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Frontier Wrestles Worst ISP in America Award Away from Mediacom

“Frontier offers a level of suckage that cannot be proportionally compared with any other company in America. Stabbing yourself with knitting needles is less painful than their snail slow internet service and dealing with customer service agents that formerly served as prison guards at a Syrian detention camp.” — A deeply dissatisfied Frontier DSL customer in Ohio

Frontier Communications has achieved a new low in customer satisfaction, wrestling away the award for America’s worst ISP from perennial favorite Mediacom, in a newly released American Customer Satisfaction Index.

No internet service provider did particularly well in customer satisfaction, but Frontier managed to alienate more of their customers than any other this year, ranking poorly in speed, reliability, and customer service. Customers also complained about being given inaccurate information, inaccurate billing, and surprise charges on their bill.

Frontier’s worst performance is delivered in legacy DSL service areas, where its aging copper wire network is often incapable of delivering 21st century broadband speeds. In many areas, speeds drop well below 10 Mbps during peak usage. Even worse, company officials signaled that the company had few plans to improve its wireline network or service experience in 2019. As a result, many customers switched providers, if one was available. If Frontier is the only option, customers often have no options.

“For several years we have had no internet options except for Frontier. We receive 10 to 20% of the service we pay for time and time again,” wrote one customer in a complaint with the Better Business Bureau. “The service has even diminished over time, [and] whenever my work demands me to log online, I often have to leave my home at different times of the day or night to a location where I can get free Wi-Fi or drive 24 miles to my job. This is totally unacceptable. Every single weekend and every night my internet shuts off. I mean every night. Nothing has been done from a customer’s view to improve service.”

What seems to have driven Mediacom out of last place was not so much an improvement in their network or service.

“Mediacom has the second-lowest score among subscription TV services at 56, but has one of the highest-rated mobile apps, both in terms of quality and reliability,” the ACSI found.

Frontier has an improved website, but still offers many potential subscribers a severe disappointment when shopping for internet plans, and finding only one:

N.Y. and California Head 10-State Lawsuit to Block T-Mobile/Sprint Merger

 James

New York Attorney General Letitia James and California Attorney General Xavier Becerra today filed an unusual multi-state lawsuit, along with eight other State Attorneys General to halt the proposed merger of telecom giants T-Mobile and Sprint, deciding not to wait for a decision from the Department of Justice, which is also reviewing the merger. The complaint, filed in the federal Southern District of New York court in coordination with Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia, and Wisconsin alleges that the merger of two of the four largest national mobile network operators would deprive consumers of the benefits of competition and drive up prices for cellphone services.

“When it comes to corporate power, bigger isn’t always better,” said Attorney General Letitia James. “The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country. That’s why we are going to court to stop this merger and protect our consumers, because this is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”

“Although T-Mobile and Sprint may be promising faster, better, and cheaper service with this merger, the evidence weighs against it,” said Attorney General Xavier Becerra. “This merger would hurt the most vulnerable Californians and result in a compressed market with fewer choices and higher prices. Today, along with New York and eight other partner states, we’ve filed a lawsuit to block this merger and protect the residents of our state.”

The states departed from traditional courtesies in the case, deciding to launch a pre-emptive legal challenge to the transaction without providing Justice Department officials advance notice of their decision to sue. That decision may have come after FCC Chairman Ajit Pai gave his full support for the merger, with indications the Republican majority on the FCC would also vote in favor of approving the deal. Staffers in the Antitrust Division of the Justice Department object to the merger, and are recommending it be rejected. But the Justice Department’s unpredictability, and its poor track record trying to block the AT&T-Time Warner (Entertainment) merger in court may have pushed the state attorneys general to also act on their own.

T-Mobile USA and Sprint are the third and fourth largest mobile wireless networks in the U.S., and are the lower-cost carriers among the “Big Four” — with market leaders Verizon Wireless and AT&T controlling the larest share of the wireless market. Intense competition, spurred in particular by T-Mobile and Sprint, has delivered declining prices, increased coverage, and better quality for all mobile phone subscribers. According to the Labor Department, the average cost of mobile service has fallen by roughly 28 percent over the last decade, while mobile data consumption has grown rapidly. The merger, however, would put an end to that fierce competition, argue the attorneys general, which has delivered a great number of benefits to consumers.

States with large urban poor communities are particularly sensitive to the merger, because both T-Mobile and Sprint focus their coverage on urban areas. With the average U.S. household spending $1,100 annually on wireless phone service, even small rate increases can dramatically increase service suspensions or disconnections due to late or non-payment.

“Low-and moderate-income (LMI) New Yorkers put a greater share of their household income toward their phone bill, and when you are looking at a budget that is already stretched thin, every dollar counts,” said Mae Grote, CEO of the Financial Clinic. “Cellphones now not only give us the ability to communicate with friends and family, here and abroad, but are increasingly the way we engage with many critical services. Our customers use cellphone apps to access public information, send and receive money, manage their SNAP benefits, look for a job, and even communicate with their doctors, and maintaining competition in the market for this critical service ensures LMI consumers have the same access to quality, affordable service as the more financially secure. The Clinic is proud to advocate on behalf of the communities we serve to protect their inclusion in the modern economy.”

The attorneys general investigation laid bare many of the alleged merger benefits offered by T-Mobile and Sprint to win approval of the merger. The group found many of the claimed benefits were completely unverifiable and were likely to be delivered years into the future, if ever. But within weeks of approving such a merger, the companies would have an immediate incentive to raise prices and reduce service quality. Sprint’s network, in particular, was scheduled to be largely mothballed as a result of the merger, even though Sprint provides coverage in some areas that T-Mobile does not. Although the two companies could identify several self-serving deal efficiencies that would reduce their costs and staffing needs, there is no evidence the merger would deliver consumers lower prices and were outweighed by the merger’s immediate harm to competition and consumers.

Additionally, the merger would harm thousands of hard-working mobile wireless independent dealers in New York and across the nation. The ten states are concerned that further consolidation at the carrier level would lead to a substantial loss of retail jobs, as well as lower pay for these workers in the near future.

Becerra

“CWA applauds the Attorneys General and especially General Letitia James’ leadership in taking decisive action today to prevent T-Mobile and Sprint from gaining anti-competitive power at the expense of workers, customers, and communities,” added Chris Shelton, president of the Communications Workers of America (CWA). “Reducing the number of national wireless carriers from four to three would mean higher prices for consumers, job loss for retail wireless workers, and downward pressure on all wireless workers’ wages. The states’ action today is a welcome development for American workers and consumers, and a reminder that regulators must take labor market concerns seriously when evaluating mergers.”

Before filing suit, the states gave significant consideration to T-Mobile and Sprint’s claims of increased coverage in rural areas. However, T-Mobile has yet to provide plans to build any new cell sites in areas that would not otherwise be served by either T-Mobile or Sprint. As stated in the complaint, the U.S. previously won the “race to LTE” as a direct result of vigorous competition among wireless carriers. Finally, continued competition, not concentration, is most likely to spur rapid development of a nationwide 5G network and other innovations.

“This merger is bad for competition, and it is bad for consumers, especially those living in or traveling through rural areas, who will experience fewer choices, price increases, and substandard service,” stated Carri Bennet, general counsel for the Rural Wireless Association. “We are pleased that the New York Attorney General, along with nine states have filed their lawsuit to block the merger. The process at the FCC has not been transparent and the FCC appears to be blindly accepting New T-Mobile’s words as truth.”

The complaint was filed under seal, because it contains unredacted confidential information, in United States District Court for the Southern District of New York.  A redacted copy of the lawsuit is likely to be made available later.

T-Mobile currently has more than 79 million subscribers, and is a majority-owned subsidiary of Germany’s Deutsche Telekom AG. Sprint Corp. currently has more than 54 million subscribers, and is a majority-owned subsidiary of Japan’s SoftBank Group Corp.

AT&T Warning Tower Owners to Cut Prices or They Will Relocate

AT&T claims it is willing to play hardball to force cell tower owners to reduce the cost of leasing space for AT&T’s wireless services. If tower owners won’t lower their prices, AT&T is threatening to find someone else willing to build a new, cheaper tower nearby.

AT&T is closely coordinating its tower strategy with its biggest competitor, Verizon Wireless. Together, the two companies are looking to force costs down by seeking opportunities with newer tower companies Tillman, CitySwitch, and Uniti Towers that are willing to build new towers next to old ones, while offering “much cheaper” pricing than industry leaders American Tower, Crown Castle, and SBA Communications.

Light Reading notes AT&T would like to pay roughly half the current rent for its wireless infrastructure. But it is running into a roadblock because 65% of American cell towers have no competition within a half-mile radius. Getting zoning approval to construct new towers, especially in suburban and residential areas, can be difficult and costly. But the three upstart tower companies AT&T and Verizon are working with claim they will commit to tower construction when there are signed contracts in hand. AT&T is using this fact to leverage existing companies to lower prices or lose AT&T’s business.

But Wall Street analysts suggest AT&T is bluffing. Research of FCC public records between January 2017 and April 2019 found 1,000 new tower applications, but only 500 had been built. Only 40% of those applications were to build new towers near existing ones. When one considers there are about 110,000 cell towers in the U.S., fewer than 0.5% of cell sites are likely to face competition based on the applications already filed.

The wireless industry prefers to co-locate infrastructure on existing towers, which means Verizon Wireless, AT&T, T-Mobile and Sprint could all theoretically be leasing space on the same tower. This was originally both a cost-saving measure and a bow to reality because new tower applications often take years to approve and often face local opposition. Most wireless companies sign 10-year contracts with tower companies, so any organized effort to force competition will probably take years.

AT&T complains it is the victim of a lack of competition and is fed up with the “vicious model” of monopoly tower companies charging excessively high prices and raising fees anytime AT&T changes their contract. Many of their customers can relate.

WarnerMedia’s Streaming Service Will Cost $16-17 and Bundle HBO/Cinemax

WarnerMedia’s forthcoming streaming service will showcase HBO and Cinemax at the heart of a one-size-fits-all streaming package priced at $16-17 a month, featuring premium movies and Warner Bros. vast movie and TV show collection.

AT&T plans to begin beta testing of the service later this year, with plans to sell the service to consumers as early as March 2020, according to the Wall Street Journal.

John Donovan, CEO of AT&T Communications, signaled AT&T’s “radical reshape” of television on a Credit Suisse Communications conference call event on Wednesday.

“The streaming strategy, whether you call it an OTT or IPTV or thin client, we’re going to transform our product,” Donovan said. “It is the consumer product I am most excited about since the iPhone. It radically reshapes what your concept of television is.”

The “new concept” is a radical departure from AT&T’s earlier plan to offer “good,” “better,” and “best” price points, varying the amount of content depending on how much subscribers were willing to pay. Instead, Donovan proposes one price point for every subscriber, with access to an unprecedented amount of content produced by one of the country’s largest Hollywood studios. Warner Bros. has produced thousands of movies and series since the early days of television in the 1950s and the advent of commercial filmmaking in the early 20th century.

Donovan

“The idea of three tiers never made much sense and is too complicated to fly in the marketplace,” analyst Craig Moffett of MoffettNathanson told the newspaper.

Despite the potential of an enormous library of streamed content, consumers may balk at WarnerMedia’s asking price, especially if they have no interest in HBO or Cinemax. Netflix’s most popular two-stream plan costs $12.99 a month and second place Hulu is available for $5.99 a month with ads or $11.99 a month without. Most niche streaming services like MHz Choice, CBS All Access, Acorn Media, BritBox, and other similar services are all under $10 a month. AT&T proposes to set its price higher than traditional premium movie network services like HBO, which usually costs $14.99, to protect the relationships and revenue it earns from cable, satellite, and telco TV providers. But AT&T’s new service may be a tough sell, especially considering forthcoming streaming services like Disney+ plans to launch Nov. 12 at $6.99 a month, and Viacom’s Pluto TV and Sinclair’s STIRR are ad-supported and free. In fact, most of the newly announced streaming services yet to launch are targeting much lower price points, fearing consumers may be nearing their budget limits for more content.

AT&T warns it may adjust pricing before the service launches next year, and there may eventually be a cheaper, ad-supported version, making the service comparable to Hulu. AT&T has also not disclosed how much original made-for-streaming programming it plans to include in the venture, which may be an important consideration to attract price-sensitive customers not interested in watching repeats and movies they can watch elsewhere. Consumers may also be overwhelmed and fatigued by the amount of content already available to watch through established players like Netflix and Hulu, so WarnerMedia may find their streaming service a difficult sell, especially as cord-cutters find prices for streaming live TV services already rising as fast as their old cable TV subscriptions.

Bronx, Monroe Counties Among the Worst in New York for Urban Broadband Users

Broadband service is available to 99.1% of the Bronx and 99.8% of the Rochester and its suburbs, but just 38.5% of Bronx residents are using the internet at broadband speeds (at least 25/3 Mbps) and only 54% of Monroe County residents are receiving a true broadband experience.

These two New York communities, one in the dense New York City area, the other straddling the Finger Lakes region and Western New York, are examples of the FCC’s vast over-count of consumers getting suitable broadband service and speed, according to Microsoft. The problem is much worse in rural areas where DSL speeds predominate and providers like Verizon and Frontier are in no hurry to upgrade their rural networks.

“These significant discrepancies across nearly all counties in all 50 states indicates there is a problem with the accuracy of the access data reported by the FCC,” Microsoft said about its findings. “Additional data sources like ours, as well as work by others to examine data in a few states or regions, are important to understanding the problem.”

Microsoft’s performance data is not alone representative of a local cable company not delivering advertised speeds. For example, in the Bronx, affordability issues mean that more residents rely on their cell phones and mobile connectivity for internet access. In Rochester, where true broadband speeds usually cost $50-65 a month depending on the provider, affordability is also a factor. But there is also the presence of local telephone company Frontier Communications, which has saddled Rochester with inferior DSL service it has no concrete plans to upgrade. Frontier DSL usually offers substandard speed of 12 Mbps or much less, making its customers part of Microsoft’s estimation of those underserved.

Schumer

Sen. Charles Schumer (D-N.Y.) complained about the state of broadband in New York, claiming internet speeds are “horrible” in much of the state and broadband providers are not being honest about advertised speed.

“When there’s slow internet, it drives you crazy​.​ ​You just sit and wait and wait and wait. It’s horrible,” Schumer said at a news conference held Sunday in Manhattan. “There’s a new report out that says our internet here in New York may​ ​be moving more like molasses than like lightning.”

Schumer is taking direct aim at the recent positive report from the FCC that broadband has dramatically improved in the United States, a conclusion the Republicans serving at the FCC took credit for, explaining policies of deregulation and elimination of net neutrality spurred private investment and better internet service for all.

“But Microsoft did its own report, and it shows that over four and a half million New Yorkers and Long Islanders are not getting the speed on the internet that the carriers say they’re getting​, [and] that’s a real problem,” Schumer argued, adding that most consumers are not getting consistent access to at least 25/3 Mbps service. “It’s like paying for the speed of a car but getting the speed of a bicycle.”

Schumer wants the FCC to hold providers to account for their broadband speed and performance. But last week, the FCC had other ideas, delaying broadband performance testing requirements until 2020 for internet service providers receiving taxpayer or ratepayer funds to build out their networks.

“T​he FCC is falling down on the job,” Schumer said. “I don’t think it’s nefarious but the providers, to upgrade to the required speed​,​ would have to pay for more equipment. They should. We’re all paying big bills for that.”

 

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