ISPs Are Now Forcing Cord Cutters To Subscribe To TV If They Want To Avoid Usage Caps

from the damned-if-you-do dept

We've noted time and time again how broadband usage caps on fixed-line networks are arbitrary, unnecessary, and harm innovation. They're also a useful weapon against streaming video competitors, and the natural evolution of TV competition. Caps can be used to either punish users who try and cut the cord with higher prices, but they also allow ISPs to exempt their own streaming services from said caps (something currently being done by both Verizon and Comcast), thereby giving these services a distinct and unfair advantage in the market.

But broadband ISPs are now coming up with a new way of attacking cord cutters: forcing them to subscribe to television if they want to avoid usage caps.

Back in January, AT&T announced that the company would be happy to remove usage caps on its wireless network, but only if you subscribe to DirecTV or U-verse TV service. Then last month, AT&T carried this idea over to its fixed-line broadband network, announcing that it would be imposing new usage caps on its broadband users starting May 23. While AT&T says it will generously allow users to pay $30 more per month to avoid usage caps entirely, it also announced that users who subscribe to its TV services will be able to avoid usage caps entirely.

This month, an Oregon company by the name of Bend Broadband followed suit, informing its users that it would be happy to remove its usage caps (ranging from 150 GB to 500 GB), but only if users subscribe to television service. Bend offers up a misleading explanation for why caps are necessary in the first place in a company FAQ:

"The continued migration of Netflix usage from mailed DVD to Internet streaming/download, as well as other data intensive uses of the Internet, are impacting all providers of high-speed Internet service. While we certainly acknowledge and appreciate that content rich services like Netflix make our high-speed offering more valuable to the end user, the volume of data associated with this content drives significant incremental investment in the network and the need to purchase more bandwidth in order to maintain the user experience and this must be funded."

Right, but that's bullshit. U.S. residents already pay some of the highest prices for broadband in the developed world; money that any earnings report will clearly illustrate is more than enough to offset what at this point is only modest network upgrades. As one cable CEO recently noted, most of the heavy investment is over, and the name of the game now is milking these uncompetitive markets for all they're worth until either broadband competition magically sprouts from the ether, or regulators wake up from a deep slumber and shut down the price gouging party.

Usage caps on fixed-line networks are nothing more than rate hikes on uncompetitive markets, and anybody claiming otherwise either has been swindled by a good salesman, or is selling you something themselves.

There's absolutely nothing good about this trend. ISPs are using a lack of competition in the broadband space to impose usage caps. They're then using caps to force subscribers to sign up for TV services they may or may not actually want. It's a mammoth, misleading and anti-competitive abuse of two markets simultaneously, all sold to consumers under the lie that ISPs need even more revenue to keep funding unprecedented investment and innovation. In reality, the entire push may just be one of the largest cons ever perpetrated on consumers in the modern communications era.

Filed Under: broadband, bundling, cord cutting, data caps, isps, tv, tying, usage caps

Brazil Has To Pause Adoption Of Broadband Usage Caps After Consumers Revolt

from the pay-more-for-the-same-service! dept

It appears to have only taken the better part of the last decade, but we finally appear to be reaching the point where people have finally realized that broadband caps aren't about managing congestion, they're about turf protection. Here in the States, companies like Suddenlink, Comcast AT&T and CenturyLink have all rushed toward adopting caps and overage fees as not only a pointed weapon against streaming video competitors like Netflix, but as a nifty way to charge more money than ever for a product that's actually getting cheaper and cheaper to provide.

The same thing is happening in Brazil, where ISPs have convinced telecom regulator Anatel it's absolutely necessary to shift from flat-rate pricing to metered usage lest the Internet explodes (it's surely just coincidental that Netflix's popularity is soaring). And, like here in the States, regulators have been more than happy to help repeat broadband industry claims that you need low caps and overage fees because it's just not possible to continue offering unlimited broadband:

"...The president of the telecom watchdog Joao Resende told journalists at a press event yesterday that it is unlikely that Anatel will challenge operators, since "not all models can accommodate an unlimited service provision and also because the networks won't be able to cater for everybody." Resende added that operators are guilty for making users think that unlimited service provision would be available indefinitely.

The problem is that most consumers and press outlets are perfectly capable of reading earnings reports, and realize that flat-rate broadband has been perfectly sustainable, and that caps and overage fees are really just massive price hikes on uncompetitive markets:

"Companies argue that caps are needed to prevent network congestion, but continued investment in infrastructure to cope with forecast demand consistently announced by these same firms in recent years suggest that usage caps really have nothing to do with network congestion issues. In addition, bandwidth costs for telcos largely remain fixed, and despite major growth in their user base, providers such as Vivo are paying less today for raw bandwidth than they were a decade ago. So really, there is no technical or economic justification for a cap."

Anatel had been pondering regulation that would have codified this shift toward metered usage, but the unprecedented amount of public backlash appears to have the regulator re-thinking its agenda:

"According to Anatel, the decision to let service providers introduce the data limits has now been stalled due to the several complaints that were received, and will remain on hold until the proposals for the new plans have been submitted by operators and analyzed by the watchdog."

That doesn't mean Anatel won't ignore consumers anyway, but it does highlight how consumer activism and revolt can at the very least still give telecom regulators pause. Instead of letting ISPs wage war on innovative services with unnecessary usage caps, less beholden regulators have realized their focus should be on improving broadband competition, which in turn improves speeds (Akamai currently ranks Brazil 80th in overall broadband speed) but organically punishes neutrality violators and prevents carriers from being able to pummel captive markets with such glorified rate hikes.

Filed Under: anatel, brazil, broadband, data caps, usage caps

As Broadband Usage Caps Expand, Complaints To The FCC Skyrocket

from the pay-more-for-the-same-service dept

For several years now, broadband providers have been taking full advantage of the lack of competition in the broadband market by expanding usage caps and overage fees. More recently, companies like AT&T, Comcast and Suddenlink have taken this practice one step further by charging users a $10 to $35 per month surcharge if consumers want to avoid usage caps. In other words, consumers are paying more money than ever for a service that costs less and less to provide, thanks again to limited competition in the broader broadband market.

And while companies like Comcast have used the same approach seen in the boiling frog metaphor to slowly expand its usage cap "trials" and hope nobody notices, people are definitely noticing the rising temperatures. The Wall Street Journal filed an FOIA request with the FCC, and has found that consumer complaints about broadband caps have been skyrocketing over the last year:

"Fearful of crossing data limits, some customers say they are canceling the streaming services, including Netflix, Sling TV and Sony PlayStation Vue. Consumer complaints to the Federal Communications Commission about data caps rose to 7,904 in the second half of 2015 from 863 in the first half, according to records reviewed by The Wall Street Journal under the Freedom of Information Act. As of mid-April, this year’s total was 1,463."

Though we've warned about this for years, the Journal almost-but-not-quite comes to the realization that usage caps have nothing to do with congestion or financial necessity, and everything to do with hamstringing Internet video and protecting legacy TV revenues. Companies like SlingTV and Netflix make that abundantly clear in their comments to the Journal, though Comcast clings to a familiar narrative in trying to justify why it's charging more money for the same service:

"Comcast says its aim is to ensure the heaviest users are paying more than lighter ones, since 50% of its bandwidth is consumed by just 10% of its customers. Comcast set up the trials to show “people who are consuming the most should carry more of the bill rather than raise everybody’s bill by the same amount,” says Marcien Jenckes, executive vice president of consumer services at Comcast."

But we've long noted how that justification is nonsense. The cable industry itself admitted years ago that congestion had nothing to do with usage caps. Comcast's own leaked support documents and comments from company engineers have also acknowledged as much. Meanwhile, if a small fraction of your customers are consuming an "excessive" amount of bandwidth (and ISPs never provide hard data on this front), you could easily push them to business-class tiers without having to impose a draconian and confusing new pricing paradigm on your entire customer base.

No, Comcast is imposing usage caps to simultaneously cash in on, and thwart, Internet video. Granted the company can't just come out and admit that, so we often see flimsy claims that imposing huge new rate hikes on its entire userbase is about fairness, even if Comcast's cost to deliver broadband services remains fixed or declining. Not too surprisingly, Comcast tells the Journal that the company's a gift to the Internet and would never, ever behave anti-competitively:

"We everyday contribute to the use and the growth of the Internet,” Mr. Jenckes says. “There is absolutely no anticompetitive belief or objective."

The reality is that when it comes to complaints about caps, we're only starting to see the tip of the consumer annoyance iceberg. Not only are companies expanding usage caps, companies like Comcast are now exempting their own content from these caps -- a fantastic way to give their otherwise underwhelming Netflix alternatives an unfair advantage in the market. Other companies like AT&T are using usage caps to attack cord cutters in another way, by socking them with overage fees unless they sign up for traditional TV services they may no longer even want (something AT&T tells the Journal is just a "really compelling" offer).

And despite the soaring complaints, and the broad anti-competitive implications of such arbitrary limits, the FCC has remained largely mute about usage caps -- often supporting the industry narrative that this is just "creative pricing experimentation." The hope at the FCC has been that its policies to encourage broadband competition will make a specific crackdown on usage caps unnecessary, but so far it certainly hasn't worked that way. Though less talked about, it's also a problem that the FCC has failed to ensure that ISP usage meters are accurate; as a result they often aren't, with some consumers being billed for usage when their modem is off or the power is out.

Broadband competition isn't going to magically fix itself, and outside efforts like Google Fiber or community broadband are only helping a fraction of the market. As such, complaints submitted to FCC systems will only grow as more and more consumers realize that usage caps and overage fees are a giant con perpetrated on an already annoyed and captive market.

Filed Under: broadband, complaints, consumers, data caps, fcc, isps, usage caps

FCC To Ban Charter Communications From Imposing Usage Caps If It Wants Merger Approval

from the throttled-and-capped dept

If you recall, the FCC and DOJ blocked Comcast's acquisition of Time Warner Cable, in large part because of the sheer volume of nonsensical benefits Comcast tried to claim the deal would bring consumers. When Charter Communications subsequently announced its own acquisition of the company, it decided to take a different tack; most notably by taking a more congenial tone with regulators, dialing back the tone-deaf rhetoric and astroturf, and even hiring long-time net neutrality and consumer advocate Marvin Ammori to help seal the deal.

And it's now apparent that Charter's approach paid off. After months of meetings with regulators, both the FCC and the DOJ have announced they intend to approve the deal -- with a few conditions. After Bloomberg leaked word of the looming approval, FCC boss Tom Wheeler issued a statement saying (pdf) that most of the conditions being attached to the deal will focus on preventing Charter from harming Internet video competitors.

According to Wheeler, Charter won't be able to impose caps, engage in interconnection shenanigans, or bully broadcasters into withholding content from streaming providers (something Dish complained about) for a period of seven years:

"In conjunction with the Department of Justice, specific FCC conditions will focus on removing unfair barriers to video competition.

First, New Charter will not be permitted to charge usage-based prices or impose data caps. Second, New Charter will be prohibited from charging interconnection fees, including to online video providers, which deliver large volumes of internet traffic to broadband customers. Additionally, the Department of Justice’s settlement with Charter both outlaws video programming terms that could harm OVDs and protects OVDs from retaliation– an outcome fully supported by the order I have circulated today. All three seven-year conditions will help consumers by benefitting OVD competition. The cumulative impact of these conditions will be to provide additional protection for new forms of video programming services offered over the Internet."

The FCC's ban on usage caps is probably the most interesting or the proposed conditions. The agency has by and large turned a blind eye to usage caps and zero rating of content so far. In part because it was unsure whether or not the courts would uphold the regulator's new net neutrality rules (which should be settled any day now), but also because the FCC has been hesitant to engage in broadband rate regulation. Like net neutrality, usage caps are a sign of a lack of competition in the broadband market, and streaming competitors like SlingTV worried that the Charter merger would simply result in yet another giant like Comcast -- with a vested interest in using the lack of broadband competition to hammer emerging streaming TV evolution.

Granted the conditions aren't all that revolutionary in that while Charter has flirted with usage caps, it currently doesn't impose them anyway. And on the interconnection front, the devil will be in the condition details (the threat of neutrality rule enforcement appears to have solved many of these disputes, for now). Meanwhile, consumer groups like Free Press say they aren't impressed, arguing the debt created by the deal will be passed on to Charter customers in still-uncompetitive markets, one way or another:

"Customers of the newly merged entity will be socked with higher prices as Charter attempts to pay off the nearly $27 billion debt load it took on to finance this deal. The wasted expense of this merger is staggering. For the money Charter spent to make this happen it could have built new competitive broadband options for tens of millions of people. Now these billions of dollars will do little more than line the pockets of Time Warner Cable’s shareholders and executives. CEO Rob Marcus will walk away with a $100 million golden parachute."

And while it's probably true that Charter will just find some other way to impose rate hikes on these subscribers, the conditions are at least an interesting signal from the FCC (and the DOJ, that issued its own statement on the approval) that it recognizes the growing threat usage caps are posing to the future of innovative services. Still, the conditions will be no substitute for real broadband competition, the lack of which a bigger, badder Charter will simply have to find new and creative ways to abuse.

Filed Under: antitrust, broadband caps, conditions, data caps, datacaps, doj, fcc, merger, usage caps
Companies: charter, time warner cable

ISPs Now Charging Broadband Users A Steep Premium If They Want To Avoid Usage Caps

from the captive-audience dept

Thanks to the lack of broadband competition, the ISP push to impose unnecessary and arbitrary usage caps shows no sign of slowing down. Comcast continues to expand its "trial" of usage caps and overage fees, while AT&T has followed suit. And both companies have now started adding a new wrinkle to the mix, charging consumers $30 to $35 more per month if they want to avoid usage caps entirely. That's right, despite broadband getting cheaper than ever to provide, ISPs are now charging you a massive monthly premium if you want the same unlimited broadband service you enjoyed yesterday.

Now Suddenlink, a US cable operator recently bought by French telecom Altice, is also joining the festivities. The company is now informing customers that they can avoid usage caps if they're willing to sign a long-term contract. In year one of that contract avoiding usage caps is "free." In year two it will cost users $5 more a month, and $10 a month after that. Obviously there's nothing stopping the "hey, don't cap me" fee from skyrocketing further down the road. The caps and added fees are necessary, Suddenlink insists, to improve the "consumer experience":

"Data plans are one step among several that help us continue delivering a quality Internet experience for our customers. Other steps include the sizable investments we’ve made and continue making to provide greater downstream and upstream system capacity and more bandwidth per home. Even with those investments, a relatively few customers use a disproportionate amount of data, which can negatively affect the Internet experience of those who use far less. That’s why, as a complement to our network investments, we’ve established data plans."

The particular usage cap "experience" at Suddenlink has been a rocky one for customers. Suddenlink originally imposed usage caps back in 2012, but had to back off the attempt after users complained they were being billed for usage when their modems were off or they weren't at home (regulators have shown no interest in regulating meter accuracy, so as a result they often aren't). By 2013 the ISP claimed it had sorted out most of its problems, and now imposes current usage caps that range from 250 GB to 550 GB, depending on speed. Users pay $10 per each 50 GB over the cap they travel.

While Suddenlink's $10 is better than the $30-$35 being charged by AT&T and Comcast to avoid being capped, the precedent remains problematic all the same. Usage caps simply aren't necessary on modern, well-managed networks; flat-rate pricing has proven perfectly profitable enough to help fund infrastructure improvements. What usage caps do is protect legacy TV from Internet video, while letting companies charge a captive audience more money for a product whose provisioning costs are dropping. Just ask Suddenlink CEO Jerry Kent, who acknowledged the latter to investors a few years ago:

"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. 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.”

Kent has since crowed to investors about how usage caps "have become a significant revenue stream for us." And that's great for broadband duopolies, but notably less great for consumers already paying some of the highest broadband prices in the developed world. It's also problematic for the startups, small companies and other innovators that are going to be hurt by the move toward zero rating only the biggest, wealthiest companies from usage caps (yet another layer of new revenue on a service that costs less and less to provide, especially if you're happily skimping on customer service).

As we've noted a few times companies like AT&T and Verizon are giving up on unwanted DSL customers, in turn creating a stronger cable monopoly -- one that intends on taking full advantage.

Filed Under: broadband, isp, usage caps
Companies: altice, suddenlink

AT&T Follows Comcast's Lead, Now Charging Users $30 More To Avoid Usage Caps

from the what-competition? dept

Last fall, Comcast added a new wrinkle to its plan to impose arbitrary and unnecessary usage caps on the company's broadband customers. It began charging users a $30-$35 premium if users wanted to avoid caps, effectively turning the idea of unlimited data into a luxury option many could no longer afford. Caps continue to be a great way to impose price hikes on uncompetitive broadband markets, charge more money for the same service, with the added bonus of both curtailing -- and cashing in on -- the growing use of Internet video.

And because the broadband market is so uncompetitive, AT&T this week effectively just came out and decided it would follow Comcast's lead. In a blog post, the company announced that it's bumping the usage caps on its U-Verse broadband customers, but it's also going to be following Comcast's lead and charging users a $30 premium if they want to avoid them entirely. That is, unless you sign up for AT&T or DirecTV (now owned by AT&T) TV services:

"On May 23 we will introduce a new unlimited data option for our U-verse home Internet customers. Customers who subscribe only to our home Internet service who anticipate they will use more data than their new higher monthly data allowance – or who don’t want to think about how much data they are using – can sign up for unlimited home Internet data for $30 more a month. If you have AT&T U-verse Internet and DIRECTV® or U-verse TV service and pay for your services on a single bill you will automatically get unlimited home Internet data at no additional charge – a discount worth $30 a month.

What sweethearts! To soft sell the idea, AT&T emphasizes that they're raising the company's previous caps, but it forgets to mention (and most news outlets aren't noticing) that it had never bothered to enforce caps on U-Verse previously, effectively making these new caps. And like other ISPs before it, AT&T tries to argue that the caps aren't a big idea because most of its customers won't run into them:

"Today, our home Internet customers use just over 100 GB of data per month on average. So even with our smallest U-verse Internet data allowance of 300 GB the average customer has plenty of data to do more...If you don’t have unlimited home Internet data and you exceed your data allowance at any point during the billing cycle, you will receive increments of 50 GB of additional data for $10 each. The usage of approximately 4% of AT&T U-verse Internet customers currently exceeds our new higher data allowance.

The fact that the majority of your customers won't hit the caps now doesn't mean they won't in a year or two. It also doesn't magically explain away the reality that usage caps on fixed-line networks simply aren't necessary. They exist solely as a way to take advantage of uncompetitive markets, charging users more money for the same product. They're also an ingenious, anti-competitive way of protecting legacy TV revenue from Internet video. But an ISP can't come out and just say that, so AT&T sells it as a way for consumers to have "more choices":

"We want to continue providing a great experience for our Internet customers so we’re giving U-verse® Internet customers more choices and more data, including an unlimited data option available to any U-verse Internet customer."

Again, forcing customers to pay more money for the same service isn't giving consumers more choices. All AT&T's doing is imposing a glorified price hike. That's after the company announced it would be charging users a different $30 fee to opt out of AT&T snoopvertising, making privacy a luxury option just like unlimited data. It's yet another example of how the only real competition in the broadband industry -- is a competition over who can screw a captive market the hardest while with a straight face proclaiming they're improving the "customer experience."

Filed Under: broadband, fees, usage caps
Companies: at&t, comcast

Comcast Battles Google Fiber In Atlanta -- With Threat Of Usage Caps Unless You Sign 3-Year Contract

from the almost-but-not-quite-competing dept

With Google Fiber now starting to encroach on some major Comcast territories, the company's suddenly finding itself in the unfamiliar position of actually having to compete on price. In Atlanta, where Google Fiber is expected to appear later this year or early next, Comcast has been circulating flyers urging locals not to fall for the "hype" of ultra-fast, relatively cheap Google Fiber service.

But given that Atlanta is one of Comcast's growing usage cap "trial" markets, many were wondering just how far Comcast was willing to go in terms of competing on price. With the company's announcement this week that it's beginning to deploy gigabit cable service (technically 1 Gbps downstream, 35 Mbps upstream) in Atlanta, Comcast's strategy has become somewhat more clear. According to the company, Comcast will offer its gigabit service for $70 a month if you sign a contract, but $140 a month if you choose to go without.

The press release not-too-surprisingly chooses to omit this, but if a customer chooses to go the non-contract route, they'll find themselves subject to Comcast's 300 GB monthly usage cap and overage fees:

"That's Comcast's attempt at price competition, given that Atlanta is one of the markets Google Fiber has targeted for deployment. Comcast tells me that while the $70 option will not feature the company's usage caps (which are being "trialed" in the Atlanta market) users on the no-contract, $140 plan will face usage caps. They also have the option of paying $35 per month extra to avoid said caps."

In other words, if you lock yourself down in a three-year contract to avoid usage caps, you'll obviously not be able to sign up for Google Fiber without a major penalty when the service arrives. If a customer chooses to go without a contract to leave their options open -- they'll face either a 300 GB cap and $10 per 50 GB overage fees, or the option of paying a $35 per month fee to avoid the usage caps entirely. So yes, Comcast's "competing," but in only the way Comcast can.

Much like its usage cap plans, Comcast states these early gigabit cable deployments (Nashville, Chicago, Detroit and Miami on deck) are just trials, and the company's pricing could shift depending on whether this latest long-term contract gambit is effective at keeping potential Google Fiber customers from jumping ship.

Filed Under: atlanta, contracts, google fiber, usage caps
Companies: comcast, google

Comcast-Funded Think Tank: Broadband Usage Caps Make Netflix Streaming Better. You're Welcome.

from the sinking-to-new-logical-lows dept

As we've noted for some time, the broadband industry (and all the think tanks and politicians that work for it) have spent the last few years trying to vilify Netflix. That's primarily due to the company's support of net neutrality, but also its opposition to anti-innovative and anti-competitive broadband usage caps. These attacks usually start with the criticism that Netflix now dominates around 37% of peak downstream traffic (as if that's a bad thing), followed by some bizarre and unfounded claim that Netflix should be forced to "pay its fair share" (read: give us a cut of revenues despite us having no legitimate claim to it).

While these assaults had quieted down for a while, Daniel Lyons (not the fake Steve Jobs Daniel Lyons) and the American Enterprise Institute last week came out with a bizarre missive on broadband caps, in which Lyons tries to claim that broadband usage caps are a great way to force Netflix "to become a better corporate netizen." As noted above, Lyons starts by highlighting how Netflix consumes a huge amount of peak Internet capacity:

"Netflix has long reigned as one of America’s most significant Internet-traffic generators. Network equipment company Sandvine reports that the video-streaming company is by far the leader in peak period traffic, responsible for more than 33 percent of all fixed Internet traffic during peak hours — more than twice the share of the next-biggest competitor, YouTube. This means that at times when the Internet is most susceptible to congestion, Netflix alone is responsible for one out of every three packets sent through the network."

For clarity it should be noted that Netflix customers are responsible for this consumption. Netflix consumers who, in the United States, already pay more for bandwidth than consumers in most developing countries. Netflix in turn not only pays for bandwidth, it now pays ISPs for direct interconnection to their networks, after ISPs were accused of intentionally degrading peering points to force its hand. Everybody is paying, and paying, and paying some more -- so it doesn't matter one iota how much bandwidth Netflix is consuming -- because consumers are demanding and (probably over)paying for it.

Back in December, Netflix announced it was making some changes to the way it intelligently encodes its titles. This shift involves encoding titles differently depending on type and genre, since cartoons (with static backgrounds) technically eat less bandwidth than live action movies. The move was prompted by one thing: this month's expansion by Netflix into 130 more countries. Netflix's primary concern? Making sure that networks -- especially of the mobile variety in developing nations -- would have a more consistent and trouble-free viewing experience. It was just a smart, albeit admittedly belated shift in improving the way Netflix operates.

Apparently seeing a flimsy logical opportunity for the ages, Lyons tries to claim that Netflix was forced to improve its efficiency -- solely thanks to the wonder and glory of broadband usage caps:

Usage-based pricing forced Netflix to be more mindful of the size of its digital footprint. Because they face potential overage charges, consumers are becoming more aware of the amount of bandwidth their online activities consume. This leads edge providers such as Netflix to develop more efficient methods of delivery, in response to increased consumer sensitivity. The result is a more efficient operation that benefits everyone by freeing up network capacity — which is like broadband providers improving speeds, but without having to install new network lines."

That's an astonishing, incredible load of bullshit.

Netflix has long allowed capped users to adjust streaming quality to manage consumption, but to claim caps are to thank for these improvements is aggressively dishonest. Lyons and his friends at the AEI are funded by Comcast, the same company that's aggressively expanding utterly unnecessary usage caps on millions of consumers. Those caps have one overarching function: to raise rates on uncompetitive markets, give Comcast's own services an unfair advantage, and to protect Comcast TV revenues from Internet video.

There's clearly some worry on the part of Comcast and its think tank friends that the FCC will finally get off its ass and begin pressing Comcast on its anti-competitive abuse of usage caps, but if this is the best argument the AEI can come up with, Comcast may want to reconsider its disinformation budget for 2016.

Filed Under: broadband, broadband caps, data caps, interconnection, streaming, usage caps
Companies: aei, comcast, netflix

Comcast's Christmas Present To Broadband Users: More Usage Caps In More Places

from the captive-markets dept

Comcast has quietly announced that the company is expanding its usage caps into nearly a dozen new markets just in time for the holiday season. And by announced, I mean the company buried the freshly capped markets in a FAQ over at the Comcast website. As we've been noting, Comcast has slowly but surely been expanding a "trial" of usage caps whereby users face a 300 GB cap with $10 per 50 GB overages, or pay $30 to $35 if they want to bypass the usage cap entirely. Apparently, Comcast believes if it moves slowly toward capping all users, people won't notice they're the frog in the boiling frog metaphor.

As the press and public have grown increasingly critical of the cash grab, Comcast has responded -- by first pretending it didn't actually have usage caps (they're "usage allotments," Comcast insists), then by claiming these limits are necessary to establish "fairness" in the broadband market. In this latest e-mail sent to customers, Comcast falsely informs customers that they have nothing to worry about, because the majority of customers will never hit the company's cap:

"The median usage for XFINITY Internet customers is 40 GB of data in a month. And based on your recent usage history, it appears this new 300 GB data plan will not impact you. If you are not sure of your monthly data usage, please refer to the Track and Manage Your Usage section below...While we believe that 300 GB is more than enough to meet your Internet usage needs, if for any reason you exceed the 300 GB included in your plan in a month, we will automatically add blocks of 50 GB to your account for an additional fee of $10 each. We’re also implementing a three-month courtesy program. That means you will not be billed for the first three times you exceed the 300 GB included in the monthly data plan.

Isn't that sweet. Of course it's irrelevant what the median customer consumes, because we're on the eve of the cord cutting revolution, and every house in the country will soon be burning through 300 GB as entire families consume streaming video (and soon 4K streaming video) like popcorn shrimp. Comcast knows this, and wants to get usage caps in place before this inevitable future delivers a round house kick to the face of its traditional TV revenues. You'll note the e-mail to customers doesn't even try to provide a reason for the caps, since Comcast long ago gave up on the bogus claim that such limits help police congestion.

Historically, Comcast has aimed these usage cap "trials" at less competitive markets, where users can't really vote with their wallet. But this latest expansion includes Chattanooga, Tennessee, home of one of the more notable municipal fiber broadband deployments by the name of EPB broadband. Comcast not only tried to sue EPB out of existence, it effectively bought a state-level protectionist law to ensure EPB couldn't grow. As such, it's odd Comcast is now eager to drive its customers to a competitor it tried for a decade to destroy, though EPB likely appreciates the sentiment all the same.

Historically the FCC has been utterly tone deaf to the anti-competitive, anti-innovation implications of both usage caps and zero rating, seemingly buying the broadband industry's claim that rate hikes imposed on captive markets are somehow about "creative experimentation." There have been some reports that the FCC is watching Comcast closely, but it's far from clear if the agency will ever actually act, and our new neutrality rules don't specifically forbid caps. The only real solution to Comcast's cash grab is competition, but unless you're lucky enough to live in an area with Google Fiber or municipal broadband (like the EPB example above), Comcast's got you exactly where it wants you: captive and capped.

Filed Under: broadband, broadband caps, competition, data caps, usage caps
Companies: comcast

FCC May Finally Include Price & Usage Caps When Weighing Broadband Deployment Progress

from the welcome-to-2015 dept

The FCC's long history of ignoring the broadband duopoly's stranglehold over telecom markets has at times bordered on the comedic. This is, after all, the agency that required 36 public workshops, 9 field hearings, 31 public notices and 376 pages to craft a "National Broadband Plan" that went well out of its way to avoid doing anything substantive about the lack of broadband competition. And only the FCC could spend $300 million on a broadband mapping website that completely omits price, while routinely hallucinating both competitors and available speeds.

If the FCC has an area of expertise, it has historically been empty broadband lip service and elaborate, theatrical dance routines designed to protect the status quo.

But under Tom Wheeler, we're actually starting to see this change a little bit. For example, Wheeler recently pushed the agency to bump the definition of broadband to 25 Mbps, to highlight how three-quarters of American homes lack more than one option for real broadband service. Under Wheeler, for the first time in fifteen years, the FCC is no longer pretending that U.S. broadband is robustly competitive. He's still been reticent to acknowledge high prices or the fact that broadband users are consistently gouged with misleading, below the line fees, but baby steps, right?

Now the agency has announced it is fielding inquiries on whether or not it should include usage caps, overage fees, pricing and latency when crafting its annual Broadband Progress Report on the state of broadband competition:

"Today’s Notice of Inquiry further seeks comment on whether to consider standards beyond speed when assessing broadband deployment, including latency and consistency of service. And it asks whether to consider factors beyond physical deployment, including pricing and data allowances, privacy, and broadband adoption."

That's not great news for lagging broadband ISPs, given that the FCC's most recent Broadband Deployment Report already found that 55 million Americans -- 17 percent of the population -- lack access to advanced broadband, and over half of all Americans lack access to broadband at speeds of 25 Mbps down, 3 Mbps up. Factor in price, actual line performance, and whether a connection is hampered with bandwidth caps and overages, and those statistics could very quickly get much, much uglier. The FCC has also told the GAO that it may start factoring in streaming video performance when reporting on whether competitive broadband is being successfully deployed.

All told, the FCC's proposed changes will make it harder than ever for incumbent broadband ISPs to pretend that nothing's wrong with the U.S. broadband market. Not that they won't keep trying, since at this point pretending U.S. broadband is infallible is sort of a national pastime and full-time job for incumbent ISPs and their armies of paid telecom policy wonks.

Filed Under: broadband, deployment, fcc, price, usage caps