KJCT-TV caught customers lined up literally out the door of this AT&T store in Grand Junction, Colorado.

AT&T store employees in the Grand Valley of Colorado are using the company’s upgrade of former Alltel service areas to 3G service as an excuse to tell customers they need to buy new cell phones if they continue to want to use their wireless service.

Customers lined up outside AT&T stores in communities like Grand Valley, Colorado on Monday fuming over service problems than began last weekend.

“I had about an half hour wait just to find out I had to buy a new phone and they wouldn’t credit me for it or anything,” customer Josh Simpson told KJCT-TV.

AT&T employees told the television newscast the company is “getting rid of the 2G service in Grand Junction to make room for larger networks.” Employees also said customers were sent a letter informing them about the service change, but customers might have overlooked the e-mail because it looked like spam.

Local employees shrugged their shoulders as customers repeatedly complained about having to foot the bill for brand new phones, often at full price, in order to continue using their service.

“It’s a corporate decision,” one replied.

At issue is AT&T’s adopted network, acquired originally by Verizon Wireless from Alltel but spun away to AT&T as part of an agreement with federal anti-trust officials.  Alltel’s network in the Grand Valley placed more prominence on its legacy 2G EDGE network than AT&T is willing to continue.  AT&T isn’t actually discontinuing the 2G network — it is moving 2G service to less-favorable spectrum it owns in order to make room for improved 3G coverage.  That might work fine in areas less expansive and rugged than western Colorado, but in the Grand Valley, it means many customers will find they no longer have data service at all.

The ongoing tower upgrades have also disrupted cell service generally, and when customers arrive at AT&T’s stores to complain, the employees on hand attempt to upsell them more expensive phones to “fix” the problem.

Customers calling to complain are met with busy signals or general statements from AT&T telling them the changes are for their own good.  But because so many basic cell phones don’t support 3G service, upgrades to phones that do often represent a major unexpected financial hit (and another two year contract and data plan if the phone happens to be a smartphone).

“Alltel served us just fine for many years,” writes our Glade Park reader Tim. “When AT&T eventually showed up, we got everything we never wanted, and this should be a lesson for those who think AT&T will somehow ‘improve’ service at T-Mobile if they acquire them.”

AT&T customer Joan Burns told KJCT AT&T just made up her mind for her.

“I will never again sign a contract with them,” she said. “That’s bull.”

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KJCT in Grand Junction reports AT&T customers may be noticing a disturbance in their cell phone service, as AT&T employees use it as an opportunity to get customers to upgrade to more expensive phones.  (3 minutes)

Big cable companies are targeting their non-customers, and those current customers who refuse to sign up for triple-play bundles, with some of the most aggressively-priced promotions in years.  The two largest, Comcast/Xfinity and Time Warner Cable, have been sending out letters offering dirt cheap $20 Internet service or cable television packages that include DVR service, a second set top box, and hundreds of digital cable channels for $49.99 a month for two years.

Comcast

Comcast promotions vary in different markets, depending on who their competitors are.  The best pricing goes to new customers, as a recent promotion sent to suspected DSL customers in their service areas illustrates.

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The cable company is pitching 12 months of Xfinity Performance (typically around 12Mbps) for $19.99 a month for the first year for new customers only.  Some customers report they can cancel penalty-free at the end of the first year, while others are told Comcast is actually pitching a two-year contract where the price of the service increases to $34.99 a month during the second year (a early cancellation fee pro-rated to less than $50 applies in some areas if you cancel early).  This pricing applies to standalone service, which makes it aggressively priced.  Most cable providers charge a higher price for Internet-only service.  Some customers also report a $25 or more installation fee applies (and in some areas an in-person install is required for new customers).  We’ve heard from some readers that successfully qualified for the promotion under the name of a spouse if they have had Comcast service previously.  Otherwise, Comcast usually requires customers to be without service for 90 days before they are considered “new customers.”

Customers can try calling 1-877-508-5492 to request this offer: $19.99/Month for 1 year with no additional service required (Code at bottom of letter: LTP79376-0014).

If that number does not work from your calling area, other numbers to try include: 1-877-298-0903 (CA, TX), 1-877-508-5492 (CA, WV), 1-877-494-9166 in NJ (currently pitching 6-month version of this promotion without contract.)

If 12Mbps is not fast enough, ask the representative what promotional pricing exists for faster speeds.  Some customers scored 35Mbps service for $10 more per month.

A separate ongoing promotion from Comcast offers Blast Internet service at 25Mbps+ on similar terms.  But pricing varies wildly in different markets.  Customers in California were able to purchase this promotion for as little as $19.99 a month with a year-long contract, while customers in Chicago were asked to pay $39 for essentially the same service.

Comcast’s promotions list runs several pages, so if you are shot down asking for these promotions, ask about other current offers or hang up and try calling again and asking to speak with someone else.  Your results may vary depending on the representative you speak with.  Remember Comcast’s 250GB usage cap applies to all residential service plans.

Time Warner Cable

In addition to regular Road Runner standalone Internet service promotions that deliver Standard Service speeds for $29-35 a month for a year, Time Warner has been getting very aggressive trying to win back cord-cutters and those who have left for a competing pay television provider.  The cable company has mailed letters to non-cable TV customers in the northeast pitching substantial discounts on cable TV service price-locked (but no commitment term for you) for two years and includes free DVR equipment, DVR service, and a second set top box with digital cable TV for $49.99 a month.  They’ll even credit back the cost of any early termination fees charged by another provider over the course of the first year of service.

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The promotion is intended primarily for customers who already receive service from another provider, but new customers can call 1-855-364-7797 and ask for the offer without the competing provider early termination fee rebate.  If you do receive service from another provider, there are various requirements and steps to follow to qualify for up to $200 in termination fee credits.  Visit SwitchtoTWC or call them to learn the details.

Neither of these promotions work for existing Time Warner Cable customers.  If you already subscribe, discounts will be offered when you threaten to cancel service.  Retention deals from Time Warner Cable can be as aggressively priced as new customer promotions.  We have found retention offers made during the initial call to request a service disconnection are often not very aggressive.  Most representatives try and pare back your package before starting to offer retention pricing (which gradually gets better the more times you reply, “is that the best you can offer?”)

Our best recommendation is to call and request to cancel service 2-3 weeks from today and wait for a Time Warner Cable retention specialist to call you (answer those mystery caller ID calls — it could be Time Warner).  The reps that call you directly often deliver the most aggressive retention deals.  If nobody does reach out to you, call Time Warner yourself a few days before the disconnect is scheduled and ask them to make you an offer to rescind your disconnect request.  You may find some serious savings taking this approach.  If not, you still have time to rescind your disconnect request on your own before the plug gets pulled.

LG Optimus T

Some analysts would have you believe nobody wants to keep doing business with T-Mobile, but when the price is right, it can bring the company’s online ordering system to its knees.

T-Mobile’s prepaid division ran a sale this morning on a refurbished LG Optimus T, an entry-level Android v2.2 smartphone, for just $82.49.  In addition to free ground shipping, the phone also included $30 in airtime credit (as all of their $50+ prepaid phones currently include).

T-Mobile exhausted its supply within hours, but not without some frustration from customers who found completing the order difficult when the website began to fail from all of the traffic.

“This is an amazing deal, especially when combined with some “cashback” programs run by websites like Fatwallet, which knocked another $7.50 off the price,” writes Stop the Cap! reader Jenny Truro.  “T-Mobile’s prepaid service is actually a good deal when you top up once for $100, because all subsequent refills in any amount won’t expire for an entire year.”

Truro doesn’t use a cell phone enough to justify a standard two-year contract plan, and hated dealing with AT&T’s GoPhone prepaid plan because minutes were costly and expired quickly.

“AT&T lets you keep minutes up to a year when you spend $100, but you have to keep renewing at $100 every year if you want to hang on to last year’s minutes,” Truro says. “T-Mobile doesn’t stick you with that, and some of the other providers charge way too much per minute.”

Truro says the LG Optimus T she purchased this morning will be her introduction to smartphones.

“If I find I don’t use it enough to justify paying for prepaid data plans and other features, it was not an expensive experiment.”

The LG Optimus T can also be unlocked by T-Mobile by calling customer service 60 days after activating the phone on their network.  That allows the phone to be used on other providers’ networks with an appropriate SIM card.

Since AT&T announced its intention to merge with T-Mobile, analysts have declared T-Mobile a white elephant — one that postpaid customers are increasingly leaving.  But T-Mobile’s innovative, often-aggressive pricing proves that for the right price, customers will not only stick with the carrier, they’ll be joined by thousands of others willing to sign up.

Julia Chastin is old enough to know that life sometimes makes you wait, but three hours is ridiculous.

Chastin (her maiden name, to protect her privacy), is a customer of Shaw Cable in Fort Macleod, Alb.  Her Internet service went down last weekend when the neighbor’s overzealous application of a “weed whacker” went awry and damaged her cable connection.  Chastin called Shaw Cable to report the problem, and there began her life in call queue hell.

“Usually companies who make you wait will tell you if their lines are especially busy, which is fine because I can just set the telephone on the speakerphone and go about my business until someone answers, but this turned a phone call into an afternoon adventure,” Chastin says.

In total, it was two hours, fifty-three minutes before a human being finally came on the phone, but only briefly.

“I heard this fumbling sound like someone’s headset was coming off, some mumbling and laughter, and then the line disconnected,” Chastin reports.  “I was furious.”

Chastin is not alone.

“Shaw’s hold times are legendary here in the west,” says Rob Kelvey, a Shaw customer near Vancouver.  “You can easily wait on hold an hour or two before someone answers, and that is day or night.”

Kelvey reports Shaw teases customers with an option inviting customers to accept a call back from a Shaw representative instead of waiting on hold, but it doesn’t work.

“I have used this option at least three times in the past year or so and it has never worked once.”

The problem isn’t just noticed by customers.  A recent polite editorial in the Grand Forks (B.C.) Gazette called out Shaw’s ridiculous hold times and poor customer service:

There are probably many people out there who have had to call the cable company when a TV or Internet-related problem arises only to be put on hold and not just recently.

It is not unusual to be put in a phone queue, especially when it comes to customer service, but the sometimes extraordinarily long wait times can even test those with the greatest of patience.

“Three hours isn’t patience, it’s perseverance,” retorts Chastin.

Customer Service Scoreboard bottom-rated Shaw, based on several hundred responses from customers.  More than 300 were critical of Shaw; only 17 people shared positive experiences with the company’s representatives.   The website rated Shaw Cable a dismal 29 out of 200, putting them firmly in the “terrible” category.

“Sometimes it really is faster to walk to a local Shaw Cable office to report problems instead of calling them on the phone, an ironic fact for a telecommunications company,” says Kelvey.

Shaw officials will occasionally tweet apologies for extended hold times and suggest customers use their online chat customer support feature or their Facebook page for assistance.  But some customers found Shaw’s online chat had “hold times” as well, sometimes as long as 40 minutes.

“Fort Macleod doesn’t offer a lot of options for Internet access, so waiting for Shaw is unfortunately the best option, but when I finally did manage to get someone on the phone, they heard from me good and I received a $20 service credit as an olive branch, which I appreciated,” Chastin says.

“I’d appreciate more not having to wait my life away on hold for hours even more.”

Get ready for Qwikster

Netflix CEO Reed Hastings apologized this morning on the company’s blog for the perceived lack of “respect and humility in the way we announced the separation of DVD and streaming, and the price changes,” imposed on customers this month.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD, plus lots of TV series. We want to advertise the breadth of our incredible DVD offering so that as many people as possible know it still exists, and it is a great option for those who want the huge and comprehensive selection on DVD. DVD by mail may not last forever, but we want it to last as long as possible.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We feel we need to focus on rapid improvement as streaming technology and the market evolve, without having to maintain compatibility with our DVD by mail service.

So we realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently. It’s hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best: In a few weeks, we will rename our DVD by mail service to “Qwikster”.

We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

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Netflix CEO Reed Hastings apologizes and explains the company’s new mailed DVD service Qwikster.  (3 minutes)

Hastings promises little will change with Netflix’s DVD-rental business except the name.  But is that enough to erase the perceived price and policy changes customers are complaining about?  Some of our readers say no, and most of the 10,000+ comments on Netflix’s blog as of this afternoon were also very hostile.

“He’s re-arranging the deck chairs and calling them lounge seats, but they are really the same deck chairs,” shares reader Tom Defrancisco in Austin, who shared the story with us.  “The ship is still taking on water, and that will only get worse when the rest of Hollywood gets their piece.”

Defrancisco is referring to ongoing content contract renewals Netflix is pursuing to keep, and expand, its online video streaming.  With the potential forthcoming loss of content from Starz, which could take a significant amount of current movie titles offline, subscribers may not be willing to pay more for less content to stream.

“It’s inevitable Netflix will have to raise streaming prices in the next six months when some of their content deals are renewed, and I am asking myself if it is worth $10-12 a month to stream old documentaries, TV shows, and movies I barely care about when current movies are simply not available online,” Defrancisco adds.

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CNBC investors and analysts are calling Netflix’s announcement they are splitting up their streaming and DVD rental business a “the third strike” for the company and are telling investors to get out before it’s too late.  “Qwikster=QUITster,” says Michael Pachter, Wedbush Securities, who thinks customers are once again the big losers.  “In the last three months, customers have seen prices rise, the quality of streaming content decline, and they just made the service a lot more complicated.”  (4 minutes)

Several of our readers miss Netflix’s 1-out-DVD/streaming companion plan, which used to offer unlimited streaming and one DVD rental at a time for $9.99 a month.

“I don’t care if they call it Netflix or Qwikster or MasterWatch,” says our reader Kyle. “It’s the same thing at the same high price called something else.  Who are they trying to fool?  I think it’s very telling Mr. Hastings doesn’t even directly own shares in his own company, and has sold off tens of millions in indirect shares he controls.”

The company’s new YouTube channel is also being pelted with negative views of Netflix’s latest business moves.

VoiceOreezn:

You guys just don’t get it. You don’t care what your subscribers want, and now are trying to justify your actions. Your streaming service sucks, and the pickings are very slim. I cancelled my account. It’s not about price, it’s about greed. You started off with a good concept, (but not enough streaming movies). Now, you’re just another greedy corporation. Want people back? Give them MORE, not less. I’d be very afraid of Amazon if I were you.

Netflix stock has lost nearly 50 percent of its value since the company first announced its price increase and plan changes on July 12.  Last week, Netflix admitted it was adding fewer new subscribers than forecast since raising prices nearly 60 percent on combination streaming-DVD plans.

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Bloomberg talks with Cory Johnson about the outlook for Netflix Inc., after the company cut its U.S. subscribers forecast following a price increase.  Netflix has some surprise expenses coming up.   (2 minutes)

Some analysts, including Gabelli & Co analyst Brett Harriss don’t think today’s developments will make much of a difference, telling Reuters Hastings has talked repeatedly about separating the businesses in the past.

But one thing Qwikster will bring that Netflix never had: video game rentals for Wii, Playstation 3 and XBox 360 owners.