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Cogeco User Socked With Thousands in Overages
Company Imposes Even Higher Penalties to 'Improve Experience'
by Karl Bode 12:13PM Friday Jan 27 2012
Back in April of 2009, Canadian cable operator Cogeco foisted metered billing on the back of their customers, applying caps as low as 10GB per month and overages as high as $2.50 a gigabyte on top of existing tiers. When customers complained, Cogeco insulted customer intelligence by insisting the move wasn't about making money. Cogeco then decided to raise monthly rates as well -- and add a DOCSIS 3.0 "upgrade fee" for good measure. Consumers subsequently complained that the meters didn't actually work well, while lamenting that there's zero regulatory oversight to ensure they ever will.

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To sell the idea Cogeco originally had overage penalty ceilings in place, meaning that even if you incurred overages, you couldn't go over a certain amount each month (initially $30). Last summer Cogeco eliminated the cap ceilings completely for their Ultimate 30 and Ultimate 50 tiers, and raised the penalty ceiling for all other tiers from $30 to $50. A letter to consumers at the time claimed the price hikes were about "enhancing" subscriber broadband services to create "a better Internet experience."

One user in our forum is having one hell of an "improved experience." According to a post to our forums, the user claims Cogeco never sent him a notice that they'd be eliminating the cap ceiling for his "Ultimate 30" service tier. That tier provides 125 GB of data transfer capacity per month, after which you're charged $1.00 for every GB. The result? A ridiculous broadband bill.

The user says Cogeco began automatically deducting his account for huge amounts, starting with $891.40. When pressed, the company informed him that his account had had the $50 monthly overage cap removed, and that he should have received a letter. When the user informed Cogeco he never received notification of any kind, Cogeco initially doubted his claim, but was eventually nice enough to give him a $50 credit -- which they'll kindly deduct from the $2,500 he now owes for just three months of service.

To be clear the user was consuming a lot of bandwidth, one month clocking in over 689 GB of overages -- something he attributes to a six-user household with heavy video consumption and HD project file transfers. That said, he says he obviously would have dropped to a lower Cogeco tier if he had known he'd need to take out a second mortgage to pay his bandwidth bill.

The problem remains that such a price point for residential bandwidth borders on insane, and is literally a markup of thousands of percent over the pennies Cogeco pays for each additional gigabyte. Again, the problem also persists that that (unlike power utilities) there's absolutely no regulatory oversight of this process, which makes things immeasurably worse for consumers who feel they were unfairly billed. Cogeco also didn't feel it was necessary to inform the customer that his broadband bill was quickly spiraling out of control, something that at the very least could have been done as a courtesy before auto-billing him for hundreds of additional dollars.

We've dropped a line to Cogeco to get their comment on the matter, and will post any response we receive. The move to eliminate the overage penalty ceiling for some users comes as smaller independent Canadian ISPs are trying to lure annoyed users with new unlimited broadband tiers. You have to think this kind of behavior is a sales pitch for these independent ISPs, assuming such a choice is even available. The reality is this kind of predatory pricing is only made possible because many of these users don't have the choice of an alternative, more reasonable ISP.

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