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Cox Cable has slammed its phone company competition in a series of new TV commercials that call out antiquated and slow DSL. But customers switching to Cox have to endure that company’s unjustified Internet Overcharging schemes.  Cox arbitrarily limits your Internet usage in an effort to maximize profits and reduce costs.  Watching the online video Cox advertises could put you perilously close to your monthly allowance. Exceed it once too often and you may find your account shut off.

Cox executives promise they’ll listen to customers and what they want. Stop the Cap! urges you to participate in our pushback against Cox usage caps. Tell the cable company it does no good selling their broadband service for online video when the company threatens to shut it down if you watch “too much.”  (2 minutes)

Verizon Wireless’ answer for rural America’s broadband troubles goes live across the country today, offering the broadband deprived the opportunity of getting wireless service at almost twice the price of conventional DSL, with a 10GB monthly usage allowance.

HomeFusion Broadband uses Verizon’s LTE network to deliver service to homes and businesses within range of Verizon’s 4G network.  For rural America, the speeds Verizon is capable of delivering offer a significant improvement over rural DSL.  Verizon promises 5-12Mbps down and 2-5Mbps up, depending on how many users are sharing the cell tower and how strong a signal one receives.

“HomeFusion Broadband is another example of Verizon Wireless’ commitment to providing our customers with the most innovative products and services,” said Tami Erwin, vice president and chief marketing officer, Verizon Wireless. “With HomeFusion Broadband, customers across the United States, in towns large and small, will have the chance to link devices to the Internet and take advantage of the speed, coverage and connectivity offered by our 4G LTE network.”

Whether they can afford it may be another matter.

Verizon Wireless charges a one-time equipment fee of $199.99, which includes professional installation of the required cylindrical outdoor antenna and router that allows customers to share the wireless connection with other devices inside the home.

Monthly service fees start at $60 a month and include 10GB of monthly usage. If you need more data, you will pay a significant amount to get it — up to $120 a month for 30GB of usage.  As a tease, customers get 50 percent more data allowance for the first two full billing cycles of service.  If you become accustomed to using that extra allowance, it could be very costly once the first two months are up.  Overlimit fees run $10/GB.

Verizon claims two-thirds of the country is now covered by their 4G LTE network, including the regions Verizon sold off to companies like FairPoint and Frontier Communications.  Those independent phone companies will soon have Verizon as a broadband competitor in states like West Virginia, Vermont, Ohio, and Maine. If customers value speed over everything else, Verizon could be a formidable competitor over traditional rural DSL, which often operates at speeds of 1-3Mbps, as long as customers steer clear of allowance-eating online video.

Verizon has positioned HomeFusion as a rural broadband solution, and earlier pricing and policy changes make it clear Verizon is downplaying its traditional DSL service.  In April, Verizon announced it would no longer sell standalone DSL service to customers without voice phone lines, or to those who live in areas also wired for the company’s fiber optic network FiOS.

Canadian cable, phone, and satellite providers have done a better job stymieing would-be “cord-cutters” than their counterparts further south in the United States.

The Canadian Radio-television and Telecommunications Commission’s (CRTC) annual report on the country’s telecom companies shows all of them remain exceptionally profitable, keeping pay TV customers far more effectively than American providers. Total revenues climbed from $12.5 billion to $13.5 billion in just one year, as price hikes, Internet Overcharging schemes like usage-based billing, and lack of competition continue to takes its toll on Canadian wallets.

The biggest winners were the biggest telecom companies in Canada — Rogers Communications, Bell Canada (BCE), and Shaw Communications, which all saw profits soar 8.2% to $11 billion.  Costs increased about 10.7% in 2011, fueled by network upgrades and rampant hikes in programming costs — an interesting state of affairs considering Rogers and Bell own or control a substantial number of the programmers demanding higher payments.  Most of those increases were passed on to customers in the form of rate hikes.

Although Canadians are increasingly interested in streaming online video, virtually every major Internet Service Provider in the country has effectively prevented customers from dropping cable television service in favor of broadband-only access.  They manage it with usage caps and usage billing on their broadband products.  With streamed video accounting for a substantial drain on customers’ monthly usage allowances, Canadians are unlikely to cancel cable TV in favor of watching all of their favorite shows online.

In fact, the number of Canadian households that subscribed to a cable company’s basic television service actually increased by 2.8% in 2011 to reach 8.5 million.  Experts say the country’s transition to digital over the air television may account for some of that increase, but a few high broadband bills with overlimit fees for “excessive Internet use” can effectively drive online video fans back to traditional cable TV as well.

Satellite television in Canada remained flat,  with a virtually unchanged 2.9 million Canadians relying on Bell and Shaw satellite service for television entertainment.

But everyone is paying more to watch.

In 2011, cable companies paid $2.1 billion in wholesale fees to the pay and specialty services they distribute, an increase of 10.2% over the $1.9 billion paid the previous year. The fees paid by satellite companies rose by 2.8% in one year, going from $894.4 million to $919 million.

That leaves vertically and horizontally-integrated conglomerates like Bell in the perfect position to extract higher programming payments.  Those costs are passed down to Canadian consumers and blamed on “greedy programmers,” despite the fact those programmers are owned in part or outright by Bell.

A Rogers retail rental store

Rogers is also well-suited to remain a part of the Canadian entertainment experience.  The company owns cable systems, wireless phone networks, programmers, and even home video stores. However Stop the Cap! reader Alex notes Rogers has been closing a number of those video stores over the past few months.

“This gives customers one less choice for renting movies, basically forcing them to use Rogers On Demand instead,” writes Alex.

Rogers On Demand comes with a higher price, too.  In-store rentals from Rogers are priced at 2 for $9 or 3 for $15.  A recent look at Rogers’ video on demand website, Rogers Anyplace TV, shows most movie titles priced at $4.99 each.  With Rogers closing 40 percent of their retail rental outlets, movie fans have had fewer competitive choices for movie rentals.

One potential new contender coming to Canada – kiosk video rentals.  Although services like Redbox are now commonplace in the States, they are virtually unknown in the north.  Jim Gormley, former owner of Jumbo Video is back with Planet DVD.  With just 2% of Canadians renting movies from kiosks, Gormley believes there is plenty of room to grow, especially as Rogers scales back its video rental business.

Planet DVD has a pilot project running with supermarket chain Sobeys to place kiosks in front of nine store locations.  The first kiosk was erected in early March in front of a Sobeys store in Mississauga, Ont.

A new release at a Planet DVD kiosk is priced at $3 for a one-day rental.  That’s less than what most video stores charge, but more than double what Americans pay at a Redbox kiosk.

Our good friends at Broadband Reports reported they discovered a new usage meter for Cox Cable customers that implied overlimit fees were on the way for those who exceeded the company’s arbitrary usage caps.

Now Cox Cable’s director of media relations is calling the appearance of the new glitzy usage gauge, and references to “overages” all a ‘big mistake‘:

“Thanks for bringing this to our attention,” Cox Director of Media Relations Todd Smith tells Broadband Reports. “This is an error and the language is being removed from the site. Our policy remains the same, we do not currently charge customers for exceeding bandwidth allowances.”

Cox did not make it clear how exactly the language was included in the meter by accident, and their statement does not preclude the possibility that they’re interested in moving this direction eventually.

Cox's New Meter (Courtesy: Broadband Reports)

Cox Cable customers upset the cable company has a usage meter and caps should first thank them for backing down on charging broadband users overlimit fees for “excessive use.”

After that, it is time to take Cox on and tell them you don’t want your broadband usage metered at all, especially at the prices they are charging for broadband service.

Just last June, Cox Communications President Pat Esser told an audience at the National Cable & Telecommunications Association Cable Show that the industry must keep asking customers what they want and find ways to satisfy those demands.

‘Cable must accept that fact that a robust broadband platform means the ‘industry won’t control everything,’ Esser told fellow cable executives.

Stop the Cap! thinks Esser needs help understanding Cox Cable customers do not want their Internet access limited with caps and additional fees.

You don’t want to check a usage meter and cannot understand why a company that earns incredible profits from broadband that costs less and less to deliver needs to cap your access.

Cable operators don’t unveil new usage meters and mentions of overlimit fees by mistake. It is likely their new usage meter “jumped the gun” and the company temporarily withdrew it.

This is your opportunity to deliver a death blow to Cox Cable’s Internet Overcharging.

Get Involved and Send Cox Executives the Message!

Call Cox Corporate Relations at (888) 566-7751 or e-mail them at [email protected]

Better yet, you can write directly to Cox’s top executive.  We have provided a sample, but you can be most effective writing it in your own words:

Mr. Pat Esser
President, Cox Communications
1400 Lake Hearn Drive
Atlanta, GA 30319

Dear Mr. Esser,

Last June, you told attendees at the National Cable & Telecommunications Association annual meeting that the cable industry needs to keep asking customers what they want and then find ways to satisfy those demands.  As a loyal Cox customer, I am taking advantage of that opportunity to write and express my profound concern Cox Cable has started to limit my Internet usage.  I cannot understand why Cox needs usage caps at a time when broadband revenue is skyrocketing and the costs to deliver the service are actually in decline. There is simply no justification for these limits, particularly after Cox upgraded its network to DOCSIS 3, which supports a considerably larger data pipeline.

Cox and other cable operators are introducing new, faster speeds for customers to earn more revenue.  But with usage caps, there is little incentive to pay more for faster service that remains constrained with a usage limit.  Would you buy a race car you could only drive around the block?

As competition for my telecommunications dollar continues to increase, I am willing to cancel my Cox service over this issue and take my business to another provider.  Some have shown a willingness to waive usage caps in order to win my  business, and I am happy to oblige. I’d prefer to stay with Cox, but not if your company keeps refusing to listen to its customers on this issue.

If you were serious in your remarks last summer in Chicago, then you should follow the lead of companies like Verizon, Cablevision, and Time Warner Cable which have all avoided imposing usage limits on customers. Time Warner Cable believes unlimited broadband should always be available to customers. Cox has imposed limits on everyone, and that has to change.

Very truly yours,

// Your signature here

The new 4G LTE-equipped Apple iPad you picked up late last week may be burning a hole in your wallet more than you think.  Across the country, consumers are reporting shock and surprise when they discover the new, faster mobile broadband-equipped tablet is capable of blowing through AT&T and Verizon Wireless’ monthly usage caps in a matter of hours.

The culprits: online video and giant-sized app downloads.

Online video on a usage-limited mobile broadband plan simply does not last long on Apple’s newest sensation.  A Wall Street Journal article found one new iPad owner discouraged after a two hour basketball game completely obliterated his 3GB usage allowance provided by AT&T.  With $10/GB overlimit fees just around the corner, AT&T is set to earn enormous data fees from customers who use their iPads to stream video.

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The Wall Street Journal reports the newest iPad has been out for less than a week and buyers are already burning through their monthly data allowances on usage capped 4G mobile plans.  (3 minutes)

USA Today tech columnist Edward Baig also blew through his allowance in less than one day:

Less than 24 hours after purchasing the Verizon Wireless version of the iPad + 4G — and choosing a $30, 2GB monthly data plan from Verizon — I was shocked by the notification on my iPad’s screen: “There is no data remaining on your current plan.”

My remaining options for the month included changing to a $50 5GB data plan or an $80 10GB plan. (AT&T offers a 250MB plan for $14.99; 3GB for $30; and 5GB for $50.)

[…] In my case, I wasn’t watching video. What nailed me, I think, is that I was wirelessly downloading a number of the apps that I had already purchased for my older iPad onto the latest model. Those apps were made available through Apple’s iCloud.

To help avoid just this situation, the new iPad has a 50MB per app download limit on 4G. Anything over that, and you’re directed to Wi-Fi. (The over-the-air download limit on 3G-capable iPads was 20MB.) But that’s a per-app limit, and all those smaller-sized apps I was moving to the new iPad collectively added up.

Storing anything on Apple’s iCloud service or other backup storage sites like Dropbox can prove costly when relying on 4G service from AT&T and Verizon.  That’s on top of Apple’s premium price for 4G-equipped iPads, which start at $629 (comparable Wi-Fi only models are priced at $499 and above).  As a result, consumers are shutting off the wireless mobile feature they paid $130 extra to receive.

“All the advantages of the iPad device are completely neutralized by [AT&T’s] two gigabyte data limit,” Steve Wells told the Journal.

Some customers are upgrading their mobile data plans to 5GB for $50 a month, offered by both AT&T and Verizon.  Others are learning to stick to Wi-Fi.  According to a study conducted by the consulting firm Chetan Sharma, nearly 90% of tablets bought in the United States are Wi-Fi only models.  The added cost for mobile-equipped tablets and the expensive data plans that accompany them are largely responsible.

Consumer Advice:

1. You can still leverage 4G mobile broadband speeds on a cheaper Wi-Fi-only equipped iPad if your smartphone supports the “mobile hotspot” feature. When activated, your phone becomes a Wi-Fi hotspot your iPad can connect to for wireless data. If you have an unlimited mobile hotspot plan from Verizon Wireless (now difficult to obtain unless you are grandfathered on an unlimited data plan), you are not subject to Verizon’s usage limits for mobile devices.
2. Rely as much as possible on Wi-Fi, especially for file downloads or streamed content. Since the iPad can seamlessly switch between Wi-Fi and expensive mobile data service, protect yourself by shutting off Cellular Data within the settings menu when you don’t absolutely need to use it.
3. Turn off LTE service when not needed. 4G consumes battery life faster and its speeds encourage the kind of increased usage that can exhaust your allowance.
4. Monitor how much data you’ve used from the settings menu. Web browsing and e-mail will not consume a lot.  Online video and giant app downloads will.

[Thanks to our regular readers Scott and Earl for sending in several stories reporting on this.]

Apple iPad in the News:

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Joe Brown, editor-in-chief at Gizmodo.com, talks about Apple Inc.’s new iPad, the outlook for Amazon.com Inc.’s Kindle Fire and the tablet market. Brown speaks with Jon Erlichman on Bloomberg Television’s “Bloomberg West.” (6 minutes)

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Shelly Palmer talks about the record-breaking sales numbers of the new Apple iPad. He discusses what is great and not so great about the new tablet on New York’s WNYW-TV.  (4 minutes)

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Paul Reynolds, electronics editor for Consumer Reports, talks about the magazine’s temperature test of Apple Inc.’s new iPad. The newest iPad runs “significantly hotter” than the earlier model when conducting processor-intensive tasks such as playing graphics-heavy games, Consumer Reports said on its website.  (9 minutes)

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It’s the hottest item in the tech world – literally. WFXT in Boston also takes a look at how other tablet manufacturers are doing in competition with Apple.  (4 minutes)