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Sprint Realizes Not Everyone Wants a $200 Cell Phone Bill: Announces $20, 1GB Family Data Plan

budgetIf your family budget cannot handle a $200 monthly cell phone bill from AT&T or Verizon and you can keep your data usage to around 1GB, Sprint has a deal for you.

On Wednesday, Sprint unveiled a low-end family data plan offering 1GB of data for $20 a month, an improvement over the 600MB data option Sprint used to offer. It’s also a better deal than the 500MB $20 buys you on Verizon’s network or the piddling 300MB AT&T delivers on its budget plan.

“This entry-level sharable data allowance reinforces Sprint’s commitment to offering customers the best value in wireless,” said Marcelo Claure, Sprint CEO. “We’re offering customers a choice – whether they need a small amount of data or are a high-end data user.”

Customers can build their own plan in three steps. First, choose the shared data allowance. For 1GB, it’s $20 per month for up to 10 lines. Second, add data access for phones with unlimited talk and text while on the Sprint network. The data access charge for non-discounted phones is $25 per month per line for 1GB through 16GB. Third, add your tablet devices for $10 per month per line and mobile broadband devices for $20 per month per line. There is no early termination fee and no annual service contract with non-discounted phones.

In addition, when customers switch their number to Sprint, a family with up to 10 lines can get 20GB of shared data and unlimited talk and text for only $100 a month through 2015.

This chart reflects a 2GB shared data plan for two lines that amounts to $75 a month before taxes, fees and surcharges.

This chart reflects a 2GB shared data plan for two lines that amounts to $75 a month before taxes, fees and surcharges.

Since wireless carriers discovered reports of a spectrum crisis were vastly exaggerated, they have fallen all over each other with “double your data” promotions and other allowance boosters. Sprint’s family plans allow customers to divide up an inexpensive data plan across all phones on the account. If you spend most of your time on Wi-Fi or share an account with parents or grandparents not accustomed to using much data, Sprint’s plan may deliver enough data to satisfy.

Sprint has hemorrhaged its high-end customers for several quarters, mostly because its 3G data service is barely usable and its new 4G LTE network has rolled out at the typical speed of a glacier and its performance has not always impressed. Sprint has cut prices and is trying to find a stable niche among budget-conscious postpaid customers unwilling to pay AT&T and Verizon’s asking price but are willing to tolerate reduced coverage in favor of a better price. Sprint and T-Mobile are both competing for these customers. Verizon says it cannot be bothered being seen as a discount carrier, and AT&T is committed to keeping its average revenue per customer numbers growing.

Half of AT&T’s Customers Are Paying $100 for 10GB Data; Unlimited Customers Still Throttled After 3-5GB

Speed bump

Speed bump

More than half of AT&T’s wireless customers are paying at least $100 a month for 10GB or more of wireless data on AT&T’s Mobile Share Plans at the same time AT&T continues to throttle its legacy unlimited data customers who use more than 3GB of data on its 3G network or 5GB of data on its 4G LTE network.

AT&T claimed in 2012 it implemented its “fair usage policy” for unlimited customers to assure all could receive reasonable service during peak usage times when cell towers become congested.

AT&T also blames “a serious wireless spectrum crunch” for the speed throttling, implying access to more spectrum could help ease the problem. But there is a much faster way to overcome AT&T’s “spectrum crunch:” agree to pay them more money by ditching that $30 unlimited plan for a tiered plan.

John Stephens, AT&T’s chief financial officer, told investors Wednesday that nothing boosts revenue more than pushing customers into usage-cappped data plans that customers are regularly forced to upgrade.

“On the ARPU (average revenue per user/customer) story, I think the biggest issue with the improvement is people buying the bigger [data] buckets and buying – upping plans,” said Stephens. “We had over 50% of the customer base at the 10GB or bigger plans.”

Stephens added that AT&T benefited from customers upgrading to 4G LTE devices that are handled more efficiently by AT&T’s mobile data network.

Increased usage and upgraded data plans delivered a 20% increase in data billings over the last quarter.

Since 2012 AT&T has paid out more than $50 billion to shareholders through dividends and share buybacks. The company benefited from nearly $20 billion a year in free cash flow and asset sales over the last two years and is expected to repeat those numbers this year. Consolidated revenue at AT&T grew to $33 billion, up $800 million since the same time last year.

Miraculously, despite the “alarming spectrum crunch,” AT&T found more than enough spectrum to award its best customers with a “double data” promotion that turns a 15GB data plan into a 30GB plan, a 20GB plan to 40GB, a 30GB plan to 60GB, a 40GB plan to 80GB, or a 50GB plan to 100GB. Importantly, AT&T boasts its double data promotion won’t “explode” — their language for “expire” — on customers until their contract ends.

Lowering the bar on "unlimited use" customers.

Lowering the bar on “unlimited use” customers.

“Those exploding offers — customers hate those offers,” said AT&T Mobility CEO Ralph de la Vega at a recent investor conference. “Unless they change their mind, we won’t offer those kinds of promotions.”

But de la Vega doesn’t mind leaving the company’s most loyal legacy customers in the penalty box if they cling to their grandfathered unlimited data plans. The throttles stay and the allowances have remained unchanged since first announced, despite the bountiful spectrum obviously ready and available to serve AT&T’s deluxe customers. Unlimited customers are regularly reminded they can easily avoid the throttle — just abandon that unlimited data plan. According to Stephens, more than 80% of AT&T’s customers already have.

The excuses for wireless speed throttles and killing off unlimited data plans at AT&T and Verizon Wireless don’t seem to wash with FCC chairman Thomas Wheeler, who demanded Verizon offer the “rationale for treating customers differently based on the type of data plan to which they subscribe, rather than network architecture or technological factors,” after it announced it was planning speed throttles for its remaining unlimited data plan customers. Verizon canceled the plan after Wheeler began scrutinizing it, but the throttles are still in place at AT&T.

AT&T’s 10GB Mobile Share Plan starts with a $100 data plan. Customers also pay:

  • $10 a month for each auto-based smart-locator;
  • $10 a month for each tablet, camera or game device;
  • $15 a month for each basic phone;
  • $20 a month for each wireless home phone replacement;
  • $20 a month for each connected Internet device;
  • $40 a month for each connected smartphone.

A family of four with four smartphones, a tablet, and AT&T’s wireless home phone replacement would be billed $290 a month before at least $39 in taxes, fees, and surcharges — well north of $300 a month for most.

T-Mobile: AT&T Gouges Us With Data Roaming Rates 150% Higher Than Average

bill shockT-Mobile has asked the Federal Communications Commission to investigate AT&T’s “artificially high roaming rates” charged when its customers travel outside of T-Mobile’s home service area.

T-Mobile is heavily reliant on AT&T for roaming service outside of major cities and the country’s smallest national wireless carrier complains AT&T is using their market power to put it at a major disadvantage, which could force new limits on roaming access in some areas.

T-Mobile provided examples of the damage already done by AT&T’s roaming rates:

“Limitless Mobile has severely restricted its customers’ access to AT&T’s network ‘for the sole reason that AT&T’s data roaming rates are too high and by continuing roaming access, Limitless could not maintain a commercially competitive retail wireless data offering to the general public,’” T-Mobile told the FCC.

The Rural Wireless Association noted that competing carriers “cannot sustain the provision of data roaming services if [they] must provide that service at a loss.”

The problem of data roaming rates is getting larger as carrier agreements are due for renewal at many mobile providers. Independent cellular companies are finding AT&T unwilling to renew at prices and terms comparable to their existing contracts. Instead, they face renewal rates that average a minimum of 10 and as much as 33 times higher than the national carriers’ retail rates.

For example, T-Mobile’s agreement with AT&T includes a data roaming rate that is now 150 percent higher than the average domestic rate that T-Mobile pays for data roaming.

This is one thousand percent higher than the data roaming rate negotiated between Leap Wireless and MetroPCS prior to their respective acquisitions, wrote T-Mobile.

With the stark price increases, carriers have begun imposing limits, including speed throttling and data caps, on customers when roaming on AT&T’s network.

t-mobile-set-recordBecause of AT&T’s artificially high roaming rates, T-Mobile wireless customers roaming in South Africa have a better user experience than customers roaming on AT&T’s network in South Dakota, argues T-Mobile. Their speed is twice as fast, and their data usage is unlimited.

T-Mobile is asking the FCC to intervene by establishing some type of standard about what constitutes “commercially reasonable” roaming rates as part of its 2011 Data Roaming Order, designed to protect competition.

This year, carriers dependent on Verizon Wireless or AT&T to help deliver “nationwide coverage” are negotiating roaming access to the companies’ 4G LTE networks for the first time. Most roaming agreements used to only cover 3G service, delivered at a slower speed.

If carriers like Sprint and T-Mobile are unable to negotiate fair terms, both companies will be at a major competitive disadvantage, relegated to providing only regional coverage or charging higher prices for roaming service.

AT&T vice president of regulatory affairs Joan Marsh said T-Mobile’s request bordered on being illegal, in direct violation of the Telecommunications Act. Marsh argued T-Mobile and other carriers should be incentivized to build their own networks instead of relying on cheap roaming access from companies like AT&T. Marsh added any move by the FCC to set rates or benchmarks would be beyond the FCC’s mandate. Wireless carrier rates are deregulated and not subject to common carrier regulation.

New Zealand Getting 200/200Mbps Uncapped Fiber Broadband

Snap-Logo-2-300x300New Zealanders want faster broadband and they want it without a usage cap, and Snap is ready to offer both.

Snap’s nationwide 200/200Mbps Ultra-Fast Broadband commenced this week providing the fastest broadband on offer throughout New Zealand, priced at $111.50 a month with an unlimited use add-on available for an extra $8 a month. To date, the service had only been available in Auckland.

Kiwis can sign up for Snap on the Chorus network for the fastest 200/200Mbps speeds. Those served by Enable or UltraFast Fibre will see upload speeds reduced to 20Mbps for now, but will also be compensated with a lower monthly price: $87.71.

A wireless gateway to support the faster speeds will be provided at no extra cost to customers signing up for 200Mbps service.

no limitsSnap’s new service comes as a result of New Zealand’s deployment of fiber networks and an end to usage caps, consumption billing, and/or bandwidth throttling. Snap has been well received in New Zealand because it guarantees no traffic shaping, traffic management schemes, or mandatory usage caps. This comes at a time when North American providers are trying to force customers into usage-capped broadband plans and wireless carriers insist on using traffic shaping and caps.

“There is no faster commercially available service across the whole country today,” said James Koers, general manager, Snap Retail. “We’ve built our own network to ensure customers receive the fastest, most reliable service possible. We don’t cache or proxy or shape traffic in any way, giving customers peace of mind that they’re getting the service they expected and paid for.”

Koers adds there is a clear demand for fiber optic broadband across the country.

“Today, two out of every three of our sign-ups are for a fibre service which shows New Zealanders’ appetite is increasing for UltraFast Broadband as it becomes available,” said Koers. “200Mbps is just the beginning though as we’re now trialling Chorus’ new 1Gbps residential service.”

PC Magazine has rated Snap the fastest broadband provider in the country.

Comcast Invites Customers to Upgrade to New $10 Modem Fee, Or Else Watch Your Speed Degrade

Some Comcast customers with older cable modems are receiving letters from the cable company warning they will need an upgraded modem to “get the most out of your XFINITY Internet service.”

comcast upgrade

Customers are asked to “properly dispose” of old equipment while contemplating either buying a new modem or leasing one from Comcast. Sticking with cable company-provided leased equipment is the choice of more than 90 percent of cable Internet subscribers, despite the fact cable operators charge hefty rental fees. In parts of the Pacific Northwest, Comcast has introduced its newest price for rented cable modems: $10 a month, which amounts to $120 a year — more than the cost of buying a modem outright.

Comcast’s letter may be premature for customers with DOCSIS 2 equipment subscribed to speeds under 38Mbps (the top-rated speed for DOCSIS 2 equipment). Although DOCSIS 2 is not fast enough for Comcast’s 50Mbps Blast Internet plan, it’s more than adequate for the 25Mbps Performance Internet plan and other lower speed plans.

Customers in Illinois are also getting the letter, arriving as the company boosts speeds. Most are being sent to customers using cable modems more than 3-4 years old. Customers can find a new compatible modem on Comcast’s Approved Device List. We strongly recommend customers buy a modem and avoid renting one from Comcast. Monthly modem rental fees, now $8 and likely to increase to $10 across the country in the future, are a major earner for Comcast, bringing in $275-300 million quarterly.

Rural America: Welcome to Verizon LTE Broadband – $120/Mo for 5-12Mbps With 30GB Cap

They are coming.

With both AT&T and Verizon petitioning various state regulators for permission to switch off rural landline phone and broadband customers and force customers to use wireless alternatives, getting affordable broadband in the countryside is becoming increasingly difficult.

Last week, Millenicom — a reseller of wireless broadband service specializing in serving rural, long-haul truckers, and recreational vehicle users notified customers it was transferring their accounts directly to Verizon Wireless and will no longer have any role selling discounted Verizon Wireless broadband service.

Reports indicate that Millenicom’s contract renewal negotiations with Verizon did not go as expected and as a result customers are facing potential price increases and long-term contracts to continue their wireless broadband service.

Both AT&T and Verizon have told regulators they can satisfactorily serve rural customers with wireless LTE broadband service as an alternative to maintaining rural landline infrastructure. Neither company likes to talk about the price rural customers will pay if they want to keep broadband in their homes or businesses.

Some Millenicom customers have been invited to preview Verizon Wireless’ Home LTE Installed Internet plans (formerly known as HomeFusion) and many are not too pleased with their options:

lte1

lte2

Verizon’s overlimit fee is $10/GB for those that exceed their plan limit. According to several Amazon.com reviews of the service (it received 1.5 stars), customers are quickly introduced to “Verizon’s shady usage meter” that consistently measures phantom usage. Bills of $400-500 a month are not uncommon. One customer was billed for 18GB ($180) in extra usage despite following Verizon’s suggestion to stop using the service when it reported he reached 29GB of usage.

verizon bill

This bill includes more than $3,000 in data overlimit fees.

“The bill came with the bogus data charges, and it was twice as much as the meter detected,” the customer reported.

In fact, the phantom usage has become so pervasive, Verizon customers have dubbed the phenomenon “ghost data,” but the overlimit fees Verizon expects customers to pay are very real.

“[It] went out more than my DSL and my first bill from Verizon was $1300+,” reported Jill Kloberdanz. “I want this demon out of my house.”

“According to [Verizon], I used over 65GB in just one week,” reported Aron Fox. “And they want almost $800 for it. My wife and I are two 60-somethings that never game and rarely stream.”

“Definitely stay away [...] unless you like to see your data charges skyrocket (in my case more than doubling) when your use doesn’t,” reported Richard Thompson. “I’ve pulled the plug on it — literally.”

“We have the same problem – huge data overages, meter does not match our usage,” writes Heather Comer. “We turn the router off at night and when we check the next morning, it is still accumulating data.”

There are close to a dozen more complaints about Verizon’s usage meter, all stating they were charged for usage even when the equipment was switched off.

While both Verizon and AT&T stand to save millions disconnecting rural landline customers, they stand to earn even more switching rural customers to their more costly (and profitable) wireless alternatives.

The Capitol Forum’s Insightful Review of the Comcast-Time Warner Merger Deal: A Tough Sell

be mineWall Street is increasingly pessimistic about Comcast and Time Warner Cable pulling off their merger deal as regulators stop the clock to take a closer look at the transaction.

The Capitol Forum, an in-depth news and analysis service dedicated to informing policymakers, investors, and industry stakeholders on how policy affects market competition, specializes in examining marketplace mergers and their potential impact on American consumers and the general economy. The group has shared a copy of their assessment — “Comcast/Time Warner Cable: A Closer Look at FCC, DOJ Decision Processes; Merits and Politics May Drive Merger Challenge, Especially as Wheeler Unlikely to Embrace Title II Regulation for Net Neutrality” — with Stop the Cap! and we’re sharing a summary of the report with our readers.

The two most important government agencies reviewing the merger proposal are the Federal Communications Commission and the Department of Justice. The FCC is responsible for overseeing telecommunications in the United States and is also tasked with reviewing telecom industry mergers to verify if they are in the public interest. The Department of Justice becomes involved in big mergers as well, concerned with compliance with antitrust and other laws.

In many instances, the two agencies work separately and independently to review merger proposals, but not so with Comcast and Time Warner Cable.

Sources tell Capitol Forum there is a high level of coordination and information sharing between DOJ and the FCC, potentially positioning the two agencies in a stronger legal position if they jointly challenge the merger. Readers may recall AT&T’s attempt to buy T-Mobile was thwarted in 2011 when the FCC followed the DOJ’s lead in jointly challenging the merger on competition and antitrust grounds. With a united front against the deal in Washington, AT&T quickly capitulated.

comcast cartoonDespite a blizzard of Comcast talking points claiming the cable industry is fiercely competitive, Capitol Forum’s report indicates the DOJ staff level believes the cable industry suffers dearly from a lack of competition already, and allowing further marketplace concentration would exacerbate an already difficult problem.

Capitol Forum reports the DOJ’s staff is inclined to “take an aggressive posture with regards to [antitrust] enforcement.”

The DOJ would certainly not be walking the beltway plank to its political doom if it ultimately decides to oppose the merger.

Few on Capitol Hill are likely to fiercely advocate for a cable company generally despised by their constituents. The Capitol Forum report notes that Comcast faces powerful opposition and its political support is overstated. Comcast’s lobbying efforts and ties to President Obama and several high level Democrats have also been widely exposed in the media, which makes it more difficult for D.C.’s powerful to be seen carrying Comcast’s water.

In fact, the report indicates a regulatory challenge against Comcast and Time Warner Cable would face considerably less political opposition than what the FCC faces if it reclassifies broadband as a “telecommunications service,” protecting Net Neutrality and exposing the industry to stronger regulatory oversight.

The report suggests FCC Chairman Thomas Wheeler, who seems intent on opposing reclassification of broadband under Title II, may appease his critics by taking a stronger stance on the Comcast/Time Warner deal instead.

Wheeler has already expressed concern about the state of competitiveness of American broadband. He considers providers capable of delivering at least 25Mbps part of broadband’s key market, which in many communities means a monopoly for the local cable operator.

Understanding “The Public Interest” and the Implications of a Combined Comcast/Time Warner Cable on Competition

comcastbuy_400_241The FCC will review the transaction pursuant to Sections 214 and 310(d) of the Communications Act of 1934, in order to ensure that “public interest, convenience, and necessity will be served thereby.”

The merger proposal must also demonstrate it does not violate antitrust laws.

It is here that merger opponents have a wealth of arguments to use against Comcast and Time Warner Cable.

Despite Comcast’s insistence the deal would have no competitive implications, the Capitol Forum reports the merger’s potential anticompetitive effects are “widely recognized and evidence from the investigation could provide DOJ and FCC with a solid foundation to challenge the merger.”

Although the two cable companies don’t directly compete with each other (itself a warning sign of an already noncompetitive marketplace), the report finds “a wide array of anti-competitive effects and several antitrust theories” that would implicate the cable company in a Clayton Act violation.

Comcast is betting heavily on its surface argument that by the very fact customers will not see any change in the number of competitors delivering service to their area, the merger should easily clear any antitrust hurdles. That argument makes it more difficult for the DOJ to fall back on the usual market concentration precedents that would prevent such a colossal merger deal. To argue excessive horizontal integration — the enlarging of Comcast’s territory — the DOJ would first have to prove Comcast’s size in comparison with other cable companies is a reason for the courts to shoot down the deal. Or it could bypass Comcast’s favorite argument and move to the issue of vertical integration — one company’s ability to control not just the pipes that deliver content, but also the content itself.

octopusHere the examples of potential abuse are plentiful:

  • Comcast would enjoy increased power to force cable programmers to favor Comcast in cable programming pricing and policies while allowing it to demand restrictions on competitive online video competitors or restrict access to popular cable programming;
  • Comcast could impose data caps and usage-based pricing to deter online viewing while exempting its own content by delivering it over a Wi-Fi enabled gateway, game console or set top box, claiming all are unrelated to Comcast’s broadband Internet service or network;
  • Force consumers to use Comcast set top boxes that would not support competing providers’ online video;
  • Use interconnection agreements as a clever way to bypass the paid prioritization Net Neutrality debate. Netflix and other content producers would be forced to compensate Comcast for reliable access to its broadband customers;
  • Noting AT&T has declared U-verse can not effectively succeed in the cable television business without combining its customer base with DirecTV to qualify for better volume discounts, there is clear evidence that a super-sized Comcast could command discounts new entrants like Google Fiber could never hope to get, putting them at a distinct price disadvantage.

The FCC’s scrutiny of Comcast’s merger deal has already uncovered evidence previously unavailable because of non-disclosure agreements which show Comcast’s heavy hand already at work.

The report notes Michael Mooney, a senior vice president and group general counsel at Level 3, told the Capitol Forum the dispute earlier this year between Netflix and Comcast could have been resolved in about five minutes had Comcast added a port to relieve congestion at an interconnection point. The cost? Just $5,000. Had Comcast been willing to spend the money, millions of Comcast customers would have never experienced problems using Netflix.

Whether Comcast is ultimately deemed too large to permit another consolidating merger or whether it is given conditional approval to absorb Time Warner Cable remains a close call, according to the Capitol Forum, despite the fact consumers have urged regulators for something slightly more concrete – a single sentence, total denial of its application.

http://www.phillipdampier.com/video/Capitol Forum The Consumer Welfare Test.mp4

The Capitol Forum broadly explores how the “consumer welfare standard” has become a part of the antitrust review process over the last 30 years. Sometimes, a strict antitrust test is not sufficient to protect “the public interest” of consumers, and allows the dominant player(s) to harm competition. In the digital economy, corporate mergers that empower companies to restrict innovation can prove far more damaging than classic monopoly abuse. (15:52)

Earthlink Customers Benefit from Time Warner Cable Maxx Broadband Upgrades

earthlink_logoEarthlink customers in New York, Los Angeles and Austin are receiving letters from Time Warner Cable advising them they qualify for the same speeds Time Warner Cable broadband customers are receiving as part of the TWC Maxx upgrade program.

Standard Earthlink customers in these cities will get speed upgrades from 15/1Mbps to 50/5Mbps at no extra charge. Turbo speed customers will see speeds rise from 20/2Mbps to 100/10Mbps, also at no additional cost.

twcmaxStop the Cap! reader Iris was immediately suspicious about the tone of Time Warner’s letter, which has the potential of confusing customers that own their own cable modems. The letter suggests customer-owned equipment might not be compatible with the speed upgrades. Customers are given a phone number to verify their eligibility, and some who have contacted Time Warner Cable report back they have been given a brief sales pitch to ditch their own modem in favor of one from Time Warner Cable, which costs $5.99 a month forever.

Time Warner could have simply enclosed its list of approved modems, which would answer customer concerns without having to make a phone call. But that wouldn’t give the company a chance to score extra revenue convincing customers to toss their old equipment in the trash while paying an unnecessary monthly modem fee for the rest of their lives.

For the record, your old modem probably will continue to work even if it isn’t capable of delivering the fastest speeds. If 50/5Mbps is fast enough for current Earthlink Turbo customers, they might want to consider downgrading service until they can budget to buy a new modem capable of taking full advantage of the faster 100/10Mbps speeds now on offer.

For your convenience, here is the latest Time Warner Cable Approved Modem List for TWC Maxx upgrade areas:

approved modems

 

Marriott’s Scheme to Force Guests to Use $1,000 Hotel Hotspots Derailed by FCC; Fined $600K

Marriott's Gaylord Opryland Resort made sure it had a corner on the Wi-Fi market by blocking the competition and charging $250-1,000 to win access to the hotel's Wi-Fi.

Marriott’s Gaylord Opryland Resort in Nashville made sure it had a corner on the Wi-Fi market by blocking the competition and charging $250-1,000 to gain access to the hotel’s Wi-Fi.

Marriott International, Inc. and its subsidiary, Marriott Hotel Services, Inc., have been fined $600,000 after a Federal Communications Commission investigation uncovered hotel employees intentionally interfering with personal Wi-Fi networks during convention events, forcing guests and exhibitors to use the hotel’s Wi-Fi network, at a cost of up to $1,000.

The FCC Enforcement Bureau, in response to a guest’s complaint that the hotel was intentionally jamming every Wi-Fi network except their own, discovered hotel workers were using a Wi-Fi monitoring system at the Gaylord Opryland in Nashville to prevent visitors from using their personal mobile broadband hotspots, a serious violation of Section 333 of the Communications Act.

Employees of Marriott, which has managed the day-to-day operations of the Gaylord Opryland since 2012, were tasked with using features of the hotel’s Wi-Fi monitoring system at the Gaylord Opryland to contain and/or de-authenticate guest-created Wi-Fi hotspot access points in the conference facilities. In some cases, employees sent de-authentication packets to the targeted access points, which would dissociate consumers’ devices from their own Wi-Fi hotspots and lock out the devices to keep them from connecting in the future.

Guests and exhibitors arriving expecting to use their AT&T, Verizon, Sprint or T-Mobile mobile hotspots found them completely disabled while on the property. Even adjacent Wi-Fi networks from nearby properties stopped working the moment users entered or approached the hotel grounds.

At the same time the hotel was blocking connections, Marriott charged conference exhibitors and guests dependent on Wi-Fi to run their exhibits or manage business matters connection fees ranging from $250-$1,000 per device for access to the Gaylord’s Wi-Fi network, the only network available.

“Consumers who purchase cellular data plans should be able to use them without fear that their personal Internet connection will be blocked by their hotel or conference center,” said Enforcement Bureau chief Travis LeBlanc. “It is unacceptable for any hotel to intentionally disable personal hotspots while also charging consumers and small businesses high fees to use the hotel’s own Wi-Fi network. This practice puts consumers in the untenable position of either paying twice for the same service or forgoing Internet access altogether.”

Marriott claimed they were just protecting their guests from cyber attacks and the FCC’s decision to fine the hotel has created confusion across the hospitality industry.

marriott-logo“Marriott has a strong interest in ensuring that when our guests use our Wi-Fi service, they will be protected from rogue wireless hot spots that can cause degraded service, insidious cyber-attacks and identity theft,” Marriott said in a statement. “Like many other institutions and companies in a wide variety of industries, including hospitals and universities, the Gaylord Opryland protected its Wi-Fi network by using FCC-authorized equipment provided by well-known, reputable manufacturers. We believe that the Opryland’s actions were lawful. We will continue to encourage the FCC to pursue a rule making in order to eliminate the ongoing confusion resulting from today’s action and to assess the merits of its underlying policy.”

Several hotel chains have turned to Internet connectivity as a revenue generator, but few hotels have asked as much as Marriott. Some hotel chains charge as much as $22 per day for permission to connect to the facility’s Wi-Fi network, convincing many guests to use their own personal mobile devices as Wi-Fi hotspots instead. But Marriott’s debacle with the FCC allowed several chains to get an edge on the competition and trumpet they are not in the Wi-Fi jamming business:

  • Hilton Hotels:  “We do not block or jam any wireless transmissions at our properties;”
  • Kempinski and Hyatt Hotels: There are no policies that allow our hotels to jam, block or prevent guests’ use of personal Wi-Fi hotspots;
  • InterContinental Hotels Group (Candlewood Suites, Crowne Plaza, Even, Holiday Inn, Holiday Inn Express, Hotel Indigo, Hualuxe, InterContinental and Staybridge Suites) has no problem with guests using personal networks on hotel property, but why bother when any guest can enroll in the IHG Rewards Club at no charge which gives them free unlimited access to the chain’s Wi-Fi;
  • The majority of Wyndham’s hotels are independently owned and operated, but most already offer complimentary Wi-Fi to guests, according to a hotel spokesperson.

Marriott was convinced it was not in violation of the law because it was not using an illegal signal jammer, commonly available overseas and often used in restaurants and theaters to silence cell phones. Marriott’s guests could still make and receive phone calls and text messages. But the Enforcement Bureau found that argument uncompelling after discovering hotel employees intentionally targeting any non-hotel hotspots they could locate to disconnect or block consumers from using them.

The $600,000 fine, the first of its kind for an incident of this kind, won’t mean much to the Marriott Gaylord Opryland. For staying at one of the hotel’s 3,000 rooms, Marriott charges $18 a day in “resort fees” for the “free Internet access,” $6.99 a day for enhanced Internet speed “suitable for downloading files, video chat and video streaming,” and $21-28 a day to park your car there.

But the FCC enforcement action has put a stop to this kind of access blockade spreading further. Under the terms of Marriott’s agreement with the FCC announced today, Marriott must cease the unlawful use of Wi-Fi blocking technology and take significant steps to improve how it monitors and uses its Wi-Fi technology at the Gaylord Opryland. Marriott must institute a compliance plan and file compliance and usage reports with the Bureau every three months for three years, including information documenting any use of access point containment features at any U.S. property that Marriott manages or owns.

Verizon Wireless Cancels Its LTE 4G “Network Optimization” (Speed Throttling) Plan Before It Launches

throttleVerizon Wireless, facing scrutiny from FCC chairman Thomas Wheeler, today announced it has canceled plans to introduce a new “network optimization” policy that would have significantly throttled down speeds for heavy users still on grandfathered, unlimited use data plans.

Stop the Cap! received a statement from Verizon Wireless this afternoon announcing a sudden change of heart:

Verizon is committed to providing its customers with an unparalleled mobile network experience.  At a time of ever-increasing mobile broadband data usage, we not only take pride in the way we manage our network resources, but also take seriously our responsibility to deliver exceptional mobile service to every customer.  We’ve greatly valued the ongoing dialogue over the past several months concerning network optimization and we’ve decided not to move forward with the planned implementation of network optimization for 4G LTE customers on unlimited plans.  Exceptional network service will always be our priority and we remain committed to working closely with industry stakeholders to manage broadband issues so that American consumers get the world-class mobile service they expect and value.

Chairman Wheeler questioned Verizon’s strategy almost immediately after the company announced its “network optimization” strategy in July.

Wheeler

Wheeler

“‘Reasonable network management’ concerns the technical management of your network; it is not a loophole designed to enhance your revenue streams,” Wheeler wrote in a July 30 letter to Verizon Wireless CEO Dan Mead. “It is disturbing to me that Verizon Wireless would base its ‘network management’ on distinctions among its customers’ data plans, rather than on network architecture or technology.”

Wheeler reminded Mead the FCC defined network management practices to be reasonable “if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.”

Wheeler told Mead Verizon’s plans didn’t qualify.

“I know of no past FCC statement that would treat as ‘reasonable network management’ a decision to slow traffic to a user who has paid, after all, for ‘unlimited” service,'” Wheeler wrote.

everybody does itWheeler also questioned how Verizon could justify its planned speed throttling under the conditions it agreed to after winning the 700MHz “C Block.” That spectrum was accompanied by a special FCC mandate – open platform rules which prohibits Verizon Wireless from denying, limiting, or restricting the ability of end users to download and use applications of their choosing on the C Block networks. A speed throttle would make using some applications impossible.

In August, Wheeler hammered home his opposition to Verizon’s plans at a news conference.

“My concern in this instance–and it’s not just with Verizon, by the way, we’ve written to all the carriers–is that [network management] is moving from a technology and engineering issue to a business issue, such as choosing between different subscribers based on your economic relationship with them.”

Wheeler has expressed irritation that Verizon’s justification for congestion management only applied to its unlimited customers, while those paying on a per-gigabyte basis could use (and spend) as much as they like.

Verizon responded that other providers — notably AT&T — already have a similar network management policy in place, throttling speeds of grandfathered unlimited customers who consume more than 3GB of wireless traffic on its 3G network or 5GB on its 4G network a month.

“‘All the kids do it’ was never something that worked with me when I was growing up and didn’t work with my kids,” Wheeler responded, noting Verizon was trying to reframe the issue instead of justifying the need for speed throttles for some customers, while giving others unlimited access as long as they pay.

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