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.

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Comments on “As Broadband Usage Caps Expand, Complaints To The FCC Skyrocket”

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33 Comments
Anonymous Coward says:

“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…”

The problem with percentages statements like this is that there will always be a top 10% of people, whether they’re using 1PB a month or 1MB a month. It tries to obfuscate the actual impact by hiding behind percentages, trying to make it seem like a bigger deal than it is.

“…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.”

If you’re going to start treating your service like a utility, let’s start regulating it like a utility.

Andrew D. Todd (user link) says:

Re: Re: Re:

Well, if you will recall, I have done the costing-out exercises. What costs is peak rate (even if totally unused), not cumulative bits. The cable is either installed or it isn’t. Within installed cables, what costs is subscriber loops, not back-haul, because trunk lines and switches have terrific economies of scale. Comcast and other ISP’s keep asserting that the moon is made out of green cheese, and there are enough naive people, constitutionally incapable of doing arithmetic, that they get away with it. Bit-counting is an essentially pointless exercise.

Anonymous Coward says:

Re: Re: Re: Re:

Bit-counting is an essentially pointless exercise.

Except when one set of bits come from other people over the Internet, and the other set comes from you as cable TV. Then you want to tip the bit usage towards you set, and avoid at all costs people not subscribing to your bits because they have found replacement amongst the Internet bits.

magnafides (profile) says:

Re: Re: Re:

I can tell you, Comcast’s meters are certainly not accurate. I was suspicious when Comcast records had me coming dangerously close to the 300GB cap for all of the last 4 months, where my usage is basically one netflix stream for 2 hours/day (average) plus casual browsing. I turned on my router’s traffic logging at the end of last month, and lo-and-behold, Comcast shows my usage for April being 200GB whereas my router shows it at around 130GB.

Gumnos (profile) says:

Re: Re: Re: measuring Comcast

Just making sure that your router logged all WAN traffic, not just HTTP/HTTPS. A 70GB discrepancy is still a HUGE difference and would be hard to reach on DNS/NTP-queries (or other common UDP traffic) alone, but I could see it being from IMAP/POP/SMTP or SSH/BitTorrent traffic.

Or maybe Comcast is injecting 70GB of super-cookies in your HTTP(non-S) traffic and billing you for the privilege. ????

Ninja (profile) says:

“people who are consuming the most should carry more of the bill rather than raise everybody’s bill by the same amount,”

No. You have to pay to keep their pipe up regardless if they use it 10% of the time or only with 10% of its capacity. I pay for you to keep my pipe up, the size I hired. The added cost for using 100% of the capacity in this case is small enough that it can be ignored.

It’s crystal clear that caps are anti-competitive behavior because they can. Except if you intentionally turn a blind eye.

Anonymous Coward says:

Re: Re:

For the most part you are right, but you have to remember, data does go to switches that do have limited capacity. With the current model it is impossible for everyone to use their connections at 100% at the same time.

So yes, there is a good reason to charge more for top users, but there is already a model for handling it. It’s call tiered services..

Those who want to use more just buy higher bandwidth packages just like the do it now, so the problem is already solved, we just need to stop them from creating a problem where it does not exist!

PaulT (profile) says:

Re: Re: Re:

“With the current model it is impossible for everyone to use their connections at 100% at the same time.”

Indeed. But, the reason why that model exists is that it’s very clear that will never happen anyway. Even as 4K video streaming and 30Gb game downloads become commonplace, half their customer base will still only be using their connections to read email and browse. The extra capacity is, and should be, paid for by the capacity those people are paying for but leave unused, not by charging people more for daring to use their connection.

However, extra bandwidth will always be needed as data loads are certain to increase in the future, both through additional connections and new applications. They need to stop finding excuses to rip people off, and start investing in infrastructure – as they should have been doing already.

Anything else is a weak excuse.

Ninja (profile) says:

Re: Re: Re: Re:

That. It’s actually sensible to leave less unused capacity than the actual size of pipes you are providing exactly because most people will not need it. But even then it should be said and agreed upon.

I would go for a tiered system as he said. If you want to have full speed, all the time, you are a tier 1 user otherwise you are a tier 2, 3 and on user that gets the speed limited by a percentage depending on the tier. So you get X speed, tier 1, 2 or up. The first will always get full pipe. The second will be shaped as the network load goes up during peak times up to a y% of the speed. The third z% and so on. It still needs to be regulated to a sane amount of possible tiers but it is feasible.

Data caps aren’t an option.

Cecil says:

caps

When someone pays for 15/1.5 mb/s service and someone else pays for 50/5 mb/s service and yet another person pays for 100/50 mb/s service, why do they all have the same cap? Those who pay for faster speeds should be expected to want more bits and that should be built into the price. One size fits all caps show that they are not about the bits but about the money.

That One Guy (profile) says:

Re: Re:

Yeah, you don’t have to look very far to see the holes in their arguments.

“We’re doing it to keep the super-users from clogging up the connection!”

Okay, except if they pay a little more in which case suddenly it’s not a problem?

“We’re doing it because services like internet streaming take up too much data!”

Except your competing service, which magically doesn’t have that problem…

“If you use more you should pay more!”

Conversely if someone uses less shouldn’t they then pay less then? No?

“Our networks can’t handle people using their connections to that degree!”

A customer using their connection at it’s full capacity should never be a problem unless you oversold your service and can’t actually provide what you advertised. If you can’t provide the supply, don’t lie and claim that you can meet the demand.

Anonymous Coward says:

“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.

So if we go by this statement what Comcast is really saying is that they should be reducing the cost for the rest of the 90% if this is the issue.

I’ve heard this argument before as referred to as like being the electric utility, the more you use the more you pay. The other half of the argument is where they become hearing impaired. That the less you use the less you pay.

My caps come into effect soon. I plan on calling my ISP this week and telling them ‘kiss off’. No improvement in service, doesn’t meet broadband definitions, so I have no interest in continuing business with them. They have overvalued their service, far beyond what I am willing to pay them.

Anonymous Coward says:

Re: Re:

“like being the electric utility, the more you use the more you pay”

My electricity company uses a lower rate per kWh for higher usage, which is typical in my State. There are 3 tiers – the lowest use is the most expensive per KWh, and the highest use is the cheapest. There is also has a baseline charge which stays the same regardless of usage. It is remarkable how the top limit of the lowest tier (most expensive kWh) and the lower limit of the top tier (cheapest kWh) have crept upwards over the years.

Example-

5 yrs ago:

Tiers (kWh usage): under 400, 400 to 1000, 1000+

Usage 450 kWh:

400 kWh at highest rate
50 kWh at middle rate

Usage 1200 kWh:
400 kWh at highest rate
600 kWh at middle rate
200 kWh at cheapest rate

Today:

Tiers (kWh usage): under 500, 500 to 1500, 1500+

Usage 450 kWh:

450 kWh at highest rate

Usage 1200 kWh
500 kWh at highest rate
700 kWh at middle rate

During this timeframe per capita usage has reduced (efficiency measures) and hence more people are trapped in higher rate bands.

I can only surmise that tiered internet pricing (referenced in other comments) would result in the same gaming tactics.

Anonymous Coward says:

I’m about to file a formal complaint against CenturyLink. I’m an engineer who designs and build network hardware, I know a think or two in this regards. About two months ago, netflix went from good quality, to horrendous. After talking to both companies and being lied to by both companies about the source of the issue, I started doing testing. I’ve gathered enough evidence to show that CenturyLink is either refusing to upgrade their peering (which doesn’t make much sense as I was able to stream 4k on my 40mbs connection just fine before)… or, as the data I’ve collected would indicated, there is intentionally throttling occurring (the very even, consistent, trickling flow of packets at about 0.5mbs doesn’t look anything like a truly clogged link).

Andy says:

Bulldust

I could go on and on about this but i think techdirt should investigate some of the ideas from new startups and places like google investigating ideas to provide wifi broadband to everyone at crazy low prices with no caps and better service.#

It would be interesting to see how many of those startups could destroy the big 5 into shutting down or cutting consumer costs by 95% so they can come close to competing.

And no i ma not talking about the balloon internet which i believe was a cover story for something else…or the satellite internet which would have such terrible lag it would be useless for anyone playing games online which there are millions doing.

No i am talking about someone putting a tower in an area and covering a 50 mile radius with strong stable and cheap unlimited wifi. Damn it does not even have to go those distances some big cities are at most 15-20 miles in circumferences with most actually under 6 miles.So even a 20 mile range which is available right now could resolve much of the problems and destroy the incumbents and ensure they collapse totally never to do business again or if they want to do business have to offer something like google fibre at under $20 to everyone.It could be done but then they would have to spend some of the trillions they make a year. The telecoms broadband industry has done this to themselves and change will come , hopefully soon and it could change the landscape over a few weeks time before the big 5 could react.

Whatever (profile) says:

wah wah wah

So you are crying becuase the all you can eat buffet is closing, or at least costs a lot more than it use to? That’s classy!

I think you need to go back and read Google’s most recent results to understand that all you can eat internet isn’t a money making concept. Google has only rolled out in what should be the most profitable situations, and they are still losing their ass big time as an ISP. As consumers continue to demand more connectivity and more throughput that requires significant investment to create, something has to give to pay the price. Google can get away with it by burying hundreds of millions of losses under their billions of ad revenue. A normal ISP cannot just randomly spend that much money with no hope of a reasonable return on investment.

Ninja (profile) says:

Re: wah wah wah

Yes! Let’s ignore the fact that the heavy load of the costs ISPs have are actually securing BANDWIDTH or if you want something easy to understande, the WIDTH of the pipe. So what matters in terms of cost is the amount of water that can go through the ISP network at any given time and not the actual usage.

As another debunk to your idiocy from my personal experience: I use an online service that fetches files in other places and stores them so I can get later via HTTP. Their main appeal is downloading torrents automatically and letting you get the files via often faster HTTP. They sell their plans by storage not by data transferred. They migrated from charging for data transferred to storage a while back and the people in charge gave a nice explanation to all users effectively telling us that the cost to keep the files trumps the transit costs. So you are WRONG. As for the costs, they’ve adjusted their pricing ONCE in 4 years of existence. So, yes, ISPs in the US or anywhere asking for data caps are FULL OF SHIT.

Anonymous Coward says:

Interestingly, from an Australian point of view, we’ve always had usage caps of some sort – the more you pay the higher the data limit. Also the majority of ISPs tended to ‘shape’ the data to 256kb when you were over limit rather than charging a small fortune.
However, over time they have become more realistic. I took out a contract with my current ISP 4 years ago for a 250GB plan. This was later upgraded (at no extra cost) to 350 and has just been upgraded again to 1000. That means that I can stream video now without worrying about going over.

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