Satellite Internetaccess lawsuit DirecPC: Some users who have had their download speeds reduced take their complaints to court.

August 24, 1998|By Michael Stroh | Michael Stroh,SUN STAFF

When Hughes Network Systems launched its satellite-based Internet service two years ago, the Germantown company called it the perfect choice for heavy Internet users.

And for good reason. Hughes' DirecPC satellite technology allowed subscribers to access the Net at speeds up to 14 times faster than a standard dial-up modem and for a fraction of the cost of other high-speed Internet services.

People like Michael Blanchard rushed to sign up. A software tester for Microsoft, Blanchard needed to download as much as 120 megabytes of software each week - a volume that would have taken the better part of a day with a normal modem connection but less than an hour with DirecPC.

"At first I was getting very fast speeds. It was perfect for what I wanted to do," said Blanchard, 30, who lives in Rochester, Mass.

Around February, however, Blanchard noticed that at times, his DirecPC connection would mysteriously slow to a crawl - slower than the speed of a dial-up modem.

"I called up DirecPC and asked them if anything was going on. They said no," he recalled.

But there was something going on. Sometime in the past year - Hughes won't say exactly when - the company quietly began to restrict heavy users. The plan is simple: When a customer downloads more than a certain volume in a day, the system puts the brakes on his service, significantly slowing it down.

Hughes says its "Fair Access Policy" is designed only to stop a small minority of subscribers from hogging the company's satellites and slowing service for all of its customers.

But the policy has riled many of DirecPC's estimated 60,000 subscribers, who say they're not abusers but have had their speed curtailed anyway - rendering the service and their investment in DirecPC nearly worthless. Although less expensive than some other high-speed Internet options such as ISDN phone lines, DirecPC's satellite dish and associated hardware cost as much as $400 and require users to spend hours on their roofs to set up the equipment. Users pay $30 or more per month in subscription fees.

Now Blanchard and other former and current DirecPC subscribers have filed a class action lawsuit in Montgomery County Circuit Court, accusing Hughes of false advertising. "What is wrong is to be advertising DirecPC as this very open fast service, get people to pay a lot of money for it, and then not provide it," said attorney Brian Hufford of Pomerantz, Haudek, Block, Grossman & Gross in New York, representing DirecPC users in the class action.

Hughes would not comment directly on the Fair Access Policy or the litigation. In a written statement, however, the company said: "We believe the plaintiff's claims are meritless. All of the named plaintiffs were aware of the Fair Access Policy when they subscribed to the service and their claims are barred by the contracts that they agreed to when they signed on with DirecPC."

The flap over FAP, as Hughes' policy is known, spotlights an issue that may become more serious as the Internet grows more congested.

The latest online census figures from Forrester Research of Cambridge, Mass. show the Internet is home to more than 55 million people. By 2003, analysts expect that figure to nearly double. As more people try to log on, the companies that act as on-ramps to the Information Superhighway may be forced to impose stricter rules or add more tolls to keep Internet traffic flowing and make a profit.

Some are doing so.

In April, several large nationwide Internet service providers such as AT&T Corp. and IBM dumped their all-you-can-surf price plans and allotted customers a set number of hours each month. Anyone who goes over the limit is charged an small hourly fee on top of the monthly rate. The change was intended to discourage so-called "campers" who stayed logged on around the clock.

"Companies can't make money if people just park online," said Forrester analyst Bill Bass. "What you're seeing now is a mere foreshadowing of bigger changes ahead."

In the future, Bass said, Internet access companies might charge a lower rate for sending e-mail than for downloading a video, which eats up more network resources. "Think of toll roads where you get charged by the number of axles on your vehicle or distance you've driven," said Bass. "The idea is that companies may try to tie payment to usage."

In the case of Hughes, the plaintiff's say the company may have oversold its DirecPC service, signing up more heavy Internet users than its satellites could handle. The Fair Access Policy, they say, may have been a way to compensate.

"What we are saying is either you need to spend the necessary money to provide the high-speed access or you need to 'fess up that you can't provide it and give people reimbursements for the money they spent," Hufford argued.

! Pub date: 8/24/98

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.