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AT&T Deregulation Wallops Californians In Their Wallets; Rates Up 222%, Despite Competition Claims

special reportStop the Cap! reader Steve L. has heard enough of AT&T’s promises that deregulation would bring more competition and better deals to Californians.

The Carlsbad resident is staring at the fruits of AT&T’s labor — winning deregulation of phone rates in 2006: a  basic phone bill that has increased from $5.70 a month before deregulation to $21.25 effective Jan. 2, 2014. That represents a 272 percent increase for basic measured (pay-per-minute) local telephone service. As if that was not enough, AT&T is also raising the per-minute rate for semi-local calls for the second time in two years. Earlier this year, AT&T slashed customers’ calling allowances by 25 percent, reducing the 225 minutes a month of toll-free calling down to 168 minutes in January.

Customers living in large, spread out cities in California are accustomed to Zone Usage Measurement (ZUM) charges for calls placed to numbers more than 12 miles from the local telephone exchange. But they may get bill shock after noticing how much the per-minute rates have increased:

  • ZUM 1/2 (12-15 miles): Calls have doubled in price over the last 36 months. Prior to 2013, calls cost three cents per minute. AT&T raised prices to four cents in January and will raise them again to six cents per minute on Jan. 1;
  • ZUM 3 (15-16 miles): Calling prices have increased from five cents a minute in 2012 to six cents a minute in 2013 and will be seven cents per minute in 2014.

attcarlsbad“After surcharges, fees, and taxes, my bill will be nearly $30 per month for measured rate service, representing a near doubling of cost in just a 22-month period,” Steve writes. “I have no other choice than AT&T for a true powered landline, but I am rejecting this latest increase and plan to test and move to a VoIP system.”

The constant parade of rate increases from the state’s largest local telephone company began shortly after the California Public Utilities Commission (CPUC) unanimously approved sweeping deregulation of telephone rates in August 2006. Then Republican Commissioner Rachelle Chong was the driving force behind the effort, reports the San Francisco Chronicle.

Chong embraced AT&T’s attitude about telecommunications deregulation, promising consumers would not face abusive rate hikes or bad service. Under the old system, AT&T telephone rates were capped in California. AT&T had to approach the CPUC and justify any proposed increases. Without solid evidence, the company’s rate increase requests were rejected. Under deregulation, AT&T was permitted to set rates at-will.

“By the end of the 2010, these rate caps will no longer be necessary,” Chong promised as the new rules were being phased in. “The market will be so competitive it will discipline prices.”

Not quite.

att_logoAT&T’s rates have shot up as much as 222 percent for the average Californian’s measured rate phone service. Some customers, including our reader, found rates nearly three times higher than they were before deregulation. In the last few years, AT&T has increased prices on landline service and calling features even more dramatically across the state:

  • AT&T Flat-Rate landline service jumped 115 percent since 2006, from $10.69 to $23 a month;
  • Call Waiting, a popular phone feature, is up nearly 180 percent;
  • Anonymous Call Rejection fees have almost quadrupled;
  • Lifeline Service for California’s most disadvantaged is up 28 percent.

“My belief is that AT&T is essentially harvesting,” Dane Jasper, chief executive of Sonic.net, a competing broadband Internet service in Santa Rosa that tosses in domestic phone service for free, told the newspaper. “They jack up the rate by a pretty egregious amount … because if people leave, well, where are they going? AT&T mobile phone service in at least half the cases. So they’re happy to have them leave or happy to have them stay.”

rate hikesAT&T defends the increases by suggesting rates were artificially restrained by rate regulators under the old system, and the new higher prices reflect economic reality and the deregulated marketplace. But AT&T’s rate increases have blown past other service providers in the state. Verizon’s flat rate service only increased 18 percent since deregulation. Independent providers SureWest and Frontier Communications have only raised prices by about six percent.

With these kinds of rate increases, customers like Steve are making hard choices about whether to keep or ditch their landline service. Ironically, AT&T’s argument to decommission traditional landline service is based on the premise customers are abandoning landline service. AT&T advocates moving customers to its deregulated U-verse platform in urban areas and switch rural customers to wireless-only service.

Chong paid a personal price for her erroneous predictions of consumer savings. In December 2009, the Democratically controlled State Senate refused to hold hearings on Chong’s reappointment to the CPUC, ending her term. AT&T and Verizon strongly backed Chong and lobbied hard for her confirmation. AT&T even turned out its notorious “dollar-a-holler” sock puppet brigade of non-profit groups that showered the legislature with letters supporting her reappointment, without bothering to disclose AT&T had made substantial direct or indirect contributions to the groups in the past.

Murray Bass, head of a small nonprofit in Northern California, initially wrote lawmakers saying Chong was a strong voice for low-income seniors. But in an interview, he admitted he’d endorsed her at the suggestion of executives at AT&T, which had given his group money.

“There’s an essential conflict of interest when a regulated — or supposedly regulated — entity is intervening on behalf of a regulator that’s friendly to them,” said Mark Toney, executive director of the Utility Reform Network, a group that opposed Chong.

SUPPORTERS OF COMMISSIONER CHONG WITH TIES TO AT&T

Organization  Funding Received  Letter Signatory (-ies)
Asian Pacific Islander American Public Affairs (APAPA) The AT&T Foundation gave APAPA $25,000 in 2007. On the APAPA website, AT&T is listed as a top-tier event sponsor with a $50,000 donation in 2009. Joel Wong, Bay Area Chapter PresidentNorm De Young, VP Outreach and Chair of APAPA’s GovernmentRelations Committee (spoke on behalf of Filipino Progress)
CA Small Business Association (CBSA) AT&T is a corporate sponsor of the Small Business Roundtable (CBRT), the advocacy wing of CBSA, which has received $37,500 from AT&T since 2006.    The AT&T Foundation  underwrites  CBRT’s education fund, tech training and website.  Both CBSA and CBRT are active in CPUC proceedings, and CBSA endorses candidates and lobbies public officials.The California Small Business Education Foundation received a 3-year $1.125 million grant from the AT&T foundation.  Betty Jo Ticcoli, the letter’s signatory, is its Chair and CSBA is a member.CSBA is a member of the California Utilities Diversity Council (CUDC) along with AT&T and Verizon. Betty Jo Toccoli
California Hispanic Chambers of Commerce (CHCC) $30,000 from AT&T corporate since 2006, millions more from the Foundation.  Black, Hispanic & Asian Chambers are sharing a 1.25-year $287,000 CETF grant.   AT&T is a corporate member statewide and of several local Hispanic Chambers.  AT&T sponsors CHCC’s annual convention and underwrites local events such as FestivALL, sponsored by the Silicon Valley Hispanic Chamber.Member of  CUDC. Kenneth A. Macias, Chairman of the BoardJoel Ayala, President & CEO
City of Firebaugh $633,000 CETF grant. Jose Antonio Ramirez, City Manager
Cristo Rey High School Sacramento Received a $25,000 grant from AT&T Foundation in 2009. Joan Evans, VP for Advancement
Fresno-Madera Area Agency on Aging (FMAAA) $50,000 SBC Foundation Grant in 2002; $20,000 in 2003; AT&T has sponsored FMAAA’s Scamnot.org website since 2005. Jo Johnson, Executive Director
Latino Community Foundation $25,000 CETF grant. Aida Alvarez, Chairperson
Latino Institute for Corporate Inclusion (LICI) AT&T is a corporate partner of LICI; LICI’s IRS form 990 shows  income of $19,742 in 2008 and it has received $17,500 from AT&T corporate according to AT&T’s 77-M filing with the state, more from the AT&T foundation.Member of CUDC. Ruben Jauregui, President & CEO
Latino Journal $17,500 from AT&T since 2006; AT&T, Verizon and the CPUC are strategic partners in the Journal-sponsored California Education Summit, which AT&T underwrites.Member of CUDC. Jose L. Perez
Mexican American Opportunity Foundation (MAOF) $25,000 from AT&T Foundation. Magda Menendez, Administrator
Other Connections Between AT&T and Chong Supporters
OCA – Organization of Chinese Americans Sacramento AT&T is a corporate partner of national org and both AT&T and Verizon sponsor Asia Week and other heritage events Joyce Eng, President
Tools of Learning for Children Big AT&T logo on website. Told the Los Angeles Times, “he’d endorsed [Chong] at the suggestion of executives at AT&T, which has given his group money.” Murray T Bass, MA, CFP
United Way of Butte & Glenn Counties President Preston Dickinson is former Director of External Affairs for AT&T. W. Jay Coughlin, Executive Director

 Notes

  • 1.  CUDC – The California Utilities Diversity Council is a collaboration between the CPUC , the utility companies and other industry participants  to promote diversity in the utility industry.  AT&T is a gold sponsor of CUDC’s annual convention.
  •  2.  CETF – CETF is a private non-profit corporation created by the California Public Utilities Commission (CPUC) and funded entirely by AT&T and Verizon.  Commissioner Chong is Chair of the CETF Board of Expert Advisors and its Accessibility Committee.  CPUC President Michael Peevey is Chairman of the CETF Board of Directors. The CETF board is appointed by the CPUC, AT&T and Verizon.

Sources:

  • AT&T Foundation IRS form 990
  • The Utility Reform Network

NY Slams Verizon for Excessive Document Redaction; Secret Voice Link Documents May Go Public

Phillip Dampier December 2, 2013 Competition, Consumer News, Public Policy & Gov't, Rural Broadband, Verizon, Wireless Broadband Comments Off on NY Slams Verizon for Excessive Document Redaction; Secret Voice Link Documents May Go Public
Verizon "redacted" hundreds of pages of information about its controversial Voice Link project, including its User's Guide.

Verizon “redacted” hundreds of pages of information about its controversial Voice Link project, including its User’s Guide.

Verizon today lost its appeal to keep company documents about its controversial Voice Link wireless landline replacement away from company critics that allege the company is intentionally undercutting its landline network and redirecting investment towards its more profitable wireless service.

In a 20-page decision published this afternoon, Kathleen Burgess blamed Verizon for hurting its own case with excessive secrecy.

“But for Verizon’s failure to submit documents with fewer redactions, as directed by the Records Access Officer (RAO), it might have satisfied its burden of proof,” that the company would suffer harm if it released proprietary information that could be accessed by competing providers, ruled Burgess.

Burgess took a dim view of Verizon’s attempt to claim blanket confidentiality for its Voice Link project, even including a redaction of Voice Link’s User’s Manual — the same one given to customers subscribing to the service. Burgess noted in response to a Freedom of Information Law (FOIL) request from consumer groups, Verizon responded with “13 documents – 330 pages – with blanket redactions except for the page headings and page numbers.”

Verizon needed to meet its burden of proof by “presenting specific, persuasive evidence that disclosure will likely cause it, or another affected enterprise, to suffer a competitive injury.”

“Verizon apparently believes that it is possible to meet the burden of protecting information under FOIL by providing a cogent and persuasive explanation of how a competitor could use the information and why it is likely to lead to harm,” Burgess observed (emphasis ours). “As an initial matter, [Verizon] has not parsed out each of the 13 documents and demonstrated how each, if disclosed, would competitively injure it. Instead, Verizon is attempting to obtain a blanket exemption for all 13 documents by summarily stating that disclosure would enable competitors to obtain, for free, information on processes that the company developed at considerable expense and effort. Verizon has, however, failed to demonstrate, in adequate detail, how the complete disclosure of all 13 documents would result in substantial competitive injury.”

Verizon hurt its own case by “co-mingling” detailed cost information that might otherwise win confidentiality with the Public Service Commission with less proprietary marketing information and even publicly available documents and then redacted all of them, according to Burgess.

Verizon-logoAs a result, Verizon lost its case:

The Commission recognizes that limiting competitor access to proprietary material is an important policy. Exemptions are to be narrowly construed, however. The entity resisting disclosure bears the burden of proof and, therefore, must demonstrate a particularized and specific justification for denying access to the subject documents. Absent such a showing of competitive injury covering each document that comprises the response, the speculative concerns articulated by Verizon are not enough to sustain the company’s burden of proving that the information should remain protected as trade secret materials.

[…] Under FOIL case law, the burden is on Verizon to demonstrate a particularized and specific justification, supported by evidence, for denying access to the documents at issue and, inasmuch as Verizon has failed to meet its burden, I uphold the RAO’s November 4, 2013 Determination.

Absent a court order or later ruling, full versions of the blacked-out documents may become public two weeks from today.

Up to 2/3rds of Emergency 911 Calls Placed on Cell Phones Lack Critical Caller Location

Phillip Dampier November 26, 2013 Consumer News, Public Policy & Gov't, Video, Wireless Broadband Comments Off on Up to 2/3rds of Emergency 911 Calls Placed on Cell Phones Lack Critical Caller Location
Prominent law enforcement, public safety, and emergency response organizations held a press event outside the Federal Communications Commission (FCC) on Monday, November 18th at the opening of a Commission workshop on e911 location accuracy.

Prominent law enforcement, public safety, and emergency response organizations held a press event outside the Federal Communications Commission (FCC) on Monday, November 18th at the opening of a Commission workshop on e911 location accuracy.

Up to two-thirds of emergency calls made over a cell phone lack critical information about the caller’s location, prompting an advocacy group to call the current situation a crisis.

“If you use a cell phone, you probably think that a 9-1-1 operator can find you if you call in an emergency. Unfortunately, that assumption could be fatally flawed,” said Jamie Barnett, former Chief of the FCC’s Public Safety and Homeland Security Bureau and director of the Find Me 911 Coalition. “For two-thirds of wireless callers in some counties, the emergency call arrived without accurate information on the caller’s location, putting lives at risk when callers don’t know or can’t share their location. The FCC should take immediate action to ensure that all 9-1-1 callers can be immediately located in a crisis, whether indoors or outside, in a rural or urban setting.”

The wireless industry’s lobbying group says the problem is complicated and overblown, and the nation’s biggest cell phone companies are placing the responsibility for the problem on poorly trained 9-1-1 operators. But while the issue is debated, lives are being lost. It’s a growing problem, says the Coalition, because 70 percent of all calls to 9-1-1 now come from cellphones. High-powered smartphones with the latest technology can support thousands of apps, streaming video, help travelers find their way home, and access data at megabit speeds, but when you are in a car or building, your wireless carrier might not be able to pinpoint your exact location and share it with emergency personnel until it is too late.

findme911Deanna Cook of Rylie, Tex is just one victim who might still be alive today if 9-1-1 operators could have tracked her precise location. Last August, Cook called 9-1-1 from her home but was too badly injured in a domestic violence incident to provide her address. Operators relied on the current system to access her location. It took just a few seconds to find the cell tower Cook was accessing to place the call. Shortly after that, Cook’s street and general location became available in about a block-wide circumference, part of what the industry calls “Phase One” data. But the operator had to wait nine minutes for Cook’s wireless provider to finally pinpoint what they believed to be her exact address, the critical “Phase Two” data that can bring help to the right door.

The call location problem is growing worse in this Pennsylvania county.

The call location problem is growing worse in this Pennsylvania county.

The Dallas Morning News discovered while Cook was pleading for her life on 9-1-1 tapes, responding officers didn’t arrive until 50 minutes after the call was placed and then left when no one answered the door, perhaps uncertain about the veracity of the address given to them. Cook’s body was found two days later by relatives. Her ex-husband was eventually arrested and faces murder charges.

It isn’t an isolated incident, Lt. Midge Boyle of the Dallas police told the newspaper.

Dallas’ emergency call center, like many around the country, has seen an increase in the number of calls in which 911 call takers have to spend precious time trying to get the caller’s location, and what operators do receive from cell phone providers isn’t always correct.

“It’s time-consuming,” Boyle said. “In an emergency when minutes count, it’s a challenge.”

In Delaware County, Penn., new data from the Federal Communications Commission shows despite all the wireless network improvements taking place, problems locating callers are actually getting worse.

action 911The Coalition notes the FCC’s data shows an alarming drop in more accurate “Phase Two” data from 75 percent of all wireless calls placed during March 2011 to just 35% in September of this year.

Countywide data released by the FCC found that 489,726 of the wireless calls received since April 2011 lacked accurate “Phase Two” location information, despite FCC regulations requiring accurate location data be provided with all calls.  In most cases, the 9-1-1 call center only received basic “Phase One” data showing the location of the cell tower from which the call originated, information of little use to emergency responders given the large area covered by each tower.

California regulators named names of providers deficient in providing reliable location data in that state:

  • AT&T provided Phase Two location data 20 percent of the time;
  • Sprint managed to deliver accurate data 21 percent of the time;
  • T-Mobile USA only managed to offer correct information 10 percent of the time;
  • and Verizon Wireless scored the highest, but only to the extent it delivered Phase Two location data 37 percent of the time in California.

The Coalition wants the FCC to require more advanced and accurate location technology. A whole range of solutions exist that could pinpoint a 9-1-1 caller even within a downtown office building 70 floors high. Among them:

  • Advanced Forward Link Trilateration (AFLT);
  • Observed Time Difference of Arrival (O-TDOA);
  • RF Pattern Matching;
  • Terrestrial Beacon Transmitters;
  • and Uplink Time Difference of Arrival (U-TDOA)

The CTIA – The Wireless Association said it was willing to sit down with public safety organizations to discuss the problem, but little more. Barnett hopes the FCC will act more quickly. The Coalition is hoping public support will help nudge the FCC to give the issue priority attention. The group has set up a webpage to help the public draft letters to members of Congress.

[flv]http://www.phillipdampier.com/video/ABC GMA Murder Victims Husband Fights to Improve 911 System 11-13.flv[/flv]

ABC’s “Good Morning America” talked with Nathan Lee, husband of Denise Amber, who was kidnapped and murdered in 2008. Lee advocates an overhaul of the cell phone network after law enforcement failed to find Denise even after she covertly used her attacker’s cell phone to call 9-1-1 for help. “Denise should be alive today had the Local 9-1-1 system performed to every citizen’s expectation.” (1:59)

AT&T Celebrates 10,000,000th U-verse Customer With a Rate Hike

Phillip Dampier November 26, 2013 AT&T, Broadband Speed, Competition, Consumer News, Video, Wireless Broadband Comments Off on AT&T Celebrates 10,000,000th U-verse Customer With a Rate Hike

yay attAT&T this month signed up their 10 millionth customer to U-verse High Speed Internet service, surpassing Verizon FiOS as the nation’s biggest telephone company supplier of broadband, television, and telephone service. Coinciding with that success, AT&T is raising prices for U-verse, despite AT&T’s record earnings from the fiber to the neighborhood service, now accounting for $1 billion a month in revenue.

AT&T is protecting its broadband flank by convincing current DSL customers to switch to higher-speed U-verse broadband as the network upgrade reaches into more homes across AT&T’s service areas. In the last quarter U-verse picked up 655,000 new broadband customers nationwide, many upgraded from traditional DSL. Where AT&T has not invested in U-verse upgrades and cable competition exists, results are not as good. AT&T lost 26,000 DSL customers last quarter, most moving to cable broadband.

“This latest milestone shows how U-verse is helping transform AT&T into a premier IP broadband company,” said Lori Lee, senior executive vice president, AT&T Home Solutions. As of the third quarter of this year, total U-verse high-speed Internet subscribers represented about 60 percent of all wireline broadband subscribers, compared with 43 percent in the year-earlier quarter.

Verizon FiOS, in comparison, has signed up just 5.9 million customers FiOS Internet subscribers on its stalled fiber optic network. Most Verizon broadband customers with no FiOS in their future either stick with DSL service or, increasingly, switch to a cable competitor for faster speeds.

Some of AT&T’s strongest U-verse growth came from its TV package. At least 265,000 cable and satellite cord-cutters looking for a better deal switched to U-verse TV in the last three months, a gain from 198,000 at the same time last year. That’s the second-best quarterly gain ever. A total of 5.3 million AT&T customers subscribe to U-verse TV.

project vip

Much of the growth has come from AT&T’s investment in expanding U-verse to new areas. Project Velocity IP is a three-year, $14 billion plan to upgrade AT&T’s wireless and wired broadband networks. AT&T has added almost 2.5 million more homes to its broadband footprint so far this year and hopes to expand broadband availability to reach about 57 million customers by the end of 2015.

Although $14 billion is a significant investment, AT&T has spent considerably more on its shareholders. John Stephens, AT&T’s chief financial officer told Wall Street analysts AT&T has bought back 684 million shares of stock that will save the company more than $1.2 billion in future dividend payouts.  Combined with its dividend payout, AT&T has handed shareholders $18 billion so far this year and more than $40 billion since the beginning of 2012. AT&T expects to spend $20 billion on wireless and wireline network improvements in 2014.

AT&T’s speed upgrades have also not run as smoothly as AT&T claims. Efforts to increase speeds to 45Mbps in 79 markets has had mixed results with a significant number of customers complaining they cannot get qualified for the faster speeds because of infrastructure problems with AT&T’s network. The company still says it is on track to offer 75 and 100Mbps speed tiers in the future and is building a fiber to the home network in Austin to compete with Google.

u-verse revenue

Many customers who have been with AT&T for more than a year are learning better service does not come for free. AT&T has filed rate increases for its television service beginning Jan. 26, 2014 for customers not on a pricing promotion. The monthly price for the following U-verse TV service plans will increase $3, along with fee hikes for local stations and equipment, bringing AT&T at least $15 million in extra revenue each month:
Top secret.

  • U-family to $62;
  • U200 to $77;
  • U200 Latino to $87;
  • U300 to $92;
  • U300 Latino to $102;
  • U450 to $124;
  • and U450 Latino to $134.
  • Grandfathered plans also will increase $3: U100 to $64 or $69, depending on when first ordered; and U400 to $119.
  • The monthly price of each non-DVR TV receiver will increase from $7 to $;
  • Beginning on February 1, 2014, the Broadcast TV Surcharge will increase $1 to $2.99 per month to recover a portion of the amount local broadcasters charge AT&T to carry their channels.

Those customers who have a U-verse TV pricing promotion will continue to receive the promotional benefit until the applicable promotion ends or expires.  Customers are being notified of these changes via bill messaging occurring in November and December and a reminder in January and February 2014.  In addition, customers will be notified of these changes online at www.att.net/uversepricechange and att.com/uversesupport.

[flv]http://www.phillipdampier.com/video/ATT U-verse with GigaPower — Reactions 11-13.mp4[/flv]

AT&T is trying to get ahead of Google by advertising AT&T U-verse with GigaPower, a 1,000Mbps fiber to the home service promised in Austin sometime in the future. (0:30)

Qualcomm Proposes to Unleash LTE 4G Technology on Unlicensed Wi-Fi Bands

Phillip Dampier November 21, 2013 Consumer News, Public Policy & Gov't, Wireless Broadband 1 Comment

LTE-Logo-5adb5Qualcomm plans to push for the use of LTE — the fourth generation cellular technology common in the latest smartphones — in the unlicensed radio bands used for Wi-Fi and Bluetooth.

Qualcomm CEO Paul Jacobs said he believes LTE can co-exist peacefully with existing Wi-Fi and Bluetooth devices and in certain cases can boost interoperability by allowing next generation tablets and smartphones to use the same standard your cell phone company is likely providing to boost data speeds. In one case, an LTE-equipped router might one day communicate with all of your wireless devices without using traditional Wi-Fi.

WiFiZonelogoJacobs said the LTE standard was more advanced than Wi-Fi and capable of limiting interference to other devices. LTE could also be adopted for one-way broadcasts that other nearby users could watch without clogging the airwaves.

But unleashing LTE technology in the unlicensed Wi-Fi bands is likely to stir controversy if LTE avoids the interference it potentially creates for Wi-Fi users who find their current wireless devices compromised by the newest neighbor.

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