Spectrum Mobile customers who sign up for cell service can expect an inquiry about their creditworthiness, and some customers with near-perfect FICO scores are embarrassed to discover Spectrum considers them too risky, thanks to an Experian credit scoring model developed specifically for utilities, phone and cable companies.

When you inquired about our device(s) and mobile service(s), we evaluated your credit score of 797 and determined we can only offer you a limited number of our available devices for purchase.

This decision was made solely by Spectrum Mobile though such decision was based on the information supplied by Experian, a consumer reporting agency. The terms we are offering may be less favorable than the terms offered to customers who have a better credit score. Experian will not be able to provide you with any information relating to Spectrum Mobile’s decision or any other Spectrum policies, devices, and/or services.

In practical terms, the letter means this Reddit contributor will be limited to just one line of service on his account.

Spectrum Mobile is relying on a special credit risk management product to score its customers. The TEC Connect 2.0™ “risk model” stands for “T”elecommunications, “E”nergy, and “C”able, and was created exclusively for utility and telecommunications companies. It was designed to predict the likelihood you will pay utility and cable bills on time and in full. During times of economic distress, telecom and energy bills often get paid later than mortgages, auto loans, and credit cards. Still, with a score range of 400-900, the recipient’s 797 ranking represents a low credit risk, probably undeserving of a one line limit.

What counts the most towards your TEC Score?

Experian cited four adversities on this individual’s TEC Connect 2.0 report:

00011 – The date you opened your oldest joint revolver is too recent
00070 – Lack of sufficient relevant real estate/HELOC account information
00003 – Credit amount on your open first mortgage account is too low
00058 – Your most recently opened account is too new

That would seem to imply the customer is a relatively young borrower, or someone who closes older credit lines, which can count against your credit score. The report also seems to include conflicting information about any owned property and if it is mortgaged, which might mean the applicant is actually a renter. Recently opened credit accounts will diminish a TEC Score, and having a recent history of opening multiple new accounts could signal you are potentially over applying for credit or are overextended. Even if your FICO score reflects a good credit history, if you are a late-payer of energy or telecommunications bills, your TEC Score will reflect that and expose you to rejection of your application, line limits, and advance deposits.

Critics of Experian’s TEC Connect score note many utility companies do not report or report incomplete payment histories, many accounts are often missing from credit reports, and even those with perfect payment histories and a high FICO score can still run afoul of TEC Connect’s scoring model.

If you receive notice of an adverse credit decision, always take advantage of the opportunity to receive and review your report, free of charge. You are entitled to correct errors and have those corrections sent on to companies like Spectrum Mobile for a credit re-evaluation.

Charter Spectrum’s broadband-only customers run up more than double the amount of broadband usage average customers subscribing to both cable TV and broadband use, and that consumption is growing fast.

“Data usage by residential internet customers is rising rapidly and monthly median data usage is over 200 GB per customer,” Charter CEO Thomas Rutledge said on a morning quarterly results conference call. “When you look at average monthly usage for customers that don’t subscribe to our traditional video product, usage climbs to over 400 GB per month.”

Last week, Comcast reported its average broadband customer also used over 200 GB a month, but did not break out the difference between those subscribing to cable TV and those who do not. If Comcast’s broadband-only customers are consuming a comparable amount of data, they could be nearing half of their monthly usage allowance (1 TB), in markets where Comcast caps its customers’ usage. But because that is only an average, it means many more Comcast customers are likely nearing or now exceeding Comcast’s data cap, exposing them to hefty overlimit penalties.

Spectrum does not impose any data allowances on its customers — all usage is unlimited.

Charter officials also reported their average mobile customers use “well under 10 GB a month.” The fact Charter did not get more specific about mobile usage is important because the new product is getting scrutiny from some on Wall Street concerned it will have a hard time becoming profitable because of its wholesale agreement with Verizon Wireless, which provides the 4G LTE service for Spectrum Mobile.

Subscribers have been primarily drawn to the $14/GB plan, which includes unlimited talk and texting, because it offers a very low entry price for a full-function wireless plan. But a customer only needs to use more than 3 GB of service per month to find their bill higher than what they would pay subscribing to Spectrum Mobile’s $45 unlimited usage plan. If Charter executives said the average mobile user consumed 5 GB of data, analysts could deduce what the average customer bill probably looked like. To maximize profits, Charter needs customers to select an unlimited data plan and keep data usage low to assure it can cover the wholesale costs Verizon Wireless charges the cable company for wireless connectivity.

Rutledge

Rutledge stressed he expects Spectrum Mobile to be profitable with the current Verizon Wireless MVNO contract in place — the service simply needs a larger user base to overcome its current losses.

Rutledge also announced Spectrum Mobile was testing dual SIM technology, which could allow it to eventually offload more of its 4G LTE traffic to its own (cheaper) network, which could eventually include mid-band wireless spectrum and the CBRS spectrum the company is already testing for fixed wireless service for rural areas. Spectrum could also follow Comcast with its own in-home network of publicly available Wi-Fi or innovate with unlicensed wireless mobile spectrum using small cells or external antennas.

Charter executives noted that customer data demands were pushing many to upgrade to higher speed internet products.

“Over 80% of our internet customers are now in packages that deliver 100 Mbps of speed or more and 30% of our customers are getting 200 Mbps or more,” Rutledge said. “We’re also seeing strong demand for our Ultra product, which delivers 400 Mbps, and we have gigabit service available everywhere.”

The costs to continue upgrading service for broadband customers are negligible on the company’s current platform, Rutledge admits. In the future, Charter Spectrum is considering offering 10 Gbps and 25 Gbps symmetrical service to customers, and it can scale up upgrades very quickly.

“For example, in only 14 months we launched DOCSIS 3.1, which took our speeds up to 1 Gbps across our entire footprint at a cost of just $9 per passing,” Rutledge said.

Verizon Communications has indefinitely suspended plans to charge customers an extra $10 a month for access to Verizon’s extremely spotty and uneven 5G service, which launched earlier this month in Chicago and Minneapolis.

Early adopters were told Verizon would waive the extra $10 fee for the first three months of service. But after receiving mixed reviews about Verizon’s 5G performance and very limited coverage area after launch, Verizon decided to withdraw the charge until further notice.

“This is some of the blowback you get from being first” in offering smartphone 5G service, John Hodulik, an analyst at UBS Group AG, told the Wall Street Journal. “It didn’t make sense to charge people extra money for a service that they’re rarely going to use.”

AT&T’s CEO Randall Stephenson sent signals to shareholders AT&T was also considering charging a premium rate for customers upgrading to 5G technology in the next two or three years.

Verizon’s not-quite-ready-for-prime-time mobile 5G network hurriedly held a public launch event April 3rd using a small network of 5G millimeter wave small cells installed in downtown Chicago and Minneapolis, despite employee admissions there were significant issues with the network’s reliability, coverage, and stability.

Driving Verizon was a chance to win bragging rights by claiming ownership of the world’s first, publicly available, mobile 5G network. In a company-produced video intended for employees, it quickly becomes apparent Verizon was preoccupied by South Korea’s own race to launch mobile 5G, and daily meetings at Verizon’s offices in New Jersey hinted at pressure to announce Verizon’s own 5G launch day as soon as possible.

It was also clearly a priority for Verizon’s new CEO, Hans Vestberg.

“Since I came into Verizon, this is the first thing I wanted to do,” Vestberg said. “I want to be first on 5G in the world.”

But was the network ready for launch and fit for purpose? As of April 1, there were still coverage, latency, and speed issues. Garima Garg, from Verizon’s Network Performance, said the 5G network was “very unstable” early in the first week of April. Attempts to test every smart cell in Chicago were unsuccessful. Garg said the team couldn’t connect to several of them.

Besides beating South Korea, Verizon’s goal was to launch 5G with speeds better than its 4G LTE network and AT&T’s enhanced 4G LTE service it calls “5Ge.” To test network performance, Verizon employees ran countless speed tests, often just across the street from light pole-mounted smart cells around 100 feet away. Just a day or so from launch, Verizon testers were still trying to address network problems, including packet loss and delayed acknowledgments on the TCP side of the uplink, which ‘really hurt speed.’ Verizon claims it resolved some of these problems in the final hours before launch with a custom software build.

Verizon’s efforts almost came to naught, because SK Telecom, South Korea’s largest wireless operator, suddenly surprised the public with a star-studded “5G Launching Showcase” the morning of the 3rd. SK Telecom technically beat Verizon’s attempt to be first to launch, but Verizon pointed out only a handful of celebrities, social media influencers and so-called “brand promoters” were given smartphones capable of connecting to SK Telecom’s 5G network. Verizon’s spin was that South Korea’s launch was effectively a publicity stunt, as no consumer could walk into a store and buy 5G capable devices on that date. Verizon’s launch, however, would be different. Any customer could immediately walk into a Verizon store in the two launch cities and walk out with a smartphone capable of connecting to 5G on the first day the network was switched on. Just in case SK Telecom had any other surprises planned, Verizon decided to move up its official launch date.

Garg (Image courtesy of: Verizon)

On the morning of April 3, Vestberg appeared in a friendly and exclusive CNBC interview announcing the launch of Verizon’s 5G mobile network. By the following day, tech reporters in Chicago gave the network its first thorough test, and found many of the same issues that had concerned Verizon engineers earlier that week. Not only was Verizon’s 5G service area miniscule, several small cells appeared not to be working at all (or at least were not available for connections), and after a day using Verizon’s 5G network, the service was deemed “unreliable” by PC.

Reporters used Moto Z3 phones with the new 5G Moto Mod back panel, which snaps on the back of the phone and delivers 5G connectivity to the Z3. The Mod concept is neither an elegant or inexpensive solution, turning the Z3 into a bulky and heavy handset. The Moto Mod also has its own battery, and not a high-capacity one at that. Testers reported it was dead after five hours of significant use. It cannot be recharged by the phone either. At some locations, reporters were able to verify Verizon’s 5G network did deliver a significant improvement in speed — up to 600 Mbps peaks on small cells that likely had few, if any other customers connected at the time. But the densest parts of Chicago’s downtown were already well-served by Verizon’s 4G LTE network, which capably peaked at 400 Mbps.

Verizon’s mobile 5G network relies on millimeter wave frequencies, which are very short-range and sensitive to solid objects, which can block or degrade the signal. Despite Verizon’s earlier claim that it saw better than anticipated range and performance from the company’s millimeter wave fixed wireless service running in a few other cities, real world testing showed the effective range of Verizon’s smart cells was less than expected for mobile users. Verizon claimed up to 800 feet of range from each 5G small cell, but testing found that claim wildly optimistic.

“I saw more like 300 feet of effective range, with speeds dropping below LTE levels beyond that, even though my 5G indicator would dutifully flicker on until about 450 feet,” reported PC’s
Sascha Segan. “The Mod seems unable to judge when a 4G connection would be better than a 5G one, so it hangs on to 5G for dear life even if it’s just eking out a few megabits. A phone should probably prefer a good lower-gen connection over a poor higher-gen one.”

Real world testing also revealed the expected shortcomings of mobile 5G — it can be downright terrible indoors.

“Stand under the cell site, you get 600 Mbps down. Go into the Starbucks, through glass, and that’s cut to 218 Mbps,” Segan wrote. “Go around the corner and duck into the lobby of a stone building that doesn’t face onto the site, and you’re down to 41.5 Mbps. Lower frequency bands do not have this behavior.”

Of course, it is early days for Verizon’s 5G and network and software improvements are likely to significantly improve service. But Verizon’s experience strengthens the theory that small cells are likely to thrive only in dense population areas where there is already a high traffic demand. It seems unlikely that Verizon’s 5G network will make economic sense to deploy in outer suburbs and rural areas. It may not even play well in the suburbs.

Verizon produced this video covering the challenges launching their mobile 5G network in Chicago and Minneapolis in early April. (12:34)

Justice Department staffers have told T-Mobile and Sprint that their $26 billion merger is unlikely to win approval as presently structured, according to a report in the Wall Street Journal.

Unnamed sources familiar with the deal told the newspaper the Justice Department’s Antitrust Division is among the most skeptical of those reviewing the deal, questioning claims from the companies that the merger will create synergy and increased efficiency that could free up resources to dramatically expand the combined company’s wireless business.

At the core of the concern is the impact of combining the nation’s third and fourth largest wireless carriers, reducing competition to just three national postpaid companies — AT&T, Verizon Wireless, and T-Mobile. That could present an unacceptable threat to competition.

The Justice Department is not alone expressing concern over the merger deal. Multiple state attorneys general are still reviewing the deal and several have announced they are prepared to sue the companies involved to stop the merger if it manages to win approval on the federal level. The Federal Communications Commission is also said to be questioning some of the claims of the company about the merits of its promised 5G home broadband service and exactly how much consumers could save should they subscribe.

The Financial Times also published a story this afternoon essentially confirming the Journal story.

John Legere, CEO of T-Mobile USA, denied the premise of the Journal’s story in a tweet late this afternoon, calling it “simply untrue,” but refused further comment.

The premise of this story, as summarized in the first paragraph, is simply untrue. Out of respect for the process, we have no further comment. This continues to be our policy since we announced our merger last year. https://t.co/3q9CVgkRfv key info: https://t.co/N5YvuuJtPZ

— John Legere (@JohnLegere) April 16, 2019

Any decision about the merger is not expected for several weeks, and any recommendations from the staff report on the deal can be overruled by the political appointees that run the Justice Department. The Times reports that the final decision will likely rest with Makan Delrahim, President Trump’s pick as chief of the antitrust division. With staff objections now leaked to the press, Delrahim could be in a politically difficult situation overruling his staff’s recommendations. In the meantime, company officials can offer concessions, such as selling off certain assets to overcome regulator objections.

Many Wall Street analysts feel the chances of the merger winning approval are reduced the longer the merger review remains underway in Washington. Many have placed the odds at less than 50% that the deal will ultimately be approved. If it is rejected, T-Mobile is expected to continue its business without any significant financial hurdles. Sprint may be a different matter, as its Japanese backer SoftBank has soured on the merits of pouring additional money into Sprint’s wireless business.