Suddenlink serves portions of these Texas communities

Stop the Cap! has learned Suddenlink will establish usage allowances nearly identical to AT&T for their broadband customers, with a $10 overlimit fee for each 50GB customers manage to exceed their limits.

Suddenlink officials have declined to comment on Stop the Cap!’s report published yesterday.

The usage caps, which will first be implemented on customers in Amarillo, Tex., are as follows:

• 150GB per month for customers subscribing to “lite” tiers of less than 10Mbps, similar to what AT&T limits its DSL customers;
• 250GB per month for 10, 15, or 20Mbps customers, similar to AT&T U-verse;
• 350GB per month for premium-priced 50 or 107Mbps service packages.

Suddenlink says they expect less than 1% of their customers to exceed the monthly limits.  If they do, they will receive warnings three times before the overlimit fee is imposed.

“It could have been worse, but there doesn’t seem to be any justification for these limits other than the fact their biggest competitor in Texas — AT&T — has them,” says Amarillo resident and Stop the Cap! reader Angel.

“It’s another example of what happens when you live in a country that allows broadband duopolies,” Angel says. “Just like with cell phones, as soon as AT&T does something, their competitors follow suit and the customers are stuck paying more and more for less and less service.”

Angel says the first time he is billed an overlimit fee of any kind, he’ll downgrade his broadband service.

“Why pay for premium priced speed tiers when usage caps make them not worth the extra money?”

Suddenlink will introduce an Internet Overcharging scheme beginning with their customers in Amarillo, Tex. Oct. 3rd, according to a company document obtained by Stop the Cap!  But the new usage cap and overlimit fee scheme will not be limited to Texas.  The company’s internal memo notes the new limits will eventually be imposed on customers nationwide, and incredibly, the cable operator claims it will make their Internet service better:

Early next month, October 2011, Suddenlink will notify residential (non-business) Internet customers in Amarillo, Texas, of a new usage allowance plan (AP) that is designed to further enhance their Internet experience.

This allowance plan will be introduced to other residential Internet customers, in other Suddenlink communities, in the following weeks and months.

An introductory letter will be mailed to Suddenlink residential Internet customers, when our allowance plan goes into effect in their community. The introductory letter to Amarillo customers will be mailed on or about October 3, 2011.

In addition to the introductory letter noted above, we will launch a new Web page on or about October 3, 2011, at suddenlink.com/allowanceplan.

This new page will provide additional information about the allowance plan in the form of frequently asked questions (FAQs).

Suddenlink's national service area

On the first instance of exceeding the limit, the customer’s Internet service will be suspended until the customer reads and agrees to a web notification message that includes an understanding that on the fourth instance of going over their usage cap, customers will be billed $10 for every 50GB increment that exceeds their allowance, whether it is by 1MB or 40GB.  That pricing is identical to AT&T’s usage cap overlimit fee.

Amarillo residents already pay $55 a month for 15Mbps standalone broadband service from Suddenlink.

Stop the Cap! reached out twice today to Suddenlink officials to get their reasons for implementing the usage allowance program, what the specific allowances might be, and when the usage caps will reach markets beyond Amarillo.  We have still not heard back from them as we “go to press” but will update the piece if and when we do receive their comments.

Suddenlink’s employees are being trained on how to handle the inevitable complaints when customers discover their bills have suddenly increased.  Their employee FAQ:

Q. I only went over my allowance by 1 gigabyte, but I was still charged $10. I thought I would not be charged $10 until I was 50 gigabytes over my allowance. What happened?

Of the very few customers who go over their monthly allowance, we have found that most go over by a significant amount. Accordingly, to make this process as fair and simple as possible on all customers, we do not start charging until the third time someone goes over the allowance – and, once that happens, we automatically assign additional allowances to the account, in standard 50-gigabyte installments, at a standard price of $10 for each installment.

Customers can use all or some of that additional allowance, depending on their individual situations. What’s more, if they exceed the additional allowance of 50 gigabytes, another 50-gig allowance is automatically applied, again at the standard price of $10.

To help customers manage their Internet accounts, we have provided a way for them to monitor their monthly usage at Suddenlink.net.
• If you’re already registered at Suddenlink.net, log on, go to “My Account,” and then click the link for “My Internet Usage Summary.”
• If you’re not already registered at Suddenlink.net, visit that site, look toward the upper right corner for the log-in box and the link that reads “Don’t have an account? Sign up now!” Follow that link to a set of instructions on how to register your account, and then, when you’re finished, click the link for “My Internet Usage Summary.”

Kent: The days of system upgrades are over.

Finally, we offer some tips at suddenlink.com/allowanceplan, about ways to keep usage within the monthly allowances we’ve established.

Q. Can I have fewer than 50 gigabytes or less than $10.00 applied to my account the next time I go over?

Not at this time. The 50-gigabyte installments and $10 per installment charges have been standardized in all areas where we’ve rolled out this allowance plan, to make the process as fair and simple as possible on all customers.

Q. I don’t recall being notified that this was starting in my area. When did that happen?

We mailed letters announcing this change to all customers in your area several weeks before the allowance plan was put into place. I’m sorry if you missed that letter, but rest assured, very few customers – less than 1 out of every 100 – go over their allowance. And for the very few customers who do go over their allowances, charges are waived the first couple of times.

Q. What gives Suddenlink the right to do this?

We occasionally make changes to our Internet services, consistent with our Residential Services Agreement, which is published on our website. This allowance plan is one of those changes.

If asked: To view our Residential Services Agreement, go to Suddenlink.com, and look for a link near the bottom of the page titled, “Terms & Policies.” Click on that link and then look for another link titled, “Residential Services Agreement.” Click on that link and then scroll down the page until you see the sections related to Internet service, such as Section 46.

Suddenlink’s new Internet Overcharging website is not yet active, so we are unsure exactly what plan limits will be, but Suddenlink has been no stranger to usage caps.  The company introduced a usage meter in several markets in the summer of 2009, and used to claim usage limits were partly to handle traffic loads on a limited number of cable systems that were in the process of upgrading.  Once the upgrades were complete, the caps were supposed to be relaxed or retired.

Then, Suddenlink president and CEO Jerry Kent appeared on CNBC last September to announce that people don’t realize the days of system upgrades are over and it was time to rake in the profits:

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” Kent said. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Suddenlink’s journey to usage caps includes all the hallmarks we foretold in an article published on Stop the Cap! in 2009:

1. Establish a foundation for usage caps.  In their 2009 FAQ, Suddenlink conflated broadband usage with electricity: “What is “Internet usage”?  Much like electric usage is measured in kilowatts, and water usage is measured in gallons, Internet usage is measured in gigabytes (GB).”
2. Establish a ‘pulled from the air’ number of gigabytes (which often conveniently later becomes your usage allowance) and then tell subscribers what they can do with that.  In Humboldt County, Calif., in March 2011, Suddenlink began telling “heavy users” what other customers were doing with what the company deemed a more appropriate, average amount of Internet service.  Suddenlink also told customers the Internet service they were providing was for “entertainment only.”
3. Tell customers such tools are actually for their benefit.  See above.
   
4. Lie to customers when a usage meter suddenly shows up or terms and conditions are quietly changed to support an Internet Overcharging scheme.  In 2009, Suddenlink introduced a usage meter but tried to reassure customers, telling them: “Does Suddenlink plan to set a maximum usage allowance for its Internet customers, like other companies are doing? Do you plan to charge extra if a customer’s usage is too high?  Those steps are not part of our current plan. Our only goal at this time is to help the few customers whose usage is well above (two to three times higher than) the typical range to identify the reasons for that high usage and take steps to protect and secure their computers and accounts.”

You used too much. Look what you can do with an "average" amount of usage instead.

Now usage caps will protect and enhance Suddenlink’s profits on Internet service.  Remarkably, Suddenlink put itself in the “predicament” of facing increased customer demand of the Internet through its own marketing.  The company’s website heavily promotes its bandwidth-heavy Suddenlink2GO™ service to “watch TV online anytime, anywhere in the U.S. on any computer for FREE when you subscribe!”

But “free” becomes $10 for every 50GB if you watch too much.

How to Get Unlimited Back: If you are a Suddenlink residential customer who does not want to face restricted-use Internet, you can avoid the limits by switching to Business Class service, which will not have caps.  Unfortunately, pricing information was not immediately available to us.  One customer in Lubbock noted he paid $69 a month for 6Mbps Business Class service and $107 a month for 107Mbps residential service, so expect to pay comparatively more for lower speed service.

Cox Communications is telling customers if they exceed the company’s usage caps three times over the lifetime of an account, they either must upgrade to a more expensive service plan, make sure they never exceed plan limits again, or face an indefinite loss of their Internet service if they exceed Cox’s limits a fourth time.

Stop the Cap! reader Adam found out about Cox’s Three Strikes Program for himself in an online chat with Claudia, a Cox customer service representative:

Adam: I am concerned with the messages I got about a usage cap. I was told by the salesman that there was no bandwidth cap on our Internet, however this message is very troubling. Please explain this cap to me.
[…]
Claudia: I am really sorry for the lack of information provided to you by our Sales representative.
Adam: Is there a hard cap coming? Is that why we’re getting these messages?
Claudia: That is correct.
Claudia: At the fourth message your services will be blocked, on the previous one they will suggest you to upgrade your plan.
Adam: Fourth monthly, or fourth cumulative?
Claudia: Your Data Usage is reset each month, so it will be your fourth monthly message if exceeding the allowance.
Adam: So four months of going over. Does that counter ever reset?
Adam: Like if I’m bad three months, then good for three. Is it reset?
Claudia: Unfortunately, it is not reset.

Cox, like Comcast, does not charge overlimit fees, but the company does encourage customers who want to use the Internet more than their arbitrary allowances permit to upgrade to a more costly service plan.

Cox’s limits are detailed in an earlier piece Stop the Cap! brought readers a few weeks ago.

Internet Service Providers claim usage caps are important to protect the customer experience from “excessive users” slowing down service in your neighborhood, but as companies like Cox upgrade to DOCSIS 3, the broadband pipeline that results has increased so exponentially, it eliminates the excuse that came with the limits.

Now, ISPs increasingly see another reason to retain usage allowances: fatter profits from tiered usage plans that inevitably drive video-hungry Internet customers into costly upgrades.

Sprint, the last remaining major national wireless carrier without an Internet Overcharging scheme, will adopt one of its own on Oct. 2 when it begins limiting 3G/4G Mobile Hotspot customers to just 5GB of usage per month with a huge $50/GB overlimit fee (charged in megabyte increments).

SprintFeed shared the details in a copy of a leaked internal company newsletter announcing the changes:

(click to enlarge - Courtesy: SprintFeed)

It is important to note Sprint currently plans no usage limits on their tablet or smartphone customers — this usage cap only applies to customers signed up for the Mobile Hotspot option who use their phone’s Wi-Fi feature to connect other wireless devices.  Those with third-party tethering apps or other “unofficial” tethering schemes won’t face the usage cap either, so long as Sprint does not initiate a crackdown on customers without a company-sanctioned tethering plan.

Customers will automatically be “migrated” to the new $29.99 usage-limited Mobile Hotspot plan in October.  Affected customers will be notified of the changes in bill messages or postcards.  Sprint will not grandfather existing customers.

Some Sprint customers claim the company has always had a “secret 5GB cap” on the Mobile Hotspot feature, only enforced when customers considerably exceeded it, but this makes it official.

Sprint may be preparing its network for the introduction of iPhone 5, which Sprint is rumored to introduce early next month.

(Courtesy: Pando Networks)

Bears who fancy a good rub up against wireless Internet transmission towers were blamed for knocking out service for customers in the Potlatch area one day, a problem unique to rural communities who make due with whatever broadband access they can find.

Such is life in rural Idaho, deemed by Pando Networks to be America’s slowest broadband state, with average Internet speeds of just 318kbps.

Stop the Cap! reader Jeff in Pocatello is happy the big city New York Times has noticed Idaho’s online challenges.

“Please take notice of this newspaper article about our online experience here in Idaho,” Jeff writes. “While it underplays the near-total failure of our state legislature to recognize there –is– a broadband problem here, at least the rest of the country will understand just how bad Internet access remains in rural America.”

Jeff should know.  Pando Networks calls Pocatello America’s slowest Internet city.  It’s no surprise why.  Pocatello residents are stuck between a rock — the infamous Internet Overcharging leader Cable ONE (incidentally owned by NY Times‘ rival The Washington Post), and a hard place — Qwest/CenturyLink DSL.

Nobody does Internet Overcharging better than Cable ONE, which baits customers with high speed access and then ruins the deal with an $8 monthly modem rental fee, infamously low usage caps and a two-year contract plan that subscribers call a ripoff.

“Cable ONE never heard of a square deal because they break every consumer rule in the book,” Jeff says. “Although the company pitches speeds up to 50Mbps, they tie it to a two-year contract that only delivers one year at that speed.  After 12 months, they reduce your speed to just 5Mbps for the entire second year, and if you cannot convince the customer service representative to renew and reset your 50Mbps contract for an additional year, there is nothing you can do about it.”

THE Internet Overcharger

Cable ONE has written the book on usage limits.  Customers paying for “blazing fast 50Mbps speed” get to consume a maximum of just 50GB per month (100GB for triple play customers) before overlimit fees of $0.50/GB kick in.  Other Cable ONE plans include daily usage limits of just 3GB, which can make Netflix viewing difficult.

“Cable ONE makes you ration your Internet like satellite providers do, and it’s very irritating because they tease you with fast speeds you literally cannot use unless you are willing to pay a lot more,” Jeff says.

The alternative for most Idahoans is DSL, if Qwest/CenturyLink provides it.  In many areas, they don’t.

“You can be a mile out of Pocatello’s city center and be told there is no DSL, and those that do get it often find it working at 1-3Mbps,” he adds.

In a country now rated 25th in terms of Internet speed, Idaho is comparatively a bottom-rated broadband disaster area.  The state secured 11 federal broadband grants to deliver some level of service in communities across the state, at a cost of $25 million.

The Slow Lane

But ask some local officials about the quality of broadband in Idaho and you find a lot of denial there is even a problem.

The Times got a brusque response to their inquiries about broadband service from the executive director for the Bannock Development Corp., a business development group.  Gynii Gilliam told the newspaper things were just fine, at least for large businesses in cities like Pocatello.

“The last thing I need is a report that says we don’t have the capacity and speed, when I know it exists,” Gilliam said. She noted that Allstate Insurance was opening a $22 million call center in Pocatello and that the Federal Bureau of Investigation has a service center there. “We have not lost any business because of Internet speeds,” she said.

Which proves the old adage that you can have just about anything, for the right price.  The disparity between residential and business broadband — urban and rural — is particularly acute in mountain west states like Idaho.  Verizon was considering rural Wyoming for a multi-billion dollar high speed Internet data center, until it found it could purchase an alternative already up and running elsewhere.  Meanwhile, much of the rest of Wyoming has no Internet, slow speed wireless or DSL, or limited cable broadband in some larger communities.

Even Gilliam admitted her home broadband account was nothing like the service Allstate Insurance was likely getting.

“It feels like it’s moving in slow motion,” she told the Times. “A lot of times I’ll start downloads and not complete them.” She said she was happy as long as she could get e-mail.

But not everyone is satisfied with an Internet experience limited to occasional web browsing and e-mail.

Qwest (now CenturyLink), is Idaho's largest Internet Service Provider.

“With countries like Latvia getting better broadband than we have, it’s only a matter of time before we start to lose even more jobs in the digital economy over this,” Jeff says. “This is one more nail in the coffin for rural economies in the west, which are being asked to compete with bigger cities and eastern states that have much better infrastructure.”

Pando found the northeast and mid-Atlantic states, excepting Maine, New Hampshire, and Vermont, have the best broadband speeds in the country.  The mountain west has the worst.

Rural states like Montana, the Dakotas, eastern Oregon, Idaho, Wyoming, and Utah are the least likely to have widespread access to cable broadband, which can typically offer several times the Internet speed found in smaller communities with DSL service from dominant provider Qwest (now CenturyLink).  CenturyLink claims 92 percent of their customers have some access to broadband, but didn’t say at what speeds or how many customers actually subscribe to the service.

In Idaho, cost remains a factor, so CenturyLink is planning to sell low-income households a discounted DSL package.  Speeds and pricing were not disclosed.

Jeff says the real issue is one of value.

“Some in the Times article blame lack of access, while others claim it’s all about the cost, but it’s really more a question of ‘is it worth paying this much for the service we actually get’,” Jeff says.

“Cable ONE is simply deal-with-it Internet, with usage caps and contract traps that leave customers feeling burned, but their only other choice is Qwest, and they show few signs of caring about delivering fast broadband in this state,” Jeff says.

“I believe CenturyLink Idaho’s vice president and general manager Jim Schmit when he says, ‘We’re in business to make a profit,’ Jeff concludes. “There isn’t a lot of profit in selling Internet service in rural mountain states, so the company simply doesn’t offer it where they won’t make back their investment quickly.”

“The question is, should profit be the only thing driving broadband deployment in the United States?  If you answer ‘yes,’ Idaho is the result.  If you answer ‘no,’ and think it is an essential utility, profit shouldn’t be the only consideration.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Cable ONE Countdown High Speed Internet.flv[/flv]

Cable ONE’s ad for 50Mbps leaves out a lot, including the 50GB usage cap and two-year contracts that downgrade service to just 5Mbps for the entire second year.  (1 minute)