Lawmakers Complain About Comcast's Bullshit Expanded Usage Caps

from the do-not-pass-go,-do-not-collect-$200 dept

Last November, Comcast announced it would be expanding its bullshit usage caps and overage fees into the Northeast. For years, the Northeast had avoided the utterly pointless cash grab that is broadband usage caps because Comcast faced at least a tiny bit of competition from (uncapped) Verizon FiOS. But as federal and state regulators have grown more toothless and pathetic, Comcast's eagerness to expand the surcharges has only grown.

Reminder: Comcast's own internal memos have indicated such restrictions don't manage congestion or serve any valid technical or financial purpose. They're a glorified price hike on captive customers, and Comcast's decision to expand them (in addition to a bevy of other price hikes and fee increases) during a pandemic isn't being taken particularly well by lawmakers like Massachusetts State Rep. Andy Vargas:

"Rep. Vargas said it’s just a money grab. “Are they seeing increased cost as a business because people are using more data? And the answer to that question is no."

Comcast continues to push the claim that the caps are no big deal because only a few customers will hit the 1.2 terabyte monthly restrictions. But with entire households quarantined and hoovering up bandwidth during work Zoom calls and home education, that's simply not true. Usage has soared during the pandemic, and U.S. consumers already pay some of the highest prices for bandwidth in the developed world. Flat rate broadband has proven hugely profitable, and greed is the only thing driving this latest expansion.

Comcast wants folks hung up in a debate over whether "1 terabyte is fair," and not discussing why these confusing and arbitrary charges are being imposed in the first place, a ploy at least a few lawmakers, like Vargas, are seeing through:

"Rep. Vargas is not convinced. “This data cap is arbitrary, and there’s no reason for them to put this in place right now,” he said."

Vargas was one of a dozen Massachusetts legislators who "strongly urged" Comcast to reverse course during the pandemic:

"It is inconceivable that that Comcast would chose to impose this 'cap and fee' plan during a pandemic, when many Massachusetts residents are forced to work and attend school form home via the internet," the legislators said. "The last thing our consumers need is to worry about paying more for the same quality of service."

The question then becomes: what are lawmakers actually going to do about it? Telecom monopolies like AT&T and Comcast are powerful enough that they've effectively neutered any meaningful oversight on both the state and federal level. They're politically powerful enough that they literally get to write state law, usually with an eye on hamstringing competition. They were so politically powerful, they convinced the FCC to effectively self-immolate via the net neutrality repeal based on a bunch of bullshit data points that had been debunked for years.

Either we care about holding natural monopolies accountable or we don't, and based on the fact that Comcast will likely see zero penalty for price gouging during an historic health and economic crisis, it's not particularly complex math to determine which side of that line the United States falls on.

Filed Under: andy vargas, broadband, competition, data cap, overage fees, usage cap
Companies: comcast

Bullshit Broadband Usage Caps Are Hugely Profitable During A Pandemic

from the fancy-that dept

We've noted for years how broadband providers have increasingly imposed arbitrary, confusing, and punitive usage caps and overage fees to cash in on the lack of competition in US broadband. Not only have industry executives admitted these limits aren't technically necessary, they've increasingly been abused to hamstring competitors. AT&T, for example, doesn't impose the limits on its broadband customers who use its streaming video service (AT&T Now), but will impose the added charges if you use a competitor like Netflix.

For more than a decade ISPs have slowly but surely imposed such limits hoping that consumers wouldn't notice (think of the frog in the pot of boiling water metaphor with you as the frog). But with most folks stuck at home during an historic health and economic crisis, bandwidth usage (and thereby profits gleaned by usage caps) has grown significantly. In fact, data from OpenVault indicates that the number of broadband "power users," or users who consume more than a terabyte per month, has doubled over the past year:

"In Q3 2020, 8.8 percent of broadband subscribers used at least 1TB per month, up from 4.2 percent in Q3 2019, according to a study released yesterday by OpenVault. OpenVault is a vendor that sells a data-usage tracking platform to cable, fiber, and wireless ISPs and has 150 operators as customers worldwide. The 8.8- and 4.2-percent figures refer to US customers only, an OpenVault spokesperson told Ars."

Cross this phony threshold and you wind up owing your ISP even more money, despite Americans already paying some of the highest prices for broadband in the developed world -- a notorious metric that doesn't even include the additional costs incurred by usage caps, overage fees, and other nonsensical surcharges the industry uses to falsely advertise a lower rate. If you're a telecom monopoly, this is all great. If you're an American struggling to pay your broadband bill, suddenly higher due to household video streaming, gaming, school work, regular work, and video conferencing, it's decidedly less so.

OpenVault of course advises ISPs to embrace caps because it means more users will be paying more money over time than ISPs that don't:

"In potentially bad news for customers, OpenVault seems to be urging ISPs that haven't imposed data caps to adopt them. "The goal for network operators is to ensure that subscribers who consume the most bandwidth are in faster, higher ARPU [average revenue per user] speed tiers," OpenVault said. "Usage-based billing operators are achieving this goal more, on average, than network operators who utilize flat-rate unlimited billing."

But again, the problem is that such restrictions are bullshit. They do not manage congestion. They aren't required for network management because they don't really help network strain. They're glorified price hikes by natural monopolies on captive customers who can't vote with their wallets. They're not even necessary as a product differentiator, as the heaviest users can already be shoved toward business-class tiers. They exist solely to extract an additional pound of flesh from uncompetitive U.S. broadband markets. And now they're being exploited during a national crisis.

The Trump FCC made some performative, empty gestures toward this problem earlier this year when it announced an entirely voluntary pledge with ISPs, who agreed they'd temporarily stop charging late fees or imposing usage caps. Many ISPs not only ignored their promise, but it was only a few months before most ISPs returned to business as usual, hitting struggling Americans with all manner of spurious additional charges.

Of course you'd never realize such limits are bullshit reading outlets like the Wall Street Journal, which recently parroted industry claims like caps are necessary to "keep the prices of internet packages stable by shifting the extra cost to heavy users," (nonsense, everybody pays more under such a model as the average usage rate creeps skyward), or "protect the majority of subscribers from having rates raised every year" (also nonsense, given U.S. broadband flat rate prices and other fees routinely increase your costs either way).

It's just monopolies being monopolies, and there's a sizeable industry of think tankers, consultants, academics, and lobbying firms funded by the U.S. telecom sector whose entire job is to pretend that's not actually a problem.

Filed Under: broadband, data caps, overage fees, profits, usage caps

Bizarre Court Ruling Helps Cable Broadband Monopoly Charter Tap Dance Around Merger Conditions

from the our-courts-might-be-broken dept

Eager to impose higher rates on its mostly captive customers, Charter Communications (Spectrum) has been lobbying the FCC to kill merger conditions affixed to its 2015 merger with Time Warner Cable. The conditions, among other things, prohibited Charter from imposing nonsensical broadband caps and overage fees, or engaging in the kind of interconnection shenanigans you might recall caused Verizon customers' Netflix streams to slow to a crawl back in 2015. The conditions also involved some fairly modest broadband expansion requirements Charter initially tried to lie their way out of.

But with the GOP having neutered FCC authority over broadband providers (including the axing of net neutrality rules), Charter obviously is eager to take full advantage. So on one hand, they've been engaged in some fairly dodgy lobbying of the FCC to scuttle the conditions, which already had a seven year sunset provision (they expire in 2 years anyway). On the other hand, the telecom-backed Competitive Enterprise Institute (CEI) took a different tack, and filed suit against the conditions, somehow convincing four Charter customers to sue under the argument the conditions (not the merger) raised consumer prices.

This being America, the telecom-backed think tank last week scored a favorable ruling thanks to the US Court of Appeals for the District of Columbia Circuit. In its ruling (pdf), the court completely bought into the CEI's arguments that conditions crafted by consumer advocates, aimed at protecting consumers, somehow hurt consumers. As such, the court vacated two of the conditions -- one banning Charter from having to offer lower-cost broadband plans, and one prohibiting ISPs from engaging in dodgy behavior out at the edge of the network (interconnection).

In its ruling, the court proclaims that the restrictions on interconnection drove up consumer prices:

"To begin, the condition plainly caused New Charter to forgo revenue from edge providers. Before the merger, Time Warner, the largest broadband provider among the merging companies, raised substantial revenue from paid interconnection agreements. So did Bright House. But the merger condition prohibits New Charter from using those same revenue sources."

But that's a misrepresentation of what the conditions did. If you'll recall, networks of all kinds for years engaged in settlement free peering. As incumbent ISPs faced more competition from the likes of Netflix in the TV space, transit and streaming video companies alike accused ISPs like Verizon and Charter of intentionally letting their peering points get congested to force companies to pay significantly higher rates if they wanted their traffic to reach an incumbent ISP's customers. The FCC's net neutrality rules and the merger conditions were fairly mild restrictions designed to prevent ISPs from using interconnection as a way to drive up costs for their competitors.

Whether you like the rules or their implementation, the argument that they harmed consumers is nonsensical, and it's not being made in good faith. Telecom mergers as a whole generally drive up costs. History is very clear on this point. Yet here we have the telecom sector and its think tank allies trying to claim it was the attempts to mitigate merger harms...not the damn merger itself that was the problem.

One of the other major conditions, a seven year ban on bullshit usage caps, was also singled out by CEI as some bizarre affront to consumer welfare. But the court refused standing on caps under the bizarre claim that Charter has purportedly no interest in imposing such profitable restrictions:

"Nonetheless, the consumers have failed to prove causation because there is scant evidence that New Charter would offer usage-based pricing if allowed to do so. Before the merger, its predecessor companies rarely offered it. Charter had specifically rejected it. Time Warner offered one plan with usage-based pricing, but abandoned efforts to expand the practice after “significant public backlash.” Id. at 6363. Bright House never offered it. Given the lack of evidence that New Charter’s predecessor companies had offered usage-based pricing before the condition was imposed, or that New Charter would offer usage-based pricing if allowed to do so, the appellants have failed to show traceability or redressability.

For one, the company's name is "Time Warner Cable," not Time Warner. And while it's good the court rejected the CEI's attempts to scuttle the ban on broadband caps (which again expire in two years anyway), the logic here doesn't make much sense either. It's abundantly clear that Charter is lobbying to kill these conditions in large part because not having them would allow the monopoly to raise prices. That this is something that's even debated by the court shows they don't really even understand the motivations of the players here. The only reason Time Warner Cable didn't succeed in capping usage previously was historic public backlash.

In short, a telecom monopoly-linked think tank filed a lawsuit claiming that post-merger prices went up because of some pretty modest conditions specifically designed to try and prevent that. And the courts, which routinely reject consumer group lawsuits built on far-more concrete logic, bought into that reasoning entirely (in large part because the Trump FCC refused to defend them). Nowhere does the court even faintly recognize the lawsuit is in bad faith. Nor does the court recognize that Charter lied so frequently about its adherence to the merger conditions it was almost kicked out of New York State.

It's another example of why it's often far easier to just ban problematic mergers, instead of trying to rely on a bunch of conditions that are difficult to enforce, don't fix what they profess to, aren't permanent, or can't be enforced due to regulatory capture and a slow but steady erosion of the U.S. court system.

Filed Under: broadband, broadband caps, competition, data caps, fcc, interconnection, merger conditions, net neutrality, overage fees
Companies: charter spectrum, chater, time warner cable

Broadband ISP Cox Will Now Charge You $50 More To Avoid Usage Caps, Overage Fees

from the thanks,-competition dept

We've noted repeatedly how large ISPs for years have happily abused the lack of competition in the broadband market by imposing arbitrary, unnecessary and confusing usage caps and overage fees. While ISPs had tried for a while to suggest these caps were "only fair," or necessary due to congestion, repeated debunking of those excuses forced the ISPs a few years back to finally stop pretending there's any good reason for these limits.

These days, ISPs don't even give coherent reasons for the limits, because they know caps are about one thing: abusing a lack of competition to raise rates and protect TV revenues from streaming video competition. More importantly, they know that thanks to this limited competition, there's nothing you can do about it either way.

Cox Communications is one of several cable providers that have taken full advantage of the reduction in competition by telcos to drive up rates via usage caps and overage fees. Back in June, Cox announced it would be imposing usage caps of one terabyte, then charging users $10 for each additional 50 GB of data consumed. And this week, the company unveiled the other arm of the company's ingenious plan -- charging its users $50 more per month if users want to avoid usage caps entirely:

"A memo being circulated among employees on the changes downplays the impact of these restrictions on consumers, repeatedly trying to argue that confusing and unnecessary usage limits aren't a big deal because the majority of Cox customers won't run afoul of them...today.

"An overwhelming majority of data is consumed by a very small percentage of internet users," the memo reads. "The new choices are great options for the small percentage of heavy users who routinely use 1TB+ per month and prefer a flat monthly rate, rather than purchasing additional data blocks.".

If it's truly only a "very small percentage" of users causing problems with "excessive" usage, Cox could have simply pushed these users to business-class tiers. Instead, they made the conscious decision to impose confusing new rate hikes on all users, feebly trying to insist that this can't possibly impact their consumption. And while it might be true it won't impact consumption today that's not really the point. Once caps are imposed, ISPs can tighten the noose at their discretion. And in a few years, when 4K video streaming and other new high-bandwidth applications emerge, ISPs have a wonderful new way to raise rates on a consistent basis.

But consumers realize they're being screwed, which goes a long way toward the cable industry's utterly abysmal customer satisfaction ratings. In just a few months, Cox imposed pricey and confusing new surcharges knowing a lack of competition would let them get away with it. They then offered users the "option" to pay $50 more just to enjoy the kind of unlimited connections they had last year -- for notably less money.

It's a wonderful racket, and one regulators at the FCC and elsewhere (regardless of political party) have pretty consistently made abundantly clear they couldn't give two shits about. And while many people reading these reports get bogged down over whether one terabyte limits are fair, that misses the entire point. There's no technical reason to impose these limits in the first place. They're glorified rate hikes, poorly justified, shoveled on the backs of captive users who already pay more for bandwidth than users in most developed nations. All thanks to a broken market very few people seem all that interested in fixing.

Filed Under: data caps, fees, overage fees, usage caps
Companies: cox

CenturyLink Follows Comcast's Lead, To Start Charging Broadband Overage Fees

from the more-money-for-the-same-shitty-product dept

You can add CenturyLink to the growing number of ISPs charging more money for the same product thanks to limited broadband competition. The company told attendees of an earnings conference call this week that it would be following Comcast's lead and conducting a "trial" of broadband usage caps and overage fees sometime later this year. The company lost 22,000 DSL customers last quarter, and clearly believes that layering an already inferior product with new restrictions and higher prices will surely make its customers happy:

"...Regarding the metered data plans; we are considering that for second half of the year. We think it is important and our competition is using the metered plans today and we think that explore those starts and trials later this year is our expectation."

According to CenturyLink's "excessive use policy," the company has capped customers on 1.5 Mbps or slower lines at 150 GB a month. Customers on lines faster than 1.5 Mbps enjoy the luxury of a 250 GB monthly limit. And whereas ISPs used to provide bullshit justifications for such restrictions (the network congestion bogeyman! it's only fair!), as those excuses have been shown to be nonsense over the years, ISPs have just stopped offering any. Here's how CenturyLink's website justifies these glorified price hikes:

"CenturyLink is committed to providing an optimum Internet experience for every customer we serve. To accomplish this, CenturyLink needs to ensure that customers are on the rate plan that meets their data download requirements. Of the millions of CenturyLink High-Speed Internet customers, a very small fraction has exceeded the download usage limits provided with their monthly plan. It is for this reason that CenturyLink has made the decision to place download limits on residential plans.

That's not really a reason, that's just words arranged to look vaguely like sentient logic. Of course the real reason is because they can.

In most markets CenturyLink enjoys either no competition at all, or they face a cable provider that also has usage caps in place. That's why with the exception of a few cherry picked markets in places like Seattle, CenturyLink users still enjoy speeds circa 2001 or so. And why not add insult to injury, and combine pathetic last generation broadband speeds (which cost very little to actually provide already) with aggressive restrictions and cutting edge, next-generation overage fees?

Like Comcast, CenturyLink calls this a "trial" to keep regulators at bay, since "creative pricing experimentation" sounds so much better than "price gouging uncompetitive markets and erecting unnecessary obstacles to innovation and streaming competitors." Given the FCC has yet to bat an eyelash at the practice, this logic appears to be working. The FCC's also apparently blind to the fact that nobody is confirming whether usage meters are accurate, or that ISP's are now exempting their own services from unfair competitive advantage.

So while you'll hear a lot of media hype about cherry picked gigabit broadband deployments paving the way to our glorious connectivity future, a lack of competition, usage caps and zero rating are ensuring that for broadband customers in most markets, the reality is going to look decidedly less futuristic.

Filed Under: broadband, broadband caps, competition, dsl, net neutrality, overage fees
Companies: centurylink, comcast

Wireless Carriers Finally Cave On Overage Fees; Reluctantly Agree To Stop Treating Customers Like ATMs

from the it'd-be-a-great-racket-if-it-wasn't-for-these-stupid-customers dept

About a year ago, various wireless service providers found themselves under investigation by the FCC for sky-high overage fees. Of course, they protested this charge in the form of hilarious statements, expressing "concern" that their customers might be "confused" if they were warned about impending overage charges. Some even went so far as to claim that customers obviously wanted overage charges because (get this) customers racked up overage charges.

To wit:

"For accounts that repeatedly go into overage, it is reasonable to infer that it is a matter of consumer choice. These customers are either indifferent to overages or are making the deliberate decision to incur overages because it is the most cost-efficient solution for their usage patterns."

Or maybe, just maybe, customers wanted to be informed of these possible overage charges but no cell phone company was interested in telling them. While tools are available for consumers to track their own usage, this is not something that's promoted very heavily (or indeed, at all) by most phone companies.

Well, the FCC has finally stared down the wireless carriers, who have decided to voluntarily (through gritted teeth) implement many of the rules suggested by the FCC, rather than deal with being regulated by the government.

Customers will receive free text alerts in real-time when they're about to exceed their limits, CNET reports. The move is supposed to cut down on the "bill shock" people may feel when hit with sky-high rates for extra usage. Wireless carriers will also warn customers who travel overseas about the additional fees they may incur.

Of course, this being a government-related decision (and one performed under presumable duress), don't expect to be notified any time soon.

Under the volunteer measures, wireless carriers have 18 months to put their warning systems in place.

Not only that, but your months-away warnings may not be timely enough, especially for those of you with notorious text-fiends (read: teenage children) on your mobile plans.

Some providers, including AT&T and Verizon Wireless, already warn their customers as their data use approaches the limit. However, these warnings may be delayed. AT&T, for example, takes 24 hours.

24 hours?!? That's like 3 years of texting for normal users! The good news is that sometime within the next two years, your mobile carrier may have to speed up its notification system to something approaching "real time."

Until then, you may want to consider switching to an unlimited plan or putting your kids up for adoption, whichever is cheaper.

Filed Under: fcc, overage fees, wireless
Companies: at&t, verizon wireless

Neat Trick: Rogers Offers Online Video And Broadband Cap To Punish You For Using It

from the that'll-work-well dept

Two separate initiatives by cable companies are coming together in conflict. We've seen how many cable companies are trying to set up video portals that will let subscribers to cable TV get access to the same content online, as a weak attempt to reduce churn of consumers dumping cable altogether and concentrating on online options. But, at the same time, they're also looking to implement broadband caps with high overage fees. Those two concepts are shown together with Rogers offering both a video portal and low metered caps with high overage fees. So your incentive is to not use the video portal (which apparently is limited in the first place). How is that going to reduce the churn? It seems like a far better option is to just go with another provider that actually focuses on adding value rather than limiting it. Too bad there's so little competition up in Canada. Ahhh... that explains things, now, doesn't it?

Filed Under: broadband caps, cable, canada, metered billing, overage fees, tv content
Companies: rogers

Comcast Thinking About Overage Fees And Tiered Usage

from the please-don't-use-our-broadband dept

Following Time Warner's recent plans to test broadband caps and overage fees, Broadband Reports has the scoop that Comcast is very strongly considering the same thing. Unlike Time Warner Cable's plans to test super low caps, Comcast is looking at 250GB/month -- which it claims will only impact 0.1% of users. Overage fees will be pretty high, however: $15 charge for each 10 GB over the cap. Comcast will also give users one free "slip up" month per year, for those who go over just for that one month.

There are some good and bad things to this news. On the good side, it would represent a big step up for Comcast in terms of actually being transparent. The company has always had caps, but they've been totally secret "fuzzy caps." Users would have no idea if they had gone over until Comcast sent them a nasty letter telling them to cut down on usage -- or they would lose their account. That said, the problem with tiered broadband is that it can serve to hold back innovation. It puts a limit on what people can do online, just as ISPs should be encouraging more innovative uses. As higher bandwidth applications are coming, limiting the value of an internet connection doesn't seem particularly wise. Providers who embrace innovation and supply the bandwidth to support it will be rewarded with happy customers.

Filed Under: broadband, cable, caps, overage fees, transparency
Companies: comcast