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Competition Finally Starts Hurting Verizon Wireless; Holiday Margin Pressure and Higher Disconnects

Phillip Dampier December 8, 2014 Competition, Consumer News, Verizon, Wireless Broadband 1 Comment

Christmas Stocking with chunks of coal laying on a green textured backgroundFor years Verizon Wireless has charged some of the highest prices in the wireless industry because it could. But those days may finally be coming to an end as the company admits it is seeing an increase in customer disconnects, and the company announced it will spend more on subscriber promotions to win back old customers and attract new ones.

Verizon Wireless executives have repeatedly stressed they can charge ‘Cadillac prices on a Cadillac network’ that has traditionally outperformed the competition in coverage, 4G data, and customer service. But customers may be telling the carrier “enough as enough” as a growing number are attracted to offers of dramatically lower pricing from Sprint and T-Mobile.

In a statement issued to shareholders, Verizon Wireless reports it is not on track to have a completely Merry Christmas:

As the company is accelerating the upgrades of high-quality customers to 4G, total retail postpaid disconnects are trending higher both sequentially and year over year in this highly competitive and promotion-filled fourth quarter.

The company expects that the fourth-quarter impacts of its promotional offers, together with the strong customer volumes this quarter, will put short-term pressure on its wireless segment EBITDA and EBITDA service margin (non-GAAP, based on earnings before interest, taxes, depreciation and amortization) as well as its consolidated EBITDA margin (non-GAAP) and earnings per share.

Despite the growing number of customers leaving Verizon for more affordable alternatives, those remaining are willing to pay even higher prices upgrading to the latest smartphones and tablets equipped to take advantage of Verizon’s 4G LTE network. Customers are gradually moving away basic cell phones and towards smartphones and tablets.

Customers are also increasingly willing to abandon the upgrade subsidy in favor of early upgrades and device payment plans. Verizon reports almost one-quarter of customers are now enrolled in its Verizon Edge smartphone program, which budgets the cost of a new phone in installments charged to a cell phone bill. Just three months ago, Verizon had only enrolled 12% of its customers in the upgrade program.

Cuomo: 100% of New York State Should Have Access to 100Mbps Broadband by 2018

ny broadbandNew York Gov. Andrew Cuomo has set a goal that every resident of New York State should have access to at least 100Mbps broadband no later than 2018.

The governor will kick off his latest broadband expansion effort with the launch of his $500 million broadband expansion program, dubbed the New New York Broadband Fund, a follow-up to the state’s $70 million public-private effort to expand broadband that began in 2012.

Much of the money awarded in the 2012 broadband expansion effort went to Wireless Internet Service Providers, institutional broadband networks, middle-mile fiber projects not accessible to the public, and emergency service network upgrades. Another $5.2 million was awarded to Time Warner Cable to expand broadband service to 4,114 households in the Capital, Central, Finger Lakes, Mid-Hudson, Mohawk Valley, NYC, North Country, Southern Tier and Western regions of New York State. In June, many of the top funding recipients also received honors from the governor’s office in the first annual New York State Broadband Champion Awards.

Gov. Cuomo

Gov. Cuomo

Despite the money, the 2012 effort did not make a significant dent in the pervasive problem of broadband availability in upstate New York.

While Gov. Cuomo is committed to a target speed of 100Mbps within the next four years, more than one million New York households still cannot access broadband that achieves the state minimum — 6.5Mbps. That includes 113,000 businesses.

The governor’s solution is to subsidize private businesses with more tax dollars to resolve the broadband problem, with a significant part of the next round of funding likely to reach more institutional and public safety networks off-limits to the public, middle mile network expansion that can build state-of-the-art fiber rings that do not connect to end users, and an even bigger amount handed to Time Warner Cable (or Comcast if the state approves a merger with Time Warner Cable) and rural phone companies like Frontier Communications. Much of the money awarded to last mile providers like cable and phone companies will placate those that have stubbornly refused to expand further into rural areas unless taxpayers pick up some of the expense.

“In some of these areas, there’s just not a business case for these [service] providers to build out,” said David Salway, director of the New York State Broadband Program office. “The cost far exceeds what the revenue might be for that area.”

An unintended consequence of the broadband funding effort could be taxpayers subsidizing the establishment of for-profit monopolies in rural corners of the state. Although Salway told Capital NY he wanted to make sure New Yorkers had a choice, he clarified he was referring to a choice in technology, not service providers.

twcGreenThat must come as a relief for Verizon. The state’s largest phone company has petitioned state officials in the past for a gradual mothballing of New York’s rural landline network in favor of switching customers to wireless voice and broadband over Verizon’s cellular network. Theoretically, taxpayers could end up subsidizing the demise of rural New York landlines and DSL if Verizon seeks money from the rural broadband fund to expand its wireless tower network in rural New York. Time Warner Cable almost certainly will also seek more funding, probably in excess of the average $1,264 paid to the cable company for each of the 4,114 additional connections it agreed to complete during an earlier round of funding.

While rural broadband remains an important issue in New York, the merger of Comcast and Time Warner Cable is on the front burner and Salway, like the governor, had little to say. But Salway did offer that he did not believe the merger “would reduce [access] as much as further our goal” for expansion.

Guidelines for grant recipients are expected to become available just after the governor’s State of the State presentation in January, with ground-breaking on projects likely to start by mid-summer of 2015.

Fiber Games: AT&T (Slightly) Backtracks on Fiber Suspension After Embarrassed by FCC

HissyfitwatchAT&T CEO Randall Stephenson’s public hissy fit against the Obama Administration’s sudden backbone on Net Neutrality may complicate AT&T’s plans to win approval of its merger with DirecTV. forcing AT&T to retract threats to suspend fiber buildouts if the administration moves forward with its efforts to ban Internet fast lanes.

Hours after Stephenson told investors AT&T wouldn’t continue with plans to bring U-verse with GigaPower fiber broadband to more cities as long as Net Neutrality was on the agenda, the FCC requested clarification about exactly what AT&T and its CEO was planning. More importantly, it noted responses would become part of the record in its consideration of AT&T’s proposed acquisition of the satellite television provider. The regulator could not send a clearer message that Stephenson’s statements could affect the company’s $48.5 billion merger deal.

AT&T responded – four days after the FCC’s deadline – in a three-page letter with a heavily redacted attachment that basically told the Commission it misunderstood AT&T’s true intentions:

The premise of the Commission’s November 14 Letter is incorrect. AT&T is not limiting our FTTP deployment to 2 million homes. To the contrary, AT&T still plans to complete the major initiative we announced in April to expand our ultra-fast GigaPower fiber network in 25 major metropolitan areas nationwide, including 21 new major metropolitan areas. In addition, as AT&T has described to the Commission in this proceeding, the synergies created by our DIRECTV transaction will allow us to extend our GigaPower service to at least 2 million additional customer locations, beyond those announced in April, within four years after close.

Although AT&T is willing to say it will deliver improved broadband to at least “15 million customer locations, mostly in rural areas,” it is also continuing its fiber shell game with the FCC by not specifying exactly how many of those customers will receive fiber broadband, how many will receive an incremental speed upgrade to their existing U-verse fiber/copper service, or not get fiber at all. AT&T routinely promises upgrades using a mix of technologies “such as” fiber to the home and fixed wireless, part of AT&T’s broader agenda to abandon its rural landline service and force customers to a much costlier and less reliable wireless data connection. It isn’t willing to tell the public who will win fiber upgrades and who will be forced off DSL in favor of AT&T’s enormously profitable wireless service.

Your right to know... undelivered.

Your right to know… undelivered. AT&T redacted information about its specific fiber plans.

Fun Fact: AT&T is cutting its investment in network upgrades by $3 billion in 2015 and plans a budget of $18 billion for capex investments across the entire company in 2015 — almost three times less than what AT&T is ready to spend just to acquire DirecTV.

The FCC was provided a market-by-market breakdown of how many customers currently get U-verse over AT&T’s fiber/copper “fiber to the neighborhood” network and those already getting fiber straight to the home. But this does not tell the FCC how many homes and businesses AT&T intends to wire for GigaPower — its gigabit speed network that requires fiber to the premises. Indeed, AT&T would only disclose how many homes and businesses it plans to provide with traditional U-verse using a combination of fiber and copper wiring — an inferior technology not capable of the speeds AT&T repeatedly touts in its press releases.

That has all the makings of an AT&T Fiber Snow Job only Buffalo could love.

AT&T also complained about the Obama Administration’s efforts to spoil AT&T’s fast lane Money Party:

At the same time, President Obama’s proposal in early November to regulate the entire Internet under rules from the 1930s injects significant uncertainty into the economics underlying our investment decisions. While we have reiterated that we will stand by the commitments described above, this uncertainty makes it prudent to pause consideration of any further investments – beyond those discussed above – to bring advanced broadband networks to even more customer locations, including additional upgrades of existing DSL and IPDSL lines, that might be feasible in the future under a more stable and predictable regulatory regime. To be clear, AT&T has not stated that the President’s proposal would render all of these locations unprofitable. Rather, AT&T simply cannot evaluate additional investment beyond its existing commitments until the regulatory treatment of broadband service is clarified.

AT&T’s too-cute-by-half ‘1930s era regulation’ talking point, also echoed by its financially tethered minions in the dollar-a-holler sock-puppet sector, suggests the Obama Administration is seeking to regulate AT&T as a monopoly provider. Except the Obama Administration is proposing nothing of the sort. The FCC should give AT&T’s comments the same weight it should give its fiber commitments — treat them as suspect at best. As we’ve written repeatedly, AT&T’s fabulous fiber future looks splendid on paper, but without evidence of spending sufficient to pay for it, AT&T’s piece of work should be filed under fiction.

AT&T Out of In-Flight 4G LTE Air-to-Ground Wireless Data Business; Will Focus on Overseas Acquisitions

Phillip Dampier November 10, 2014 AT&T, Competition, Consumer News, Wireless Broadband No Comments

att_logoAT&T has decided it is too risky to get into the in-flight connectivity business and has pulled the plug on a plan to launch 4G LTE air-to-ground wireless data service in the United States.

“As AT&T explores opportunities for future growth and diversification, expanding our international presence has remained an area of interest,” an AT&T spokesperson told Runway Girl Network, an air transport intelligence news service. “On Friday we announced our intent to acquire Mexico wireless company Iusacell. After a thorough review of our investment portfolio, the company decided to no longer pursue entry into the Inflight Connectivity industry.  We are focusing our capital on transformative investments, such as international and video.”

The sudden cancellation of the project came as a surprise, because AT&T had been planning an extensive network that would offer Wi-Fi to in-flight passengers and was discussing partnerships with vendors and airlines in late September.

AT&T bought Iusacell instead, for $2.5 billion. The Mexican cell carrier serves 8.6 million subscribers across 70% of Mexico. AT&T could eventually rebrand the venture as “AT&T” and market it as America’s first “North American Mobile Service,” covering over 400 million consumers and businesses in Mexico and the United States without roaming charges for AT&T customers who often travel to Mexico.

Iusacell’s network is fully compatible with AT&T’s GSM network, but lacks 4G LTE data service.

Net Neutrality: President Obama Calls on FCC to Reclassify Wired/Mobile Broadband Under Title 2

tollIn a major victory for net roots groups, President Barack Obama today announced his support for the strongest possible Net Neutrality protections, asking the Federal Communications Commission to quickly reclassify broadband as a “telecommunications service” subject to oversight and consumer protection regulatory policies that would prohibit paid fast lanes, the blocking or degrading of websites for financial reasons, and more transparency in how Internet Service Providers handle traffic.

“For almost a century, our law has recognized that companies who connect you to the world have special obligations not to exploit the monopoly they enjoy over access in and out of your home or business,” said the president. “That is why a phone call from a customer of one phone company can reliably reach a customer of a different one, and why you will not be penalized solely for calling someone who is using another provider. It is common sense that the same philosophy should guide any service that is based on the transmission of information — whether a phone call, or a packet of data.”

“’Net neutrality’ has been built into the fabric of the Internet since its creation — but it is also a principle that we cannot take for granted,” President Obama added. “We cannot allow Internet Service Providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas. That is why today, I am asking the Federal Communications Commission (FCC) to answer the call of almost four million public comments, and implement the strongest possible rules to protect Net Neutrality.”

The president’s call will likely force FCC chairman Thomas Wheeler to abandon efforts to reclassify only certain types of Internet traffic under Title 2 regulations while leaving consumers vulnerable to paid fast lanes and other traffic monetizing schemes. Wheeler was rumored to be working on a limited Net Neutrality plan that would protect large online video content distributors like Netflix and Amazon from unfair compensation deals with ISPs. The plan would have given the FCC authority to review agreements between your Internet provider and some of the net’s biggest traffic generators.

President Obama’s statement goes beyond Wheeler’s tolerance for “individualized, differentiated arrangements” that could let cable and phone companies offer compensated “preferred partnership” deals with websites and applications, granting them special treatment or exemptions from speed throttles or usage caps not available to others.

The president’s four principles for a free and open Internet represent “common-sense steps that reflect the Internet you and I use every day, and that some ISPs already observe:”

  • netneutralityNo blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business;
  • No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called “throttling” — based on the type of service or your ISP’s preferences;
  • Increased transparency. The connection between consumers and ISPs — the so-called “last mile” — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet;
  • No paid prioritization. Simply put: No service should be stuck in a “slow lane” because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet’s growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.

The president also expressed a desire to see the same rules applied to mobile networks. That is a significant departure from the policies of the FCC under Wheeler’s predecessor Julius Genachowski, who served as chairman during the Obama Administration’s first term in office. His Net Neutrality policies exempted wireless carriers.

“The rules also have to reflect the way people use the Internet today, which increasingly means on a mobile device,” said the president. “I believe the FCC should make these rules fully applicable to mobile broadband as well, while recognizing the special challenges that come with managing wireless networks.”

http://www.phillipdampier.com/video/111014_NetNeutrality_Final.mp4

President Barack Obama recorded this message supporting strong Net Neutrality protections for the Internet. (1:56)

Republicans in Congress and large telecommunications companies both immediately pounced on the president’s Net Neutrality plans.

Cruz Control

Cruz

“Net Neutrality is Obamacare for the Internet,” tweeted Sen. Ted Cruz (R-Tex.) “The Internet should not operate at the speed of government.”

Cruz’s spokeswoman,  Amanda Carpenter, added that Net Neutrality would place the government “in charge of determining pricing, terms of service, and what products can be delivered. Sound like Obamacare much?”

The National Cable and Telecommunications Association expressed surprise over the president’s strong public support for Net Neutrality action.

“We are stunned the President would abandon the longstanding, bipartisan policy of lightly regulating the Internet and call for extreme Title II regulation,” the NCTA wrote. “The cable industry strongly supports an open Internet, is building an open internet, and strongly believes that over-regulating the fastest growing technology in our history will not advance the cause of Internet freedom. There is no dispute about the propriety of transparency rules and bans on discrimination and blocking. But this tectonic shift in national policy, should it be adopted, would create devastating results.”

“Heavily regulating the Internet will lead to slower Internet growth, higher prices for consumers, and the threat of excessive intervention by the government in the working of the Internet,” stated the NCTA release. “This will also have severe and profound implications internationally, as the United States loses the high ground in arguing against greater control of the Internet by foreign governments. There is no substantive justification for this overreach, and no acknowledgment that it is unlawful to prohibit paid prioritization under Title II. We will fight vigorously against efforts to impose this backwards policy.”

Wall Street Investors Suckered By Broadband, Wireless Myths on Usage Pricing, Network Investment

verizon-protestBig Telecom companies like Verizon and AT&T use phony numbers and perpetuate myths about broadband traffic and network investments that have conned investors out of at least $1 trillion in unnecessary investments and consolidation.

Alexander Goldman, former chief analyst for CTI’s American Recovery and Reinvestment Act grants, is warning Wall Street and investors they are at risk of losing millions more because some of the largest telecom companies in the country are engaged in disseminating bad math and conventional wisdom that relies more on repetition of their talking points than actual facts.

Goldman’s editorial, published by Broadband Breakfast, believes the campaign of misinformation is perpetuated by a media that accepts industry claims without examining the underlying facts and a pervasive echo chamber that delivers credibility only by the number of voices saying then same thing.

Goldman takes Verizon Communications CEO Lowell McAdam to task for an editorial published in 2013 in Verizon’s effort to beat back calls on regulators to oversee the broadband industry and correct some of its anti-competitive behavior.

McAdam claimed the U.S. built a global lead in broadband on investments of $1.2 trillion over 17 years to deploy “next generation broadband networks” because networks were deregulated.

Setting aside the fact the United States is not a broadband leader and continues to be outpaced by Europe and Asia, Goldman called McAdam’s impressive-sounding dollar figures meaningless, considering over the span of that 17 years, the United States progressed from dial-up to fiber broadband. Wired networks have been through a generational change that required infrastructure to be replaced and wireless networks have been through at least two significant generations of change over that time — mandatory investments that would have occurred with or without deregulation.

Over the past 17 years, the industry has gotten more of its numbers wrong than right. An explosion of fiber construction in the late 1990s based on predictions of data tsunamis turned out to be catastrophically wrong. University of Minnesota professor Andrew Odlyzko, the worst enemy of the telecom industry talking point, has been debunking claims of broadband traffic jams and the need to implement usage-based pricing and speed throttling for years. In 1998, when Wall Street was listening intently to forecasts produced by self-interested telecom companies like Worldcom that declared broadband traffic was going to double every 100 days, Odlyzko was telling his then-employer AT&T is was all a lot of nonsense. The broadband traffic emperor had no clothes, and statistics from rival telecom companies suggested Worldcom was telling tall tales. But AT&T executives didn’t listen.

fat cat att“We just have to try harder to match those growth rates and catch up with WorldCom,” AT&T executives told Odlyzko and his colleagues, believing the problem was simply ineffective sales, not real broadband demand. When sales couldn’t generate those traffic numbers and Wall Street analysts began asking why, companies like Global Crossing and Qwest resorted to “hollow swaps” and other dubious tricks to fool analysts, prop up the stock price and executive bonuses, and invent sales.

Nobody bothered to ask for an independent analysis of the traffic boom that wasn’t. Wall Street and investors saw dollars waiting to be made, if only providers had the networks to handle the traffic. This began the fiber boom of the late 1990s, “an orgy of construction” as The Economist called it, all to prepare for a tidal wave of Internet traffic that never arrived.

After companies like Global Crossing and Worldcom failed in the biggest bankruptcies the country had ever seen at the time, Odlyzko believes important lessons were never learned. He blames Worldcom executives for inflating the Internet bubble more than anyone.

A bubble of another kind is forming today in America’s wireless industry, fueled by pernicious predictions of a growing spectrum crisis to anyone in DC willing to listen and hurry up spectrum auctions. Both AT&T and Verizon try to stun investors and politicians with enormous dollar numbers they claim are being spent to hurry upgraded wireless networks ready to handle an onslaught of high bandwidth wireless video. Both Verizon’s McAdam and AT&T’s Randall Stephenson intimidate Washington politicians with subtle threats that any enactment of industry reforms by the FCC or Congress will threaten the next $1.2 trillion in network investments, jobs, and America’s vital telecom infrastructure.

Odlyzko has seen this parade before, and he is not impressed. Streaming video on wireless networks is effectively constrained by miserly usage caps, not network capacity, and to Odlyzko, the more interesting story is Americans are abandoning voice calling for instant messages and texting.

8-4WorldcomCartoonThat isn’t a problem for wireless carriers because texting is where the real money is made. Odlyzko notes that wireless carriers profit an average of $1,000 per megabyte for text messages, usually charged per-message or through subscription plan add ons or as part of a bundle. Cellular voice calling is much less profitable, earning about $1 per megabyte of digitized traffic.

Wireless carriers in the United States, particularly Verizon and AT&T, are immensely profitable and the industry as a whole haven’t invested more than 27% of their yearly revenue on network upgrades in over a decade. In fact, in 2011 carriers invested just 14.9% of their revenue, rising slightly to 16.3 percent in 2012 when companies collectively invested $30 billion on network improvements, but earned $185 billion along the way.

While Verizon preached “spectrum crisis” to the FCC and Congress and claimed it was urgently prioritizing network upgrades, company executives won approval of a plan to pay Vodafone, then a part owner of Verizon Wireless, $130 billion to buy them out. That represents the collective investment of every wireless provider in the country in network upgrades from 2005-2012. Verizon Wireless cannot find the money to upgrade their wireless networks to deliver customers a more generous data allowance (or an unlimited plan), but it had no trouble approving $130 billion to buy out its partner so it could keep future profits to itself.

Odlyzko concludes the obvious: “modern telecom is less about high capital investments and far more a game of territorial control, strategic alliances, services, and marketing, than of building a fixed infrastructure.”

That is why there is no money for Verizon FiOS expansion but there was plenty to pay Vodafone, and its executives who walked away with executive bonuses totaling $89.6 million.

As long as American wireless service remains largely in the hands of AT&T and Verizon Wireless, competition isn’t likely to seriously dent prices or profits. At least investors who are buying Verizon’s debt hope so.

Goldman again called attention to Odlyzko’s latest warning that the industry has its numbers (and priorities) wrong, and the last time Odlyzko had the numbers right and the telecommunications industry got its numbers wrong, telecommunications investors lost $1 trillion in the telecommunications dot.com bust.

As the drumbeat continues for further wireless consolidation and spectrum acquisition, investors have been told high network costs necessitate combining operations to improve efficiency and control expenses. Except the biggest costs faced by wireless carriers like Verizon are to implement strategic consolidation opportunities like the Vodafone deal, not maintain and grow their wireless network. AT&T is putting much of its spending in a proposed acquisition of DirecTV this year as well — at a cost of $48.5 billion. That could buy a lot of new cell towers and a much more consumer-friendly data plan.

Voice to text substitution (US)

year voice minutes billions texts billions
2005 1,495 81
2006 1,798 159
2007 2,119 363
2008 2,203 1,005
2009 2,275 1,563
2010 2,241 2,052
2011 2,296 2,304
2012 2,300 2,190

Cell phone network companies (if you can believe their SEC filings) are incredibly profitable, and are spending relatively little on infrastructure:

year revenues in $ billions capex in $ billions capex/revenues
2004 102.1 27.9 27.3%
2005 113.5 25.2 22.2
2006 125.5 24.4 19.4
2007 138.9 21.1 15.2
2008 148.1 20.2 13.6
2009 152.6 20.4 13.3
2010 159.9 24.9 15.6
2011 169.8 25.3 14.9
2012 185.0 30.1 16.3

Killing Off Affordable Rural Internet: BMI Loses $99 Sprint Unlimited, Gains 10GB Verizon Plan for $100

bmi.net-logoRural Americans who cannot get cable broadband or DSL will now pay more money for less service as wireless carriers continue to cancel affordable mobile broadband plans with a generous usage allowance in favor of premium-priced, stingy usage-capped wireless Internet.

Two weeks after Millenicom was forced to drop affordable Verizon wireless broadband service, Blue Mountain Internet received word its unlimited Sprint broadband reseller agreement was being terminated the following day, forcing the company to hurry out cancellation notices to affected customers.

“We received notification yesterday from our upline provider that our mobile broadband accounts utilizing the Sprint network (Net2) will all be cancelled on Friday, Oct. 31st, 2014,” the company wrote in an email to customers. “We apologize for the short notice but we just received notice yesterday.”

BMI had offered customers an unlimited use mobile broadband plan from Sprint for $99 a month. It has been replaced with a Verizon plan that costs a dollar more and comes with a 10GB monthly data allowance with a steep $20/GB overlimit fee. “Heavy users” can pay $120 a month for a monthly allowance of 20GB. Affected customers intending to switch to Verizon get a discount off the monthly plan price if they pay quarterly: $85 (10GB) or $100 (20GB).

Blue Mountain Internet Mobile Broadband Rental Prices & Plans

Package Network Traffic Traffic Email AV Optimizer Best Price Monthly Quarterly
      Optimized Accts Licenses Software paying quarterly 3 months
VMBB-HalfGig 1 1/2Gb 1.5Gb 1 1 Yes $19.99/Mo $24.95 $59.97
VMBB-1GB 1 1Gb 3Gb 1 2 Yes $34.95/Mo $39.99 $104.85
VMBB-3GB 1 3Gb 9Gb 1 2 Yes $52.95/Mo $59.99 $158.85
VMBB-5GB 1 5Gb 15Gb 1 2 Yes $69.99/Mo $79.99 $209.97
VMBB-10GB 1 10Gb 30Gb 1 2 Yes $84.95/Mo $99.99 $254.85
VMBB-20GB 1 20Gb 60Gb 1 2 Yes $99.99/Mo $119.99 $299.97
Plan Details: Network 1 Overages are charged at a rate of $20/Gigabyte – regardless of plan. Hardware options available or you can bring your own device (BYOD). Traffic optimizer software is free for Windows & Macintosh. Optimizer does not compress video or already compressed files.

EVDOinfo notes that with Millenicom and BMI losing their relationships with Verizon and Sprint respectively over the course of just one month, “it seems unlikely that we’ll see another [reseller] emerge with a no-contract, high-data plan using one of the major carriers’ networks.”

Millenicom customers were being offered a slightly different plan if they agreed to switch to a Verizon Wireless account: 20GB a month for $99 with a $15/GB overlimit fee. Customers signing up for a “More Everything” plan will pay considerably more. A 30GB plan with a mobile hotspot device costs $150 a month, not including fees and taxes. A one-year contract commitment usually applies.

Federal Trade Commission Suing AT&T Over Unfair Speed Throttles for Unlimited Data Customers

throttleThe Federal Trade Commission today filed a lawsuit against AT&T for its practice of subjecting grandfathered unlimited data customers to speed throttles that dramatically cut speeds up to 90 percent after customers use more than 3GB of data on AT&T’s 3G network or 5GB on its 4G network. Thus far, according to the FTC, AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times.

The FTC’s complaint alleges that the company failed to adequately disclose to its customers on unlimited data plans that, if they reach a certain amount of data use in a given billing cycle, AT&T reduces – or “throttles” – their data speeds to the point that many common mobile phone applications – like web browsing, GPS navigation and watching streaming video –  become difficult or nearly impossible to use.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said FTC Chairwoman Edith Ramirez. “The issue here is simple: ‘unlimited’ means unlimited.”

FCC chairman Thomas Wheeler publicly complained about Verizon’s plans to start a similar throttling program on its wireless network, questioning the fairness of cutting speeds for certain customers while exempting others. Both Verizon and AT&T have claimed speed throttles are part of a fair usage policy that allows all customers to share its wireless resources. Broadband providers have often painted a picture of a “bandwidth hog” taking a disproportionate share of network resources away from other customers, but there is no evidence heavier users are creating conflicts for other users, especially as wireless carriers encourage customers to use more data.

throttle att

From AT&Ts website

The logic of rationing Internet use for unlimited customers while providing unlimited access to those willing to pay usage-based charges escaped the FTC, which is what brought the suit.

According to the FTC’s complaint, AT&T’s marketing materials emphasized the “unlimited” amount of data that would be available to consumers who signed up for its unlimited plans. The complaint alleges that, even as unlimited plan consumers renewed their contracts, the company still failed to inform them of the throttling program. When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars.

The FTC alleges that AT&T, despite its unequivocal promises of unlimited data, began throttling data speeds in 2011 for its unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period. According to the complaint, the throttling program has been severe, often resulting in speed reductions of 80 to 90 percent for affected users.

According to the FTC’s complaint, consumers in AT&T focus groups strongly objected to the idea of a throttling program and felt “unlimited should mean unlimited.” AT&T documents also showed that the company received thousands of complaints about the slow data speeds under the throttling program. Some consumers quoted the definition of the word “unlimited,” while others called AT&T’s throttling program a “bait and switch.” Many consumers also complained about the effect the throttling program had on their ability to use GPS navigation, watch streaming videos, listen to streaming music and browse the web.

The complaint charges that AT&T violated the FTC Act by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans.

FTC staff worked closely on this matter with the staff of the Federal Communications Commission.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Northern District of California, San Francisco Division.

Comcast Prepares to Launch All-Out Attack on C Spire’s Irritating Competition in Mississippi

comcast crushThe sleepy deep south isn’t often a battleground for an all-out broadband competition war, but Ridgeland, Miss.-based C Spire, a regional cell phone company with fiber broadband aspirations, has gotten too big for its britches and Comcast is preparing to demonstrate its size and resources can run even a home state provider into the ground.

C Spire is building a statewide fiber-to-the-home network, city by city, on its pre-existing fiber backbone which extends to C Spire’s cell towers across the Magnolia State. As the fiber network expands, talk of doing something in a “Mississippi Minute” will be a thing of the past as C Spire prepares to deliver gigabit broadband speeds far in excess of what competitors like Comcast, AT&T and Cable One are prepared to offer.

Communities already on the construction list include: Batesville, Clinton, Corinth, Hattiesburg, Horn Lake, McComb, Quitman, Ridgeland and Starkville.

But C Spire’s network caught the attention of Comcast earlier this month when it announced Jackson, the state capital, was going to get fiber service.

C Spire is following Google Fiber’s model, attempting to get enough residents in a neighborhood to pre-register with a refundable $10 deposit. Online pre-registration for the service began in Jackson last month, and several hundred residents applied even before the fiber network expansion was announced, ready to tell Comcast to take a hike.

Jackson neighborhoods that reach sign-up levels set by C Spire will be the first to get the new generation of fiber services, the company says.

“Gigabit infrastructure can create a new economic reality for the city of Jackson,” Duane O’Neill, president & CEO of the 2,100-member Greater Jackson Chamber Partnership, told the Mississippi Business Journal. “In the handful of U.S. cities where this infrastructure is deployed and widely available, it has generated thousands of jobs, millions of dollars of new investment, boosted home values and improved the overall quality of life.”

c spire fiberC Spire’s plans could cost Comcast a significant number of cable customers across Mississippi, and it isn’t taking that lightly.

Departing from its usual tradition of focusing new technology on large northeastern cities, Comcast will begin saturating Jackson with its Wi-Fi hotspot service, starting with 200 public hotspots slated for launch before the end of this year. The company only had a handful of Wi-Fi hotspots in Jackson before. Jackson will also get significant cable service upgrades, including the introduction of a new “smart home” service, a cloud-based service integrating Comcast’s cable, Internet, and home-security.

Comcast says it has plans to turn Jackson into a “truly connected city,” and if that means competitively disconnecting C Spire from its nascent fiber customer base, all the better.“This is the kind of threat that would frighten competitors,” said industry observer Jeff Kagan. “Comcast can be a heavy-duty competitor when they want to be. So why is Jackson and other Mississippi cities getting this kind of attention from Comcast and C Spire? I think it’s a matter of competition and C Spire’s aggressive move in the state of Mississippi played a role in the Comcast decision to turn up the heat.”

Kagan also expects Comcast will cut prices to undercut C Spire. That would be consistent with Comcast’s customer retention policies that dramatically lower rates for customers threatening to leave. Rate-cutting will benefit consumers, but if Comcast engages in below-cost predatory pricing, those savings will be short-lived.

“It’s starting to look like that old nursery rhyme, Jack and the Beanstalk,” said Kagan. “Watch out Jack, the Giant is waking up.”

If that battle becomes cut-throat, C Spire’s fiber aspirations may end up nothing more than pipe dreams if the company retreats, deciding it cannot survive in a battle with Comcast, the Giant of all cable companies.

Fly the Stupid Skies: American Airlines Grounds Flight Over “Al Quida” Wi-Fi Hotspot

airplane panicAmerican Airlines left passengers stewing for more than three hours on board a flight from LAX to London before finally returning to the gate. The reason? A passenger reported a functioning Wi-Fi hotspot labeled “Al Quida Free Terror Nettwork” and complained to a flight attendant.

Flight 136’s passengers were questioned, the aircraft was torn apart by security and airline cleaning crews, and passengers were eventually handed hotel vouchers to stay overnight after nothing was found and the flight was canceled.

Police admitted no crime was committed and no further action will be taken. It is not illegal to misspell the name of the infamous terror group as your Wi-Fi hotspot, nor is it illegal for a passenger to freak out and report it. But the wisdom of both is open to serious question.

“It must have been somebody on the aircraft,” passenger Elliot del Pra told KABC. “Thank goodness that we did not fly because you just don’t know. It’s very scary to think somebody would actually do that, especially on an international flight.”

But the likelihood of an actual terrorist openly calling attention to his bad grammar and spelling skills and his affiliation with a terror network while surfing the net in first class are slim to none.

“It was a stupid prank and everyone completely overreacted,” a British passenger countered, frustrated after being left on the tarmac for hours only to see his flight home canceled. “It’s clear American Airlines won’t be my next flying choice because common sense eludes them completely.”

http://www.phillipdampier.com/video/KCAL Los Angeles LAX Al Quida WiFi 10-27-14.mp4

Terror on the tarmac? Not quite. KCAL-TV in Los Angeles reports the obvious — someone was pulling a bad prank (and are behind the times) naming their Wi-Fi hotspot after Al Qaeda, long after being eclipsed by ISIS in the headlines. (1:55)

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