With Verizon Wireless poised to launch 4G LTE service in Alaska for the first time, Alaska Communications (ACS) and AT&T are hurrying wireless broadband expansions to protect their market turf. But Wall Street investors are unhappy, especially with ACS’ investments in its landline network and the recently announced suspension of its dividend payout. Some are now asking whether ACS’ lucrative wireless business should be up for sale, primed for a buyout by AT&T or Verizon Wireless.

Alaska Communications has soft launched its LTE 4G service in 10 cities: Anchorage, Fairbanks, Homer, Juneau, Kenai, Palmer, Seward, Soldotna, Wasilla and Whittier.

AT&T operates a mix of LTE and slower HSPA+ networks in Alaska and is expanding 4G service to Prudhoe Bay and Deadhorse for the benefit of short-term oil company employees working on the North Slope. But the company is also still expanding its existing 3G network along more remote Alaskan highways.

They are coming.

The investment frenzy is seen by many as a defensive maneuver to keep existing customers happy before Verizon Wireless arrives in Alaska sometime next year.

ACS and GCI, Alaska’s homegrown phone and cable companies now jointly operate their wireless operation together. AT&T is their principle competitor. But Verizon Wireless’ impending arrival in Alaska has shown it is no shrinking violet. There are persistent rumors Verizon is trying to acquire ACS’ wireless operations. Verizon has also announced partnerships with Copper Valley Telecom and Matanuska Telephone Association to potentially expand LTE service in those communities as well.

Investors hope ACS considers any Verizon offer carefully. Wireless is a revenue center for the landline phone company, which continues to see declines in home phone and business customers.

Since June, ACS lost just shy of 2,000 residential landlines and 753 business lines. The company still has 57,000 residential customers and 81,000 business customers.

ACS faces the same problems other phone companies do: network upgrades require significant investments, and investors question whether it will ultimately pay off. Many are also unhappy ACS suspended its dividend payout, refocusing $8 million on debt payments.

Two Cablevision customers in Nassau and Suffolk counties are the lead complainants in a $250 million class action lawsuit filed Tuesday in New York State Supreme Court alleging the cable operator is illegitimately charging customers for service knocked out by Hurricane Sandy.

The suit claims that unlike other cable and phone companies in New York and New Jersey extending automatic service outage credits to impacted customers, Cablevision is only giving credits to customers who self-report outages within 30 days.

Cablevision was the hardest hit cable operator in the region, with its coastal service areas on Long Island, Connecticut, and New Jersey receiving the brunt of storm surges and wind-related damage. At least half of the company’s three million customers were without service after the storm hit Oct. 29. Nearly 80,000 customers are still without power and utilities are signaling some may wait until after Christmas before lights are back on. Some of the most devastated areas are not scheduled for restoration at all because those properties will have to be abandoned or rebuilt.

The plaintiffs claim Cablevision, “only agreed to rebate some of its most favored customers on a discretionary basis and in varying amounts, and only after the customers’ contacted Cablevision for the rebate.” The suit also alleges customers threatening to cancel service are getting the most generous rebates.

The suit suggests Cablevision should have known not to bill or accept money from customers that remain without service. Many Cablevision customers are on the company’s electronic billing and autopay programs, which will continue to deduct money from bank accounts for services customers cannot actually receive.

“The lawsuit misstates the facts and is without merit,” Cablevision said in a statement. “But lawsuits aside, we have an extremely broad and customer friendly credit policy following Sandy. Blanket or arbitrary credits for cable outages could shortchange customers because each case is different and our policy covers the entire period of time when Cablevision service was out, including when the service interruption was caused by the loss of electrical power.”

Cablevision says the amount of damage to its facilities is so extensive, it could impact the next quarter’s financial results. Company officials also admit some of their customers will not be coming back because their homes and businesses no longer exist.

Share and share alike is a concept unfamiliar to Rogers Communications, at least in the eyes of the independent Internet Service Providers who have wholesale bandwidth agreements with eastern Canada’s largest cable operator that are supposed to guarantee speed parity.

The Canadian Network Operators Consortium (CNOC) last week announced it filed a complaint with the Canadian Radio-television and Telecommunications Commission (CRTC) accusing Rogers of withholding speed increases from independent ISPs.

In 2006, the CRTC made it clear that cable companies must treat its wholesale customers fairly:

The Commission determines that should a cable carrier introduce a speed upgrade to one of its retail internet service offerings with no corresponding price change, it is to issue at the same time, revised [third-party ISP access] tariff pages that match these retail service speed changes with no corresponding price change.

According to CNOC, Rogers wants independent ISPs to pay higher prices for the faster speeds it is providing its own customers for no additional charge.

That leaves providers like TekSavvy at a competitive disadvantage, according to the provider.

Peter Nowak explains Rogers is attempting to hurry independent ISPs to move to “aggregated points of interconnection,” part of the foundation of the CRTC’s earlier decision on usage-based billing. Independent ISPs were given two years to complete the transition and Rogers wants that change to move at faster pace:

Rogers wants indie ISPs to move onto the aggregated method, something it says the CRTC essentially ordered at the conclusion of the big usage-based billing fiasco a year ago. Here’s what a spokesperson told me:

We are not denying TPIAs access to our new speeds provided they have moved to a single point of connection, called an aggregated point of interconnection (POI). As part of the usage based billing rulings in November of last year, TPIAs were given two years to move from a disaggregated POI to an aggregated POI. The sooner this happens, the sooner we can provide those speeds to these third party ISPs.  Rogers will continue to provide access at existing speeds on the old network architecture until November 15, 2013.

The dispute, as usual, boils down to whether or not Rogers’ move can be considered anti-competitive. The small ISPs argue that it is, since Rogers’ own retail customers are getting the benefit of higher speeds without higher prices, yet the indie companies – and their own subscribers by extension – are being expected to pay more.

If it’s uneconomical for the indies to sell the faster speeds, they won’t, in which case the big network owners like Rogers will hold a distinct advantage since internet access is sold largely on speeds. Since they’ll simply perish if they can’t keep pace, the indie ISPs will ultimately have no choice but to accept the higher prices being pushed on them – and that effectively neutralizes the entire point of their existence, which is to provide a competitive check to the big guys.

CNOC has asked the CRTC to make an expedited ruling on the controversy as soon as possible to mitigate competitive damage.

Time Warner’s maze of explanations and excuses still don’t add up.

Instead of waiting for the outcome of a class action case against Time Warner Cable’s new $3.95 monthly modem fee, readers might do better taking their case direct to the company. Longtime Stop the Cap! reader “PreventCAPS” rattled the cages of Time Warner’s social media customer service representatives, which resulted in credits worth six months of modem rental fees.

Our reader tells us he brought pointed questions about the modem fee, complaints about the inconsistent reasons for imposing them, and irritation about the lack of notification.

Some Q&A:

Q. Why is Time Warner Cable now charging a modem fee? Earlier reports that the fee would cover the cost of equipment do not make sense because the company is not automatically supplying customers with new cable modems and already assesses $24-150 penalty fees to “cover costs” of damaged or unreturned cable modems. 

A. Time Warner Cable now says the fee is to cover the costs of increasing broadband speeds. A representative explained that the company wants to make sure everyone can be assured of getting the speeds advertised, and there are still customers with DOCSIS 1x equipment that can only support broadband speeds up to 9Mbps, which already conflicts with the company’s advertised 10Mbps Standard Service speed (soon to be 15Mbps).

Our Take: DOCSIS 1x equipment was recalled from western New York customers years ago. It was first introduced locally in 1998 and is long past its expiry date. It is a safe bet only a very tiny percentage of Time Warner customers still have first generation equipment. The overwhelming majority of current broadband customers have DOCSIS 2 modems, many installed years earlier. Those customers will keep that equipment for years to come unless they choose to upgrade to 30/5Mbps speeds or higher because a DOCSIS 3 modem is required for faster speeds. Our reader pointedly asked if the new modem fee guarantees every customer will receive the newest equipment and increased service. The answer in response was “no.”

These phony explanations and justifications tapdance around the reality this modem fee is being introduced as a revenue enhancer — nothing more, nothing less.

Customers are not buying this!

Q. Why is the list of supported DOCSIS 3.0 modems so thin and limited?

A. The representative speculated the reason Time Warner Cable so heavily favored Motorola equipment came from contractual support agreements and guarantee obligations with that company. But the representative claimed Time Warner Cable “will activate and support any modem model they currently lease to customers.”

Our Take: This claim represents a new development, but one unlikely to prove consistent across the country. Time Warner Cable’s national call centers have employees currently trained to activate and support only those modems on the approved list. However, local technical support and “Tier 3” agents inside of local offices seem to have a more flexible attitude about accepting other equipment. This is a classic case of “your results may vary.”

Q. Why are there modem fees for Internet service but no modem fee if I use the exact same equipment for my Time Warner Cable phone service.

A. The representative claimed it has to do with Federal Communications Commission rules governing phone equipment.

Our Take: We are not certain what rules would apply in this case, but it is possible the company’s lawyers found some “exposure” if Time Warner began charging the fee for phone service equipment. Again, we suspect the fee applies to broadband primarily because it is the service customers are least-likely to cancel over a price hike. Phone service is more tenuous. Increase the price and disconnect requests are likely to rise.

Q. Why are these fees being instituted to “cover costs” when records show capital expenses for Internet service (and cable modem equipment) have dropped for the past three years in a row?

A. The representative claimed that capital costs don’t cover cable modems.

Our Take: That answer is completely inaccurate. Nice try. Stop the Cap! earlier reported that capital expenditures for customer premise equipment dropped for the last three years in a row. For the benefit of readers (and Time Warner Cable), here is the company’s own definition of that equipment¹:

“Such equipment includes digital (including high-definition) set-top boxes, remote controls, high-speed data modems (including wireless), telephone modems and the costs of installing such new equipment.”

 ¹- Time Warner Cable 2011 Annual Report, “TWC’s capital expenditures,” p.60

Verizon Wireless announced Monday it will pay a dividend of $8.5 billion to owners Verizon Communications and Britain’s Vodafone Group PLC, by the end of the year.

Together with an earlier dividend paid in January, an extremely profitable Verizon Wireless will return a combined $18.5 billion to investors in 2012.

Verizon Communications, owner of Verizon landlines and fiber optic network FiOS, owns 55 percent of the wireless operation. Britain-based Vodafone Group owns a 45 percent minority interest. Verizon Wireless, like many U.S. corporations, has used excess cash to pay down or refinance debt at historically low interest rates, reacquire stock, or pay dividends to shareholders in lieu of major infrastructure and hiring expansion.

Verizon Communications needs its share of the wireless dividend to help cover dividend payouts to its own wired shareholders. Verizon Communications has been unable to command the kind of high profit margins its wireless counterpart has succeeded in delivering to investors.