In Canada, where ISPs have successfully implemented low caps and high per-gigabyte overages, we've noted how companies like Cogeco have had a difficult time providing accurate consumption tools to customers
. Of course these screw ups result in additional support costs for carriers, and and can confuse customers. In New Zealand, where caps and overages are common, the New Zealand Herald
(via Stop The Cap
) reports how broadband Telecom New Zealand over-billed and throttled its customers -- thanks to a routine network upgrade:
Telecom has reimbursed 150,000 customers whose broadband speed was slashed, as network upgrades for the much-vaunted new TiVo digital recorder service caused widespread technical problems. . . said the error was caused when Telecom's engineering partner, Juniper, was upgrading the network in preparation for TiVo's November 6 launch in New Zealand.
Whoops. It's important to note that in contrast to what the Herald story suggests, the ISP in question didn't just spontaneously discover their error and issue refunds out of altruism. Those 150,000 customers would not be seeing refunds if users of a local New Zealand user forum named Geekzone
hadn't pieced together what was happening. If you follow threads there, you'll note that for many Telecom New Zealand customers, the meter provided them frequently doesn't work, or shows incorrect usage. Users there had to make a concerted effort to get the ISP to investigate and to issue refunds.
Here in the States of course, our largest ISPs are very eager to impose this per-byte overage model, simply because it generates more revenue. Unfortunately for ISPs, they've run into strong opposition
from consumers, many of whom prefer the simplicity and lower price of flat-rate service. One of the many disingenuous ISP arguments (aside from "it's fair to grandmothers
" and "it will prevent the Internet from collapsing
") in support of this shift is that your electricity is also metered, so it just "makes sense."
Of course as we've repeatedly noted
, what ISPs want is not a fair, purely-usage based system, because they'd make no money if the nation's light users (80%+ of their customers) suddenly started paying $10 a month instead of $40. What they want is to have their cake and eat it too -- charging users per-gigabyte overages on top
of a flat monthly rate that in most cases already more than pays for the service and support being delivered.
One problem with the electricity metaphor? If carriers want to compare themselves to your local electrical utility, they'd better be ready to have their meters heavily regulated to guarantee accuracy -- just like your electricity meter. You can be sure they won't like that. In many markets the world over, ISPs fight against people independently verifying the accuracy of their meters. If U.S. ISPs want to head down this path, consumers shouldn't have to wrangle with their ISPs over meter accuracy.
You'll recall that Comcast is among several ISPs (including Time Warner Cable and AT&T) that have been considering per gigabyte overages. Comcast is clearly aware of the necessity for an accurate usage meter -- given it took them more than a year to deliver one after imposing a 250 GB cap in 2008. Comcast recently unveiled their new meter in Portland
, using a firm of their choice to determine it's accuracy. The firm they hired, of course, proclaimed proudly that the meter was accurate to within 0.5% each month.
Who'll confirm this? Nobody. Are there laws protecting consumers from abuse? Nope. Will there be? Probably not. But with an FCC that at least claims that "total transparency" is one of their top broadband issues as they craft America's very first national broadband policy, expect this to be a heated topic in 2010.