Almost two years to the day Frontier Communications quietly introduced language in its customer agreements providing a monthly broadband usage allowance of just 5GB per month, the company has quietly removed that language from its terms and conditions.

The 5GB usage allowance was deemed generous by Frontier CEO Maggie Wilderotter.  Frontier claimed most of its 559,300 broadband subscribers (2008 numbers) consumed less than 1.5 gigabytes per month.  But news of the cap angered customers anyway, particularly in their biggest service area — Rochester, N.Y.  In fact, Frontier’s usage cap was what sparked the launch of Stop the Cap! in the summer of 2008.

While never universally enforced against the company’s DSL customers, Frontier has used that portion of its acceptable use policy to demand up to $250 a month from some “heavy users” in Mound, Minn.

Frontier’s usage limit language also played a role in a major controversy in April, 2009 when Time Warner Cable planned usage limits of their own for western New York customers already faced with Frontier’s 5GB usage limit.

The phone company used Time Warner’s planned usage cap as a marketing tool to switch to Frontier DSL service.

Frontier used Time Warner Cable's usage cap experiment against them in this ad to attract new customers in the spring of 2009.

This website has pounded Frontier for two years over its continued use of the 5GB language as part of its broadband policies.  We raised the issue with several state regulatory bodies as part of Frontier’s purchase of Verizon landlines in several states.  Several state utility commissions raised the usage cap issue with Frontier as a result, deeming it negative for rural broadband customers who would effectively endure rationed broadband service from a de facto monopoly provider.

We also criticized Frontier for promoting its MyFitv service, little more than a website containing Google ads and embedded videos already available on Hulu, while not bothering to tell its customers use of that service on a regular basis would put them perilously close to their 5GB allowance.

In the end, Frontier itself denied they would strictly enforce the 5GB limit, making its continued presence in the company’s terms and conditions illogical.

Now, the company has returned to the earlier language it formerly used, reserving the right to shut you off if you use the service excessively or abusively.  This resembles similar language from most broadband providers.  While not absolute in defining those terms, Frontier doesn’t commit to a specific number either.  Today’s “generous usage allowance” is tomorrow’s “rationing.”

If Frontier cuts off customers for using only a handful of gigabytes a month, deeming it excessive, we want to know about it.

Stop the Cap! opposes all Internet Overcharging schemes like usage caps, speed throttles, and so-called “consumption billing.”  We believe such limits retard the growth and potential of broadband service and are unwarranted when considering the ongoing decline in costs to provide the service.  We do not oppose providers dealing with customers who create major problems on their networks, but believe those issues are best settled privately between the company and the individual customer.

Providers must also be honest in recognizing that broadband is a dynamic medium.  They have a responsibility to grow their networks to meet demand, especially at current pricing which provides major financial returns for those offering the service.  We also believe broadband tiers should be limited to speed, not consumption.  Customers with higher data demands will naturally gravitate towards higher-priced, faster-speed tiers, providing higher revenue to offset the minimal costs of moving data back and forth.

Broadband customers will be loyal to the providers that treat them right.  We applaud Frontier Communications for finally removing the last vestiges of its infamous 5GB usage allowance.  Hopefully, going forward, Frontier will spend its time, energy and money improving its broadband service instead of trying to convince customers to use less of it.

Rural upstate New Yorkers can now obtain far faster broadband service as Time Warner Cable continues to expand DOCSIS 3 speed upgrades everywhere in New York… except Rochester.

Time Warner’s “Wideband” Internet service offering up to 50/5Mbps service became available this week for the 11,000 residents of Oneida, who have joined cities as large as New York and as small as Utica and Watertown in getting the cable company’s fastest possible broadband speeds.

Ironically, the most significant city in New York still off the upgrade list is Rochester, the city with New York’s second largest economy and home to more than one million residents across the region.  Rochester was the city Time Warner Cable tried to use in New York for its 2009 test of Internet Overcharging schemes, claiming the usage limits would put Rochester high on the upgrade list for broadband expansion.  While other cities in New York never faced the prospects of usage limits and overlimit fees, they have all managed to obtain upgrades residents of the Flower City have yet to receive.

“Since we introduced Wideband earlier this year in Syracuse and throughout Central New York, customers looking for extra online speed have embraced our new service and its many benefits,” Henry Pearl, Area V.P. of Operations told the Oneida Daily Dispatch. “In addition to blazing-fast speeds, those benefits include shared wireless for multiple users through home networking, backed by our years of experience and dedicated, local customer service.”

Wideband service offers 50/5Mbps service for $99.95/month or 30/5 Mbps service for $69.95/month.

Already available in New York City, Buffalo, Syracuse, Albany, Utica, and Watertown, Wideband will also be available in Binghamton as well as the New York counties of Tompkins, Jefferson and Cortland by fall.

Time Warner Cable is probably changing your channel lineup, or already has — removing several analog channels you used to receive as part of your Standard Service subscription and moving them to digital.

For customers with digital set top boxes, the change happens without most noticing the difference.  The formerly analog signal still shows up in the same place, only the transmission format has changed.

But customers without set top boxes will notice as channels disappear forever from their lineups, replaced with… nothing.  But their cable bills will remain exactly the same, despite the loss of channels.

For Stop the Cap! readers like Bev, today spelled the end of Animal Planet and The Travel Channel, among others.  For those in Rochester, N.Y., last night was the last chance to watch C-SPAN 2, The Travel Channel, TruTV, Discovery Health, and Shop NBC in analog.  In Buffalo, it was bye-bye to The Travel Channel, C-SPAN 2, TV Guide Channel, and CMT.

It some states, particularly Texas, Time Warner Cable is sticking it to Public Access, Educational, and Government channels, moving them all to digital.  In some cases, cable companies and AT&T U-verse have managed to forever bury these PEG channels in Digital Channel Siberia with channel numbers in the high hundreds or even thousands.  For many subscribers, a search and rescue team couldn’t find their new channel positions.

It’s all a part of a larger plan to slowly erode away analog channels in favor of digital service, which takes up far less bandwidth on Time Warner Cable systems.

As cable systems are nearing capacity and do not wish to spend millions to commit to further upgrades, switching out analog service in favor of digital can provide enormous new capacity to accommodate HD channels and forthcoming DOCSIS 3 cable modem service upgrades.

Unfortunately, these channel changes will irritate subscribers who do not want to pay for set top boxes and do not want them on their televisions.  If you are among this group of box-haters, Time Warner Cable will continue to slowly drop more and more of the channels you used to watch without bothering to reduce your bill for the channels you no longer get.  Eventually, virtually all analog channels will probably disappear, replaced by digital versions you will need a set top box to view.

In many areas of upstate New York, Time Warner is trying to placate angry subscribers by offering one set top box at no charge for one year.  But here comes the tricks and traps — Stop the Cap! confirmed with Time Warner Cable this evening that only those customers without any set top boxes in their home can take advantage of this free offer.  If you already have a box, you’ll continue to pay for it even though your neighbor is getting one free for a year.  After the year is up, pony up — each box costs $7.80 a month ($7.50 for the box, $0.30 for the remote).

At least Texans are getting a better deal from Time Warner Cable — Broadcast Basic subscribers will get their boxes free for five years, Standard Service customers will get them for one year.  But beware — if Time Warner needs to roll a truck to install your box in the San Antonio area, be prepared to cough up $39 for the service call.

For broadband customers, there is some good news.  Virtually all major Time Warner Cable service areas facing channel changes like this will receive DOCSIS 3 upgrades and the chance to obtain faster Internet service by the end of 2010, even those communities bypassed for earlier upgrades.  You will also get additional HD channels.  In western New York, for example, Time Warner Cable plans to add a large number of HD cable channels by mid-fall:

On or About September 2, 2010:
Style HD
BBC America HD

On or About September 9, 2010:
National Geographic Wild HD
MTV HD
Comedy Central HD
Nickelodeon HD
Spike HD

On or About September 16, 2010:
History Channel International HD
CMT HD
Hallmark HD
VH-1 HD
Cooking Channel HD
DIY HD
TWCSN HD
YNN HD

On or About October 1, 2010:
Womans Max HD
HBO Latino HD

Another rate increase letter from Time Warner Cable (click to enlarge)

For the second time in a year, Time Warner Cable is jacking up the rates on its Road Runner broadband service for residents in western New York.

Stop the Cap! reader Patrick in Rochester sent word and a screen image of a letter he received notifying him Time Warner Cable was raising the price on standalone Road Runner service to $54.95 a month, effective September 1st.  Patrick, and other customers who are only interested in getting broadband service from the cable company, were paying just under $45 a month for Road Runner standalone service in early 2009.  Today, standalone service runs $49.99 a month, but the cable company is back looking for another $5 a month starting this fall.

July 30, 2010

Dear Road Runner Customer,

We are writing to inform you that effective September 1, 2010, we will be increasing the price of our Road Runner High-Speed Internet product from $49.99 to $54.95 per month for all Road Runner Standard only customers.

If you are currently receiving Road Runner High-Speed Internet products at a discounted rate, your current discounted rate will continue until the term of your promotion is complete.  Your rate will increase to the new retail rate noted above or the effective retail rates at that time.

This rate will also apply as of September 1, 2010 for those customers with two separate Time Warner Cable accounts at the same address.  Please contact us if you’d like to combine these accounts.

Keep in mind there are many packages available allowing you to bundle our video and phone products together with your Road Runner High-Speed Internet for substantial savings….

Time Warner Cable, like many cable providers, wants to discourage customers from taking only one of its products, so it gradually increases prices to drive customers to its “better value” bundled services.  As for broadband, Time Warner Cable executives have made it clear they can raise prices whenever they want.

Landel Hobbs, Chief Operating Officer for Time Warner Cable, told investors this past February consumers love their Road Runner service.

“Consumers like it so much that we have the ability to increase pricing around high-speed data,” Hobbs said.

At $55 a month, standalone Road Runner becomes increasingly difficult to justify for many consumers, but for residents in cities like Rochester, the only alternative is far slower DSL service from Frontier Communications, complete with its 5GB monthly usage allowance.

However, you can leap off the Time Warner Rate Increase Railroad by switching to Earthlink, which is running a promotion for six months of 10Mbps service for $29.95 per month.  Earthlink service is indistinguishable from Road Runner, except Earthlink speeds do not benefit from “Powerboost” — Time Warner Cable’s very temporary speed boost during the start of large file transfers.  Most customers will prefer the boost they receive from keeping the $25 difference in price in their wallets — $150 over the life of the promotion.  At the end of six months, you can hop back to Time Warner Cable’s Road Runner service on a new customer promotion at a significant discount.  No modem exchange is required — the switch to and from Earthlink can be done over the phone.  Billing is done by Time Warner Cable for both services.  Just be aware your Road Runner e-mail account will be closed when you change providers.

You can escape Time Warner Cable's Road Runner rate hike by switching to Earthlink service at a substantial discount.

Greed is still good at Time Warner Cable

Time Warner Cable has tried every excuse in the book to justify their continued interest in Internet Overcharging schemes directed at residential Road Runner customers.  Over a year after Stop the Cap! and its readers helped bury an experiment in overpriced broadband, the notion of doubling or tripling Internet pricing for consumers is still alive and well at the nation’s second largest cable company.

Nate Anderson of Ars Technica explored the thinking of Time Warner Cable’s executives a year later and discovered their desires for overcharging remain as strong as ever, but the excuses they give for wanting to do so have changed.

TWC’s revenues from Internet access have soared in the last few years, surging from $2.7 billion in 2006 to $4.5 billion in 2009. Customer numbers have grown, too, from 7.6 million in 2007 to 8.9 million in 2009.

But this growth doesn’t translate into higher bandwidth costs for the company; in fact, bandwidth costs have dropped. TWC spent $164 million on data contracts in 2007, but only $132 million in 2009.

What about investing in its infrastructure? That’s down too as a percentage of revenue. TWC does spend billions each year building and improving its network ($3.2 billion in 2009), but the raw number alone is meaningless; what matters is relative investment, and it has declined even as subscribers increased and revenues surged. “Total CapEx [capital expenses] as a percentage of revenues for the year [2009] was 18.1 percent versus 20.5 percent in 2008,” said the company a few months ago.

In fact, CapEx has declined for the industry as a whole. As the National Broadband Plan noted, the big ISPs invested $48 billion in their networks in 2008 and $40 billion in 2009. (About half of this money can be chalked up to broadband; the rest of the improvements were done to aid cable or phone service.)

To recap: subscribers up, revenues up, bandwidth costs down, infrastructure costs down. This might seem like a textbook case of “viability”; what were execs like Britt and Hobbs talking about last year when data caps were held up as a necessary safeguard against doom?

Before moving to Time Warner’s Excuse-O-Matic, let’s pause for a moment and reflect on the fact this company has stalled more on Internet upgrades than virtually every other major cable operator.  Even bankrupt Charter Communications has been aggressively pursuing investment in the win-win DOCSIS 3 technology that allows cable operators to sell faster tiers of service -and- reduce congestion in heavy web-surfing neighborhoods.  By effectively “bonding” several cable channels devoted to its broadband service together, the pipeline into even the most hip college neighborhoods can sustain a full-scale assault by Hulu fans streaming high bandwidth video.  Comcast realized this more than two years ago and rolled out its super-fast 50Mbps tier to a dozen cities well over a year ago.  In contrast, Time Warner Cable managed to bring forth its “wideband” offering in just a handful of communities — New York City being the largest, last year.

Internet providers always try to awe an audience with claims about the billions of dollars they invest in improved technology, while forgetting to mention they earn tens of billions in profit on those investments.  The shock and awe of stacks of money piled high on a table is tempered when you see the warehouse holding the rest of the cash standing behind it.

Broadband is becoming the single biggest revenue source for cable operators, passing digital phone and well on the way to passing cable television service.  It’s the cash cow that can be milked forever, especially with the limited number of choices most Americans have to obtain the service.

Back to Nate’s story:

Several months ago, while on a business trip to Manhattan, I entered a nondescript building near the Flatiron building and rode the elevator to the top. Inside was one of TWC’s main New York operations centers, hosting an astonishing array of cable and Internet gear. But the real showpiece was the monitoring room, a darkened room with control hardware, computers, and a wall of TVs showing every cable channel currently running out over TWC’s network.

It looked brand new and obscenely expensive. Engineers slipped in and out in silence. A huge pile of boxes on the floor held a new set of replacement TVs. When I make my career shift from ink-stained wretch to Evil Genius, this is exactly the sort of room I will build in order to plot my world domination.

“It’s not a cheap endeavor to run a network like we do,” said TWC’s tweeting VP of Public Relations, Alex Dudley, when I had spoken to him the week before. Here was an obvious reminder of what he meant.

Time Warner Cable’s version of a command and control center, wall after wall fitted for television sets — the Time Warner Cable Sports Bar — impresses only until you realize the company could have paid for it out of the petty cash box.  It’s obvious nobody was watching those televisions last spring as wide-scale protests erupted in four of the cities Time Warner Cable chose for their experimental pricing project.  If they had, they would have apologized to their customers and buried the idea then and there.

At this point, Mr. Anderson began the useless attempt to debate Mr. Dudley, whose job is to sell the agenda of Time Warner Cable (and obfuscate when necessary).  Why has Time Warner Cable’s senior management held onto its dreams of Internet Overcharging like a pit bill, refusing to let go, Anderson asked.  Because of labor costs, Dudley replied.

As Internet use increases, TWC techs, engineers, and executives need to make adjustments such as DOCSIS upgrades at the cable company headend or “node splits” that divide a shared cable loop in two when bandwidth use hits certain metrics. Paying all of these people costs money, and those costs increase as the network is more heavily used.

Last April, when Time Warner Cable was relying on its tweeters like TWCAlex to spin a tale about how their Internet Overcharging schemes would benefit customers and help pay for DOCSIS 3 upgrades (which ended up bypassing cities like Rochester, N.Y., and went to New York City instead — where no such pricing scheme was tested), Alex’s bosses were just completing a layoff of some 1,250 Time Warner Cable employees.  As Internet use was increasing, Time Warner Cable was decreasing the number of its employees from coast to coast.

If Alex is telling the truth, Time Warner Cable needs an employment fund from 8.9 million customers.  Considering many Time Warner Cable cities raised the price on Road Runner service by $5 a month this year, that’s $240 million dollars a year to get the pot started and I’m only counting four million of those subscribers.  If Time Warner Cable hired back those 1,250 former employees, they could each get $192,000 a year from that kitty.  Implement Internet Overcharging schemes that could triple consumers’ rates for an equivalent level of service and they could earn as much as CEO Glenn Britt and then some.

I’m also uncertain how often Time Warner Cable executives are shimmying up phone poles or clearing out wasp nests inside those green cabinets positioned all over town while performing service upgrades and node splits.  It’s far more likely they are spending their time dreaming up new excuses to raise cable rates.

Please deposit 25 cents for the next megabyte of usage

This latest excuse, while certainly novel, is just another bit of nonsense.

Time Warner Cable actually spent more money last year dealing with HD channel rollouts and upgrading their cable systems to support Switched Digital Video to accommodate them.  The company did not exactly slap limits on how often cable viewers can leave their sets on, nor pitted their average TV viewers against viewing piggies who watched too much.  Maybe the coin slot on top of the cable box can be tried in 2011.

In fact, as broadband equipment continues to become more reliable and scaled to manage growing demand, it’s becoming easier than ever to keep broadband lines humming at the cable company.  That leaves Time Warner in the envious position of enjoying increasing profits on service that increases in price while decreasing in cost.  In fact the only thing growing at a faster pace than the company’s broadband profits is the level of incredulity informed consumers have towards cable companies with long lists of excuses to justify rape and pillage pricing.

No matter what Time Warner Cable executives want you to believe, the FCC noted in its broadband plan that international bandwidth has grown 66 percent each of the last five years, all while the costs have dropped by 22 percent per year to handle that traffic.

Consumers do not want these Internet Overcharging schemes.  Time Warner Cable should do itself a favor and drop them, once and for all, just as they have done for their Road Runner Mobile service.  If 3G/4G wireless broadband from Time Warner comes without usage caps, why in the world should cable broadband be any different?