comply with those regulations.”

The National Multifamily Housing Council also objected to another proposal approved in the draft.

“Article 8 of the MSC grants broadband providers the unilateral right to install facilities in all multifamily residential and other commercial buildings and mandate construction of broadband facilities at the property owner’s expense without regard to the rights and concerns of the owner,” the organization claimed. “NMHC/NAA and its real estate industry partners argued that Article 8 of the MSC is riddled with many practical and legal problems. Among the most serious issues with the MSC is that it interferes with private property rights, disrupts negotiations and existing contracts between property owners and communications service providers and will lead to costly regulation and litigation at the state level without any assurance of actually spurring broadband deployment.”

AT&T would be among the biggest beneficiaries of the tax fund, already receiving $428 million annually from another rural broadband fund to expand wireless internet access in rural areas. If Nurse’s predictions are correct, the tax could collect $20-30 billion, far more than has ever been spent on rural broadband before.

Liccardo

Critics also contend the BDAC’s industry-friendly proposals are predictable for a Committee created by FCC Chairman Ajit Pai and well-stacked with telecom industry executives and lobbyists. The former head of the BDAC was arrested by the FBI on fraud charges, and San Jose Mayor Sam Liccardo quit the Committee in January, writing, “the industry-heavy makeup of BDAC will simply relegate the body to being a vehicle for advancing the interests of the telecommunications industry over those of the public” in his letter of resignation.

Whatever the BDAC ultimately decides, the final proposal has a long road to travel before becoming law. Each state can choose to adopt the proposal, part of it, or none of it. In the end, it is just a “model code” for states to consider. But it will be part of the argument made by the telecom industry that laws must be streamlined to prevent delays in deploying service, and that those benefiting from broadband should cover more of the costs to provide it.

Ironically, the person most likely to be embarrassed by the model code could be FCC Chairman Ajit Pai, who has almost universally rejected new taxes and fees on broadband services. But his approval is not required to advance the argument and the model code to the states, where the telecom industry’s lobbyists are waiting to begin advocating the passage of new state laws enacting its recommendations.

Cable One Changing Name to Sparklight in the Summer of 2019 to Refocus on Broadband

Phillip Dampier December 12, 2018 Broadband Speed, Cable One, Consumer News, Data Caps 3 Comments

Cable One will rebrand itself Sparklight starting in the summer of 2019, reflecting a refocus on selling broadband service.

“We are very excited for this evolution to our new brand and the next chapter in our story,” Cable One CEO Julie Laulis said in a statement. “Over the past several years we have evolved and our new brand will better convey who we are and what we stand for – a company committed to providing our communities with connectivity that enriches their world.”

The corporate name will remain Cable One, but like Charter’s Spectrum or Comcast’s XFINITY, customers will primarily know the company under its new brand.

Cable One provides service in these areas.

Cable One has just over 800,000 customers in 21 states nationwide, primarily in the South. The company’s decision to hold the line on the wholesale cost of its cable television package resulted in the company dropping Viacom-owned cable networks, which caused a significant number of customers to cancel service. Today, nearly 60% of its customers are broadband-only.

The cable company has also been criticized for dramatically raising the price of its internet service and for its regime of data caps, which limits most of its customers to 300 GB of usage a month. Customers who exceed their usage allowance three times during a calendar year “may be required to upgrade to an appropriate plan for data usage.”

Cable One currently offers four broadband options:

  • Starter Plan (100/3 Mbps) $55/mo with up to 300 GB of usage
  • Family Plan (150/5 Mbps) $80/mo with up to 600 GB of usage
  • Streamer and Gamer Plan (200/10 Mbps) $105/mo with up to 900 GB of usage
  • GigaONE (1000/50 Mbps) $175/mo with up to 1,500 GB of usage

Under the rebrand, the company will “streamline” its residential broadband options and pricing, which will likely push customers towards a more expensive, higher-speed tier. Sparklight will also offer unlimited data on any of its revamped tiers for an additional monthly fee. Both measures are likely to boost revenue, and customer bills.

“As consumer data consumption continues to increase, multi-device households become the norm, and businesses expect a broad suite of services, Sparklight will continue to evolve with our customers by offering innovative options to fit their needs, while providing helpful, proactive and personal local service,” Laulis said.

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