Verizon Voice Link: The company’s landline replacement, works over Verizon Wireless.

The New York Public Service Commission has granted limited approval for a Verizon Communications plan to replace traditional landline service on the western half of Fire Island with a wireless voice service some users complain is unstable and unreliable.

Verizon claims its landline network on Fire Island has been damaged irreparably in places, and argued it needed to immediately deploy a wireless alternative before the arrival of thousands of tourists on the island, a popular summer destination.

On May 3, Verizon asked the commission to approve the use of Voice Link, which provides fixed wireless phone service, anywhere in the state if the company can prove there is an equal competitor or if existing copper-based facilities are damaged or too costly to upgrade.

Stop the Cap! reminded local politicians, union representatives, and consumer advocates Verizon’s CEO earlier promised it would decommission its copper wire networks in rural areas in favor of wireless, mostly for financial reasons. The New York State Attorney General’s office took careful note of McAdam’s commitment to abandon copper in their objection letter to the commission.

Verizon CEO Lowell McAdam in 2012:

The vision that I have is we are going into the copper plant areas and every place we have FiOS, we are going to kill the copper. We are going to just take it out of service and we are going to move those services onto FiOS. We have got parallel networks in way too many places now, so that is a pot of gold in my view. And then in other areas that are more rural and more sparsely populated, we have got LTE built that will handle all of those services and so we are going to cut the copper off there. We are going to do it over wireless.

Verizon’s efforts to rush a tariff change without adequate public notice or formal hearings brought complaints from affected customers, unions, and area politicians.

The Communications Workers of America called Verizon’s emergency “self-made.” The company could have begun repair work on Fire Island as early as last November, but instead only came to regulators earlier this month with its Voice Link proposal, while much of the western half of the island remains out of service.

CWA officials are concerned Verizon is using Hurricane Sandy as an excuse to carry out its broader agenda of abandoning rural New York’s landline infrastructure in favor of wireless service.

“Playing on sympathy for the plight of customers whom it has left without service for more than six months, Verizon proposes to implement broad, generic rules that go to the core of its obligation to serve,” said CWA vice president Chris Shelton.

The union considers Verizon’s wireless alternative less adequate than the wireline facilities Verizon wants to abandon. The CWA wants the PSC to study Voice Link’s performance during times of peak cellular usage times, power outages, adverse weather, and inadequate reception.

Thomas Barraga, a legislator in Suffolk County, says his constituents with Voice Link service are already unhappy with its performance and reliability.

“Residents and business owners who had Voice Link installed after Sandy say the connection is unstable and unreliable, and doesn’t provide for DSL Internet or fax service,” Barraga wrote in a letter to the PSC.

“Internet service is so much a part of everyday life it should be consider a basic service and they should be mandated to provide this as well,” writes Fire Island resident Robert Gonzalez. “They should provide this for the same fees and usage rates as they had previously been charging.  As of today they are price gouging.  Prior to Sandy we paid approximately $50 per month for unlimited Internet access.  Now they are putting low limits on our usage for the same $50 per month with severe penalties for going over.  You can opt for higher usage plans at a much greater cost and they are not offering an unlimited plan.”

Stop the Cap! also continues to hear from Fire Island residents about their dissatisfaction with the service. Among the newest complaints we have received:

• “It doesn’t work with collect calls and you cannot dial “0” for operator assistance;”
• “I have to dial 10 digits for all calls, seven digit dialing no longer works even though it did before;”
• “Call Waiting and Caller ID often do not work, and my unit does not ring for incoming calls about 30% of the time and people have to keep calling me back;”
• “When you attempt to take a call when on the line with someone, you cannot get them back after answering a new call;”
• “I cannot use this with my home alarm system at all and the monitoring company keeps notifying police because they think my phone line was cut;”
• “If we had a major storm with three days of power being out, Verizon’s claim Voice Link will work for two hours without power means I would have to feed it up to 72 ‘AA’ batteries, costing more than what the phone line costs me every month;”
• “What does this do to our future? It makes us second class citizens without access to the Internet except through very expensive wireless capped usage plans that cost much more.”

The PSC ruled that allowing Verizon to deploy Voice Link on Fire Island during the peak tourist season will make sure adequate phone service is up and running as quickly as possible. But the commission also made it clear it is unwilling to approve Verizon’s request to extend the service further into rural New York without a thorough review of its performance and customer reaction.

Phillip “I don’t have $1 million in AT&T and Verizon stock” Dampier

Before Tom Wheeler, President Obama’s pick to head the Federal Communications Commission, can find his seat at the federal agency overseeing the nation’s telecommunications industry, he will need time to sever the extensive ties he maintains as an ex-lobbyist and investor in the companies he will soon oversee.

To avoid an even bigger appearance of a conflict of interest, Wheeler has agreed to dump at least $1 million in personal stock in AT&T and Verizon, as well as divest himself of holdings in 76 other media and tech companies including Time Warner, Comcast, Google, Sprint, Deutsche Telekom and News Corp.

Wheeler is also submitting his resignation from the board of Earthlink, an Internet Service Provider, and will also sell off his shares in that company. He will also have to step down from Core Capital, a venture capitalist investor firm with extensive holdings in the telecom industry.

In our view, Wheeler has shown he couldn’t be more of a telecom industry insider unless he also served on the board of AT&T. Wheeler’s extensive holdings depict someone who has maintained a direct financial interest in the industry for years, even after ending his leadership at the National Cable Television Association and leading the nation’s biggest wireless industry lobbying group, the CTIA.

These kinds of deep industry ties are a serious concern for the average consumer. As we’ve reported before, Tom Wheeler has said almost nothing on his blog about consumer interests, writing views from the perspective of an industry lobbyist and investor. Watching him disgorge well over a million dollars in direct investments in AT&T and Verizon — companies he’d oversee in his new role — does not ease our concern he remains a consummate insider. He is well-positioned to move back through the D.C. revolving door at the end of the Obama Administration to reinvest in the companies his tenure at the FCC could potentially make or break.

Wheeler’s appointment represents another broken promise from the Obama Administration:

“No political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years. And no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration.”

Not allowing Wheeler to oversee regulations or contracts with the companies who helped pay his salary and earn him a fortune from his investments would leave the new FCC chairman little to do beyond opening the mail. But of course, that campaign promise from the Obama-Biden campaign has long since been broken and forgotten by most.

Despite the clear conflicts of interest, President Obama remains fully behind his new FCC chairman pick.

“Tom knows this stuff inside and out,” Obama said.

No doubt.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Real News Obama Nominates Cable Industry Lobbyist and Campaign Bundler New Head of FCC 5-12-13.mp4[/flv]

Former FCC commissioner Nicholas Johnson blasts the nomination of Tom Wheeler, an ex-industry lobbyist and insider, for the role of new chairman of the FCC. (From: TheRealNews) (16 minutes)

When Industry Canada announced it was planning to boost competition by setting aside certain spectrum for new competitors entering the wireless marketplace, the Conservative government promised Canadians they would see a new era of robust competition and lower prices as a result.

Today, it turns out the only competition around is watching which of the three largest wireless carriers snap up their newest competitors first.

Telus, Canada’s third largest wireless carrier, today announced it was acquiring Mobilicity for $380 million — almost exactly the amount of outstanding debt owed by the Data & Audio Visual Enterprises Holdings’ venture. That means Telus will pick up its competitor just by agreeing to pay its bills.

Mobilicity said it was burning through cash at an alarming rate and simply could not attract enough customers in its home service cities Toronto, Ottawa, Calgary, Edmonton and Vancouver, to become profitable. It also reportedly lacked financial resources to take part in a forthcoming spectrum auction that would have been critical to the company’s long-term survival.

Informal merger talks among the three largest independent carriers — Wind Mobile, Public Mobile, and Mobilicity — reportedly went nowhere.

“Mobilicity has been losing a significant amount of money every month,” Mobilicity’s chief restructuring officer, William Aziz, said today. “The financial strength of Telus will allow the business to be continued in a way that will benefit customers and employees. An acquisition by Telus is the best alternative for Mobilicity.”

But that may not be the best alternative for Canadians. Regulators are expected to scrutinize the merger and current rules do not allow Telus to acquire the spectrum Mobilicity holds until next year. But with few other expected buyers, regulators may have no choice but to allow the deal to go through.

If approved, Telus will pick up Mobilicity’s 250,000 customers and likely switch them to Koodo Mobile, its prepaid division.

Minister Paradis

Mobilicity customers could do worse. Koodo Mobile, given a “C” grade by Canadian consumers, was Canada’s highest rated wireless carrier. That disparity hints at how much Canadians loathe their current wireless options.

Bay Street investors were not surprised by the announced merger, believing competition has its limits in a marketplace dominated by three enormous telecom companies — Bell (BCE), Rogers, and Telus — all collectively holding more than a 90% share of the Canadian wireless market. Many expect the remaining independent providers to also jettison their businesses or combine them in a last stand.

Industry Minister Christian Paradis, the Conservative government’s point man on independent competition in the wireless market, was caught off guard by the apparent faltering of the new carriers.

Paradis said he remains committed to making sure Canadians have a fourth choice for wireless service in every regional market in the country. But his only assured success is in Québec, where Vidéotron — the provincial cable company — competes with the big three providers. That competition has worked in that province to hold pricing down. According to The Globe & Mail, the average monthly bill in Québec dropped to $50.36 a month in 2011 from its peak in 2009 and is on par with where it stood in 2007. In comparison, according to CBC News, the average monthly wireless bill across Canada was $77 in 2013, up from $68 in last year’s survey.

Paradis is now pondering new regulations that would prevent the three largest carriers from buying out the remaining two independent providers just for their spectrum assets.

The merger will need regulatory approval from The Competition Bureau, Industry Canada, and the Canadian Radio-television and Telecommunications Commission.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/BNN Telus in Talks to Buy Mobilicity 4-13.flv[/flv]

BNN reported back in April that Telus and Mobilicity were in acquisition talks. The news channel speaks with Maher Yaghi from Desjardins Securities about the implications the merger would have on the Canadian cell phone market and the prices consumers pay. (5 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/BNN Telus Acquiring Mobilicity 5-16-13.flv[/flv]

BNN this morning reported the ball is back in Ottawa’s hands as the government tries to decide how it can salvage its wireless competition agenda. (6 minutes)

Use your future Rogers Card to pay your Rogers bill.

The Canadian Minister of Finance has given permission for Rogers Communications to open its own bank, primarily to let the cable operator get into the credit card business.

Rogers wants into the lucrative card services business to build customer loyalty and retention through a future rewards program that awards customers credits towards Rogers’ services.

But more importantly, the incorporation of Rogers Bank will let the cable company master its entry into the emerging digital mobile wallet business.

“Today’s announcement is a significant milestone in our plan to issue a credit card,” said David Robinson, vice president of emerging business at Rogers. “The Rogers credit card program represents a new growth opportunity while giving customers an opportunity to accumulate value in a future Rogers loyalty program.”

Rogers has 12 months to complete the application process towards accreditation of its financial institution, after which it can introduce its credit card.

In the past, Rogers has maintained a working relationship with CIBC, Canada’s fifth largest bank.

AT&T says government regulations have hampered the company’s plans to roll out faster broadband networks to areas where consumers and businesses want faster speeds.

Now that Google has gotten permission to roll out its gigabit fiber network only to neighborhoods that show an interest in the service, AT&T says it should be allowed to operate the same way.

CEO Randall Stephenson told investors at a J.P. Morgan investor conference in Boston that AT&T would like to build fiber networks, but government requirements that it offer the service universally across the communities it serves has made such networks financially unprofitable. Eliminating those rules would create a new incentive for fiber upgrades in areas that want them.

“I think you are going to see that begin to manifest itself around the United States, and in not just AT&T and Google,” Stephenson said. “You will see others doing this because the demand for really high-speed broadband via gigabit-type fiber-based solutions on a targeted basis is going to be very, very high.”

AT&T says Google has already changed how future broadband networks are deployed — only to areas where there is enough demand for the service. Google’s entry into Kansas City came with a pre-registration procedure that allowed the company to gauge demand for its fiber network. The neighborhoods expressing the most interest were given priority during the network buildout. Google also won the right to entirely bypass neighborhoods where an insufficient number of residents expressed interest in the service.

Stephenson

Traditionally, cable and phone companies constructing networks like FiOS, U-verse, and similar fiber deployments are required to offer service throughout each community. The only general exception relates to sparsely populated or very high cost areas that have an insufficient number of potential customers, making return on investment difficult. Google can bypass even the most densely populated sections of downtown Kansas City if there is insufficient demand for its service. Cable and phone providers who attempted this in the past would have been accused of “redlining” — singling out only the most lucrative, affluent service areas while bypassing low-income neighborhoods.

Now AT&T hopes Google has established a precedent it can use to cherry-pick network upgrades of its own.

“The key is being able to do it in places where you know there is going to be high demand and people willing to pay the premium for those type services,” Stephenson said, predicting in some parts of Austin, AT&T could achieve a 35 percent market share for its promised fiber network.

Stephenson also suggested an unlikely new source of money to finance fiber upgrades — content producers and applications developers who need faster networks to support sales of their online products and services. That would shift the economics of faster broadband to an entire new model — broadband providers may decide their current networks are fast enough and might avoid upgrading them without some financial compensation from the websites and content producers customers visit.