Just as in the United States, the promises made by satellite broadband providers are turning out to be too good to be true.

In Great Britain, commercial broadband providers have argued satellite Internet access is a better solution for rural residents because wiring out-of-the-way places is “too uneconomical.”

Despite promises of 20Mbps service from satellite operators, customers report actual speeds are well below 1Mbps at the times they actually want to use the Internet. Unlimited access is also increasingly a thing of the past, replaced with usage caps of 50-60GB, with unlimited usage from 11pm-7am.

Providers deny any serious problems, pointing to speed test tools developed and released by the ISPs showing speeds are theoretically great. But browsing the public Internet suggests otherwise.

Avonline customers have a very active ongoing discussion complaining that £65 satellite broadband should work better:

For past three weeks, the service takes a dive in the evening, I thought this started about 7pm but having tried it earlier, it’s more like 5pm and today about 4pm. Speed tests provided by Avonline suggest I am getting 20/5Mbps but all other tests suggest between 1 and 2Mbps download and ?? upload. Often their own speed test stalls on the upload altogether or eventually returns a result of 0.1Mbps or similar.

As a family, we come home from work and school and want to watch things online at a time to suit us as terrestrial TV is a bit dire. The service is unavailable at this key time and remains down until 1 or 2 am.

Unlimited customers paying £75 per month have been told they are “abusing” the service and that it has effectively run out of capacity and is oversold.

“Unfortunately we cannot do much about the bandwidth on the shared network during peak hours,” came one response from Tooway, another satellite ISP that recently disclosed it will only sell unlimited service to 20,000 customers and wants assurances customers are using their accounts for private, family, and personal use only before the overnight usage caps come off.

*-Only applies at 3am.

But even then, some customers say pervasive speed throttling accomplishes the same thing as a strict cap – it keeps customers away from the service. One Tooway customer shares his dissatisfaction:

The Fair Use policy posted by ToowayUK has only just been introduced. Prior to this there was just boilerplate language that boiled down to “we can do anything at any time” (not that different from the FUP language of any other ISP).

Of course what is really a joke here is that the “unlimited” service actually has a 60GB cap – the traffic management policy works just the same way if we go beyond 60GB as when a capped customer goes beyond their cap.

ThinkBroadband notes satellite ISPs may also have insufficient capacity back on earth, but later reports show satellite bandwidth capacity is also a growing issue:

The KA satellites carry many transponders, but these are usually spread out to cover the whole of Europe meaning that for any particular satellite there may only be 3 or 4 transponder beams for the whole UK, and as a transponder has a throughput limit of 475Mbps this could prove a bottleneck. Oddly the fact that the speed probe tests gave good results, suggests the issue may not be satellite capacity but rather the purchased amount of capacity from the ground station to the Internet at large.

Moffett

A consolidated cable industry envisioned by Dr. John Malone, currently bidding for a merger between Charter Communications and Time Warner Cable, would feature widespread usage caps and usage billing and could obliterate competition from over-the-top online video providers, predicts a cable industry analyst.

Craig Moffett, now out on his own as co-head of independent Wall Street research firm MoffettNathanson, says broadband usage pricing is the sleeper issue of the last five years.

“I’ve written for years that [usage based pricing] is the single most important issue in all [the telecom sector],” Moffett said in an interview last week. “I’ve always been amazed by how little attention people have always paid to the issue.”

The Street reports that a unified cable cartel limiting consumer access to the Internet or more importantly monetizing that access would immediately devastate streaming video competitors including Netflix, Amazon, YouTube and Hulu.

If usage based pricing were implemented across the cable industry tomorrow, Moffett believes Netflix’s subscriber base would immediately fall from 30 million to 10 million. Nascent video players like Intel and Apple would likely find their business plans untenable, and some analysts believe the sweeping price changes would probably end the shift towards integrating streaming technology into large flat panel television sets.

Consumer backlash

Moffett says the impact would be broadly felt. Other analysts predict it could cause a national consumer uprising, especially at a time when other countries are swiftly moving to get rid of usage limits and consumption-based billing that have never been popular with customers.

“I think it will become clear that over the summer the window may have already closed for the cable operators to move to a usage based pricing theme,” Moffett said.

The Federal Communications Commission has done almost nothing about the issue of usage caps and usage pricing. Former FCC chairman Julius Genachowski even applauded the unpopular price scheme, calling it an important innovation.

Customers call it something else, and an uproar from consumers and competitors alike could overshadow the broadband successes of the Obama Administration. It would represent “a laughable setback for the nation’s communications infrastructure,” predict increasingly pessimistic Wall Street analysts concerned about the inevitable backlash.

The Street:

In a new broadband pricing regime, regulators would have to condone what consumers and competitors would immediately recognize as anti-competitive. Meanwhile, immensely popular content providers such as Netflix, Amazon Prime, Hulu, YouTube and the like would have to lose a Washington lobbying battle to the interests of cable monopolies, their arcane billing and off shored customer service.

Hollywood and broadcast networks would lose marginal new content buyers such as Netflix. Tablet makers such as Apple, Google, Samsung and Amazon would see the value of their fastest growing products put at risk.

Most importantly, it would be an affront to one of the few clear consumer victories for the Department of Justice in the Obama administration.

Cox Communications has found a new way to target cord-cutters and sell television service to its broadband-only customers reluctant to sign up for traditional cable television.

flareWatch is a new IPTV service delivered over Cox’s broadband service. For $34.99 a month, customers participating in a market trial in Orange County, Calif. receive 97 channels.  About one-third are local over the air stations from the Los Angeles area, one-third top cable networks, and the rest a mixture of ethnic, home shopping, and public service networks. Expensive sports channels like ESPN are included, but most secondary cable networks typically found only on digital tiers are not. Premium movie channels like HBO are also not available.

The service is powered by Fanhattan’s IPTV set-top box. Cox offers up to three “Fan TV” devices to customers for $99.99 each.

flareWatch’s channel lineup in Orange County, Calif.

The service is only sold to customers with Preferred tier (or higher) broadband service and is being marketed to customers who have already turned down Cox cable television.

What Cox reserves for the fine print is an admission the use of the service counts against your monthly broadband usage allowance. Preferred customers are now capped at 250GB of usage per month. While occasional viewing may not put many customers over Cox’s usage caps, forgetting to switch off the Fan TV set-top box(es) when done watching certainly might. flareWatch also includes another usage eater — a cloud-based DVR service. Cox does not strictly enforce its usage caps and does not currently impose any overlimit fees, but could do so in the future.

[flv width=”480″ height=”292″]http://www.phillipdampier.com/video/Cox FlareWatch 7-13.mp4[/flv]

Cox’s brief promotional video introducing flareWatch. (1 minute)

Cool… usage capped.

Cox spokesman Todd Smith described the introduction of flareWatch as a “small trial,” and that “customer feedback will determine if we proceed with future plans.”

The service is clearly intended to target young adults that are turning down traditional cable television packages. Most of those are avid broadband subscribers, so introducing a “lite” cable television package could be a way Cox can boost the average revenue received from this type of customer. It may also serve as a retention tool when customers call to disconnect cable television service.

The MSO is selling flareWatch at five Cox Solutions stores in Irvine, Lake Forest, Rancho Santa Margarita, and Laguna Niguel.

Customers (and those who might be) can share their thoughts with Cox about flareWatch by e-mailing [email protected] and/or [email protected]. Stop the Cap! encourages readers to tell Cox to ditch its usage cap, and point out the current cap on your Cox broadband usage is a great reason not to even consider the service.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/The Verge Fan TV revealed is this the set-top box weve been waiting for 5-30-13.flv[/flv]

The Verge got a closer look at the technology powering flareWatch back in May. Fan TV could be among the first set-top boxes to achieve “cool” status. Unfortunately, technical innovation collides with old school cable company usage caps, which might deter a lot of Cox’s broadband customers from using the service.  (4 minutes)

An older Comcast Wireless Gateway (Model 2)

Comcast customers may soon find themselves providing free Internet access to other Comcast customers under a new initiative announced today that will turn millions of homes into Wi-Fi hotspots.

The “xfinitywifi” project will activate a second 15-25Mbps Wi-Fi signal from Comcast’s XB2 and XB3 wireless gateways that any Comcast broadband customer can reach as long as they stay within 250-300 feet of the gateway.

“We’ve been able to add certain feature functionality to the firmware of our devices,” Tom Nagel, senior vice president of business development, told CED. “The way its architected is we sort of logically split the modem in two. On the private side, you still get the same things. You can do your own security, you can manage, you can do port forwarding and all the things that no one really understands but are available to you. On the public side what happens is it’s logically a separate network. We actually provision a separate service flow to that cable modem for the public side. If that public side uses up what we’ve given them, there is no getting from someone else.”

In simplified terms, Comcast is opening up a second dedicated Internet connection for its public Wi-Fi service that will not share your existing broadband service. The two networks will co-exist from the wireless gateway, and although the available bandwidth cannot be combined to increase connection speed, customers do have the option of connecting various wireless devices to either the home Wi-Fi or public Wi-Fi connection. The public Wi-Fi service is exempt from usage measurement, caps, and/or consumption-based billing at this time. (Comcast last year suspended usage caps in all of its service areas except Nashville and Tucson.)

In beta tests, Comcast claims customers did not object to sharing their Wi-Fi wireless gateways as long as it did not affect their speed and protected their privacy.

Nagel says the service was designed to address both concerns, noting a 50Mbps Blast customer will still have full access to 50Mbps service, regardless of how many wireless visitors are connected to the customer’s gateway.

“There’s also no leakage of the public and private security functions as well,” Nagel said. “We do two totally different security regimes in the box and there’s really no way to get in between the two. We do provide people the ability to opt out of the service but there have been very few people that have done that, like sub fractions of 1 percent.”

Comcast enables the new service with a firmware upgrade automatically sent to customers when an area is ready for a Wi-Fi launch. Customers in Washington, D.C.; Philadelphia; Boston; Northern Virginia, Chicago, Atlanta; Delaware; and California will likely be among the first to receive the new service.

Some customers do have a problem with Comcast charging them for equipment Comcast is appropriating for its own benefit.

“This is a fine deal for Comcast, which can keep charging customers $7 a month for their gateway and benefit from millions of new hotspots they did not have to build themselves,” said Comcast customer David Tate. “If customers get wise and buy their own [gateway/cable modem], Comcast’s new Wi-Fi service will begin losing hotspots as customers return the equipment to avoid the fee. They should be charging a lot less or nothing at all for equipment if they want us to host their hotspots.”

Tate also believes Comcast will ruin its own service if they attempt to bring usage caps back.

“If Comcast brings back the cap, I wouldn’t want anyone else sharing my connection and I would avoid using Comcast’s Wi-Fi if they counted that usage against my allowance,” Tate explained. “If they exempt the wireless service from caps, customers can just connect to that network to avoid the cap so they would have a big loophole.”

Cablevision will maintain unlimited Optimum Online broadband service to all of its customers and will not introduce usage-based pricing, according to Gregg Seibert, chief financial officer.

“I don’t see usage-based billing as something that we have plans for at this time,” Seibert told investors attending this week’s Bank of America/Merrill Lynch Global Telecom and Media Conference in London. “I think it would take a broader industry shift for that type of metered pricing to come in. At this point we don’t see that in the future.”

Cablevision has a long history opposing usage pricing or caps. In 2009, Jim Blackley, Cablevision’s senior vice president of corporate engineering and technology, said usage caps were not in the cable company’s plans:

“We don’t want customers to think about byte caps so that’s not on our horizon,” he said. “We literally don’t want consumers to think about how they’re consuming high-speed services. It’s a pretty powerful drug and we want people to use more and more of it.”

Cablevision’s announcement may also be in response to its biggest competitor. Verizon earlier this year repeated it had no plans for usage-based pricing for FiOS customers either.

Cablevision continues to attract new broadband customers, primarily from customers canceling DSL service but not moving to FiOS.