Verizon hopes to herd its smartphone owners onto limited use data plans

Engadget is speculating Verizon Wireless is planning to end its unlimited data plan for smartphone customers July 29th.  In a brief story published last night, the site claimed it had heard rumors of the impending demise of unlimited at the nation’s largest cell phone company:

We’re hearing that Big Red intends to move to some sort of tiered bucket strategy on July 29. We don’t have details on whether the pricing will be identical to AT&T’s ($25 for 2GB, $15 for 200MB), but we imagine it’ll be within shouting distance if not. Of course, Verizon has been sending this message for a long time — even before AT&T was — so it shouldn’t come as a surprise to anyone that this is going down. You might say that Droid Does Caps, eh?

Verizon and AT&T have followed each others’ relentless price increases, tricks and traps for the last few years — forcing customers to accept mandatory service “add-ons” when buying the latest phones, paying higher costs to terminate contracts early, and driving customers onto higher priced service plans bundling services and features many customers do not want.

It therefore comes as no surprise Verizon would follow AT&T’s lead on severely restricting customers’ data use, even though Verizon does not suffer from the level of congestion AT&T has.

We expect Verizon will announce data pricing identical to that offered by AT&T.

However, existing customers can be grandfathered into today’s unlimited plans, so if you think you’ll need unlimited data on Verizon’s network, you have until the end of the month to sign up for a plan should Engadget’s report turn out to be true.

Rogers Communications Monday began their latest Internet Overcharging scheme on Canadian broadband customers — they’ve doubled the maximum overlimit penalty from $25 to $50 for customers who exceed the cable company’s arbitrary broadband usage allowances.

It’s a fact of life for anyone living with a provider that wants to charge too much for broadband service.  Like the credit card industry, the tricks and traps keep on coming as providers seek to monetize everything they can to extract as much money from customers as possible.

For some providers like Bell, the trick is to gradually reduce your usage allowance, exposing more and more customers to overlimit fees (the company even sells an insurance plan to protect you from their audacious pricing).  For others, the fee trap comes from gradually increasing the maximum overlimit fee until there is no maximum.

Rogers has chosen the latter method, effectively passing through massive rate increases for Canadians that dare to use too much.

Originally, Rogers Extreme service was priced at $60 a month for 10/1 Mbps service with a 95 GB cap.  Customers who traditionally exceeded that paid $1.50 per gigabyte in overlimit fees.  With a $25 maximum penalty, many customers just accepted the fee as their ticket to unlimited broadband.  Now, Rogers has conceded a quarter to customers, lowering the per gigabyte penalty rate to $1.25.  But for customers who still regularly exceed their allowance, the charges really add up.  That $60 a month now balloons to $110 per month for exactly the same unlimited service customers used to enjoy for less.

That forces customers like the Globe & Mail’s Michael Snider to make some choices:

1. Reduce usage — a win for Rogers and broadband rationing for him;
2. Upgrade to a higher tier service plan to get a better allowance — a win for Rogers and a higher bill for Snider.  Extreme Plus has an allowance of 125 GB, just a 30 GB difference, for an additional $10 a month;
3. Grin and bear it — a win for Rogers and a future that guarantees him bigger bills indefinitely.

This is the type of move that may force customers who regularly approach or exceed their cap to seriously consider upgrading their service package.If that’s part of Rogers’ plan, it worked.

I just bumped up my service from Extreme to Extreme Plus (if you do the same, inquire about the promotion that offers $20 off Internet for the first six months if you lock in for a year — that’s upgrading only). So now, I’ll be getting 25-Mb download speeds (still a measly 1-Mb upload, though) and a cap of 125 GB a month and, once the promotion ends, will be paying $14 a month more ($10 for the service and $7 for the modem rather than $3).

Call me a sucker, but twice in the past year I have exceeded my 95 GB cap and paid an extra $25 on my bill — once after backing up several gigs on an online backup service and once after downloading a few movies on my Xbox.

But Snider also faces, by design, the one-two punch of Internet Overcharging schemes.  Not only do they fatten provider profits, they also discourage him from using his broadband service, fearing a higher bill.  Even better, they discourage cord-cutting — relying on your broadband service and dropping your cable-TV package.

I am discovering that I’m actually limiting my consumption of some totally legitimate services because I’ve no desire to pay extra on my Rogers bill at the end of the month.

Take for example Microsoft Xbox’s movie service. After waiting for what seemed eons for some kind of a legit movie download service, I finally have access to one that has a list of movies that I’d actually like to see, but it’s proving too expensive to really enjoy it regularly. Reason is, downloading an HD movie eats up more than 11 GB of my bandwidth — more than 10% of my monthly allotment (before I upgraded) for one freaking movie. That goes for games too. It seems as though distributors are leaning more and more to online delivery, but at 6 or 8 GB per game, again, that eats up a lot of bandwidth.

Being the gatekeeper for broadband distribution and also being a content distributor has its advantages.  If the competition starts getting too hot and heavy, locking down the distribution platform guarantees no competitor will ever get the best of you.

Whatever you do, don't turn off this modem, despite the fact you're paying for traffic it receives 24/7. Unplugging a cable modem could "damage it" according to Rogers.

Rogers claims its all about costs from increased broadband consumption, but one look at their pricing scheme proves that wrong.  Rogers reserves the biggest penalties of all for its lightest-use customers.  Those on Rogers Ultra-Lite tier suffer with barely-broadband speeds of 500/256 kbps with a usage limit of just 2 GB for a ridiculous $27.99 per month.  The penalty rate for customers who can hardly be described as “power users” is a whopping $5 per gigabyte.  They pay more because they impact the network more?  How does that work?

The Canadian Radio-television and Telecommunications Commission (CRTC), the agency responsible for oversight of telecommunications services in Canada is no help.  They’ve become a de facto telecom industry trade association, rubber-stamping approval of whatever providers want.  The result is expensive, usage-limited, speed-throttled broadband service across the country.

What can you do to control your monthly broadband bill Rogers wants to raise?  Their advice is basically to use less of the broadband service you paid good money to get.  Oh, and despite the fact whenever your cable modem is powered on you are bombarded with constant traffic which eats into your allowance, whatever you do, don’t leave it unplugged — it will “damage it.”  From Rogers Internet FAQ:

We STRONGLY recommend that you do not turn off your modem when you are away from home. Your cable modem has been designed to remain powered at all times. Regularly turning it off and on may result in damage to your cable modem.

…and damage to our profits.

That's not all that expanded in Reno... customer's broadband bills faced $1/GB overlimit penalties as part of an Internet Overcharging experiment

AT&T’s experiment with usage caps appears to have lost them loyal customers, and generated numerous complaints against AT&T with the Better Business Bureau regional offices in Nevada and Texas for false advertising.  Now there are indications AT&T will wrap up the entire experiment by this April and “study the results.”  Stop the Cap! reader John wrote to say the nightmare may be ending… for now.  At least one of our readers arguing with intransigent AT&T executives heard likewise.

AT&T last year subjected Beaumont, Texas and Reno, Nevada to a trial forcing a usage allowance between 20-150 gigabytes per month on customers, depending on the type of broadband plan selected.  The proposed overlimit fee?  $1.00 per gigabyte, although problems with their usage meter often kept overlimit fees off customer bills.

We’ve documented the howls of complaints from customers who were falsely sold an “unlimited” plan from AT&T and were never notified, or notified after signing up, of the existence of the Internet Overcharging scheme.  Some customers received express mail letters officially notifying them of the scheme, others received robocalls.  Complaints to the Better Business Bureau usually got any excess charges refunded, and some managed to secure a complete exemption from the usage cap trial, under threat of canceling their accounts.

Stop the Cap! reader Robin is a typical example of a customer who was sold a bill of goods by AT&T’s marketing, only to be punished with the fine print after signing on the dotted line.

“I just got my Express letter in the mail today. My internet was hooked up yesterday – no one ever said anything about any cap! I was in shock when I received the letter in the mail, I have never heard of anything like this. I live about 30 minutes out of Reno. Needless to say I am very very upset and trying to figure out what I am going to do now as I know I will go over the cap every month, I can’t afford that and I can’t afford cable internet at this time either. AT&T sucks and so does their customer service.”

Robin joins many other customers in both communities stuck in a trial that even some AT&T customer service representatives don’t understand.  Robin’s calls to customer service met with claims the account could not be found, and transfers to four different AT&T departments before being able to address the usage cap surprise.

Albert, another reader, was similarly surprised.

“They are fraudulent in every respect. The state attorney should look into this. They say “unlimited” and when you sign up, they send you a little email saying you are screwed [with the trial],” he writes.

AT&T’s response to Albert was essentially “tough cookies” and if he didn’t like it, he could cancel.

Our readers in Beaumont went through the same AT&T Confusion Circus, transferred between departments until someone recognized the caller was a lucky winner of an Internet Overcharging experiment.

In both cities, delivering an effective message of customer contempt with AT&T’s usage cap scheme means filing a complaint with the Better Business Bureau.  As an accredited member, AT&T values its rating very highly, and targeting complaints to the Bureau forces them to spend time and money to respond.  Better yet, AT&T executives don’t like it one bit, as Albert writes:

“Go to the Southern Nevada Better Business Bureau and file a complaint. I just had the VP of Regional West of AT&T call.  She was pissed that I filed a complaint, and now she has to personally reply. She hung up on me.”

Being an active consumer willing to make your voice heard is an effective way to deliver the message pricing and usage tricks and traps are unacceptable.  Better yet, it annoys providers with dollar signs in their eyes, especially when canceling your service.

Albert was told the nightmare ends April 1st, when the trial wraps up, but now is the time to deliver the final protest AT&T cannot ignore.

April 1st is an ironic date — the first anniversary of  Time Warner Cable sharing word of its own Internet Overcharging experiment in Austin, San Antonio, Greensboro, NC and Rochester, NY. After two weeks of protest, Time Warner Cable shelved their experiment.

If you’re a resident of Reno or Beaumont, it’s critically important to deliver AT&T a message they can understand:

1. Contact the local media and request they publicize the ongoing controversy over Internet Overcharging schemes;
2. Contact your local and federal elected officials and let them know AT&T’s schemes are unacceptable.  See our “Take Action” section regarding support for legislation that would outlaw such schemes;
3. File a detailed complaint with the Better Business Bureau, particularly emphasizing any lack of disclosure about the experiment, bait and switch advertising, ripoff pricing, etc.  Demand an immediate and full refund for any overage charges and a free pass to cancel AT&T services without any early termination fees.
4. Reno residents — contact Barbara DiCianno at 775-334-3112. She is the mayor’s assistant. Call her and ask to have an investigation launched regarding AT&T’s discrimination against Reno with overcharging schemes that put the city at a distinct broadband disadvantage.  Local elected officials can deliver a strong political message to AT&T that such overcharging schemes will lead to robust support for re-regulation of AT&T’s broadband business to protect consumers.
5. Tell AT&T you will never remain a customer of a provider that has Internet Overcharging pricing schemes.  Tell them in no uncertain terms usage limits and usage based billing are unacceptable, and you will cancel service the moment they attempt to implement either.

A year ago, it was the residents of Beaumont and the other cities impacted by Time Warner Cable’s overcharging scheme that fought on the front line to protect every Time Warner Cable customer from facing a tripling of their price for broadband service.  Today it’s Reno and Beaumont fighting for AT&T customers, both inside their own communities and those nationwide.  As Albert reminds us:

“We will be the ones that determine if this continues or stops here and now.”

Frontier's latest promotion promotes one price, but you'll pay considerably more thanks to profit-padding fees, surcharges, and taxes.

Frontier Communications is mass-mailing its latest DSL promotion to customers — a year of their fastest tier DSL service for just $20.10 per month.

Labeled “FrontierFast,” the promotion claims you will get a “groundbreaking value” on their fastest Internet service for $20.10 per month, with a Price Protection Plan and a $4.50 monthly modem fee.  Frontier says you will enjoy:

• Breakthrough speeds at an unbeatable price
• Dedicated, unshared connection that won’t bog down during peak hours
• Safe, secure Frontier Mail and a personal online portal powered by Yahoo!
• Free professional installation
• A three month free-trial of Peace of Mind Hard Drive Backup and unlimited technical support.

Sounds reasonable… until you explore the terms and conditions that are attached to it.  Frontier has created a minefield of tricks and traps designed to maximize their profits and make you jump through hoops to minimize your exposure to them.

Let’s explore:

1. The $4.50 monthly modem fee makes it $24.60 for 2010.  The modem fee is nothing more than profit-padding.
2. That “Price Protection Plan” is really a nice way of saying “contract term” committing you to sticking with Frontier broadband for one year, or face a $200 early cancellation penalty.
3. That “Peace of Mind” trial is anything but if you forget to cancel before the three free months are up.  If you don’t they’ll charge you an extra $9.99 a month for the service.  Forgot to cancel during the trial?  Then pony up a $50 cancellation fee if you want out.  At least the free trial is optional.  Do yourself a favor and opt out before Frontier opts-in your wallet.
4. The promotion is available to new customers only, and you are required to bundle it with phone service -and- pay installation fees for that phone line, if you don’t have one already.
5. Service is subject to availability, speeds are not guaranteed, and your credit will be checked before you get service.
6. Taxes and surcharges apply, and they do add up fast.  You can easily add an additional $10 when combining the modem rental fee with the other fees Frontier collects for various taxing authorities.
7. Don’t forget Frontier defines an appropriate amount of usage at just 5GB per month in their Acceptable Use Policy.

Broadband service shouldn’t have to come with a minefield of fine print and profit-padding fees and surcharges.  The out-the-door price should be published so customers can truly understand what they are getting into, before exposing themselves to those steep cancellation fees.  They should also not have to worry about a ridiculous 5GB limit in Frontier’s Acceptable Use Policy.