Blame those eBay bottom feeders, suggests the mobile industry press, for Verizon Wireless’ decision to double the early termination fee paid when breaking your cell phone contract.

Effective November 15, customers will face the $350 early termination fee for select phones sold on contract.  Each month the customer remains with Verizon Wireless, the fee drops by $10.

It seems those seeking out some of the hottest new phones, including the Storm 2 and Droid, aren’t keeping them.  They are signing up as “new customers,” getting phones at a substantial discount, and then immediately canceling.  Even with the current $175 early termination fee, they make a handsome profit reselling the phone online for more than $500.

Some have reportedly done this repeatedly, costing Verizon Wireless a pretty penny on generous phone subsidies for new customers, and they’re doubling the early termination fee to discourage some of the reselling.

Verizon Wireless is not the only company facing the reseller challenge, so expect other national carriers to follow suit soon enough.

Of course, the prospect of paying more than $300 is also likely to keep a lot more customers with Verizon Wireless.  Unless the service is a complete catastrophe for the customer, most will probably wait out their contract instead of paying the steep price for the privilege of leaving.

A typical eBay sale for the Storm2, which looks suspiciously like a "sign-up and cancel" transaction for eBay resale.

When utilities want to “charge you for what you use,” it would be nice to trust the meter is accurately measuring your usage, California consumer advocates say.

In a growing controversy, Pacific Gas & Electric (PG&E) is now being accused of installing so-called “smart meters” that were smart for PG&E profits, but financially devastating for California consumers who face higher bills and growing questions about just how accurate those “smart meters” really are.

Customers across California who have had new meters installed, which are supposed to help consumers save energy by charging lower prices at off-peak usage times of day, report enormously higher bills from PG&E after installation.

State Sen. Dean Florez, D-Shafter (Kern County), reports he has seen bills from customers that don’t begin to make sense.

California Senator Dean Florez (D-Shafter/Kern County)

“One farmer was charged $11,857 for running a piece of equipment that was never turned on. A local attorney at the hearing clutched a $500 bill from July, a month in which she was visiting family out of state and almost every appliance in her house was shut off,” he reports.

Florez quotes the woman — “My smart meter keeps reading these spikes in usage at noon. But no one was in the house,” she said. “It’s obvious to me that this technology is not ready for prime time.”

Customers across the state with smart meters have reported similar stories, and are angry with PG&E’s response to their concerns, which can be boiled down to, “the meter is right, you are wrong, now pay us.”

PG&E claims that during its own internal reviews, it found nobody being overcharged. Spokesman Jeff Smith says “in all 1700 of those cases we have not found an instance thus far of the smart meter transmitting inaccurate information or incorrect usage information.”

The California Public Utilities Commission doesn’t think that’s enough and has begun ordering an independent review of the “smart meter” program and accuracy of meter readings.

Liz Keogh spent 14 years collecting and analyzing data at the Institute for Social Research in Ann Arbor, Michigan, and now lives in Bakersfield, California.  She has been pulling out her old PG&E bills and records showing her utility use all the way back to 1983.  What she found since the “smart meter” was installed on her home was disturbing.

Her analysis was printed in the San Francisco Chronicle:

My July, August and September 2009 bills showed the highest usage and cost in 26-plus years, even though I rarely go over “baseline usage.” The dollar difference from 2008 to 2009 was $20 to $30 each month. Billing costs are a product of usage multiplied by kilowatt-hour rates, which, like the federal income tax structure, is “tiered,” so that the more you use, the more you pay – and at higher and higher rates. Analysis of usage is the first step toward understanding fluctuations in cost.According to the smart meter installed on Sept. 12, 2007, the increase in my 2008-09 usage over 2007 was:

	2008	2009
May	+5.6%	+28.6%
June	+7.5%	+32.6%
July	+10%	+50.2%
Aug.	+3.1%	+41.1%
Sept.	-4.8%	+67.9%
Oct.	+4.9%	NA

PG&E’s own data show there was not a significant difference in temperatures for each comparable month. Why, then, did my “usage” increase range from 30 percent to 70 percent in 2009, while the 2008 increases were no more than 10 percent?

Simple answer: Meter malfunctioning, whether accidental and idiosyncratic, or, as some claim, intentional.

The suspicion that funny business is going on might be justified when considering Bakersfield residents have been through this all before.

“[Several years ago] Bakersfield is where PG&E first realized it had made a $500 million mistake, installing tens of thousands of inferior meters that would never live up to the promise. So the utility purchased a new generation of meters from Silver Spring Networks Inc. of Redwood City. PG&E insists that these new meters are glitch-free, though it concedes that it has tested only 50 out of 250,000 meters in Kern County,” Florez said.

At a time when some broadband providers want to install their own meters to overcharge customers for their Internet service, the PG&E experience is telling.  Independent oversight of any meter comes down to the enforcement mechanism available to guarantee accuracy.  But broadband service in the United States is unregulated, and no such enforcement mechanism exists.

And just when you thought you could believe the rhetoric that utility customers who conserve their usage will save more money, another electric and gas utility in San Diego filed a rate increase request that will charge customers who have managed to cut their usage even higher prices than those who have not.

[flv width=”640″ height=”480″]http://www.phillipdampier.com/video/KGET Bakersfield Senator Florez Questions SmartMeters 9-23-09.flv[/flv]

KGET-TV Bakersfield talked with Senator Florez on September 23 about the SmartMeter controversy (4 minutes)

More video coverage below the jump.

… Continue Reading

T-Mobile explained its second network outage in two months with a brief post on its support forum:

On Tuesday, some T-Mobile customers may have experienced service disruptions impacting voice and messaging services.  We restored full service to all affected customers later in the day.   After investigating the cause, we have determined that a backend system software error had generated abnormal congestion on the network.  T-Mobile has since implemented additional measures to help prevent this from happening in the future.  We again apologize to those customers who were affected and may have been inconvenienced.

But PC Magazine mined several messages from the storm of customer discontent suggesting not all of the problems were actually fixed at that time, and several customers still without service were told to turn their phones off and on to re-register them with T-Mobile’s network.  Some reported that didn’t work either.

Meanwhile, a company with an outage that significant can create its own headlines when it becomes one of the most important topics being discussed on Twitter, as social media critic Jenn Van Grove discusses.

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Auburn, Alabama

Residents of Auburn, Alabama will one day have a choice for cable television service.  Incumbent cable company, Charter Cable, which has been in bankruptcy, will eventually face competition from Knology, a cable “overbuilder” servicing more than a dozen cities in the southeastern U.S.

The Auburn City Council unanimously agreed Tuesday night to begin a non-exclusive cable franchise agreement with Knology, based in West Point, Georgia.  The cable company already serves several other Alabama communities including Dothan, Huntsville, Lanett, Montgomery, and Valley, and expects approval to construct a system in nearby Opelika shortly.

The decision to bring competition to the city of 56,000 was an easy one because residents demanded more choice:

“Thank goodness this has finally happened.  It is time that people in this area had a choice regarding their cable.  Charter has provided poor customer service as well as poor cable and internet service for years.  I am surprised that my internet has stayed up long enough for me to type this!” — psych1

“This makes my day, now all we need is for satellite to have rights to the local channels and we’ll truly have the competition and choice we deserve…this is a huge step though!” — Matt

“I will dump Charter the second Knology is here.” — lp95

“Now we just need this in Opelika. I hate Charter with all my being.” — jackburnt

“Thank Goodness!  Charter is surely the worst cable company in history. I hope nobody reading this fell for their BS “contract” pricing lately.  They knew this was coming and tried to tie folks down for at least another year. This is truly a victory for the people of Auburn.” — tboone

“I am glad to see competition is coming in,” Ward 1 council member Arthur L. Dowdell told the Opelika-Auburn News. “I wish there was more coming in.”

One question remains on the table — When will Knology commence service in the area?

Chad S. Wachter, general counsel for Knology, said he didn’t know when Knology will be available for city residents.

“We’ll provide those answers with the city when we get them,” he said.

Ward 7 council member Gene Dulaney, the News noted, encouraged Wachter to build as fast as possible.

Charter Cable representatives followed the usual playbook cable operators use when competition is imminent.

Skip James, Charter’s director of government relations, addressed the council during citizens’ communications to express the company’s support for competition.

“We competed with Knology in the past and we will continue to in the future,” he said.

Knology provides customers with cable television, telephone and broadband services.  Most of their systems offer broadband at around 8Mbps and there doesn’t appear to be a limit.  Knology is quietly upgrading their systems to DOCSIS 3 to provide “wideband” service, cable’s designated turn of phrase for next generation broadband speeds.  But the company is also following a familiar pattern of not spending the money to upgrade where competitive pressure doesn’t exist.

Knology chairman and CEO Rodger Johnson told investors during a 1st quarter 2009 earnings call that the company was prepared to upgrade, but isn’t going to jump the gun.

“We are enabling our markets to deliver Docsis 3.0 when we decide the time is right to push the trigger,” Johnson said. “A very expensive piece of that proposition is the transition of the cable modems to 3.0 cable modems. We will make that move at the time that we’re feeling competitive pressures to move to a 3.0 environment, but not until that time.”

Johnson should be careful about waiting too long.  Pinellas County is one of Knology’s service areas in Florida, and it has Verizon FiOS and Bright House Networks fighting for customers in an upgrade war Knology cannot win with slower broadband.

[flv]http://www.phillipdampier.com/video/Knology – Choices Ad.mp4[/flv]

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p style=”text-align: center;”>Knology “Choices” Ad (30 seconds)

The Novatel USB760, branded for Verizon Wireless

Verizon Wireless today announced the introduction of a prepaid wireless broadband option for customers who don’t want to pay $60 for 5 gigabytes of usage, with a two year contract.  Prepaid Mobile Broadband will be available starting November 15th in Verizon Wireless stores, sold as a “starter pack,” for $129.99, which includes a Novatel USB760 modem and a brochure showing different pricing options for the service.

Both Verizon and Virgin Mobile’s prepaid broadband services use the same USB760 modem, but that’s where the comparison ends.

Verizon Wireless expects prepaid customers to pay premium pricing for the convenience of having wireless broadband access without a contract on Verizon’s expansive 3G network.  Customers have three options:

• Daily Access: $15/day for 75MB
• Weekly Access: $30/week for 250MB
• Monthly Access: $50/month for 500MB

Unused allowances expire at the end of each term.  Verizon includes a “usage chart” with low ball estimates of what customers can do on each respective prepaid plan:

Data Type             Daily         Weekly       Monthly

E-mail (1 text page)  25,600        85,300       170,000
Typical Web page         500         1,700         3,400
Low-resolution photos    150           500         1,000

Don’t even think about streaming video at these prices. Virgin Mobile’s prepaid wireless broadband service was expensive until Verizon Wireless came around. Virgin Mobile charges $10 for 100 MB for 10 days, $20 for 250 MB per month, $40 for 600 MB and $60 for 1 GB.  Cricket also sells a prepaid wireless broadband plan for $40 a month for up to 5GB of usage, but has dramatically less coverage.

These plans are typically designed for occasional use only.  Those with regular on-the-go wireless broadband needs will do better under a contract plan.