Phillip “What’s $520 a month between friends” Dampier

The average Ohio household consumes 52 gigabytes of data per month — the equivalent of more than five million emails or surfing the Internet for about 100 hours monthly — up from 28GB in 2012.

Demand for broadband and mobile communications continues to skyrocket as consumers in urban Ohio dump traditional landline phone service at an accelerating rate.

Since 2000, the industry group Ohio Telecom Association reports 64 percent of landlines have disappeared in the state since peaking in 2000. An additional 6-10 percent continue to cut the cord every year, either when elderly customers pass away or when consumers decide to switch to a wireless, cable telephone, or a broadband Voice over IP alternative like Vonage.

Some telephone companies, particularly AT&T and Verizon, argue the ongoing loss of landlines means the service is becoming technically obsolete — a justification to drop old copper phone networks in rural areas in favor of wireless and switching to fiber-fed IP networks like U-verse in urban and suburban areas. But copper landlines do more than just connect telephone calls.

Broadband usage statistics suggest rural customers in Ohio could find their Internet bills exploding if AT&T succeeds in forcing those customers, least likely to face competition from cable providers, to the company’s highly profitable wireless network.

AT&T currently sells rural landline customers DSL service starting at $14.95 a month. A usage cap of 150GB per month technically applies, but remains unenforced.

Customers switched to AT&T wireless service will pay much more for much less.

AT&T’s DataConnect plan, suitable for fixed wireless home use, starts at $50 a month and includes a usage allowance of 5GB per month. With the average Ohio resident now consuming 52GB a month, switching to wireless broadband is a real budget-buster. AT&T’s overlimit fee is $10/GB, so the average resident would face a monthly Internet bill of $520 a month this year. Assuming usage growth continues at the same pace, in 2014, AT&T customers will need to write a check for around $780 a month.

Ohio’s broadband and wireless usage statistics are familiar because they echo the rest of the country. According to Connect Ohio, wireless-only residents are 81 percent urban or suburban, where cell networks provide the best reception; 84 percent are under age 44; 58 percent have a college education; and 63 percent earn more than $25,000 annually.

Those affected by a forced transition to a wireless-only solution are least financially equipped to handle it.

“The least likely to convert to a wireless-only solution would be an older, rural, less educated, lower-income individual,” said Stu Johnson, executive director of Connect Ohio. “Those are probably also the most expensive copper customers.”

Following Verizon’s lead, AT&T has announced a new privacy policy that includes fine print allowing the company to track your website visits, location, viewing habits, mobile app usage, and numbers called and received. AT&T says it will aggregate the information collected and peddle it to businesses who want to learn everything they can about potential customers, store visitors, and viewers.

AT&T will likely earn millions from the enhanced surveillance of its customers, but none of those earnings will bring you a lower bill.

“The scope of the information collected is significant when one considers AT&T will be matching it with credit reports, mailing lists, and already-available demographic information,” says online privacy expert Thom Sonderland. “Although AT&T says they will not sell personally identifiable information to third parties, the company will have much more detailed information about their customers at their disposal for any internal use they want.”

AT&T included examples of collected information:

• The names and web addresses of all websites visited;
• the length of time spent on each website;
• the addresses of all web links customers choose to click, which ads appear on-screen and which are accessed;
• a complete list of search terms entered into search engines;
• how customers use their AT&T wireless or home phone, including numbers dialed and received;
• which mobile apps are installed, used, and for how long;
• all stores, homes and businesses visited while carrying your mobile phone and for how long;
• what television shows/channels U-verse customers watch and for how long;
• which U-verse apps are being used.

AT&T customers have been largely hostile to the sweeping privacy policy changes.

“AT&T should not be making money on my data – they make plenty of money from my wireless plan and the devices sold to me – and […] the wireless coverage in my area is awful,” writes Kippian Yost. “Why not concentrate on better coverage for the prices we are paying to AT&T?”

“Selling my private information to marketers doesn’t enhance my experience, it only erodes it but pads your top line,” writes Bruno S. “My contract is up soon, I will choose to do business with a company that respects my privacy, not one that views my private actions as a commercial asset.”

“I want to know how to opt out of my U-verse and business phone line,” said Robert Celano. “I have already done so for my AT&T Wireless account. I want to opt out of everything connected to AT&T.”

Stop the Cap!’s Guide to Opting Out of AT&T’s New Privacy Policy

1. You can opt out of those targeted ads by logging into your AT&T account online and clicking “Advertising Choices” found at the bottom of the screen in fine print. From here, you can opt out of all targeted online advertising. Important: You must visit this link from each device or web browser you use to completely opt out. The choices you make apply only to the device used when accessing the website.
2. While logged in, you can also opt out of most of the rest of AT&T’s customer tracking program from their Privacy Choices for External Marketing & Analytics Reports website. Important: If you are an AT&T landline customer, you can also use this site to opt out of AT&T tracking your landline service.

If you don’t want to receive AT&T marketing messages, follow these three steps to opt out:

• E-Mail: Every marketing e-mail AT&T sends contains instructions and a link that will allow you to stop additional marketing e-mails for that product or service type. You also can unsubscribe from AT&T marketing e-mails here.
• Text Messages: Opt-out of AT&T marketing text message contacts by replying “stop” to any message.
• Consumer Telemarketing: Ask to be removed from AT&T’s consumer telemarketing lists by contacting them at one of the numbers listed here, or by sending an e-mail to [email protected]. You also can ask the AT&T representative to remove you from their telemarketing lists when you receive a marketing or promotional call.

Now what: AT&T Next and Verizon Edge

Wireless carriers know that the average relationship between a smartphone and its owner is becoming shorter every day. Sometimes the relationship is over when a customer drops or loses their phone and needs a replacement. Others simply covet the next best thing. When a large enough contingent of customers is willing to open their wallets and let their money fall out, what’s a poor wireless company to do? Ignore the pile of twenties falling to the floor? Not on your life.

AT&T last month announced it was dumping its 20-month early upgrade offer, following Verizon (again) which announced it was pulling the rug out on a similar plan in April. ‘Customers should wait a full 24 months before expecting a new subsidized phone,’ said both companies.

Then came scrappy T-Mobile, the company AT&T originally wanted to put out of business. TMO decided to apply some European competitive logic in the U.S. market. No more two-year contracts with nasty termination fees, declared CEO John Legere. But no more “phone subsidy” either. In return for the end of contracts, customers should expect to pay retail price for their smartphone, but at least they can finance it through T-Mobile and have the somewhat affordable monthly installments added to their bill.

Now, in a remarkable about-face for Verizon Wireless and AT&T, the features and promotions diet imposed on customers that has eroded discounts, ended early upgrades, and slapped on early termination fees and opaque junk bill charges might be coming to an end. Early upgrades are back… for a price.

It is the first step in a major shift away from the North American wireless business model which traditionally offers customers cheap devices at massive discounts known as “device subsidies.” Since the early days of cell phones, wireless companies in the U.S. and Canada typically grant customers up to $350 off their phone purchase in return for a 24 month contract (until recently, 36 months in Canada). But wireless providers don’t just give away free money. Carriers get back every penny of this subsidy over the life of a cell phone contract by setting their plan rates artificially high.

T-Mobile isn’t giving away the store either, but at least everything is on sale. By jettisoning the subsidy, T-Mobile’s plan rates are dramatically lower than those offered by its competitors. That is no surprise because TMO no longer has to worry about recouping device subsidies.

When a customer walks into a T-Mobile store, they can buy the latest iPhone for $650 or agree to finance it at the retail price through the carrier. They can even buy it somewhere else. But T-Mobile’s new Jump plan also offers customers a chance to “jump” to a newer phone every 6-9 months with its trade-in program. For avid phone upgraders, the end effect is like leasing your phone. You will always have a device newer than the next guy, and you will always be paying a monthly fee for the phone itself. That looks a lot more attractive than trying to wait 24 months with AT&T or Verizon or frequently buying a new phone for north of $500 and trying to recoup part of the cost by selling your old phone on eBay or Craigslist.

Wall Street would normally punish carriers that do anything to shorten the 24-month traditional upgrade cycle because investors generally hate the whole concept of the phone subsidy. It costs companies liquidity to tie up money fronting that $350 discount and waiting up to two years to get the money back. But since T-Mobile can immediately book the full purchase price of a phone for accounting purposes and does not need to show the amount of money dedicated towards phone subsidies, analysts are not pummeling the stock into the ground.

As Stop the Cap! has written for more than a year, the wireless Golden Calf Wall Street really wants to worship is a cell phone plan priced artificially high to recover a subsidy providers no longer give. That’s a plan only Ma Bell and its shareholders could love. But nobody thought AT&T and Verizon Wireless could get away with it.

Silly people.

Introducing The Wireless Trojan Horses: AT&T Next from AT&T and VZ Edge from Verizon

Yay!: No more expensive subsidies and extra free money

AT&T yesterday introduced AT&T Next — the company’s response to T-Mobile’s Jump with AT&T’s usual gouging touch.

The highlights of the plan include:

• No membership, activation or upgrade fees;
• Buying a new phone under AT&T Next does not require a down payment, any finance charges, or early payoff penalty;
• Customers can trade-in for an upgrade after one year or keep the device for 20 months and own it.

VZ Edge is still a rumor, but leaked promotional material indicates it is nearly identical to AT&T Next, with some important exceptions:

• VZ Edge appears to be an extension of Verizon’s existing 12-month financing plan, limited to two devices at a time with a combined financed balance not to exceed $1,000;
• First payment due at time of purchase with a recurring finance charge of $2 for each month there is a remaining balance;
• No upgrade fees, no contracts, no pre-payment/payoff penalty;
• Customer qualifies for their next upgrade after 50 percent of their current phone’s retail price is paid;

The leaked document does not include details about the disposition of your device when beginning an upgrade. Presumably, Verizon will accept it for trade-in or the customer can pay the remaining balance off immediately and own it.

What sets Verizon and AT&T far apart from T-Mobile are the prices of their service plans. Both AT&T and Verizon are effectively ending their subsidy program for those participating in these early upgrade plans. Customers must purchase (or finance) their next device at the regular retail price, which will range between $500-650 for most top-of-the-line smartphones.

Bunco

But neither Verizon or AT&T are lowering their service plan pricing, which was specifically designed to recoup a subsidy they are no longer providing. T-Mobile has appropriately lowered their plan pricing because the company no longer needs to win back that $350 subsidy they might have given you for the newest Apple iPhone or Galaxy device. That means you are effectively paying AT&T and Verizon twice for the same phone. It’s Wall Street’s dream come true: kill the subsidy and keep the money still being charged to recoup it. That amounts to as much as $29 a month out of your bank account and into theirs.

For now, only those itching for fast upgrades will get the pinch, at least until AT&T and Verizon decide this is the new and improved way to sell phones to everyone without a two-year contract. Now if we can only get AT&T and Verizon to rescind the contract taken out on our wallets….

A Michigan man last week opened his front door only to find AT&T’s efforts to install U-verse for a neighbor tore up his front yard and he isn’t even a customer.

Broadband Reports‘ AT&T forum member “riekl” in Macomb discovered AT&T’s service “upgrade” for the neighbors left him with a front yard “downgrade” consisting of a long strip of dead grass, a potentially undermined driveway, and no idea who will pay to repair the damage.

“The only utility easement is a 20 foot strip in my back yard,” he wrote.

AT&T decided running cables well inside the Macomb man’s front yard and beneath his driveway was fine. So was leaving without bothering to repair the damage.

An AT&T ‘Right of Way’ manager was eventually dispatched to the property and quickly conceded AT&T buried its lines well outside of the utility easement. The company is now making arrangements to repair the resident’s lawn.

“He also apologized as their techs are told to always notify the homeowner when crossing property,” said the irked resident.

But the story may not be over. AT&T’s cable is now a permanent feature beneath the non-customer’s front yard, which could create some issues if AT&T assumes it now has an ‘effective’ easement and will be free to repair or replace the cable in the same area at their discretion.

AT&T has a long history of using contractors that do not always favor the correct solution over an expedient one.

But at least they buried the cable this time.

Last fall, a Texas resident arrived home to find AT&T had installed a new line for one of their customers by stringing it across the top of the neighbor’s back lawn, where it remained untouched and unburied for an extended period.

AT&T announced late Friday it was acquiring Leap Wireless for almost $1.2 billion — a premium of 88 percent over Leap’s stock price.

Creditors may be pleased. Leap Wireless had $2.8 billion of net debt which is expected to be retired by AT&T as part of the buyout. Go to https://www.edudebt.sg/achieve-debt-freedom-with-edudebts-expert-guide-to-debt-consolidation-plan-in-singapore/ to learn more about debt consolidation.

The Cricket prepaid brand is expected to survive the acquisition, at least for now. Unlike many other prepaid providers, Leap Wireless owns and operates its own CDMA and LTE cell network in its “home service” areas. The Cricket brand is best known for its PCS prepaid service, which is targeted almost exclusively in urban areas. Leap has an extensive roaming agreement with Sprint to provide service where its own cell network does not reach.

AT&T has not said if it will eventually convert Leap’s CDMA network to the standard AT&T uses — GSM. It may not be as important in the future as LTE becomes available to five million Cricket customers. AT&T said the purchase would open Cricket users to roaming on AT&T’s cellular and data networks, which cover a larger service area than Sprint. The biggest impact may be felt by Cricket’s dealer network. AT&T is likely to move the Cricket brand “in-house” and market it within AT&T stores.

Both AT&T and Verizon Wireless have been strongly urging on consolidation in the wireless provider market. Executives at both companies and several Wall Street analysts predict America will eventually have three major carriers, presumably Verizon, AT&T, and a consolidated Sprint, which could eventually acquire T-Mobile. These predictions all assume federal regulators will accept the wireless industry’s premise that fierce competition will remain with fewer providers. A handful of small independent providers may continue to exist as outliers, but most do not believe they will have any significant impact on the market share of the top three.

Many wireless industry observers believe AT&T is not interested in Leap/Cricket because of its business model. It is Leap’s spectrum holdings in large urban markets that makes it an attractive takeover target.

AT&T expects no problems with regulator approval and anticipates the acquisition will be complete by early 2014.

“The combined company will have the financial resources, scale and spectrum to better compete with other major national providers for customers interested in low-cost prepaid service,” AT&T said in a release on Friday.