A Verizon Wireless tweet from this morning welcoming customers to a new era of "wonderful usage based plans."

Verizon Wireless might be regretting having a Facebook page open for comments after users started excoriating the company yesterday, when it first publicly broached the subject of its now-implemented wireless Internet Overcharging scheme.

“The price is too damned high,” exclaimed one customer livid that new customers would pay $30 for just 2GB of data usage (one penny higher than the company’s now-retired unlimited use plan).  “$80 for 10GB?  And I thought AT&T was greedy,” commented another.

Judging from the countless hundreds of negative comments, Sprint is about to have a robust quarter of new customer additions defecting from Verizon.  Sprint retains its unlimited use plans on both its 3G and 4G networks, although the speeds do not compare favorably to Verizon’s LTE/4G network.

Matt Hamann summed up the sentiment of customers who despise usage caps, even if they are currently grandfathered on an unlimited use plan:

Hey, Verizon…I will *never* add another smartphone to my plan until you come up with fairer data prices. $30 for 2GB?? You gotta be kidding! How is this fair? How is it in your customer’s best interests?

Bottom line: IT ISN’T! It’s 90% corporate greed. What’s the best way to get more revenue from customers, huh?

Listen here: I’m already looking for better options. As soon as I find one, I’m gone. And I’ll take every family member and friend that I can along with me.

The best mobile provider you are no more.

Verizon created considerable confusion for their customers by saying nothing until just a day before the new plans took effect.  Although the media has covered the imminent end of unlimited data for over a week, customers have not been notified by Verizon itself, despite one customer’s claim Verizon told him they mailed letters in advance of the plan changes.

As we have reported, those customers with pre-existing unlimited data plans will be able to retain them indefinitely, even if they upgrade to a new phone in the future, and even if they renew their contract.  Only new customers, those changing plans or any new lines added to a family plan will face the “wonderful” tiered pricing Verizon tweeted about this morning.

To commemorate Verizon Wireless’ new mobile data prices, we present a clip from the leader of ‘The Rent is Too Damned High’ party.

Mobile Hotspot App from Verizon Wireless (Courtesy: Pocketnow.com)

Things got considerably more confusing over the mobile Hotspot feature — a tethering application built into most Verizon smartphones.

Verizon Wireless representatives were sharing conflicting information with Stop the Cap! about the availability and pricing of this feature as late as this morning, but we’re now confident we have an answer the company will commit to for impacted customers.

For 3G Verizon Wireless smartphones, nothing changes.  It was $20 a month for 2GB before July 7th, and remains the same going forward.  For LTE/4G phone owners, things are much more confusing.  Existing customers have been enjoying free tethering on a special promotion made available only to 4G customers for several months now.  That promotion officially ended this morning.  A software update is imminent for 4G phone owners which will remove the free Hotspot feature and replace it with a prompt for one of two options:

• a $20 for 2GB Hotspot plan
• $30 Hotspot plan with unlimited usage

Most would be foolish not to lock in unlimited tethering with the $30 plan, which is a much better deal going forward.  Where the confusion comes in is for customers rushing out to upgrade their existing phones to a 4G phone just to lock in unlimited data -and- unlimited Hotspot tethering.

We spoke yesterday afternoon to Verizon Wireless representatives who denied any knowledge of the $30 unlimited tethering plan or confused it with the basic unlimited data plan.  Eventually, we were told only pre-existing customers with already-activated 4G phones would qualify for the option of choosing the $30 unlimited tether plan.  It was too late, even before yesterday at midnight, for others to hop on board this deal.

But by this morning, we were starting to get different answers, culminating in a Verizon representative telling Stop the Cap! any customer who placed an order for a 4G smartphone through Verizon Wireless that invoked a plan change (part of the process of ordering the phone direct from Verizon assures that) would have likely found the addition of the “Verizon Mobile Hotspot Promo” as one of the line items added to your plan as part of the order.  If so, that qualifies you for the $30 unlimited tethering option, even if you are still waiting for your 4G phone to arrive in the mail.

Verizon claims after you receive and activate your new 4G phone, attempts to use the Hotspot feature should offer you the choice for the $30 Hotspot plan.  If it does not, we have the name and contact details of a Verizon employee that should be able to cut through the red tape and get you this plan.  The only requirement is you had to order the phone before midnight on July 7th.

Verizon does not know at this point if customers will be offered the promotional $30 unlimited price for a limited time only, or will forfeit it forever if they do not accept it immediately (or drop the optional add-on at some point).

Rogers Communications claims usage caps are not creating problems for customers, but if and when they do, the company says it will get rid of them.

Luiza Staniec, manager of public relations for Rogers’ Quebec and Atlantic Canada region, made that remarkable claim in an interview with the New Brunswick-based Times & Transcript.

“At this point there is a cap. It hasn’t really caused a problem,” Staniec said.  “If the cap begins to affect users online, we will abolish it.”

At issue is Netflix’s popular streaming service, which opened for business in Canada last year.  Consumers are embracing the $7.99 service which delivers unlimited streaming of the Netflix online library.  But an increasing number of customers are discovering that while they can watch as much Netflix as they’d like, Internet Service Providers like Rogers have usage limits in place to keep online viewing under control.

Netflix told investors to expect $50 million in operating losses in international business this year, in part because growth in Canada is being hampered by stingy usage limits and high priced broadband.  Once consumers get a broadband bill with overlimit fees attached, some are reconsidering their love affair with video streaming.

Lindsey Pinto, communications representative for OpenMedia.ca, a consumer rights organization, says a regime of usage limits in place at most Canadian ISPs will ruin high bandwidth applications and services like Netflix, as consumers find them too expensive to use.

“It takes a lot of bandwidth to stream a movie or watch Netflix,” Pinto told the newspaper. “People will stop doing things that will bring them over the cap. There will be a disintegration from these services under this model.”

Staniec counters that Rogers offers higher usage cap plans (for more money) to accommodate Netflix viewing.

“If you watch a lot of movies, pick the package with the highest cap,” she says. “If you don’t watch too many, you don’t need the high cap.”

She added Rogers is willing to be flexible, adjusting caps “to suit the consumers.”

But last summer Rogers actually reduced the usage cap of its popular Extreme service plan from 95GB to just 80GB per month, one day after Netflix announced plans to enter Canada.

[Updated 5:12pm EDT — We heard from Ms. Staniec who wants readers to know she was respectfully misquoted by the reporter at the Times & Transcript:

“The correct message I conveyed was that our offer will evolve as customers needs/use evolves. The journalist added, ‘perhaps one day they will be abolished altogether.'”

Staniec would like our readers to know she herself made no statement about the issue of abolishing usage caps.]

Phillip Dampier

While North American ISP’s call 3Mbps DSL “revolutionary” for rural America and dream of Internet Overcharging schemes like usage caps and consumption billing everywhere else, Australia is poised to take broadband to a level North America can only imagine.  Watch this documentary on Australia’s fiber-based National Broadband Network future and how it will transform their economy and culture, and then ponder what your Internet Service Provider is doing these days.

While we scratch our heads wondering how to wire West Virginia for slow speed DSL, Australia is planning to rip out copper wire networks everywhere.  While we fight over communities trying to get their citizens 21st century broadband speeds from community-owned providers private companies want to ban, Australia will deliver the same fiber speeds to 90 percent of the country, whether it’s ‘economically viable’ (to investors) or not.  As we watch a handful of giant telecom companies try to mess with broadband pricing to further increase their profits without delivering any improvements in service, Australia is going to rid itself of artificial limits on broadband usage.

But Australia’s NBN goes much farther than just delivering fast broadband.  It builds a foundation to transform virtually every aspect of Australian life:

• Rural Australia’s economic viability is guaranteed a future with the availability of fast and reliable broadband for businesses large and small;
• Telemedicine means patients seeking routine care and follow-ups can conduct them from the comfort of their own homes;
• Telecommuting means less energy consumption, less traffic, and reduced costs in roadway maintenance as workers do their jobs away from the office without wasting precious time in traffic;
• Telelearning provides rural students with access to the same high quality education city students receive, and ongoing education can be managed anytime, anywhere, even for those with existing jobs and families;
• Australian businesses can reach new customers across the world, increasing sales, whether they sell a digital product or one that leverages online shipping and tracking tools to complete delivery anywhere;
• Millions of Australians will have access to the same high speed broadband, delivering a platform for the development of large-scale, next generation applications that don’t make sense in countries where broadband is a patchwork of speeds, service, and basic availability.
• It means a broadband network so far advanced above that found across North America, it could change Australia’s standing in global commerce, and impact our own.

Embarrassed yet?  Worried about America and Canada becoming broadband followers instead of leaders?

You should be.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Australia’s NBN June 2011.flv[/flv]

Australia’s National Broadband Network  (38 minutes)

Bright House Networks, a cable company primarily serving Florida and other southeastern states says it has no plans to implement Internet Overcharging schemes like usage caps or consumption billing.  But a company spokesperson went even farther, telling Tampa Bay Online the cable company was not even considering them.

Bright House, which relies on Time Warner Cable’s programming negotiators and sells broadband under the Road Runner brand, was among the only companies in Florida that was willing to go on record stating they were not considering limiting broadband customers.

Other providers were unwilling to follow Bright House’s lead:

• AT&T: “2 percent of our customers were using 20 percent of our bandwidth,” said an AT&T spokesman, so the company slapped 150GB usage limits on DSL customers, 250GB on U-verse customers.  The overlimit fee is $10 for every 50GB extra.
• Verizon Florida: “At this point, we’ve not implemented any usage controls or broadband caps.  We’ll continue to evaluate what’s best to ensure our customers get the highest quality broadband service for the best value,” the company said.  But it also added: “We’re continuing to evaluate usage-based pricing for our wireline broadband customers.”

“Bandwidth caps stifle consumer choice,” said Parul Desai, public policy counsel for Consumer’s Union.  Desai notes customers do not sign up for pricey high-speed FiOS broadband service from companies like Verizon just to read e-mail.  Customers who are willing to pay premium prices for super high speeds certainly don’t want a usage cap devaluing their broadband package.

Comcast, for example, uniformly limits consumption to 250GB per month, even on high speed plans delivering over 50Mbps service.

“It’s like building a rocket that you blow up after it reaches 250 feet into the air,” says Stop the Cap! reader Will in Tampa, who shared the article with us.  “What is the point of having 50 or 100Mbps service from any provider if they slap a limit on it like that.”

Will thinks customers will abandon higher speed packages in droves once they realize they really can’t use them.

“With some of these companies talking about caps around 40GB per month, you can’t even take your connection for a test drive,” he says.  “You might as well stick with basic speeds, just to remind and discourage you from putting yourself over their stupid limits.”

Desai suspects broadband companies will try limiting their customers, if only because they face few competitors consumers can use instead and they have video services to protect.  But she suspects some consumers will either abandon or seriously downgrade their broadband service and find other ways to trade large files and content.

“It’s not inevitable they’re going to succeed,” she told TBO. “People only find value in broadband because of what they can access with it. If more people feel constrained, they’ll start looking for another way.”

Cerf

Vint Cerf understands the Internet.  Widely recognized as one of the two “fathers” of what eventually grew into today’s Internet, Cerf has watched a network launched by the United States Department of Defense grow into an economic powerhouse driving a knowledge-based economy.

Today, Cerf works as an Internet evangelist for Google, promoting the company’s innovation in the next generation of the broadband experience.  He brings decades of advice to Internet Service Providers the world over: upgrade your networks.  But more importantly, he told attendees of Juniper Network’s Nextwork conference, upgrade exponentially, not incrementally.

Cerf’s remarks Wednesday targeted the conundrum of coping with increasing video traffic on the Internet.  Cerf pointed to his employer’s construction of a gigabit fiber to the home network in Kansas City as the best antidote to traffic congestion.

Simply put, Cerf believes bandwidth must be increased exponentially and not through incremental upgrades that try and stay one step ahead of demand.  Google intends to prove gigabit fiber broadband is cost-effective and within reach of providers.  A side benefit of building next generation networks is the opportunity for innovating new online applications.  Many of tomorrow’s online innovations are simply impossible on a constrained, incrementally upgraded network that often requires accompanying traffic limiting schemes.

“When you are watching video today, streaming is a very common practice. At gigabit speeds, a video file [can be transferred] faster than you can watch it,” Cerf said. “So rather than [receiving] the bits out in a synchronous way, instead you could download the hour’s worth of video in 15 seconds and watch it at your leisure. It actually puts less stress on the network to have the higher speed of operation,” he said. 

Wu

So far, many providers are considering Netflix and other video traffic a threat to their networks, and are attempting to collect tolls to allow Netflix content to reach subscribers (Comcast), or are considering Internet Overcharging schemes that combine usage caps with overlimit fees to discourage customers from watching too much (AT&T, Time Warner Cable).

At another session held Tuesday, Tim Wu, Columbia University law professor noted efforts by several U.S. providers to do away with all-you-can-use broadband.

Wu said phone companies like AT&T are ideally looking towards replicating the cell phone model on broadband — leaving users to guess how much usage they will rack up over a month, knowing most will be wrong.  As the consumer, he noted, you end up buying too much or you face steep overlimit fees for underestimating usage — either way “you are screwed.”  Wu called consumption-oriented pricing “abusive.”

Wu also said wireless carriers in particular are uneasy with the open, “ownerless” concept of the Internet.  Their instinct is to own, control, and manage networks.  Their only success so far is trying to advocate for fast, premium-priced traffic lanes, and slow “free lanes” for everything else — a key reason why many consumers advocate to preserve the open model of the Internet through enforced Net Neutrality.

Wu called these efforts by phone companies to control traffic “dangerous.”