"This is not a rate increase, this is about fair pricing for everyone, seriously."

It’s always awful when you wake up with a bad taste in your mouth.  That’s the flavor of industry hacks and sock puppets who spent a good part of yesterday and last night on the attack against Rep. Eric Massa and your consumer interests.  Part of this battle is about engaging those who claim to represent consumers, but actually turn out to be paid by a lobbyist firm or “think tank,” usually located either in or near Washington, DC.  They are typically unwilling to disclose that involvement.  I’m not.  When called out, the typical response ranges from silence to ‘I would be saying the same things even if I didn’t get paid by them.’

Sure they would.

Consumers need to be particularly vigilant about the Say for Pay crowd of sock puppets that arrive in quotations in articles that attack common sense pro-consumer positions, or in the comments  below an online article.

Now you may be asking what in the world is a “sock puppet.”  Craig Aaron at Free Press explains:

Sock puppets, for those unfamiliar with the creatures commonly found inside the Beltway, are mouthpieces who rent out their academic or political credentials to argue pro-industry positions. These pay-to-sway professionals issue white papers, file comments with key agencies, and present themselves to the press as independent analysts. But their views have a funny way of shifting depending on who’s writing the checks. (To be clear, at Free Press we take no industry money.)

Sock puppets and astroturf groups go hand in hand.  If you remember, we’ve exposed a number of these groups that claim they are standing up for consumers, but in reality are paid to sit down and absorb their industry backer’s talking points.  The snowjob that typically follows claims that if you do the pro-consumer common sense thing, such as not allowing Internet Overcharging schemes to rip people off, you’ll destroy the Internet, America, and maybe even freedom itself.  Besides, just look at the “expert credentials” of our guy telling you that.

When you boil it all down, sock puppets are people who feel morally fine with taking money for being willing to assume any position you want them to take.  It’s vaguely familiar to another profession that’s been around for a very long time.  One just has better office space than the other, and better business cards, too.

If you want to explore a perfect example of sock puppetry at work, with a group trying to get public taxpayer money to benefit big telephone and cable companies with few strings attached, check out Craig Aaron’s article on the subject this past January.

In Stop the Cap!‘s history, we’ve debated a representative from Nemertes Research who refuses to disclose who pays for their industry research reports that conveniently say exactly what the telecommunications industry’s positions are on the broadband issues of the day.  We’ve questioned a group that claims that “openness” or “neutrality” of the Internet is irrelevant, and called out the American Consumer Institute Center for Citizen Research (you gotta love the name — it’s a delicious consumery-sounding word salad… with special interest croutons sprinkled all over the top), who applauded Internet Overcharging as a great thing for customers, except they were packed with lobbyists to really satisfy big telecom interests.

Readers of this site should be well-qualified to engage industry propaganda and consumer misconceptions about the fairness of Internet Overcharging schemes.  You’ve gotten the information you need to effectively educate consumers and expose the sock puppetry.  The entire reason this group exists is because we realized the fight is not over, and we’d need an army prepared to combat the Re-education campaign we were promised back in April.  The battle is fully engaged now, and I’ve been happy to see many of you joining conversations on other sites where misconceptions and sock puppets prevail, and helping to educate consumers with facts, not focus group-tested propaganda.

We need many more of you to do likewise.  If your local newspaper runs an article on Rep. Massa’s bill, or our issues, take a look at the article online and look at the comments being left by readers.  Encounter misconceptions?  Help educate people.  Discover a sock puppet browbeating consumers for standing up for common sense reform of the broadband industry?  Defend the consumer’s point of view and don’t allow anyone to berate you with smug, fact-free answers.  Most are unprepared to respond with actual evidence to back their views, just a load of industry rhetoric and evidence-free claims they have expertise you don’t.

… Continue Reading

The audio from this morning’s conference call to introduce the legislation follows at the bottom of the page. Participants were: Rep. Eric Massa (D-NY), Ben Scott, policy director of Free Press, and Phillip Dampier, founder of StoptheCap!

WASHINGTON, D.C. – Today Congressman Eric Massa formally introduced the Broadband Internet Fairness Act, H.R. 2902. The drafting of the bill was prompted by thousands of constituents and industry experts who voiced their concerns in regard to the outrageous increase in fees proposed by broadband providers.

In April, when Time Warner Cable in Rochester announced that they would begin overcharging customers based on their bandwidth usage, a group of doctors approached Congressman Massa and informed him that if the proposal was enacted, they would be forced to raise rates on their patients. Time Warner’s new program would have raised the cost of their current unlimited internet plan from $50 per month to $150 per month, tripling customers’ monthly bill. The proposed increase in rates gouges customers and limits competition between internet video sites and cable networks that offer identical content. The intended result of this increase would be to reduce the public’s internet usage and send customers back to cable television.

The Broadband Internet Fairness Act will prevent the monopolistic rate increases of broadband companies by promoting the interests of broadband customers. Specifically the bill:

·    Requires internet service providers (ISPs) to submit plans to the Federal Trade Commission (FTC), in consultation with the FCC if they plan to move to a usage-based plan;

·    Prohibits volume usage plans if the FTC determines that these plans are imposing rates, terms, and conditions that are unreasonable or discriminatory;

·    Sets up public hearings for plans submitted to the FTC for public review and input;

·    Only affects internet providers with 2 million or more subscribers;

·    Imposes penalties for broadband ISPs that ignore these rules;

“Access to the internet has become a critical part of our economy and we can’t let corporate giants limit the public’s access to this important tool,” said Congressman Eric Massa. “The Broadband Internet Fairness Act is all about protecting consumers from outrageous internet overcharges and giving the public a voice in this process. I have taken lots of time to work on this bill and have consulted with my constituents and industry experts. Now the hard work of passing this bill begins.”

“Cable providers want to stifle the internet so they can rake in advertiser dollars by keeping consumers from watching video on the Internet.  But so long as Americans can’t choose which cable channels they want to pay for, I don’t think cable operators should be able to determine consumers’ monthly internet usage. Additionally, charging based on a bandwidth usage is a flawed model when the cost of usage is totally out of line with the price. Consumers are much better served by plans based on the speed of the connection rather than amount of bandwidth used. Competition is crucial to our economy and I refuse to let monopolistic corporations dominate the market and gouge my constituents.”

Conference Call to Introduce HR 2902 – the Broadband Internet Fairness Act – Washington, DC & Rochester, NY – June 17, 2009 (26 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Rep. Eric Massa (D-NY) introduces pro-consumer legislation designed to stop Internet Overcharging schemes.

Congressman Eric Massa (D-New York) will formally introduce the Broadband Internet Fairness Act (H.R. 2902) this morning on a nationwide conference call with rep0rters.

Rep. Massa is joined by two organizations that helped to bring about the bill’s creation – Stop the Cap!, an all-consumer advocacy group opposed to Internet Overcharging schemes and service limits, and Free Press, a national, nonpartisan organization working to reform the media and promote universal access to communications.

Rep. Massa introduced the bill after hearing an outpouring of complaints from constituents in his home district in western New York.  Time Warner Cable’s Rochester division announced plans to implement an Internet Overcharging scheme on residential customers on April 1st which would dramatically raise rates on broadband service from $50 per month to $150 per month for continued access to unlimited service.  Other subscribers faced the prospect of a severely curtailed broadband service with limited usage allowances and overlimit fees for exceeding them.

“Access to the internet has become a critical part of our economy and we can’t let corporate giants limit the public’s access to this important tool,” said Congressman Eric Massa. “The Broadband Internet Fairness Act is all about protecting consumers from outrageous internet overcharges and giving the public a voice in this process. I have taken lots of time to work on this bill and have consulted with my constituents and industry experts. Now the hard work of passing this bill begins.”

The Broadband Internet Fairness Act will prevent the monopolistic rate increases of broadband companies by promoting the interests of broadband customers.  Specifically the bill:

• Requires internet service providers (ISPs) to submit plans to the Federal Trade Commission (FTC), in consultation with the FCC if they plan to move to a usage-based plan;
• Prohibits volume usage plans if the FTC determines that these plans are imposing rates, terms, and conditions that are unreasonable or discriminatory;
• Sets up public hearings for plans submitted to the FTC for public review and input;
• Only affects internet providers with 2 million or more subscribers;
• Imposes penalties for broadband ISPs that ignore these rules.

Phillip Dampier, a consumer writer from Rochester, New York created a website in 2008 to combat Internet Overcharging schemes.  Stop the Cap! is an all-consumer, all-volunteer website combating Internet Service Providers attempting to impose arbitrary usage limits, unwarranted and overpriced “consumption billing,” and extra fees and penalties on broadband subscribers.  The site has been visited by more than 100,000 people in the past year, particularly during Time Warner Cable’s proposed Internet Overcharging trial.

“When word of Time Warner Cable’s plan reached us in western New York on April Fool’s Day, we had to verify this wasn’t simply a bad joke,” Dampier said.

Phillip Dampier

“The Internet Overcharging scheme Time Warner Cable was proposing would have tripled our broadband bill for the exact same level of service we enjoyed as loyal Road Runner customers since 1998, when the service first became available in Rochester,” Dampier said.

“At a time when the economy is hurting, and our family already spends more than $175 a month on Time Warner Cable services, asking us to pay at least $275 a month was way out of line,” he added.

Dampier’s website quickly mobilized Time Warner Cable customers in all of the cities chosen for the proposed trial.

“People from New York, North Carolina, and Texas may not always agree on everything, but we found common ground with our friends in Austin, San Antonio, Beaumont, and the Triad region of North Carolina in absolute opposition to these pricing schemes,” Dampier said.

Media attention on the story, particularly in Rochester, was relentless.  One news anchor said few issues had provoked as much outrage from viewers than Time Warner Cable’s proposed pricing changes for Internet service.

In mid-April, Time Warner Cable CEO Glenn Britt announced that the company was “shelving” its pricing experiment until customers could be “educated” about the benefits.  Since that time, Time Warner Cable officials have continued to make public statements praising what they call “consumption-based billing.”

Dampier believes that means Time Warner Cable will be back for more.

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Rep. Eric Massa (D-NY), Phillip Dampier, founder of Stop the Cap!, and Ben Scott, Policy Director of Free Press, will participate on a national conference call Wednesday morning to discuss the “Broadband Internet Fairness Act,” legislation that would protect consumers from excessive Internet overcharges.

The “Broadband Internet Fairness Act” would give the government explicit authority to prevent broadband providers from overcharging for Internet access.

DATE: Wednesday, June 17
TIME: 11:30 a.m ET/8:30 a.m.PT
SPEAKERS:
Rep. Eric Massa (D-N.Y.)
Ben Scott, policy director, Free Press
Phillip Dampier, founder, StoptheCap.com

To join the conference call, dial (888) 792-8352, Access Code 15549429

A recording of the conference call will be available after the event is concluded.

Additional information will be forthcoming shortly.

Beaumont & Golden Triangle, Texas residents were the first to face Time Warner Cable Internet Overcharging experiments.

For awhile there, it seemed like nobody in the Golden Triangle on the Gulf Coast of Texas was paying attention to the fact their region was the nation’s guinea pig for Internet Overcharging schemes.  How wrong we were.

Stop the Cap! reader Mark, who lives just north of Beaumont in the city of Silsbee, had been fighting a one man battle against not one, but two providers serving his community of 7,400 — Time Warner Cable and AT&T.  Mark may exemplify the average consumer in the Golden Triangle, unaware that their broadband service had been subjected to Internet Overcharging experiments until the bill arrived in the mail.  Both providers have a track record of not always disclosing such schemes to their customers when trying to sign them up for service in southeastern Texas.

Both providers have used the area for pricing experiments, providing paltry usage allowances and charging steep overlimit fees for exceeding them.

Mark’s problems began when he unknowingly set himself up to be overcharged later.  Originally a Time Warner Cable customer, Mark decided to give AT&T’s Elite DSL package a try, primarily because it was less expensive than Road Runner service and supposedly faster as well.  AT&T claims their Elite DSL service in Silsbee provides up to 6Mbps down/768kbps up speed for $35 a month, compared with Time Warner Cable’s Golden Triangle Road Runner, providing (at the time) 5Mbps down/384kbps up speed for $44.95 a month.

“After DSL was installed, we discovered we were too far from the [phone company facilities] to get Elite speed, and instead of informing us about the problem, they switched us to Basic service speed, which is up to 768kbps down/384kbps up, and never bothered to tell us,” Mark writes.

The bill Stop the Cap! reader Mark received showing $73 in Internet Overcharging penalties (click to enlarge)

After Mark’s family felt AT&T was too slow to meet their needs, they ventured back to Time Warner Cable for Road Runner service.  The salesperson offered a “welcome back” discount, and mentioned nothing about the fact Time Warner Cable had implemented an Internet Overcharging scheme on the residents of the Golden Triangle region.  Instead of his old service priced at $44.95 a month for unlimited use, his new standard service was priced at $54.95 a month, and was limited to 20GB of usage per month before a $1/GB overlimit penalty kicked in.

When the first bill arrived showing his family exceeded that amount, it was quite a shock.  In addition to the $54.95 charge for “Roadrunner Residential”, there was a $73.00 fee entitled, “Road Runner Select Plan Additional Usage.”  (They also nickle and dimed him $0.99 for a “Paper Invoice Fee.”)

This was the first time Mark had encountered an “additional usage” overlimit fee, so he called Time Warner Cable to investigate.  Despite what the salesperson had sold him on, and online promotions were still selling to attract new customers, Mark learned for the first time Time Warner Cable changed pricing.  The Golden Triangle Division of Time Warner Cable implemented an Internet Overcharging scheme in June 2008, but only applied it to new customers.  Had Mark never left Time Warner Cable for AT&T, he would have never been an unwilling participant in the experiment to extract an extra $73 from his wallet.

Because he returned to Time Warner Cable after the “experiment” commenced, he was stuck.

Mark was angry.  He contacted the Better Business Bureau (BBB), the Federal Trade Commission, and the Federal Communications Commission to complain about unfair business practices, improper disclosure of the Internet Overcharging scheme, and abusive pricing.

Time Warner Cable's 4/7/09 letter in response to a Better Business Bureau complaint regarding Internet Overcharging schemes implemented in the Golden Triangle, Texas (click to enlarge)

The most productive response came from Time Warner Cable, responding to the BBB complaint Mark had filed.  In addition to giving the standard talking points about Internet Overcharging schemes, Alberto Morales, Southwest Division Customer Advocate for Time Warner Cable, suggested the company would do a better job of training salespeople to disclose “the disclaimer regarding the consumption based billing when processing a new Roadrunner order.”  Morales also issued a one time credit for the $73 in overlimit fees charged to Mark’s account.

Mark recognized the language of the letter for what it was — propaganda from a cable broadband provider looking to cash in at the expense of their customers.  Among the dubious reasons given in the letter:

It’s also recognized that the Internet was not designed to handle the mass amounts of video that are now being consumed, therefore there is a risk that service speeds could slow down dramatically.  Video over the internet is an interesting and growing phenomenon.

So are Internet Overcharging schemes, but few would call them “interesting.”  Using the company’s own logic, Time Warner Cable should not be placing video on their own customer website, much less embark on a grand experiment called TV Everywhere to stream enormous amounts of video at broadband speeds to their customers.  Now that is interesting.  The “Internet brownout” theory of slowdowns and outages can occur when a provider chooses to pocket profits instead of keeping up with required investments to maintain their broadband network.  Time Warner Cable CEO Glenn Britt disputes there is a problem with Time Warner Cable’s network as-is, telling a conference sponsored by Sanford Bernstein in May that, “I’m very comfortable with our plant… I don’t see a need for a massive upgrade.”

By implementing the Roadrunner Select Plan (where a customer can choose the level of speed they desire for their internet use), each level has its own cap of bandwidth consumption allowance per month.

Of course, customers cannot choose the one plan that has been an outstanding success for Time Warner Cable since its inception – the one they have right now (or had in the Golden Triangle prior to the “experiment”), unless they were willing to pony up 300% more for the same level of service, based on the last proposal Time Warner Cable introduced before temporarily “shelving the plan” due to customer outrage.

In the Golden Triangle, the maximum amount of usage was 40GB per month, followed by “the sky is the limit” $1/GB overlimit penalties.

Morales claimed that only “5% of users actually exceed their limit.”  But 100% of the Golden Triangle’s customers were left waiting for the arrival of a “gas gauge” measuring their usage, something they would now be required to check daily if they wanted to be sure not to exceed the paltry level of “bandwidth allowance” they were granted.

Time Warner Cable's follow-up letter of 4/29/09, in response to Mark's complaints that he was never told about the Internet Overcharging plan which subjected him to a 20GB monthly limit and $73 in overlimit penalties. (We assume the June 6, 2009 reference is a typo and should have read 2008) (click to enlarge)

Mark wasn’t sold by any of the arguments Morales was making.  That’s because he read Time Warner Cable’s own shareholder documents, as he had been accustomed to doing since he bought shares himself.  They told a very different story — one he shared in a letter to Morales:

“In 2007, Time Warner made $3,730 million dollars on high speed data alone, and then had to turn around and spend $164 million to support the cost of the network,” Mark writes. “In 2007, total profit on high speed data was $3.566 BILLION dollars.”

He adds, “in 2008, Time Warner made $4,159 million dollars on high speed data alone, and then spent just $146 million to support the cost of the network, a decline from the year past.  Total profit in 2008 on high speed data: $4.013 BILLION dollars.”

Mark realized “it cost Time Warner 11% less money to keep their network running in 2008 than in 2007.”

He also knew Time Warner Cable’s experiment in his city was done where the only alternative was his AT&T DSL service, which hardly offered comparable competition.

In a follow-up letter responding to Mark in late April (after the four city experiment was shelved), Time Warner Cable made it very clear their position was firmly planted in the ground:

“There are no plans to deviate from the consumption based billing plan.”

The company also elected to blame the customer for not understanding that an Internet Overcharging scheme had been introduced in the first place.

“When a customer goes online at www.roadrunneroffers.com, a disclaimer appears on the page with the first sentence including the following, “Subject to change without notice.  Some restrictions may apply.  Installation fees may apply.” This information is in view for anyone to read before proceeding with an order entry.

The fact this kind of disclaimer is, in the company’s view, sufficient notice for implementing Internet Overcharging schemes, is hardly adequate.

“We eventually dropped them again,” Mark writes. “We thought a usable slower Internet was better than a faster one we were not going to use.”

Mark realized Time Warner Cable’s business practices and models aren’t a good fit for the way he feels companies should treat their customers, and he dumped his Time Warner Cable stock and did what so many customers have also chosen to do: use the one word Time Warner Cable did seem to understand during their Internet Overcharging experiment:  C A N C E L.

As long as broadband providers continue to believe that Internet Overcharging schemes are the best way to protect their business models and leverage even more profits from their broadband division, action on every front, from legislative to direct consumer protest and refusal to do business with such companies remain the best course of action.

Stop the Cap! will continue to help deliver that action, along with a consumer education campaign that doesn’t require focus group testing to sell, because it’s based on common sense and not dollars.

Still to Come: Mark takes his battle to AT&T and gets an upper level AT&T retention agent to mark his account “exempt” from Internet Overcharging fees and penalties.  Perhaps you can, too!