Some Clearwire customers remain unhappy when speeds are throttled to “manage” the network.

Clear (formerly known as Clearwire) has announced a general rate increase of about 10 percent for customers using its legacy 4G WiMAX broadband service.

As a result, most customers will pay about $5 more per month for fixed wireless or “on the go” broadband service.

“We instituted this to remain competitive and manage our costs,” a Sprint representative told Broadcasting & Cable. “Like our competitors, we must respond to customer trends, and provide a good user experience, and as a result we will make adjustments to fees and services from time to time. Our offer is still comparable to other offerings in the marketplace.”

Some customers would argue with Sprint’s definition of a “good user experience,” as complaints continue about heavy-handed throttling of Clear’s service that makes high bandwidth applications painful or impossible to use in the evening.

Stop the Cap! reader Akos contacted us this week to complain Clear still advertises and contracts for “unlimited data and top speeds,” while not exactly being upfront about targeting certain traffic for a prime time speed throttle that effectively keeps customers from streaming video.

“They openly admit their service is being throttled by software at each tower site that activates when it detects streaming video services like Netflix, reducing speed from 1.3Mbps to as little as 20kbps, rendering it unusable,” said Akos.

The speed throttle is usually active from 8pm-1:30am daily, when traffic is anticipated to be highest. Clear speaks about its network management speed throttle in the fine print: its Acceptable Use Policy.

Akos complains Clear’s speed throttle makes it easy to blame the streaming service, not Clear itself, because customers running speed tests will not see throttled speeds.

“It fools people to think the problem is on their end or with the streaming service, so customers don’t complain to Clear,” says Akos.

As a result, people using streaming video services get about 30 seconds of uninterrupted video before the throttle kicks in bringing extensive buffering delays.

Clearwire’s Speed Throttle Subject of Lawsuits

Clear’s own 2010 marketing promises unlimited usage with no speed reductions, like those “other” providers.

Clearwire’s speed throttle has been a part of life with the wireless service since 2010. Clearwire had significant legal exposure over its choice of network management because the company routinely advertised “unlimited service” with no speed throttles or overlimit fees. At least three lawsuits were filed against the company for its undisclosed throttling practices, eventually condensed into a single class action case that was finally settled last month.

Under the terms of the settlement, Clear admits no wrongdoing, but will clearly disclose it uses “network management” practices — a term that generally means usage caps and/or speed throttles — and will give customers information about the speeds they can expect when the throttle is active. As of today, Clear has not done that. Clear also volunteered to suspend term contracts and waive early termination fees for customers complaining about speed issues.

At least seven law firms handling the case will split a total award fee of $1,887,792.91 and expenses of $62,207.09. Individual representative plaintiffs each receive up to $2,000. Everyone else identified as part of the class action case that returned a claim form prior to Jan. 3, will receive an average of less than $30:

• a 50% refund of any early termination fee charged after a customer canceled service because of speed throttling;
• a rebate of $14 for customers signing up for Clearwire before Sept. 1, 2010 and experiencing speed throttling or a rebate of at least $7 for Clearwire customers signing up on or after Sept. 1, 2010;
• plus varying amounts for each month of service prior to Feb. 27, 2012 during which Clearwire’s records show it throttled a customer’s Internet speed. Customers throttled at 0.25Mbps will receive $5.00 for each month throttled, 0.60 Mbps: $3.00, and 1.0 Mbps: $2.00.

Court documents reveal of the 2,733,406 customers identified in Clearwire’s records as being speed throttled, only 83,840 submitted timely claims as part of the class action case. This represents a claims rate of about 3.1%. Of those, 76,199 were for speed throttling, 2,331 were requests for reimbursement of early termination fees.

The Future of Clear’s WiMAX and Sprint’s 4G

Sprint purchased the assets of Clearwire Corporation in July, rebranded the network “Clear,” and as of the end of August, stopped selling WiMAX devices to customers. Although Clear will still activate existing equipment, potential new customers are being marketed broadband plans on the Sprint network instead.

Former Clear dealers have received word Sprint plans to eventually decommission its acquired WiMAX network as early as 2014, most likely by gradually converting portions of the 2.5GHz spectrum Clear’s WiMAX service now uses in favor of Sprint’s 4G LTE service in urban and high congestion areas. Clearwire itself was in the process of adopting a variant of 4G LTE technology that would gradually replace the outdated WiMAX standard when Sprint acquired the company.

Although Sprint runs its own 3G network, it partnered with Clearwire to provide 4G WiMAX for Sprint customers. In 2011, Sprint announced it would stop selling devices with built-in support for WiMAX and announced it would launch its own 4G LTE network. Sprint will adopt the same version of LTE other North American carriers are using: FD-LTE, or Frequency Division LTE, which requires one transmit channel and one receive channel. But it will also support and continue Clearwire’s upgrade to TD-LTE, or Time Division LTE, a slightly different standard that supports receiving and transmitting signals on a single frequency at slightly different time intervals, providing enhanced spectrum efficiency. At least 5,500 towers should be active with TD-LTE service by the end of this year. End users will care only to the extent their devices support one or both standards.

Sprint’s 4G LTE rollout will depend primarily on higher frequency spectrum that is disadvantageous indoors and over extended distances. Sprint’s competitors AT&T and Verizon Wireless primarily depend on lower 700MHz frequencies that penetrate buildings better and can serve a larger coverage area. But a combination of Sprint and Clearwire’s spectrum assets give Sprint the most wireless spectrum of any U.S. carrier, which means potentially faster speeds and more capacity.

• 1900MHz: Sprint’s primary 4G FD-LTE service is now available in 151 cities on more than 20,000 cell towers;
• 2500MHz: Now used by Clear’s legacy WiMAX network, will see a transition towards Sprint’s TD-LTE service which will be targeted to urban and high congestion areas from “small cell” sites;
• 800MHz: The former home of now-shuttered Nextel, Sprint will eventually launch FD-LTE service on this band which will offer better indoor and marginal area reception.

Customers can expect devices that support both FD-LTE and TD-LTE in 2014.

Comcast has expanded its 300GB usage cap to Internet customers in Huntsville and Mobile, Ala. and Charleston, S.C.

In these cities the XFINITY Internet allowance includes a $10 penalty for each 50GB segment customers exceed the arbitrary allowance. Alabama and South Carolina join customers in parts of Georgia, Kentucky, Mississippi and Tennessee now subject to a usage allowance.

Comcast is also offering a new Flexible Data Option for Economy Plus customers that use less than 5 GB per month.

Customers who do not want the new usage caps can register their displeasure by calling Comcast Customer Security Assurance at 1-877-807-6581, contacting the local news media, or writing to your federal elected officials.

Phillip “Unlimited Innovation depends on Unlimited Access” Dampier

Comcast wants to embrace innovation and change. Before it can succeed, the cable company needs to permanently retire usage caps and consumption billing schemes, now being market-tested for possible reintroduction nationwide.

Comcast today announced it created a new executive position — vice president of consumer services for video, phone, Internet, and home products and appointed Marcien Jenckes to the position. His role is to oversee development of ideas for new products and services that can be sold to Comcast customers.

Jenckes says Comcast’s product lines are blurring as convergence between television and broadband continues. His role is to keep customers of both services happy by embracing innovation and change.

He will find his hands tied should Comcast bring back its usage cap, now under serious consideration. Limiting residential broadband limits customers’ interest in innovative new online applications that carry the threat of a wallop to one’s wallet from overlimit fees. Comcast ditched its arbitrary 250GB usage cap in the spring of 2012, but continues to think about bringing it back. This year, Comcast has tested a new 300GB cap in certain states tied to an overlimit fee for customers exceeding their usage allowance.

Customers don’t like usage caps one bit. Neither should Comcast “innovators” like Mr. Jenckes.

The future of Internet innovation is likely to be developed on a platform that delivers faster Internet speeds, opening up new high bandwidth applications not easily possible today. Usage caps are anathema to that kind of innovation because customers will be unlikely to embrace new services that blow their usage allowance away.

If Mr. Jenckes is seriously interested in promoting a new spirit of innovation at Comcast, he should start by pressing his fellow executives to ditch usage caps and consumption billing once and for all. The future of unlimited innovation in broadband has its best chance of success with unlimited access.

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.

Mediacom, the worst-rated cable operator in the United States, claims it needs usage caps and consumption billing to force heavy users to pay for needed upgrades. But that isn’t what Mediacom’s executives are telling investors and the Securities and Exchange Commission (SEC).

Thomas Larsen, group vice president of legal and public affairs for Mediacom told The Gazette the consumption-based billing program was intended to pay for the cost of network upgrades incurred by “individuals who are the highest users.”

But Mediacom’s August 10-Q filings (Mediacom LLC and Mediacom Broadband LLC) with the SEC indicate Mediacom’s revenues are increasing faster than the cable operator’s costs to provide service, as customers upgrade to more costly, faster speed Internet tiers.

“Revenues from residential services are expected to grow as a result of [broadband] and phone customer growth, with additional contributions from customers taking higher speed tiers and more customers taking our advanced video services,” Mediacom reports. “Based upon the speeds we offer, we believe our High Speed Data (HSD) product is generally superior to DSL offerings in our service areas. As consumers’ bandwidth requirements have dramatically increased in the past few years, a trend we expect to continue, we believe our ability to offer a HSD product today with speeds of up to 105Mbps gives us a competitive advantage compared to the DSL service offered by the local telephone companies. We expect to continue to grow HSD revenues through residential customer growth and more customers taking higher HSD speed tiers. “

Mediacom’s consumption billing program, already in effect for new customers, will be imposed on all Mediacom broadband customers starting in September. Larsen claims only about three percent of customers will be impacted by the usage allowance, which will include 250GB of usage for customers selecting the company’s most popular speed tier. Larsen also claimed the average Mediacom customer uses only 14GB per month.

That usage profile is below the national average, and leads to questions about why Mediacom needs a usage allowance system when 97 percent of its customers do not present a burden to the cable company.

“Once a customer reaches their monthly allowance,  for $10 they can purchase an additional 50GB a month of capacity,” Larsen explained. “Each time that they reach that next level, they’ll be able to purchase another allotment. We’re never going to stop you from using data, we’re just going to charge you more if you exceed your monthly allowance. Before, we could cap you, there was no mechanism for them to purchase more.”

Mediacom did not frequently enforce its usage caps in the past except in instances where usage levels created problems for other customers. Despite Larsen’s assertion Mediacom would spent the overages collected from heavy users on broadband upgrades, Mediacom’s report to the SEC indicates broadband usage has never been a significant burden for the cable operator:

Our HSD and phone service costs fluctuate depending on the level of investments we make in our cable systems and the resulting operational efficiencies. Our other service costs generally rise as a result of customer growth and inflationary cost increases for personnel, outside vendors and other expenses. Personnel and related support costs may increase as the percentage of expenses that we capitalize declines due to lower levels of new service installations. We anticipate that service costs, with the exception of programming expenses, will remain fairly consistent as a percentage of our revenues.

Although Mediacom reported field operating costs rose 7.6%, much of that increase was a result of greater fiber lease and cable location expenses on its wireless backhaul business for cell towers and greater use of outside contractors. In the company’s latest 10-Q filing, Mediacom reports its revenues increased 2.9 percent in the past year while its costs rose only 1.5 percent. Mediacom’s revenues from its broadband division are even more rosy, rising 9% in the past year alone. In fact, broadband is the company’s highest growth residential business.

Many of Mediacom’s long-standing customers were initially promised they would be exempt from usage caps, with only new customers subject to usage limits. But Mediacom has unilaterally changed their minds, much to the consternation of some customers.

As of this afternoon, Mediacom is still promising customers usage caps only apply to new customers and those making plan changes.

“It is my belief a man’s word is gold and when Mediacom customers have been told for ages they were grandfathered in with no usage data charges unless they changed plans, that is how it is supposed to be,” said D. Gronceski. “I have explicitly turned down service increases in the past to stay on the unlimited usage plan originally offered by Mediacom […] so I get screwed twice, once for bandwidth caps and again because I’m not getting the services I would be getting if I had not refused the automatic increases.”

Other customers incensed about the new usage limits have called to cancel service only to be threatened with steep early termination fees.

“Why do I have to pay an early termination fee?” asked AustinPowersISU. “The way of billing for the service is changing and I do not agree to this method of billing. I should be allowed to terminate my service without paying a fee.”

A Mediacom social media team representative offered one suggestion for customers finding themselves quickly over their usage limits: upgrade to faster speed tiers at a higher price. As for complaints about the unilateral introduction of usage caps with overlimit fees, it’s tough luck for customers, on contract or off:

All Internet users will be held to the new terms of service and usage based billing as of Sept. 7, 2013.  There is no agreement to sign, no acknowledgement needed.  Continuing to utilize Internet services is acceptance of these changes. If for any reason you do not feel that your current service level meets your needs, let us know and we can have a representative contact you with further options.

[…] Per the posted terms of service and acceptable use policy, there has always been an established data consumption threshold (data allowance) to be enforced at Mediacom’s discretion.  With this change, we have clarified these methods of enforcement and have expanded the allowance to offer different levels of users different options.  We have notified the proper departments of possible additions, but these statements are and have been posted.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KCRG Cedar Rapids Mediacom Going Usage Billing 8-21-13.mp4[/flv].

KCRG in Cedar Rapids reports Mediacom is switching to consumption billing for broadband service in September.  (2 minutes)