Are you using too much Internet service?  If your service provider thinks you are, it can alert you by barging in on your web-browsing sessions with forced notification messages warning you are about to be the latest victim of Internet Overcharging.

PerfTech, a maker of browser messaging systems has teamed up with Active Broadband Networks to deliver providers a way to notify up to two million subscribers about their broadband usage from just a single rack-based system.

“Feedback from ISPs who have deployed usage-based Internet tiers has confirmed that two factors are key to success: accurate usage measurement and quick, proactive notifications,” PerfTech vice president of sales Jane Christ said in a statement.

Most browser message injection systems are used to warn customers when they are approaching monthly usage limits or excessive use charges.  Some can even redirect web users to a single ISP-administered website to alert them their service has been suspended or request payment for additional usage with a credit card.

So far, only smaller U.S. providers are using PerfTech’s system, including WideOpenWest, BendBroadband in Oregon, and Buckeye Cable in Ohio.

• WideOpenWest doesn’t appear to limit usage except for newsgroups.  According to their FAQ, users may download up to 5GB per month of newsgroup content;
• Bend Broadband has a 100GB monthly limit on all but its highest speed Internet plan, which carries a 150GB monthly limit.  The overlimit fee is $1.50 per gigabyte.
• Buckeye Cable favors “network management” techniques, which can slow down customers deemed to be using too much, at its discretion.  But the company does have a 3GB strict usage cap on newsgroup access.  Exceeding it is very costly.  The overlimit fee is a whopping $45 per gigabyte.

Cornell University students pay an average of $37,000 a year (before housing, student fees, and other expenses) to attend one of America’s most prestigious universities.  When they arrive on-campus, it doesn’t take long to learn the college has one of the nastiest Internet Overcharging schemes around for students deemed to be using “too much Internet.”

For years, Cornell limited students to less than 20 gigabytes of Internet usage per month, only recently increasing the monthly allowance to 50GB this summer.  Cornell’s overlimit fee starts at $1.50 per gigabyte, billed in megabyte increments.  Now some students are pushing back, launching a petition drive to banish the usage limits that curtail usage and punish the 10 percent of students who exceed their allowance.

Christina Lara, originally from Fair Lawn, N.J., started the petition which has attracted nearly 300 signatures over the past few weeks.

“Cornell students, along with students across the world, rely on the Internet to pursue their academics, independent research, and leisure activity,” Lara writes. “We should not be subjected to charges for our Internet usage, particularly because our curriculums mandate we use the Internet. Despite this, Cornell University continues to adopt NUBB (Network Usage-Based Billing), which charges students for exceeding the 50 gigabyte per month ‘allowance.'”

Lara incurred bills as high as $90 a month in overlimit fees last year, thanks to regular use of Netflix and Skype for online video chats with friends and family back home.

Internet fees for on-campus housing are included in the mandatory student services fee.  Although Time Warner Cable has a presence on campus, most residence halls don’t appear to be able to obtain service from the potential competitor, which sells unlimited Internet access in the southern tier region of New York where Cornell is located.  Instead, Cornell students on campus rely on the university’s wireless and Ethernet broadband network, and DirecTV or the university’s own cable TV system for television.

Lara

The apparent lack of competition makes charging excess-use fees for Internet usage easy, critics of the fees charge.

“It’s much easier if you live off-campus or in one of the apartment complexes students favor,” says Neal, one of our readers in the Ithaca area who used to attend Cornell.  “The only complication is getting access to the University’s Intranet, which is much easier if you are using their network.”

Neal says Verizon delivers landline DSL to off-campus housing, but not on-campus.  Because the service maxes out at 7Mbps, most who have other options sign up for Time Warner Cable’s broadband service instead.

“It’s cheaper on a promotion and much faster, and it’s still unlimited,” Neal says. “Hasbrouck, Maplewood and Thurston Court were the only residential buildings that offered the chance for Time Warner Cable on-campus, and only if the wiring was already in place.”

Neal notes many apartment complexes off campus have contracts with Time Warner Cable, which means cable TV and basic broadband are included in your monthly rent.  Some Cornell students who live on or near campus try to make do with a slower, but generally free option — the Red Rover Wi-Fi network administered by the University.  Others reserve the highest usage activities for computers inside university academic buildings, where the limits come off.

Lara complains Ithaca, and the southern tier in general, is hardly an entertainment hotbed, making the Internet more important than ever for leisure activities.

Time Warner Cable provides the rest of Ithaca with unlimited Internet.

“If Cornell was situated in a major metropolitan area with a vast nightlife that could accommodate the interests of most, if not all, our undergraduates, then many Cornellians wouldn’t be so inclined to stay in their rooms and get on the Internet,” Lara says. “But that’s not the case. Cornell’s Greek life dominates the social scene, making ‘nightlife’ a dividing factor in the community.”

Tracy Mitrano, Cornell’s director of information-technology policy, told The Chronicle the vast majority of students will never hit the cap, and those that do cannot be charged more than $1,000 a month in overlimit fees, regardless of use.  Those that do exceed the limit typically find a monthly bill for “overuse” amounting to $30.

“The approach that Cornell uses offers transparency and choice,” said Mitrano. She noted that Cornell provides students with clear information regarding their network usage by alerting them by e-mail when they are about to hit the limit and by setting specific rates for overuse fees.

“The choice seems to be using the university network or moving off-campus to buy Verizon or Time Warner Cable broadband to avoid the usage cap,” counters Neal. “I am not sure their ‘choice’ argument flies if students don’t have the option of signing up for Road Runner in their rooms on their own, bypassing the Internet Overcharging altogether.”

Both Neal and Gregory A. Jackson, vice president of Educause, seem to be reaching consensus on whether or not universities should be charging students for Internet separately from room and board.  Jackson notes it is a discussion being held at an increasing number of universities.  Neal thinks having a wide open access policy to deliver competition could solve this problem in short order, and students should make the decision where to spend their broadband funds themselves.

“If Cornell’s IT bureaucracy faced unlimited-access competition from Verizon and Time Warner Cable, do you think they’d still have a 50GB usage cap, considering only a small percentage of their captive customers exceeded it,” Neal asks.  “Of course not.”

[Thanks to PreventCAPS for the story idea.]

Their prices are sky high.

Back in May 2010, Stop the Cap! launched a debate with a few Wireless Internet Service Providers (WISPs) that provide largely rural America with wireless access to the Internet over long range Wi-Fi networks.  The debate got started when Matthew Larsen, who runs the Wireless Cowboys blog, announced the arrival of an Internet Overcharging scheme at his WISP — Vistabeam, which serves residents in rural Wyoming and Nebraska.

WISPs are being increasingly challenged by the changing tastes of Internet customers, who are gravitating towards broadband multimedia content, saturating limited capacity networks and forcing regular infrastructure upgrades to keep up with increasing usage demands.  Unlike larger providers, many WISPs are independent, family-run businesses that lack easy access to capital and resources to rapidly respond to demand, especially when most have a rural customer base that numbers in the hundreds or thousands.

That’s one of the reasons why Stop the Cap! has not been as harsh on these providers when they implement usage limit schemes on their customers.  Because WISPs provide service where cable and phone companies usually don’t bother to serve, these wireless providers are the only option beyond satellite Internet, which we regularly label “fraudband” for claims of broadband speeds that are rarely delivered.  Still, we were not impressed last year with some of Larsen’s language about what his usage caps were intended to do (underlining ours):

I feel that these caps are more than generous, and should have a minimal effect on the majority of our customers.   With our backbone consumption per customer increasing, implementing caps of some kind became a necessity.    I am not looking at the caps as a new “profit center” – they are a deterrent as much as anything.    It will provide an incentive for customers to upgrade to a faster plan with a higher cap, or take their download habits to a competitor and chew up someone else’s bandwidth.

Ouch.

It’s been over a year, and Larsen is back with an editorial patting himself on the back for an Internet Overcharging success story well-implemented:

We have never raised prices on our services.    We still have a customer note on the wall that reads “Your bill was the only one I got this month that DIDN’T go up.   Thank you!”     I would have a hard time raising prices on this person because of their neighbors that are downloading 20x as much.   Usage Based Billing is a much fairer way to go, especially when the provider faces so much reinvestment cost to accommodate the heavier users.   After the first year of implementation, I am very glad that we took the time to implement it and intend to use the revenue to build a better network for all of our customers.

Larsen is also upset with those who believe in the concept of unlimited Internet:

Operating a broadband network is not free, and it is not a low-maintenance business.   I have a group of dedicated employees and subcontractors that have spent a lot of late nights and early mornings away from their families to build and maintain our network.   Anyone who thinks that unlimited broadband is a God given right should be forced to spend a few days in my lead tech’s shoes, getting a good look at what a broadband provider has to do to build a network and keep it running.

Larsen, like other WISPs are confronting the reality that Internet usage is on the upswing, and while we sympathize with the challenges faced by Vistabeam and other WISPs, his statements do not apply to every broadband network around.  And frankly, an increasing number of customers simply aren’t interested in Larsen’s challenges, especially if another provider can deliver service more cheaply and efficiently.  Vistabeam better hope nobody does, because their prices are simply not competitive if just about any other provider manages to work their way into his territory.

Vistabeam prices start at $29.95 a month for 384kbps/128kbps service with a monthly usage limit of 10GB.  Exceed that and you will pay an additional $1 per gigabyte.  Customers who need more speed pay dearly for it.  A tier providing 4/2Mbps service will run you $99.95 a month with a 60GB monthly usage allowance.

As of late, Larsen has been railing against the U.S. Department of Agriculture over recent broadband stimulus awards designed to improve coverage of broadband Internet in the same rural regions of the country Vistabeam serves.  He’s upset the USDA has awarded a $10.2 million infrastructure loan to the Hemingford Cooperative Telephone Company, which provides service in western Nebraska under the name Mobius Communications.

Larsen speaks highly of the fact Vistabeam delivers service in the absence of government funding or stimulus. But average consumers are not likely to care when they compare prices and consider the fact Mobius doesn’t appear to limit customers’ usage.

Mobius DSL Prices:

• 500kbps – $35.00
• 1.5Mbps – $40.00
• 3Mbps – $50.00
• 5Mbps – $60.00 (Currently available in Alliance and Chadron.)

Mobius charges effectively half the price Vistabeam charges, and offers faster tiers of service in some areas, without fear of overlimit fees.  It’s also important to recognize the “award” was actually a “loan,” which must be repaid.  Larsen seems less upset with the fact there are broadband stimulus programs than with the reality industry lobbying has effectively cut out many Wireless ISPs from standing any chance of winning one.

I get especially frustrated by loan awards like this one because I have operated two ISPs that have had to compete directly with Mobius and did not have access to any federal grant or loan programs.   The USDA Broadband and Loan programs are essentially only available to [regional phone companies].   When I made inquiries into the programs several years ago, I found that they would only loan to a single recipient in a region so that they were not funding competing projects.

Phillip Dampier

For Stop the Cap!, our constituents are consumers interested in obtaining the best possible broadband service at the best price.  Larsen’s views, understandable from the perspective of a business owner, would leave a number of consumers paying effectively double the price for usage-limited broadband. That would, however, satisfy a business argument that self-funded private providers should not face competition from other providers that can extend faster, unlimited DSL, cable, or fiber service with low interest loans.

Wouldn’t a better solution be to form a coalition to force open the same beneficial loan programs to Wireless ISPs who can more readily and affordably build up their networks and ease the Internet Overcharging that too often comes along for the ride?  We’re not accusing Larsen of gouging his customers for fun and profit, but we would like to see WISPs like Vistabeam develop win-win strategies that deliver success for their innovative efforts and lower priced, faster service for their customers.

The alternative may be the eventual arrival of those rural phone companies, increasingly equipped to deliver faster and cheaper service to Vistabeam’s current customers, eventually spelling disaster to that company’s business plan.  It has happened before.  Anyone remember the “wireless cable” industry that delivered a few dozen cable channels over microwave signals?  That’s a service whose time came and went, largely replaced with satellite television and rural telephone cable TV, better equipped to provide the kind of service consumers actually wanted, but wireless cable was ill-equipped to provide.

Earlier this year, Gov. Sam Brownback (R-Kansas) signed legislation into law that allows AT&T to deregulate itself, and its rates, at will.  Kansas ratepayers are about to pay the price for that law as basic phone rates are expected to increase as much as $84 a year for residents that have few alternatives.

AT&T wants to eliminate price caps on landline service, which currently limit pre-tax prices to $15.70 in rural areas, $16.70 in larger Kansan cities with enhanced local calling areas.  After AT&T won similar deregulation in Oklahoma, Texas, Missouri and Arkansas, AT&T has been regularly raising basic phone rates, which are now $5 to $7 more a month for basic service than before deregulation.

AT&T intends to divert much of the additional revenue away from upkeep of its landline network, which in several states it has won the right to abandon in rural areas, and use the money to enhance its cell phone network instead.

AT&T spokesman Aaron Catlin told The Wichita Eagle AT&T intends to supply communities currently bypassed by AT&T DSL with heavily usage capped, and much more expensive, 3G wireless broadband instead.

AT&T currently sells that service for $60 a month with a 5GB usage limit and an overlimit fee of $50 per gigabyte.

Catlin told the Eagle AT&T was excited with the possibilities, although rural Kansans facing those prices might not be.

“A lot of bad things are going to happen long-term,” Steve Rarrick, an attorney for the Citizens’ Utility Ratepayer Board told the newspaper. “Over time, they (customers) are going to see their phone bills go up. That’s been the experience of other states.”

Stop the Cap! reader Larry Posk from Atlanta just threw AT&T overboard, fed up with the company’s anti-consumer policies, and Sprint paid him $125 to walk.

“I can’t think of a single reason to stay with the sharks at AT&T who are spending my money to pay off legislators to drop Net Neutrality, impose usage caps on all of their broadband and wireless accounts, and now try and wipe out T-Mobile; I’ve had enough,” Larry writes.  “I told AT&T goodbye and switched to an unlimited plan from Sprint, who more than covered my early termination fee and gave me a new smartphone for free.”

Larry is a beneficiary of Sprint’s customer win-0ver promotion that covers up to $125 in early termination fees when customers cancel service mid-contract.  Larry owed AT&T around $70, but Sprint gave him the full $125 benefit as a credit on his first Sprint bill.

“All I had to do was transfer my old AT&T number to Sprint, which effectively ended my AT&T service,” Larry says.  “Technically I did not even have to call AT&T to cancel service — the number transfer does the trick, but I felt extra satisfaction giving AT&T a piece of my mind.”

Larry doesn’t want to do business with companies that engage in Internet Overcharging.

“I can basically understand there might be a need for some limitations on wireless service, but when AT&T put the same scheme on their DSL and U-verse customers, it was clear they were simply ripping customers off and I want no part of it,” Larry says.

Sprint also gave Larry another 10 percent off because he belongs to a credit union that qualifies him for additional discounts.  In the end, he’s actually saving about $24 a month and isn’t exposed to a usage limit any longer.

“I recognize the fact Sprint’s network isn’t as wide-ranging as AT&T or Verizon, but I barely travel and Sprint’s coverage in Atlanta is actually better than AT&T because Sprint hasn’t dropped any of my calls,” Larry says. “Data speed is adequate for my needs, and is about on par with what AT&T was delivering here in Atlanta, but it’s not as fast as Verizon.”

Larry says he didn’t know about Sprint’s promotion until he asked, and he recommends customers inquire about Sprint covering their early termination fees before signing up for service.  We found some customers complaining they did not get the credit, but we suspect that might be because they didn’t follow the terms and conditions.  The most important one of all: you have to buy your new phone from Sprint, not a third-party retailer.  Here is the fine print:

Available for consumer and individual-liable lines only. Available online, via telesales, and in participating Sprint stores. Purchases from other retailers are not eligible for the service credit. Requires port-in from an active wireless line/mobile number or landline/number that comes through the port process to a new-line on an eligible Sprint service plan. Excludes $19.99 Tablet Plan. Request for service credit must be made at sprint.com/switchtosprint within 72 hours from the port-in activation date or service credit will be declined. Ported new-line activation must remain active with Sprint for 61 days to receive full service credit. Upgrades, replacements, add-a-phone/line transactions and ports made between Sprint entities or providers associated with Sprint (i.e. Virgin Mobile USA, Boost Mobile, Common Cents Mobile and Assurance) are excluded. You should continue paying your bill while waiting for your service credit to avoid service interruption and possible credit delay. A $125 service credit will be applied for netbooks, notebooks, tablets, mobile broadband devices and smartphones which include BlackBerry, Android, Windows Mobile, Palm, and Instinct family of devices. All other phones are considered feature phones. A $50 service credit will be applied for feature phones and Sprint Phone Connect (when available). Smartphones require activation on an Everything Plan with data with Premium Data add-on charge.