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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.

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.

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.

Los Angeles Public TV Station Gives Up Its Channel So AT&T/Verizon Can Have More Spectrum

Two educational public broadcasting stations in Los Angeles will soon share the same channel to make room for AT&T and Verizon Wireless’ growing needs for wireless spectrum.

KCET, a charter member of the Public Broadcasting Service (PBS) that left the network to become the nation’s largest independent TV station in 2010 will share the transmitter of KLCS, an educational PBS TV station owned by the Los Angeles Unified School District Board of Education. The move will turn back a 6MHz UHF channel to the Federal Communications Commission, to be auctioned off to the highest wireless carrier bidder in a future spectrum auction.

The two stations will share a single UHF channel, multiplexed into up to eight digital over-the-air sub-channels, equally divided between the two.

The time-sharing agreement is nothing new for KLCS, which had shared one of its digital sub-channels with Spanish language KJLA-TV earlier this year in a trial in partnership with the biggest wireless lobbying organization in the country – CTIA and the Association of Public Television Stations. The trial was designed to see how well two stations could use the H.264 compression video codec for simultaneous shared digital television transmissions. The multiplexing test, completed in March, found generally good results as long as the stations avoided concurrent HD broadcasts on the same channel. There is simply not enough bandwidth in a single 6MHz channel to handle multiple HD feeds showing complex content.

KJLA’s primary transmitter already multiplexes 10 low resolution digital sub-channels of its own, primarily in Vietnamese, Mandarin and Spanish.

When KCET and KLCS begin the channel sharing arrangement, one is unlikely to air its programming in HD. Instead, the channel space will be divided into up to eight 480i channels airing both stations’ programming lineups. For some, it will be a viewing quality downgrade. KCET was one of the first stations in Los Angeles to air HD programming, but that will be unlikely in the future.

KCET’s Channel Lineup

Channel Video Aspect PSIP Short Name Programming
28.1 720p 16:9 KCET-HD Main KCET programming
28.2 480i 4:3 KCET-LN KCET Link
28.3 KCET-Vm V-me
28.4 N H K NHK World Japan

KLCS’ Channel Lineup (No HD programming)

Channel Video Aspect PSIP Short Name Programming
58.1 480i 4:3 KLCS-1 Main KLCS programming/PBS
58.2 KLCS-2 PBS Kids
58.3 KLCS-3 Create
58.4 KLCS-4 MHz WorldView

KCET is the financially weaker of the two stations, having given up its membership in PBS four years ago and seeing a dramatic decline in viewer pledges ever since. KCET sold its studio complex to the Church of Scientology in 2011 and moved its operations to smaller facilities in Burbank. KOCE-TV in Huntington Beach is now the primary PBS station in greater Los Angeles.

The Federal Communications Commission will hold its voluntary spectrum incentive auction in mid-2015, allowing stations to bid on surrendering their licenses, moving their UHF channel to an open VHF channel or sharing their channel with another station — all in exchange for cash payments. AT&T and Verizon Wireless are widely expected to be the two largest bidders for the valuable spectrum.

Wi-Fi is Threatening AT&T and Verizon Wireless’ 4G Data Money Party; Wi-Fi Usage Conquers 4G

att verizonVerizon Wireless and AT&T have invested billions expanding and improving their wireless networks, telling investors that revenue from exploding wireless data usage would more than recoup their investments, but the growing availability of low-cost and free Wi-Fi is threatening to derail those plans.

Business Week reports that as carriers have dropped unlimited use data plans in favor of costly, restricted-usage offers, savvy customers have learned to conserve their data allowance by switching to Wi-Fi wherever possible. Adobe Systems reported this week that more than half of all wireless data traffic from smartphones occurs over Wi-Fi, not 3G or 4G networks. Total Wi-Fi traffic passed mobile data networks more than a year earlier.

AT&T and Verizon’s business plans depend on smartphone users accessing faster 4G LTE networks to consume high bandwidth online applications like video streaming, but that isn’t happening at the rate they expected. Instead, customers are waiting to connect to a Wi-Fi hotspot before watching.

The carriers are partly to blame for the Wi-Fi habit by encouraging customers to switch to Wi-Fi to reduce congestion on their 3G and 4G networks while they were upgraded and expanded. But after carriers completed those upgrades, customers are sticking with Wi-Fi.

“There’s a flavor of too much of a good thing here, where Wi-Fi offloads start to really impinge on the prospects of monetizing all that additional usage,” says industry analyst Craig Moffett. “All the carriers have put their eggs in the basket of incremental usage as the source of revenue growth. It isn’t going according to plan.”

wifiAT&T and Verizon hoped customers would face upgrades to more costly plans with more generous usage allowances as data usage increased. Early efforts to monetize data usage seemed encouraging. Both carriers reported surprising success from in-store marketing efforts to push families to upgrade to deluxe 10GB+ usage plans in larger numbers than anticipated. But customers are now increasingly trying to stay within their budget and current usage allowance, with the help of Wi-Fi.

‘As customers become more aware of the limits on their data plans, they’re more careful about moving to Wi-Fi as often as possible,’ says Tamara Gaffney, an analyst with Adobe’s Digital Index.

Wi-Fi hotspots are easier to find as cable companies provide them for their customers. Major shopping, dining and entertainment venues often offer free access to draw and keep customers.

As carriers began to realize smartphones would not be the data sucking vampires they were expecting, both AT&T and Verizon eagerly dove into the tablet business, hoping to convince customers to buy mobile-ready versions of the devices that would more likely be used for data allowance-killing online video.

But customers outsmarted them again, preferring tablets equipped only with Wi-Fi. Carriers responded by slashing prices, to no avail. Even those who splurged on 3G and 4G-ready tablets rarely use them on AT&T and Verizon’s wireless networks. More than 93% of tablet traffic is done over Wi-Fi, derailing a potential wireless data money train.

onstarTheir latest plan is to push the “Internet of Things” — machine to machine communications. Both AT&T and Verizon have invested heavily in wireless utility meter technology and are pushing manufacturers to add 4G capability to all sorts of home appliances from refrigerators, ovens, and dishwashers to home laundry centers, alarm systems, and even pet-webcams. But early efforts have not been promising. Reception in fixed indoor locations, especially basements, is often very poor to non-existent, and manufacturers don’t see much benefit adding mobile network connectivity when traditional Wi-Fi is cheaper and much more reliable.

That hasn’t stopped AT&T, which won a lucrative contract to offer 4G LTE and/or HSPA+ support inside Audi and GM vehicles. To them, the “connected car” is a cash cow waiting to be milked.

“Five or six years ago when we talked to car OEMs, it was about safety and embedded modules and cheap rates,” said Glenn Lurie, CEO of AT&T Mobility.

That was the era of OnStar and other competing telematics systems that can monitor vehicle performance and notify emergency responders in the event of an accident. Verizon Wireless has supported GM’s OnStar system for years and until GM’s bankruptcy reorganization offered Verizon customers the option of adding their OnStar speakerphone to a Verizon Wireless family plan for $9.99 a month, sharing that plan’s voice calling minutes. Starting this year, AT&T has the contract.

AT&T is celebrating the end of cheap rates and see big dollar signs selling in-car connectivity, which will be available in dozens of car models.

Mary Chan from GM committed to offer AT&T 4G access on 33 GM model vehicles by the end of this year.

Customers will get a free sample of the service in promotions lasting from 30-90 days. After that, customers will need to pay:

  • OnStar’s data plan (doesn’t include voice calling/emergency response) will cost $10 a month to add the car as a device on your AT&T Mobile Share plan and $10 a month for 200MB of data; $30 a month for 3GB of data, or $50 a month for 5GB;
  • Applicable taxes and federal/state universal service charges, regulatory cost recovery charge (up to $1.25), gross receipts surcharge, administrative fees and other government assessments which are not taxes or government required charges are not included in the above-stated prices;
  • A $5 day pass will be available for occasional users providing 250MB of access for up to 24 hours;
  • All payments must be made in advance of receiving service and will be automatically renewed month-by-month until the customer cancels;
  • The built-in Wi-Fi hotspot will support up to seven devices;
  • Excessive roaming may result in service termination.

“The connected car will change the entire wireless industry,” said AT&T Mobility’s Ralph de la Vega. AT&T expects as many as 10 million connected cars will be signed up for service in just a few years.

But at AT&T’s prices, Moffett suspects the ingenuity of Silicon Valley and other entrepreneurs will eventually find a much cheaper solution, potentially robbing AT&T of yet another expected cash coup.

FCC Chairman Complains About State of U.S. Broadband But Offers Few Meaningful Solutions

FCC chairman Thomas Wheeler doesn’t like what he sees when looks at the state of American broadband.

At a speech today given to the 1776 community in Washington, Wheeler complained about the lack of broadband competition in the United States.

“The underpinning of broadband policy today is that competition is the most effective tool for driving innovation, investment, and consumer and economic benefits,” Wheeler said. “Unfortunately, the reality we face today is that as bandwidth increases, competitive choice decreases.”

faster speed fewer competitors

“The lighter the blue, the fewer the options,” Wheeler said, gesturing towards his chart. “You get the point. The bar on the left reflects the availability of wired broadband using the FCC’s current broadband definition of 4Mbps. But let’s be clear, this is ‘yesterday’s broadband.’ Four megabits per second isn’t adequate when a single HD video delivered to home or classroom requires 5Mbps of capacity. This is why we have proposed updating the broadband speed required for universal service support to 10Mbps.”

But Wheeler added that even 10Mbps was insufficient as households increasingly add more connected devices — often six or more — to a single broadband connection.  When used concurrently, especially for online video, it is easy to consume all available bandwidth at lower broadband speeds.

Wheeler

Wheeler

Wheeler’s new informal benchmark is 25Mbps — “table stakes” in 21st century communications. About 80 percent of Americans can get 25Mbps today or better, but typically only from one provider. Wheeler wants even faster speeds than that, stating it is unacceptable that more than 40% of the country cannot get 100Mbps service. Wheeler seemed to fear that phone companies have largely given up on competing for faster broadband connections, handing a de facto monopoly to cable operators the government has left deregulated.

“It was the absence of competition that historically forced the imposition of strict government regulation in telecommunications,” Wheeler explained. “One of the consequences of such a regulated monopoly was the thwarting of the kind of innovation that competition stimulates. Today, we are buffeted by constant innovation precisely because of the policy decisions to promote competition made by the FCC and Justice Department since the 1970s and 1980s.”

Wheeler said competition between phone and cable companies used to keep broadband speeds and capacity rising.

“In order to meet the competitive threat of satellite services, cable TV companies upgraded their facilities,” Wheeler said. “When the Internet went mainstream, they found themselves in the enviable position of having greater network capacity than telephone companies. Confronted by such competition, the telcos upgraded to DSL, and in some places deployed all fiber, or fiber-and-copper networks. Cable companies further responded to this competition by improving their own broadband performance. All this investment was a very good thing. The simple lesson of history is that competition drives deployment and network innovation. That was true yesterday and it will be true tomorrow. Our challenge is to keep that competition alive and growing.”

But Wheeler admits the current state of broadband in the United States no longer reflects the fierce competition of a decade or more ago.

“Today, cable companies provide the overwhelming percentage of high-speed broadband connections in America,” Wheeler noted. “Industry observers believe cable’s advantage over DSL technologies will continue for the foreseeable future. The question with which we as Americans must wrestle is whether broadband will continue to be responsive to competitive forces in order to produce the advances that consumers and our economy increasingly demand. Looking across the broadband landscape, we can only conclude that, while competition has driven broadband deployment, it has not yet done so a way that necessarily provides competitive choices for most Americans.”

Wheeler recognized what most broadband customers have dealt with for years — a broadband duopoly for most Americans.

antimonopoly“Take a look at the chart again,” Wheeler said. “At the low end of throughput, 4Mbps and 10Mbps, the majority of Americans have a choice of only two providers. That is what economists call a “duopoly”, a marketplace that is typically characterized by less than vibrant competition. But even two “competitors” overstates the case. Counting the number of choices the consumer has on the day before their Internet service is installed does not measure their competitive alternatives the day after. Once consumers choose a broadband provider, they face high switching costs that include early termination fees, and equipment rental fees. And, if those disincentives to competition weren’t enough, the media is full of stories of consumers’ struggles to get ISPs to allow them to drop service.”

Wheeler emphasized that true competition would allow customers to change providers monthly, if a vibrant marketplace forced competitors to outdo one another. That market does not exist in American broadband today.

“At 25Mbps, there is simply no competitive choice for most Americans,” Wheeler added. “Stop and let that sink in…three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy. Included in that is almost 20 percent who have no service at all. Things only get worse as you move to 50Mbps where 82 percent of consumers lack a choice. It’s important to understand the technical limitations of the twisted-pair copper plant on which telephone companies have relied for DSL connections. Traditional DSL is just not keeping up, and new DSL technologies, while helpful, are limited to short distances. Increasing copper’s capacity may help in clustered business parks and downtown buildings, but the signal’s rapid degradation over distance may limit the improvement’s practical applicability to change the overall competitive landscape.”

Wheeler finds little chance wireless providers will deliver any meaningful competition to wired broadband because of pricing levels and miserly data caps. Such statements are in direct conflict with a traditional industry talking point.

In a remarkable admission, Wheeler added that the only hope of competing with cable operators comes from a technology phone companies have become reluctant to deploy.

“In the end, at this moment, only fiber gives the local cable company a competitive run for its money,” Wheeler said. “Once fiber is in place, its beauty is that throughput increases are largely a matter of upgrading the electronics at both ends, something that costs much less than laying new connections.”

Wheeler also continued to recognize the urban-rural divide in broadband service and availability, but said little about how he planned to address it.

Wheeler’s answer to the broadband dilemma fell firmly in the camp of promoting competition and avoiding regulation, a policy that has been in place during the last two administrations with little success and more industry consolidation. Most of Wheeler’s specific commitments to protect and enhance competition apply to the wireless marketplace, not fixed wired broadband:

1. comcast highwayWhere competition exists, the Commission will protect it. Our effort opposing shrinking the number of nationwide wireless providers from four to three is an example. As applied to fixed networks, the Commission’s Order on tech transition experiments similarly starts with the belief that changes in network technology should not be a license to limit competition.

In short, don’t expect anymore efforts to combine T-Mobile and Sprint into a single entity. Wheeler only mentioned “nationwide wireless providers” which suggests it remains open season to acquire the dwindling number of smaller, regional carriers. Wheeler offers no meaningful benchmarks to protect consumers or prevent further consolidation in the cable and telephone business.

2. Where greater competition can exist, we will encourage it. Again, a good example comes from wireless broadband. The “reserve” spectrum in the Broadcast Incentive Auction will provide opportunities for wireless providers to gain access to important low-band spectrum that could enhance their ability to compete. Similarly, the entire Open Internet proceeding is about ensuring that the Internet remains free from barriers erected by last-mile providers. Third, where meaningful competition is not available, the Commission will work to create it. For instance, our efforts to expand the amount of unlicensed spectrum creates alternative competitive pathways. And we understand the petitions from two communities asking us to pre-empt state laws against citizen-driven broadband expansion to be in the same category, which is why we are looking at that question so closely.

Again, the specifics Wheeler offered pertain almost entirely to the wireless business. Spectrum auctions are designed to attract new competition, but the biggest buyers will almost certainly be the four current national carriers, particularly AT&T and Verizon Wireless. Although low-band spectrum will help Sprint and T-Mobile deliver better indoor service, it is unlikely to drive new market share for either. Wheeler offered no specifics on the issues of Net Neutrality or municipal broadband beyond acknowledging they are issues.

3. Incentivizing competition is a job for governments at every level. We must build on and expand the creative thinking that has gone into facilitating advanced broadband builds around the country. For example, Google Fiber’s “City Checklist” highlights the importance of timely and accurate information about and access to infrastructure, such as poles and conduit. Working together, we can implement policies at the federal, state, and local level that serve consumers by facilitating construction and encouraging competition in the broadband marketplace.

competitionMost of the policies Wheeler seeks to influence exist on the state and local level, where he has considerably less influence. Based on the overwhelming interest shown by cities clamoring to attract Google Fiber, the problems of access to utility poles and conduit are likely overstated. The bigger issue is the lack of interest by new providers to enter entrenched monopoly/duopoly markets where they face crushing capital investment costs and catcalls from incumbent providers demanding they be forced to serve every possible customer, not selectively choose individual neighborhoods to serve. Both incumbent cable and phone companies originally entered communities free from significant competition, often guaranteed a monopoly, making the burden of wired universal service more acceptable to investors. When new entrants are anticipated to capture only 14-40 percent competitive market share at best, it is much harder to convince lenders to support infrastructure and construction expenses. That is why new providers seek primarily to serve areas where there is demonstrated demand for the service.

4. Where competition cannot be expected to exist, we must shoulder the responsibility of promoting the deployment of broadband. One thing we already know is the fact that something works in New York City doesn’t mean it works in rural South Dakota. We cannot allow rural America to be behind the broadband curve. Our universal service efforts are focused on bringing better broadband to rural America by whomever steps up to the challenge – not the highest speeds all at once, but steadily to prevent the creation of a new digital divide.

Again, Wheeler offers few specifics. Current efforts by the FCC include the Connect America Fund, which is nearly entirely devoted to subsidizing rural telephone companies to build traditional DSL service into high-cost areas. Cable is rarely a competitor in these markets, but Wireless ISPs often are, and they are usually privately funded and consider government subsidized DSL expansion an unwelcome and unfair intrusion in their business.

“Since my first day as Chairman of the FCC my mantra has been consistent and concise: ‘Competition, Competition, Competition,'” said Wheeler. “As we have seen today, there is an inverse relationship between competition and the kind of broadband performance that consumers are increasingly demanding. This is not tolerable.”

Under Wheeler’s leadership, Comcast has filed a petition to assume control of Time Warner Cable, AT&T is seeking permission to buy DirecTV, Frontier Communications is acquiring the wired facilities of AT&T in Connecticut, and wireless consolidation continues. A forthcoming test of Wheeler’s willingness to back his rhetoric with action is whether he will support or reject these industry consolidating mergers and acquisitions. Wheeler’s FCC has also said little to nothing about the consumer-unfriendly practice of usage caps and usage-based billing — both growing among wired networks even as they upgrade to much-faster speeds and raise prices.

Verizon Wireless Closing Unlimited Data Plan Upgrade Loopholes; The Latest Party Ends 8/24

610px-Verizon-Wireless-Logo_svgVerizon Wireless is closing several loopholes that customers have used to acquire new subsidized, on-contract smartphones and keep their unlimited data plans intact for an extra two years.

Since Verizon Wireless stopped enrolling customers in unlimited use data plans in 2012, current customers have been able to hang on to their unlimited use plans with the understanding they will not be entitled to subsidized upgrades or new lines with unlimited data. Despite that, Verizon still aggressively pursues unlimited data customers at almost every contact encouraging them to ditch their unlimited plan in favor of much more profitable Family Share plans, which feature usage-based billing tiers that customers will need to regularly upgrade to stay ahead of increasing data usage trends.

A study from Consumer Intelligence Research Partners showing Verizon has successfully convinced all but 22% of their customers to dump their unlimited plans. Those still hanging on guard their unmetered plans zealously. Some have even managed to find loopholes that let them keep unlimited data while getting subsidized device upgrades. But Verizon has caught on and is slowly closing the loopholes, increasing restrictions on unlimited data plan customers.

The Loopholes

One of the newer loopholes is a type of subsidized upgrade through Best Buy. A number of careful steps are required to win the upgrade without changing your data plan, and there are several side effects explained exhaustively on the Slickdeals website. If you try, read the instructions very carefully or you could lose your unlimited plan. The upgrade has been successful for many who have kept their unlimited packages, signed a new two-year contract exempting them from Verizon Wireless’ 4G speed throttle, and getting a new device at a subsidized discount. it won’t be easy to tell when this loophole is closed, and you might have to fight to win back your unlimited data package if it is removed from your account.

Another loophole involves shifting upgrades around on your current family plan. As different family members become eligible for device upgrades, it is possible to an upgrade to an existing number with an unlimited data plan without losing that feature. This is the most popular loophole at the moment and the one Verizon Wireless wants to kill the most.

"Tina, bring me the axe!"

“Tina, bring me the axe!”

Verizon Takes the Axe to Loopholes, Discounts, and Finance Plans for Unlimited Data Customers

Verizon has declared a virtual war on their grandfathered unlimited data plan customers, and has gradually tightened the noose:

  1. Verizon Wireless will begin throttling 4G/LTE speeds of off-contract, unlimited data plan customers deemed heavy users who consume more than 4.7GB of data per month beginning this fall;
  2. On July 13, Verizon Wireless quietly terminated its Device Payment Plan for unlimited data customers seeking to finance the cost of an unsubsidized device upgrade over 12-20 months. Instead, customers must enroll in Verizon Edge to get a phone with little cash upfront and monthly payments. One of the conditions of the Edge program is forfeiting your unlimited data plan;
  3. Verizon will no longer allow customers with unlimited data plans to transfer an available device upgrade from another line on the account to get a subsidized device upgrade while keeping their unlimited data plan.

In the past, some customers who love upgrading devices a lot either grabbed other family members’ device upgrade offers or opened up extra lines on the account. For each additional $9.99 a month basic line, a customer could qualify for a new subsidized device with a two-year contract, initially attaching a basic 2GB $30/month data plan they can immediately drop when the phone is switched to a line with unlimited data. Some customers have even maintained two or three unused phantom lines just so they can upgrade their phone every 10 months or so.

Beginning Aug. 24, Verizon will close that loophole by forcing customers to keep a data package associated with every subsidized device on their account for the length of the contract. This means customers must pay at least $30 for a 2GB data package, plus the usual $9.99 a month fee for service over the next two years for each line with a smartphone attached, regardless of what number it gets associated with.

According to information received by Droid Life, Verizon believes that when it “gives customers a discount on the retail price of a smartphone, we expect them to pay for data services and keep the smartphone activated for two years. This change closes the loopholes which allowed customers to activate/upgrade a smartphone and immediately revert back to a basic phone, resulting in a discontinued smartphone with no associated data plan.”

This may explain why Verizon Wireless is so gung-ho about getting me to switch to their "money-saving" Family Share Plan. In fact, it's a Family Theft plan -- nearly three times more expensive with a data cap that will force even more upgrades at a higher cost in the future.

Here’s an offer I’d like to refuse: This may explain why Verizon Wireless is so gung-ho about getting customers to switch to their “money-saving” Family Share Plan. In fact, it’s a Family Theft plan — nearly three times more expensive with a data cap that will force even more upgrades at a higher cost in the future.

Something Extra from an Indiana Verizon Wireless Store: Unlimited Meth, Paraphernalia Upgrades

Phillip Dampier July 30, 2014 Consumer News, Verizon No Comments
Sellers (Photo: Dubois County Security Center)

Sellers (Photo: Dubois County Security Center)

A now former Verizon Wireless store manager has been arrested and charged with multiple felony counts after customers complained they were offered something more than a data plan upgrade and a new phone case: illegal prescription drugs, meth, marijuana, and assorted drug paraphernalia.

Daviess County, Ind. police arrested 45-year-old Jennifer Sellers of Elnora Friday on a warrant for possession of a range of illegal drugs. The arrest came after an investigation from the Dubois County Sheriff’s Department, sparked by complaints that drugs were being sold inside of the Verizon Wireless store at 3780 North Newton Street in Jasper.

On June 30, while customers shopped for new phones, the county’s narcotics officer, K-9 unit and Jasper police showed up to begin looking for drugs.

Store owner Moorehead Communications, the largest Verizon Premium Wireless Retailer in the United States, manages over 800 Verizon Wireless reseller locations across 28 states, usually under the name “The Cellular Connection.”

Embarrassed by the allegations, Moorehead officials promptly fired Sellers and issued a statement condemning the alleged drug operation.

“We take the safety of our employees and customers very seriously, and in light of these allegations, we are conducting a full investigation,” said the statement. “TCC will not publicly comment on ongoing legal matters but will continue to cooperate with legal authorities.”

That cooperation may prove important as officers also uncovered unusual pseudoephedrine purchases by other people associated with Sellers at the business. This chemical, found in non-prescription cold remedies, is used in large quantities to produce methamphetamine.

Your Unlimited, Off-Contract Verizon Wireless Web Experience Will Be “Optimized” (Throttled) Oct. 1

throttleVerizon Wireless’ ongoing campaign to get rid of its grandfathered unlimited data customers continues this week with news the carrier will begin throttling speeds of off-contract customers still hanging on to their uncapped data plans starting Oct 1.

Verizon doesn’t call the enforcement of speed reductions a “throttle,” but rather “Network Optimization”:

Verizon Wireless strives to provide its customers with the best wireless experience when using our network. In 2011, Verizon Wireless launched Network Optimization, which slows the data speeds of its unlimited data subscribers with 3G devices who are in the top 5% of data users when they connect to a cell site experiencing high demand.

Effective October 1, Verizon Wireless will expand its existing Network Optimization policy to include its unlimited data subscribers using 4G LTE devices who have fulfilled their minimum contract term. Based on your plan and recent data usage, one or more lines on your account may experience a reduction in data speeds when connected to a cell site experiencing high demand. Customers on MORE Everything or other usage-based data plans are not subject to Network Optimization. For more information about our Network Optimization, please refer to www.verizonwireless.com/networkoptimization.

Verizon Wireless customers on the company’s 3G network have been subject to speed throttling for several years if Verizon deems them a “heavy user,” but the company’s 4G LTE network avoided the speed noose until now. Customers who find themselves subjected to Verizon’s speed limiter report it is a very unpleasant experience.

610px-Verizon-Wireless-Logo_svg“My phone has been throttled and is now essentially unusable for the very things it is marketed for,” reports one customer sentenced by Verizon’s “Network Optimization.”  “I can send texts, emails, and view basic websites but any sort of streaming is now out of the question for the remainder of the billing cycle and possibly the next cycle as well.”

The throttle effectively limits speeds to well under 300kbps, and in most urban areas where cell tower usage is higher, punished customers have to live with speeds of around 50kbps — the same as dial-up.

Verizon’s logic and consistency about its “Network Optimization” faced customer scrutiny as well.

“This is not about equal opportunity bandwidth, it’s about Verizon realizing they can increase their revenue stream, otherwise, wouldn’t those tiered folks be getting throttled as well if they ‘abused’ and used ‘inordinate’ amounts of data?  Oh no, of course not, Verizon just bills them more.  This scenario is as ridiculous as charging $20/month for text messaging, which, by the way, is also data.”

What makes you speed-throttling-worthy? According to Droid Life, which broke the story, anyone using more than 4.7GB of data per month on a busy cell tower is likely to end up on a speed diet.

Verizon claims its “Network Optimization” is designed to protect the usage experience among all of its customers, and suggests the speed reductions will only occur when a heavy user is connected to a “high demand” cell site.

“Once you leave that site and attach to a new cell site without high demand, your speeds return to normal,” claims Verizon. “Other carriers often throttle you no matter what throughout the end of a billing cycle.”

But Verizon’s gesture isn’t as generous as it first suggests.

Once a customer is suspected of being a data hog and forced to endure Verizon’s speed throttle, they can stay in Verizon’s speed prison for up to 60 days after being sentenced. The result is dramatically reduced data speeds when a customer happens to travel through a busy cell site area, regardless of whether they are using a lot of data at the time or not.

Network congestion problems may be a result of too many customers connected to a single cell site at any one time, several customers concurrently engaged in high bandwidth traffic exchanges through a cell site, or Verizon’s inadequate capacity to meet even the reasonable needs of its wireless customers.

But regardless of the cause, only one group will be punished for their usage-excess: unlimited data plan customers who are now mostly off-contract (Verizon requires most customers signing a contract renewal that includes equipment discounts to migrate off their unlimited plan, which stopped being sold to new customers in June, 2012.)

Customers can get out of speed jail permanently simply by agreeing to give up their unlimited data plan. Then they can use (and abuse) Verizon’s limited wireless bandwidth, whether it slows every other customer down or not.

Google Makes Good on Verizon’s Broken Promise of a Free Data Plan for Chromebook Owners

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Verizon decided a year was long enough to give away 100MB of LTE data every month. It unilaterally cancels the 2-year offer after 12 months.

Verizon’s credibility in keeping its word with customers is under fire this week as owners of Google’s $1,450 LTE Chromebook Pixel discover their free 100MB data plans are being shut off a year earlier than promised.

Only if you are willing to pay. No freeloaders!

One year was plenty for you.

Google’s high-end LTE-enabled Chromebook Pixel was supposed to include two years of free mobile data, but Verizon unilaterally reinterpreted “two years” to actually mean “one year” and began terminating the free data plans this spring. In its place, Chromebook owners were invited to sign up for new paid Verizon data offers:

  • Unlimited: $9.99/day
  • 1GB: $20/month
  • 3GB: $35/month
  • 5GB: $50/month

Computerworld’s J.R. Raphael got nowhere with Verizon Wireless customer service:

Verizon is telling customers that as far as it’s concerned, the plans were valid only for one year — and that’s why those initiated last spring are now expiring. I called the carrier’s customer service line and, after holding for 15 minutes and then talking in circles to an agent for another 10, was able to get through to a supervisor. That person politely told me he wasn’t aware of any two-year commitment and that — despite my pointing out official documentation to the contrary — there was nothing he could do to help me.

shenanigansWith Verizon unwilling to budge, Google has stepped in with $150 Visa gift cards for all affected customers to make up for Verizon’s stinginess and broken promises.

“While this particular issue is outside of our control, we appreciate that this issue has inconvenienced some of our users,” a Google spokesperson told Computerworld.

Affected customers can contact Google Play Store customer service to start the process of obtaining the gift card.

 

 

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