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The Broadband Boomerang's Back
'It's got to be admitted we've destroyed more investor value than in any other industry ever.'
- Bill Esrey CEO Sprint
The sins of the providers are visited upon the customers. The broadband boomerang's back.
It's very easy to understand. Early broadband providers advertised unbelievable connectivity speeds they often could not attain. Speeds were too optimistic or over-hyped and they were almost always dependent on conditions the providers knew they couldn't control.
Broadband connectivity - as with telephonic connectivity - is based on the number of subscribers on a line at any one given time. Normally lines are not built to accommodate all possible subscribers at once but to accommodate subscribers in most 'ordinary' situations.
But what's happened with the broadband industry is providers crowded their lines way out of realistic proportion - a bit of the 'greed' the more enlightened in the industry such as Bill Esrey warned of early on.
The use ratio on telephone lines was normally kept at 1:8 or 1:10; for broadband the providers have been using 1:36 or 1:48 and some have even looked at 1:60 and beyond.
It works fine if you're the only one on the line (and if the advertised speed is realistic) but as soon as more and more get connected those stats go out the window.
It's a savage strategy. Any day now the providers will - if they're allowed to - raise rates for subscribers who want to retain the speeds they paid for in the first place.
European and Japanese broadband currently beat the US hands down. Amongst the 'fastest' countries in Europe can be counted Sweden, Germany, England, and Denmark. Connections in Sweden advertised as 100 Mbit are not uncommon.
But the fallout and the backlash have begun. And it's not only about unattainable speeds subscribers are paying for - it's also about greedy corporations set on acquiring subscribers before their own infrastructure is prepared to support them.
Swedish tabloid Aftonbladet is currently running an extensive series on the scandal.
An Aftonbladet survey currently underway shows only about half of all subscribers are happy with their connections and their providers. For 2008 complaints are up a full 25%. [Note: the survey garnered nearly 10,000 votes in its first hour. It's a hot issue all right.]
'Actually it should be simple', writes Karin Ahlborg. 'Give me a broadband connection at the speed I pay for. And answer the phone when I call for help. And don't screw up the delivery. Dream on. In reality many of us are jumping and stamping in fury and frustation because our broadband connections and services don't work.'
The most common complaint according to Ahlborg is subscribers feeling powerless to affect their situation - the providers don't deliver, don't answer their phones, and even when people do get help it takes way too long. 'Broadband used to be a compute snob luxury item', says Ahlborg. 'But those days are long gone.'
Ahlborg also points out how crucial the Internet connection has become in subscribers' everyday lives. 'Today we pay our bills online. We choose our children's schools online. Broadband has become as vital as energy and water.'
Paying for a Nonexistent Connection?
Daniel Karlsson and Ann-Elise Tammar returned from their holidays on 2 March this year. All of their broadband and related services were out of order.
No television can be a bummer but there's always DVDs. And surviving without a telephone land line can be troublesome but a cellphone can save the day. But it's different when it comes to broadband: if you need it for your work you're totally screwed.
Both Daniel and Ann-Elise use their connection in their work. Daniel's a comedian and magician and he gets his bookings through the Internet. Ann-Elise is a nurse in a support pool and she gets her appointments through the Internet.
Their provider acted nonchalant: there was an error but it would take a full week to fix it.
'We thought a week is a very long time to be without broadband, telephone, and television but they insisted they could absolutely not get a technician out to us any earlier. What were we to do?'
A week later the technician came, looked around - and then left without saying anything.
They used their cellphone to call the provider to ask what was going on. Put on hold. After a while they got through and were told their connection was reported as working again even though it wasn't.
Daniel and Ann-Elise protested - and after a lot of resistance from the provider got them to agree to open a new ticket on their connection.
Two weeks after this the provider called back - to their cellphone of course - to tell them they'd finally found the error: a neighbour of theirs had somehow screwed things up. At the same time the provider lamented they would need yet another fortnight to send out the technician again.
And the punch line? Daniel and Ann-Elise Tammar got their bill on time at least - to be paid in full. For the month they had no connection.
Daniel is furious. 'So far I've lost over $3000 because they 'don't have time'. And it's absurd their telling us we'll be without television and broadband for a full month.'
Almost Everyone Gets Bamboozled
'I think this is shit', says Magnus Holmström of his broadband service. 'And I'm actually surprised I get half the speed I'm paying for. Their performance is terrible.'
Aftonbladet's informal survey shows only one subscriber in six getting the advertised speed.
What do Holmström's provider Glocalnet say? It's the 'connections'. Of course it is.
'We always send out full speed from our telestations. That the speed decreases is due to the quality of the copper wires, the distance to the connection point, and other peripheral devices in use there', counters Glocalnet's CEO Martin Tivéus.
But Rickard Dahlstrand who represents the broadband speed monitor Bredbandskollen says providers can never attain higher speeds with current technology. 'They advertise speeds they can't guarantee', says Dahlstrand. 'People feel cheated.'
But settling for speeds lower than the advertised is not something you have to pay for in Sweden. A subscriber who bought 24 Mbit but in practice got only 11 Mbit was awarded a solution by the national consumer board. As the provider also sold 8 Mbit connections the bureau ruled the subscriber needed only pay for the slower connection.
'To sell a 24 Mbit connection where most subscribers don't get the advertised speed contravenes marketing legislation', says Ola Svensson of the national consumer board.
Yet many who Aftonbladet spoke with can't even get slow broadband. And sometimes their connections simply don't work. Their mail servers crash, they have consistently recurring outages, connections disappear for weeks at a time with no warning or explanation given...
Some providers do the right thing and refund their subscribers but other providers just ignore them. 'The arbiter is the contract', says Ola Svensson. 'Do you have a clause granting you a refund for services you never got but still get billed for?'
'We'll Call You Back'
Pard Lindström of Falun Sweden put up with Glocalnet for half a year and then gave up and switched provider. Each time she called the company to complain they promised to call her back. But they never called back.
Glocalnet also promised to refund her payments for a service that never worked. She's still waiting for the money. And even though she's officially through with them there's a bookkeeping glitch whereby she gets new bills all the time.
Icing on the cake.
Glocalnet's CEO Martin Tivéus back again: he insists Lindström's been refunded. 'In this particular case the customer was affected by quirks in our new infrastructure but we have indeed now refunded the customer', insists Tivéus.
That's of little help or consolation to Lindström who still hasn't seen the money.
Thirty days: that's the far end of how long it's supposed to take to get any good or service in Sweden. But Lasse Honkanen had to wait four months. 'They behaved like swine', says Honkanen.
And Honkanen's provider didn't actually say it would take a full thirty days either - they first told him it would take a mere twenty minutes! Yet four months later all Honkanen had received were his monthly bills.
Honkanen repeatedly nagged the provider to get the connection working. 'Oh goodness! Oh of course we'll get working on it right away!' was the mantra Honkanen heard time and again.
Press attaché Marcus Adaktusson at provider Bredbandsbolaget - the broadband company in Sweden with by far the most official complaints - has an explanation.
'Here the issue was a communications breakdown between us and the subscriber's landlord. It wasn't established if Honkanen's floor in the building was connected to our broadband. We are of course very sorry Honkanen got in a mess here and we've sent along a mobile broadband connection as a temporary solution.'
But according to the national consumer bureau this provider are still in breach of the law.
'The law states consumers shall receive product within a 'reasonable time' - within thirty days. And that applies as well for goods and services purchased on the Internet', says Ola Svensson. 'If delivery takes longer you have the right to rescind the purchase. And you also have the right to rescind the purchase up to a fortnight after delivery for any reason.'
But if you purchase broadband in a terrestrial store you have to be careful. 'How that works depends on your contract with the provider', says Ola Svensson.
Go Get Them!
Aftonbladet's Karin Ahlborg personally took up the cases of two victims of the broadband boomerang.
'The idea was brilliant', writes Ahlborg. 'I take up the cases of two abused subscribers and try to fix them!'
'Daniel and Ann-Elise who on Wednesday have been without broadband, television, and telephony for a full month can now go out on the town, drop into a café, and do anything they want instead of sitting with their cellphone waiting for their provider to pick up and tell them why they have the gall to keep sending bills for services they can't get working, why it's taken a month so far to get nowhere at all, and what level of compensation for damages they can expect some sunny day!'
'So here I sit and I get to listen for ten minutes to different broadband offers until a real human being picks up. It's not even rush hour - I call right after 12:00 noon when everyone in Sweden's eating lunch. And it still takes ten minutes for someone to pick up!'
But finally they do pick up.
AHLBORG: Hi! I'm wondering why your company send bills to people for services you're incapable of delivering for more than three weeks now?
PROVIDER: Oh goodness! You mean their connection still isn't working?
AHLBORG: No it is not working! Can you please find out why it's taking so long to fix this? Or otherwise can you give me the name of the repair company you outsource to so I can check with them myself?
PROVIDER: Oh! Actually I think we outsource to several companies...
[Daniel and Ann-Elise were told earlier the (single) company used had no available time for a fortnight.]
AHLBORG: But if you outsource to more than one company one's got to have time to look into this?
'But no: they can't tell me what companies they outsource to. Instead they switch me to their 'support' department.' And as I'm on hold another ten minutes I realise this idea of mine which I'd thought so brilliant isn't really going to accomplish anything at all.'
'Subscribers are completely powerless against these broadband providers. They're dribbled away by a few empty headed phrases and worthless promises they'll actually fix something. What can we do? More than banging our heads into the wall?'
'The next person I talk to can't see what companies do the outsourced repairs either. They're evidently so busy they don't have a single free hour for a whole month.'
'But I do learn a few things out of this ordeal.'
- Technicians are expensive. It's cheaper to keep writing out and sending bills to subscribers.
- You can get them to rip your bill up over the telephone but you'll have to be forceful about it.
- If you want compensation you need the address to their customer relations office to write to.
- You can demand anything you want. It's all down in the end to how well you can barter.
- A general guideline: customers without telephone service for a month get about $150.
'So go get them! Nag them! Make your demands! Hit 'em where it hurts - in their pocketbooks and on their balance sheets! For Daniel and Ann-Elise we got as far as getting the bill ripped up and an acknowledgement they might have to compensate them for the outage.'
'It would probably have worked better and faster if I'd laid the cables around their house myself!'
Bredbandskollen is a new service and website set up by the Swedish national consumer board, the mail and telephony foundation, and the Swedish foundation for Internet infrastructure. It uses services from Ookla and Speedtest to measure connectivity speeds. And ever since the site went online people have been frenetically checking their connection speeds.
'Complaints have been on the rise ever since the site went online', says Mattias Grafström of consumer bureau KTIB.
When complaints reached a peak several years ago providers cleverly changed their tune - the wording of their advertisements - adding the cautious qualifier 'speeds up to'. And they reckoned with being able to deflect most complaints.
But they were wrong. 'If the providers are unclear in their advertising the customers will normally win in civil suit cases', says Grafström.
For a successful defence the provider has to prove they've formally informed the customer beforehand that the speed of their service is limited. If they haven't done this the customer should win the case.
A new version of the speed test at Bredbandskollen went online last October. Private subscribers suddenly were able to easily test their connection speeds - which in turn resulted in the number of complaints going ballistic.
Now four broadband providers together with KTIB and the Swedish Minister of Infrastructure Åsa Torstensson have put together a five point program to make it easier for potential subscribers.
- Broadband speeds are to be described as an interval rather than 'up to'. Such as '8-24 Mb/second. In which case the provider is guaranteeing a speed at the low end.
- Customers have the right to switch to a connection with a lower speed at no additional cost if they are dissatisfied with the speed they're getting.
- Website information and information available in other channels about what influences connection speeds is to be improved so consumers know better what they can expect.
- Introduction of an industry wide information sidebar about connection speeds to be published with all advertisements.
- Cooperation with Bredbandskollen to make it clear to consumers what influences broadband speeds. A working group is set up to organise this effort.
The Party's Almost Over?
What's happening in Sweden foreshadows what can happen anywhere with startups and established telcos too eager to start raking in the big bucks and not interested in spending the time they need preparing their support crews for the ordeal ahead. And most of them grossly underestimate what service they'll be required to offer. After all it's all computerised and automated, right?
And the cables simply won't hold. And as 'net neutrality' continues to get airplay it's going to come down to what the providers have planned for, what they're willing to provide - and how much they've yet again bamboozled their customers.
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