Mid-Rivers Communications, a Montana-based telecom co-op, wants everyone to believe their mandatory, usage-based broadband scheme that charges $19.95 a month + $0.20 per gigabyte is popular with their customers.

After the company noticed that fewer than 20% of customers were responsible for more than 90% of Mid-Rivers’ network traffic, it decided to ditch its traditional usage-capped, speed tier plans in favor of a compulsory usage-based billing scheme that included the maximum speed available, sometimes as high as 1Gbps, with no usage allowance.

To listen to Michael Candelaria, Mid-Rivers CEO and general manager, people have lined up at the doors just waiting to sign up, according to an interview published by Telecompetitor:

Initially the company tested usage-based pricing as an option in one CLEC market. But considering that 80% of customers opted for usage-based pricing within one year of its introduction, Mid-Rivers moved completely to usage-based pricing and launched it throughout all four CLEC markets.

Mid-Rivers has been particularly proud of the response it has received from local businesses. Candelaria noted that local hotels have seen occupancy drop after the area experienced an oil-related boom, followed by a bust. Nearly-empty hotels were paying $500 to $1,000 a month for high-bandwidth connections from competitors but only using a fraction of the capacity. The Mid-Rivers usage-based broadband offering was perfect for them.

During certain months, the hotels’ bills are dramatically lower than they were before.

“When the hotel is full, their bill goes up and they know why,” Candelaria said.

Meanwhile, as businesses that were not Mid-Rivers customers heard about the usage-based offering, “they came to us” after “we beat on their door for 20 years,” he noted.

But as news of the interview spread, it seems more than a few customers are not happy with Mid-Rivers’ new broadband pricing, and accused the company of propagandizing its usage based pricing scheme and censoring social media to suppress customer backlash.

Candelaria admitted the company used to take a lot of heat from customers that called up and asked for the cheapest internet plan available, which was $40 a month for 1.5Mbps service. At those speeds and prices, customer slammed the company’s Facebook page.

“This is where Candelaria time traveled a bit on his answer,” reflects Dan Corey, a customer rebutting Candelaria’s case. “Before the usage-based internet [plans], the tiers Mid-Rivers [offered] were 8, 12, and up to 50Mbps. There has not been a 1.5Mbps speed at Mid-Rivers for years.”

These days, Candelaria claims, complaints about speed and pricing are mostly gone.

“Of course they are gone,” responds customers J.P. and Kyle Jones, who jointly shared their feelings with Stop the Cap! “Mid-Rivers now censors their social media after taking a lot of heat so complaints are never publicly seen on their Facebook page.”

“Mid-Rivers must approve any comments made on their Facebook page, so 90% of the complaints are never seen unless Mid-Rivers has a full (even if not accurate) response ready to post along with it,” adds Corey. “No dissatisfied customers would know of others because of the control. Their Facebook page used to show all comments when posted, but that changed once they got a better understanding of how to control the flow of comments.”

Jones points out that the reason “80% of customers opted for usage-based pricing” is that any account change automatically forced the customer onto a usage-based pricing plan whether they wanted it or not. Most customers, including himself, do not want data caps or usage pricing, but he didn’t get a choice in the end.

“Put yourself in the shoes of a customer that used to be enrolled in Mid-Rivers’ Preferred Plan, which cost $59.95 a month and includes 600GB of usage at 12/1Mbps speeds,” writes J.P. “People don’t live in Montana for the social life so we spend a lot of time streaming video at home. Under Mid-Rivers’ new plan, if I used 500GB a month, I’d pay $20 for the account and $100 in usage charges — double what I paid a month earlier just for faster speed I could have paid more to get if I wanted or needed it. How many people do you think are enthusiastically waiting to pay double what they used to for internet?”

Mid-Rivers new usage-based plan.

For Candelaria, “Wide Open Wi-Fi”  is about selling fast internet access for less, and customers should only pay for what they use.

“People have been paying for utilities by usage for some time,” he told Telecompetitor. “Customers don’t tally up how much electricity they use and then order a 30-kilowatt plan and they don’t count how many showers they take to determine what kind of water plan they need. Why should the internet be any different? Everybody should have good internet. It doesn’t matter if you’re rich, poor, you should be able to afford fast internet.”

Customers like J.P. agree with wanting fast and affordable internet, but argue this isn’t that. Where available, “Wide Open Wi-Fi” quickly becomes the only option Mid-Rivers offers, he claims.

“The reason for the [high] ‘take rates’ is that if you attempt to change or upgrade service, you are forced onto the usage-based service,” adds Corey. “There is no choice, so the take rates are very misleading. Customer satisfaction would increase for those that don’t use the service as of now. However, with more and more of the world going to internet, those customers will feel the squeeze soon enough.”

For customers that avoid calling Mid-Rivers and keep their heads down to keep their current plan, that doesn’t stop the company from eventually notifying customers their plan was changing whether they liked it or not.

Mid-Rivers older tiered plans.

“You will be ‘offered’ the Wide Open internet shortly I’m sure. Just like we in the cable modem towns were,” noted BigSkyGuy. “However, once not enough people switch to it, or it’s been some pre-determined amount of time, you’ll be forced onto it like the rest of us. Then you can enjoy the larger bills. Just like your forced router unfortunately.”

Mid-River sells its “Wide Open” service as a great way to get rid of data caps and tiered plans, and includes a free Wi-Fi router:

• Virtually unrestricted speeds
• Connected Home Wi-Fi included!
• No more tiered plans! You automatically get the fastest speed!
• No more data caps
• Pay for only what you use
• Your speed and experience will be greatly enhanced
• Your perfect plan – whether you need the fastest speeds or the most affordable option
• You as the customer will have control over your Internet bill*

That asterisk points to fine print that explains for $19.95 a month, you get no data allowance. You are billed $0.20 per gigabyte in one gigabyte increments. Don’t like the high bill that results?

“Your bill can be controlled by monitoring how much data you are using, use less and your bill will decrease,” the company explains.

But for most internet users, using less isn’t an easy option, especially as cord-cutting shifts more viewing towards the internet. Once Netflix, Hulu and similar services detect the faster speeds available on Mid-Rivers’ metered plan, their players increase video bandwidth to match available speed unless the customer intervenes. If they don’t, streaming can get very expensive.

“I have been hit with that Wide Open internet scam […] and unless you change your settings in [Netflix, Hulu, CBS, etc.] it’ll run you up to 7GB an hour, especially when it reads that speed setting from the Wide Open. In essence, Mid-Rivers is making you pay $1.40 per hour of Netflix,” writes BigSkyGuy. “Now granted, you can go in and change your settings, but how many people really know you can do that?”

The meter is lurking.

Candelaria argues the majority of Mid-Rivers customers use less than 100GB a month and their bill is less than $40, which is nearly $5 less than Mid-Rivers’ cheapest plan at $44.95, which includes a 300GB data allowance. He also claimed ‘the change to usage-based broadband has increased customer satisfaction and take rates – and while margins initially dropped, profitability was back to its previous level within six months.’

To accomplish that, either the company has signed up more new customers under the plan than it expected or usage charges from heavier users are covering the lost revenue. For Candelaria’s statement to remain true, “most customers” would have to use less than 100GB of usage a month for their bill to remain under $40. Lighter use customers may benefit from the faster speeds and continue to pay less as long as their usage stays at or near 100GB a month. But as average internet use continues to increase, so will customers’ bills.

Jones says the news isn’t all good for Montana businesses either.

“In areas where Charter/Spectrum offers business internet service, their bills are a fraction of what Mid-Rivers is charging if that business tends to run up a lot of usage, and there are no surprise bills from Mid-Rivers’ traffic charges,” Jones notes. “The problem is that Mid-Rivers is charging sky-high usage fees of $0.20/GB while other ISPs pay at most pennies per gigabyte. In fact, most ISPs buy bandwidth based on meeting demand during peak usage times, not traffic alone. During off-peak times, using your connection costs Mid-Rivers next to nothing, but Mid-Rivers keeps charging $0.20/GB day and night.”

BigSkyGuy notes other ISPs in the area are offering customers a better value proposition with flat-rate internet that will quickly be the envy of many Montanans facing future Mid-Rivers’ usage charges:

• RTC/Reservation Telephone Cooperative: (100/100Mbps) UNLIMITED DATA $55/month
• Midco/Midcontinent Communications: (75/5Mbps) UNLIMITED DATA $56/month or (25/3Mbps) UNLIMITED DATA $42/month
• Nemont: (10/10Mbps) UNLIMITED DATA $71/month

Montana is among the bottom three states for Internet broadband performance and the state can partly blame Charter Communications for its poor service.

Net Index rates Montana so low because the state relies on slow speed DSL and cable broadband service provided by smaller players who either lack the will or resources to invest in improved service.

Among the worst providers: Charter Cable, which often suffers from capacity and connectivity problems in the state.

“Right now with Charter we are experiencing significant packet loss going out to major networks in the country,” Joshua Reynolds, president of JTech Communications in Bozeman told NBC Montana. “Its gotten so bad recently that he can’t connect to our file server and download files,” said Reynolds.

Reynolds said Charter’s slow service is now affecting his company by preventing an out-of-state employee from doing his job.

Brit Fontenot, director of economic development for the city of Bozeman is surprised Montana didn’t rank dead last. Fontenot told the television station local cable and phone providers are not investing in more reliable fiber optics to solve capacity slowdowns. The city is exploring taking matters into its own hands.

“The future is a ring, a community ring connecting around the community that allows data to be transmitted both internally and externally,” said Fontenot.

The city is now engaged in dialogue with local business leaders to get comments on the quality of local Internet service.

Charter Cable is the second worst-rated cable company in the nation, according to Consumer Reports.

Speed ratings in Montana range from serviceable to painful. The fastest average speeds are around 15Mbps and the worst are just above 3Mbps.

[flv]http://www.phillipdampier.com/video/NBC Montana State Broadband Third Worst 1-27-14.flv[/flv]

NBC Montana surveys the broadband situation in Montana and the results are not good. (1:39)

Verizon Wireless customers and public safety personnel are upset that the cell phone company was caught unprepared after a rural roaming agreement with AT&T expired at the end of June, leaving police officers without communications and others with no way to reach 911.

AT&T no longer permits Verizon Wireless customers to roam on its acquired former Alltel network, which has dramatically reduced service in Geraldine, Absarokee, Ft. Benton, Browning, Harlem, Evaro, Cascade, Stanford, Lincoln, Ennis, Virginia City, and Great Falls.

Lincoln resident Gayle Steinch is living with the result of that business decision. She has a single bar of service on her Verizon Wireless cellphone at her house. It is her only phone — she dropped landline service in 2007.

“And I live a half a block off the main street,” she told the Great Falls Tribune.

Verizon’s road to no bars in rural Montana.

Capt. Gary Becker of the Montana Highway Patrol told The Montana Standard troopers in the area haven’t been able to communicate on their cell phones or their computers installed in their cruisers since the roaming agreement expired. Becker said police have to travel at least 30 miles to get any usable reception from Verizon.

Jessica Constantine, manager of the AT&T Elite Wireless store in Butte, said AT&T “had a roaming agreement with Verizon and we allowed them to use our towers for three years. The contract is over.”

And with it, Verizon Wireless network reception.

The agreement was part of a deal between AT&T and Verizon over Verizon’s 2010 purchase of Alltel. Federal regulators required Verizon to divest itself of certain Alltel territories for competitive reasons, transferring those customers to AT&T. As a result, territories that used to be well-served by Alltel’s CDMA network are now being converted by AT&T to GSM and data service, exposing Verizon’s sparse home cellular coverage in several parts of the state.

“They had years to prepare for AT&T switching off Alltel’s old CDMA service Verizon was dependent on, and Verizon did little to nothing,” said Jim Brown. “The Verizon person I spoke with told me it did not make sense to build a network out here because the only thing it would serve are crows. But they promised they would at least try to equal the coverage Alltel used to give us. That never happened and still isn’t.”

Verizon denied there was a major service loss in rural Montana. Bob Kelley, corporate spokesperson for Verizon, said that the change in service was planned and its impact would be limited to “less than optimal” service. He confirmed there were no unexpected outages.

After negative media coverage reported Verizon’s inability to provide quality cell service in rural Montana, the company agreed to temporarily deploy portable cell towers to improve coverage.

The “COWs”— cellphone towers on wheels — are stationed in Lincoln, Virginia City, Lima, Broadview, between Absarokee-Fishtail, as well as in Jackson, mostly meeting the needs of law enforcement monitoring the Rainbow Family Gathering last week. Verizon is also deploying repeaters that can re-broadcast signals and enhance range, as well as add coverage to existing permanent facilities. The company is planning on adding permanent towers this week in Marion and Tarkio. Additional permanent towers are also planned for Lincoln and Columbus by the end of August.

That cannot come soon enough for some customers.

Cell tower on wheels

“Verizon brought up this 40-foot [temporary] antenna, but you really can only get service on it on Main Street,” said Steinch, the manager of The Bootlegger, a Lincoln bar and restaurant. “We had a guy in here this morning who has a towing company who missed out on an $1,800 job because his cellphone didn’t get the call.”

Service has deteriorated so badly in rural Montana, some AT&T stores had lines of soon-to-be-ex-Verizon customers snaking out the door, and at least one reported it was completely sold out of cell phones and wireless broadband devices.

“Dillon sold out of cell phones yesterday,” said Constantine, “because everybody in Lima who was using Verizon just flooded the Dillon store.”

Verizon subscriber John Ulias found his cellphone useless at his cabin in the Little Belt, as did many of his neighbors in that area.

Although Verizon told Ulias and the Tribune subscribers should still be getting service in the Little Belts area from a Verizon antenna in Stanford, Ulias said that isn’t the case.

“I gave the Verizon representative the cell numbers of two of my Little Belt neighbors after he told me we should be getting service up there,” Ulias told the newspaper. “The guy called me back and said his calls went straight to their voicemail.”

Montana residents affected by the disruption of Verizon Wireless service seeking to file a complaint should contact the Office of Consumer Protection at the Montana Department of Justice by emailing: [email protected], faxing 406-444-9680 or calling 800-481-6896 or 406-444-4500.

For customers planning to switch carriers because of reception issues in Montana, Verizon is waiving early termination fees. For those customers the company can convince to stay, discounted service will be available along with discounts on a Verizon Network Extender, a portable in-home mini-cell tower that interfaces with a home broadband connection. To pursue either option, prepaid consumers should call Verizon Customer Service at 1-888-294-6804; all others should call 1-800-922-0204.

In New York and New Jersey, Verizon is attempting to convince some rural residents to abandon their landline service in favor of Voice Link, which relies entirely on Verizon Wireless reception.

“I have one word for my friends back east: don’t,” said Brown.

A handful of broadcasters in California, Michigan, Montana and New Mexico interrupted their regularly scheduled programs earlier this week to warn audiences that zombie attacks were underway and residents should avoid the undead at all costs.

This ‘War of the Worlds‘ scenario did not frighten radio and television audiences, but caught stations off-guard, because the Emergency Alert System messages received over the Internet were programmed to broadcast live over the air with no intervention on the part of the living.

“Local authorities in your area have reported the bodies of the dead are rising from their graves and attacking the living,” said one message, which went out as both a scrolling text message and a voice alert. “Do not attempt to approach or apprehend these bodies as they are considered extremely dangerous.”

The Federal Communications Commission on Tuesday warned the nation’s broadcasters to lock down the equipment that monitors for EAS warnings and rebroadcasts them to the public.

The zombie reports managed to find their way to the airwaves in Los Angeles and Michigan Monday. On Tuesday, the messages were delivered across New Mexico on several of the state’s PBS stations.

How are the hackers getting in?

“Before a year or two ago, the EAS systems were hooked up through phone lines, now they’re hooked up to the Internet,” said Karole White, president-CEO of the Michigan Broadcaster’s Association. “We feel fortunate they were not able to get into the entire Emergency Alert System – that’s the good news. The bad news is they got in at all.”

An equipment vendor suspects affected stations never changed the default password supplied with the equipment that inserts warning messages into broadcasts. The FCC agreed, warning broadcasters:

EAS Participants must change all passwords on their CAP EAS equipment from default factory settings, including administrator and user accounts.
EAS Participants are also urged to ensure that their firewalls and other solutions are properly configured and up-to-date.

The hacker or hackers have not yet been found by federal authorities. If convicted, the person(s) responsible face hefty federal fines.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KRQE Albuquerque Zombie attack announced on local TV 2-13-13.mp4[/flv]

KRQE in Albuquerque reports a hacker attack on the state’s largest public broadcaster delivered fake zombie warnings over the Emergency Alert System earlier this week. (3 minutes)

Here today, gone tomorrow.

Cablevision West, formerly known as Bresnan Communications, has been up for sale for weeks, and at least three major cable operators have submitted bids to acquire its 300,000 customers in Montana, Wyoming, Colorado and Utah.

Cablevision bought Bresnan Communications in 2010 for $1.37 billion. The cable operator invested millions updating the cable properties in the mountain west, but ultimately decided the more rural cable systems were too far away from its hometown systems in densely populated suburban New York, New Jersey, and Connecticut.

Selling Cablevision West would improve Cablevision’s balance sheet and allow the company to concentrate on its highly competitive home territory in the northeast, where Verizon FiOS frequently competes.

Among the three vying for Cablevision West, Charter Communications seems to be the best positioned to win. Charter already operates cable systems in the central and western United States, mostly in smaller cities and rural areas. Former Cablevision CEO Thomas Rutledge was in charge when Cablevision bought Bresnan Communications, and in his new role as CEO of Charter, he told CNBC he still admires those western systems.

Suddenlink has attained deeper pockets after its acquisition earlier this year by the Canada Pension Plan Investment Board, European private equity firm BC Partners and the cable operator’s current management. With money to spend, Suddenlink Communications could find itself the highest bidder. Suddenlink currently serves over 1.4 million residential and commercial customers, primarily in Texas, West Virginia, North Carolina, Oklahoma, Arkansas and Louisiana.

Time Warner Cable, the second-largest U.S. cable provider, is also among the stingiest of the three bidders. CEO Glenn Britt has consistently told investors the company will not engage in bidding wars or overpay for acquisition opportunities. The company has passed on several earlier opportunities for cable systems up for sale, although it did successfully acquire Insight Communications earlier this year.

The winner will likely be announced as early as January and then customers will have to prepare, once again, for another owner to take control.