Broadband customers face dramatically higher prices for Internet service from a telecom company that wants to define for Alaskans an “appropriate” amount of “fair usage” of the Internet.

GCI, Alaska’s largest cable company, is currently embarked on a so-called “education” campaign over the summer telling residential customers it might be time for them to log off, or face the consequences of enormously higher broadband bills.

For one Anchorage coffee shop, that added up for several hundred dollars for just a single month of usage — all because they offer free Wi-Fi to their customers.

“People use it for their second space. Their home office,” Kaladi Brothers Coffee COO Dale Tran told KTVA news. “We’ve always offered an open network in our cafes, and after hours some people come by and park out front.”

Tran says the result was a bill from GCI several hundred dollars higher than expected.

GCI Communications Manager David Morris says at least two percent of their 110,000 customers are using “too much” service and violating the company’s “fair use” policies.  Morris also warned customers with wireless equipment that if they don’t take steps to lock down their routers with passwords and security, they could be exposed to a huge bill from GCI for providing free Internet service to the entire neighborhood.

Morris claims the company wants to specifically define what it considers “fair use,” claiming it will make things more equitable for everyone.

But GCI’s Internet Overcharging scheme will never save a single customer a penny.  Instead, customers will see only skyrocketing bills should they not fit within GCI’s arbitrary definition of “fair use”:

The company’s website states, “For a large majority of customers, normal usage activities are not expected to exceed the plan profiles defined below”:

GCI customers are not happy.  One reader of the AK Community forum provided additional insight:

To add a little dimension to this before I start ranting, here are the respective rates for the above service plans:

Now, those prices are misleading because they are only for the internet service portion of the “bundle.”  What they’re not telling you (anywhere on the web site that I can find, in fact) is that in order to receive that price, data transfer rate, and monthly bandwidth, you must also pay for GCI’s digital cable television service ($57.99 when part of a bundle), local phone service ($15.49 a month), and long distance service ($5.99 a month plus taxes and surcharges).

Without factoring in the various FCC fees and whatnot, the above information brings the total cost of GCI’s fastest, highest monthly bandwidth package to $179.46 per month!  That’s actually the cost they quoted me on the phone, too, so at least we know their “customer service” staff are at least intelligent enough to figure out an adding machine.

Oh, and did I mention that those speeds and transfer rates are not available for standalone cable modem [subscribers]?

[…] What happens when you do go over?  BAM!  $5.12 per gig tacked on to your bill!  I don’t know about you guys, but I’m sick of getting ripped off by GCI.  Those of you who live outside of Alaska can confirm this, but GCI is just about the only cable company that still meters their customers’ bandwidth.  I have friends who tell me that they’re paying $49.00 a month for 8Mb/s transfer rate and unlimited bandwidth!

What GCI is doing is highway robbery.  How are they getting away with it?  I’ll tell you: no competition.  For very high speed broadband internet, they’re the only show in town, so they can charge whatever they want to anybody who wants more than 3Mbps (standard speed DSL service from Alaska’s other big telecom provider, the phone company).

[flv width=”478″ height=”380″]http://www.phillipdampier.com/video/KTVA Anchorage GCI Fair Internet Use Crackdown 6-2-10.flv[/flv]

KTVA-TV in Anchorage ran this report about GCI’s plans to force many of their broadband customers to pay more if they enjoy the Internet “too much.”  (3 minutes)

Jon Stewart spent a few minutes last night making a tentative stab at Net Neutrality on The Daily Show, trying to begin educating viewers about an Internet controversy many net users don’t even know exists. (3 minutes)

From the people who brought you the incredibly creepy computer animation re-enactments of Tiger Woods’ blowout and Lindsay Lohan’s jail stint for Taiwanese television, the Verizon-Google deal is now fair play, right down to devil’s horns for executives at both companies.  (1 minute)

Time Warner Cable faces an increasing number of subscribers cutting their cable television service off, choosing to watch their video entertainment online.

Now the nation’s second largest cable company is trying to mitigate the potential damage with a series of new applications designed to bring cable television and your computer, cell phone, and iPad together.

Time Warner is getting started with the iPad, developing an application that will help cable subscribers remotely control their DVR cable box to record and manage programming.  Away from home and want to scan a program guide and record an upcoming show?  The new app will let you do it.  Need to grab some video on-demand from Time Warner?  Not a problem.  You can even start watching on your iPad and pick up where you left off from your home.

Integrating the many devices consumers use as part of their daily lives with cable television could bring the cable viewing experience back front and center among at least some subscribers.  That reduces the chance customers will decide they can do without cable TV.  Since most of Time Warner Cable’s on demand library will only be available to current cable subscribers, cutting cable’s cord also means an end to online on-demand viewing of cable-licensed programming.

Time Warner Cable's prototype iPad app

Time Warner Cable CEO Glenn Britt has repeatedly emphasized his interest in delivering cable services the way customers want, and claims the new generation of applications on the way from the cable company will provide just that.

Although Time Warner will start with the iPad, the application will quickly become available for the iPhone and iPod Touch series.  Additionally, versions for other smartphones as well as portable and home computers will soon follow.

Ironically, this integration process could drive data volumes on Time Warner Cable’s broadband network to new heights.  Video streaming alone will dramatically increase traffic.  Yet the same company that is ready and willing to provide these bandwidth-intensive services also complained about existing broadband customers “using too much” of their existing broadband service.  In the spring of 2009, the company sought to implement a 40GB usage limit on some its broadband customers and charge up to three times more — $150 a month for unlimited access.  At the time, Britt and other company officials blamed the burden of online video and other usage-intensive applications for spiking the demand on their network.

Customers may wonder whether Britt’s new enthusiasm for online video means he recognizes their network has plenty of capacity to support unlimited access or is looking for a new excuse to justify a return to Internet Overcharging schemes.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Time Warner Cable iPad App.flv[/flv]

Time Warner Cable CEO Glenn Britt, CTO Mike LaJoie, VP of Web Services Jason Gaedtke and Director of Digital Communications Jeff Simmermon ponder their prototype iPad app and discuss the implications of integrating cable TV with other electronic devices.  For Time Warner Cable, it’s a matter of preserving cable TV subscribers who might contemplate cutting the cable TV cord and watching everything online.  (13 minutes)

Dream On: WildBlue's home page shows a user thrilled about an Internet experience she'll never truly enjoy with a monthly usage limit at low as 2.3GB. Exceed it and face the consequences: WildBlue's Time Out Corner: a speed throttle delivering 128kbps downstream and just 28kbps upstream.

When is broadband not broadband?  When it is delivered by hopelessly overloaded and underpowered satellite providers that annoy their subscribers with high prices and low usage allowances.

For many customers of WildBlue and HughesNet, getting high speed Internet access remains a far off dream. No broadband Internet service is more rationed and speed throttled than satellite “fraudband.”

Most satellite broadband customers live in America’s most rural areas, literally miles away from the nearest telephone exchange and often hundreds of miles away from a town with cable broadband.  Even wireless Internet providers can’t find enough customers to justify the costs of delivering service.

For America’s most rural, there are three choices:

1. Go without.
2. Use dial-up service.
3. Choose the least annoying satellite provider you can afford.

Just over one million Americans have stuck it out with choice number three, paying twice as much wired Americans pay for broadband and getting just a fraction of the speed and use.

But both providers claim that is all about to change.

WildBlue and HughesNet are in a hurry to launch brand new satellites with dramatically improved capacity that will deliver, they claim, “speeds as fast as fiber.”

For Stop the Cap! reader Adele in a rural part of Arizona, she’ll believe it when she sees it.

“As Stop the Cap! has said all along, anyone who thinks satellite ‘broadband’ is a useful alternative to DSL or cable Internet should be condemned to use it,” she writes.  “Everyday brings a new frustration, especially with so-called ‘Fair Access Policies’ that effectively restrict your use to web page browsing and e-mail.”

HughesNet explains how their satellite service uses your satellite dish to send and receive Internet data. (click to enlarge)

For many people running Microsoft Windows, the company’s monthly gift of bug fixes, service packs, and updates is just a minor nuisance. For satellite Internet customers, it can sometimes mean the “day of no Internet.”

Adele explains:

If you have multiple computers and Microsoft determines it has a lot of screw-ups to fix, the monthly updates can easily run into the hundreds of megabytes when every computer receives their individual updates.  HughesNet’s “budget” Home and Pro Plans cost up to $70 a month and only include a daily allowance of up to 300 megabytes.  It’s no trouble at all to exceed that usage on increasingly large web pages loaded down with video advertising, pop-ups, and other content.  Now deal with Microsoft Update Day and in our house, that means you get a good book and stay offline.

If she doesn’t, HughesNet inflicts a stinging punishment — 24 hours in the time out corner with barely dial-up speed penalties for exceeding the limit.

But both satellite providers promise better days ahead when their newest satellites are launched into space.

The New York Times notes WildBlue’s next generation of satellites will bring 10 times the capacity of its three current satellites combined.  That opens the door for faster satellite broadband, according to both companies, without price increases.

HughesNet believes satellite broadband’s best days lie ahead, especially as a contender in the rural broadband market.

“One advantage satellite has is ubiquity,” Arunas G. Slekys, vice president for Hughes Network Systems, said. “The cost of reaching you with a satellite dish is independent of where you are. Fiber or cable is labor-intensive and dependent on distance.”

As to satellite’s potential in rural regions, “clearly, there’s an unserved market,” Mr. Slekys said. “And it’s not as though they have terrestrial or satellite. They only have satellite as a choice.”

Can a new generation of satellites save satellite broadband?

One question the Times didn’t ask is whether increased capacity will mean the end of so-called “Fair Access Policies” that strictly ration the amount of browsing customers can manage before the speed throttle punishment begins.  Neither company is saying.

“When pigs fly,” Adele thinks.  “Sometimes these satellite companies think rural people are just plain stupid.  When you live this far out in the country, you learn to recognize snake oil salesmen when you see them.  Why give us more access when nobody else will provide the service?”

The sudden interest in satellite broadband in the nation’s paper of record is no coincidence.  Both HughesNet and WildBlue are upset they are not getting a bigger piece of the broadband stimulus pie.  The Times notes just $100 million out of $2.5 billion in U.S. Department of Agriculture grants for rural broadband will go to satellite companies.  Raising the question in a newspaper widely read in Washington can’t hurt your cause.

Thomas E. Moore, chief of WildBlue, said satellite technology would be able to serve thousands more rural residents than terrestrial services at a fraction of the cost. He cited a $28 million grant to a nonprofit group in North Carolina to extend fiber to 420 schools and libraries. That same grant could have instead directly served 70,000 residents in North Carolina through satellite service, Mr. Moore said.

“For every one of those people, there are literally hundreds more who won’t have access to stimulus funds,” he said.

But Joseph Freddoso, president of MCNC, the nonprofit group that manages North Carolina’s public education technology network, said satellites were not an ideal primary service for his users, who require a more reliable network for their research and data-heavy applications.

“To compare what we do with what satellite does as a service is an apples-to-oranges comparison,” Mr. Freddoso said, adding that the grant will serve one million students in 37 counties.

Adele is concerned that means even more people will fight for the limited resources satellite has until the next generation of satellites get launched, especially for rural customers trying to share a spot beam in North Carolina.

“These companies have really stopped heavily promoting themselves in parts of rural America because both are already at or over capacity in many places,” she says. “The advertised speeds for some parts of the country are straight out of Alice in Wonderland — total fiction, and with the lag time that comes naturally from sending and receiving data over a distance of 22,000 miles, it’s not getting any better.”

Adele is referring to the satellite providers’ regionally-directed signals.  Much like how satellite TV companies can deliver local stations within limited regions of the country, satellite Internet service can be divided up and delivered to certain parts of the United States.  One beam might serve rural Louisiana, another could be directed to northern California, and so on.  Once a region’s capacity nears saturation, speed and performance suffers.  In areas where capacity remains underused, the service performs better.

Regardless of the promises for enhanced satellite broadband, most cable and fiber broadband providers spend no time pondering the competitive impact, because there is none.  They plan to continue ignoring the likes of WildBlue and HughesNet for years to come.

Kevin Laverty from Verizon told the Times their FiOS fiber network is expensive to deploy but is light years ahead of satellite when it comes to speed and easy upgrades.

“Fiber optic is virtually an unlimited technology,” he said. “All you have to do is change the electronics on either end.”

A spokesman for Time Warner Cable said cable broadband speeds already easily exceed the satellite providers’ proposed new speeds, so they have nothing to worry about.

For most satellite customers, WildBlue and HughesNet are not choices, they are realities if rural Americans want to participate in the broadband revolution.

“Nobody chooses these satellite providers over DSL, cable, fiber, or even most wireless ISPs,” Adele says. “They choose satellite because of the absence of these other providers.”

Should Adele’s local phone company offer her DSL or a wireless broadband provider arrive to deliver service, would she switch away from HughesNet?

“In a shot,” she says. “I dream about throwing their dish into the biggest bonfire I can build and then my neighbors and I visit their headquarters to horse-whip them for years of horrible service and throttled speeds.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Satellite Fraudband.flv[/flv]

We’ve assembled some examples of advertising for both HughesNet and WildBlue, typically seen on networks catering to rural Americans, a brief interview with a representative from WildBlue, and some actual customer… uh… “testimonials” about the quality of service actually received.  Finally, we’ve included the most painful speed test ever encountered.  The original video was silent and some might think it’s actually stuck.  It’s not.  We’ve added some music to spice things up or to increase your pain and suffering.  You might want to get a piece of cake for this. Oh, and one last thing:  If you are using a satellite provider to access Stop the Cap!, forget about the video.  Watching it will eat almost a quarter of your daily usage allowance.  (6 minutes)

The firebrand Rep. Alan Grayson (D-Florida), normally a plain-spoken kind of guy, has managed to tie himself into a human pretzel over the issue of Net Neutrality.  In less than a week, he’s adopted every side of the issue as his own.

Grayson shocked many of his supporters last week when he signed on with AT&T, Verizon, and Comcast to pressure the Federal Communications Commission not to regulate Internet principles like Net Neutrality.

Grayson’s increasingly high profile in the Democratic party and his hero status among many progressives made his allegiance to big telecom stick out like a sore thumb.  Liberal blogs immediately blasted Grayson’s decision to side with the “you can’t use my pipes for free” crowd.  Some bloggers called his position “curious” while others accused him of selling out.

Grayson has been engaged in damage control ever since.

His letter to the FCC echoed earlier letters from Democrats hostile to broadband reform (but receptive to campaign contributions from the phone and cable companies).  But Grayson insists he has been misunderstood.

The Orlando Democrat told the Huffington Post that he is in favor of Net Neutrality and that his alliance with the telecom industry is a coincidental case of “strange bedfellows.”

“I say in the letter that I support the policy of Net Neutrality. I don’t know how I could be more explicit than that,” he told HuffPost. “There is a question, though, of how to reach that conclusion, and it’s a legitimate question. My own feeling is that we should not allow a matter like this to be resolved by regulation, because regulations can be changed very easily. We saw this all the time with the Bush administration. I think it is preferable to have the principle of net neutrality enshrined in statute.”

Grayson

Grayson’s position does not make sense to many Net Neutrality advocates who do not understand why Grayson cannot be supportive of both regulatory reform and legislative changes.

“I think Grayson is mistaken to think that good Net Neutrality legislation could come out of this Congress. And certainly he’s mistaken to think that good Net Neutrality legislation would come out of the next Congress,” said Tim Karr of Free Press.

Karr told HuffPost he hoped Grayson would note conservative bloggers are in love with the congressman’s position on Net Neutrality and rethink his position. “Given that Grayson is considered a progressive lion in the House of Representatives, that the people who routinely vilify him are now seeing him as a champion should make him think twice,” he said.

Grayson argues that getting the FCC to reform broadband and make Net Neutrality a formal agency directive would be a waste of time because Republicans would simply throw it out the next time they occupy the White House.

For many Net Neutrality advocates, that kind of defeatist attitude is symbolic of a problem Democrats have long faced — the impression they’ll cave-in when challenged by Republicans.

Marvin Ammori, a law professor at the University of Nebraska:

“What he’s implying is that Republicans actually do what they want to do and implement the policies they want and Democrats don’t,” said Ammori. “It sounds like they’re unwilling to change regulations because they’re worried Republicans will change them back… It just highlights that Republicans are willing to change the law and Democrats aren’t.”

Perhaps most upsetting to Net Neutrality supporters is Grayson’s belief that many phone and cable companies support Net Neutrality, at least how they define it.

Ammori thinks that is nonsense, and easily dismissed as lip service when one considers the actions of the telecom industry.

“If they supported Net Neutrality, we’d have it by now,” he said. “They’ve spent hundreds of millions fighting against Net Neutrality… This is part of their pitch: ‘We don’t plan on blocking anything on the Internet. We just want the right to do so’… He’s essentially crediting their PR claims.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/MSNBC Alan Grayson on Net Neutrality.flv[/flv]

Grayson faced questions about his position on MSNBC about his Net Neutrality views, and was lectured by progressive talk show host Cenk Uygur.  Grayson called the FCC “a fundamentally corrupt organization.”  (2 minutes)