Don’t want blazing fast fiber optic broadband speeds?  Unhappy with fiber optic quality video and want to go back to putting a satellite dish on your roof?  If the answer to either question is “yes,” Frontier Communications has good news for you.

The phone company, which assumed control of a handful of communities formerly served by Verizon’s fiber-to-the-home FiOS network, has announced it will begin marketing DSL and satellite TV services to its fiber customers.

Frontier CEO Maggie Wilderotter told investors on a third quarter results conference call that FiOS broadband could be too expensive.

Wilderotter noted Verizon would not allow customers in a FiOS neighborhood to buy DSL service, which leaves budget-minded customers behind.

“Now, FiOS starts at like 50Mbps and it’s very expensive. It’s like $50 a month for a customer. So they left a whole host of customers behind from an affordability perspective who didn’t need that kind of capability on broadband.” Wilderotter explained. “We have just over the last 30 to 60 days opened up DSL in all of the FiOS markets to give the customer choice. So the customer can choose whether they want FiOS broadband or they want high-speed Internet service, typically, and in those markets we’re offering around 6 to 7Mbps.”

Time Warner Cable occasionally runs promotions helping customers break free from Frontier's multi-year service contracts.

Of course, Frontier FiOS starts at 15Mbps — not 50, and that costs $50 a month for standalone service.  For $99, ($89 in Verizon FiOS areas), customers can get broadband, cable TV and unlimited phone service.  Frontier’s “Turbo” DSL service is priced at $40 a month for up to 7.1Mbps service.

Wilderotter also noted their FiOS customers can also choose to skip fiber video and go with DirecTV.

“We think that customers should be able to choose what kind of video they want,” she said. “We have aggressive offers in the market for both DirecTV and for FiOS video, but in our vernacular, what we care about is keeping the customer, getting the customer to take more products and services from us and making sure the customer is happy with the choice.”

Wilderotter said Frontier is prepared to tolerate more congestion on its DSL circuits than Verizon permitted, which opens the door to potential traffic slow-downs down the road.

“We’ve opened up in many of these locations the opportunity to sell high-speed service up to 95% capacity on the equipment that we have out in the field. Verizon had set a parameter at 75%,” Wilderotter said.

The company continues to study whether Frontier FiOS is worth maintaining or expanding outside of the Verizon territories where it was originally constructed.

“We are still evaluating it from a financial perspective and a customer perspective, and from a cost perspective and a revenue perspective,” Wilderotter told investors. “In terms of what that does for us overall, what it does for churn, how much does it really cost to extend this capability in the markets that we’re in today — we think that analysis and evaluation will go on through the first quarter [of 2011] and then we’ll be able to make some [decisions] in terms of what we want to do with FiOS from an expansion perspective or a maintenance perspective.”

Frontier Communications CEO Maggie Wilderotter answered questions about broadband expansion and the impact of the fall elections on telecommunications policy in Washington. (11 minutes)
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Frontier's largely rural service areas provide a captive audience for the company's DSL broadband service.

In the near term Frontier has several plans to get more aggressive in the marketplace to meet its target goal of losing only 8 percent of their customers per year — a goal that illustrates legacy phone companies are still on a trajectory towards fewer and fewer customers:

1. Don Shassian, executive vice president and chief financial officer of Frontier reports expansion of DSL remains a top priority for Frontier.  The company is on track to deliver access to 300,000 additional homes by the end of the year.  Verizon delivered access to 64 percent of Frontier’s acquired territories.  Frontier wants to get that number up to 85 percent.  But part of that target is not just expanding service to unserved areas.  It’s also trying to win back customers lost to other providers through promotions and incentives.
2. Frontier plans to resume aggressive promotions in the coming weeks and months, including its “free Netbook” promotion, which provides a Netbook computer to new customers signing up for several packages of services, committing to remain with Frontier for at least two years.
3. Frontier intends to push “price protection agreements” on as many customers as possible.  Their “Peace of Mind” program locks customers into multi-year contracts with stiff cancellation penalties.  Wilderotter noted: “I think, as you know, in our legacy markets, 96% of all of our sales are on a price protection plan and we have close to 60% of our residential customers on a one-, two- or three-year price protection plans. That number is below 15% in the acquired markets. So we’re also driving for price protection plans with every sale that we’re doing in these new markets as well.”  Such contracts dramatically discourage a customer from disconnecting Frontier, because fees for doing so can exceed $300 in some cases.  Frontier has been heavily criticized by some customers and State Attorneys General for deceptive business practices regarding contracts.

Frontier continues to enjoy a lack of solid cable competition in its largely rural service areas.  Shassian reports Comcast competes with Frontier in only about 32% of homes in some areas, Time Warner Cable in about 23%, and Charter below 15%.  With reduced competition, Frontier often represents the only broadband option in town.

Frontier is also spending an increased amount of time coping with copper thefts, especially in West Virginia where the company is warning would-be thieves it will prosecute to the fullest extent of the law.

“Damage to our facilities can affect communications access in an emergency, increase company costs and consumer rates, and disrupt community phone and broadband connections,” said Lynne Monaco, Frontier’s Director of Security. “When network connections are severed by copper thieves, it endangers customers and emergency responders and poses significant risks of personal injury and property damage.”

Just last week, West Virginia state police solved another copper caper that disrupted service for some customers.

The Charleston Daily Mail reports:

Stephanie Burdette of Charleston was arrested in connection with a copper wire theft.

Trooper A.B. Ward from the South Charleston detachment went to the Fishers Branch area of Sissonville last Thursday afternoon when a Frontier worker discovered a section of the communications line missing. The worker found that 300-feet of the 400-pair line, valued at about $5,000, was missing, according to a complaint filed in Kanawha Magistrate Court.

A trooper who had worked on a similar investigation told Ward to check the home of Ervin “Tubby” Page, 49, where troopers had previously found evidence of wire burning. Ward went to Page’s home, described as a Goose Neck travel trailer parked next to the Guthrie Agricultural Center in Sissonville, and found three burn barrels about 50 feet in front of the trailer. One of them was on fire.

Page’s girlfriend Stephanie Marie Burdette, 25, of Cross Lanes, was at the scene when the trooper arrived. Ward spoke to her then checked out the barrels where he found aluminum wrap, which is used to cover the copper communications wiring, and pieces of copper cabling, the complaint said.

Frontier customers are encouraged to report any suspicious activity around telecommunications equipment and facilities by calling the company’s toll free security line 1-800-590-6605. Anyone witnessing a theft in progress should not confront the suspects but should immediately call 911 and then call Frontier. Vehicle and suspect descriptions are very useful. This is a community safety problem, and the cooperation of the public is critical.

[flv width=”500″ height=”395″]http://www.phillipdampier.com/video/WOWK Charleston Copper Thieves 11-15-10.flv[/flv]

WOWK-TV in Charleston covers Frontier’s difficulties with copper wire thieves across the state of West Virginia.  (1 minute)

Mona Shaw - The "Comcast Hammer Lady"

Up to 60 percent of callers to America’s big telecom companies experience rage when their calls go unanswered, their problems go unresolved, or they literally cannot get past the language barrier of today’s outsourced customer service agents working half a world away.

Cable and phone companies are among the worst at delivering quality customer service, with Comcast in particular causing enough frustration to bring a Virginia woman into a local Comcast office armed with a hammer, smashing company computers to get attention.

Only credit card companies have a worse reputation.

[flv width=”352″ height=”308″]http://www.phillipdampier.com/video/Peggy Ads.flv[/flv]

A compilation of six different “Peggy” Ads from Discover Card lampoon poor customer service among many credit card companies (2 minutes)

Unconscious Comcast employee

“When we call, what we want is ‘yes’ — that’s it,” says Emily Yellin, author of the book Your Call Is (not that) Important to Us, chronicling corporate America’s quest for cheaper customer service, usually alienating customers along the way.

Too often, American hear “no” or nothing at all, thanks to customer service representatives that lack the authority to solve problems or simply don’t care.

For many years, customers either took it or left.  But the Internet has changed everything, allowing customers to take their complaints to a wider audience, often embarrassing bad acting companies and creating tremendous damage to corporate reputations along the way.

An infamous example was the case of the Comcast employee who literally fell asleep waiting more than an hour to talk to co-workers about a customer’s problem.  A video of the sleeping worker became an online sensation.

Women like Mona Shaw, dubbed the Comcast Hammer Lady, also come away as folk heroes when customers can relate to the level of frustration she experienced from a company that only cared if she was a few days late paying her cable bill.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CBS News Combating Poor Customer Service 11-14-10.flv[/flv]

Copper thieves looking for quick cash, typically to finance drug habits, continue to plague telecommunications companies who find their networks literally stripped as brazen thieves rip utility lines right off phone poles.  Although these thefts eventually cost cable, phone, and electric utility customers money in the form of higher bills, taxpayers are increasingly paying the price for copper thefts affecting wireless communications networks.

That’s because emergency responders are increasingly placing communications equipment at existing commercial cell sites and radio communications centers, and when those networks go down communities pick up the tab and argue about the bill later.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WSOC Charlotte – Copper Thefts Costing Taxpayers 11-16-10.flv[/flv]

WSOC-TV in Charlotte visits Rock Hill to see how copper thefts are costing area taxpayers plenty.  (2 minutes)

Scrap copper wire - as good as gold

In Charlotte, N.C., copper thieves are targeting copper plates that can weigh up to 70 pounds used to ground cell and radio towers to protect them from lightning strikes.

Without them, towers and the equipment used to deliver service can be seriously damaged, leading to the loss of cell phone service and a county’s emergency radio system.  That can leave dispatchers unable to talk to police and firefighters.

Because of the importance of these communications systems, when plates go missing, York County taxpayers pick up the tab for replacing them.  That costs several thousand dollars every time the plates have to be replaced.

WSOC-TV in Charlotte noted while working on a story about the thefts, just one day after plates were replaced from one tower, they were stolen again.

New legislation designed to crack down on illicitly-obtained copper sold to recycling firms should have curtailed the ability for thieves to turn tons of copper into stacks of cash.  But despite new laws in states like California, legislation is only effective when it is enforced.  In northern California, budget cuts eliminated the one officer that devoted time and energy to stopping copper thefts in the Sacramento area.  A local television station went undercover and discovered the state might as well not even have a law, because they were able to obtain quick cash for copper… no questions, or ID, asked.

[flv]http://www.phillipdampier.com/video/KOVR Sacamento Copper Wire Rules Not Followed 11-16-10.flv[/flv]

KOVR-TV in Sacramento went undercover and discovered the futility of copper theft legislation that is not enforced.  (5 minutes)

Time Warner Cable customers in North Carolina are getting rate hike letters from the cable company that foreshadows what other Time Warner Cable customers around the country can expect in the coming months.

For residents in Charlotte and the Triad region, Time Warner is boosting prices for unbundled customers an average of six percent, which will impact customers not on promotional plans or who are not locked into a “price protection agreement.”

The rate increases particularly target standalone service customers.  Those with the fewest services will pay the biggest increases.  Those who subscribe to cable, phone, and broadband service from the company will suffer the least.

A Time Warner Cable spokesman claimed the company is just passing on the cost of programming.

WXII-TV in Greensboro reported that for many customers already struggling with their bills, they don’t want to hear anything about a price hike.

“I think it’s ridiculous at this time with the economy — it’s hard to make it as it is,” one customer told the station.

“I wish there was a better option out there, but it’s about the only thing you can get,” said another viewer.

Time Warner has been developing pricing models that increasingly push customers towards bundled packages of services.  Standalone broadband service saw dramatic price increases in many areas in 2010, and the company’s most aggressive new customer promotions encourage customers to take all three of its services.

But broadband customers need not expose themselves to inflated broadband prices for standalone service.  Most Time Warner Cable franchises offer Earthlink broadband at comparable speeds at prices as low as $29.95 per month for the first six months.  When the promotion expires, customers can switch back to Road Runner at Time Warner’s promotional price.

Time Warner does face competition in some areas of North Carolina from AT&T U-verse, which offers attractive promotional pricing for new customers.  But the phone company’s broadband speeds come up short after Time Warner boosted speeds across much of the state.  The cable company now delivers Road Runner at speeds of up to 50/5Mbps.  AT&T tops out at 24Mbps, and not in every area.

When a competitor can’t deliver the fastest speeds, they inevitably claim consumers don’t want or care about super-fast broadband.

“We are focused on offering the broadband speeds that our customers need, at a price that they can afford,” said AT&T spokeswoman Gretchen Schultz.

Greenlight promotes its local connection to Wilson residents

Some North Carolina consumers are watching AT&T’s slower speeds and Time Warner’s price hikes from the sidelines, because they are signed up with municipal competitors.

Residents in Wilson with Greenlight service from the city don’t have to sign a contract to get the best prices and obtain service run and maintained by Wilson-area employees. The provider has embarked on a campaign to remind residents that money spent on the city-owned provider stays in the city.

In Salisbury, Fibrant is making headway against incumbent Time Warner as it works through a waiting list for customers anxious to cut Time Warner’s cable for good.  Fibrant customers are assured they’ll always get the fastest possible service in town on a network capable of delivering up to 1Gbps to businesses -and- residents.

MI-Connection, the rebuilt former Adelphia cable system now owned by a group of local municipalities is managing to keep up with Time Warner with its own top broadband speeds of 20/2Mbps.  The system is comparable to a traditional cable operator and does not provide fiber to the home service.  Its 15,000 customers in Mooresville, Cornelius and Davidson are likely to stay with the system, but it is vulnerable to Time Warner’s bragging rights made possible from DOCSIS 3 upgrades.  Since Time Warner does not provide service in most of MI-Connection’s service area, city officials don’t face an exodus of departing customers.

But that could eventually change.  Some MI-Connection customers have reported to Stop the Cap! they have begun to receive promotional literature from Time Warner Cable for the first time, and there are growing questions whether the cable company may plan to invade some of MI-Connection’s more affluent service areas.  Cable companies generally refuse to compete with each other, but all bets are off when that cable company is owned by a local municipality.

For most North Carolina residents, AT&T will likely be the first wired competitor, with its U-verse system.  To date, U-verse has drawn mixed reviews from North Carolina consumers.  Many appreciate AT&T’s broadband network is currently less congested than Road Runner, and speeds promised are closer to reality on U-verse compared with Road Runner during the early evening.  But some AT&T customers are not thrilled being nickle-and-dimed for HD channels Time Warner bundles with its digital cable service at no additional charge.  And for households with a lot of users, AT&T can run short on bandwidth.

“We have five kids — three now teenagers, and between my husband’s Internet usage and me recording a whole bunch of shows to watch later, we have run into messages on U-verse telling us we are trying to do too much and certain TV sets won’t work until we reduce our usage,” writes Angela.  “AT&T doesn’t tell you that you all share a preset amount of bandwidth which gets divided up and if you use it up, services stop working.”

Angela says when she called AT&T, the company gave her a $15 credit for her inconvenience, and the company claims it is working on ways to eliminate these limits in particularly active households.  For now, the family is sticking with U-verse because the broadband works better in the evenings and she loves the DVR which records more shows at once than Time Warner offers.  Their U-verse new customer promotional offer saves them $35 a month over Time Warner, at least until it expires.

“From reading about Fibrant and Greenlight on your site, my husband still wishes we lived in Salisbury or Wilson because nothing beats fiber, but at least what we have is better than what we used to have,” she adds.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WXII Greensboro TWC Raising Rates 11-16-10.flv[/flv]

WXII-TV in Greensboro reports of Time-Warner Cable’s rate hikes for the Piedmont Triad region of North Carolina.  (2 minutes)

Not really

Back in 2002 Vincent and Liza Concepcion walked into a southern California AT&T Mobility store to purchase new cellphones for themselves.  AT&T advertised a buy one, get one “free” offer for cellphones.  What AT&T didn’t say was that the family would end up paying more than $30 in hidden sales taxes for both phones.

More than eight years later, that purchase — and the resulting class action lawsuit it launched — threatens to sweep away important consumer protections by letting corporations ban class action cases and curtail Attorneys General from enforcing state consumer protection laws.

Oral arguments in the case AT&T Mobility v. Concepcion were heard before the U.S. Supreme Court last Tuesday in one of the most important consumer protection cases in decades. At issue is this clause, inserted into the Concepcion’s service contract with AT&T that would disallow the family from participating in a class action lawsuit:

“You and AT&T agree that each may bring claims against the other only in your or its individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding.”

That clause clashes with several state laws, California’s included, which basically say consumers cannot be compelled to sign away their basic consumer protection rights.  California law also says some contracts can be considered unenforceable ‘if they are built on deception, are too-one sided, or violate broader public policy.’

Hello, AT&T.

Vincent and Liza, through their attorney, argue that bringing an individual lawsuit against AT&T over $30 in sales taxes would be crazy — no lawyer would take the case and no plaintiff would front a retainer well beyond the amount in dispute.

As Justice Ruth Bader Ginsburg wrote in another class action case, “The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.”

The “class action” concept provides at outlet for aggrieved consumers who can attract legal representation if a company can be sued on behalf of every impacted customer.  For AT&T, that could mean facing not just the Concepcion family, but millions of Californians — each charged sales taxes for phones the company advertised as “free.”

How AT&T’s Case Has Broadened Into a Major Dispute Over Arbitration vs. Class Action Lawsuits

It's easy to navigate AT&T's terms and conditions to achieve a good outcome from arbitration, right?

But what began as a legal argument over a “free” phone has broadened into a much larger legal case before the Supreme Court: can consumers be compelled to participate in company dispute settlement schemes and give up their legal right to petition the court system for relief?  Further, what happens when those contract clauses conflict with state consumer protection laws?

Following in the footsteps of the credit card industry, AT&T inserted a clause mandating customers stay away from class action lawsuits.  By telling consumers they are forbidden to participate in such cases, AT&T pushes customers into the murky world of “arbitration” — a system where AT&T picks a private company, with whom it has a financial-business relationship, to “impartially” rule on customer complaints in secret proceedings.  Consumers have to pay their own way to attend arbitration hearings, often held in cities a thousand miles away or more.  They also must agree the decisions are binding and final.

AT&T argues, both directly and through its dollar-a-holler advocates, that class action cases are annoying, expensive, and do not typically deliver substantial benefits to class members.  The wireless carrier argues arbitration of individual cases is much faster and potentially more lucrative to would-be class action members.  Stephen J. Ware, a professor of law at the University of Kansas School of Law argues consumers have often done far better avoiding litigation and entering into arbitration programs.

But consumer advocates claim AT&T’s arbitration rules are stacked against consumers.  Arthur H. Byrant, executive director of Public Justice argues:

First, AT&T’s “agreement” bars its customers from court (except small claims court) and requires them to utilize the company’s mandatory arbitration program. Its rules say that, if a customer completes the process and recovers more than the last written settlement offer AT&T made before the arbitrator was chosen, a $7,500 premium will be paid. Second, the “agreement” bans AT&T’s customers from bringing or participating in class actions against it. Third, the “agreement” provides that, if AT&T’s class action ban is found to violate the law (as 20 states have held contractual class action bans do when they effectively immunize a company from liability), the arbitration clause “blows up” and the class action must proceed in court. Then, when the class action ban is struck down under state law (as AT&T knew it would be), the company springs its wacky trap: It argues that the Federal Arbitration Act of 1925 (FAA) pre-empts — and invalidates — that state law because (believe it or not) the state law is biased against arbitration.

AT&T’s call for pre-emption suffers from a bad connection. State law is not biased against arbitration. It allows AT&T to resolve disputes in either arbitration or court. Only AT&T’s “agreement” is biased against arbitration. Its “blowup clause” precludes class actions from proceeding in arbitration, but not in court.

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Using the scroll bar to the right of the player, move down and click on Attorney Paul Bland’s name and watch him argue forcefully that AT&T’s motives are plain and simple — to allow them to get away with anything they want and not face accountability from the legal system. — “Arbitration is not the Candy Bridge into Rainbow Land.”

Tapping Into Consumer Discontent With Class Action Cases for the Benefit of AT&T

What the lawyers get

Ask anyone about the merits of most class action settlements and one will often get a response that the lawyers win while consumers lose.  Just this week many owners of HP printers will get word a deal has been reached over a class action case involving printer ink.  The multiple law firms involved will split not more than $2.9 million under the terms of the proposed settlement.  Consumers will get “e-credit” worth $5, $2, or $6 redeemable at HP’s online store, which sells ink cartridges at inflated prices.  In effect, HP has little to grumble about delivering “awards” to consumers that ultimately benefit its own enterprise, the only place those awards can be redeemed.

With settlements like that all too common, it is easy for AT&T’s advocates to tap into consumer discontent with class action lawyers, proclaiming AT&T’s case is actually consumer-friendly because it would cut those money-grabbers out of disputes with the company.

But consumer advocates stress class action cases do more than deliver settlements — they deter bad behavior on the part of would-be wrongdoers, bring corporations to account fiscally when they are forced to settle, and open the door to legal discovery which can uncover patterns of extensive wrongdoing that would otherwise remain secret in arbitration.

But most important of all, class actions impact every customer, not just the handful who navigate arbitration to achieve a confidential settlement.  That can be critically important to stop unfair business practices.

What you get

Of course, reform is also desperately needed in the class action system.  Too often, judges approve class action cases that deliver maximum benefits to the law firms that bring them, leaving consumers with peanuts.  Strict limits on legal fees recouped in such cases, perhaps tied to a percentage of total recovery would be a start, as are bans on settlements that don’t provide cash refunds to consumers who choose not to conduct further business with companies that abuse them.  Coupons, low value trinkets, and donations to third party groups (non-profit or otherwise) are insufficient.  Attorneys that selfishly claim most of the proceeds for themselves have only themselves to blame when corporations use that fact against them under so-called “tort reform” proposals.

Some advocates of AT&T’s position also argue that government oversight can provide a more effective system of checks and balances against corporate overreach.  While a noble sentiment, anyone who has watched the revolving door of lobbyists going to work for such agencies, later returning to lucrative jobs with the companies they formerly regulated, knows that is a classic case of the fox overseeing the hen house.  In an era of government “oversight” that missed everything from BP’s safety lapses, salmonella-infected eggs, produce, and meat, tainted pet food ingredients from China, and indecisiveness about telecommunications reform like Net Neutrality — such proposals are not to be treated seriously.

The Supreme Court Decision

While it will be months before the Court rules, most observers suspect consumers will ultimately win the case.  Liberals on the court are skeptical AT&T’s efforts to preempt state consumer protection laws are actually for the benefit of consumers, and some of the most conservative members of the court like Justice Clarence Thomas, big believers in “states’ rights” are likely to find for the Concepcion family.

“Based on what was said during the argument, I predict a 8-1 or 7-2 vote for the consumers and California, with Samuel Alito dissenting and John Roberts a toss up. Thomas, who never speaks at oral argument, will vote for the consumers and state on federalism grounds, as he always does in [arbitration] cases,” writes Lawrence Cunningham, Argument in Class Waiver Case Favors Consumers, States, Concurring Opinions.

“[I]t doesn’t look as though there are too many votes at the high court to do away with the right of consumers to band together to sue the great American manufacturers of fine print,” said Dahlia Lithwick, Can You Hear Them Now? The Supreme Court reads the fine print on your cell phone contract, Slate.

If these two observers are wrong, it will be open season on consumers who will be forced into arbitration agreements that deliver all of the benefits to companies like AT&T.  Under such a scenario, there would be little to dissuade companies from developing new fine print to trick and overcharge consumers.  Few will be willing to buy a ticket to fly halfway across the country to sit for arbitration proceedings over a $20 dispute, especially when the arbitration firm’s income depends on fees paid by the very companies that are accused of wrongdoing.