Stop the Cap! reader Paul writes to share his dilemma with AT&T U-verse:

I have had AT&T U-verse broadband for three years and although the company has a 250GB usage cap, they have a completely dysfunctional measurement tool. It has never worked. AT&T tells me I should not be concerned about my Internet use for billing purposes. It seems pretty clear to me AT&T’s -only- interest in capping usage is, in fact, for billing purposes. If you ask customer service about why AT&T caps wired usage, they claim it provides a better user experience for everyone. But nowhere does AT&T ask customers to consider what they are doing with their Internet accounts. If this was really about congestion, why not ask customers to conserve broadband resources?

With AT&T, one of the largest phone companies in the country, it was never about congestion and still is not. This is about money, pure and simple. Their usage meters don’t work right, their billing penalty is a huge $10 fee for 50GB of usage (why not $0.20 per gigabyte?), and their service has tons of capacity once it gets onto their fiber network at the link up the street. Who are they kidding?

Suddenlink is throwing a hissyfit over Frontier’s aggressive advertising.

Now come on, you are both pretty… slow that is.

Suddenlink Communications is crawling mad that Frontier Communications has been hammering the cable company over their broadband speeds, which PC Magazine this week proclaimed were nothing to write home about. The cable operator successfully challenged some of Frontier’s ads with the National Advertising Division of the Council of Better Business Bureaus.

The group recommended Frontier cease making claims that its DSL service offers “dedicated” lines to the Internet in contrast to Suddenlink, which forces customers to share their connection with the whole neighborhood.

Frontier claims Suddenlink’s network can bog down during peak hours, while Frontier makes sure customers consistently get the speeds they pay for.

Many of the ads targeted customers in West Virginia, who regularly tell Stop the Cap! neither provider competing there offers particularly good service.

“Is Frontier kidding?,” says Shane Foster, a former Frontier customer in West Virginia. “I was supposed to be getting up to 6Mbps service and I was lucky to get 1.5Mbps at 2 am.”

Foster says he believes Frontier oversold its DSL network in his area, with speeds slowing even further during the evening and weekends when everyone got online. While Frontier may not require customers to share a line from their home to the company’s central office, congestion can occur within Frontier’s local exchange or on the connection Frontier maintains with Internet backbone providers.

“The technician sent to my house even privately admitted it,” Foster tells Stop the Cap!

Foster switched to Suddenlink, but he is not exactly a happy customer there either.

“Their usage caps suck, the service is slow, and their measurement tool is always broken,” Foster shares. “West Virginia doesn’t just get the bottom of the barrel, it gets the dirt underneath it.”

Frontier Communications says it has been making improvements in West Virginia and other states where it provides DSL broadband. Some areas can now subscribe to 25Mbps service because of network upgrades. Foster says he would dump Suddenlink and go back to Frontier, if they can deliver speeds the rest of the country gets.

“Sorry, but 1.5Mbps is not broadband and with their prices, tricky fees and contracts it is robbery,” says Foster. “They need to clean up their act and I’ll come back. I hate usage caps with a passion.”

Frontier says it will appeal the NAD’s decision. But Frontier might do better advertising its broadband service as usage cap free — something customers consistently value over those running Internet Overcharging schemes.

Phillip “The Company Paid by Suddenlink to Issue a Third Party Guarantee Makes All the Difference” Dampier

When Stop the Cap! and Broadband Reports reader Simon contacted us about Suddenlink’s fact-free usage measurement tool that managed to rack up nearly 23GB of usage for one West Virginia customer on the same day his service was out for most of the evening, he probably did not think one customer catching the cable company’s fingers in the usage cookie jar would make much difference.

But it did.

Suddenlink spokesman Pete Abel, initially responding to complaints about the usage tool’s accuracy, told Light Reading last week its meter was “consistently accurate, as was demonstrated in the tests we ran before we launched this program.”

Four days later, the company effectively disavowed that, put the meter’s built-in overlimit fee scheme on hold and plans to hire a third party company to “validate the accuracy of its system,” after finding it was faulty after all.

Suddenlink won’t say what is causing the inaccuracies, but blamed “unusual” circumstances for the problem. The company is now refunding customers billed overlimit fees of $10 per 50GB and waiving future charges until its system is reviewed and validated by “a trusted third party.”

Stop the Cap! believes that does not come close to satisfying the company’s responsibility to its customers for accurate billing.

Suddenlink has never demonstrated it actually needs an Internet Overcharging scheme with usage limits and overlimit fees. The company proves that when it claims only a “relatively small number of customers” were ever billed overlimit fees. With no demonstrable usage problem, the company’s need to implement its Project Imagine “Allowance Plan” is sorely lacking.

Easy as counting anyway we like.

Additionally, the accuracy of providers’ usage measurement tools has proven highly suspect, and not just with Suddenlink. All of the companies caught with inaccurate meters always strongly defend them, until overwhelming evidence suggests they should not. Even super-sized companies like Bell Canada (BCE) and AT&T have enforced usage limits with meters the companies later had to disavow. Suddenlink is only the latest.

The scale in your grocery store is checked and certified. So is the corner gas pump, your electric meter, water meter, and gas meter. Why should broadband usage be any different?

Consumers are right to suspect Suddenlink’s usage meter. No official regulatory body verifies the accuracy of usage measurement tools and whatever company Suddenlink chooses to “verify” its meter has a built in conflict of interest — it works for a company that depends on a certain result in its favor. Suddenlink clearly has no business in the usage measurement business when it insists on the accuracy of a meter it disavows just a few days later.

With only murky details available to consumers about what caused the problem and why Suddenlink did not see it until a customer managed to catch them in the act, there is little confidence the company will actually solve a problem it never realized it had. There is also nothing to assure us — “third party guarantee” or not — it cannot happen all over again.

Suddenlink customers need to reach out and tell Suddenlink its “Allowance Plan” is completely unacceptable. Tell the cable company you don’t want to worry about their unverifiable and proven-inaccurate metering program. Ask them why you should remain a customer when they spend time and money on a scheme that the company itself admits is not really needed — targeting just a small number of “heavy users.”

Suddenlink’s customer service team does not think much of customers who use their broadband service a lot, as this recent “Who’s On First” exchange illustrates:

Lisa (Suddenlink): “Well, you show heavy OVERUSAGE of the Internet, you drew 14GB of data yesterday.”

Customer: “Okay, let’s back up, explain to me how I drew 12GB of data when my power was off and I wasn’t home on June 30.”

Lisa: “I didn’t say anything about June 30.”

Customer:  “If you have sooo much faith in your meter, explain to me how I drew 12GBs of data on June 30, while I didn’t have power, and wasn’t home.”

Lisa:  “I didn’t say anything about June 30.”

Customer:  “I’m asking, how did I draw 12GB of data without power to my house?”

If Suddenlink has a problem with a handful of users creating problems for other subscribers on its broadband network, it has always reserved the right to contact those customers directly and work out the problem one on one. That is a far better solution than inconveniencing all of their customers with endless rounds of “usage roulette,” where the big winner could find themselves with Bill Shock from overlimit fees, whether they actually deserve them or not.

[flv]http://www.phillipdampier.com/video/CNBC Internet v. Cable 8-20-10.flv[/flv]

CNBC interviewed Suddenlink CEO Jerry Kent in August 2010 on how his company intends to deal with “invasive online video,” threatening to erode cable-TV profits. Kent proved Suddenlink doesn’t really need any extra money from overlimit fees — the days of big spending on capacity are over, but the money is nice to have anyway.  (8 minutes)

Suddenlink’s decision to implement an Internet Overcharging scheme that couples usage caps with overlimit fees can be a real revenue-booster for the cable company, especially if a usage measurement tool decides to nip at your allowance with phantom usage that can eventually expose you to overlimit fees.

Simon, a Suddenlink customer in northern Texas contacted Stop the Cap! with news he managed to catch Suddenlink in the act of ginning up his broadband usage, measuring around 23GB of broadband usage in just one day:

Here is what Suddenlink’s usage measurement tool reports Simon has used during the month of August. Not the 23GB measurement recorded for Aug. 18.

“Suddenlink believes I used ~23GB and my router confirms I only used 2.22GB (a difference of 936%),” Simon writes. “It’s insane.”

Even more unusual is Suddenlink’s measurement tool recorded that usage on a day when a thunderstorm knocked out his cable broadband service for nearly six hours during peak usage times. It is not the first time Suddenlink’s meter has gone haywire.

Consumers are at the whim of broadband provider-supplied measurement tools, which are unregulated and unmonitored by federal, state, or local authorities. What those tools measure is what customers will be billed for, with no verification or proof of accuracy required.

Companies utilizing these measurement tools require customers to accept the provided measurements as the final word on the matter.

“I think it’s a repugnant money grab that needs to be regulated by the state or federal government,” Simon shares.

Unregulated metered billing is a dream come true for providers who can bill customers whatever they want.

Here is what Simon’s router measured on that same date – 2.22GB, almost a 1,000% difference… in Suddenlink’s favor.

America’s worst-rated cable company is facing an apparent customer backlash on two fronts — its introduction of usage caps and at least one disgruntled unidentified citizen who mailed Mediacom a white powdery substance that forced a temporary closure of one hospital and left two Mediacom employees and two Washington County, N.C. sheriff’s deputies quarantined Wednesday.

Deputies launched an investigation after Mediacom employees handled and opened a plain envelope that was found to contain an unknown substance. Employees unintentionally exposed two sheriff’s deputies to the material after they responded to the incident. As a precaution, Mediacom’s Plymouth office was evacuated and both employees and police were decontaminated in an area hospital also placed on lockdown.

All are reportedly doing fine and the unknown substance was sent to Raleigh for further examination. Authorities won’t release further details about the envelope or its contents as the investigation is ongoing, but did say the substance turned out not to be harmful.

Earlier this month the cable company announced it was introducing variable usage caps for customers who either add or change broadband services after August 1. Current customers will be grandfathered under Mediacom’s informally uncapped usage plans, but cannot make changes to their packages without choosing one of several new usage-limited plans. (Thanks to Stop the Cap! reader Curt for sending along the details.)

The caps range from 150GB for Mediacom’s lightest-use plan Launch, which offers 3Mbps downstream, 250GB for the popular 15/1Mbps Prime plan, to 999GB for the company’s 50/5 Ultra and 105/10Mbps Ultra Plus plans.

A Mediacom representative explained the company’s reasons for the usage caps:

“We’ve implemented the usage allowances to ensure we can deliver on our promise of Always Faster Internet,” said “Chad” — from Mediacom Social Media Relations in Gulf Breeze, Fla. “In reality, only 2% of our users exceed our usage allowances. This 2% can use over 19 times what the average household would use, and this can dramatically impact the service you experience in your home. It could cause us to raise our rates for everyone, just to accommodate the excessive use of a few.”

Unfortunately, not every Mediacom customer currently has access to a company-developed usage measurement tool. If a customer exceeds their limit, Mediacom will charge a flat $10 for every 50GB segment over that amount.

Mediacom’s need to implement usage caps is open to debate, however.

The company’s latest 10-Q report filed with the Securities & Exchange Commission, Mediacom admits it has already increased rates for its broadband customers – heavy users and otherwise. At the same time, Mediacom admits its costs to operate its broadband service have dropped 18.7%, principally due to lower connectivity costs.

In fact, the largest costs Mediacom faced included:

• Field operating costs, which grew 13.7% as the company increasingly relies on outside, third-party contractors;
• Marketing costs increased 13.8% to pay for the company’s rebranding, junk mail marketing, and advertising;
• Employee costs increased 23.5%, primarily to beef up its marketing and direct sales to potential business customers.

Nothing in Mediacom’s required declarations to the SEC show any impact by so-called “heavy users” on its broadband service costs or revenues. If they represented any potential threat to the company’s value to investors, disclosure as a “risk factor” is required by law.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WNCT Jacksonville Investigation continues following Mediacom Powder 8-8-12.flv[/flv]

WNCT in Jacksonville, N.C. covers a potential anthrax scare when an unidentified person mailed a plain envelope to Mediacom in Plymouth containing a white, powdery substance.  (2 minutes)