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New Bill Gives FTC Veto Power Over Broadband Caps

Agency would oversee any attempt to shift to usage-based plans

By Martin H. Bosworth
ConsumerAffairs.com

June 18, 2009

Sharp-eyed TWC customers noticed that this month's bill contained a small change to their service agreement — one which would not only enable the company to impose caps on its Internet service plans, but would permit them to throttle or block customers whom they deem as using too much bandwith.

The new language in TWC's service agreement reads as follows (emphases added):

(ii) I agree that TWC or ISP may change the Maximum Throughput Rate of any tier by amending the price list or Terms of Use. My continued use of the HSD Service following such a change will constitute my acceptance of any new Maximum Throughput Rate. If the level or tier of HSD Service to which I subscribe has a specified limit on the amount of bytes that I can use in a given billing cycle, I also agree that TWC may use technical means, including but not limited to suspending or reducing the speed of my HSD Service, to ensure compliance with these limits, and that TWC or ISP may move me to a higher tier of HSD Service (which may result in higher monthly charges) or impose other charges and fees if my use exceeds these limits.

(iii) I agree that TWC may use Network Management Tools as it determines appropriate and/or that it may use technical means, including but not limited to suspending or reducing the Throughput Rate of my HSD Service, to ensure compliance with its Terms of Use and to ensure that its service operates efficiently. I further agree that TWC and ISP have the right to monitor my bandwidth usage patterns to facilitate the provision of the HSD Service and to ensure my compliance with the Terms of Use and to efficiently manage their networks and their provision of services. TWC or ISP may take such steps as each may determine appropriate in the event my usage of the HSD Service does not comply with the Terms of Use. I acknowledge that HSD Service does not include other services managed by TWC and delivered over TWC’s shared infrastructure, including Video Service and Digital Phone Service.

Phillip Dampier, a Rochester, New York resident who led the charge against TWC's rollout of the bandwith cap plan, said on his StopTheCap.com blog that "Since the terms and conditions have now fundamentally changed, new customers must now agree to these new terms, allowing the company to force you into any metered billing scheme even if your current level of service doesn’t provide for that. Formerly, price protection contracts would protect you from being forced into such plans until your contract expired."

"It compels subscribers to retroactively agree to whatever overlimit fees the company may choose to impose," Dampier added.

A leaked memo last year revealed TWC's plan to introduce bandwith caps in small markets like Beaumont, Texas, where it faced little or no competition from other cable or telecom companies.

TWC released plans to extend the bandwith caps to larger markets in April 2009, including Rochester and San Antonio, Texas. A furious protest from customers and online activists alike pushed them to withdraw the initiative.

TWC's move would not be the first time a cable or telecom company used changes to their terms of service to slide through controversial policies. In 2007, AT&T attempted to alter its terms of service to enable the company to censor customers who expressed opinions critical of its policies. The telecom giant reverted its policy back after an outcry from customers and activists, claiming the change infringed on freedom of speech and "net neutrality," the right to access all Internet content equally.

Comcast had previously drawn heavy criticism both for its practice of cutting customers off when they reached undisclosed bandwith caps, and for blocking customers' access to file-sharing services such as BitTorrent. The FCC ruled against Comcast in that case, setting a precedent against open throttling of an Internet provider's network.

Cable companies have promoted metered billing as a way to reduce congestion on their networks and prevent service degradation. Critics say the tactic is designed to hinder heavy watching of video and television shows over the Internet, in order to preserve the cable companies' own legacy offerings of television packages.

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