The classic one-two punch of Internet Overcharging is to limit your broadband usage -and- throttle speeds downwards.  AT&T wireless customers in several major cities across the United States are experiencing that for themselves over the long holiday weekend, reporting upload speeds have been throttled down to 100kbps or less (one-tenth of the speed most customers enjoyed as late as last week).

Speedtest.net has shown AT&T network throttling in many parts of Baltimore, Boston, Cincinnati, Cleveland, Columbus, Denver, Des Moines, Detroit, Fairfax, Houston, Kansas City, Las Vegas, New York, Orlando, Phoenix, St. Paul,  Salt Lake City, and Washington, D.C.

The speeds are so noticeably slow, it has become a national story as irate customers find their wireless broadband service first usage capped at just 2GB per month, and now upload speed throttled to the point of unusability.  AT&T promised a statement explaining the issue, but one has not yet been forthcoming.  Some speculated the throttles were designed to reduce congestion on AT&T’s network over the holiday, while others suspect a technical fault.

Reducing your wireless speed reduces the impact on AT&T’s backhaul network, which in turn reduces congestion and the number of dropped wireless calls.

The introduction of speed throttles for “heavy users” is a favorite in countries where overcharging schemes predominate.  Most permit a preset amount of traffic to pass at normal speeds, but once customers exceed an arbitrary allowance, a temporary speed throttle gets applied to dramatically reduce speeds and discourage further use.  Some limit customers to a selected amount of traffic per day, others per month.  Once the window expires, the throttle is automatically removed.

While there is no indication AT&T is applying such a throttle at this point, the company has strongly opposed efforts to ban such schemes.  AT&T has a history of antagonizing its wireless customers with poor network performance, and has been judged the least favorite provider by Consumer Reports.

Sprint will not limit use or throttle speeds for users of its 3G or mobile WiMax networks, despite a report from Engadget claiming the company was on the verge of applying speed throttles on its users exceeding 5 GB per month of usage.

A Sprint spokesman told Dow Jones Newswires any limits would apply only for Sprint mobile broadband data users roaming on other companies’ data networks using modems attached to laptops or personal computers.  Smartphone users are not affected.

“Sprint does not, nor plan to limit speeds, nor change a customer’s ability to use any particular application or Internet site,” said Sprint spokesman Mark Elliott.

However, the company has made it clear it can temporarily suspend a customer’s ability to roam on Sprint’s data network if “excessive usage” is detected.  Current plans provide up to 300 megabytes of service while roaming.  Higher allowances are available for purchase.  Customers will receive text messages notifying them when they reach 75 percent and 90 percent of their allowance.  After that, Sprint can cut off service until the next bill cycle begins.

Sprint has to pay higher fees when customers roam on non-Sprint networks, hence the usage limit.

Sprint, America’s third largest wireless carrier behind Verizon Wireless and AT&T, is trying to position itself as the competitive choice for customers who do not want to worry about usage allowances and overlimit fees.  The company hopes customers who are tired of escalating wireless bills will once again look beyond the two largest providers.

Telekom Malaysia

A scheme to impose usage limits and speed throttles on Telekom Malaysia’s broadband customers was beaten back just a day after the plan was announced.

Malaysia’s largest telecommunications company announced the limitations at the same time in introduced new speed tiers and new pricing for them.

Customers were not pleased when they discovered TM’s UniFi broadband service came with high prices and usage caps:

TM UniFi Broadband Packages

• 5/5Mbps Service RM149/$46.73 now capped at 60GB per month.
• 10/10Mbps Service RM199/$62.41 now capped at 90GB per month.
• 20/20Mbps Service RM249/$78.09 now capped at 120GB per month.

In comparison, residents in nearby Singapore can buy 100Mbps service, with no limit, for RM200/$62.73 per month.

Those who exceed the limits would find their speeds throttled to about 10 percent of the speed they purchased, for the rest of the month.

Telekom Malaysia CEO Datuk Zamzamzairani Mohd Isa said the measures were part of its Fair Usage Policy.

Dato’ Zamzamzairani

“This policy is a standard industry practice to ensure that all subscribers get to enjoy the same web surfing quality,” he said.

Only it’s not standard industry practice, despite that often-heard excuse.  In countries where usage limits are common, those limits are being eased or discontinued as broadband expansion and competition drives the unpopular usage limits out of the market.

Malaysians weren’t willing to wait.

The social media firestorm of protest that followed the announcement forced the company to back down just one day after announcing the Internet Overcharging scheme.

An announcement on Twitter, noting customer feedback, stated “no volume cap 4 all #unifi packages 4 now.”  The company did say it would continue to “reserve the right to enforce a download limit to ensure all UniFi subscribers receive equal service quality,” but that type of language has been standard in service provider agreements for years.

Company officials told The Malaysian Insider customers “may abuse” the service, which is why they wanted the cap.

But customers feel they deserve value for money — the price being charged can be considered high for many countries in Asia even without the cap.

The Star newspaper notes:

With the latest announcement by Telekom Malaysia, many people are rejoicing. Among them is communications consultant Justin Then, who said he’s happy to note that Telekom Malaysia listens to consumers.

“Capping our high speed Internet access doesn’t make sense, if the Government wants Malaysians to seek out knowledge and be innovative,” he said.

A Twitter user, who asked to be identified only as Flo, said she’s glad Telekom Malaysia has decided not to employ the cap for now.

“We are paying a premium for technology that offers super high bandwidth, so a daily cap shouldn’t be applied. There’s no value in that; we would be better off with regular broadband,” she said.

One caveat.  As has been the case with a handful of U.S. providers seeking to monetize your broadband usage, rescinding usage caps today doesn’t guarantee they won’t be back tomorrow.  Indeed, TM has yet to remove them from their website, instead inserting in the fine print, “The monthly download volume policy will not be implemented until further notice.”

[flv]http://www.phillipdampier.com/video/Malaysia Telekom UniFi Promotional Video.flv[/flv]

TM’s slick promotional video unveiling the faster UniFi broadband packages asks y0u to “imagine.”  We did… imagining how in the world we can accomplish all of the things they show in the video with the company’s proposed arbitrary usage limits and speed throttles.  Imagine actually getting the service you paid to receive without a provider imagining how much use = “abuse.”  (6 minutes)

New Apple iPad 3G owners launched a small controversy over the weekend about their discovery that certain video streaming services are showing lower resolution video (or no video at all) when using Apple’s new iPad 3G over AT&T’s wireless 3G network.

A range of sites pounced on the news.  It’s not easy to sort through who broke the story first, but by the end of the weekend, it developed a small life of its own.

iLounge was among the first to note serious video quality degradation when using the iPad over a cellular network, while it worked just fine over Wi-Fi:

…some video delivery applications act differently over the 3G network than they do on Wi-Fi. The iPad’s built-in YouTube application strips both standard and HD videos to a dramatically lower resolution over the cellular data connection, something that iTunes Store video previews notably do not do, instead staying at a higher quality and consuming a greater amount of data. Other third-party applications, such as the ABC Player, refuse to work at all over the cellular connection, producing a notification pop-up that states, “Please connect to a Wi-Fi network to use this application. Cellular networks are not supported at this time.”

YouTube streamed over AT&T's 3G Network on an iPad defaults to very low resolution. (Image: iLounge)

Electronista also jumped on the story, at first speculating AT&T may have had a hand on the speed throttling noting Sling Media ran into a similar blockade with AT&T before the wireless company relented and the software became available from the App Store.  PC Magazine quoted from the Electronista story (before Electronista’s editors modified their original piece) to build on the story.

By the end of the weekend, Electronista pulled back on some of their language in their original report and included a cryptic denial from AT&T, which claimed it was “a question for Apple.”

Stories of reported throttling and content walls will not take long to reach the public policy debate over Net Neutrality.  Is this an example of AT&T throttling Apple iPad customers and blocking them from accessing web content?

The answer, based on current evidence, is probably not.

There are technical issues behind the scenes which play a larger role here, but let’s begin with the average consumer and how a 3G network impacts on their “user experience.”

When designing a device like the iPad, engineers have to factor in usability and the overall impression customers will have using the product with a wireless network.  For many original iPad owners reliant on a Wi-Fi connection, pages render quickly, videos play properly, and applications that require higher bandwidth generally work fine.  Unfortunately, for those who lined up outside of Apple stores looking for the 3G wireless mobile broadband version of the iPad, the same may not always be true using AT&T’s 3G network.

AT&T promotes its 3G network as fast and capable of handling most any web application, including video.  But even the best 3G experience from AT&T is often much slower than a wired or Wi-Fi connection.  Despite the PR from AT&T, its 3G network frustrates many customers, especially in areas where cell sites are jammed with traffic or signals aren’t great.  Apple made sure larger-sized, streamed multimedia content seemed to work equally well on wireless by using adaptive video quality that can sense the speed of a connection, and reduce the quality of a video in order to make it play properly.  The theory is that a consumer using a handheld device probably wouldn’t notice the quality reduction on a small screen and would appreciate quick, uninterrupted playback.  Without such technology, a high quality video file can take longer to send over AT&T’s 3G network than it will take you to watch it.  That triggers the annoying “buffering content” pauses you see on slower networks.

AT&T officials told inquiring media “it’s a question for Apple,” which seems to confirm the reduced video quality is a function of the video player trying to adapt to AT&T’s speed.

Even with this in mind, some accused AT&T of employing social engineering to get customers to instinctively rely on Wi-Fi connections for higher bandwidth applications, reducing the demand on AT&T’s 3G network.

There is no need for a conspiracy theory like that when the simple, naked truth is far easier to grasp — AT&T has inadequate capacity and needs to upgrade their wireless networks to handle more traffic and sustain the speeds customers expect from a 3G-capable network.  AT&T is not purposely throttling the speeds of iPad 3G owners — their insufficient capacity results in a de facto speed throttle for all of their customers.  Unfortunately for those outside of the United States, the implications of AT&T’s slower 3G network can impact them as well.  Jesse Hollington in Toronto noted:

Unfortunately, these limitations don’t seem to be triggered by AT&T’s network, but rather in the iPhone OS or apps themselves, and the restrictions (at least on the iPhone) exist in every country where the iPhone is sold. There’s a general feeling outside of the U.S. that Apple’s kowtowing to AT&T’s “requirements” is actually ruining the experience for the rest of the world.

For instance, I can perhaps understand why YouTube videos need to be downsampled on AT&T’s slow 3G network, which even at peak performance is only 1.8mbps in most places.  As I noted above, however, Rogers up here provides 7.2mbps just about everywhere and provides better 3G performance than I get on some Wi-Fi networks. Yet we have to live with the same 3G restrictions as AT&T users do because they’re built into the iPhone OS.

That prompts the question what limits would have been “built-in” had AT&T’s own 3G network consistently delivered 7.2Mbps performance across its service areas.

As for ABC, and certain other content producers that restrict iPad owners to Wi-Fi viewing, that turns out not to be clear cut either.  ABC’s video streaming evidently exceeds a speed threshold that triggers the player to tell the user to use a Wi-Fi connection instead.  Licensing restrictions may also prevent the content from playing across a 3G network.

One of the most common arguments Net Neutrality opponents use to argue Net Neutality’s “unintended negative consequences” comes from bans on such adaptive speed controls.  Providers claim that by prioritizing or favoring certain traffic, they can maximize a consumer’s online experience so that they can use high bandwidth applications, as long as an intelligent network shaped the delivery of that traffic.

So one might ask, because adaptive video quality lets people watch their favorite online videos over AT&T’s 3G network, wouldn’t a ban on speed throttles make it difficult or impossible to provide a customer with access to that video?  Isn’t Net Neutrality a bludgeon that kills intelligent traffic management tools?

There is no shortage of techie-speaking, industry-funded Net Neutrality opponents that argue it regularly.  Unfortunately, it doesn’t hold up to scrutiny.

Net Neutrality does not ban software that can sense the speed of your connection and request an appropriate web stream that will assure uninterrupted playback.  Even ancient RealPlayer technology can adaptively adjust streaming quality based on what your connection will support, if the content producer supports it.  Such technology directly benefits the consumer (who can also often shut it off), whereas the kinds of traffic shaping providers advocate really only benefits them.

That’s an important distinction.  Too often, the kinds of “intelligent networks” providers speak of are designed to protect providers from “costly upgrades” and opens up new revenue streams by manipulating or limiting traffic and then charging users and producers to be exempted from them (for the right price).

More evidence arrived this week that Internet Overcharging schemes are becoming a thing of the past for many global broadband users.

Sky has announced it is getting rid of its usage limits and speed throttles for most of its broadband customers.  It’s also giving away a free speed upgrade to up to 20Mbps for its DSL-provisioned broadband service.

“It comes with no usage caps, fair use policies or traffic management, making it ideal for those who want the freedom to download emails, photos, TV programs, movies and games. It’s also ideal for those who want to access live and on-demand TV through Sky Player,” Sky said.

That may be part of the plan.  Sky, a satellite television company serving the United Kingdom, is preparing to launch new video on demand features that will work in conjunction with its broadband service.  Delivering faster access, without limits, could be part of the equation of making their video on demand service a success.

For occasional broadband users who don’t exceed 2 gigabytes of use per month, Sky is giving free usage-limited broadband service to customers who also subscribe to Sky’s telephone service.  For those that don’t, the 2 gigabyte-capped service costs £5 ($7.59US) per month.

For those looking for unlimited service, Sky Unlimited is available for £7.50/$11.38 per month for Sky customers with Sky Talk or £12.50/$18.97 per month for those without.  In the United Kingdom, line charges for the phone line are broken out from broadband pricing and have to be considered towards the total monthly cost for broadband service.  Line rental from BT costs £12.50/$18.97 a month for customers who pay by direct debit and receive paper billing (£11.25/$17.08 with paperless billing).

Sky requires a 12 month service commitment.  These prices and plans take effect June 1st.  New customers can get a promotion offering six months of free broadband service, including line rental, when signing a 12-month service commitment.

New customers can get six months of broadband service for free when signing up

Is there a downside to this offer?  Not as far as usage limits are concerned.  However, the service is dependent on BT-provisioned DSL phone lines, which can create great variability in the maximum actual speeds customers receive.  The further away from a BT exchange office, the slower the maximum speed a customer will achieve.

But for existing Sky satellite customers looking for a discount on bundled service and an end to worries about monthly usage or speed throttles, Sky Broadband is a welcome relief for those tired of Internet Overcharging schemes.

It’s also one fewer example North American providers can point to as an excuse to attempt Internet Overcharging schemes of their own.