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Danger of "Sponsored Data" via AT&T, Others

AT&T has announced a program that has put many of us on edge - "Sponsored Data." As an example, I may have a 500 MB cap on my monthly AT&T plan, but Facebook could pay AT&T so that its content does not count against my cap. Both Free Press and Public Knowledge have taken strong stands against the program, arguing that the FCC should not allow it. And the L.A. Times explains that it won't save consumers any money.

But those who defend the program argue that it is nothing more than a modern day 1-800 number, where the other party pays for the call. I find the argument unpersuasive.

For decades, 800 numbers were a fraction of calls made. Most phone calls have been local in nature, so even if 800 numbers were a substantial amount of long distance calls, it didn't really impact how we used our phones. By contrast, here AT&T will be targeting the most common applications on the Internet, further centralizing power among those with deep pockets to build a moat around their services and hamper innovation.

Additionally, we had unlimited local calling in combination with tolled long distance. If all calls were tolled individually, the 800 number would be a more appropriate comparison. All data counts against the monthly cap except for companies that pay to exempt their data. So if you have a choice between two video streaming services, which would you pick? The one that runs up your AT&T bill more or the one that doesn't?

Finally, with this "pay to play" program, the big wireless carriers have a strong incentive to keep data caps low because if companies like Facebook, Google, and others are willing to pick up the tab.

The whole approach may harm innovation in ways that were spelled out quite well on AVC:

Entrepreneur: I plan to launch a better streaming music service. It leverages the data on what you and your friends currently listen to, combines that with the schedule of new music launches and acts that are touring in your city in the coming months and creates playlists of music that you should be listening to in order to find new acts to listen to and go see live.

VC: Well since Spotify, Beats, and Apple have paid all the telcos so that their services are free on the mobile networks, we are concerned that new music services like yours will have a hard time getting new users to use them because the data plan is so expensive. We like you and the idea very much, but we are going to have to pass.

This isn't the make-believe world of Chicago economists. It is a world where making it big means finding investors - and investors rarely want to go after massive corporations with moats around their products. This is the same reason investors rarely see any prospect of making a quick buck by competing against Comcast.

Lack of Competition Creates Capped Connections

This post comes to us from Patrick Lucey of the Open Technology Institute at the New America Foundation. The post was originally published there, but we are excited to feature it here as well.

Last month my colleagues and I at the the Open Technology Institute released a paper titled “Capping the Nation’s Broadband Future?” The paper examines data caps, an increasingly common practice where internet service providers charge individuals a fee if they exceed a monthly threshold on the data they use. The paper discusses how data caps are not a solution to network congestion concerns, nor a reflection of increased costs due to more people being online. A review of public financial documents for Comcast shows their broadband network operating are decreasing. Other costs, like bandwidth transit, are decreasing as well. Instead, data caps are a reflection of a lack of competition in both the home and wireless broadband market. 

As if to hammer home the larger point about a lack of competition, a few days after releasing the paper I received the following flyer in my mailbox. It is a promo piece from a joint marketing agreement between Comcast and Verizon Wireless where they promote each others’ services. Signing up for Verizon Wireless service will give me a discount on my home Comcast subscription. 

Although this agreement was approved by the FCC and Department of Justice, this kind of chummy behavior between supposedly rival companies is hardly a sign of aggressive competition. Verizon FiOS is often cited as the main competitor to incumbent cable companies, even though Verizon officials have stated the company is not expanding FiOS to new markets.  

At a recent public event, Vint Cerf, recognized as one of the creators of the internet, stated that since the days of dial-up service competition among broadband providers has “evaporated.”  Perhaps most telling for the American broadband market are recent developments in China, where new buildings are required to be wired with fiber optics if there is a larger fiber network in the area. The article touts how individuals will have their choice of internet providers. By adopting open access policies such as these on a large scale, customers in China -- a country that has embraced capitalism but is still nominally communist -- could end up enjoying greater free market competition than customers in the U.S. 

The lack of broadband competition in the U.S. has led more and more telecom policy leaders to worry that instead of competing and building state-of-the-art networks, internet service providers are increasingly focused on “harvesting” higher revenues from their customer base. Indeed, recent trends seem to confirm these fears, as providers have begun implementing data cap overage charges, introducing new modem rental fees, and entering into joint marketing agreements. 

It is important to have a discussion around data caps and what they mean for online innovation, commerce and consumer behavior. However, data caps are merely the manifestation of a larger problem: the lack of robust competition among U.S. internet providers. New entrants like Google Fiber in Kansas City or municipally-owned networks in other cities are offering faster broadband speeds and typically without data caps. Policymakers in Washington must focus on ways to encourage these local examples of innovation on a larger national basis in the broadband market.

Bandwidth Caps are Unnecessary and Counterproductive

The Open Technology Institute at the New America Foundation has released a report on data caps in the U.S. The report, Capping the Nation's Broadband Future, was authored by Hibah Hussain, Danielle Kehl, Benjamin Lennett, and Patrick Lucey.

The paper looks at the growing prevalence of monthly data caps by massive ISPs like Time Warner Cable, AT&T, and others. Authors conclude that data caps are effectively discouraging Internet usage with restrictions and limits that can be expensive. From the summary:

As this paper documents, data caps, especially on wireline networks, are hardly a necessity. Rather, they are motivated by a desire to further increase revenues from existing subscribers and protect legacy services such as cable television from competing Internet services. Although traffic on U.S. broadband networks is increasing at a steady rate, the costs to provide broadband service are also declining, including the cost of Internet connectivity or IP transit as well as equipment and other operational costs. The result is that broadband is an incredibly profitable business, particularly for cable ISPs. Tiered pricing and data caps have also become a cash cow for the two largest mobile providers, Verizon and AT&T, who already were making impressive margins on their mobile data service before abandoning unlimited plans.

The increasing prevalence of data caps both on the nation’s wireline and mobile networks underscore a critical need for policymakers to implement reforms to promote competition in the broadband marketplace.  Data caps may offer an effective means for incumbents to generate more revenue from subscribers and satisfy investors, but making bandwidth an unnecessarily scarce commodity is bad for consumers and innovation.  The future is not just about streaming movies or TV shows but also access to online education or telehealth services that are just starting to take off. Capping their future may mean capping the nation’s future as well.

The paper also looks at the technical challenges of capping data usage. Additionally, the authors delve into the many ways data caps are turned into profit for a few big providers while harming users. This resource brings relevent data into focus along side long term policy implications and offers some advice:

Data Cap Myth

For the Internet to continue to serve as a catalyst for economic growth it is imperative that consumers and entrepreneurs not feel constrained online. In a recent speech, former FCC Executive Director and Chief of Staff Blair Levin highlighted the links between broadband abundance, innovation, and economic growth.

"When it comes to the wireline access network, instead of talking about upgrades, we are talking about caps and tiers. Instead of talking about investment for growth, we are talking about harvesting for dividends,” …  “[policymakers] should recognize that our progress demands an investment environment that creates the conditions that allows us to invent the future, not just harvest from the past."

An uncapped Internet environment gave rise to a host of innovative and popular applications. Broadband and bandwidth must continue to be thought of as an abundant resource, not a rationed commodity, to ensure the vibrant online ecosystem can continue to flourish.

Shortly after this report was published, the lead lobbyists for cable interests in Washington, DC, admitted that the bandwidth caps are not designed to solve any congestion problems, which Karl Bode covered with his usual smart analysis.

Except the argument that usaged pricing is about fairness has been just as repeatedly debunked. If usage caps were about "fairness," carriers would offer the nation's grandmothers a $5-$15 a month tier that accurately reflected her twice weekly, several megabyte browsing of the Weather Channel website. Instead, what we most often see are low caps and high overages layered on top of already high existing flat rate pricing, raising rates for all users.

Any argument that caps for wireline service are necessary is refuted by the fact that the fastest networks in the US, whether publicly owned, Google, or even Verizon's FiOS, see no need to cap monthly transfer amounts.

The big cable monopolists don't care about fairness, they care about boosting profits while investing as little as possible. Unfortunately, their overcharging lack of investment is harming every other industry in our country.

AT&T, Others Overcharge Subscribers Based on Secret Bandwidth Meters

Imagine going to a gas station, putting 10 gallons into your car's 12 gallon tank, and driving off only to find your needle only approaches half a tank? This scenario is quite rare because government inspects gas stations to ensure they are not lying about how much gasoline they dispense.

But when it comes to the Internet, we have found measurements of how much data one uses is unregulated, providing no check on massive companies like AT&T and Time Warner Cable. And we are seeing the results -- AT&T is not open about what its limits are or how to tell when one has exceeded them.

Stop The Cap has noted that AT&T has advertised unlimited bandwidth for its DSL/ U-verse product while chiding and charging customers who exceeded certain amounts of monthly usage. Customers were quietly warned and charged $10 for each additional 50 GB over 150 GB for DSL subscribers or 250 GB for U-verse customers.  Clearly, "unlimited" has several definitions, depending on whether one is a customer or an ISP.

Complaints have also come in from SuddenLink customers and others. The ISP charged usage based customers for bandwidth usage when they didn't even have power. Simlarly, AT&T customers began to complain about inaccurate meters from the beginning of the program. This from a 2011 DSL Reports story - one of many comments from AT&T customers:

AT&T's data appears to be wholely corrupted. Some days, AT&T will under-report my data usage by as much as 91%. (They said I used 92 meg, my firewall says I used 1.1 Gigs.) Some days, AT&T will over-report my data usage by as much as 4700%. (They said I used 3.8 Gig, dd-wrt says I used 80 meg. And no, this day wasn't anywhere near the day they under-reported.)

Most of us don't keep track of our bandwidth usage, because there is no easy way to do it. For the most part, we have to take the word of our Internet service providers, but who is ensuring that they are accurate? Mismeasuring could be the result of incompetence or fraud, but the FCC has not stepped up to ensure consumers get what they are promised.

DSL Reports has extensively covered this AT&T bandwidth cap story and its refusal to open its meters to verification. One customer recorded a persistent pattern of inaccuracuracies, finding that AT&T was over recording the households daily usage by about 20-30%. The user contacted AT&T support to get a definition of "metered usage" because there was no definition on its website. From the article (and reposted from Slashdot):

Boy, did I get a surprise. After several calls, they finally told me they consider the methodology by which they calculate bandwidth usage to be proprietary. Yes, you read that right; it's a secret. They left me with the option to contact their executive offices via snail mail.

As long as there is no meaningful competition for broadband customers, AT&T will face no market penalty for abusing its customers. And unfortunately, the FCC has been asleep at this wheel as well. Also from Karl at DSLReports:

Worse perhaps, is that regulators in both the United States and Canada haven't shown the slightest interest in the problem despite the fact that ISPs are billing like utilities, with nobody but the consumer confirming whether their meters are accurate.

We have yet to hear of a credible reason to need bandwidth meters on wired networks. The companies that have invested in modern networks -- from community fiber to Verizon's FiOS -- see no need to count bits. It only seems to be those who don't want to invest and cable companies that want to slow the growth of over-the-top video pushing these limits.

Usage Based Billing - Time Warner Cable Latest Attempt to Increase Prices

Time Warner Cable's announced intention to expand its usage based billing for broadband has recently received a little media attention. The company currently uses tiers for customers in parts of Texas, allowing customers to sign on to a plan which limits the amount of usage per month. If they come in under the plan amount (currently 5 gigabytes), they get a $5 dscount. If they go over, they are charged $1 per gigabyte over the tier limit.

One commentary we find particularly insightful is from Susan Crawford, "The Sledgehammer of usage-based billing." Crawford not only addresses TWC's billing change, but critiques New York Times' "Sweeping Effects as Bradband Moves To Meters" by Brian Stelter.

Crawford points out several statements in Stelter's article that sound rational on paper, but are actually "holes" in the fabric of reality. Based on what we have seen from companies like Time Warner Cable, we concur.

Stelter justifies Time Warner's decision to shift to usage-based billing based on the fact that its competitors are doing it. Crawford points out that:

Time Warner does not have competitors among cable companies – if by competition you mean a cable distributor that could constrain Time Warner’s pricing or ability to manage its pipe for its own purposes. Time Warner’s DOCSIS 3.0 services do compete with Verizon’s FiOS, but FiOS is available in just a tiny part of Time Warner’s footprint. The major cable distributors long ago divided up the country among themselves.

The Stelter article raises the issue of high usage and congestion, their connections to the usage tier billing model, and claims that there is no other way to handle high usage. Crawford calls out this error as it relates to the new billing plan:

Cable distributors have a choice: They could maintain the 90+ % margins they enjoy for data services and the astonishing levels of dividends and buybacks their stock produces, or they could rearchitect their networks to serve obvious consumer demand. But they are in harvesting mode, not expansion mode. And no competitor is pressuring them to expand.

Stelter quotes Comcast when it tried to defend the new billing program:

Last spring, David L. Cohen, Comcast executive stated “Our network is not an infinite resource, and it is expensive to expand it,”

To which Crawford replies:

There is no empirical connection between any of the pricing involved in this story – the monthly prices, the overage prices, any of it – and the cost of actually providing data service and responding to consumer demand. The major cable distributors can charge whatever they want, however they want, for whatever services they define. There is no oversight of any of this and no visibility into what is actually going on.

Christopher Mitchell discussed this very subject last week on an impressive panel of Internet experts that discussed this issue for an hour:

Will charging extra for downloading an extra movie solve the problem of congestion? No, it will just let TWC profit from a hot consumer trend - viewing content online. Will TWC and Comcast use that profit to expand? Maybe, but history shows that those 90+% margins are not typically directed toward for expansion of any kind.

A significant chunk of that money, however, is dedicated to lobbyists and legislators who help TWC and Comcast maintain their de facto monopolies and escape regulation. These companies have already spent at least $9 million in DC to ensure policymakers are paying more attention to their desires and our needs. Crawford points to the North Carolina Law revoking local authority to build a network and we add South Carolina to that ever expanding list. The list of state legislators who bend to giant cable company whims continues to grow.

When considering the environment, Crawford reminds us to look at the forest, not only the trees:

The cable operators have a built in, giant conflict of interest. They want to make sure that only their own premium video products are successful, and they can twist all the dials to make sure that happens. They can re-define services (calling their own content “specialized” and exempting it from caps or usage-based billing), they can withhold programming (particularly sports and live specials and first-run premium content) in concert with their colleagues, or charge so much for it that it won’t make sense to compete with them online, they can treat the bits coming from non-partners badly through their control over in-home devices as well as the pipe itself…endless endless ways to control.

Some commentary has been favorable of the new pricing, arguing that people should not have to pay for unlimited usage if they don't need or want it. Yet, if people were actually able to pay something that actually corresponded to the cost of their usage, their bills would drop dramatically. Time Warner Cable is trying to increase the amount many pay, far above the cost of their usage.

Stacey Higgenbotham pointed out another problem. Tiered usage based billing reinforces the concept that efficient, unlimited online access is a luxury. Such an approach is contrary to what the internet is becoming all around the world (a human right) except in the U.S. Continuing this attitude will continue to drag us down as the rest of the world advances.

One piece of wisdom from the Stelter article came from Nicholas Longo, the director of Geekdom, a new collaborative work space for small companies in San Antonio:

“It’s like locking the doors to the library.”

Or, like letting you stay in the library for a long time, if you pay extra,and making you leave if you don't have sufficiently deep pockets.

If this is an issue you want to learn more about, we strongly recommend checking in on Stop the Cap!.

Roundtable Discussion on Bandwidth Caps and Broadband Networks

On Friday, July 13, I was a guest on TWiT Specials on the This Week in Tech Network, discussing bandwidth caps with Dane Jasper, Reid Fishler, and Benoit Felten. Hosted by Tom Merritt.

It was a very good discussion over the course of one hour.

Senator Franken Calls on FCC to Actually Enforce Its Rules

One of the reasons we so strongly support local, community owned broadband networks over European-like regulations on private companies is that large institutions regularly game the rules. We wrote about this last year, when Free Press called on the FCC to stop Verizon from ignoring the rules it agreed to for using certain spectrum.

Senator Franken, who has taken a strong interest in preserving the open Internet, has just reminded the FCC that creating rules does no one any good if it refuses to enforce them.

Not only has Comcast announced that its own Netflix-like service does not count against its bandwidth caps, some researchers found evidence that Comcast was prioritizing its own content to be higher quality than rivals could deliver. Comcast has denied this charge and proving it is difficult. Who do you believe? After all, Comcast spent years lying to its own subscribers about the very existence of its bandwidth caps.

The vast majority of the network neutrality debate centers around whether Comcast should be allowed to use its monopoly status as an onramp to the Internet dominate other markets, like delivering movies (as pioneered by Netflix). Comcast and many economists from Chicago say "Heck yes - they can do whatever they like." But the vast majority of us and the FCC have recognized that this is market-destroying behavior, not pro-market behavior.

So when Comcast was allowed to take over NBC Universal, it agreed to certain conditions imposed by the FCC to encourage competition. But the FCC has a long history of not wanting to enforce its own rules because it can be inconvenient to upset some of the most powerful corporations on the planet. Plus, many of the people working in telecommunications policy for the federal government will eventually make much more money working for Comcast, Verizon, and other carriers.

The FCC often ignores or delays action on many of these apparent violations, which Comcast expected when it agreed to them. In waltzes Senator Franken, who just wrote this excellent letter to the FCC and Department of Justice [pdf]:

Senator Al Franken

... It has now been more than a year since the merger was approved, and a number of complaints regarding Comcast's compliance with the merger conditions have been filed with the Federal Communications Commission (FCC). Several of these have languished before the Commission for extended periods of time. As I wrote last August, I am concerned that if the Commission fails to address conditions disputes in a timely manner, it will only incentivize Comcast to challenge future conditions and delay resolution of disputes through a protracted complaint process. It will also dissuade other companies from seeking relief before the Commission, if they believe Comcast has violated a condition. This ultimately undermines the conditions that were imposed by your agencies to promote the public interest and to foster competition, and it raises serious questions about whether it is appropriate to rely on behavioral conditions to prevent anticompetitive conduct.

Even if the FCC had the courage to restrain Comcast's anti-competitive actions (which would require a new Chair to replace Commissioner G), Comcast could delay any implementation of proper pro-competition rules with lawsuits and a strong lobbying campaign because Americans continue to vote for politicians that want to give more power to the biggest corporations while reserving less of it for local communities.

What are your Senators doing on this issue? Senator Franken is demanding accountability from the FCC and DoJ - you should call on your elected representatives to do no less. Today.

Radio and television are totally dominated by a few massive corporate interests. The only thing to stop the Internet from being similarly controlled is smart policies and government agencies that actually enforce them. Oh, and communities that own their own networks.

New Year, Same Lame Cable and DSL Monopolies

It's a new year, but most of us are still stuck with the same old DSL and cable monopolies. Though many communities have built their own networks to create competition and numerous other benefits, nearly half of the 50 states have enacted legislation to make it harder for communities to build their own networks.

Fortunately, this practice has increasingly come under scrutiny. Unfortunately, we expect to see massive cable and telephone corporations use their unrivaled lobbying power to pass more laws in 2012 like the North Carolina law pushed by Time Warner Cable to essentially stop new community broadband networks.

The FCC's National Broadband Plan calls for all local governments to be free of state barriers (created by big cable and phone companies trying to limit competition). Recommendation 8.19: Congress should make clear that Tribal, state, regional and local governments can build broadband networks.

But modern day railroad barons like Time Warner Cable, AT&T, etc., have a stranglehold on a Congress that depends on their campaign contributions and a national capital built on the lobbying largesse of dominant industries that want to throttle any threats to their businesses. (Hat tip to the Rootstrikers that are trying to fix that mess.)

We occasionally put together a list of notable achievements of these few companies that dominate access to the Internet across the United States. The last one is available here.

FCC Logo

As you read this, remember that the FCC's National Broadband Plan largely places the future of Internet access in the hands of these corporations. On the few occasions the FCC tries to defend the public from their schemes to rip-off broadband subscribers, Republicans (joined by a number of Democrats) threaten to overrule what is supposed to be an independent agency to defend the corporations that just happen to be donors to their campaigns.

Back when most assumed AT&T would be able to push its horribly anti-competitive takeover with T-Mobile through an impotent federal government, a few stories exposed the tip of the iceberg of AT&T's astroturf efforts, as with this report from the Center for Public Integrity:

“It is important that we, as Christians, never stop working on behalf of the underserved and forgotten,” the Rev. R. Henry Martin, director of the clinic, wrote to FCC Chairman Julius Genachowski in June. “It might seem like an out-of-place endorsement, but I am writing today in order to convey our support for the AT&T/T-Mobile merger.”

...

Not included in Martin’s letter to the FCC was the fact that his organization had received a $50,000 donation from AT&T just five months earlier. Indeed the Shreveport-Bossier Mission is one of at least two-dozen charities that were recipients of AT&T’s largesse and have written in support of the T-Mobile buyout, which will cut the number of national wireless companies from four to three.

When AT&T's wasn't able to buy enough influence with legitimate groups willing to sell out the interests of their members (who would pay more for their communications in a less competitive environment), it would simply create its own groups to push its interests:

AT&T Logo

Tallahassee Mayor John Marks brought an Atlanta nonprofit to the city as a partner in a $1.6-million federal-grant project, saying it would put high-speed Internet into the hands of poor people.

What he didn't say, and now says he didn't know, was that the Alliance for Digital Equality (ADE), in its first three years of existence, was nearly 100-percent funded by AT&T and spent most of its money — four of every five dollars — to pay board members, consultants, lawyers and media companies to push the global communication giant's positions on Internet and wireless regulation. Nor did Marks disclose, initially, that ADE had paid him $86,000 over several years as a member of its board of advisers.

We continue to see these massive companies abuse their market power to increase their prices, knowing that their lobbying arms will continue pushing legislation to stop communities from building their own networks.
Time Warner Cable hiked its rates in North Carolina immediately after passing its legislation to stop communities from building networks. Mediacom raised its prices while it attempts to sabotage efforts in rural Minnesota to build networks in unserved areas. And invented new fees to rip off its subscribers while trying to disrupt a rural fiber-to-the-farm initiative that slightly overlapped some territory in which they have long refused to invest.

Even as profits on cable broadband services approach Exxon proportions, Time Warner Cable has pushed for usage-based pricing to further overcharge subscribers, but mostly to strangle enormously popular competitors like Netflix. CenturyLink is not far behind, with usage caps prioritizing its own video content over competitors.

Verizon Wireless tried to sneak a new fee past subscribers by announcing it just before Christmas but backed down after outraged consumers reacted. One has to wonder whether it would have backed down in a world where AT&T took over T-Mobile, resulting in 3 out of 4 wireless customers being with Verizon Wireless and AT&T. Four competitors isn't the robust competition envisioned by Adam Smith, but it still beats the duopoly dynamic that results from even less competition.

Verizon Logo

Speaking of less competition, the recent deal between Verizon and cable companies is troubling. We already knew that FiOS was all but dead, but this deal truly puts a fork in it:

I'll assume that neither cable operators or Verizon are going to let us see the deal fine print to confirm the Times guess, but the logic fits Verizon's strategy. Verizon already cherry picked the most valuable FTTH upgrade markets, and has shown total disinterest in further upgrades. This deal allows them to save money on FTTH upgrade costs, instead soaking up remaining customers with LTE -- which we noted was the plan some time ago. This deal is very bad news to the rural telcos without the cash for large-scale upgrades (CenturyLink, Frontier, Fairpoint, two of which Verizon sold aging DSL networks to), and for satellite broadband providers.

The future of next-generation networks is now only community networks, cooperatives, and some small private networks.

We've long argued that phone and cable companies have systematically overstated their coverage in mapping efforts as part of their effort to blunt any sensible public policy that would result in all Americans having a choice between fast, affordable, and reliable connections to the Internet. The New England disaster called FairPoint is back in the news for overstating the number of subscribers that have access to DSL. The company has not met the requirements it agreed to when purchasing Verizon's lines a few years ago.

Comcast Logo

And in the continuing saga of Comcast's growing domination over the information people can access, Bloomberg TV is fighting Comcast's practice of discriminating against channels in which it has no ownership stake. Comcast has long strongly encouraged those who want to put television channels on its lineup to give Comcast a piece of the action, not unlike a mobster encouraging a small business to pay protection money. It wants to continue expanding its role as a gatekeeper to the Internet, particularly in the many areas where people have no real choice from other high speed providers.

And perhaps the best example of why we should not trust these massive corporations to run essential infrastructure is the revelation that AT&T defunded 9-11 call centers in Tennessee to gain a market advantage over competitors, a practice they were previously caught doing, leading to settlements out of court.

These corporations are not evil, they are following a sensible mandate to maximize their shareholder value. It is our government that is not sensible -- entrusting them with the future of Internet access without even bothering to enact the most basic regulations. Communities must continue to wise up and ensure they have the access they need to modern communications -- access that reponds to their needs, not those of distant shareholders.

Need Cloud Services like Online Backup? Steer Clear of Comcast

The net is buzzing about Comcast's data caps after a Seattle resident ran afoul of them. I found it particularly interesting given Seattle's recent decision to use its assets to further Comcast's monopoly following a poorly considered RFP.

This story highlights many of the frustrations and injustices that come with companies as massive as Comcast effectively monopolizing an essential utility, with practically no oversight locally or federally.

When Comcast enacted is 250GB monthly transfer cap years ago, many thought it was sufficiently high that few would run afoul of it. But the smart folks noted that if it did not increase as natural usage increases, it would hurt legitimate users (as opposed to those who run servers constantly trafficking in file sharing that violates copyright).

I made very clear to the gentleman I spoke with that I thought Comcast’s data cap policy was arbitrary, unfair, and extremely irritating… and that if I had any decent competitive options in the neighborhood I’d dump Comcast in a heartbeat. Since I don’t, I listened to him read his canned warning that if I exceeded their cap again I’d be cut off again.

Bear in mind that when you fill up the fuel tank in your car, you are at a gas station that is regularly inspected by the state to ensure it is correctly measuring the volume of gas dispensed. Comcast is not similarly regulated and we have to take Comcast's word on how much traffic we use. Most of the time I have visited Comcast's meter to see what my household usage is, I have been unable to even access it.

But back to the story, our Seattle friend later found that he had unintentionally violated the cap again, despite taking precautions not to:

The Customer Security agent was polite, and after the standard identification questions notified me I was cut off for a year due to exceeding Comcast’s Acceptable Use Policy limits on their bandwidth cap. I asked for details on what had been using bandwidth, and again, Comcast would not share. In a sudden brainstorm, I then asked whether the 250 GB bandwidth cap applied to just downloads (which I had assumed, as the majority of most bandwidth used in households is downstream bandwidth), or download and upload bandwidth. Surprise, surprise! Comcast measures both upstream and downstream bandwidth – and it suddenly clicked for me.

I’m a photographer and audiophile. I shoot all of my pictures in RAW format, and I store the many hundreds and hundreds of CDs I’ve purchased over the last 20 years or so in a variety of lossless and lossy music formats. …

This stuff is valuable to me, and I recently purchased a three-year subscription to Carbonite so I could back all of this content up to the cloud. I also recently saw Amazon’s announcement of being able to upload unlimited M4A/AAC tracks to their Cloud Drive service, and decided to upload my library there so I could access it when on the road. And it turns out uploading all of this content to the cloud triggered Comcast’s bandwidth cap and caused me to be cut off from the internet – again.

This is what you can expect from Comcast, which is only growing in power and influence. They have a flawed meter that is poorly understand by their customers (is it measuring up or down or both?) and will provide you will no help in the event they believe you have exceeded your allotment.

This is exactly why communities need to consider building their own networks that are directly accountable to the community.

Photo used under Creative Commons license, courtesy of Titanas on flickr.