Christmas in January.

AT&T and some of the company’s best friends in Congress have attached wireless America’s legislative wishlist to the must-pass Payroll Tax Bill that will temporarily reduce Social Security taxes for millions of Americans.  Now AT&T and other cell phone companies want their piece of the action.

Michael Weinberg at Public Knowledge has sounded the alarm attacks on Net Neutrality, spectrum auctions, and White Space Wi-Fi have turned up in amendments to a bill that Big Telecom is convinced must pass.  Weinberg explains:

No Net Neutrality Protections.  Forget your feelings about the FCC’s formal Open Internet Rules.  An amendment by Rep. Marsha Blackburn would prevent any restrictions on network management, block any requirements to make connectivity available on a wholesale basis (which would increase competition), and stop the FCC from passing a rule allowing users to attach any non-harmful device to the network.  As a result, the winner of the spectrum auction would be able to throttle, block, and discriminate however it sees fit – something that runs counter to any definition of network neutrality.

No Safeguards Against Further Consolidation.  It is no secret that one of the reasons that there are only four nationwide wireless carriers (and two dominant ones) is that only a few companies control most of the available spectrum in the United States.  This amendment would prevent the FCC from making sure that new spectrum goes towards new or under-provisioned competitors instead of being further consolidated by AT&T and Verizon.   That’s probably why AT&T is pushing so hard for this amendment.

No Super-Wifi.  One of the greatest boons of the transition from analog to digital TV broadcasting was supposed to be the creation of unlicensed “whitespaces” or “super-wifi.”  This new spectrum – which is much better at communicating long distances and through walls than current wifi spectrum – would be used cooperatively by everyone and usher in a new era of wireless devices.  However, a third amendment would destroy the FCC’s power to allocate some of this great spectrum for unlicensed uses.  That means that opportunity would simply pass us by.

Weinberg notes consumer advocates like Public Knowledge are now fighting all three amendments.  There are opportunities to strip them from the bill as it works its way through the legislative process.  Those backing the amendments hope the public doesn’t find out.

They just did.

The Canadian Radio-television and Telecommunications Commission late Tuesday ruled against a revised proposal from Bell that could have effectively ended flat rate Internet service across the country, but also allows the phone company to raise wholesale prices for independent Internet Service Providers (ISPs).

The Commission ruled Bell and cable companies like Rogers must sell access to third party providers at a flat rate or priced on speed and the number of users sharing the connection.  The CRTC rejected a Bell-proposed usage-based pricing scheme that would have charged independent ISPs $0.178/GB.

Ultimately, the CRTC came down closest to adopting a proposal from Manitoba-based MTS Allstream, which suggested a variant on speed-based pricing, steering clear of charging based on usage.  Under the CRTC ruling, independent ISPs can purchase unlimited wholesale access based on different speed tiers.  The new pricing formula requires independent providers to carefully gauge their usage when choosing an appropriate amount of bandwidth.  If an independent ISP misjudges how much usage their collective customer base consumes during the month, they could overpay for unused capacity or underestimate usage, leaving customers with congested-related slowdowns.  ISPs will be able to purchase regular capacity upgrades in 100Mbps increments to keep up with demand.  They can also implement network management techniques which may discourage heavy use during peak usage.

The CRTC decision underscores that Internet pricing should be based on speed, not on the volume of data consumed by customers.  That’s a model Stop the Cap! strongly approves because it does not allow providers to monetize broadband usage.

Finkenstein

But that is where the good news ends.  Nothing in the CRTC ruling changes the Internet Overcharging regime already in place at the country’s leading service providers.  Companies like Bell and Rogers are free to continue setting arbitrary limits on usage and charging overlimit fees for those who exceed them.

Konrad von Finckenstein, chair of the CRTC, says the regulator made a mistake in deciding last year to allow Bell to raise its prices for independent service providers.

“Our original decision was clearly not the best one. It was wrong and it was pointed out by a lot of people, including Minister Clement. He was right. We have today fixed it, we have made this new decision,” von Finckenstein said. “The bottom line is that you as a consumer will not face a cap or limitation of use because of anything mandated by the CRTC. Any kind of cap or limit, payment per use, that you will have to pay is because your ISP decides to charge you, not because we mandate it.”

But many independent providers are unhappy with the CRTC ruling because it also allows wholesale providers like Bell to raise prices, sometimes substantially, on the bandwidth they sell.

One independent ISP — TekSavvy, said it faced increased connectivity costs in eastern Canada.

“The CRTC decision is a step back for consumers. The rates approved by the Commission today will make it much harder for independent ISPs to compete”, said TekSavvy CEO Marc Gaudrault. “This is an unfortunate development for telecommunications competition in Canada,” he added.

“Rates are going up,” added Bill Sandiford, president of Telnet Communications and of the Canadian Network Operators Consortium, an independent ISP association.

In addition to whatever rate increases eventually make their way to consumers, some independent providers may end up adopting network management and usage cap policies that attempt to slow down the rate at which they are forced to commit to bandwidth upgrades.  That’s because providers purchase capacity based on what they believe their peak usage rate is likely to be.  Providers will be free to upgrade service in 100Mbps increments.  But with the new, higher prices, providers could overspend on capacity that goes unused or find themselves underestimating usage, creating congestion-related slowdowns for all of their customers.

Angus

Some network management techniques that could reduce peak usage — and the need for upgrades — include speed throttles for heavy users during peak usage times or usage caps that fall away during off-peak hours when network traffic is lower.

Yesterday’s decision will provide some small relief to wholesale buyers of bandwidth in Quebec, where’s Videotron’s sky-high wholesale prices are set to be reduced.  But the unusual divide in Internet pricing between eastern and western Canada will remain.  Western Canadians will continue to enjoy much larger usage allowances, and lower wholesale pricing, than their eastern neighbors in Ontario and Quebec.

The CRTC’s ruling did not go far enough for NDP Digital Issues critic Charlie Angus. Angus notes only 6 percent of Canadians purchase Internet service from independent providers.  The rest will still be stuck with what he calls “unfair billing practices and bandwidth caps.”

Angus is convinced the CRTC just gave the green light to force rate hikes for the minority of consumers who found a way around companies like Bell, Shaw, Videotron, and Rogers.

“Allowing big telecom companies to reach into the pockets of struggling families and ask for even more money is just plain wrong,” Angus said.

Bell’s senior vice-president for regulatory and government affairs, Mirko Bibic, still believes the company’s proposal to charge just under 20c per gigabyte to wholesale users was appropriate, but the CRTC’s permission to allow Bell to increase wholesale rates was a nice consolation prize.  Bibic tried to frame the decision as forcing ‘independent ISPs to pay their fair share.’

Independent ISPs “are going to have to lease more traffic lanes,” he told CTV News. “I think the philosophy is [to] put the independent ISP in a position of responsibility. If usage goes up, you’re going to have to buy more lanes – it’s the same decision that we have to make.”

After nearly a half-million Canadians expressed outrage about Bell’s Internet Overcharging practices, the company is responding.  This week, Bell sent a letter to their wholesale customers announcing it plans to end the practice of speed throttling peer-to-peer file traffic (at least for them):

Effective November 2011, new links implemented by Bell to augment our DSL network may not be subject to Technical Internet Traffic Management Practices (ITMP).  ITMPs were introduced in March, 2008 to address congestion on the network due to the increased use of Peer-to-Peer file sharing applications during peak periods. While congestion still exists, the impact of Peer-to-Peer file sharing applications on congestion has reduced. Furthermore, as we continue to groom and build out our network, customers may be migrated to network facilities where Technical Internet Traffic Management Practices (ITMPs) will not be applied.

Peer-to-peer traffic, once all the rage for swapping music, movies, and software (legally or otherwise), has been declining as a percentage of Internet traffic and legal online entertainment services (Netflix, et al.) have become available.  Copyright crackdowns and usage caps manage to further restrict customers from leaving P2P software running continuously as it can rapidly eat into usage allowances.

With increased capacity of Bell’s networks and decreased interest in file swapping software among customers, the practice of throttling such traffic (along with the unintended collateral damage to online gaming), means such network management practices have outlived their usefulness.

Providers these days are far more likely to blame online video for congested networks.  But once providers attach a speed throttle to an application, it can be difficult to remove.  Even as Bell announced it would no longer throttle their wholesale clients, retail customers will still suffer with reduced speeds during “peak usage times” — 4:30pm-2am local time.

Michael Geist, who covers Canadian broadband issues, wonders if Bell’s throttles are actually in violation of the Canadian Radio-television and Telecommunications Commission’s traffic management guidelines:

While Bell says its congestion has been reduced, its retail throttling practices have remained unchanged, throttling P2P applications from 4:30 pm to 2:00 am.  Given the decline in congestion, a CRTC complaint might ask whether the current throttling policy “results in discrimination or preference as little as reasonably possible” and ask for explanation why its data cap policies “would not reasonably address the need and effectively achieve the same purpose as the ITMP.”  In fact, the same can now be said for many other ISPs who deploy broad based throttling practices (Rogers, Cogeco), which may not be reasonable under the CRTC policy.

AT&T and Verizon: The Doublemint Twins of Wireless

Mirroring AT&T’s announcement last month that it would begin implementing speed throttles for wireless unlimited data plan customers who are among the “top 5% of users,” Verizon Wireless quietly made changes last week allowing the company to throttle its own unlimited data plan “heavy users” who consume more than 2GB of usage per month on its 3G network.

But Verizon claims it isn’t actually throttling the speeds of customers, it is simply engaging in “network optimization practices” and using “network intelligence” to reduce speeds (sometimes to near-dial-up) while connected to a “congested cell site.”

That will prove a distinction without much difference to customers who rely on 3G data usage using cell sites Verizon deems congested.  They may also find the time spent in Verizon’s penalty box unusually long.

“You may experience [reduced speeds] for the remainder of your then current bill cycle and immediately following bill cycle,” Verizon’s FAQ states.

That can mean customers paying $30 a month for an “unlimited data plan” may find 3G usage a very slow experience for a maximum of two months before they are off Verizon’s throttle list.

The new speed throttle policy began Sept. 15.  Verizon:

Network Optimization practices and throttling is network intelligence.  With throttling, your wireless data speed is reduced for your entire cycle, 100% of the time, no matter where you are. Network Optimization is based on the theory that all customers should have the best network possible, and if you’re not causing congestion for others, even if you are using a high amount of data, your connection speed should be as good as possible. So, if you’re in the top 5% of data users, your speed is reduced only when you are connected to a congested cell site. Once you are no longer connected to a congested site, your speed will return to normal. This could mean a matter of seconds or hours, depending on your location and time of day.

Verizon has not said exactly how many of its cell sites it deems as “congested,” at what times that congestion is most likely to occur, and admits there is currently no way customers can learn when they are connected to a congested site so they can make an informed decision about their usage.

But the company does say customers can avoid the penalty:

1. Upgrade to a 4G phone and hope for good 4G LTE coverage.  Customers using Verizon’s 4G network are not currently subject to a speed penalty for “excessive use.”
2. “Upgrade” to a tiered data plan with usage allowances.  Verizon will not throttle the speeds of customers who are not on unlimited data plans.
3. Reduce your data usage, especially in areas where congestion is likely.

Choke collars are in season at AT&T and Verizon Wireless, leaving Sprint's unlimited service looking more consumer-friendly by the day.

Those suggestions require potentially pricey new handsets, require customers to abandon their existing unlimited data usage plan, or simply get you thinking twice before launching a data session, fearing being grounded for up to two months with a dramatically reduced level of service.

The biggest impact of the network speed throttles will be among data-heavy iPhone users.  Apple’s iPhone doesn’t support 4G, and is likely to continue to rely on 3G network coverage when the next version of the popular phone is introduced in October.  Ultimately, Verizon’s new policy means iPhone devotees using more than 2GB per month may have to abandon their phone or their unlimited data plan if they want to avoid the throttle.

Verizon also found a way to keep customers from canceling penalty-free, noting contract changes that reserved the right to implement network management techniques were made in February.  The 60-day window for the “materially-adverse” contract change cancellation policy expired in April.  Verizon:

By alerting customers in February 2011, and including the notice in our terms and conditions as of February 3, 2011, we made sure customers knew we began reserving the right to implement Network Optimization practices.  In February 2011, we began alerting customers:

• Data Management – (note: now named “Network Optimization” to more accurately describe the tools) – Verizon Wireless may reduce data throughput speeds in a given bill cycle for customers who use an extraordinary amount of data and fall within the top 5% of data users.  The reduction will only apply to those using congested cell sites and can last for the remainder of the current and immediately following billing cycle.  The reductions will only apply when appropriate in locations and at times of peak demand.
• Data Optimization – (note: now named “Video Optimization” to more accurately describe its function) – Verizon Wireless is implementing optimization and transcoding technologies in its network to transmit data files in a more efficient manner to allow available network capacity to benefit the greatest number of users, and although unlikely, the process may minimally impact the appearance of the file as displayed on the mobile device.

Interestingly, AT&T’s own speed throttle penalty was estimated to kick in after 4GB of usage, not the 2GB Verizon is using as its benchmark for “network optimization.”  Verizon also says customers with their Mobile Hotspot feature will find that usage exempted from counting towards the 2GB threshold.

Verizon has opened up a new web page explaining the throttling policy.

[Thanks to Stop the Cap! reader Mileena, among many others, who shared the news with us.]

A new study from the University of Michigan suggests one U.S. cell phone company is intentionally throttling cell phone speeds by as much as 50 percent, potentially to engage in “deep packet inspection” of their customers’ wireless traffic.

The researchers also found bad network management may be costing you up to 10 percent of your daily battery life.

The study, published by a team of researchers at the university and Microsoft Research, relied on nearly 400 volunteers running a diagnostic application while using 107 wireless providers around the world.  Researchers found company policies at several carriers in conflict with practices guaranteeing the fastest wireless data speeds, maximum battery life, and protection from malware and other hacker actions like IP spoofing.

The researchers refused to name the biggest offending carriers, citing legal reasons, but rang the alarm that network performance and security was clearly hampered by management decisions designed to keep costs down and maximize company network efficiency, at the expense of the quality of your service.  Among the conclusions:

• Microsoft engineer Ming Zhang believes the one U.S. carrier with dramatically reduced speed performance is probably using “deep packet inspection” techniques to analyze what individual customers are doing with their wireless connections.  The overhead from that inspection process is implicated in reduced speeds and performance;
• At least 11 wireless carriers are hurriedly shutting down TCP data connections that applications want to leave open in order to communicate on the network.  When an app discovers the data connection has been closed, it has to request a new connection, wasting up to 10 percent of daily battery life;
• Four of 60 cellular networks allow IP spoofing, which can make hosts vulnerable to scanning and battery draining attacks even though they are behind a firewall.