AT&T Rate Increases Coming

AT&T is jacking up phone rates for residents of Alabama, one year after state officials deregulated the Alabama telephone service marketplace based on the premise that competition would bring about lower rates for consumers, not higher.

Darrell Baker, director of the Alabama Public Service Commission’s telecommunications division, said telephone companies heavily promoted the price deregulation plan by claiming competition would keep rates down.  An industry-friendly deregulation bill was passed in 2005 over PSC objections, and another bill the Alabama Legislature passed this spring expanded deregulation further.

Alabama residents will now pay for that free-market construct in a state with limited local line competition.

AT&T spokesman Hood Harris said customers with Basic Service, a single-line home phone, will see their bill rise 3 percent, from $16.95 per month to $17.45.  Approximately 15 percent of AT&T’s Alabama customers have basic service.

Customers with AT&T’s deluxe plan, the Residence Complete Choice Package, will see an increase of 9.5 percent, from $21 per month to $23.

Harris blamed the increases on inflationary costs.

Baker was unimpressed with the rate increase announcement.  “It doesn’t sound like the competitive market is having much impact,” he said.  Baker expects other telephone companies in the state to quickly follow suit.

AT&T increased rates in 2008 by 4.1%.

No Myth: AT&T Huge Wireless Data Bills

In between the wall-to-wall coverage of the passing of Michael Jackson last week, Stop the Cap! reader Lou discovered Twitter was all-a-tweet about yet another person who got stuck with an enormous mobile data bill from AT&T Mobility.  This time it was Mythbusters’ Adam Savage, who spent five days in Montreal and discovered the most expensive part of the trip was the $11,000 bill from AT&T.

The story here isn’t really about AT&T’s math, or the remarkably expensive Canadian data roaming rate of $0.015 per kilobyte, it’s the fact AT&T will let your bill run into the ionosphere before alerting you, or giving you the option to automatically shut yourself off before you go over a plan limit.

Savage’s tweet to his 50,000 followers all but guaranteed a rapid response (and credit) from AT&T for the $11,000 in fees charged to his account (and they turned his phone back on.)  Unfortunately, company policies remain unchanged, leaving those who encounter similar kinds of overlimit fees who don’t have tens of thousands of followers on Twitter, stuck paying those bills or begging for credit.

AT&T should automatically notify any customer entering into a roaming area with a text message explaining the rates and fees charged when inside that roaming area.  Customers should have the right to choose a setting for their account that best meets their needs:

1. No roaming access/No overlimit fees: This would suspend service on your phone automatically until you contacted AT&T to remove it at your request;
2. No Overcharges: This would turn your service off when your plan limit is reached, requiring the customer to opt-in to any overlimit fees;
3. Free and Open: The current standard — roaming and overlimit rates apply automatically.

AT&T claims it will send a text message and/or contact customers who substantially exceed their normal usage, but there has been scant evidence that policy is applied uniformly.  Customers should have the right to make their own choices about their wireless usage, and the responsibility to select an option that best protects them from the heart attack in the mail, a/k/a the bill.

Beaumont, Texas

Stop the Cap! reader Mark who went to war with Time Warner Cable in the Beaumont area when they tried to impose Internet Overcharges on his account (and got his money back), found himself back with AT&T after dropping Time Warner Cable.  Mark is among many who made it clear that imposing these kinds of billing schemes is not up for discussion — he will cancel service immediately.

Before Mark returned to AT&T, he called the company’s customer service sales center and asked about usage limits and other pricing tricks and traps, and they responded, “there are no cap limits.”  That’s because for most of AT&T’s coverage area, that’s true… for now.  The company has been testing Internet Overcharging with usage allowances and overlimit fees in two cities – Beaumont, Texas and Reno, Nevada.  Unfortunately, not every AT&T sales representative seems aware of this fact, even when you provide them with an address and telephone number within the test area.

“We received the modem and before I had opened the package a certified letter arrived from AT&T,” Mark says.

“It was a letter stating that AT&T had introduced usage limits, and I called them immediately to  cancel,” he said.

When you live in a city with two broadband providers, both engaged in Internet Overcharging, you discover you run out of options very quickly.  Or do you?

“I called AT&T and talked to an upper level retention agent named Jennifer, and told her if I could not get a flat rate Internet plan from AT&T, I wanted to also cancel my two phone lines and my business Yellow Pages ads,” Mark said.

Even when providers claim to “listen to their customers” on issues like this, the one word they always truly understand is: CANCEL.

“Jennifer immediately agreed to note my account that there would be no usage overlimit charges, which effectively gave me flat rate service,” Mark said.

The AT&T representative also sent him a $75 gift card and promised to investigate getting him faster DSL service on the Elite tier he tried before, and failed to receive.  To date, Mark hasn’t been billed one cent more than his standard monthly rate, despite AT&T’s ongoing “tests” in Beaumont.  As long as that remains true, and AT&T works on getting him more reasonable speeds, Time Warner Cable has lost a customer, potentially for good.

Mark feels he’s living on the front line of a battle between consumers and providers over what is rapidly becoming a utility as important as telephone service.

“I feel the Internet is going to pass Americans by if something is not done,” Mark adds.  “I personally will not pay the kind of fees the ISP’s want to charge.”

Mark is also curious why these “tests” are being imposed on residential customers, and not business customers who are charged prices providers claim are justified considering their “higher usage.”

“Starbucks and Books a Million all have Internet service from these companies and provide it to their customers,” Mark notes.  “Were they exempt?”

Time Warner Cable’s testing, now suspended, never involved commercial accounts.  AT&T doesn’t appear to have included their business accounts in any tests either.

If you are an AT&T customer in Beaumont or Reno, you may have a shot at exiting a test you never wanted to be a part of in the first place.  Simply insist on either being exempted from Internet Overcharging schemes, or take your business elsewhere (Time Warner Cable in Beaumont, for now, may be your best option.)  Retention specialists may be the only representatives empowered to exempt you, so you may have to indicate your intent to cancel service before reaching one.

If you are under a contract with an early termination fee, ask the competitor if they’d be willing to cover your exit fee.  Time Warner Cable is doing that in some markets.  If not in full, negotiate and see how far they’ll go.

Report any results of your efforts to us.  We’ll pass the word on to others.

Frontier Essentially Accuses Time Warner Cable of Being a Shakedown Artist

Early indications of a more challenging second quarter of 2009 may be what’s behind the sudden speed increases and new promotions being run by providers, who are also counting on signing new customers, now that moving season is in full swing.  A roundup of promotions and service adjustments customers may find enticing them:

AT&T

U-verse Internet Max customers received free upgrades last week in most areas, boosting broadband download speeds from 10Mbps to 12Mbps.  AT&T previously announced a slowing of U-verse deployment for economic reasons.  AT&T competes with cable operators offering video, voice, and broadband service.

Cablevision

Cablevision Systems continues to offer new customers taking at least a combined broadband and phone package a $200 American Express gift card through June 30.  The company already announced major increases in premium speed levels, and promises no limits on consumption.

Comcast

Reduced pricing in highly competitive Washington, DC market for premium 50Mbps service to under $100, for customers signing up for at least two Comcast services (video, voice, and/or broadband)

Frontier

A substantial mailing offering discounts and giveaways was sent through postal mail to consumers in many Frontier service areas.  Frontier is using a cable-critical mailer depicting their cable competitor as “Rob” and “Bill.”

Rogers (Canada)

Rogers, which earlier increased rates for subscribers, announced a “free speed increase” to its “Hi Speed Internet Express” package, from 7Mbps to 10Mbps, and “Internet Lite” from 1Mbps to 3Mbps.  Rogers limits its customers typically to 60GB of consumption per month for standard levels of service.  Much lower limits are placed on economy packages.

Time Warner Cable

Time Warner Cable is continuing to mail customer postcards and other mailings promoting its existing service packages, but this week also attempts to pick up customers trapped in Frontier term contracts by agreeing to cover early contract termination penalties, up to $200.  Time Warner Cable is also hinting that cable customers will soon be able to use Tivo software for their Digital Video Recorder (DVR) boxes, which permit customers to record programming.

Verizon

Verizon announced substantial speed increases throughout their service area. The company also has engaged in a price war with Cablevision over gift cards. Verizon offered $150 gift cards to new customers signing up for a service bundle (although Cablevison beat their offer by $50).  The company also began promotional giveaways to customers signing a contract agreement.

To date, AT&T continues tests limiting consumption to as low as 20GB per month in Beaumont, Texas and Reno, Nevada.  Comcast has a straight limit of 250GB of consumption per month for residential customers nationwide.  Frontier defines “acceptable use” at 5GB consumption per month, but does not enforce it at this time.  Rogers limits consumption based on the level of speed selected by the customer.  Most customers face a 60GB monthly limit.  Time Warner Cable tested, but temporarily shelved, tiered pricing and consumption limits.  Other providers not listed have no Internet Overcharging schemes in place.

The NoChokePoints Coalition has a point.  They are a coalition of public interest groups and providers like British Telecom and Sprint-Nextel that are upset with monopolistic pricing for high speed broadband lines.  Verizon and AT&T “control the broadband lines of almost every business in the United States” the coalition states, and “generates a profit margin of more than 100% for the controlling phone companies.”

“Releasing the broadband economy from the chokehold these huge phone companies have on the special access market will be a catalyst for innovation and investment in the broadband marketplace, something we desperately need,” said Maura Corbett, spokeswoman for the NoChokePoints coalition.

“Every time you send an email, withdraw money from an ATM, or use your wireless phone, your information travels on these high-capacity lines. Excessive pricing and other market abuses by these companies have long been an issue of concern at the Federal Communications Commission (FCC). Nearly five years ago, after many complaints by broadband customers in several FCC proceedings, the Commission began a review of the high-capacity broadband market to determine the changes needed to ensure reasonable prices. Despite ample evidence of excessive pricing, the Commission inexplicably has yet to take any action.”

“The Obama administration, Congress, and the FCC repeatedly emphasize the importance of broadband to our economic recovery and, frankly, it defies explanation that we are still fighting this market abuse,” Corbett continued. “Huge companies like Verizon and AT&T control the broadband lines of almost every business in the United States. The virtually unchallenged, exclusive control of these lines costs businesses and consumers more than $10 billion annually and generates a profit margin of more than 100 percent for the controlling phone companies, according to their own data provided to the FCC. This hidden broadband tax results in enormous losses for consumers and the economy, and this country cannot afford it; especially now.”

NoChokePoints cited four central principles of its campaign to reform the special access market: (1) the special access market is broken; (2) the outgoing Federal Communications Commission made a bad situation worse by failing to address obvious market abuse by these huge phone companies; (3) this unchecked market control continues to slow broadband deployment, compromise innovation and harm our national information economy; and (4) the resulting market failure must be corrected now.

Yes, when one or two providers get together and establish pricing for a product that is way out of line for what it costs to provide, and uses that control to further squeeze every last penny they can from customers, something should be done.

As consumers, we should agree to join the NoChokePoints coalition struggle.  There are several very credible pro-consumer organizations that support the Coalition and its goals.  And consumers like myself shall, mere seconds after:

Member BT (British Telecom) stops throttling UK customer’s broadband connections, and imposing Internet Overcharging schemes on customers through limits on their data consumption.

Member Sprint-Nextel agrees that consumers should be able to request temporary suspension of their wireless data account, currently limited to 5GB of consumption per month, the moment the limit is reached to avoid the potential of paying overlimit fees, if/when applicable.

TW Telecom gets a pass here as they are entirely independent from Time Warner Cable.

Internet Overcharging schemes, monopolistic control, abuse of market pricing, and other anti-competitive behavior should be confronted.  But companies engaged in problematic behavior themselves should not anticipate a great deal of consumer compassion towards their plight, when those consumers often are on the receiving end of that problematic behavior themselves.