Rochester, NY - New York's second largest economy on the shores of a broadband backwater

Broadband Reports this morning received word from an “insider” that Time Warner Cable is laying the groundwork to introduce “wideband” broadband service up to 50Mbps throughout New York State’s Verizon FiOS-wired communities.  According to the report, Time Warner Cable plans to launch faster DOCSIS 3.0 service in Buffalo in mid-November, Syracuse in December, and Albany in January.  The company introduced “wideband” service in metropolitan New York City a few weeks ago.

Omitted from the upgrade list is New York’s second largest economy and high tech capital of upstate New York — Rochester.  The city was in the news in April when Time Warner designated Rochester as one of the “test cities” for an Internet Overcharging experiment.  The plan was shelved when customers organized a mass revolt against the plan and two federal legislators intervened.

From a logical standpoint, it wouldn’t seem to make sense for a broadband provider to omit a region with more than one million residents, many who have been highly educated and work for the community’s largest employers – the University of Rochester/Strong Health, Eastman Kodak, Xerox, ViaHealth/Rochester General Hospital, Rochester Institute of Technology, Paychex, and ITT.

But from the all-important business standpoint, Time Warner Cable enjoys extraordinarily limited competition in the area, and the gap only widens in the coming future.  The area’s telephone provider, Frontier Communications, is known mostly for providing service in rural communities, and has so far offered lackluster plans for a 21st century broadband platform, preferring to rely on now-aging DSL technology while Verizon wires most comparably-sized cities in the rest of the state for advanced fiber-to-the-home FiOS service.

While Frontier can live comfortably in rural communities where cable television is not an option, customers who live and work in their largest service area continue to find disadvantages from a company business plan that these days seems more focused on mergers and acquisitions, and is content with language that defines an appropriate amount of monthly broadband usage at a ridiculously small 5 gigabytes per month.

Against a competitor like that, why would Time Warner Cable bother?

NY State Attorney General Andrew Cuomo

The New York State Attorney General has slapped Frontier Communications with a $35,000 fine and ordered the phone company to refund up to $50,000 it wrongfully charged consumers in so-called “early termination fees” for telephone and broadband service — fees consumers were never properly informed about at the time they ordered service.

“Frontier failed to spell out in its contracts the existence of costly fees,” said Attorney General Andrew M. Cuomo. “The company is now fixing the issue by providing written notices of these fees and paying back consumers who were wrongfully charged.”

Frontier, located on South Clinton Avenue in Rochester, provides high speed broadband Internet service (FrontierHSI) and local and long distance telephone service. Between January 2007 and September 2008, Frontier sold bundles of various services under one-, two- or three-year agreements known as Price Protection Plans that offered a lower rate than month-to-month service as well as a promise that the subscription rate would not increase during the term of the plan. However, Frontier charged early termination fees to consumers who terminated a service before the end of the term. These fees typically ranged between $50 and $400, depending on the contents and services included in the package.

The Attorney General’s investigation determined that consumers who purchased one-year bundle agreements were never provided with written notice of the term or the existence of an early termination fee. The investigation also uncovered that consumers were not notified in their monthly billing statement that their agreements contained early termination fees. Therefore, many consumers first learned about the fee only after they canceled their service with Frontier and the charge appeared on their final bill.

In at least one instance, Frontier automatically re-enrolled a consumer to a term commitment after the initial term expired and then charged an early termination fee when she canceled after the initial term.

This is not the first time Frontier’s promotions have faced scrutiny by a New York Attorney General.  In March 2006, Frontier agreed to pay $80,000 in penalties and around $300,000 in customer refunds for what former Attorney General Eliot Spitzer called “misleading advertising and marketing tactics.”

Frontier’s customer service centers have often provided uneven service to consumers calling for information about products and services.  Stop the Cap!‘s editor, yours truly, had a number of problems when sampling Frontier’s DSL service during the Time Warner Cable Internet Overcharging experiment.  In addition to inconsistent product information, pricing, and terms and conditions, customer service representatives were ill-equipped to properly describe their own lineup of products, at one point promoting their wireless wi-fi network service in Rochester as “wee-fee.”

After the company couldn’t provide DSL service to my residence at speeds better than 3.1Mbps, service cancellation did not result in an early termination fee, but did cause serious billing foul-ups that took multiple calls to sort out.

In 2008, Stop the Cap! helped many customers cancel their DSL service without incurring early termination fees when the company introduced a 5GB usage limitation in their Acceptable Use Policy, under the provision allowing customers to opt-out of materially adverse changes in their service.  The company later announced customers under their Price Protection Agreement would not be subject to any service limitations until those agreements expired.

In January 2009, Attorney General Cuomo’s Office began investigating Frontier Communications and its subsidiaries after receiving dozens of complaints from consumers who were unexpectedly charged early termination fees.

Through an agreement with Attorney General Cuomo’s Office, Frontier must pay up to $50,000 in refunds and credits of early termination fees paid by eligible consumers who filed complaints prior to December 31, 2008. The company has provided the Attorney General’s Office a list of those eligible for refunds or credits.

Frontier's headquarters in Rochester, N.Y.

Other consumers who believe they are eligible for a refund or credit may submit a claim to the Attorney General’s Office by December 21, which will review the claims and act as the final arbiter for eligibility for reimbursement. Consumers wishing to file a complaint should call the Attorney General’s Rochester Regional Office at (585) 327-3240.  A promised web-based claim form could not be located on the NY Attorney General’s website at press time.  Residents living outside of New York State are not eligible to participate, but you may want to contact your own state’s Attorney General and ask them to review the New York settlement agreement, which could provide the basis for similar settlements in other states.

Frontier must also pay $35,000 in fees and costs. Frontier will send written notices to all customers who subscribe to new services regarding early termination fees. The company will not collect any such fee until after the notice has been sent. Frontier must also include a written notice of the term of any service agreement on consumers’ monthly billing statement for any agreement with an early termination fee.

Many customers never realized Frontier automatically renewed their Price Protection Agreements without their explicit consent, generating early termination fees of $300 for some customers who left after more than five years of service with the company.

JuniPerez, a former Frontier customer, wondered whether Frontier was offering a Price Protection Lifetime Agreement: “I had Frontier’s DSL and phone service for about five to six years (phone service for much longer). After my last move, I switched to Time Warner’s phone, cable, and broadband package. Within two weeks of notifying Frontier of my service cancellation, they sent me my last bill — $300.00! This was for what they called an “Early Termination Fee”. After five to six years I had an early termination fee? I didn’t even get a chance to dispute it. Within days (not weeks or months) they turned the account over to a collection agency. They still dare to send me ‘come back to us’ flyers and specials.”

Some Frontier customers sign up for bundled packages of service to receive incentives, such as heavily discounted satellite television service or a “free” Dell netbook (after paying $45 in fees for taxes and shipping), in return for signing a two- or three-year Price Protection Agreement.  The agreement promises customers will not see any changes in pricing for the length of the agreement.  At the same time, the agreement “locks-in” the customer to stay with the company for the length of the contract, or face a penalty for canceling service early.  In many cases involving incentives, the early termination fee amounted to $300.

But Frontier appears to have made some changes even before yesterday’s settlement with the Attorney General.

As of at least this past spring, customers signing up for a promotion with a Price Protection Agreement were directed verbally to an e-mail copy of the agreement sent to them, urged to read it, and were required to electronically consent to the terms of the agreement in order to participate in the company’s promotions.  Follow-up e-mails were sent to customers who did not complete this process.  The contract also included provisions notifying customers that agreements were automatically renewed for an additional term unless the customer notified the company in advance they did not consent to automatic renewal.  In fact, customers could cancel the contract renewal almost immediately after electronically consenting to it.

Frontier’s e-mail was sent to the customer’s Frontier e-mail account, which some customers never used and never accessed.  For some, the terms amounted to “fine print” that many never read.  While the New York Attorney General ultimately found Frontier Communications responsible for failing to adequately notify customers about such fees, Stop the Cap! reminds the public they have a responsibility to carefully read and review the terms and conditions of all service agreements, especially those involving promotional giveaways tied to service commitments like Price Protection Agreements.  Many have historically carried steep cancellation penalties as well as automatic renewal provisions designed to keep you from switching providers.  Such agreements should be considered only if you are certain you are happy with your service provider.  If you are trying a service for the first time, inquire whether you can sample the service for a trial period and retain the right to cancel without incurring penalties.  Frontier traditionally offers a 30-day trial period for DSL service.  Always record the time and day you made the inquiry, and the name of the customer service representative you spoke with.  Should you be given incorrect or inconsistent information, being armed with this information may help convince the provider to agree to what you were promised.

Customers who are not satisfied with the response they receive from a customer service representative or their immediate supervisor should check the front of their telephone directory for the number of the “executive customer service office,” sometimes also called, “unresolved complaints.”  These special representatives are empowered to resolve complaints customer service representatives may not have the authority to fix.  Failing that, contact your state’s Public Utilities/Service Commission or the Attorney General’s office.

Two video news reports appear below the fold.

… Continue Reading

The advancement of Net Neutrality by the Federal Communications Commission was the topic of this week’s Mixed Media, a feature from WXXI-AM, a public radio station in Rochester, New York.  Scott Fybush, who has been known to drop by Stop the Cap! from time to time, talked with WXXI’s Rachel Ward about Net Neutrality and the Stop the Cap! movement, and why Rochester is such an activist community when it comes to preserving reasonable and fair pricing for Internet access.

A Federal Communications Commissioner comes out strong for net neutrality. WXXI’s Rachel Ward and media and technology reporter Scott Fybush have more. (5 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

If you have any interest in radio or television, Scott’s Northeast Radio Watch is a must-read every week. WXXI’s Mixed Media does a good job of explaining technology stories and their impact on us in a way everyone can understand.

A Broadband Reports reader from Zephyrhills, Florida was invited by E-Rewards, an online focus group, to give views on some new names and pricing for higher speed Road Runner tiers.  “Molitar,” a customer of Bright House Networks, which also markets broadband service under the Road Runner name, reports being asked impressions about new speed tiers, including faster downstream speeds of 30Mbps or more and one offering 5Mbps upload speed.

At least five different names were offered, with consumers invited to give their impressions.  Among the names: Road Runner Flash, Road Runner Extreme,  and Road Runner Lightning. “Molitar” preferred Road Runner Extreme.

Also asked: what kind of pricing customers would be willing to pay for the new premium speed services.

Assuming the facts were as the reader reported, this would likely impact residents in New York City first, where DOCSIS 3 upgrades are well underway. As upgrades begin in other cities, presumably such speed tiers would also be introduced. Those reported speeds would not likely be offered in areas where upgrades have not taken place.

Time Warner Cable has been one of the more stingy providers with upstream speeds. Many cities, including Rochester, New York have never seen a speed increase for standard Road Runner service since the product was introduced more than 10 years ago. At just 384kbps, uploading large files has been painfully slow. Road Runner Turbo, a $9.95 monthly add-on, is coveted for uploaders if only for the increase in upstream speed to 1Mbps, at least in Rochester. But many other Time Warner Cable markets offer Turbo upload speeds of 2Mbps.

Roscoe P. Coltrane and "Flash"

Speed based tier pricing is welcomed by Stop the Cap! We are supporters of providing customers with the choice of different pricing levels of service based on different speeds. “Heavy downloaders” and other “extreme” users of broadband service will gladly pay premium pricing for better service, providing enhanced revenue for operators like Time Warner Cable and bringing positive goodwill from customers who are anxious to see speed increases and are willing to pay to get them.

What we oppose, of course, is Time Warner Cable introducing consumption-based billing which curtails innovation, punishes subscribers for using the service as it was marketed to them in the first place, and sets up scenarios for massive profit-taking from consumers subjected to overlimit fees and penalties.

Time Warner Cable’s latest investor conference call featured company executives touting their initiative to give Time Warner customers access to as much content as they want, when they want, and where they want to see it. If they intend to honor that commitment, punitive consumption-based pricing denies customers the ability to access as much content as they want, makes them think twice about getting it out of fear of running over their “allowance,” and will drive customers to look elsewhere for broadband service, if not also taking their video and telephone business to another provider as well.

As for me personally, I’m not thrilled with any of those product names. Road Runner “Flash” does nothing for me at all, except reminisce about Roscoe P. Coltrane’s lazy basset hound with that name from the TV series Dukes of Hazzard (Friday night in our household growing up didn’t provide me with remote control privileges). Road Runner “Extreme” is already overused as a concept, and I frankly thought it was already in use. Road Runner “Lightning” reminds me of Frontier Communications’ older name for DSL service: Lightning Link.

I suppose Road Runner Max might be better, perhaps supplemented with the download speed as a suffix. Road Runner Max 30 for 30Mbps downloading, and so on.

Share your ideas in the comments section. Maybe we’ll offer it to them if they promise to honor the fact gas gauges belong on automobiles, not on broadband service.

Phillip Dampier

Today is Stop the Cap!‘s first anniversary.  One year ago today, this website was launched with the news that Frontier Communications, the local telephone company in Rochester, New York and in dozens of mostly rural communities nationwide, had quietly changed its Acceptable Use Policy to define appropriate maximum usage of their DSL service at a measly 5GB per month.

The  boneheaded, out of touch decision was called out for what it was: a profiteering provider pilfering wallets of their broadband customers.

All the signs of a Money Party among cable and DSL providers at consumer expense were apparent last summer.  Time Warner Cable was experimenting with a consumption billing plan in Beaumont, Texas.  In Canada, rhetoric about “bit caps” was already being circulated, trying to convince Canadians that broadband service was somehow as difficult to provide there as it is in Australia and New Zealand, where such caps were already in place.

To bring limits, rationing quotas, and consumption based billing to the United States would require consumers to ignore massive profits broadband providers were harvesting quarter after quarter at existing prices.  But demands for big profits from Wall Street meant they had to come from somewhere, and for cable companies with eroding profits from their cable TV divisions, and telephone companies dealing with disconnect requests for wired telephone lines, broadband was their choice.

It seems that what was insanely profitable a decade ago, when cable modem and DSL service started to introduce Americans to broadband, would now simply be ‘piles of  cash stacked like cord wood’-profitable as traffic increased. As the broadband adoption rate increased, bandwidth costs plummeted, and several providers also proudly trumpeted their reduced investments in their networks as a hallmark of keeping “costs under control.”

Consumers began actually using their service for… broadband-specific services, at the encouragement of providers’ marketing departments, touting their “always on” connection at “blazing fast speeds” to download music, movies, play games, and more.  Network utilization increased, and providers want someone to pay for a “bandwidth crisis” that isn’t a crisis at all.  Responsible investment in network infrastructure should be a given, in recognition that at least a small portion of those growing profits must be spent on maintaining and improving service.

One year ago, I laid out what was before us:

Cable operators have been discussing implementing usage caps in several markets to control what they refer to as a “broadband crisis.” The industry has embarked on a lobbying campaign to convince Americans, with scant evidence and absolutely no independent analysis of their numbers, that the country is headed to a massive shortage in bandwidth in just a few short years, and that a tiny percentage of customers are hogging your bandwidth.

Frontier, ever the rascally competitor, has decided to one-up Time Warner’s Road Runner product by slapping on a usage cap now for DSL customers before Road Runner considers doing the same. And in a spectacularly stupid move competitively, they have implemented a draconian cap that even the cable industry wouldn’t try to implement.

Time Warner Cable “took one for the team,” according to industry-friendly Multichannel News, when it introduced a ludicrous Internet Overcharging experiment of its own announced this past April, which would have “saved” customers money by getting them to “pay for what they use.”  In fact, their plan proved my point last summer, following the same roadmap of “bandwidth crisis” to “heavy downloaders” to trying to squeeze customers for more money for upgrades they could easily have done with the enormous profits they already earn.

Their proposal would have made a deliciously profitable $50 a month Internet service now cost consumers $150 a month with absolutely zero improvement in service, speed, or performance.  But Wall Street would have been happy with the higher returns.

Some 400+ articles later, we’ve educated consumers across North America about the reality of Internet Overcharging.  Despite industry propaganda “education” efforts, astroturfing groups we’ve exposed as having direct connections with the telecommunications providers paying them to produce worthless studies, fear-mongering about Internet brownouts by equipment vendors with solutions to sell, and a hack-a-thon of formerly respectable broadband pioneers and ex-government officials who sold their credentials for a paycheck to lobby and spout industry propaganda, most consumers continue to reject overcharging for their broadband service.  Consumers instinctively know a cable company with a rate change always means a rate increase, and plans to “save people money” actually means they will “protect industry profits.”

We have achieved victory after victory in 2008-2009:

• Fought back against Frontier’s boneheaded plan, and convinced them that DSL can compete best on price and flexibility — no usage cap has ever been enforced at Frontier, and today they are using Time Warner Cable’s blundering profiteering experiment against them in their marketing materials.  For rural Frontier customers with no other broadband provider, that’s a major relief from being stuck with one broadband option that rations their usage to ludicrously low levels.
• Stopped Time Warner Cable’s experiment before it got off the ground in several “test cities.”  The people of Austin, San Antonio, Rochester, and the Triad region of North Carolina did Time Warner Cable customers nationwide a tremendous service in halting this experiment before it spread.  Our efforts even brought a United States Senator, Charles Schumer, to the front lawn of Time Warner Cable in Rochester to announce the nightmare was, at least for now, over.  We managed to even see an end to the overcharging of customers in Beaumont, Texas who lived through a summer, winter, and spring, overpaying for their broadband service.
• We raised hell in the North Carolina state legislature, coming to the aid of Wilson and other communities in the state trying to get municipal broadband projects off the ground.  Communities across the state faced anti-consumer corporate protectionist legislation written by the telecommunications industry, introduced by willing elected officials who took big telecom money, and sold out their constituents.  We killed two bills, forced a sponsor of one such measure to repudiate his own bill, and gave major headaches to legislators that thought they could just cash those big checks, vote against your interests, and you’d never know.  Those days are over.
• We helped bring legislation up in Congress to draw attention to the issue of Internet Overcharging, and have called out providers who want to use their marketing departments to lie to customers about their broadband costs and profits, while being considerably more honest with their shareholders in their quarterly financial reports.  Congressman Eric Massa’s legislation would demand companies show proof of the need to implement consumption based billing.  Indeed, as consumers find out how profitable broadband service is at today’s prices, they’ll never tolerate the profit padding providers seek with tomorrow’s caps/limits, penalties and fees, and unjustified tiers.

As you can see, Internet Overcharging is not a dead concept.  An educated consumer will recognize a swindle when they see one, and providers continue to test overcharging schemes in focus groups in different parts of the country.  They’ll use any analogy, from a buffet lunch to a toll road traveled by big trucks and little cars.  They’re looking for anything they can find to sucker you into believing paying more for your broadband service is fair.

Broadband service must be fast, affordable, and competitive.  In too many communities in Canada and the United States, a monopoly or duopoly marketplace has guaranteed none of those things.  In our second year, we must remain vigilant in our core mission to fight Internet Overcharging, but we also need to fight for more competition, regulation where competition does not exist, oversight over providers, and support for projects that will enhance broadband and make it more affordable than ever.  With your help, we can stand toe to toe with any provider, because the facts are on our side, not theirs, when it comes to Internet Overcharging schemes.

Welcome to Year Two!