AT&T is following the cable industry’s tradition of offering slower speed internet service at a discount to qualified customers, at prices as low as $5 a month.

AT&T is introducing Access, available only to those receiving public benefits.

“We’re making it easier for more people to connect to friends, family, their communities and the possibilities of the internet,” said Cheryl Choy, vice president wired voice and broadband products, AT&T. “Access from AT&T is an affordable internet option available to millions of Americans with limited budgets.”

The service offers participants the fastest available speed tier that will work reliably at their home. AT&T DSL service can be speed variable, so some households may only be able to get slower service. If AT&T qualifies you for 5 or 10 Mbps, the service will cost $10 a month. If only 3 Mbps or less is available, the price is $5 a month. Installation and equipment is provided free of charge.

Service will include a monthly data allowance of either 150 GB or 1 TB of data per month depending on the type and speed of service you receive. If you exceed your monthly data plan allowance, you will be automatically charged $10 for each 50 GB of data usage in excess of your data plan, even if less than 50 gigabytes is used. For more information, go to att.com/internet-usage.

Get more information and enroll here.

Speed Tiers (the speed furnished will be whatever is fastest and reliable at your service address)

• 10 Mbps $10 per month
• 5 Mbps $10 per month
• 3 Mbps $5 per month
• 1.5 Mbps $5 per month
• 768kbps $5 per month

To qualify, a household must have at least one resident participating in the Department of Agriculture’s Supplemental Nutrition Assistance Program (better known as ‘SNAP’) and must live in an area where AT&T provides landline service. Customers must also not owe any past due balance to AT&T within the last six months. California residents only: If at least one member of your household receives Supplemental Security Income (SSI) benefits you also may qualify to participate.

AT&T’s merger with Time Warner (Entertainment) is now complete, and despite repeated promises to antitrust regulators AT&T would not use consolidation as an excuse to raise rates, the company is reportedly doing exactly that on its DirecTV Now online streaming service.

According to a report by Cord Cutters News, most current subscribers will be formally notified this week their rates are going up $10 a month and new customers will be offered only two choices for DirecTV Now packages going forward — a slimmed down Plus package of 40 channels and HBO for $50 a month and a slightly larger Max package with 50 channels bundled with HBO and Cinemax for $70 a month. Both represent fewer channels for more money.

News about big changes for AT&T’s streaming services were first announced by AT&T CEO Randall Stephenson in late 2018, telling investors he planned to wring more profit out of DirecTV Now by raising rates and slimming down the number of channels in the remaining packages.

Current customers can keep their current packages indefinitely, but they will pay more starting in April. The $10 rate increase comes on the heels of a $5 rate increase in the summer of 2018, and AT&T has made it clear more price hikes are forthcoming as needed.

AT&T also told Cord Cutters News that DirecTV’s satellite service will soon debut on its own streaming platform, but it won’t come discounted or cheap:

• 65 channel DirecTV package: $93/month
• 85 channel DirecTV package: $110/month
• 105 channel DirecTV package: $124/month
• 125 channel DirecTV package: $135/month

AT&T hopes its simplified menu of offerings for DirecTV Now will prove attractive to subscribers, in part because both packages bundle either AT&T-owned HBO or HBO and Cinemax. But subscribers are also likely to notice the dramatically smaller package of cable channels, now missing AMC, Viacom and Discovery-owned networks. They are also likely to be confused by the forthcoming introduction of DirecTV satellite streaming packages, which will be marketed separately from DirecTV Now. AT&T plans to eventually mothball its satellite fleet and move DirecTV entirely to an internet streaming platform, but will take several years before switching off the last satellite.

AT&T’s DirecTV Now will slim its packages down substantially as early as tomorrow, while raising prices.

An informal FAQ:

Q. When will AT&T make these changes?

A. AT&T is expected to email current customers on or about March 12, 2019 to inform them of the $10 rate hike. At the same time, AT&T is likely to stop signing up new customers for its current DirecTV Now packages and begin offering DirecTV Now Plus or DirecTV Now Max instead. Current customers can expect to see their first bill with the new rates in April.

Q. Will current customers be grandfathered?

A. AT&T plans to tell current customers they can keep their current packages as long as they do not make changes to their account (or cancel), but effective April 12, 2019, rates will increase $10 a month for those subscribed to: Live a Little, Just Right, Go Big, and Gotta Have It.

Q. If I subscribe today to the older packages, can I avoid some of the price increases and channel changes?

A. Yes and no. If AT&T’s schedule holds, today is the last day you will be able to signup for DirecTV Now’s old packages, and you will need to make a payment today and skip the free 7-day trial to lock in these packages or you could face choosing only between Plus and Max after your trial ends. You will pay existing rates for March, but the $10 rate increase will impact you starting in April.

Q. What about the prices for premium channels?

A. If the rumors are true, and we stress these are only rumors at this point, current DirecTV Now customers that already subscribe to premium networks like HBO or Cinemax prior to March 12, will be able to avoid planned rate increases on premium networks that are also supposed to be announced as early as tomorrow. If you sign up today and subscribe to HBO and/or Cinemax, you will pay $5 a month for each going forward. Showtime and/or Starz are also available for $8 a month each going forward. The rumor claims that starting tomorrow, HBO will triple in price to $15 each, with Cinemax, Showtime and Starz supposedly increasing to $11 a month each. These new prices would only apply to grandfathered customers on older packages that want to add a premium network on or after March 12 to their existing package. AT&T would use this new pricing to incentivize customers to abandon their old package in favor of Plus or Max, which bundles HBO and HBO and Cinemax into the base package price. So if you are thinking about subscribing to a premium network and want to keep your old package, you should subscribe today and lock in the current lower price.

Q. What happens to pricing for add-on international channels?

A. If you subscribe to international channels (Vietnamese – $20/mo, Brazilian Portuguese – $25/mo, or Korean – $30/mo) before March 12, your rates stay the same. If you add these channels on or after March 12, you will likely pay more to do so. If you are considering these channels, you may save a lot in the long run subscribing today for at least a month to lock it current prices. If the rate increase does not happen, you can drop the add-on after a month.

Q. What are the biggest differences between the old and new packages?

A. You are getting fewer channels for more money from the new Plus and Max package tiers. DirecTV Now is stripping out popular cable networks from AMC, Discovery-Scripps, and Viacom from the new packages, but bundles HBO in the new Plus package and both HBO and Cinemax in the new Max package. An unofficial new channel lineup of both new packages can be found here.

Q. Why are they raising rates like this?

A. AT&T shareholders have been increasingly critical about the company’s 2015 acquisition of DirecTV. Executives sold Wall Street on the acquisition on the theory that acquiring the country’s largest cable TV programming distributor with 21+ million customers would deliver AT&T’s much smaller U-verse TV (with 4-5 million customers) dramatically better volume discounts on cable TV programming. More importantly, it would help AT&T become a powerhouse in video entertainment and cut through the red tape of getting that programming on AT&T’s mobile products. If you are a cable network’s biggest customer, it helps in negotiations seeking streaming and platform distribution rights.

Stephenson

After the merger, AT&T began de-emphasizing its U-verse brand and even started selling DirecTV satellite service to video-only AT&T customers. DirecTV Now was AT&T’s response to cord-cutting, and its promotional pricing and strong package of channels was customer and regulator friendly. At the same time AT&T was seeking to win regulator approval of its acquisition of Time Warner (Entertainment), it did not hurt to argue AT&T’s prior acquisitions had not hurt the marketplace, and may have even enhanced it, pointing to the DirecTV Now offering in the cord-cutting marketplace.

But Wall Street analysts have often argued AT&T is losing money on DirectTV Now, because the wholesale programming costs plus the distribution and marketing expenses likely exceed the prices AT&T charges. Some analysts are even questioning the wisdom of acquiring DirecTV in the first place, especially as the era of cord-cutting has taken a particularly harsh toll on DirecTV’s satellite subscriber numbers. Just a few weeks after the Justice Department abandoned further court action to block the merger of AT&T and Time Warner, Stephenson followed through on his commitment to shareholders by preparing to prune back DirecTV Now’s packages and dramatically increases prices at the same time.

“We’re talking $50 to $60,” Stephenson told investors last December. “We’ve learned this product, we think we know this market really, really well. We built a two-million subscriber base. But we were asking this DirecTV Now product to do too much work. So we’re thinning out the content and getting the price point right; getting it to where it’s profitable.”

Stephenson fully expects DirecTV Now will soon shed a large percentage of ‘low value’ customers that subscribed only because they locked in a low price or promotion, telling investors he prefers to deal with high-value customers that appreciate AT&T’s brand and quality, and won’t cancel over price increases. He does not want to deal with customers that chase promotions.

AT&T is also using the changes to reset its video portfolio of products, and the audiences each will target. Those most sensitive to price will be marketed ultra-skinny bundles like AT&T Watch, which can also be used to try and get customers to switch to AT&T wireless. Middle ground customers partially sensitive to price, but want a channel lineup that better reflects what they actually watch will be pushed towards DirecTV Now, which will be marketed as cheaper than cable and a good option for cord-cutters. DirecTV’s forthcoming satellite streaming service will be the new home for customers that gravitated towards DirecTV Now’s higher end bundles. Marketing will focus on customers that want an alternative to cable television, but won’t sacrifice their favorite cable channels just to get a lower bill. These customers will be willing to pay a higher price to have a less-jarring transition from the traditional huge cable TV package to DirecTV’s alternative.

Q. What does AT&T risk doing this?

A. Hundreds of thousands of DirecTV Now subscribers are likely to cancel service as a result of this rate increase, which will leave DirecTV Now at a higher price than many of its competitors. AT&T’s loss will likely deliver a sudden spike of new customer signups for YouTube TV and Hulu Live TV, which are the closest equivalents. Other services like Philo, Vue, and even Sling TV are also likely to grab new customers, albeit in smaller numbers.

AT&T’s biggest threat may turn out to be cable operators — especially Charter Spectrum, which has launched its own response to cable TV cord cutting. Its slimmed down and pick-your-own-channels packages could be more attractive than other streaming services, and bundle all local channels.

More specifics about those options are ‘below the fold’:

… Continue Reading

The merger of AT&T and Time Warner (Entertainment) is safe.

A federal appeals court in Washington handed the U.S. Department of Justice its worst defeat in 40 years as federal regulators fought to oppose a huge “vertical” merger among two unrelated companies.

In a one page, two-sentence ruling, a three judge panel affirmed the lower District of Columbia Circuit Court decision that approved the $80 billion merger without conditions. In the lower court, Judge Richard Leon ruled there was no evidence AT&T would use the merger to unfairly restrict competition, a decision that was scorned by Justice Department lawyers and consumer groups, both claiming the merger would allow AT&T to raise prices and restrict or impede competitors’ access to AT&T-owned networks.

In this short one-page ruling, a three judge panel of the D.C. Court of Appeals sustained a lower court’s decision to allow the merger of AT&T and Time Warner, Inc. without any deal conditions.

The Justice Department and its legal team seemed to repeatedly irritate Judge Leon in the lower court during arguments in 2018, making it an increasingly uphill battle for the anti-merger side to win.

Judge Leon

Unsealed transcripts of confidential bench conferences with the attorneys arguing the case, made public in August 2018, showed Department of Justice lawyers repeatedly losing rulings:

• Judge Leon complained that the Justice Department used younger lawyers to question top company executives, leading to this remarkable concession by DoJ Attorney Craig Conrath: “I want to tell you that we’ve listened very carefully and appreciate your comments, and over the course of this week and really the rest of the trial, you’ll be seeing more very gray hair, your honor.”
• Leon grew bored with testimony from Cox Communications that suggested Cox would be forced to pay more for access to Turner Networks. Leon told the Cox executive to leave the stand and demanded to know “why is this witness here?”
• Leon limited what Justice lawyers could question AT&T CEO Randall Stephenson about regarding AT&T’s submissions to the FCC.
• Justice Department lawyer Eric Walsh received especially harsh treatment by Judge Leon after the Justice lawyer tried to question a Turner executive about remarks made in an on-air interview with CNBC in 2016. Leon told Walsh he already ruled that question out of order and warned, “don’t pull that kind of crap again in this courtroom.”

During the trial, AT&T managed to slip in the fact one of its lawyers was making a generous contribution towards the unveiling of an official portrait of Judge Leon, while oddly suggesting the contribution was totally anonymous.

“One of our lawyers on our team was asked to make an anonymous contribution to a fund for the unveiling of your portrait,” AT&T lawyer Daniel Petrocelli told the judge. “He would like to do so and I cleared it with Mr. Conrath, but it’s totally anonymous.”

Leon responded he had no problem with that, claiming “I don’t even know who gives anything.”

AT&T also attempted to argue that the Justice Department case against the merger was prompted by public objections to the merger by President Trump, who promised to block the deal if he won the presidency. That clearly will not happen any longer, and it is unlikely the Justice Department will make any further efforts to block the deal.

AT&T received initial approval of its merger back in June and almost immediately proceeded integrating the two companies as if the Justice Department appeal did not exist. The Justice Department can still attempt to appeal today’s decision to the U.S. Supreme Court, something AT&T hopes the DoJ will not attempt.

“While we respect the important role that the U.S. Department of Justice plays in the merger review process, we trust that today’s unanimous decision from the D.C. Circuit will end this litigation,” AT&T said in a statement.

Gov. Mike DeWine and his wife, Francis.

Ohio’s incoming Republican state officeholders are being showered in gifts, cash, food and drink to celebrate their 2018 election victories and get their start of the 2019 legislative term off ‘in the right direction’, all courtesy of Ohio’s biggest telecommunications and for-profit utility companies.

It’s the perfect opportunity for powerful state lobbyists to introduce themselves and get their feet in the doors of the incoming Republican officeholders that dominate the governor’s office and state legislature. At least $1.7 million in gifts and cash were directed to incoming Gov. Mike DeWine and his running mate, Lt. Gov. Jon Husted alone.

Some familiar companies donated the maximum $10,000 apiece to the DeWine-Husted Transition Fund, a special set-aside account to cover inauguration activities and allow incoming politicians to count stacks of $100 bills. AT&T and Charter Communications — the dominant phone and cable companies in Ohio — each maxed out their contributions just before DeWine announced a new industry-friendly appointment to the Public Utilities Commission of Ohio (PUCO) and prepares the 2019 budget for the Consumers’ Counsel, an underfunded state office that represents the interests of Ohio consumers dealing with problem utilities, phone, and cable companies.

DeWine did not disappoint his corporate benefactors, this week announcing the appointment of Samuel Randazzo, a retired lawyer with a 40 year history of representing the interests of utility companies, as the newest commissioner at PUCO.

“We are disappointed in this choice, as Mr. Randazzo has a lengthy career fighting against renewable energy and energy efficiency in Ohio,” Heather Taylor-Miesle, president of the Ohio Environmental Council Action Fund, said in a release. “This move is out-of-step with the rest of the Midwest, where governors are committing to the future of energy, instead of the past.”

Randazzo has a long record of opposing utility mandates or regulations that interfere with the industry’s ability to generate profits, and is expected to be one of the friendliest regulators for utility companies in recent Ohio memory. Where did DeWine get Randazzo’s name? Scott Elisar, an attorney in Randazzo’s former law firm, was also a member of the nominating council that presented the list of four candidates for DeWine to consider for the PUCO position.

Consumer groups are also concerned that DeWine will soon appoint another member of the Commission after current PUCO Chairman Asim Haque leaves on March 1 to pursue a new job opportunity.

Randazzo

“We recommend that [his] seat be filled with a bona fide representative of residential consumers, especially considering that the current PUCO commissioners include two former utility representatives,” a statement from the Office of the Ohio Consumers Counsel said this week.

Other newly elected officials are also getting a taste of the action, with donor contributions limited to $2,500 each. Considering the number of special interests writing checks this year, several members of DeWine’s administration are also enjoying considerable free cash, despite the contributions limit: Attorney General David Yost of Columbus, $33,500; state Auditor Keith Faber of Celina, $29,000; Secretary of State Frank LaRose of Hudson, $30,500; and state Treasurer Robert Sprague of Findlay, $15,000.

An early test of what corporate influence can buy from Ohio legislators suggests it does not cost very much to participate in “pay for play” politics. FirstEnergy Solutions, Ohio’s bankrupt utility that reported “massive financial problems” last spring, still managed to scrape together $172,000 in campaign contributions for Ohio House candidates — mostly Republican, and another $565,000 for the Republican Governors Association during the 2018 election.

FirstEnergy spent much of last year lobbying the legislature to stick ratepayers with a $30 annual rate increase to bail out some of its unprofitable power generation facilities. It failed, along with a more comprehensive proposed corporate bailout package worth $2.5 billion. FirstEnergy became one of DeWine’s biggest supporters in his race for governor. DeWine, in turn, has signaled his support for the FirstEnergy bailout rejected last year. That could explain why DeWine received five times more money in contributions from the utility than his Democratic opponent.

On the first day of Ohio’s new 2019 legislative session, by sheer coincidence, the General Assembly announced a new standing committee on power generation, which will have the authority to approve a new bailout package for the troubled utility. FirstEnergy also announced it was abandoning some of its more costly energy producing facilities. Decommissioning costs will likely be financed by new surcharges on Ohio residential and business customer utility bills.

AT&T began laying off thousands of workers Monday, mostly targeting highly skilled and highly paid long-time AT&T employees nearing retirement age.

Many of those laid off this week worked in the company’s wireline division, which supplies landline phone service, fiber and copper-based internet service for residential and commercial customers, and AT&T’s Foundry “innovation” centers. Other affected units include AT&T Technology & Operations, Mobility, Construction and Financing, Entertainment Group, Global Supply, Finance, and DTV (DirecTV).

Many of those targeted for layoffs were approaching 30 years with AT&T, part of an important benchmark allowing employees to retire with maximum benefits. Those who did not quite make it will be offered two weeks pay for every year of service in severance instead, capped at a maximum of six months pay. Affected employees must leave AT&T by Feb. 18 or accept, when available, an alternate position at the company if one can be located within 50 miles of the current job location.

Last year, AT&T claimed that as a result of the passage of significant corporate tax cuts signed into law by President Trump, the company would hire at least 7,000 new workers and invest up to $1 billion in its business. AT&T claims it has already exceeded those commitments, hiring more than 20,000 new employees last year and more than 17,000 the year before, although the company would not confirm if those workers were directly hired by AT&T and in the United States. The Communications Workers of America reports that AT&T eliminated 10,700 union jobs from its payroll in 2018, with at least 16,000 employees replaced by offshore workers. The company had 273,210 employees as of August 2018.

In a leaked internal memo from AT&T’s vice president of technology and operations, Jeff McElfresh warned AT&T would be laying off a significant number of workers this year. The company is seeking a “geographic rationalization” of its current employees to cut a “surplus” of workers.

“To win in this new world, we must continue to lower costs and keep getting faster, leaner, and more agile,” McElfresh told employees. “This includes reductions in our organization, and others across the company, which will begin later this month and take place over several months.”

The wife of one “surplus” worker described how an AT&T manager ended her husband’s 29-year career at AT&T in a scripted, four-minute phone call.

“My husband had 29 years with the company. [He] has been a fiber and copper splicer, engineer, ran a construction crew, and has been an instructor as the subject matter expert in over 50 courses for the last 18 years,” she shared. “His boss called him this morning […] and in less than four minutes told him he was out. Twenty-nine years and you get a call that takes less than 4 minutes?”

Some workers unaffected by the current round of layoffs fear that AT&T gutted some of its most experienced and qualified talent, and worries about the future competence of AT&T to manage its business.

“We lost so many people throughout our work groups that there is no way I can see us being able to support the systems going forward. Can’t happen,” one employee shared. “We even lost people that were in one deep slots without any thought about the impact. Some positions that flat out require multiple people just to support the existing volume of support work and new projects have been reduced to one or less headcount.”