The Canadian Radio-television and Telecommunications Commission (CRTC) has issued new guidelines for consumers with complaints about their Internet Service Providers’ throttling practices that puts the burden of proof on the consumer to demonstrate an ISP is engaged in wrongful behavior before the CRTC will act.

The revised guidelines appear to come in response to complaints from consumers who have been subjected to dramatically reduced speeds when using Rogers Cable Internet service to play online games while also running file sharing software in the background. Rogers’ speed throttling technology appears to be unable to discriminate between game traffic, which is not subject to speed reductions, and file swapping traffic, which is.

The Canadian Gamers Organization filed a formal complaint with the CRTC this summer accusing Rogers of engaging in Network Neutrality violations.

The CRTC gave Rogers until today to fix the errant speed throttle or respond to the agency with an explanation for the delay.  As of this hour, Rogers appears not to have responded.

Last week, the CRTC began a crackdown of its own — against consumers bringing Internet complaints.  The CRTC modified the complaint procedure to instruct consumers to first work with their ISP and application developers to resolve any outstanding issues before filing complaints.  From the updated CRTC Guidelines:

How to make an Internet performance complaint

Before you complain to the CRTC about an Internet traffic management practice, you should first contact your Internet service provider to see if it can resolve the issue.

If your service provider doesn’t address your complaint to your satisfaction, and you believe that your service provider’s traffic management practices are not compliant with the CRTC’s policies, you can complain to the CRTC. Before doing this, make sure that you know your rights.

Rogers chokes the speed of undesireable peer to peer file traffic, but other applications like online gaming are also impacted. Consumers are complaining about the collateral damage.

What to include in your complaint

In your complaint, explain why you think your service provider’s traffic management practice doesn’t meet the requirements set out in their traffic management policy.  It is not necessary to provide technical details about the problem, but the CRTC needs enough information to understand the problem.  Please, clearly describe:

• What part of the traffic management policy you believe the provider has not followed
• When the problem occurred, and whether it is a recurring problem
• Which software program, or application, has been affected
• How the application has been affected
• The steps you’ve taken to try to resolve the issue with your service provider, including your provider’s response to your complaint

Consumer groups are not pleased the CRTC won’t engage directly in independent oversight of ISP speed throttling practices regardless of consumer complaints.

“We are not a consumer-protection agency,” the CRTC’s Denis Carmel was quoted as saying back in July.

“The CRTC must start enforcing its own policies,” says Canadian Gamers Organization co-founder Jason Koblovsky. “The CRTC needs to put a plan forth to ensure that regular audits are done on Internet Providers rather than relying solely on consumer complaints. We are asking the public to tell the CRTC that enough is enough: the Commission needs to take a much more proactive role in ensuring that Internet providers play by the rules. We are ready to act politically and force a solution here if need be.”

Koblovsky expanded his views on the subject in a blog entry:

We find this policy update to be more of an insult to consumers, and puts the responsibility of monitoring ISP’s use of [speed throttles] directly on the back of consumers. This is not acceptable by any means, and none of the policy recommendations we made that were thrown out by the CRTC in our initial complaint were taken into consideration, or for that matter seriously by the CRTC. This is a slap in the face to what we have been fighting for, and that is the CRTC has the responsibility to follow through, monitor and enforce its policies.

[…] Not one ISP has been found by the CRTC to be acting against net neutrality policy since they acted on this in 2009 with several complaints sent to the CRTC by consumers being dismissed due to lack of evidence over years of enforcement failure by the commission. There is no indication here that the CRTC is going to be dealing with a very high evidentiary thresh hold put on the consumer to launch a CRTC investigation in this policy update. All this update does is provide information on CRTC complaints procedures that are already in place, and consumers are already abiding by.

[…] Maybe it’s time we start acting politically on this issue instead, drop the CRTC from the picture to force the CRTC through legislation to listen to consumers, and start putting forth a much better effort on their responsibility to the public to enforce their policies. Or better yet, start billing the CRTC for our efforts on each complaint we become a part of.

Read this excellent analysis of game throttling and how Canadian ISPs master the art of Internet Overcharging.

AT&T and Verizon: The Doublemint Twins of Wireless

Mirroring AT&T’s announcement last month that it would begin implementing speed throttles for wireless unlimited data plan customers who are among the “top 5% of users,” Verizon Wireless quietly made changes last week allowing the company to throttle its own unlimited data plan “heavy users” who consume more than 2GB of usage per month on its 3G network.

But Verizon claims it isn’t actually throttling the speeds of customers, it is simply engaging in “network optimization practices” and using “network intelligence” to reduce speeds (sometimes to near-dial-up) while connected to a “congested cell site.”

That will prove a distinction without much difference to customers who rely on 3G data usage using cell sites Verizon deems congested.  They may also find the time spent in Verizon’s penalty box unusually long.

“You may experience [reduced speeds] for the remainder of your then current bill cycle and immediately following bill cycle,” Verizon’s FAQ states.

That can mean customers paying $30 a month for an “unlimited data plan” may find 3G usage a very slow experience for a maximum of two months before they are off Verizon’s throttle list.

The new speed throttle policy began Sept. 15.  Verizon:

Network Optimization practices and throttling is network intelligence.  With throttling, your wireless data speed is reduced for your entire cycle, 100% of the time, no matter where you are. Network Optimization is based on the theory that all customers should have the best network possible, and if you’re not causing congestion for others, even if you are using a high amount of data, your connection speed should be as good as possible. So, if you’re in the top 5% of data users, your speed is reduced only when you are connected to a congested cell site. Once you are no longer connected to a congested site, your speed will return to normal. This could mean a matter of seconds or hours, depending on your location and time of day.

Verizon has not said exactly how many of its cell sites it deems as “congested,” at what times that congestion is most likely to occur, and admits there is currently no way customers can learn when they are connected to a congested site so they can make an informed decision about their usage.

But the company does say customers can avoid the penalty:

1. Upgrade to a 4G phone and hope for good 4G LTE coverage.  Customers using Verizon’s 4G network are not currently subject to a speed penalty for “excessive use.”
2. “Upgrade” to a tiered data plan with usage allowances.  Verizon will not throttle the speeds of customers who are not on unlimited data plans.
3. Reduce your data usage, especially in areas where congestion is likely.

Choke collars are in season at AT&T and Verizon Wireless, leaving Sprint's unlimited service looking more consumer-friendly by the day.

Those suggestions require potentially pricey new handsets, require customers to abandon their existing unlimited data usage plan, or simply get you thinking twice before launching a data session, fearing being grounded for up to two months with a dramatically reduced level of service.

The biggest impact of the network speed throttles will be among data-heavy iPhone users.  Apple’s iPhone doesn’t support 4G, and is likely to continue to rely on 3G network coverage when the next version of the popular phone is introduced in October.  Ultimately, Verizon’s new policy means iPhone devotees using more than 2GB per month may have to abandon their phone or their unlimited data plan if they want to avoid the throttle.

Verizon also found a way to keep customers from canceling penalty-free, noting contract changes that reserved the right to implement network management techniques were made in February.  The 60-day window for the “materially-adverse” contract change cancellation policy expired in April.  Verizon:

By alerting customers in February 2011, and including the notice in our terms and conditions as of February 3, 2011, we made sure customers knew we began reserving the right to implement Network Optimization practices.  In February 2011, we began alerting customers:

• Data Management – (note: now named “Network Optimization” to more accurately describe the tools) – Verizon Wireless may reduce data throughput speeds in a given bill cycle for customers who use an extraordinary amount of data and fall within the top 5% of data users.  The reduction will only apply to those using congested cell sites and can last for the remainder of the current and immediately following billing cycle.  The reductions will only apply when appropriate in locations and at times of peak demand.
• Data Optimization – (note: now named “Video Optimization” to more accurately describe its function) – Verizon Wireless is implementing optimization and transcoding technologies in its network to transmit data files in a more efficient manner to allow available network capacity to benefit the greatest number of users, and although unlikely, the process may minimally impact the appearance of the file as displayed on the mobile device.

Interestingly, AT&T’s own speed throttle penalty was estimated to kick in after 4GB of usage, not the 2GB Verizon is using as its benchmark for “network optimization.”  Verizon also says customers with their Mobile Hotspot feature will find that usage exempted from counting towards the 2GB threshold.

Verizon has opened up a new web page explaining the throttling policy.

[Thanks to Stop the Cap! reader Mileena, among many others, who shared the news with us.]

While wireless providers currently treat Wi-Fi as a friendly way to offload wireless data traffic from their 3G and 4G networks, the wireless industry is starting to ponder whether they can also earn additional profits from regulating your use of it.

Dean Bubley has written a white paper for the wireless industry exploring Wi-Fi use by smartphone owners, and ways the industry can potentially cash in on it.

“It is becoming increasingly clear that Wi-Fi access will be a strategic part of mobile operators’ future network plans,” Bubley writes. “There are multiple use cases, ranging from offloading congested cells, through to reducing overseas roaming costs and innovative in-venue services.”

Bubley’s paper explores the recent history of some cell phone providers aggressively trying to offload traffic from their congested 3G networks to more-grounded Wi-Fi networks.

Among the most intent:

• AT&T, which acquired Wayport, a major Wireless ISP, and is placing Wi-Fi hotspots at various venues and in high traffic tourist areas in major cities and wants to seamlessly switch Apple iPhone users to Wi-Fi, where available, whenever possible;
• PCCW in Hong Kong;
• KT in the Republic of Korea, which has moved as much as 67 percent of its data traffic to Wi-Fi;
• KDDI in Japan, which is planning to deploy as many as 100,000 Wi-Fi Hotspots across the country.

America's most aggressive data offloader is pushing more and more customers to using their Wi-Fi Hotspots.

Bubley says the congestion some carriers experience isn’t necessarily from users downloading too much or watching too many online shows.  Instead, it comes from “signalling congestion,” caused when a smartphone’s applications demand repeated attention from the carrier’s network.  An application that requires regular, but short IP traffic connections, can pose a bigger problem than a user simply downloading a file.  Moving this traffic to Wi-Fi can be a real resource-saver for wireless carriers.

Bubley notes many wireless companies would like to charge third-party developers fees to allow them access to each provider’s “app store.”  Applications that consume a lot of resources could be charged more by providers (or banned altogether), while those that “behave well” could theoretically be charged a lower fee.  The only thing preventing this type of a “two-sided business model,” charging both developers and consumers for the applications that work on smartphones, are Net Neutrality policies (or the threat of them) in many countries.

Instead, Bubley suggests, carriers should be more open and helpful with third party developers to assist them in developing more efficient applications on a voluntary basis.

Bubley also ponders future business strategies for Wi-Fi.  He explores the next generation of Wi-Fi networks that allow users to establish automatic connections to the best possible signal without ponderous log-in screens, and new clients that can intelligently search out and connect to approved networks without user intervention.  That means data traffic could theoretically be shifted to any authenticated or preferred Wi-Fi network without users having to mess with the phone’s settings.  At the same time, that same technology could be used to keep customers off of free, third party Wi-Fi networks, in favor of networks operators run themselves.

Policy controls are a major focus of Bubley’s paper.  While he advocates for customer-friendly use of such controls, sophisticated network management tools can also be used to make a fortune for wireless providers who want to nickle and dime customers to death with usage fees, or open up new markets pitching Wi-Fi networks to new customers.

Bubley

For example, a wireless carrier could sell a retail store ready-to-run Wi-Fi that pushes customers to a well-controlled, store-run network while customers shop — a network that forbids access to competitors or online merchants, in an effort to curtail browsing for items while comparing prices (or worse ordering) online from a competitor.

Customers could also face smartphones programmed to connect automatically to a Wi-Fi network, while excluding access to others while a “preferred” network is in range.  Wireless carriers could develop the same Internet Overcharging schemes for Wi-Fi use that they have rolled out for 3G and 4G wireless network access.  Also available: speed throttles for “non-preferred” applications, speed controls for less-valued ‘heavy users,’ and establishment of extra-fee “roaming charges” for using a non-preferred Wi-Fi network.

Bubley warns carriers not to go too far.

“[We] believe that operators need to internalize the concept of ‘WiFiNeutrality’ – actively blocking or impeding the user’s choice of hotspot or private Wi-Fi is likely to be as divisive and controversial as blocking particular Internet services,” Bubley writes.

In a blog entry, Bubley expands on this concept:

I’m increasingly convinced that mobile device / computing users will need sophisticated WiFi connection management tools in the near future. Specifically, ones that allow them to choose between multiple possible accesses in any given location, based on a variety of parameters. I’m also doubtful that anyone will want to allow a specific service provider’s software to take control and choose for them – at least not always.

We may see the emergence of “WiFi Neutrality” as an issue, if particular WiFi accesses start to be either blocked or “policy-managed” aggressively.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/The Future of Wi-Fi.flv[/flv]

Edgar Figueroa, chief executive officer of The Wi-Fi Alliance, speaks about the future of Wi-Fi. Wi-Fi technology has matured dramatically since its introduction more than a decade ago and today we find Wi-Fi in a wide variety of applications, devices and environments.  (3 minutes)

Leap Wireless is trying to save face on less-than-impressive second quarter financial results showing the company is losing its mobile broadband customers who are increasingly weary of Cricket’s price increases and speed throttles.

The company lost at least 132,000 broadband customers since the first quarter, mostly due to price increases, reduced usage allowances and “network management” practices, which reduce speeds to near dial-up for customers who are deemed to be “using too much.”

“On broadband, we tightened our focus to more profitable customers while shedding less profitable ones,” said Leap Wireless CEO Douglas Hutcheson.

Internet Overcharging Facts of Life: What 'Network Management' tools are really used for. (Courtesy: Cricket's Second Quarter Results Investor Presentation)

Cricket recently announced increased pricing on their usage limited plans: $45/month for 2.5GB, $55/month for 5GB, or $65/month for 7.5GB.

With a less-than-robust regional 3G network and higher pricing, broadband customers have decided to take their business elsewhere, despite the company’s recently announced expanded data roaming agreement with Sprint.

Cricket acknowledges their “increased network management initiatives” are partly to blame for the loss, but the company also says increased prices for mobile broadband devices, which used to be available for free after rebate, are also responsible.  Cricket’s least expensive mobile broadband modem now runs just under $90.

Company officials told investors the losses “were expected,” and that the company has been trying to make up the difference with higher value smartphone data plans.  Mobile broadband customers tend to consume more data than smartphone users, so the company’s emphasis on smartphone data users, who use less, will deliver increased revenue at a reduced cost.

Cricket’s CEO explains the company’s renewed focus on keeping highly-profitable mobile broadband customers while effectively getting rid of “heavy users” who have been targeted with aggressive speed throttling over the past year, and now face higher prices for lower usage allowances. Also explored: Cricket’s future 4G LTE network buildout.  August 3, 2011.  (4 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Cricket's declining mobile broadband business

In fact, the company’s presentation to investors credits network management tools for driving away “higher usage customers,” allowing Cricket to reap the benefit of “improved revenue yield per gigabyte.”  In short, that means Cricket profits handsomely from data plans they hope customers will only occasionally use.

One of Cricket’s biggest product priorities this year is pitching its Muve Music service, bundled into an all-inclusive $55 wireless prepaid phone plan.  It gives Muve phone customers unlimited access to an enormous downloadable music library accessed on the phone.  Since the service does not allow customers to transfer the music to other devices, record companies are happy to participate.

The biggest downside for some is that the Muve phone becomes your music player — a phone many customers consider a work in progress.  Some critics have labeled the service a “total fail” because of sound quality and DRM restrictions. But since the service is already bundled into the wireless plan at no additional cost, more than 100,000 customers are using it, downloading at least 130 million songs since it was first introduced in January.

Muve Music is another way Cricket is trying to differentiate itself from other wireless providers, and the company may try to expand the Muve Music service to much-more-profitable smartphones in the near future. Cricket hopes to begin selling no-contract smartphones at prices below $100 by Christmas.

Cricket executives answer questions from Wall Street about how the company intends to deal with a decline in mobile broadband customers, and explains their use of network speed throttles. Cricket plans to “follow industry trends” and experiment with “session-based” throttles sometime next year. These allow customers to pay an extra charge to temporarily remove the speed throttle when they need additional bandwidth. It’s just one more source of lucrative revenue from conjured up network management schemes.  August 3, 2011.  (4 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Cricket is also planning further expansion of its ‘welfare wireless’ plan — a Universal Service Fund-backed home phone replacement for customers receiving public assistance.  The Lifeline USF subsidy is designed to provide affordable home telephone service to the most income-challenged among us.  Many landline providers charge around $1 a month for the service (before fees), and then charge for every call made.

Cricket’s implementation of this subsidy could draw some controversy because it delivers a $13.50 monthly discount off -any- of their rate plans.  That means qualified customers could pay just over $40 a month for a high end smartphone service plan, subsidized by every telephone ratepayer in the country.

Cricket also plans to launch LTE 4G service starting in early 2012.

Cricket plans to introduce 4G LTE service in 2012.

AT&T's new choke collar for "unlimited use" data plan customers, ready for wearing Oct. 1

Now that Verizon Wireless has stopped signing up new customers for its unlimited usage data plan, AT&T plans to start targeting its grandfathered unlimited-data customers with speed throttles that will effectively limit the company’s “unlimited use” plan.  And the company is trying to suggest approval of its merger with T-Mobile might prevent its growing use.

AT&T says effective Oct. 1, the top 5 percent of its wireless users will receive a warning message before their speeds are cut to near-dial up for the remainder of the billing cycle.

“We’re taking steps to manage exploding demand for mobile data,” said the company in a statement.  AT&T added that “nothing short of completing the T-Mobile merger” will effectively solve the company’s network capacity issues.

“The planned combination of AT&T and T-Mobile is the fastest and surest way to handle the challenge of increasing demand and improving network quality for customers,” said AT&T.

With Verizon Wireless’ exit as a competitive alternative for unlimited data, AT&T’s newly announced speed throttle may not pose much of a risk for business when implemented, as infuriated customers have just one remaining provider offering unlimited data – Sprint.

While AT&T has not specified an exact amount of data usage that will put users in the penalty corner, they did say most of those facing throttling are “streaming video or playing some online games.”

Some AT&T customers use their unlimited wireless plans as a home broadband replacement — an action that could easily bring back a dial-up experience when the speed throttle kicks in.

Only customers on “unlimited use” plans will face AT&T’s special speed treatment.  Those paying for usage-limited packages are exempt.

AT&T’s ongoing hard-sell for the merger has not been well-received by some on Capitol Hill.

Sen. Al Franken (D-Minn.) blamed AT&T for its lack of willingness to spend money on improving its own network infrastructure for self-inflicted network capacity problems.  Franken believes the merger would be anti-competitive and anti-consumer.

In letters to the Department of Justice and Federal Communications Commission, Franken spelled out in great detail why approving the merger does not make sense:

“The competitive effects of a merger of this size and scope will reverberate throughout the telecommunications sector for decades to come and will affect consumer prices, customer service, innovation, competition in handsets and the quality and quantity of network coverage. These threats are too large and too irrevocable to be prevented or alleviated by conditions,” wrote Franken.

The International Business Times summarized many of Franken’s larger points:

• AT&T owns more spectrum than any other company, yet AT&T has been plagued with delays in rolling out infrastructure to support spectrum it has been allocated.  The quality of the service it provides is consistently ranked last amongst the national carriers, and it continues to use spectrum in an inefficient manner;
• Many of [AT&T’s] spectrum licenses remain undeveloped, including $9 billion worth of some of the most valuable “beachfront” spectrum;
• Other national wireless carriers have been aggressively preparing for this crunch. However, unlike the other wireless providers, AT&T has not visibly taken decisive steps to prepare for the coming crunch, despite the fact that AT&T should have recognized the need for additional investment shortly after introducing the iPhone in 2007;
• AT&T only increased its spending on wireless infrastructure by one percent in 2009. Although AT&T will point out that one percent is still a significant number, Verizon made the decision to increase its capital spending by 10 percent in 2009/9 and Verizon is now in a much better position when it comes to spectrum capacity.