Rogers Communications has announced usage cap and speed adjustments for many of its Internet service plans — changes that will bring increased allowances for some of the company’s most premium customers.

Rogers has modestly adjusted usage caps on its popular Extreme Internet Plan a year after slashing them, and brings dramatic increases for the company’s most expensive service tiers, even as it leaves usage caps unchanged for the bulk of their customers subscribed to the basic Express service plan:

A Rogers spokesman explained the changes.

The bar gets raised only for those who agree to spend more.

“With the rapid rise of online video, social media and online gaming, the way Canadians use the Internet is changing dramatically. We’re always reviewing our plans to ensure they meet your changing needs so starting later this month, our Hi-Speed Internet tiers are being upgraded with faster download speeds and higher data allowances for customers on Rogers DOCSIS 3.0, our best and fastest wireline network,” wrote RogersMarina on the company’s RedBoard blog.

Apparently the way Canadians use the Internet with Rogers’ most-popular Express plan hasn’t changed much, because Rogers leaves that cap unchanged at 60GB of usage per month.  Rogers previously reduced its usage cap for its Extreme level of service from 95 to 80GB, days after Netflix announced it was bringing its streamed video service to Canada.  Rogers’ latest increase amounts to just 5GB more usage than customers had during the spring of 2010.

The increased speeds that some usage tiers are gaining with the introduction of DOCSIS 3 technology come “at no additional cost” according to Rogers, but the company also mentions it charges higher prices — $1.50-$3 more per month — for the required DOCSIS 3 modem.

For customers certain to exceed their allowance, Rogers will sell you an insurance plan to protect your wallet from their $0.50-5.00/GB overlimit fees:

“Also starting later this month, you’ll be able to add a data assurance option if you’re currently using the Express and Extreme tiers. For an extra $20 per month, you’ll receive an extra 80 GB of data on top of your existing allowances. If you don’t need quite as much data, you can also get an additional 20 GB for an extra $5 per month.”

Most customers were not impressed.  Take Matt, for example:

“Speed increases are great but all they allow us to do is to get to our low data caps faster. These days with YouTube, Netflix, VOIP, and work VPN (heavy work from home user) $60 for 100 GB of data is pretty expensive, especially when a GB of data probably costs Rogers pennies per user. Competitors are starting to offer higher data caps for a similar price. In Toronto you can get a plan for same or slightly cheaper starting with 200GB.  In Vancouver you can get 50Mbps for $29 a month with a 400 GB data cap!”

Cambo notes the usage upgrades come easy for higher-priced tiers, but customers on the most popular Express tier have no increase in their usage allowance at all.

“You guys just don’t get it,” he writes on RedBoard.  “Speed isn’t the issue. Usage is. Why is it every tier gets a usage bump except the most popular Express? What is the point of bumping the speeds up and not significantly increasing usage, so we can get to the caps even faster I suppose. Sounds like a ploy to get people to spend more, to me.”

Andrew agreed:

“I also agree with this. I would rather get a larger usage bump than a speed bump — I don’t see a point in raising speeds when the data cap is still extremely restrictive. After all, I’d want to enjoy using the Internet, rather than monitoring my usage restrictions every day. If Rogers really listened to the customers, they’d know that most of us are more critical of their plans’ usage restrictions than their speeds.”

Rest in Peace, AT&T DSL

AT&T CEO Randall Stephenson doesn’t think much of the company’s largest-reaching broadband product – DSL service, telling an audience at the the National Association of Regulatory Utility Commissioners summer seminar in Los Angeles that AT&T developed DSL mostly to compete with Comcast, but “now that’s obsolete.”

That’s a remarkable admission for AT&T, which continues to provide the bulk of its Internet access to consumers over DSL on its copper-wire telephone network.  Comcast spokeswoman Sena Fitzmaurice, in attendance, promptly tweeted the news to her followers: “AT&T CEO — to chase comcast we built dsl, it is obsolete now”

The story from GigaOm’s Stacey Higginbotham only got stranger when an AT&T spokesperson tried to explain away Stephenson’s careless remarks:

Stephenson was answering a question from an audience member about how state regulators should think about new technology cycles when they are considering things like USF. He said that new technology used to be amortized over a 10-15 year period, but that has shrunk to about 5 years now. He said that DSL was introduced in the 1990s, it has been surpassed in speed by U-verse and Comcast’s DOCSIS 3.0. He also gave the example of deploying 3G in 2006 … and now 5 years later we are rolling out 4G. His point was — new technology is being surpassed by the next generation much quicker than ever before. We have millions of customers using DSL and remain fully committed to the technology — even as we constantly look to bring innovation to the marketplace.

That innovation comes mostly from the company’s more advanced DSL platform U-verse, which is only slowly working its way across urban AT&T service areas.  Unfortunately, that service will not likely be forthcoming for AT&T’s rural landline customers, who will be left with “obsolete” DSL service, if available at all, indefinitely.

With an increasing amount of AT&T’s revenue coming from its wireless division, there is little incentive for AT&T to expand DSL service into areas where it is not already sold.  In fact, most of the company’s landline-oriented lobbying has been directed at allowing the company to abandon its “universal service” obligations to provide decent, basic telephone service in rural areas.  The company has already won that deregulation in several of the states it serves, but has given no indication if and/or when it plans to shut off its landline service.

Landline providers hope American consumers will lead the way, as an increasing number disconnect their home phone lines permanently.

More than half of adults between the ages of 25 and 29 reside in wireless-only homes, according to the Federal Communications Commission.

“The number of Americans who rely exclusively on mobile wireless for voice service has increased significantly in recent years,” the FCC said, citing a January-June 2010 National Health Interview Survey.

Unfortunately, rural Americans overwhelmingly receive broadband over that landline network in the form of basic DSL, usually at speeds of 1-3Mbps.  If that network is discontinued, their opportunity for broadband service goes with it.

AT&T warns DSL customers they can watch 10 High Definition movies per month... and use their Internet connection for absolutely nothing else, unless they want to incur an overlimit fee of $10.

AT&T has released a phoney baloney video for their customers purporting to “explain” broadband usage and the company’s completely arbitrary usage limits on DSL and U-verse customers: “A single high-traffic user can utilize the same amount of data capacity as 19 typical households. Lopsided usage patterns can cause congestion at certain points in the network, which can slow Internet speeds and interfere with other customers’ access to and use of the network.”

Too bad these claims are not verified with actual facts.

Meaningless statistics

AT&T’s claim that less than two percent of their customers use 20 percent of available bandwidth is frankly meaningless to the company’s DSL and U-verse hybrid fiber-copper networks.  For years, phone companies made a marketing point that unlike cable broadband’s shared network, their DSL service was never shared with anyone else in a neighborhood.  Therefore, running it at a trickle or full speed ahead should have no impact on any other customer.  The only exception to this rule comes from phone companies that under-invest in their middle mile and backbone networks.  For AT&T, that means trying to serve too many customers on inadequate equipment ranging from a poorly planned network of D-SLAMs, which connect individual customers with a fatter pipeline back to the central office, or an inadequate network between the central office and AT&T’s regional backbones.  Fiber, such as that used by AT&T’s more modern U-verse system, completely solves any capacity issues.  Broadband traffic is only a tiny percentage of the bandwidth consumed by AT&T’s IPTV video service — the one that delivers U-verse TV to your home.  AT&T imposes no viewing limits on customers, of course.

Any actual capacity crunch would only show up during peak usage periods — when AT&T customers of all kinds pile on their broadband connection at the same time. AT&T’s usage cap regime does next to nothing to mitigate that kind of congestion.  Here’s why:

Since AT&T and other broadband companies routinely claim the average use per customer is well under 20GB per month, and only 2 percent of customers are currently deemed “heavy users” by AT&T, that tiny percentage of customers cannot create sufficient drag on AT&T’s DSL network even if they opened up their connections to full speed traffic.  In reality, the 98 percent of “average” users piling on the network during prime time would be the only thing capable of the kind of critical mass needed to create visible congestion.  What uses more capacity?  Two customers using their 7Mbps DSL lines to stream online videos concurrently or 98 customers all using their 7Mbps DSL lines at the same time for virtually any online activity?

The math simply doesn’t add up.

The Congestion Myth

AT&T targets their broadband customers with an unwarranted, arbitrary Internet Overcharging scheme they cannot effectively explain to customers.

As two week’s of hearings this month have demonstrated, Bell Canada’s similar arguments for its usage caps simply come without any evidence of actual congestion.  In fact, company officials modified their position to talk more about peak usage congestion, a problem that cannot be controlled with a usage cap well in excess of the average consumer’s usage.  In fact, only a speed throttle could control network congestion at the times it actually occurred.  AT&T also ignores when its customers are using its network.  Is a heavy user downloading files at 3 in the morning creating a problem for other users?  No.  Are the majority of their average-usage customers all jumping online after school or work creating a problem?  Perhaps, if you believed AT&T even had a congestion problem.

Industry maven Dave Burstein does not, and Burstein talked to two chief technology officers at AT&T who told him wired broadband congestion is a “minimal” problem for the phone company.

Upgrades and Cord-Cutting, Delayed

Two things usage caps can do is help your company delay necessary upgrades to meet customers’ broadband needs, whether they are “heavy users” or not.  AT&T has shown itself historically to be slow to invest, and cheap when it does.  AT&T’s wireless network is bottom-rated by consumers thanks to inadequate network capacity.  The company elected to upgrade on-the-cheap to an IPTV platform that still relies on copper phone lines to deliver service that simply cannot compete in quality and capacity with Verizon’s FiOS fiber to the home network.  But investors love the fact the company counts every penny, even if it means inconveniencing and overcharging customers for their services, usually offered in duopoly or monopoly markets.

AT&T’s usage caps on U-verse are even less credible than those imposed on their DSL service.  U-verse is a fiber to the neighborhood network with near limitless capacity for broadband and video.  In fact, the only “congestion” comes from the copper phone lines that limit how much bandwidth can be supplied to your individual home.  But no matter how much you use, you will not affect your neighbors because your copper phone line is shared with nobody else.  In fact, the biggest chunk of U-verse’s bandwidth is reserved for their video services, which makes arguments about excessive Internet usage on that pipeline un-credible.

What AT&T’s usage cap does assure is that you will not drop that video package from your U-verse service anytime soon.  That lucrative revenue from expensive video packages cannot be forfeit without a fight, and a nice deterrent in the form of an arbitrary usage cap does wonders to keep that cord cutting to a minimum.

Meters That Don’t Measure

One of the worst ongoing problems with Internet Overcharging schemes like AT&T’s is the broken usage meter.  Stop the Cap! has received hundreds of e-mails from AT&T DSL and U-verse customers who report AT&T’s usage meter is either unavailable, broken, or is wildly inaccurate.  With absolutely no independent oversight, and no consistently accurate usage measurement, charging anyone overlimit fees with a broken meter doing the counting is unconscionable.  Yet AT&T may well try.  The company has already been sued by one law firm for what it alleges is an unfair usage meter on the company’s wireless service — a meter that consistently overcounts usage in AT&T’s favor.

AT&T admits they cannot even accurately measure their own customers' usage.

Once getting over the broken meter, customers are directed to a pointless usage-estimator — the ones that tell you about how many tens of thousands of e-mails you can send and receive under AT&T’s cap regime.  In fact, these statistics are irrelevant for the vast majority of customers who never think of sending 10,000 e-mails or exchanging 2,000 pictures or songs.  That’s because customers do not use the Internet to exclusively do those things.  Even with the guestimator, they are left checking a broken usage meter to ponder whether or not they can watch one more show or download another file without incurring a $10 overlimit penalty (or more).  That “generous” limit AT&T touts suddenly doesn’t look so ample when the company gets to the wildly popular activity of streamed video.  AT&T’s own video warns you can only watch 10HD movies a month over your broadband connection — and absolutely nothing else.  No web browsing, e-mail, or photos or music.  Ten movies a month.  Still thinking of dropping your U-verse video subscription now?

Yet AT&T has the nerve to claim, “Our goal is to provide you with the best Internet service possible.”  Really?

Thankfully, not every member of the investor class is thrilled with nickle-and-diming broadband consumers for usage that costs the providing company next to nothing.

The Economist excoriated AT&T for its unwarranted usage limits on its blog earlier this year:

The use of caps allows providers to dish out bandwidth with one hand and take it away with the other. The companies have vastly increased the capacity of various copper, coaxial and fibre lines, but artificially separate out a portion—at least half and often much more—for video which a set-top box or a broadband modem spits out as an apparently distinct service. Cable firms simultaneously push out hundreds of digital channels, while telecoms firms rely on multiple digital streams from live broadcast or cable TV or on-demand pay-per-view. It is as though the water main were divided as it entered the home and a steady, modest stream was made available for showers and at the tap, while most of it was always at the ready for a coin-operated washing machine.

Increasing speed on the internet portion, which would allow consumers to give up on TV subscriptions, is balanced by capping volume. If a consumer does not monitor usage, his internet access can be withdrawn or, in AT&T’s case, overage fees of $10 charged for every additional 50 GB of usage. […] [That] $10 charge applies whether the limit was breached by 1 MB or a smidgen under 50 GB.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT Usage.flv[/flv]

AT&T’s new video on broadband usage is based on facts not in evidence and only adds to consumer confusion about arbitrary Internet Overcharging schemes.  (4 minutes)

Cable Montana is now Optimum West, Cablevision’s marketing name for the cable systems it acquired from Bresnan Communications.

Earlier today, customers in Billings, Laurel, Park City and Columbus were able to start using upgraded cable, phone, and broadband equipment on the updated cable system.  More than 2,200 Montanans were introduced to the Optimum name in a mailing sent to neighborhoods where service has been upgraded.  But all of the new equipment that comes with the service has created considerable confusion for long-standing Bresnan customers who have been using older Bresnan equipment for years.

The changes have been overwhelming for those used to Bresnan’s modest level of service for more than a decade.  Cablevision, best known for its Optimum service in suburban New York City, Connecticut, and New Jersey, has brought an enormous increase in programming, and improvements in broadband service, for many customers.

“All existing customers in Laurel, Park City and Columbus will be upgraded to Optimum TV by July 20, which will deliver many more channels, including access to more than 100 channels of free HD (high definition), thousands of titles of video on demand and other benefits like faster high-speed Internet and a better phone service with lower prices and more features than are available from any other provider,” says a Cablevision spokesperson.

When it works properly.

The Laurel Outlook reports some customers frustrated with the changeover have found themselves at local cable stores trying to sort out all the problems:

One Laurel customer installed his modem, but was not receiving service. A visit to the Laurel office did not provide answers to his satisfaction, so he drove to the Billings office on Monad Road, where he received two telephone numbers to call for tech support. He called one of the numbers, followed a menu, and was able to troubleshoot with a technician to get his Internet up and running.

A second customer installed her set-top box but was not receiving Optimum TV channels. She called the 1-800 number provided in the mailing packet, but technicians were unable to walk her through the necessary steps to receive service. Frustrated, she drove to the Laurel walk-in center on West First Street and made an appointment for a technician to come to her home. She discovered that not only must she program her television with the new Optimum channel numbers, she must also program the TV-top box with the correct numbers. After doing so, she was able to receive the new channels.

Many customers are likely going to need to reprogram their televisions more than once.  When the upgrades are complete, Cablevision says it plans to unify channel lineups across the area.

Martin

While thousands of West Virginians continue to struggle without any broadband service, the state government is having trouble finding a way to spend up to $40 million in broadband stimulus money on institutional broadband projects that often already have cutting edge fiber networks.

State officials won $126 million in federal stimulus grant money last year, from which the state announced it would lay more than 2,400 miles of fiber optic cable to wire government offices, schools, and libraries.  Now, a vocal critic says a combination of government waste, preferential treatment for the state’s largest phone company — Frontier Communications, and bad planning could leave up to $40 million of the grant money on the table, unspent for better broadband.

Jim Martin, president of business broadband provider Citynet, says the state overestimated the number of public facilities that need broadband improvements.  Many of the facilities involved already have high speed service, and do not require additional infrastructure.  As the grant expires, Martin says he would not be surprised if the state only managed to fund the installation of 300 miles of fiber.

Martin believes funds should be redirected to bolstering the state’s “middle mile” network — fiber infrastructure that would serve as an open network backbone to ensure capacity exists to support growing broadband demands in the state.  Instead, Martin told the Charleston Gazette, the state has been spending money providing fiber broadband to small libraries with fewer than a dozen computers that are unlikely to have the resources to pay the monthly fees Frontier Communications will charge for the service.

“There’s no value to any of this to anyone but Frontier,” Martin said.

In fact, Martin believes many of the current projects funded by taxpayer dollars deliver enormous benefits to Frontier’s bottom line, but only incremental improvement to some institutional users.

Martin claims Frontier has, in some cases, only spent enough money to install fiber from the pole to the building. That assures Frontier of being the only provider that can deliver ongoing service to institutional users.  Martin has a dog in this fight — his company competes with Frontier for business service contracts.

West Virginia's current broadband map shows large areas of the state have access to no broadband at all. (Olive color = No broadband.) (Click to enlarge)

Before the grant expires in February 2013, the state is hurrying to bolster its list of would-be recipients.

Jimmy Gianato, the state’s homeland security chief, said his office recently identified 330 additional “replacement locations” — higher education facilities, schools, health departments and state-owned hospitals — that could be eligible for the project, according to the newspaper.

Not on the list are individual consumers and small businesses who currently do not have access to any broadband service.  One of the ongoing problems of broadband stimulus funding is that public funds are often available to bolster broadband for state and locally-owned institutions, such as government offices, health care facilities, schools and libraries, but no funding to improve infrastructure for individual broadband service for “last mile” users.  This can result in Cadillac-style installations for small schools and libraries who win superb quality networks they ultimately cannot afford to operate on an ongoing basis.  For most, that service would come from Frontier Communications.

Martin already accused the state of investing in more than 1,000 routers without being certain if they were needed or where they would be installed.  At $20,000 each, Martin called the routers “Lamborghinis” and suggested they were largely unnecessary.