The union representing at least 200 service technicians working on behalf of Rogers Communications, Inc., in Ontario are planning to strike this Friday at 8am.

The contract employees, represented by the Communications, Energy, and Paperworkers Union of Canada, are employed by Intek Communications and Dependable Home Tech — outsource firms that contract with the cable giant for technicians who handle routine service calls including installations and certain repair work.

The union claims that employees are paid on a “piece-work” system, which typically means on a “per-call” or “per-function” basis. That can create financial difficulty for contractors who cannot depend on a paycheck that remains steady from week to week.

It is not the first strike action against Rogers. Other Rogers’ contractors voted to strike the company last month, leading to tentative settlements.

Rogers employs thousands of technicians in the province, so the strike is not expected to have a major impact on the company’s ability to handle service requests.

Won first place nationally for the best 4G LTE network with the fastest overall speeds and best performance.

PC Magazine went to a lot of effort to test the data speeds of America’s wireless providers, traveling to 30 U.S. cities sampling both 3G and 4G wireless networks to see which carrier delivers the most consistent and fastest results.

After 240,000 lines of test data, the magazine declared the results a bit “muddy.”

They have a point.

Depending on which carrier’s flavor of “4G” is being utilized, where reception was strongest, how much spectrum was available in each tested city, and how many people were sharing the cell tower at the time of each test, PC Magazine was able to deliver the definitive results. And it was effectively a draw.

Verizon Wireless achieved victory in 19 cities, AT&T won in ten others, and T-Mobile came in pretty close behind, and that carrier does not even operate an LTE 4G network. But taking all factors into account, including upload and download speeds, whether or not test downloads actually completed, and whether streamed media was tolerable, Verizon Wireless won first prize nationwide.

But by how much?

Not enough to matter, if you are using Verizon, AT&T, or T-Mobile.

But the results do offer some things to think about.

1. MetroPCS is a mess. Despite the fact this smaller carrier is building its own 4G LTE network, results were simply terrible. Either its backhaul network from cell towers offers lower capacity or its backbone network is screaming for an upgrade.
2. Cricket was not willing to participate in the test. Their network, still 3G, delivers dependably “meh” results in the places where they actually provide coverage. The company has been reducing data allowances on their mobile broadband plans and raising prices on others. In one conference call with investors, company executives admitted they have been losing mobile broadband customers and expect that to continue at the prices they are charging.
3. Sprint needs their forthcoming 4G LTE network more than ever. Their 3G data service turned in mediocre results and their 4G WiMAX network was yesterday’s news a year ago. Sprint’s 3G network is also notorious for dead-end downloads, a situation I have witnessed on friends’ phones for several months.
4. Verizon Wireless remains far ahead of AT&T in covering more cities with their 4G LTE network. But more customers are also starting to use Verizon’s newer network, and the more customers piling on, the slower the speeds get for everyone. AT&T turned in some superior speed results in several cities, but those networks are often used less than the competition, for now.
5. No network is good if you cannot afford to use it. As America’s wireless carriers keep raising prices and reducing usage allowances to keep data usage under control, there will be a breaking point where customers decide the money they spend for wireless data just is not worth it, especially if they live in a place where Wi-Fi is free and easy to find.
6. What you test today will probably be different tomorrow. Wireless networks are constantly evolving and changing, with a wide range of factors contributing to their overall performance. Perhaps a more useful test would have been measuring how wireless carriers respond when their networks need upgrading and how long it takes them to respond to changing usage patterns. Verizon seems particularly aggressive, AT&T less so based on these results. The real surprise seems to be how well T-Mobile’s older technology is performing, and how quickly Sprint is now falling behind. On Cricket and MetroPCS, “you get what you pay for” seems to apply.

Consumer reporters across the country say Verizon’s boasts of savings for consumers on their new “share everything” plans are hardly universal. Many customers face significantly higher cell phone bills switching to Verizon’s new revenue-boosting plans that eliminate voice minutes and texting allowances.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WCPO Cincinnati Verizon Savings Not So Much 6-18-12.mp4[/flv]

WCPO in Cincinnati’s John Matarese reports why Verizon’s new pricing plan will cost many customers more. (2 minutes)
 [flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WPTV West Palm Beach Verizon Share Plan 6-18-12.mp4[/flv]

WPTV in West Palm Beach talks with CNET about how consumers will need to become better educated to avoid the potential bill shock that comes from expensive, usage-restricted data plans. (2 minutes)
 [flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WWLP Springfield Verizon New Plans 6-15-12.mp4[/flv]

WWLP in Springfield, Mass. informs consumers how quickly they can burn through Verizon’s new $50 1GB wireless data plan. (1 minute)

Connected Nation, a broadband advocacy group with ties to some of the nation’s largest telecommunications companies, is accused of rewriting a Florida state budget amendment to divert proceeds from a federal broadband grant to itself.

A growing scandal over broadband map funding and allegations of political maneuvering and favoritism has now extended into the offices of several state Republicans now accused of doing the group’s bidding to change funding allocations in ways that could ultimately threaten Florida’s broadband grants.

Connected Nation’s involvement in the state’s broadband expansion efforts began in earnest in 2009 when the group won a $2.5 million contract to map broadband availability in Florida. A follow-up federal grant for $6.3 million to extend broadband deployment brought the group’s lobbyists back to Tallahassee to secure a “no-bid shot” at that new money for itself, which turned out to be a big surprise to the Department of Management Services, the Florida state agency charged with overseeing the project.

The grant award mandated that money be spent on additional broadband mapping and broadband expansion specifically for libraries and schools. When DMS hired contract employees to manage the project for the next two years, Connected Nation declared war on the effort, considering it their turf.

The Miami Herald called the lobbying battle that then ensued as “an audacious display of lobbying clout [that] got the Legislature to force DMS off the contract and steer the grant to [Connected Nation] instead.”

The newspaper reports the end effect of the bitter feud is a less than useful broadband mapping operation and a threat from the federal government it will yank back what remains of the grant money if things do not improve… quickly.

Connected Nation told the newspaper it defends its position as creating value for taxpayers and citizens. But the group also openly admits its broader goal is to increase broadband usage, which directly benefits its telecommunications partners, which the newspaper says includes AT&T, Verizon, and Comcast.

DMS officials are just as willing to play hardball in the statewide dispute, accusing Connected Nation of producing erroneous broadband maps and being responsible for “repeated performance problems.” They announced last year they would not renew Connected Nation’s contract.

Political observers note DMS probably did not realize who they were dealing with, and Connected Nation’s high powered lobbyists descended on the state capital to pull the rug completely out from under DMS, yanking the entire project away from the state agency and assigning it to another.

Holder

With the help of several Florida Republican legislators and the governor, DMS found itself without a broadband project, as lawmakers transferred it to Florida’s new “Department of Economic Opportunity.” The ultimate decision approving the transfer of broadband matters to an agency that suggests an allegiance to the private sector came from Florida’s governor Rick Scott.

The governor’s office muzzled DMS protestations. Marc Slager, deputy chief of staff for Gov. Rick Scott, acknowledged to the Herald he told DMS to stand down because “we don’t need to have different people from the governor’s agencies advocating an issue.”

Revenge is a dish best served cold, and Connected Nation is not through paying back DMS for interfering in their Florida plans to capture broadband grant funds. The group is taking its time working with several Republican legislators to cut more legs out from under the government agency.

With respect to the $6.3 million broadband expansion grant, the newspaper reports Connected Nation last year simply rewrote a state budget amendment, inserting themselves as the grant winner.

“Attached is a document that reflects conversations we’ve had with Chairman Weatherford, the draft language is consistent with the bill, and it is language we believe the [Legislative Budget Commission] would approve,” wrote Alli Liby-Schoonover, from Connected Nation’s lobbying firm, Cardenas Partners, in February 2011, making the change.

What a broadband mapping group was going to do with the money intended to wire schools and libraries remains unknown.

The New York State Attorney General has argued that Sprint’s failure to pay at least $100 million in owed sales taxes to New York taxing authorities may leave its customers in the state on the hook for past taxes, interest, and fees the company never paid.

As the state continues its lawsuit against Sprint-Nextel for what it argues is deliberate underpayment of New York sales tax, Sprint’s lawyers argued Thursday that the entire case should be dismissed because the state is selectively interpreting state and federal law.

The case originally began as a whistleblower action through a private company, Empire State Ventures, which is seeking a 25% share of any lawsuit proceeds. N.Y. Attorney General Eric Schneiderman is seeking $300 million in damages from Sprint for knowingly violating tax laws.

A review of the lawsuit shows there are serious implications for Sprint’s customers in New York if the company loses the suit or fails to pay sales taxes the state claims are owed.

Over three million current and former Sprint customers could be liable for sales tax underpayments representing a portion of their monthly bills dating back to 2005, potentially including accumulating interest charged at 14.5% annually, and penalties amounting to double the amount of the unpaid taxes or up to 30 percent of the underpayment.

Sprint has also misled millions of New York customers who purchased Sprint flat-rate plans. In its customer contracts, on its website and elsewhere, Sprint represented that it would collect and pay all applicable sales taxes. Yet Sprint did not, and it concealed this fact from its New York customers. As a result, Sprint exposed these customers to the risk of having to pay the unpaid taxes, for they are also liable under the law if Sprint fails to pay.

Although Sprint misrepresented how it would handle sales taxes, it has locked its customers into contracts with early termination fees. The customers must remain in these contracts sold under false pretenses unless they pay hundreds of dollars to Sprint.

Schneiderman

Schneiderman’s office appears to have a strong case, with evidence showing Sprint allegedly conspiring to undertax customers using an arbitrary formula to gain a competitive advantage over other wireless carriers with the promise of a lower monthly bill, in part because the company was not collecting the proper amount of state sales tax.

The lawsuit claims Sprint repeatedly ignored warnings from state taxing authorities, including senior tax officials, that declared Sprint’s creative way of determining applicable taxes was putting the company at serious risk of adverse tax department action.

That adverse action came in April when the state filed the lawsuit against Sprint seeking back taxes and triple damages.

A careful reading of the lawsuit reveals just how much bureaucracy America’s wireless industry maintains to seek out any edge it can find against regulators, tax authorities, and local, state, and federal elected officials.

Sprint, the third largest wireless company in the country, can afford to maintain that bureaucracy with $33 billion in annual revenues partly at stake.

Wireless Industry’s Tax Employees Go to Vail to Ski Discuss Tax-Avoidance Strategies

The wireless industry employs hundreds of workers who spend their days pouring over tax laws in all 50 states looking for loopholes, strategies, and creative solutions to the ongoing problem of paying local, state, and federal taxes. Sprint, a considerably smaller wireless carrier than either Verizon or AT&T, still has the resources to maintain more than 100 workers in their State and Local Tax Group. It includes a well-defined management chain, with an assistant vice-president that runs the unit reporting to Sprint’s vice president of Tax, who, in turn, reports to Sprint’s chief financial officer.

These employees, and similar ones working at every other wireless phone company, try to figure out how to pay the least amount of owed tax possible, and kick tax strategies around in regular sessions and conferences at posh resorts in places like Vail (come for the corporate meeting, stay for the skiing), Colorado.

At the 2002 Communications Tax Executive Conference in Vail, Sprint executives told other wireless carriers that tax avoidance strategies like “unbundling” posed risks of audits by taxing authorities and litigation.

The wireless industry sends their tax experts to posh resorts in Vail, Colorado to discuss tax-avoidance strategies.

The following year, a Sprint executive turned up at another industry-backed conference run by “the Wireless Tax Group,”  alerting other wireless companies that “unbundling for taxes causes significant assessment risk.” He told the group that his “marching orders” at Sprint were to “mitigate tax issues by pursuing legislation or pre-audit agreements that allow for component taxing.”

In Schneiderman’s view, Sprint never followed those marching orders in New York.

In fact, the lawsuit argues even as Sprint was lecturing other phone companies about the importance of being conservative when dealing with tax authorities, the company was conspiring to use its own creative tax interpretations to undercut their competitors with a lower monthly cell phone bill.

How to Lower Your Prices Without Risking Profits

The technique Sprint uses to this day to hand customers that lower bill is based on selectively applying sales taxes only to certain portions of a customer’s voice plan. Sprint is the only company engaged in this practice in New York. Verizon, T-Mobile, Cricket, AT&T, and MetroPCS won’t go near the concept.

New York tax law says that phone companies must collect taxes on the monthly voice plans wireless companies sell customers. If Sprint sells you 450 minutes a month for $39.99 a month, New York taxing authorities expect customers will be charged the prevailing state and local tax rate on the fixed amount of $39.99 each month. Only Sprint does not do this. Sprint leverages federal rules which state that telephone calls placed to numbers outside of the state (also known as an “interstate call”) cannot be taxed. Therefore, in Sprint’s view, customers deserve a tax break for those interstate, non-taxable calls.

But Sprint does not actually review individual calling records to figure out what specific out-of-state numbers were called. Instead it created what New York officials argue is “an arbitrary formula” to guesstimate how much the average customer spends talking to in-state vs. out-of-state numbers. But those percentages varied wildly from 2005 to the present day, with different amounts for Sprint-Nextel customers living in upstate and downstate New York:

• July 2005-October 2008: Sprint did not pay state or local sales taxes on 28.5% of its fixed monthly voice service charge;
• April 2006-October 2008: Nextel of New York did not pay state or local taxes on 13.7% of its fixed monthly voice service charge;
• May 2006-October 2008: Nextel Partners of Upstate New York did not pay state or local taxes on 15% of its fixed monthly voice service charge;
• October 2009-Present Day: Sprint does not pay state or local taxes on 22.5% of its fixed monthly voice service charge.

Here comes the taxman.

In January 2005, an internal Sprint memo obtained by New York State found the company could save $4.6 million per month using this tax avoidance strategy, without costing the company a cent in profits.

It implemented the strategy later that summer.

New York’s lawsuit makes it clear the company was warned about the practice before the suit was filed:

Sprint continues to not collect and pay New York state and local sales taxes on the full amount of its receipts from its fixed monthly charges for wireless voice services, despite being specifically informed of the illegality of this practice by a field-auditor of the New York Tax Department in 2009, and then, in 2011, by a senior enforcement official of the New York Tax Department.

Customers Caught in the Middle?

As the case winds its way through court, New York has informally put Sprint customers on notice they could be held responsible for the unpaid taxes and penalties if Sprint reneges on the owed amounts. Schneiderman’s office recognizes customers are caught in the middle, partly because Sprint decided to keep the tax changes “secret” to keep customers off the phone to Sprint customer service:

[…] In its contracts with these customers, on its website and elsewhere, Sprint represented that it would collect and pay all applicable sales taxes on its calling plans. […] Sprint’s representations in the contracts, on its website and elsewhere were false because Sprint knew it would not collect and pay the applicable sales taxes in New York.

Contrary to its promises, Sprint failed to collect and pay sales taxes on substantial portions of the fixed monthly charges for voice services under its flat-rate calling plans. As a result of this non-payment, Sprint left its New York customers liable for those unpaid amounts of sales taxes under New York law.

At no point did Sprint disclose to its New York customers that it was leaving them liable for the sales taxes that Sprint failed to collect from the customers and pay to the government, as promised.

Before Sprint began unbundling, members of its State and Local Tax Group and its marketing group considered in the early part of July 2005 whether to communicate with customers about the fact that Sprint was unbundling and that the unbundling would affect taxes for some customers. They jointly opted not to communicate the change. Sprint’s Director of External Tax was concerned that disclosing the information would “drive too many calls” to Sprint’s customer care division.

In November 2005, just months after Sprint began unbundling, a Sprint employee in the Customer Billing Services department questioned a member of Sprint’s State and Local Tax Group about whether unbundling was “presented to the customer as part of the Subscriber agreement, shown in the invoice and/or available to Customer Care Rep.” The response was simply that “we have not educated our customers on how we are de-bundling transactions for their tax relief.”

Sprint continues to misinform its current and prospective customers about sales taxes, and to subject them to undisclosed sales tax liability even today.

Sprint’s position in court is that New York’s tax laws give the company the option of unbundling its tax obligations and that the state was trying to collect money it was not owed.

“The New York Attorney General’s complaint seeks to impose liability for practices that do not violate New York law,” said Sprint’s response to the lawsuit.

Luckily for Sprint’s tax experts, many states foreclose the possibility of creatively escaping taxes by imposing a “gross receipts tax” on the total gross revenues of a company, regardless of their source. That makes it difficult, if not impossible to escape the kind of sales taxes Sprint has been maneuvering around for nearly a dozen years in New York. With fewer loopholes to find, that leaves the wireless industry’s tax experts more time on the ski slopes.

It is safe to assume Sprint hopes for a positive outcome of the case, if only to avoid the inevitable avalanche of customer complaints from New York customers who might find a notice of apparent tax liability in their mailbox one day in the future.