Time Warner Cable subscribers are at reduced risk of losing access to Disney owned channels like ESPN, Disney and local television stations in several major cities now that the two companies are close to an agreement.  But, as usual, regardless of whether Time Warner Cable whittles down Disney’s demands or Disney secures dramatically higher pricing for its cable channels, one thing is certain: Time Warner Cable subscribers will ultimately lose, facing higher cable bills in 2011.

AT&T U-verse customers: your nail-biting has just begun, as AT&T sends home postcards announcing the potential loss of the Hallmark Channel and its companion the Hallmark Movie Channel.  AT&T’s contract expired at 12:01 AM this morning, but Hallmark said it was willing to keep the signals running on U-verse while negotiations continued.

Ultimately, it’s all about who gets a bigger piece of your money.  Be it local broadcasters, cable networks, or programming conglomerates who can darken a dozen channels on your basic cable lineup, all say the cable industry is enriching itself on subscriber fees and all these networks are asking for is a bigger share of the pie.  The cable industry says cable programming fees are the most significant part of rate increases, as the industry is unwilling to absorb most of the programming rate hikes.  Cable wants to continue its healthy returns, so programming rate hikes come out of your pocket, not theirs.

Sometimes the amounts involved come down to pocket change, other times several dollars a month can be involved.

For example, Disney-owned ESPN is typically the most expensive basic cable channels in the lineup.

SNL Kagan, a cable research firm, estimates Disney charges Time Warner $4.08 a month per subscriber to carry ESPN.  The costs are high because ESPN competes with major broadcast networks to secure increasingly expensive television rights to major sporting events.  ESPN’s early days were filled with coverage of volleyball, log-rolling, and billiard sports.  The rights to air these events were affordable.  But with the benefit of increased programming fees, the cable network successfully bid for professional football and other popular sports.  The more money ESPN charges, the more money they can use in bidding wars to secure television rights.

With most cable networks charging closer to 20 cents a month per subscriber, what ESPN charges (and demands) for contract renewals can, all by itself, trigger rate increases.

AT&T and Hallmark are currently arguing over an increase in subscriber fees that currently run around just four cents per month per subscriber.  AT&T argues it doesn’t want to pay the percentage increase Hallmark is demanding, even if it amounts to pennies per month.

ESPN’s rate increase demands often exceed 50 cents, if not higher.

This year a new issue enters the debate — online video programming fees. Disney wants to generate income from a whole new tier of sports programming – that streamed online to Time Warner Cable customers.  The sticking point in Time Warner Cable and Disney’s negotiations seems to hinge on the cable company ponying up for ESPN3, an online network.  The concept of cable operators paying programming fees for online content is highly controversial, especially when broadband customers could face ever-increasing broadband bills blamed on the same “increased programming costs” that have taken basic cable packages from under $20 a month in the 1980s to over $60 a month today.

ESPN3 reportedly wants 10 cents a month from every Time Warner Cable broadband customer, regardless if they have the slightest interest in watching ESPN3.  Some in the cable industry fear once this precedent is set, other cable programmers with online shows could start demanding payments for those as well.

While Time Warner Cable continues to resist, other major cable companies like Comcast Corp., Cox Communications Inc., Charter Communications and phone companies AT&T, Frontier, and Verizon Communications have ESPN3.com agreements with Disney.  Nearly all have also boosted their broadband prices for consumers as well.

Despite assurances from Time Warner Cable’s Roll Over or Get Tough website, the cable industry typically caves in on programming fee increases, often agreeing to split the difference.  Since they simply pass those increases along to consumers, it doesn’t impact their bottom line until customers start canceling cable service.

Subscribers on Time Warner Cable’s blog keep coming up with an innovative idea to solve these problems — allow subscribers to pick and choose (and pay for) only the channels they want to receive.  That novel a-la-carte concept invokes fear in the cable industry like garlic repels vampires.

In the end, even if Disney and Time Warner Cable can’t reach an agreement, should screens darken September 2nd, watch in amazement as a deal is achieved hours after the disruption in programming begins.  Then, just a few months later, the accompanying rate hike will surely follow.

WESH-TV in Orlando notes Bright House cable customers are also potentially affected because Time Warner Cable negotiates on behalf of that cable company, which has a major presence in central Florida.  (1 minute)

Sen. David Hoyle (D-Time Warner Cable)

After 18 years representing the people of Gaston County, N.C., Senator David Hoyle closed out his ninth and final term in the North Carolina Senate with a disgraceful admission:  He allowed the state’s largest cable company, Time Warner Cable, to draft legislation in his name to thwart competition and allow skyrocketing cable and broadband bills for his constituents.  Worse yet, he admits he’s proud he did it.

Hoyle, who calls himself a “pro-business Democrat,” ignored his own constituents’ interests when he introduced legislation earlier this year that would effectively curtail municipal broadband projects across the state from providing enhanced broadband at significant savings for residents.

Stop the Cap! has covered Hoyle’s water-carrying for the cable and phone companies since he announced his pro-cable legislation and accompanying municipal broadband moratorium.  Our regular reader Tim sent word Hoyle blurted out whose interests he really represented on a Charlotte TV newscast last week.  Not having to answer to voters in a future election gave Hoyle remarkable courage to tell viewers he carried more water for Time Warner Cable than Gunga Din:

When the I-Team asked him if the cable industry drew up the bill, Senator Hoyle responded, “Yes, along with my help.”

When asked about criticism that he was “carrying water” for the cable companies, Hoyle replied, “I’ve carried more water than Gunga Din for the business community – the people who pay the taxes.”

Evidently Hoyle forgot his constituents pay taxes too, along with ever-increasing bills from Time Warner Cable.  With Hoyle’s help, North Carolina’s phone and cable companies hoped to limit competition, guaranteeing future rate increases and higher bills — a Hoyle Tax that consumers across the state would pay indefinitely.

Last December, Hoyle was more high-minded when announcing his imminent retirement from office:

[...]Having had the honor and privilege to serve my community and state in every way that has been asked of me, beginning 45 years ago as mayor of Dallas, it is now the time and the season to welcome the next phase of my life.

After much thought, I have made the difficult decision not to seek re-election to the Senate. While I will not seek re-election, please be assured that I will serve the rest of my term with the same diligence, dedication and integrity with which I have served from my first election. Public service has always been a central part of my life and my commitment to our community and our state remains strong.

Hoyle’s actions prove that his diligence, dedication, and integrity only extend to the businesses that heartily supported him while in office.  That pact protected each others’ interests while trampling yours.

Despite Hoyle’s dogged efforts to place a moratorium on municipal broadband projects in the state, even going as far as to suggest fiber was “obsolete,” several of his colleagues thought better and blocked the attempt.

For consumers in Salisbury, not too far from Charlotte, the good news is fiber optic broadband will outlast memories of a  senator working at the behest of the cable industry.

Fibrant, the city-owned fiber broadband provider, will commence beta testing of its new service in September.  It will deliver broadband service 10 times faster than that offered by Time Warner Cable and AT&T U-verse at highly competitive prices.  Standard 15Mbps service — upstream and downstream — will cost 10 percent less than the competition’s slower services.

Salisbury has spent $50 million to construct the network using bond money that will be paid back from revenue earned by the system.

For Hoyle, spouting traditional industry talking points, that’s a recipe for disaster.  Considering Hoyle raked in substantial contributions from Time Warner Cable, Sprint/Nextel PAC, and telecom lobbyist Parker, Poe, Adams, and Bernstein PAC, among others, voters may wonder whether Hoyle’s anti-municipal broadband declarations were also written by the telecom industry.

Opponents like Hoyle declare earlier municipal broadband efforts have been financial failures for cities.  If so, why the industry fulminates about such “failures” that would hardly threaten them is more than a little curious.

Other opponents claim government cannot do anything right, so they should stay out of the private sector cable business.

This "financial failure" in Dalton, Georgia has cornered 70% of the residential market offering superior service, and keeps $1.5 million in monthly revenues at home in northwest Georgia.

Yet residents in decidedly red-state Dalton, Georgia had more than enough of their free market cable system — Charter Cable.  The community of 38,000 supported a move in 2003 by Dalton Utilities to build a publicly-owned alternative.  They couldn’t install service fast enough, and today Dalton Utilities’ Optilink brings in $1.5 million in revenue every month which stays in Dalton.  The local government option today reaches nearly 70 percent of the residential market and last week was voted 2010 #1 Internet Provider in the Daily Citizen’s Readers’ Choice Awards for the third year in a row.

Opelika, Alabama also rejected the “government can do nothing right” talking point in a referendum to support a fiber to the home network for their community as well.

In reality, although no government is perfect, Americans do trust local government to provide safe drinking water, put out fires, and arrest criminals — all incredibly vital services.  As broadband increasingly joins electricity, gas, phone and water as an essential utility, providing it at unregulated monopoly pricing just isn’t going to cut it any longer.

Hoyle has a future as a paid mouthpiece for the industries he befriends, but more importantly, he’s represents s a teachable moment.  The next time an elected official scoffs at the notion he’s bought and paid for by the companies who write him generous campaign contribution checks, just remember Senator David Hoyle… North Carolina’s first senator from Time Warner Cable, but almost certainly not the last.

WCNC-TV in Charlotte got Sen. David Hoyle’s remarkable admission that Time Warner Cable wrote the bill he introduced to stop cable competition for North Carolina consumers.  (3 minutes)

Bray Cary -- Frontier's biggest fan in West Virginia

Bray Cary has been falling all over himself again — singing praises for Frontier Communications while many of its customers in West Virginia contend with service problems and outages, sometimes for weeks at a time.

Cary, president and chief executive officer of West Virginia Media, owner of television stations across the state, was a big supporter of the deal to sell Verizon’s landlines in West Virginia to Frontier Communications. This past spring, Cary’s weekly Decision Makers program treated viewers to a softball question and answer session with Frontier’s Ken Arndt, who was forced to “endure” Cary’s contention that opposition to the deal was limited mostly to labor union sour grapes.

With a hard interview like that, Arndt was delighted to be asked back for another edition of Tea-’N-Cookies Breakfast Club With Bray, this time to answer tough questions about how the transition could have possibly gone any better for the independent phone company.

Good morning and welcome to Decision Makers on a weekend when America is discovering the beauty of the great state of West Virginia.  Through the magic of worldwide television [...] we here in West Virginia are on the verge of discovering the power of the Internet across all of our hills and all of our valleys.

With that over-the-top introduction, Cary was off, spending nearly 20 minutes glad-handing Arndt through an interview that could have been produced in-house by Frontier’s marketing department.

Nearly 20 minutes of mutual admiration between Frontier’s Ken Arndt and WV Media’s Bray Cary can be experienced for yourself.  These segments appeared July 31st on the Decision Makers program.  (19 minutes)

Ohio County, WV

More tea?

Meanwhile, in other parts of the state things are not nearly as rosy as Cary and Arndt contend.

Stop the Cap! reader Ralph points us to Ohio Country, located in the Northern Panhandle of West Virginia, where Frontier has subjected some customers to service outages extending into three weeks.  Entire neighborhoods have lost phone and broadband service.  Dela Misenhelder, who lives in Valley Grove says a storm August 4th knocked out service for her and her neighbors.  Misenhelder used her cell phone to call Frontier three different times to no avail.

“My concern is the elderly,” Misenhelder told a local TV station.  “Do they have cell phones — being out in the country, do they even have a signal — and be able to get 911 in case of an emergency or problem.”

Frontier’s regional general manager, William (Bill) Moon said that Frontier was supposed to have contacted all of the neighbors impacted by the outage to make sure service was restored.  In Misenhelder’s case, since her phone line was still not working, she never got that call.

Moon is a name readers will become increasingly aware of, as he features prominently in damage control efforts by Frontier in northern West Virginia when they get negative media coverage.

Dela Misenhelder in Ohio County, W.V., was without her Frontier phone line for three weeks.  She made three calls to Frontier, who ignored her, so Dela called the newsroom of local TV station WTOV-TV in Steubenville, Ohio looking for help.  They achieved results for her, as you’ll see in this report.  (2 minutes)

Hancock County, WV

Matters are even more serious in the northern tip of the state — in Hancock County — where emergency responders are coping with defective T1 data lines that Frontier has failed to maintain properly, causing interruptions in emergency radio traffic.

The problems started when Verizon was in charge, but have gotten considerably worse since Frontier arrived.  Now the backup systems are beginning to fail as well.

When that happens, emergency communications with fire, police, and ambulance can’t happen, forcing first responders to rely on cell phones to communicate with one another.

Frontier called the problems with the T1 lines “odd” and at last check was examining more than 10,000 feet of phone cable looking for problems.

A local TV station witnessed the failure of a Frontier T1 line provided for emergency radio traffic themselves while filming a story on repeated Frontier outages.

On Saturday, another Frontier outage disrupted 911 service across Jefferson, Belmont and Harrison Counties, forcing local media to deliver streams of local direct numbers for emergency officials across all three counties.

http://www.phillipdampier.com/video/WTOV Steubenville Hancock County Experiencing More Phone Problems 7-8-10.flv

Not less than three reports about failures in emergency communications attributed to a defective T1 line maintained by Frontier Communications have run on WTOV-TV in the last two months.  (6 minutes)

Residents in Marshall and Wetzell counties, which complete the Northern Panhandle are no strangers to Frontier service problems.  They were Frontier customers before Verizon sold its landline network to the company.

Stop the Cap! reader Mitch in New Martinsville writes to tell us West Virginia is just becoming acquainted with service on ‘the Frontier.’

“The company delivered lousy service to us long before they’ll deliver lousy service to the rest of the state,” he writes. “We cannot get DSL from Frontier because they won’t spend the money to re-engineer the ancient wiring on our street.”

For Mitch, the outage experienced by his ailing grandmother this past February, which stopped calls connecting from outside of the 686 exchange, was the last straw.

“She couldn’t reach me and I couldn’t reach her,” Mitch adds. “If a phone company cannot even handle basic phone call connections, what good are they?”

A winter storm knocked out Frontier service across parts of the Northern Panhandle this past February.  Customers discovered they could only dial and receive calls from other local residents.  WTOV-TV covered the story.  (2 minutes)

When Mitch tried to cancel Frontier service, he says they tried to stick him with an early termination fee of more than $100.

“I never signed a contract with them,” he writes.

NY State Attorney General Andrew Cuomo

Mitch escalated his complaint to the West Virginia Public Service Commission, which finally got Frontier to relent.

Mitch’s experience with phantom early termination fees charged by Frontier are hardly new.  Last fall, Frontier was slapped with a $35,000 fine and ordered to refund $50,000 in wrongfully charged termination fees by the NY State Attorney General’s office.

That precedent might come in handy in Washington state, where Frontier “accidentally” put former Verizon customer Steve Matheny in Redmond on an annual contract with a hefty cancellation fee.  When Frontier took over for Verizon, Matheny decided it was time to drop service.  Frontier sent him a final bill including a fee of $120 for terminating his service before his contract had ended.

Only one problem — he never had a contract.

“These folks rolled in and added a fee that no one committed to, at least I didn’t commit to,” he said.

Frontier ignored Matheny’s attempts to get the fee off his final bill, so he called KING-TV in Seattle for help.

As with so many other cases, when local TV stations feature Frontier’s mistakes and bad service on the 6 o’clock evening news, doors to a speedy resolution have a tendency to open.  Matheny got his $120 “fee” removed.

http://www.phillipdampier.com/video/KING Seattle Bundled by accident charged a fee 8-24-10.mp4

Redmond, Washington resident Steve Matheny joins a growing number of Frontier customers who suddenly find themselves on annual service contracts with hefty cancellation fees, despite the fact they never agreed to them.  KING-TV reports their intervention finally cut through Frontier’s red tape to get $120 in early cancellation fees removed from a final bill.  (2 minutes)

For West Virginia residents, the next time you experience a problem with your Frontier landline or broadband service, why not contact Bray Cary and ask him what he’ll do about it.  At the very least, ask him to pass you the plate of cookies.

The Consumerist covers a minor bungle by Comcast, which sent e-mail to a whole mess of their customers heralding a 50 percent speed increase in huge, bold print that was not to be:

Customers who waded into the text accompanying the festivities discovered the speed increase was only meant for so-called “Economy Service” customers who were getting upgrades from 1Mbps to 1.5Mbps.  A few days later, the requisite “apology for our error” e-mail was headed out — to the wrong customers:

Broadband for America is the product of the nation's largest phone and cable companies.

Broadband for America has begun assaulting the airwaves with a high-priced advertising campaign claiming that “broadband is leading the [economic] recovery” but is threatened by “1930s telephone regulations,” urging Congress to get involved to stop broadband reform.

The 30 second ads blanketed cable and several Sunday morning news shows yesterday.

What the ads don’t mention is Broadband for America is actually one giant front group backed by large phone and cable companies.  In a study released last fall, Stop the Cap! found virtually every single “coalition” member, including so-called “independent consumer advocacy groups,” do substantial business with, or have received significant financial contributions or board assistance from companies including AT&T, Verizon, and Comcast.

Well-financed by the telecommunications industry it directly represents, Broadband for America seeks further deregulation and wants Congress to stop the FCC from enacting broadband reforms ranging from “truth in marketing” and billing to Net Neutrality.

The “honorary co-chairs” of the group are Michael Powell, the same Bush Administration FCC chairman that badly bungled the FCC’s approach to broadband policy thrown out in the courts earlier this year, and former Congressman Harold Ford, Jr., who left public service for a very lucrative career in “dollar-a-holler” advocacy and working as a lobbyist for the economic-vampire investment bank Goldman Sachs (something Broadband for America left out of his online biography.)

Broadband for America, a telecom-backed astroturf group, is running these advertisements promoting the agenda of AT&T, Verizon, and Comcast to try and stop broadband reform policies.  (1 minute)

It’s alive.

After a day or so of stumbling, Sprint-owned Virgin Mobile’s prepaid, unlimited Broadband2Go service went live early this morning, and Stop the Cap! gave it a try and has some tips to share to save you time and money.

More importantly, a “hidden soft usage cap” of 400GB a month, visible early this morning, disappeared by this afternoon after we made inquiries about whether “400GB” actually meant “unlimited.”  More on that below.

Buying Advice

Virgin Mobile keeps it simple with two mobile broadband devices — the Ovation MC760 ($79.99), about the size of a USB flash drive and the MiFi 2200 ($149.99), a portable “hotspot” that connects to Virgin Mobile’s wireless broadband 3G network and then converts the signal into standard Wi-Fi to share with up to five nearby computers.

We tested Broadband2Go using the Ovation MC760.

Virgin Mobile's USB modems are about the size of a typical USB Flash Memory device

Our first recommendation is to hurry on down to Radio Shack if you intend to purchase Broadband2Go service.  Best Buy, the other retailer selling the service, inexplicably sells the Ovation MC760 for $99.99, twenty dollars more than Virgin Mobile charges itself.  We didn’t bother to check Best Buy’s in-store price which might be lower because we put together a far better deal at Radio Shack.

You can manage to grab the MC760 for as low as $59.99 by following these steps:

1. If you are new to Radio Shack’s website, your first visit to their homepage should bring a “pop-up” offering $10 off your next purchase of $40 or more (if it doesn’t try clearing out your cookies or launching the site from a different web browser).  Simply supply an e-mail address new to Radio Shack and in a few minutes the coupon will arrive in your inbox.  It can be printed and redeemed in-store or used online.  This cuts the price of the MC760 to $69.99.  But wait, there’s more.
2. Until August 28th, Radio Shack is running a sale offering a $10 instant discount off the MC760.  We first saw this online, but when we visited a local Radio Shack store, we found the same savings in-store.  That brings the price down further to $59.99 because you can combine the coupon with the instant savings, until it expires Saturday night.
3. Many Radio Shack stores insist that you buy at least $10 in “top-up” funds when buying the MC760.  Although this increases your out-the-door price, it’s money you would spend anyway for the $40 a month service.  An incredibly long receipt will print at the register, including your PIN activation number to redeem your “top-up” funds on Virgin Mobile’s website.

Radio Shack offers up to $20 off the Ovation MC760 - $10 off for responding to this pop-up on their website and another $10 instant discount good until Saturday night.

Radio Shack stores stock both the old box-format packaging for the MC760, and a newer plastic security-sealed “clamshell” package (the one you’ll slice your fingers on when trying to get the thing open.)  There is no real difference between the two other than the packaging.

Getting It Activated

Although Virgin Mobile claims the Ovation MC760 works with Windows XP, Vista, Windows 7 and Mac OS X, 10.3 & higher, we found advice for Mac owners using older versions of the OS.  Check out this information for how to bootstrap the MC760 to work with your older Mac computer (your results may vary and don’t expect Virgin Mobile technical support to provide assistance.)  Linux users using Ubuntu found some success installing the MC760 as well from this website and this blog.  Let Google be your friend if you are running an unsupported operating system.

For new Virgin Mobile customers, the activation process is very simple.  You just plug in the device and the included software will automatically load and prompt you for installation.  After the process is complete, you will see a connection manager pop up.  Your first indication of signal strength will also be apparent, but do not be alarmed by the indicator showing only a connection to Sprint’s 1xRTT network.  Users do not access Sprint’s faster 3G EV-DO Revision A network until activation is complete.

Several slowly loading screens will appear during activation asking for your contact information, the zip code of where you intend to use the service the most, and payment details.  At the end, you are assigned a broadband “phone number” which serves as your account number, based on the zip code you provided earlier.

Things get complicated, however, for existing Virgin Mobile customers.  Many of those who anticipated the arrival of the service and pre-loaded their voice accounts with additional “top up” funds will discover there is no way for Virgin Mobile to activate your Broadband2Go service under your existing Virgin Mobile account.  A separate, new account must be established for the broadband service.

However, with the help of a customer service representative, you can transfer funds between your existing voice account and your new Broadband2Go account.  You’ll need to call a special toll-free number which will take you directly to Broadband2Go’s customer service department — 1-877-877-8443.  At the voice prompts, indicate you are a new customer and that you want “tech support.”  Expect at least 10 minutes of hold time and an overseas call center representative to answer.  There is no elevator music on hold with Virgin Mobile either.  You’ll hear plenty of rap and alternative music mixed with greetings from current hit artists.

The tech support representative will handle your Broadband2Go activation over the phone.  Have the device and a pen and paper handy.  Allow 10-15 minutes minimum for the representative to gather information or transfer details from your existing account to the new account.  The tech support rep will then transfer your call to the business office to handle the transfer of funds between accounts.

Our Experience

Phonenews also discovered Virgin Mobile's "unlimited" service had a 400GB usage cap this morning...

After activation, the device reset and we found ourselves suddenly connected to Sprint’s EV-DO network with an average of three bars of signal strength.  Sprint’s nearest tower is about 0.75 miles away from our home in a flat terrain residential area.  Still, we found indoors the signal level could decline to the point the connection fell back to the far slower 1xRTT connection.  Outdoors, the connection manager’s signal level spiked to full strength.

Although Virgin Mobile sells the service as “unlimited,” the website included a usage counter this morning that stated we had just over 400GB of usage remaining.  While extraordinarily generous, that’s still not “unlimited” in our book and we asked Virgin Mobile about it.  Their explanation? It was a “soft usage cap,” and although they didn’t expect anyone to actually hit that level of usage on a relatively slow broadband connection, if they did, customer service would reset it to zero upon request.  We asked why it was included at all on an unlimited service?  We were told it was a software issue — the website was designed for usage-limited broadband measurement.  Considering the performance of 3G wireless networks, it’s not likely many would ever hit it, especially because you would need to be running traffic almost continuously across the connection to reach it.

Nevertheless, we’re pleased to report that as of this afternoon, the 400GB limit is gone, replaced by a usage counter that plainly states “unlimited.”  We applaud Virgin Mobile for rapidly responding to concerns that “unlimited” didn’t actually mean “unlimited.”

...but not for long. As of this afternoon, even that generous usage cap was gone.

One concerned reader dropped a note to Stop the Cap! wondering about something seen in the terms and conditions about “unlimited mobile Internet (but not unlimited downloaded content).”  We couldn’t find those terms and conditions, and if they were included as part of the online activation process, that’s something we missed as we had to activate by phone.  We can only think that may have something to do with the company’s Acceptable Use Policy for data products.  Like other wireless providers, Virgin Mobile does not want customers using their service for “web camera posts or broadcasts, automatic data feeds, automated machine-to-machine connections or peer-to-peer (P2P) file sharing or other systems that drive continuous heavy traffic or data sessions.”  P2P traffic, in particular, is usually a painful experience for both the wireless user and provider.  These kinds of terms and conditions are commonly found in wireless provider agreements.  We’d have a problem with Virgin Mobile if they joined some wireless ISP’s in banning use of online video, but they have not.

So does Virgin Mobile’s marketing of its unlimited Broadband2Go service pass the Stop the Cap! Honest Marketing Test?

The company claims: “Speed varies based on location and coverage with average downlink data speeds between 600 and 1400Kbps. Virgin Mobile does not restrict your speeds based on data usage caps.”

At first glance, we suspected that 600Kbps speed might be a little higher than what real-world users would actually encounter.  Signal strength can steal a lot of speed and if Sprint’s nearest cell tower encounters heavy usage at peak times, speeds can drop dramatically.

We ran several speed tests from different server locations, because results can vary dramatically.  Here is what we found from our location in Rochester, N.Y.:

Speedtest.net recommended a speed test server in the San Francisco area. Our first test showed reasonable 3G speeds.

Interestingly, using a local speed test site showed better downstream results, although upload speeds suffered somewhat.

Finally, a speed test result using a Los Angeles test server that performed well.

Virgin Mobile’s speed and marketing claims do pass the Honest Marketing Test, although we feel they should more openly disclose the ban on P2P traffic.  It’s likely not enforced, if only because most users would grow impatient with the poor results.  Although we have not had a chance to test the robustness of Sprint’s data network and how well it hands off data signals between tower sites or peak usage, the browsing experience was definitely superior to that of the other wireless broadband service we tested — Cricket Wireless.  The speeds were better, too.

There is no way to tell whether Virgin Mobile’s owner Sprint will ultimately be able to sustain the service should a flood of new customers saturate their 3G network.  It’s a shame that although Virgin Mobile uses Sprint’s network, they do not currently allow access to Sprint’s much-faster 4G network.

Our Recommendation

For those lucky enough to have good wireless signal coverage from Sprint and are currently stuck with Hughes or Wildblue satellite fraudband service — your day has come.  Stop the Cap! can heartily recommend Virgin Mobile’s unlimited service as a great alternative to either provider.  We can also recommend this service to those stuck on .768-1.5Mbps DSL, especially if the phone company is charging you more than $40 a month for tortoise-slow DSL service.  For those on the go, this is also a great choice, assuming where you go is within Sprint’s coverage area.  Broadband2Go can even provide an effective backup if your primary Internet provider goes down.  But we do not recommend it as a replacement for higher speed DSL, cable, or fiber delivered broadband.

Because Sprint’s coverage is more spotty than AT&T or Verizon, it is important to consider where you will use the service.  Those on the edge of coverage areas may experience considerably poorer service, or none at all, when indoors.  Sprint locates their towers inside major metropolitan areas and along major highways that connect those communities.  If you are uncertain whether Broadband2Go will work where you want to use it, you can consider buying the MC760 with $10 worth of usage, which will provide 100MB of usage within 10 days.  If it doesn’t work well for you, return the modem and be out only $10 worth of usage.

Those who like the service can either top-up your account automatically to cover the $40 monthly fee with no interruption in service, or just pay for the service when you need it.  There is no activation/re-activation fee.

Overall, our first impressions are positive, although we wished existing Virgin Mobile customers could link the service to their existing accounts.  Over the next few days, we’ll take the service on the road and see how it fares.

Verizon Wireless customers increasingly confront mandatory data plans costing $10-30 a month even if they don't intend to use their phones to access data services

An increasing number of Verizon Wireless customers at the end of their two-year contracts are suspended in time, unwilling to upgrade their phones because of costly mandated data plans that dramatically boost cellular phone bills, especially if everyone in the family wants an improved phone.

Kathy Vega, who lives in Rotterdam, N.Y., is just one example.

She complained to the Albany Times Union she’s effectively trapped with her old phone, an LG enV, because any upgrade will expose her to new mandatory data plans costing as much as $30 extra per month.

She’s been a satisfied Verizon Wireless customer for years. She also has Verizon Internet service, a Verizon e-mail address and a Verizon land line at home. She’s been a virtual walking, talking advertisement for the company’s products and services.

That’s why Vega was so irked by Verizon’s response when she tried to replace her enV phone and add a second one for her stepfather for free, thanks to a Father’s Day promotion the company was running.

Vega recalls that she was told that she’d have to pay another $30 each month for a “media pack” that would provide Internet and e-mail access.

It’s not clear to her now whether the additional price quoted to her was actually $30 per phone, which was her understanding at the time, or a total additional cost of $30 per month, based on a $9.99 data plan for each phone.

The Maroon enV model like hers on Verizon’s Web site now requires a data package costing “$9.99 or higher.”

The exact amount is almost irrelevant, as far as Vega is concerned. She just doesn’t see why she should have to pay for services she doesn’t use — especially since she wants the same phone she already has with no data charge.

Kathy Vega explains her plight to the Albany Times Union Advocate.  (1 minute)

Good luck.

Verizon Wireless, like AT&T, is increasingly exposing loyal customers like Vega to hidden rate increases in the form of mandatory service add-ons, in this case to cover data usage.  While Verizon’s most basic cell phones are still free from these fees, the phones most popular with consumers these days all come with bill busting add-on requirements.

Vega pays $116 a month for cell phone service now.  Verizon’s salespeople don’t always volunteer the company offers a lower usage data plan for $10, so assuming she follows the path laid before her by Verizon’s in-store staff, she could face quite a rate hike.

Confronted with her options, Vega is toughing it out with her current phone and an expired contract — like many other Verizon Wireless customers.

For those who have been loyal to Verizon for years, it’s galling to find higher priced monthly bills when it’s time to renew a contract and upgrade a phone.

Jen Smith said she was peeved when she learned of the new data program and associated costs.

“It’s sickening. I also hate that they have no customer loyalty. We have been with Verizon since they took over for Bell Atlantic Mobile in the area (~11 years ago). We have six phones and spend about $320 a month for them. You’d think we’d get a little better service for that, or a free accessory or some little perk, or heck, even a polite customer service specialist, but nope,” she writes.

Reader Sarah discovered the same thing, and she headed out the door to Sprint:

“This is exactly why I left Verizon over a year ago. I wanted a Palm. I didn’t want the data plan. Even though you can put a block on the phone to prevent the “unintentional use” of the data plan, they refuse to sell any smart phone without a data plan. So I had to go to Sprint. Can’t say I’m totally pleased with Sprint, but at least I could get what I wanted, and that was no data.”

For Verizon spokesman John O’Malley, it’s all a matter of doing some math.

He told the Times Union’s Cathy Woodruff, who serves as the newspaper’s consumer advocate, mandating data plans actually saves customers from unexpectedly high bills. He described circumstances where many owners of such devices had been racking up unexpected charges, suffering bill shock from Verizon’s punitive charge of $1.99 per megabite of data consumed.

“Customers who purchase these phones tend to take full advantage of the phone’s capabilities for surfing the Web, checking e-mail, etc.,” O’Malley said. “We’ve seen that those customers use an average of 17 megabytes of data per month. At our pay-as-you-go rate of $1.99 per megabite, that would cost them more than $30 a month.”

The $9.99 data feature provides up to 25 megabytes of data per month, which would cost nearly $50 under the old pricing policy, which makes the package “more cost effective,” he said.

Woodruff argued it won’t save any money for customers who don’t use data services.

But beyond that, we contend O’Malley’s math only works when using Verizon’s numbers.

It was Verizon Wireless that set the price of $1,990 per gigabyte of usage for “occasional users.”  Had Verizon chosen pricing more reflective of its actual costs, consumers finding an extra dollar or two on their bill for a piddly 17 megabytes of data would still leave Verizon fat and happy, more than covering their costs.  By inflating accidental and occasional use pricing into the ionosphere, O’Malley has a stronger argument to sell customers mandatory data plans that protect them from data pricing traps created by Verizon itself.

Overpricing data plans for loyal Verizon Wireless customers who can’t or won’t jump for joy at the prospect of spending $100 a month or more for a single cell phone with data service are now shopping around for better deals.  Unfortunately, they won’t find them at AT&T, who generally charges the same prices Verizon does.  But the financially-stressed consumer can find savings if they are willing to explore the second-tier of carriers, ranging from Sprint and T-Mobile and prepaid plans that require no contract.

Sprint promotes itself as a better value than larger carriers AT&T and Verizon

Sprint is banking on Verizon and AT&T overplaying their hand and overcharging their customers.  With Sprint’s newest handset hit — the HTV Evo, which also works on Sprint’s slowly growing 4G network, the company is attracting another look by advanced smartphone users.  Sprint’s latest marketing also targets families weary of tricks and traps from their cell phone provider, especially usage-limits and allowances.  Sprint bundles more services into its unlimited plans than other carriers, and its prepaid unit, Virgin Mobile, is no longer limiting wireless broadband usage on its 3G network.

Sprint’s biggest challenges to regain its top-tier footing come from years of bad customer service which company CEO Dan Hesse now assures is behind them, and a considerably more limited coverage area that simply cannot compare to AT&T and Verizon.

But for customers like Vega, being able to use the phone she wants and not pay gotcha fees for services she doesn’t use may be enough to compel a switch. 

Verizon isn’t fooling her.

Woodruff

As Woodruff observes, “it seems foolish for Verizon to close out options for loyal customers, though, at a time when options can be such a strong selling point.”

“I just think (Verizon’s data package) is their way of building it to create more revenue, which I understand,” Vega told Woodruff, “but the customer should have a choice.”

She is so right.

Cathy Woodruff is known to Times Union readers as The Advocate.  Cathy covers telecommunications issues regularly in her column which appears twice-weekly in the newspaper.  She has covered the capital region of New York around Albany for more than 25 years, becoming The Advocate in July, 2009.  She grew up in Herkimer County in upstate New York. Her column is highly recommended.

38 Tennessee counties are about to face AT&T price deregulation, something critics contend will bring rate hikes of up to 50 percent for many of the state's most rural residents.

Attention rural residents in 38 counties in Tennessee with AT&T landlines: Start saving your money because AT&T will come looking for more of it soon enough.

As a result of 2009 legislation heavily promoted by the state’s largest phone company, AT&T has easily managed to pass a “competition test” it helped devise, triggering total deregulation of basic phone rates across the state.

Although some of the legislation’s supporters are celebrating the end of rate oversight by the Tennessee Regulatory Authority (TRA), claims that competition has broken out across Tennessee may be an exaggeration.  Critics contend many residents will face relentless AT&T rate increases, especially for the elderly and those living in rural areas — typically the poorest regions of the state.

AT&T’s competition test only required the presence of a potential competitor to meet the definition of “competition.”  Unfortunately, for many residents in the 38 affected counties, that competing cable or wireless provider often can’t or won’t provide reliable service, either because cable lines bypass rural areas or cell phone service offers poor signals.  That leaves many consumers at the mercy of AT&T, who can now charge whatever they like.

It’s a key flaw many state legislators fail to recognize when accepting the phone company’s argument that deregulation will save consumers money.  Documentary evidence suggests the reverse is true, especially in areas not well covered by cable and wireless competition. Those choosing the most basic levels of service typically face the largest rate hikes as telecommunications companies try to drive customers into multi-service bundles often approaching $200 a month.

For now, the first step is to do away with oversight and AT&T wasted no time pulling out provider maps for the 38 still-regulated counties in the state and found cable and cell phone competitors in all of them.  Despite the fact those services are not available to every resident, AT&T lawyer Joelle Phillips demanded the TRA immediately end rate regulation.

Customer Advocacy Lawyer Mary Leigh White warned the TRA AT&T would follow their track record in other states where rates were deregulated and raise prices up to 50 percent. Phillips told the Authority it didn’t matter — the law AT&T helped write and lobby for was clear:

“When a statute includes one thing specifically and doesn’t refer to other things, that the statute must be read to have done that on purpose,” said Phillips.

With that argument, the TRA capitulated Monday and voted unanimously to end rate oversight.

Consumers in the state who do find major price hikes in their future can blame the deregulation bill’s chief sponsors:

• Sen. Paul Stanley, (R-Collierville) (Resigned last August after caught in an extramarital affair with a 22-year old intern.)
• Sen. Dewayne Bunch, (R-Cleveland)
• Rep. Gerald McCormick, (R-Chattanooga)

WSMV-TV in Nashville covered the end of AT&T rate oversight and the implications the change will have on Tennessee phone bills.  (2 minutes)

Virgin Mobile has hit a roadblock trying to introduce its new $40 unlimited Broadband2Go service that was due to launch today.  It turns out the company cannot figure out how to update its computer systems to accept and properly bill the new unlimited service.

The prepaid division of Sprint issued a sheepish apology on the company’s Twitter feed postponing the introduction of the new service, now promising a launch “within the next two days.”

The launch failure by the prepaid provider comes after considerable press attention about the introduction of the new unlimited plan and yesterday’s press release heralding unlimited mobile broadband that nobody can actually buy.

The result has been customer confusion and accusations of “bait and switch” advertising.

Stop the Cap! has received a number of e-mails that confuse the company’s old pricing, still on the website, with the new pricing still to take effect.  Most believed the company was playing games with the word “unlimited,” thinking Virgin had actually limited the new “unlimited” plan to just 1GB of usage.  But that’s the old usage-limited pricing.

Virgin Mobile customer service has not helped.  Several of our readers called the provider which relies on an overseas call center.  Those customer service representatives never heard of the company’s unlimited service plan and denied they had one.

Virgin Mobile’s social media outlets acknowledge the problems, telling readers their customer service department cannot accept new orders or activations.  That has sparked some negative comments, especially on the company’s Facebook page.

We recommend consumers avoid signing up for the service until the unlimited plan appears on Virgin Mobile’s website.  We also recommend you stay away from phone activations — Virgin Mobile’s overseas customer service agents do not inspire confidence.  Some customers who jumped the gun and “topped-up” their Virgin Mobile accounts now find they are paying for Virgin Mobile’s original pricing.  Customer service will not apply funds to the new unlimited service until after the customer exhausts their current usage-limited plan.

Verizon Wireless today announced a new 5GB tier for its prepaid mobile broadband service at a steep price — $80 per month.

The new 5GB tier joins several other levels of prepaid data service available from the nation’s largest wireless carrier:

• $15 for 75MB of usage (expires in 24 hours)
• $30 for 250MB of usage (expires in one week)
• $50 for 500MB of usage (expires in one month)

But some critics charge Verizon’s new 5GB data plan is way overpriced.

Current Analysis claims $80 for just 5GB of access, expiring after 30 days, is simply too much to ask from consumers looking for a contract-free, prepaid data plan.  Although AT&T has similar pricing for occasional users, smaller carriers are driving prepaid customers to expect more data for less money.

Cricket Wireless charges $50 a month for 5GB, T-Mobile delivers the same 5GB for $40 a month, and now Virgin Mobile will deliver unlimited access for $40 a month.

The only customers that would likely consider Verizon’s $80 prepaid data plan are those outside of Sprint, Cricket and T-Mobile’s coverage areas who want something more than 500MB of usage and don’t want to be stuck on a two year contract.