Tag: "bandwidth cap"

Posted July 25, 2015 by Lisa Gonzalez

The Open Technology Institute (OTI) at the New America Foundation recently released its report on bandwidth caps. "Artificial Scarcity: How Data Caps Harm Consumers and Innovation" is the latest warning about an issue with grave implications. The PDF is now available to download. 

Last November, the Government Accounting Office (GAO) released a report [PDF] with serious comments on how ISPs might abuse their power through bandwidth caps. In that report, the GAO strongly suggested the FCC take action.

This report by Danielle Kehl and Patrick Lucey further examines how this profit grabbing technique from the big ISPs impacts consumer decisions and usage. 

From the OTI press release:

In this paper, we examine the growth and impact of usage-based pricing and data caps on wired and mobile broadband services in the United States. We analyze the financial incentive that Internet service providers (ISPs) have to implement these usage limits and discuss research that demonstrates how these policies affect consumer behavior. In particular, we explain how data caps can make it harder for consumers to make informed choices; decrease the adoption and use of existing and new online services; and undermine online security.

It is also increasingly clear that data caps have a disproportionate impact on low-income and minority populations as well as groups like telecommuters and students. In the conclusion, we urge the Federal Communications Commission (FCC), particularly as the new Open Internet Order goes into effect, to open up a serious inquiry into whether data caps are an acceptable business practice.  

In addition to their own data and conclusions, Kehl and Lucey provide information to many other resources that tackle the implications of bandwidth caps. As consumers' need for bandwidth increases with their changing Internet habits, this topic will only become more pressing.

Posted December 14, 2014 by Tom Anderson

Last month, the U.S. Government Accountability Office (GAO) released a report warning of the possibility and potential consequences of ISPs instituting data caps in their fixed line plans. In effect, this could mean applying something like the tiered service charges based on usage levels that we see in the mobile sector to broadband connections in the home or office. But whereas the vast majority of Americans have a reasonable range of choice between several major and minor carriers for mobile service, the GAO notes that the same is not true in the market for broadband, which could lead to ISPs using data caps (or usage-based pricing (UBP) in their parlance) in various harmful ways:

...providers facing limited competition could use UBP [usage-based pricing] to increase profits, potentially resulting in negative effects, including increased prices, reductions in content accessed, and increased threats to network security.

The GAO has provided the FCC with a copy of its report, and urged that the agency take action on the issue, including systematically tracking information on how many consumers are impacted by fixed providers instituting data caps and developing a voluntary code of conduct for the industry. According to Ars Technica, the FCC has taken a skeptical stance on the issue, despite Chairman Tom Wheeler’s outspoken concerns on the lack of competition in the fixed broadband market. Pointing to the small number of consumer complaints on the issue so far, the FCC asserted that “it is unclear that any action is needed at this time.”

Usage caps do not just affect sophisticated users with bandwidth-intensive jobs or hobbies that require them to transfer large design files or generate and share multimedia content. This has the potential to affect kids and adults doing homework or taking classes online, people who hope to cut the cord from traditional television providers, and telecommuters. From the GAO study:

Participants also expressed concern about difficulty tracking the wide range of devices accessing their fixed data allowance and that fixed UBP may negatively affect students, people working from home, and those with lower socio-economic...

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Posted April 24, 2014 by Christopher Mitchell

Recent reports out of the FCC say that it will allow ISPs to create and sell "fast lanes" of Internet access to the companies with sufficiently deep pockets to afford them. While some people argue over whether this violates network neutrality principles or not, the more important point is that most communities have no control over how the networks on which they depend are operated.

The big ISPs, like Comcast and AT&T, are focused on maximizing revenue for their shareholders. It is why they exist. So they will want to make the fast lanes as appealing as possible, which in turn means making providers like Netflix unable to deliver a high quality product without paying special tolls to Comcast.

What does that mean for you? It means you should expect to see the big providers slow their already anemic pace of investing in higher capacity connections in favor of pushing content providers into the paid prioritization schemes. It also means that you may have to start paying more for Netflix or Hulu, where the additional money goes to the ISP you already overpay for comparatively lousy service.

A range of ISPs, from privately owned Sonic.Net in California to Chattanooga's Electric Power Board right up to Google have demonstrated that they can deliver a "fast lane" to everyone. This fight over paid prioritization is nothing more than the big cable and telephone companies trying to increase their profits while minimizing needed investments in higher quality service to everyone.

Unless you live in an area with a community-owned network. Unlike the big providers with a fidiciary responsibility to distant shareholders, community owned networks are directly accountable to the community. Their mission is to maximize local benefits, not extracting as much wealth from households as possible. ISPs like Sonic also have much more reasonable policies but over time these privately owned ISPs are vulnerable to being bought by the big national providers.

Community owned networks are far less likely to engage in paid...

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Posted April 16, 2014 by Christopher Mitchell

For the second time this year, one of the major defenders of the cable and telephone companies has admitted that DSL cannot provide the Internet access we need as a nation. This admission validates our research as well as that of Susan Crawford and others that show most Americans are effectively stuck with a cable monopoly.

On April 7, 2014, the Diane Rehm show hosted another discussion on telecommunications policy with guests that included Jeffrey Eisenach, the Director of the Center for Internet, Communications, and Technology Policy at the American Enterprise Institute.

During that show, Eisenach stated, "The vast majority of Europeans still only have DSL service available, which we in the United States consider really almost an obsolete technology now."

Interestingly, Eisenach and others have repeatedly claimed that there is no market failure in the US - that we have plenty of choices. But most Americans have to choose between what most now admit is an obsolete DSL product and cable. Eisenach would add 4G LTE as another competitor, but as we have noted many times, the average household would have to pay hundreds of dollars per month to use their LTE connection as a replacement for DSL or cable.

The average household uses something like 40-55 GB of data per month. Given the bandwidth caps from LTE providers, the overage charges quickly result in a bill of approximately $500 or more depending on the plan. This is why the overwhelming majority of the market uses mobile wireless as a complement, not substitute to wired networks.

We are left with one conclusion: there is no meaningful competition or choice for most of us in the residential telecommunications market. And no real prospect of a choice either as the cable companies only grow stronger.

This is not the first time Eisenach admitted that DSL is insufficient for our needs. Back in January, on Diane's show, he again used Europe's dependence on DSL as evidence that it was falling behind: "They are reliant on these 20th century copper networks which have real limits on the amount of speed that they can deliver."

Even those who only want the private sector to deliver services are starting to admit that the existing providers are...

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Posted January 18, 2014 by Christopher Mitchell

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...

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Posted June 17, 2013 by Christopher Mitchell

Wireless networks have been incredibly successful, from home Wi-Fi networks to the billions of mobile devices in use across the planet. So successful, in fact, that some have come to believe we no longer need wires.

We developed this fact sheet to clarify some misconceptions about what wireless Internet networks are capable of and the importance of fiber optic cables in building better wireless networks as our bandwidth needs continue to increase.

This fact sheet defines important terms, offers some key points clarifying common misconceptions, compares 4G and 3G wireless to wired cable, and more. We also include references to additional resources for those who want to dig deeper.

Download our Wireless Internet 101 Fact Sheet Here [pdf].

If you want updates about stories relating to community Internet networks, we send out one email each week with recent stories we covered here at MuniNetworks.org. Sign up here.

Posted May 28, 2013 by Lisa Gonzalez

Another story of frustration as cable companies try to discourage Internet use on their last generation networks.

An article earlier this month in StopTheCap! tells the story of the John Heeley family, long time Cox customers and avid Netflix fans. The Heeley's received a letter from Cox warning them about their "excessive Internet usage." They were more than a little annoyed, considering they fork over $2,400 a year to the cable giant provider so called to express their displeasure:

Heeley’s fiancé Shelley was angry after realizing just how much the couple already spends with Cox.

“I called them on the phone and the first thing they want to do is get you to upgrade and spend even more money with them,” she tells Stop the Cap! “They tried to vaguely threaten our service if we continued to ‘overuse the Internet’ and suggested we cut back or cancel Netflix which they think is the reason we went over the limit.”

Shelley says she was born at night, but not last night.

“How convenient they want you to stop using Netflix, Amazon, or other online video services that their cable TV competes with,” Shelley says. “It is unfair competition.”

Shelley requested a Cox supervisor and threatened the company right back, telling Cox if they sent one more letter like that, the Heeley family would take their business elsewhere.

“He told us quietly we could ignore the letter and any future letters and they will add a note on our account,” Shelley tells us. “He confided they have customers going over the limit all the time and the letter is really about educating customers about usage.”

Posted January 28, 2013 by Christopher Mitchell

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...

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Posted January 18, 2013 by Lisa Gonzalez

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...

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Posted December 17, 2012 by Lisa Gonzalez

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...

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