Nearly 10 percent of GCI’s revenue is now earned from overlimit fees collected from Alaskan broadband customers who exceed their cable or wireless usage limits.

GCI is Alaska’s largest cable operator and for many it is the only provider able to deliver stable speeds of 10Mbps+, especially to those who live too far away for comparable DSL speeds from ACS, one of GCI’s largest competitors.

The result has given GCI a de facto monopoly on High Speed Internet (10+ Mbps) access, a position that has allowed the company to dramatically raise prices and slap usage limits on broadband users and charge onerous overlimit fees on those who exceed their allowance.

GCI already charges some of the highest broadband service prices in the country and has insisted on imposing usage caps and overlimit fees on even its most expensive plans, creating high profits for them and enormous bills for customers who have no reliable way to consistently track their usage. GCI’s suspect usage meter is often offline and often delivers usage estimates that customers insist are far from accurate. GCI says it has the last word on the accuracy of that meter and has not submitted its meter to independent testing and verification by a local or state regulatory body specializing in measurement accuracy.

GCI also makes it extremely difficult for customers to understand what happens after customers exceed their usage limits. The website only vaguely offers that overlimit fees vary from “$.001 (half penny) to $.03 (three cents) per MB,” which is factually inaccurate: $.001 does not equal a half-penny. It can equal bill shock if a customer happens to be watching a Netflix movie when their allowance runs out.

KC D’Onfro of Bethel subscribes to GCI’s Alaska Extreme Internet plan, which in February cost $100 a month for 4/1Mbps service with a 25GB usage cap. While that allowance is plenty for the countless e-mails GCI promises you can send, any sort of streaming video can chew through that allowance quickly.

Business Insider explains what happened:

One fateful night, she and her roommate decided to watch a movie on Netflix. Both of them fell asleep halfway through, but the movie played ’til the end, eating up two GBs of data too many and consequently doubling their bill for that month. (One hour of HD video on Netflix can use up to 2.3 GB of data.)

“Now, I don’t even consider Netflix until near the very end of the month, and I have to be sure that I’m no more than three-fourths of the way into my total data, at the absolute most,” KC says. (Her provider, a company called GCI, allows subscribers to view their daily usage and sends them a notice when they’ve hit 80%.) “It’s a very serious business – I have to poll people to figure out what that one very special movie should be.”

That left the D’Onfro family with a $200 broadband bill – $100 for the service and an extra $100 overlimit fee for that single Netflix movie. Today, GCI demands $114.99 a month for that same plan (with the same usage allowance) and those not subscribing to their TV service also face a monthly $11.99 “access fee” surcharge for Internet-only service.

“Many Alaska consumers have brought their GCI broadband bills to ACS for a comparative quote, providing dozens of examples of GCI overage charges,” said Caitlin McDiffett, product manager of Alaska Communications Systems (ACS), the state’s largest landline phone company. “Many of these examples include overage charges of $200 to $600 in a single month. In one instance, a customer was charged $1 ,200 in overage fees.”

GCI also keeps most customers in place with a 24-month contract, making it difficult and costly to switch providers.

McDiffett told the FCC the average Alaskan with a Netflix subscription must pay for at least a 12Mbps connection to get the 60GB usage allowance they will need to watch more than two Netflix movies a week in addition to other typical online activities. GCI makes sure that costs average Alaskans real money.

“A customer purchasing 12Mbps for standalone (non-bundled) Home Internet from GCI pays $59.99 per month plus an $11.99 monthly “access” fee for a total of $71.98 per month with a 60GB usage limit ($0.004/MB overage charge),” reports McDiffett. “Thus, the monthly bill for this service is more typically $76.98, including a $5.00 overage charge. To purchase a service with a usage limit of at least 100GB per month, a GCI customer would have to pay $81.98 per month (the $69.99 standalone rate plus $11.99 monthly access fee), subject to an overage charge of $0.003/MB.”

Rural Alaskans pay even more when using GCI’s expensive wireless ISP.

Regular Alaskan Stop the Cap! reader Scott reports that no matter what plan you choose from GCI, they are waiting and ready to slap overlimit fees on you as soon as they decide you are over your limit.

Their super-deluxe re:D service — up to 200Mbps, now available in Anchorage, MatSu, Fairbanks, Juneau, Kenai, Ketchikan, Sitka, and Soldotna areas, is not cheap.

“It’s a whopping $209.99 + taxes, and if you don’t have cable TV service bundled, the $11.99 monthly access fee also applies,” Scott says.

For that kind of money, one might expect a respite from the usage meter,  but not with GCI.

“As a top tier service, you’d think they could just offer it as ’unlimited’ at that rate,” Scott says. “Actually, it has a 500GB usage cap and $.50/GB overage fee. Again, we have a metering provider who claims the overages were to penalize bandwidth hogs, yet then offer [faster] service, increasing overall load on their network, instead of just offering a fair amount of bandwidth per customer and eliminating overages by offering unlimited usage.”

One of ACS’ strong selling points is no data caps, but DSL isn’t available to everyone.

In a filing with the FCC, ACS’ McDiffett suspects usage caps are all about the money.

“GCI reported 2012 Home Internet revenue of $86 million of which $7.9 million (nearly ten percent) was derived from overage charges,” said McDiffett. “On average, about $5 per customer per month can be attributed to GCI overage charges. GCI imposes usage limits or data caps at every level of Home Internet service, from its 10 Mbps service (10GB limit, $0.005/MB overage charge) to its 100 Mbps service (500GB limit, $0.0005/MB overage charge).”

Over time, and after several cases of bill shock, Alaskan Internet customers have become more careful about watching everything they do online, fearing GCI’s penalties. That threatens GCI’s overlimit revenue, and now Stop the Cap! readers report sudden, long-lasting problems with GCI’s usage checker, often followed by substantial bills with steep overlimit penalties they claim just are not accurate.

“I currently pay $184.99 a month for GCI‘s highest offered broadband service. 200/5Mbps, with a 500GB monthly data cap,” shares Stop the Cap! reader Luke Benson. “According to GCI, over the past couple months our usage has increased resulting in overage charges at $1.00 a GB.”

In May, Benson was billed $130 in overlimit fees, but after complaining, the company finally agreed to credit back $100. A month later, they recaptured $60 of that credit from new overlimit fees. This month, Benson would have to unplug his modem halfway through his billing cycle or face another $50 in penalties.

GCI’s bandwidth monitor has proved less than helpful, either because it is offline or reports no usage according to several readers reaching out to us. GCI’s own technical support team notes the meter will not report usage until at least 72 hours after it occurs. GCI itself does not rely on its online usage monitor for customer billing. Customer Internet charges are measured, calculated, and applied by an internal billing system off-limits for public inspection.

“I have reached out to GCI multiple times asking for help, suggestions, resolution,” complains Benson. “All I get told is to turn down the viewing quality of Netflix, don’t allow devices to auto update, etc. They pretty much blamed every service but their own.”

Other customers have unwittingly fallen into GCI’s overlimit fee trap while running popular Internet applications that wouldn’t exist if GCI’s caps and overlimit fees were common across the country. Lifelong Bethel resident and tech consultant John Wallace knows the local horror stories:

• Two girls had unwittingly allowed Dropbox to continuously sync to their computers, racking up a $3,500 overcharge in two weeks;
• One user’s virus protection updater got stuck on and it cost him $600;
• Wallace has heard people say, “I was gaming and I got a little out of hand and I had to pay $2,800;”
• Two six-year-old girls ran up $2,000 playing an online preschool game. Mom was totally unaware of what was going on, until she got the bill.

GCI’s own Facebook page was the home of a number of customer complaints until the complaint messages mysteriously disappeared. Stop the Cap! itself discovered it was not allowed to even ask questions on the company’s social media pages, apparently already on their banned list.

“It’s about equal access and opportunity,” Wallace told Business Insider. “The Internet was meant to improve the lives of people in rural Alaska, but – because of the data caps and the sky-high overage fees – it ends up costing them huge amounts of money. We have one of the highest unemployment rates in the nation, and some of the highest rates of suicide, sexual assault, and drug abuse. The people who can’t afford it are the ones that are getting victimized.  It was supposed to bring access – true availability of goods and services – but it really just brought a huge bill that many can’t afford.”

As residents across flood-stricken Colorado begin the task of cleaning up damaged homes and in some cases rebuilding them on now-empty lots, many have navigate to these guys and made calls to various utilities, trash collectors, and service providers to hold off on further bills for services they cannot use. The electric, telephone, and trash hauling companies were all understanding and reassuring. DirecTV and AT&T were not. They want their money — one for the value of satellite equipment that may have since floated into New Mexico or Kansas, the other for fees incurred from excessive texting, talking, or data usage.

DirecTV was willing to settle with Jenny, a resident living outside of Boulder whose first floor was inundated with waves of water which swept her personal property out the rear door, if she was willing to charge $400 on her Visa credit card today for one lost satellite dish and two receivers. Otherwise, “collection activity will begin that could harm your credit.”

Jamestown resident Juliette Leon Bartsch is contending with 10 feet of mud, her husband’s car smashed against the house, and AT&T’s nagging fees for excessive texting.

That will be $400 please. Call your insurance company. We want to get paid.

Bartsch says AT&T has been pounding her phone with text messages telling her she will be paying AT&T’s regular prices of 20 cents per text, 30 cents for any text with attached photos, because she exceeded her allowance sending and receiving updates about the status of her home to worried friends and family. Her idea was to keep the phone lines clear for emergency personnel contending with serious telecom outages. AT&T’s idea was to rake in 20 cents for a short message that costs them virtually nothing to handle. Sending text messages is the preferred method of communicating in a disaster area over a wireless network and it turns out to be mighty profitable for AT&T as well.

Bartsch told the Denver Post AT&T store employees were “completely unhelpful” to her plight. AT&T also never misses an opportunity to upsell a traumatized customer to a more profitable service plan, even when that customer is a disaster victim.

After waiting around for 30 minutes, an AT&T employee rudely grabbed her phone in what Bartsch interpreted as a demand to “prove” her claims of disaster-related texting. After scrolling through the messages, all the employee was willing to offer was a paid upgrade to a more expensive texting plan to cover current and future text messages.

After contacted by the newspaper, AT&T changed its tune.

“As is our routine in an emergency, we began suspending collections calls to impacted customers last Friday, and we will not be billing those customers for flood-related overages to their wireless-minute or text-message plans,” a company spokeswoman said in a statement. “AT&T has reached out to our customers to clear the flood overage charges, and we apologize for the oversight and inconvenience.”

Bartsch has not heard back from AT&T to find out if her bill will be, in fact, credited for the charges.

DirecTV has a less opaque policy for disaster victims published on its website. Getting the company to follow it is another matter.

DIRECTV has policies in place to assist customers who are impacted by natural disasters. If you live in a declared disaster area, we’ll work with you to find a solution that best fits your needs. Options available include:

You are over your texting limit.

Jenny, a Stop the Cap! reader, heard a completely different story from DirecTV.

“They were adamant, they really wanted to get paid either by me or the insurance company,” Jenny writes. “They even wanted to know the name of my carrier and my insurance policy number, which I refused to give them.”

This isn’t the first time DirecTV has ignored its disaster policy in Colorado. During this summer’s wildfires, fire victims were treated to similar demands for compensation.

Jeremy Beach’s Black Forest home burned to the ground and melted his satellite dish and reduced his DirecTV receivers to charred boxes. Then came DirecTV’s demand for cash.

“I couldn’t believe it,” he told the newspaper. “I had lost everything and they acted like they could care less.”

Even more incredible, a DirecTV spokesperson told the newspaper it was ignoring its disaster assistance policy because “most people’s insurance would cover the cost of its equipment.”

That is the same response Beach received. He hung up on the representative making the demand for payment.

Comcast’s usage caps are back for customers in three states.

Comcast has decided usage caps are in the future for more of its broadband customers.

Effective Sept. 1 XFINITY Internet Service will be capped to 300GB of monthly usage in central Kentucky, Savannah, Ga., and Jackson, Miss. Comcast says the plan provides “additional choice and flexibility.”

We’re uncertain how it does that, exactly.

Comcast will have the additional choice of slapping a $10 overlimit fee for allowance offenders for every extra 50GB of data consumed.

But the company says it will be initially flexible in how it penalizes those heavy users.

“In order for our customers to get accustomed to the new data usage plan, we will be implementing a program that gives you three courtesy months for exceeding the 300GB in any 12-month period,” writes Comcast in a new FAQ. “That means you will only be subject to overage charges if you exceed the 300GB for a fourth time in a 12-month period. On the fourth (and any subsequent occurrence), you will be notified that you have exceeded your 300GB via an email and in-browser notification, that an additional 50GB has automatically been allocated to your account, and that applicable charges will be applied to your bill.”

Choice and flexibility for the customer or Comcast’s bottom line?

Customers with questions and concerns about Comcast’s expanding Internet Overcharging scheme can call Comcast Customer Security Assurance at 1-877-807-6581. Customers might want to assure Comcast if they are going back to usage caps, they will start shopping for a different provider. Stop the Cap! recommends customers in these areas protest the usage caps firmly and loudly.

“There are no legitimate engineering or economic justifications for these caps,” notes consumer group Free Press. “But Comcast’s new Internet Overcharging scheme and its discriminatory treatment of competitors’ video offerings do pose a grave threat to future video competition.”

And to your wallet.

Analysts have estimated that Comcast’s profit margins on broadband service are at least 80 percent or higher. In 2008, Sanford C. Bernstein & Co. analyst Craig Moffett estimated Comcast’s data margins at 80 percent, and Credit Suisse reported in fall 2010 that Comcast’s gross margins on high-speed data had grown to 93 percent.

Since withdrawing a nationwide cap of 250GB in 2012, Comcast had tested usage caps only in Nashville, Tenn., and Tucson, Ariz.

Stop the Cap! thanks reader “MrPaulAR” for the news tip.

Cable ONE broadband customers will soon benefit from the cable operator’s increased investment in its operations with faster broadband speeds and a less complicated “usage guideline” system with no overlimit fees.

The cable operator, owned by The Washington Post, has announced effective June 10, customers will be able to buy 5-70Mbps packages with allowances up to 500GB a month.

Cable ONE now only sells two broadband tiers:

• 5Mbps/512kbps (3GB daily limit to avoid speed throttle) No overlimit fees ($50/month)
• 50/2Mbps – 50-100GB monthly usage limit depending on how many Cable ONE services you receive ($50/month, $0.50/GB overlimit fee)

Starting Monday, the monthly usage allowance for the 50Mbps plan will be increased to 300GB per month and no overlimit fee will be charged. The price will remain $50 a month. Other new tiers include:

• 60/2Mbps – 400GB usage limit ($75/month)
• 70/2Mbps – 500GB usage limit ($100/month)

Customers will also lose the “grace period” between 12am-8am when usage was formerly not counted against the monthly allowance. Effective June 10, all usage counts 24 hours a day.

“We are very excited to launch these new, more flexible Internet plans. Our customers are spending more time online than ever before and have voiced the need for faster service and no overage charges,” said Joe Felbab, Cable ONE vice president of marketing. “We’re committed to listening to our customers and delivering the latest products and technical advancements while maintaining the highest level of reliability and customer care.”

Customers who exceed their monthly cap will not pay overlimit fees but will receive warnings from Cable ONE. If those warnings are ignored, the company will “invite” customers to upgrade to the next higher tier or convert to a business account.

Canadian telecom regulators have announced new rules that will limit “gotcha” fees for mobile customers caught exceeding their data allowance, push for an end to the ubiquitous three-year service contract, and force carriers to unlock cell phones after 90 days.

The Canadian Radio-television and Telecommunications Commission (CRTC) this week unveiled a new consumer’s Wireless Code governing wireless service. The new rules were introduced in response to more than 5,000 consumer comments received by the regulator over service pricing, opaque wireless contract language, and policies that kept customers locked into long service contracts with expensive exit penalties.

On the surface, the new rules seem to aggressively rein in Bell, Rogers, and Telus — Canada’s three dominant carriers. Among the new provisions taking effect Dec. 2:

• cancel your contract at no cost after a maximum of two years;
• cancel your contract and return your phone at no cost, within 15 days and specific usage limits, if you are unhappy with your service;
• have your phone unlocked after 90 days, or immediately if you paid in full for your phone;
• have your service suspended at no cost if your phone is lost or stolen;
• receive a Critical Information Summary, which explains your contract in under two pages;
• receive a notification when you are roaming in a different country, telling you what the rates are for voice services, text messages, and data usage;
• limit your data overage charges to $50 a month and your data roaming charges to $100 a month;
• pay no extra charges for a service described as “unlimited”;
• you can refuse a change to the key terms and conditions of your contract, including the services in your contract, the price for those services, and the duration of your contract; and
• all cell contracts must use plain language and clearly describe the services customers receive and include information on when and why customers may be charged extra.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/CBC New CRTC wireless rules ban contract break fees after 2 years 6-3-13.flv[/flv]

CBC Television’s “The National” explains the CRTC’s new Wireless Code and how it will impact Canadian cell phone customers. Many are skeptical the CRTC will outwit the wireless industry.  (4 minutes)

“Every day, Canadians rely on wireless devices while in their homes, at their jobs, at school or traveling abroad,” said Jean-Pierre Blais, chairman of the CRTC. “The wireless code will contribute to a more dynamic marketplace by making it possible for Canadians to discuss their needs with service providers at least every two years.  The code is a tool that will empower consumers and help them make informed choices about the service options that best meet their needs. To make the most of this tool, consumers also have a responsibility to educate themselves.”

Canadians pay among the world’s highest wireless charges and most are offered contracts lasting three years. In the United States, two-year contracts are standard. But in both countries, once the contract is fulfilled customers do not receive a discount on services going forward.

“The biggest scam of all is still allowed under the new rules: wireless companies don’t lower your bill if you buy your own phone or fulfill your contract, so you are still paying their subsidy-recovery phone rates either way,” complains Thomas Harcourt in Toronto. “Once again, the wireless companies got the ears of the commissioners and despite thousands of angry Canadians, they watered down our ‘Bill of Rights’ into more bait and switch. You can almost see where the wireless lobbyists had their way with the language.”

Most Canadian wireless carriers welcomed the new rules and the industry participated in hearings contemplating their creation. The new federal rules will supersede conflicting, sometimes stronger provincial regulations, which some observers suggest is a decision in the carriers’ favor.

A closer review of the new regulations exposes several that were tempered, perhaps after industry objections.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/BNN Wireless Code of Conduct CWTA 2-11-13.flv[/flv]

Back in February, BNN talked with Bernard Lord, a representative of the Canadian Wireless Telecommunications Association about what policies they hoped to see in a national wireless “code of conduct.” The industry got most of what it wanted in the final Wireless Code. (8 minutes)

The CRTC did not ban 3-year contracts outright. Instead, they tied contract termination policies and fees to the device subsidy phone companies give customers to cheapen the upfront cost of equipment.

Blais

In Canada, a new smartphone selling for $699 might be discounted to $99 with a three-year contract. For the next 36 months, customers gradually pay back that discount, called a device subsidy, in the form of an artificially inflated rate plan. Most companies amortize that payback rate over the life of the contract. Under the new CRTC rules, companies must recoup their device subsidy within 24 months.

“We didn’t focus on the length of the contract, we focused on the economic relation,” CRTC chairman Blais said. “So, in effect, it’s equivalent to those asking for a ban of a three-year contract without us actually banning three-year contracts, because what we’re saying is the contract’s amortization period can only be for a maximum period of 24 months.”

Carriers can still charge early termination fees during the first two years and can also recoup any remaining unpaid subsidy during the third year as the regulations begin to cover more customers already under three year contracts. Customers who bring or buy their own device can also be charged an early termination fee up to $50 during the first two years of the contract.

Since the rules will apply only to new cellular contracts signed after Dec. 2, 2013, current customers will have to wait before the new Wireless Code fully applies to them. That means wireless carriers can lock you to the old rules if you buy a new phone before December until your contract ends or is amended.

“I think a lot of consumers, if they were thinking of going to the mall and picking up a new phone and signing a contract, they should think twice about doing so,” Michael Geist, the Canada Research Chair in Internet and e-commerce law at the University of Ottawa, told CTV News.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CBC 3-year contracts to end 6-3-13.flv[/flv]

The CBC tells you when you can rip up your three-year contract. But be careful. The new rules don’t take effect until December. Many complain cell phone service is far too expensive in Canada. (4 minutes)

Wireless carriers claim consumers may eventually pay the price for the rules changes, with some hinting they will increase the upfront price for devices or raise rates to cover the shortened window of time they can recoup a device subsidy.

“This requirement does limit consumer choice in the marketplace, and could make a customer’s up-front purchase price of a smartphone more expensive than current offerings,” said Bernard Lord, head of the Canadian Wireless Telecommunications Association (CWTA).

The CWTA also hinted rates may also increase to cover the “major technology development and costs associated with implementing and complying with the new code.”

Ken Engelhart, senior vice president for regulatory affairs at Rogers told BNN a new smartphone under the old three-year contract was typically priced at around $100. Under a two-year contract, that smartphone might cost $300 upfront.

The CRTC’s language banning overage charges for “unlimited” service does not offer consumers any relief from speed throttling. The CRTC says speed limits are acceptable as long as they are “clearly explained” in what the regulator calls a “fair use” policy.

Language that covers contract changes also leaves some wiggle room for carriers to make changes and in certain cases, even increase customer rates while the contract is in effect. The new rules specify customers must make “informed and express consent” to approve a contract change. But the rules might allow a carrier to consider those changes as accepted if a customer does not expressly complain and/or continues to use the phone after a specified deadline. Carriers can also make changes without consumer consent if they involve reducing the rate for a single service or increasing the customer’s usage allowance for a single service.

The limit of data overage charges ($50) and international data roaming charges ($100) are welcomed by most Canadians to avoid bill shock. But most wireless carriers will likely impose usage “toll booths” to avoid uncollectable customer overages. When a customer reaches their limit, they will be given a choice of having their service cut off, opting to cover the overlimit fees, or upgrade their plan.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/BNN Wireless Code of Conduct PIAC 2-11-13.flv[/flv]

BNN talked with John Lawford, executive director of the Public Interest Advocacy Centre about the things Canadians hate most about their wireless phone companies.  (February 11, 2013) (4 minutes)