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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.

J.D. Power & Associates Tie Vote! Hemorrhagic Fever vs. Comcast vs. Time Warner Cable

jd powerLove can be a fickle thing.

Take Comcast’s affair with J.D. Power & Associates, for example. In Comcast’s filings with regulators, it is very proud that J.D. Power cited Comcast for the most improvement of any cable operator scored by the survey firm. Comcast touted the fact it had managed to increase its TV satisfaction score by a whopping 92 points and Internet satisfaction was up a respectable 77 points. (Comcast didn’t mention the fact J.D. Power rates companies on a 1,000 point scale or that it took the cable company four years to eke out those improvements.)

Last month, J.D. Power issued its latest ranking of telecommunications companies and… well, the love is gone.

If customer alienation was an Olympic event, J.D. Power awarded tie gold medals to both Comcast and Time Warner Cable for their Kafkaesque race to the bottom.

The survey of customer satisfaction largely found only dissatisfaction everywhere in the country J.D. Power looked. While Comcast likes to cite its “customer-oopsies-gone-viral” blunders as “isolated incidents,” J.D. Power finds them epidemic nationwide.

skunkThe highest rating across television and broadband categories achieved by either cable company was ‘Meh.’ J.D. Power diplomatically scored both cable companies on a scale that started with “among the best” as simply “the rest.” Customers in the west were the most charitable, those in the south and eastern U.S. indicated they were worked to their last nerve.

“The ability to provide a high-quality experience with all wireline services is paramount as performance and reliability is the most critical driver of overall satisfaction,” said Kirk Parsons, senior director of telecommunications, in a statement.

Having competition available from a high-scoring provider also demonstrates what is possible when a company actually tries to care about customer service. In the same regions Comcast fared about as popular as hemorrhagic fever, WOW! Cable and Verizon FiOS easily took top honors. Even AT&T U-verse scored far higher than either cable company, primarily because AT&T offers very aggressive promotional packages that include a lot for a comparatively low price.

Other cable and smaller phone companies didn’t do particularly well either. Frontier and CenturyLink both earned dismal scores and Charter Cable only managed modest improvement. The two satellite television companies did fine in customer satisfaction for television service, but it was the two biggest phone companies that managed the best scores for Internet service. Among cable operators, only independents like WOW! (and to a lesser extent Cox) did well in the survey.

If J.D. Power is the arbiter of good service Comcast seems to claim it to be, the ratings company just sent a very clear message that when it comes to merging Comcast and Time Warner Cable, anything multiplied by zero is still zero.

J.D. Power ranking (Image courtesy: Reviewed.com)

J.D. Power ranking (Image courtesy: Reviewed.com)

Redbox Instant by Verizon Shutting Down Oct. 7; Customers Worry About Purchased Digital Media

Phillip Dampier October 6, 2014 Competition, Consumer News, Online Video, Verizon 1 Comment
The death certificate will be signed on Oct. 7.

The death certificate will be signed on Oct. 7.

As expected, Redbox Instant by Verizon will stop operations on Tuesday (Oct. 7) after failing to attract enough interest from customers in the Netflix-dominated online video marketplace.

IMPORTANT SERVICE SHUTDOWN NOTICE

Thank you for being a part of Redbox Instant by Verizon. Please be aware that the service will be shut down on Tuesday, October 7, 2014, at 11:59 p.m. Pacific Time.

Information on applicable refunds will be emailed to current customers and posted here on October 10. In the meantime, you may continue to stream movies and use your Redbox kiosk credits until Tuesday, October 7 at 11:59 p.m. Pacific Time.

We apologize for any inconvenience and we thank you for the opportunity to entertain you.

Sincerely,
The Redbox Instant by Verizon Team

Customers that purchased digital copies of movies Redbox Instant offered for sale may not be able to retrieve them from Verizon’s digital storage locker after the service shuts down, but the company says it is “exploring options” for those affected.

“The service is shutting down because it was not as successful as we hoped it would be. We apologize for any inconvenience and we thank you for giving us the opportunity to entertain you,” the company said as part of its shutdown notice.

Paying customers will receive a refund for one month of service and have just 24 hours to redeem any Redbox kiosk rental vouchers included with their subscription.

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.

Comcast’s Streampix and Verizon’s Redbox Instant Gasping for Air; Netflix Killers They Are Not

Rumors abound of the imminent death of Redbox Instant.

Rumors abound of the imminent death of Redbox Instant.

Comcast’s Streampix and Verizon’s Redbox Instant have not lived up to the expectations of their respective owners and the two Netflix-like services have quietly been partly decommissioned or have stopped accepting new customers altogether.

Loathe to admit the services are roadkill on the TV Everywhere highway, Comcast claims it is simply downsizing its Streampix service and Verizon issued a terse “no comment” to GigaOm’s Janko Roettgers in response to rumors Redbox Instant would begin shutting down for existing customers on Oct. 1.

But truth be told, neither service made a competitive dent in Netflix, either because they were poorly marketed or found no audience. Comcast denies it is even trying to compete against Netflix. But it did admit in a regulatory filing Streampix found very few takers at its $4.99/month asking price.

“Though Comcast sought to create excitement around Streampix by offering the online version through a unique online site and app, and offered Streampix to a small number of XFINITY broadband-only customers in one region, these attracted minimal interest,” Comcast wrote.

Streampix will be a shadow of its former self, continuing on mostly in name-only.

“Going forward, Streampix will simply be part of the XFINITY TV app and website like other video-on-demand offerings,” said Comcast in the filing. The Google Play and Apple App stores seem to confirm as much when customers looking for the Streampix app instead find: “Streampix has moved to XFINITY TV Go. Comcast customers with Streampix should download XFINITY TV Go to view Streampix content.”

Comcast launched Streampix in February 2012 as a streaming-only offering, but added download capability in late 2013.

When customers balked at paying Comcast another $5 a month for the streaming add-on, Comcast began giving it away to customers who subscribed to multiple premium channels or high value triple play packages as part of ongoing promotions.

Comcast's XFINITY Streampix admittedly didn't draw much interest from customers.

Comcast’s XFINITY Streampix admittedly didn’t draw much interest from customers.

Critics of Comcast’s merger with Time Warner Cable suspect Comcast’s real intention was to launch the service to markets outside of its service area to compete for premium over-the-top video customers without cannibalizing its cable television revenue. With the merger under scrutiny at the state and federal levels, some suspect Streampix’s public demotion is a maneuver to protect the deal from a potential political liability over Comcast’s growing dominance in the cable and broadband business.

The troubles with Verizon’s Redbox Instant service go well beyond the realm of public policy debates. Since launching in mid-2013, the service has attracted only minor interest from the public. Critics contend a marketing deal with Redbox was wrong from the start. Redbox’s success comes from renting DVDs from kiosks, not competing with Netflix. Verizon hoped a promotional tie-in offering online viewers up to four free DVD rentals a month from Redbox kiosks would bring the two services closer together. Redbox Instant also rented current movie titles on a pay-per-view basis, and hoped it could convince kiosk users disappointed with out of stock DVDs or otherwise poor pickings to go online and stream a pay-per-view video instead.

But customers would have to be psychic looking for something to stream – Redbox does not publish online movie availability on its kiosk-service website. Unsurprisingly, kiosk users have stayed loyal to renting movies through the kiosk and online viewers usually won’t bother renting a DVD from a kiosk, even with a voucher.

Free trials of Redbox Instant service brought an underwhelming number of customers converting to paid subscriptions. That might be attributed to the heavy overlap of titles available from Redbox Instant and competitors Netflix and Amazon.com, making three services redundant for many. Although Redbox’s parent has invested $70 million in the service, it is dwarfed by the massive content acquisition budgets available to its larger competitors.

It would take a larger subscriber base to change that for the better, but Redbox Instant seems intent on sabotaging its success, still refusing to enroll new customers three months after a security breach. It seems Redbox Instant’s website was an excellent resource for credit card thieves to verify if stolen card numbers were still valid. Current customers are still able to use the service, but reportedly cannot update or change their credit card information, meaning they will lose service if their credit card expires or the credit card number changes.

no new users

A notice on Redbox Instant’s website prevents new users from enrolling.

Company executives have told investors they are not happy with Redbox Instant’s subscriber numbers. Not allowing new customers to sign up while gradually losing old ones because of an expired credit card could go a long way to explain this. Redbox’s parent company previously warned it has the right to pull out of the venture if the numbers don’t improve, and they won’t if the website remains locked down.

When Roettgers asked Redbox and Verizon to comment on a reddit rumor that the service was to close down on Oct. 1, the only reply was “no comment.” Roettgers believes that is telling, because no company would want such a false rumor to spread unchallenged. With Oct. 1 less than 24-hours away, we won’t have long to wait to see what happens next.

Roettgers would not be surprised to see Redbox Instant downsize itself with an end to its subscription video plan and move forward exclusively as a paid, video-on-demand service. It already powers Verizon’s On Demand video store. Having a traditional television partner like Verizon FiOS TV could help Redbox survive in an already crowded marketplace of online, on-demand video stores like iTunes, Google Play, Vudu, Amazon, and others.

In a larger context, the industry’s belief in “if we build it, they will come,” appears to be untrue, especially cable and telephone company efforts developing their TV Everywhere platforms. Content and viewing limitations that confine online viewing largely to the home, a barrage of online video advertising, subscription fees, and the lack of quality content have all hurt efforts to deliver a good user experience that can promote customer loyalty. Nothing now or on the horizon appears to be anything like a Netflix-killer app.

http://www.phillipdampier.com/video/Bloomberg Bibb Says Comcast Has Little Confidence in Streampix 2-21-12.mp4

Two years ago, Porter Bibb, managing partner at Mediatech Capital Partners, panned the then-new XFINITY Streampix service for streaming the same television shows and movies customers can already see on Netflix and other services. From Bloomberg Television’s “Bloomberg West,” originally aired Feb. 21, 2012. (4:30)

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.

Special Report: Big Phone and Cable Companies Are Losing Your Calls to Rural America

Phillip Dampier August 28, 2014 Consumer News, Public Policy & Gov't, Video 7 Comments

aroundtheworldBig cable and telephone companies have opened a new digital divide by losing your long distance calls to rural America to save a buck.

The problems have grown so pervasive, a FCC investigation found some of America’s biggest providers are sending some of their long distance calls destined for rural communities across the U.S. through shady, fly-by-night third-party operators in Russia, the United Arab Emirates, Singapore, Japan, Bulgaria and Romania before the phone ever starts ringing on the other end. If it ever starts ringing on the other end.

In Addison County, Vt., State Representative Will Stevens knows all about it. When not representing the people of rural Shoreham, he is running Golden Russet Farm, highly dependent on his landline to deal with customers.

“Phone calls here get cut off,” he told the Addison County Independent. “Or they don’t go through at all. So many times I’ve called elsewhere and you just don’t know if the call is going through, it goes dead. It rings then goes dead. You can’t tell how many times it’s rung on the other end if at all.”

It’s even worse when callers get a recording stating the number is no longer in service.

That is what happened to Pat Plautz who runs a small map store in the town of Reedsburg, Wis. A caller from Milwaukee trying to place an order first got a recording stating her number had been disconnected. Lucky for her the caller tried again, this time connecting.

“My main concern is that people think we’re out of business,” Plautz said.

As many as one in five long-distance calls to rural communities either aren’t connected to the intended number or are corrupted by issues such as static or garbled sound, according to Communications Data Group, a telephone billing company based in Champaign, Ill.

In rural upstate New York, some callers report nearly 100% of their call attempts to certain rural customers fail.

Stevens has attempted to place calls from his rural Shoreham Tel landline in Vermont across Lake Champlain to his father’s camp – 30 minutes away by car – served by the Crown Point Telephone Corporation in Crown Point, N.Y., with absolutely no success.

Rural call failures have created a number of safety fears for concerned relatives, particularly those trying to reach seasonal residents — often retirees that live in the area part of the year.

“When they can’t get through they’ll call us and ask us to check the lines, and we do and they are working properly, so then they’ll ask us if we can go out and see if the person is OK because they aren’t answering their phone,” said Shana Macey, president of the Crown Point phone company. “And we’ll do that because we’re concerned, too.”

A Nationwide Deterioration of Rural Telephone Service

In rural Wisconsin and Minnesota, even 911 calls can get lost. In west-central Minnesota, particularly those along the I-94 corridor, hard-hit communities like Brainerd and Little Falls find their 911 calls are being dropped or lost and businesses have reported huge drops in incoming long distance calls, costing them business.

Shoreham, Vt. to Crown Point, N.Y. by auto.

Shoreham, Vt. to Crown Point, N.Y. by auto.

In Kansas, home to many rural independent phone companies, long distance call problems have become so pervasive, phone companies are publishing information about the problem in their phone directories and on their websites.

Rural customers complain long distance calls often lose one side of the conversation so both parties cannot hear each other, or the call is lost in static and distortion that make it sound like it originated from the middle of Siberia.

What shocked the FCC into calling this problem “epic” earlier this year was the revelation that long distance calls between people as little as 15 miles away from each other often are routed through Siberia or other distant lands as long distance companies seek the cheapest possible way to route calls to boost profits.

Welcome to the world of “Least Cost Routing,” (LCR) a harmless-sounding phrase that often means the difference between getting a long distance call or not.

You might have experienced LCR if you have encountered any of the following:

  • Someone tells you they tried to call you but your phone never rang;
  • Someone tells you they tried to call you and the phone rang on their end, but didn’t ring on yours;
  • A call came through but the quality was poor;
  • One side of the call cannot reliably hear the other;
  • Phantom touch-tone sounds erupt in mid-conversation or distorted sounds from other phone conversations occasionally break through and can be heard by one or both parties;
  • A call came through but the Caller ID was incorrect.

Nationally, users of Google Voice, MagicJack, and other discount long distance services have probably observed at least one of these, all because the companies involved are looking for the cheapest ways possible to route your call.

But the problems have grown well beyond the deep discount providers and affect Verizon, AT&T, Comcast, Time Warner Cable and other phone and cable company telephone customers. Evidence suggests unregulated cable and wireless phone calls are much more likely to encounter LCR than traditional regulated landlines.

http://www.phillipdampier.com/video/KMSP Minneapolis Dropped Calls 3-5-14.mp4

KMSP in Minneapolis reports Minnesota officials are helpless trying to resolve call completion problems because their oversight powers have been largely stripped away by deregulation and telecom lobbyists want to keep it that way. (3:14)

lcr

Least Cost Routing in action.

Deregulation Implicated in Race for High Profits, Low Call Quality

Wisconsin’s Public Service Commission, perhaps slightly perturbed after watching its oversight powers get largely stripped away by the Walker Administration at the behest of AT&T, explained the reality:

Once upon a time – back in the days of rotary phones – a phone call was carried over copper wires which formed a single circuit from end to end. Those days are gone. Today, the network is almost entirely digital, with calls reduced to bits and sent over a massive web of links provided by telephone, cable, cellular and fixed wireless providers. These networks pass calls using a complex set of computer controls, interfaces and protocols. Rural call completion issues appear to be caused by some error or errors in programming, or incompatibility in the software somewhere in the network, that prevents the call from reaching the rural telephone company at all.

Wisconsin Gov. Scott Walker directed his Republican colleagues to draft a sweeping deregulation bill at the behest of AT&T.

Wisconsin Gov. Scott Walker directed his Republican colleagues to draft a sweeping deregulation bill at the behest of AT&T.

The problem is bad enough in Wisconsin the PSC has devoted a section of its website to address the problem, but that is about all it can do. In 2011, Gov. Walker directed his Republican colleagues to draft a sweeping deregulation measure ghostwritten by AT&T. The bill completely stripped the PSC of its ability to investigate consumer complaints or the problems of rural call completion. The Assembly approved the Republican bill 80-13 and the Senate quickly followed on a 25-8 vote. Walker promptly signed the bill into law.

Consumer advocates and rural officials warned the bill would lead to a deterioration of telephone service in Wisconsin, especially in rural areas — exactly what has happened.

“We’re pitting urban against rural,” said Sen. Kathleen Vinehout (D-Alma). “The consumer has absolutely no recourse under this bill.”

Nonsense, declared Sen. Rich Zipperer (R-Pewaukee). “We’re ready to keep up with the technology. First and foremost, this is a job creation bill,” he said.

In fact, the bill may have indeed created new jobs… for overseas, fly-by-night wholesale call connection companies in places like Bulgaria, the United Arab Emirates, and across Russia.

Hundreds of new and mysterious telecommunications companies, some literally run out of garages with a consumer residential broadband account, jumped into the wholesale call completion marketplace. Telephone and cable companies use sophisticated databases that maintain constantly changing price lists for IP-based call completion services. If a long distance company wants the cheapest possible rate, a computer will automatically choose whatever company offers it, without regard to the reputation of the company or its ability to properly route the call.

Fraud has become a serious problem, with some call connection companies charging below-market rates and then connecting calls to an artificial, never-ending ringing signal or an intercept recording stating the number is out of service. Consumers are generally not charged for unanswered calls or those to disconnected numbers, but phone and cable companies often are.

So why do rural Americans suffer the biggest problems? Because rural telephone exchanges are allowed to charge slightly higher call completion fees to companies sending their customers’ calls into these rural areas. The higher charges help defray the higher costs incurred by rural independent phone companies to maintain service with a much smaller customer base. Verizon has millions of landline customers in New York. Crown Point Telephone has 735.

There are millions to be made in the call completion business and a growing number of cell phone companies and large phone and cable companies have teamed up with third-party call completion discounters to shave costs and increase profits. The more money to be made, the more advanced the call routing schemes have become. In the last few years, LCR has become nearly as frenzied as the stock market, with call completion rates subject to change constantly as capacity increases or decreases and as competitors try to match or beat others’ rates.

pushpollA Race to the Bottom

As flyers know, it is often cheaper to fly into a major city and catch a connecting flight to your final destination instead of booking a direct flight. The same is true for phone calls. Mr. Stevens’ call across Lake Champlain involved two high-cost rural telephone companies. So his long distance carrier (or cell phone company) likely sold the call to a third-party to handle. If that third-party found it cheaper to send the call overseas and then back again (often to avoid connection fees), that is exactly what will happen. If it found it couldn’t make any money on the call, it likely dropped it.

“In some cases, the calls become looped in the network and are never completed. In other cases, the calls are delivered via a low quality network which results in poor sound quality,” the Reedsburg Utility Commission, which also runs a local telephone company, says on its website.

In one case a call from Milwaukee to northeast Wisconsin was routed through carriers in Singapore, Dubai, and parts of Europe including Russia.

“It just kept getting shipped everywhere. It was insane,” Peter Jahn, of the Wisconsin Public Service Commission’s Division of Business and Communications Services, told the Journal-Sentinel.

These third-party operators have no responsibility to guarantee calls will be connected, and when their algorithm discovers it has been saddled with a money-losing call that will cost more to complete than the company is charging, it simply drops it, leaving the caller with dead silence, an artificial busy signal, or a dial tone.

“It’s something that’s been going on for years, and it’s very difficult to identify the bad actors. … Some of them could be fly-by-night operations,” admitted Bill Esbeck, executive director of the Wisconsin State Telecommunications Association, which represents telephone companies.

The Murky World of Grey Routes

special reportIn fact, the industry has a different name for this type of call handling – grey routes.

“The grey route is, literally, a sub-par phone line or phone company who is intentionally selling phone service in areas that should be expensive but is cutting corners to be able to provide the service for less,” says 2600hz, a Voice over IP service provider. “An example of a grey route, in it’s simplest form, might be someone buying 50 phone lines that were on special from the phone company for six months – and putting those phone lines in their garage. Then they buy an Internet connection and funnel calls from the Internet to those cheap phone lines all day long.”

The company says grey routes are responsible for a lot of the problems will call completion and quality.

“They’re most likely using a poor quality Internet connection, poor quality equipment and aren’t interested in debugging or fixing problems with their setup – as long as they can keep you on the line long enough to bill the other party,” says the company.

“How do they achieve that? They pitch the route to the phone company who’s losing money on expensive phone calls and falsely promise them great quality. In essence, the theory goes that if only 5% of your calls go over a ‘grey route’ then phone companies can save literally millions of dollars and most customers will ‘tolerate’ the poor quality because it only occurs on such a small number of calls. Unfortunately, the side effects of such behavior range from broken Caller ID and touchtone transmission to audio quality cut-outs and generally poor sounding calls.”

Fly-by-Night Least Cost Call Routing

Fly-by-Night Least Cost Call Routing

Because many of these providers are unsophisticated, mistakes in call routing are common.

In one instance, all calls intended for an area in northern Wisconsin instead were routed to a car dealership, which was deluged with wrong-number calls.

“It took months and months to figure out who had screwed this up,” Jahn told the newspaper.

Unfortunately, it isn’t just the discount long distance providers that occasionally hand off calls to grey routes. The biggest cell phone and cable companies also use them.

For months, Pat Fretschel of Reedsburg had trouble getting calls from Milwaukee. Her callers would assume she wasn’t home and would hang up, when in fact the phone wasn’t ringing at her end of the line.

The problem only affected callers using Time Warner Cable phone service.

“Time Warner kept trying to tell me the calls were being hijacked out of California. I could never wrap my head around that,” Fretschel told the Journal-Sentinel.

Back in New England, Jackie Ambrozaitis is thankful she has a website to advertise her Falkenbury Farm Guest House, because she has no idea how many long distance calls she is missing.

Molly Worden, Jackie’s daughter who lives in Connecticut, reports to the Addison County Independent that she has problems every month reaching both her mother and a sister who also lives in Benson.

Rural first responders can't respond if they don't get a call.

Rural first responders can’t respond if they don’t get the call.

“I call Shoreham Tel and they test the line and they say it’s my phone; they tell me my phone looks for the cheapest way to send the call,” Worden says. “I’ve had people over to the house and called from several different carriers with their cell phones, I’ve tried Verizon, Sprint, Nextel, and I still can’t get through. It will ring 20 times without answer or it goes to busy. Sometimes five, six days in a row I can’t get through.”

Worden’s young children get frustrated when they can’t talk to their grandparents in Vermont, and Ambrozaitis’s 90-year-old father-in-law in Connecticut gets distressed when he can’t reach the family.

Your Health and Safety at Risk?

But the problem isn’t just annoying for friends and family trying to stay in touch.

Doctors “have been unable to reach patients, hospitals have been unable to reach on-call emergency surgeons, and there is a reported instance in which a 911 call center was unable to make emergency call backs,” the National Exchange Carrier Association, which represents rural telecom companies, said in an Aug. 18 letter to the Federal Communications Commission.

“I’m concerned we’ll have a major event where perhaps a first responder doesn’t know that they were called out,” says Steve Head, engineer at HEADSolutions, consultant to the telecommunications industry. Head is working with Waitsfield Telecom, and has been instrumental in recognizing and revealing the extent of the rural connectivity problem nationwide. “We had at least one incident of a hospital trying to get ahold of a patient to schedule surgery and could not get through, and if they had not been able to get ahold of him for this surgery opening it was not going to be able to be done for some time,” he said. “That was major.”

“I Have Regulatory Authority Over Telegraph Lines” – State Regulators Helpless to Intervene

Trying to resolve this problem has fallen largely on the FCC in Washington as telephone company oversight and consumer protection laws in the states have not kept up with technology or have been wiped off the books in deregulation measures.

Rothman

Rothman

“I have regulatory authority over telegraph lines,” complained Minnesota Commerce Commissioner Mike Rothman. “Currently, wholesale transport providers are not defined in statute, they’re unknown.”

In Minnesota, attempts at wholesale deregulation have not been successful, and landline phone companies still fall under some state regulation. Cell phones are covered by the FCC, and, as Rothman explained, cable is pretty much a free-for-all.

Any attempt to place oversight or regulation on telecom companies rings alarm bells and the lobbyists quickly arrive in Rothman’s office, “all lined up, someone from Verizon, another from Sprint, and a representative from a trade group representing cable.”

“Regulation worked for a long time but customers didn’t have a choice. Now they have a choice, but the quality of calls may have declined,” said Rob Souza, senior vice president of Otelco, the Maine-based communication company that bought Shoreham Tel 13 months ago. “I’ve been in this business 40 years, and the modernization of the telecommunications system has been extraordinary. It’s a good, solid reliable system. But when people don’t play by the rules, you get more service problems. That’s not an indictment of the system, but on some people who are trying to shave every penny out of it.”

Inadequate FCC Fines Are Just the Cost of Maintaining a Very Profitable Business

Among those include Matrix Telecom Inc. of Irving, Tex., fined $875,000 by the FCC to resolve a call-completion investigation. Similar agreements were reached with Level 3 Communications LLC for $975,000 in March and Windstream Corp. for $2.5 million in February.

But those amounts are miniscule in comparison to the potential financial benefits reaped from LCR.

“In the short-term, it’s going to take the FCC cracking down and making those fines larger, so the cost of not doing what the carriers are supposed to do is greater than doing what they’re supposed to,” said Reedsburg Utility Commission general manager Brett Schuppner.

But the FCC isn’t immune to lobbying either, and powerhouse AT&T is at the front of the line fiercely fighting to weaken new FCC rules to a level that would qualify them as homeopathic.

CommLawBlog fingered AT&T as the worst offender. The phone company recently filed a petition to change FCC rules designed to find and track the source of degradation of rural calls. The company also wants waivers for its wireless traffic and intaLATA toll calls (those placed to nearby areas outside of a customer’s local toll-free calling zone). They are also seeking a six month extension of a reporting deadline. This is significant, CommLawBlog says, because AT&T is the largest interexchange carrier with the most traffic sent to many rural areas in the country. Letting them effectively “opt out” could nullify many of the benefits of the new rural call completion rules.

Those suggested changes from AT&T are getting a cold response from groups like the National Association of Regulatory Utility Commissioners, which complain that rural call completion problems have been ongoing for years and now is not the time to weaken FCC rules.

On a separate front, Sen. Tim Johnson (D-S.D.) has introduced a bill requiring the FCC to keep a registry of the companies responsible for routing long-distance calls. It also would set service quality standards for the carriers.

The bill has little chance of being passed because of significant Republican opposition.

http://www.phillipdampier.com/video/KTVM Montana Incomplete Calls Madison County 4-24-14.mp4

In rural Montana, long distance telephone calls often don’t reach homes and businesses. KTVM talks with a business owner in Madison County who thinks it’s unfair rural America is stuck with substandard service. (1:40)

http://www.phillipdampier.com/video/You Might Have to Call Again If I Live in Rural America.flv

David Lewis, CEO of ANPI talks about Rural Call Completion at the IP Possibilities Conference and Expo. Lewis goes into greater detail about how this problem developed, how it affects customers, and what solutions are available to fix it. Because Lewis is speaking to an audience of mostly telecom professionals, we’ve provided a “cheat sheet” to explain some of the jargon. (11:43)

Telco Jargon Translated (in chronological order as it appears in the video)

Tier 1 Carriers – The biggest IP networks
CLEC’s – Competitive local phone companies (Time Warner, Comcast, MagicJack, Vonage, etc.)
ILEC’s – Incumbent local phone companies that have been around for decades
RBOC – A former regional Bell company (eg. Verizon, AT&T, SBC, Qwest, etc.)
Termination – When a call successfully reaches the called party’s phone number
PSTN – The network that powers your traditional landline
Enhanced 911 – 911 operators automatically get your calling location and other pertinent details
PSAPs – a 911 call center
Rate Deck – Essentially a price list showing the cost to complete calls to different areas
Bypassing Access – Getting around the traditional compensation system for calls made to rural telephone companies
Feature Group D – a type of telecommunication trunk used to provide “equal access” capability from telecommunication carriers and central offices (where the switching equipment is located and customer lines are connected and terminated) to the access tandem. The caller’s number is passed along to the next carrier in the call chain for Caller ID and 911.

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