Home » verizon wireless » Recent Articles:

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.

Share

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.

Share

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.

Share

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.

Share

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

pixel

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.

 

 

Share

Two Wrongs Don’t Make a Right: Comcast/Time Warner Cable “Worst Companies in U.S.”

Another satisfied customer

Comcast and Time Warner Cable have achieved new lows in the most important customer satisfaction survey in the United States, winning bottom honors as the two most despised companies in the United States.

The American Customer Satisfaction Index found Comcast and Time Warner Cable the only two companies in the country that scored below 60 on the ACSI’s 100 point scale. Comcast fell 5% to 60, while Time Warner Cable plunged 7% to 56, its lowest score to date.

“Comcast and Time Warner assert their proposed merger will not reduce competition because there is little overlap in their service territories,” says David VanAmburg, ACSI director. “Still, it’s a concern whenever two poor-performing service providers combine operations. ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short-term. It’s hard to see how combining two negatives will be a positive for consumers.”

Broadband service seems to be a significant issue for customers. High prices, slow data transmission, and unreliable service drag satisfaction to record lows, as customers have few alternatives beyond the largest Internet service providers. Customer satisfaction with ISPs drops 3.1% to 63, the lowest score in the Index.

Verizon FiOS is the one bright spot in the survey, managing to grab a 71 score, beating AT&T U-verse, CenturyLink, and other providers. Cable broadband providers continued to score lowest. The best of the lot was Cox Communications, which isn’t saying much. It only managed a 6% fall to 64.

Customer satisfaction is also deteriorating for all the largest pay TV providers. Viewers are much more dissatisfied with cable TV service than fiber optic and satellite service (60 vs. 68). Though both companies drop in customer satisfaction, DirecTV (-4%) and AT&T (-3%) are tied for the lead with ACSI scores of 69. Verizon Communications FiOS (68) and DISH Network (67) follow. DISH Network may be the lowest-scoring satellite TV company, but it is better than the top-scoring cable company, Cox Communications (-3% to 63).

Among wireless carriers, things have not changed much this year.

Verizon Wireless achieved first place after climbing 3% to 75. T-Mobile (69), Sprint (68) and AT&T Mobility (68) are tightly grouped behind. As smartphone adoption continues to grow, network demands increase along with costs to the consumer, each contributing to stagnant customer satisfaction.

Share

Verizon: If Your Town Doesn’t Already Have a FiOS Commitment, Forget About Fiber

Verizon's FiOS expansion is still dead.

Verizon’s FiOS expansion is still as dead as Francisco Franco.

Verizon is prepared to watch up to 30% of their copper landline customers drift away because the company is adamant about no further expansion of its FiOS fiber to the home network.

Fran Shammo, chief financial officer at Verizon, told attendees of the Jefferies Global Technology, Media & Telecom Conference that Verizon will complete the buildout of its fiber network to a total of about 19 million homes, and that is it.

“Look, we will continue to fulfill our FiOS license franchise agreements,” Frammo said. “[We will] cover about 70% of our legacy footprint. So 30%, we are not going to cover. That is where we are still going to have copper.”

That is bad news for Verizon customers stuck with the company’s copper network because Verizon isn’t planning any further significant investments in it.

“We will continue to harvest that copper network and those customers and keep them as long as we can,” Frammo said. “But we will not be building FiOS out for those areas.”

In fact, Frammo admitted ongoing cost-cutting at Verizon’s landline division is allowing the company to shift more money and resources to its more profitable wireless network.

verizon goodbye

Verizon CEO Lowell McAdam doesn’t want to spend money on non-FiOS areas when more can be made from its wireless network.

“It is also taking cost structure out,” Frammo said.  “As I mentioned, the migration of copper to fiber has been very big for us. Our Lean Six Sigma projects have really significantly helped us in our capital investment in the wireline which is why I can put more money into the wireless side of the business.”

Verizon has shifted an increasing proportion of its capital investments towards its wireless division year after year, while cutting ongoing investment in wireline. Ratepayers are not benefiting from this arrangement, and critics contend Verizon landline customers are effectively subsidizing Verizon’s wireless networks.

Verizon will still complete the FiOS buildouts it committed to earlier, particularly in New York City, but it is increasingly unlikely Verizon will ever start another wave of fiber upgrades.

In fact, Michael McCormack, the Jefferies’ Wall Street analyst questioning Shammo at the conference foreshadowed what is more likely to happen to Verizon’s legacy copper customers.

“We have talked extensively in the past about the non-FiOS areas and I guess in my second reincarnation as a banker, I will try to help you get rid of those assets,” said McCormack.

Share

More Evidence the Wireless Data “Traffic Tsunami” is a Scam to Grab More Spectrum

telecoms reg forumWireless operators are playing up fears that without comprehensive reassignment of wireless spectrum to their businesses, a massive data crunch will slow wireless networks to a crawl.

Policy Tracker covered the Telecoms Regulation Forum in London last week and found two very different stories coming from mobile operators.

Mark Falcon, head of economic regulation at UK mobile operator Three, told the Forum that he did not really believe predictions of exponential growth in demand for mobile data. Few others believe them either, he added.

Blades

Blades

Falcon’s comments were frank and very rare in an industry that typically sings from the same hymn book on spectrum matters. More typical were remarks from Telefonica Europe’s chief regulatory officer Nick Blades who claimed a wireless apocalypse was imminent without major reallocation of spectrum for the use of wireless phone companies. Blades dismissed views that small cell antennas and offloading more traffic to Wi-Fi would make enough of a difference.

The International Telecommunications Union (ITU) has been criticized by consultants for overestimating required future spectrum requirements for wireless operators. A growing consensus outside of the wireless industry suggests the risks for wireless data tsunamis are “overblown.”

While AT&T and Verizon Wireless lobby heavily for spectrum reallocation in the United States, they routinely tell shareholders they have more than enough capacity to handle traffic for the foreseeable future and are looking for new and creative (and profitable) applications they can add to their existing wireless networks.

Share

Zain Bahrain vs. AT&T/Verizon: See How Much You’re Getting Gouged for 4G LTE Service

zain 4g

This week, mobile customers in Bahrain can now sign up for uncongested, ultra-fast 4G LTE broadband packages that include 120GB of usage and a free LTE router or MiFi device, all priced less than what AT&T and Verizon Wireless charge for just 1GB of mobile broadband and the cost of the device to use it.

att verizonZain Bahrain began offering mobile broadband packages this week that start at under $32 a month. For video lovers and downloaders, the company charges $53 a month for up to 120GB of usage at speeds up to 25Mbps, equipment included at no extra charge. Customers upgrading to 250GB or 1000GB usage allowances also get much faster performance on the company’s LTE network — up to 100Mbps.

Customers that exceed those usage allowances are not billed overlimit fees. Their speeds are temporarily throttled to a still-usable 2-4Mbps, depending on the chosen plan. There is a 4GB daily usage limit.

In the United States, AT&T customers pay $50 a month for a DataConnect plan offering up to 5GB of usage, with a $10/GB overlimit fee. A smartphone customer pays a combined $65 a month for a 1GB plan and device fee.

A Verizon Wireless customer pays $50 as month for a shared data plan offering a 4GB data allowance and includes the monthly device fee. A smartphone customer pays $80 a month ($70 if on Verizon’s Edge plan) for a 1GB plan and device fee.

“We are delighted that we are leveraging the investment in our new network to benefit our customers with new offers,” said Zain Bahrain’s enterprise broadband products and services manager Mohammed Al Alawi. “Today’s broadband customers are bandwidth hungry, with diverse connectivity needs; our new 4G LTE broadband packages are custom-designed to meet these needs and enable a digital lifestyle like never before.”

http://www.phillipdampier.com/video/Why should you switch to 4G LTE with Zain 2014.mp4

Zain produced this English language video to introduce its 4G LTE service offering speeds up to 100Mbps in Kuwait. Unlike in the United States, generous usage allowances from Zain make wireless broadband a prospect for Internet users in the home and on the go. (2:20)

 

 

Share

AT&T/Verizon Wireless’ No-Subsidy Plans Working Great for Them, Not So Much for You

Phillip Dampier April 24, 2014 AT&T, Competition, Consumer News, Verizon, Wireless Broadband 1 Comment

galaxy s5AT&T and Verizon Wireless are thrilled customers are moving away from subsidized smartphones, because both are raking in extra revenue they are not returning to customers with lower plan prices.

In the past, customers have usually chosen discounted new phones that come with a two-year contract. A smartphone that retails for $650 sells in the store for $199 or less, with the $450 subsidy gradually repaid through artificially high service plan prices over the length of the contract. The subsidy system didn’t hurt long-term revenues because the money was eventually recovered and contracts locked most customers into place for at least two years. But Wall Street has never been thrilled by carriers tying up subsidy money on the books for two years.

For a transition away from the subsidy system to be fair, providers need to lower plan prices enough to drop the subsidy payback. But neither AT&T or Verizon Wireless have done that.

AT&T customers choosing an $650 iPhone on contract under the subsidy system will pay $200 up front, a $36 activation fee, and $80 a month for a two-year plan with 2GB of data. Total cost: $2,156.

If you buy your own iPhone and finance it through AT&T, which most customers are likely to do, the cost is $65 a month for the service plan, no activation fee, and a device installment payment plan of $32.50 a month for 20 months. Total cost: $2,210 or $54 more than the subsidized plan costs.

verizon attVerizon Wireless is a bigger taker.

Sign a two-year contract with Big Red for that same phone and 2GB plan and you will pay $200 up front, an activation fee of $35, and $75 a month for the service. That adds up to $2,035. Buying a no-contract iPhone without a subsidy costs $27 a month for the installment plan, no activation fee, and $65 a month for the service. That totals $2,210, $175 more than a subsidy customer pays.

Big spending-customers can realize some further savings by upgrading to plans with a bigger data allowance, but those plans won’t make sense if you don’t use up your allowance.

Both companies claim the unsubsidized plans save customers money, but they actually don’t for most because neither lowered plan rates enough and are now pocketing the difference. Verizon and AT&T also argue customers don’t have to pay several hundred dollars up front for a phone, which is true, but they will pay more for it over time. It is also true these unsubsidized plans allow for earlier upgrades, but customers are paying for that privilege.

It’s hard to say whether AT&T and Verizon Wireless will pay fair value for old phones as customers choose to upgrade. If they don’t, customers could effectively hand both companies even more money through undervalued trade-ins.

At least 40 percent of AT&T customers are choosing the unsubsidized route through AT&T Next and the company couldn’t be more pleased.

In a conference call with investors this week, AT&T’s chief financial officer told analysts wireless service margins were up to 45.4%, with AT&T Next having a positive impact on that margin.

John Stephens noted that with the retail price of smartphones being in the $600-650 range, more customers are being convinced to sign up for AT&T’s handset insurance plan, which provides AT&T with two benefits. First, the insurance earns AT&T more than it pays out in claims and second, devices returned under the insurance program are refurbished and then sent to other AT&T customers filing claims in the future.

Tim K. Horan from Oppenheimer & Co., Inc. believes AT&T’s total subsidy expenses/internal costs are around $400 for a subsidized phone but only $100 for a phone sold on the Next unsubsidized installment plan.

With competition from T-Mobile starting to have an impact on both companies, AT&T and Verizon Wireless have plenty of room to further lower their rates and still come out ahead.

Share

Search This Site:

Contributions:

Recent Comments:

  • Ian L: Sounds like "please buy us because our name is not well thought out" to me. If the merger + spinoff happens, I give GreatLand two or three years befor...
  • dave: Can't wait till google comes here and puts these guys out of business. Suddenlink service has been degrading in quality the last few years, they aren...
  • Anon E. Mouse: Quote "I have to say, for a giant, faceless corporation customer service at AT&T has generally been great. " Wow, how can anyone say that. I me...
  • nick: why would it be the responsiblity of the cable company to provide wireless service when the dead spots are not caused by them. Custoemers who have de...
  • wilner franck: I need an usb internet service no contract unlimited do u guys haven't...
  • Ian L: Yeah; in the case of GVoice, outbound calls to US numbers are free, so I'll give 'em a little slack on call quality (they've also been fine for callin...
  • Budwyzer: “We have to look out for the interests of our members,” Rick Harnish, executive director of the Wireless Internet Service Providers Association in Oss...
  • txpatriot: The Oregon PUC has been investigating rural call completion problems in that state as early as 2012: http://www.oregonlive.com/forest-grove/index.ssf...
  • Phillip Dampier: Did your service get locked which prompted the chat or was it a revelation that came after asking about something else?...
  • Jim: Here's a crazy idea, why doesn't AT&T just offer a fair price to all customers and stop playing games? They often advertise a promotional price fo...
  • Hamza: lol I have a 250gb plan and I'm at 500gb now. I joined Cox's Tech Chat and the guy told me I had 3 warnings on my account this billing cycle...and co...
  • Limboaz: Comcast up to dirty tricks to stop competition: http://www.fiercecable.com/story/centurylink-accuses-comcast-using-lobbying-heft-block-it-competitive...

Your Account: