Verizon Selling Internet-Phone-TV Package in FiOS Areas for $95 a Month

One of the reasons StoptheCap! always believed Time Warner chose the cities it did for its cap experiment was to steer clear of Verizon, particularly where the company offers its fiber optic service to homes.  Verizon FiOS does not cap Internet usage and has made that well known.

The blowback from Time Warner’s experimental caps wasn’t just limited to the cities “lucky” enough to be chosen.  The story went national, and now competitors are moving in to take advantage of Time Warner’s public relations catastrophe and poach their customers.

Verizon is now offering customers in FiOS territories a bundle of services that are priced well below what Time Warner is charging people in nearby cities where FiOS isn’t.  For $94.99 a month for the first year ($99.99 a month for the second), they are bundling an unlimited digital phone service, a basic cable package with up to 295 channels and a dozen HD channels, and broadband service at 10Mbps down and 2Mbps up!  Oh, and they’ll also give you a $150 rebate in the form of a debit card.  I pay $170 a month to Time Warner in Rochester and don’t even get their digital phone product, and standard Internet service here is 10Mbps down and a silly 384Kbps up.  Ahhh… competition.

And Verizon will, for $10 more, give you 20Mbps down and 5Mbps up, as well as 350 channels, more than 50 in HD.  I have to pay $10 more here and that only gives me “Turbo” Road Runner offering 15Mbps down and 1Mbps up (plus the Powerboost gimmick).  That’s it.

Verizon High Speed Internet DSL Service For $18 A Month

Now you see why Time Warner doesn’t dare try their cap experiment in a community where FiOS is available.  Why would anyone stay a customer?  Heck, even if you wanted to stay with Time Warner for phone and television service, you can buy faster broadband from Verizon on their 10/2 tier for $45 a month, and no caps.

Verizon also gets to target communities where FiOS isn’t yet available, but Time Warner’s threatened caps were, with a guaranteed two year contract-fixed price for DSL comparable to Road Runner Lite for $18 a month. Or they’ll sell their highest DSL tier (7.1Mbps down/768kbps up) for $38 a month and no modem rental fee. No caps there either.

Frontier continues to enjoy smacking Time Warner around for its duplicitous “caps are about you saving money” campaign.  In the Sunday Rochester Democrat & Chronicle, they took another shot at Time Warner’s CEO Glenn Britt for accusing customers of “misunderstanding” their plan, where they try and convince customers that emptying their wallets and handing more money over to Time Warner is somehow a good thing.

Thanks to StoptheCap! reader Bob for sending along the Frontier ad.  Now, if Frontier had not lost the first self-install kit they sent our way (and are supposedly re-shipping express mail to arrive here today), we could have been hooked up by now.

I have to hand it to Frontier Communications, the DSL competitor to Time Warner’s cable modem service in Rochester.  They seem to have improved their marketing efforts considerably since last summer, and have handily taken advantage of Time Warner’s nightmarish rationing plan, now temporarily shelved.  Below the fold, check out the full page ad they took out in the Rochester Democrat & Chronicle.  Our advice: keep the ads running all spring and summer, because it’s highly likely we haven’t heard the last of the cap nonsense from Time Warner.

StoptheCap! has sent Frontier quite a bit of business since the cap announcement was made by Time Warner and customers sought alternatives.  Now, if Frontier management would only stop penning internal memos to their employees as late as a few weeks ago bashing the “opinion leaders” like us they claim “harm their reputation.”  Note to Frontier: When you do dumb-dumb things like define an acceptable amount of broadband usage at 5GB per month, don’t blame us for harming your reputation.  You did that all by yourself.  When you reformed and dumped those caps overboard, as you did recently, you gained a lot of new customers and kept your existing ones.  If, in 2010, you decide to try and bring back caps, just remember what this community did to Time Warner in two weeks, and then get smart and don’t even consider it.  We’re watching.  We’re always watching.

Remember, customers don’t want caps.  Not now.  Not ever.  Period.

… Continue Reading

[Editor’s Note: The fast-changing news on the Time Warner metered usage plan and its temporary demise did not allow sufficient time to present a full history of media coverage of this issue across all of the affected areas. For historical documentation, and in case of any potential resumption of this type of plan, I feel it is important to have this material archived here for future reference. Some of the information in this news report may no longer be applicable.]

I remember hearing bits and pieces about the “loyalty program” or extra benefits for “loyal customers” here and there but never pinned down exactly what that represented.  WROC’s cameras panned across one of the publicity sheets Time Warner had created to help explain their plan, and I finally caught a glimpse of what that represented.

As you’ll see in the clip below, “loyal” customers of Road Runner’s standard service plan would be upgraded from 10Mbps to 15Mbps, and Turbo plan customers would be upgraded from 15Mbps to 20Mbps (nothing is shown about upload speed changes.)  As we’ve remarked previously, speed upgrades on a draconian usage capped broadband plan only let you hit the limits faster than ever, and additional speed is incidental under this kind of business model.  Since only low bandwidth applications are likely to be used by customers who don’t come anywhere close to their “allowance,” extra speed makes little difference to them.  Higher consumption or “power users” enticed by speed upgrades are discouraged from enjoying them because of the caps.

Incidentally, those “loyalty” speeds for Rochester are already commonplace in Time Warner markets where they face competition from Verizon FiOS.  No loyalty or cap required.  Time Warner’s “loyalty” program was just the frosting on this cake of inadequacy.  Consumers were not placated by Time Warner’s “new and improved” Cap ‘n Tier system of Internet rationing, and they remain dissatisfied and suspicious that the “shelved” cap proposal will be back by autumn like a bad penny.

Also not to miss is Frontier’s very clever injection into the story, expressing “surprise” Time Warner would stick it to their customers at a time when the economy is hurting.  Very nice touch.

Michelle wrote StoptheCap! to remind us that we’ve all been here before.  The Rochester Democrat & Chronicle takes us back:

About 75 of Rochester’s leading businessmen, merchants and bankers gathered at the mayor’s office on Oct. 28, 1886.

They were not happy. Not one bit.

The Bell telephone company had announced a rate increase. And many of the businessmen felt betrayed.

As F.J. Amsden put it, “the business men of Rochester had been encouraged to use the telephone so that it had become almost a necessity in the conduct of business. They (telephone company) have appropriated our streets and the roofs of our buildings (to string their telephone lines), and now when the system has become of general use they demand an entire change and the adoption of the toll system.”

To be sure, the rate change was substantial. Instead of paying a flat fee, as in the past, customers would pay according to actual usage. Those within a half mile of the downtown telephone exchange would pay $50 per year for 500 calls, and six cents for each call beyond that. Customers more than a half-mile from the exchange would pay an extra $20 per mile.

To angry customers, this was not only “unjust,” it was “extortionate.”

Hmmm… sounds sort of familiar, doesn’t it?  So what did people do?

J.H. Stedman, one of the angry businessmen who met in the mayor’s office that October day, urged telephone customers to unite and “refuse to use a phone.” And that’s just what they did. They went on strike.

“On November 20, 1886, they united in an action that is unparalleled in telephone history. At noon that day every subscriber removed his telephone receiver, with the understanding that it would not be replaced until the company came to terms,” according to The Great Contrivance.

The strike went on and on as customers simply canceled service, and in some cases formed their own cooperatives to provide alternative service in different areas.  Bell finally threw in the towel 18 months later and restored flat rate service to customers.

Rochester never entirely trusted Bell again, and by 1899, Rochester Telephone Company, an independent provider, was granted a license to serve the area and compete against Bell.  They promised and delivered flat rate service to customers, and maintained a reputation of excellence for decades, with one of the nation’s largest local calling areas at a cost of less than half charged by Bell in nearby Buffalo and Syracuse.

Bell eventually threw in the towel as more and more customers chose Rochester Telephone for their respect for customers and their delivery of an essential service at a fair and reasonable price.  Bell exited Rochester several years later altogether.

A lesson a certain cable company needs to remember, because consumer empowerment to cancel service is something not limited to Rochester.

StoptheCap! has learned that Frontier Communications will officially pull the rug out from under Time Warner and announce it will not be imposing any usage caps or rationing plans in the metropolitan Rochester (area code 585) service area, giving the DSL provider a potential competitive advantage in the area.  The company still reserves the right to revisit the matter should their network be completely overwhelmed, but company officials also stated that they are fully equipped to handle the traffic they are getting now.

A well informed source within Frontier told StoptheCap! a company memo is being circulated to educate customer service representatives about the decision and answer questions from potential customers switching from Road Runner. This may have come in response to a bonanza of new subscribers Frontier is picking up this week from customers canceling Road Runner service. Company officials are internally considering a new marketing campaign to blitz Rochester area residents with information about Road Runner’s punitive caps, and that Frontier will not be imposing those caps on its customers.

There has been speculation that one of the reasons Rochester was chosen as a “test city” for the Road Runner rationing plan was because of last summer’s attempt by Frontier to impose its own usage cap, of just 5GB per month. Rochester is the only major city in New York that is not being wired by Verizon for its FIOS – fiber to the home broadband service, which does not have any usage caps. Time Warner officials may have presumed that with their draconian usage caps, Frontier would be free to reintroduce their own still leaving Time Warner with a market advantage. Frontier’s decision to the contrary is a potential game changer in the Flower City.

But in a move that StoptheCap! applauds, Frontier Communications has decided this opens a unique opportunity for the company to not only regain a stronger position in the local broadband market, but also bring back its important traditional telephone line business. Frontier has reported a growing number of people disconnecting traditional telephone service in favor of voice-over-IP services like Vonage or Time Warner’s Digital Phone service. Most customers who sign up with Frontier for multiple services choose a bundled package including telephone and broadband. The company will also continue to promote its Price Protection Agreement, which guarantees no usage caps or price increases for a term of two or three years, at the customer’s choice.

Frontier has also distributed a memo to employees that the company no longer feels their network is being challenged by ‘overuse,’ but continues to express concern about the potential for deteriorating customer broadband experience in the future. We understand that, and suggest Frontier educate their customers about the impact certain applications might have on their network, such as running torrent servers 24/7, trying to run commercial web servers on a residential account, etc. However, company officials must also be aware that with a flood of new customers will naturally come increasing demand, so they need to prepare now for the potential exodus from Time Warner. It also remains the responsibility of every ISP to recognize the revolutionary growth of the Internet, and continue to make investments in new technology which can deliver more bandwidth.  The cost for that bandwidth continues to decline, so punitive rate hikes and caps are simply not justified. Hopefully, Frontier will make their customers partners in their decision-making, and treat us with the respect Time Warner can’t be bothered with.

Some pertinent FAQ information Frontier has now released to their customer service representatives:

Q: Does Frontier charge for internet consumption?
A: No, Frontier does not charge for usage. Customers pay a flat fee per month that provides them a true High-Speed Internet Connection, up to 10 MB in Rochester.

Q: When does the Time Warner Network Consumption Pricing begin?
A: Like you, we only have knowledge based upon the recent press.

Q: Does this apply to Residential Only, or does it include Commercial?
A: We have not heard them say that anyone was excluded.

Q: What is a “bandwidth cap” and what does it mean for me?
A: Caps are thresholds placed by Time Warner so their Customers will be charged at different levels of usage on their network. Bandwidth caps generally track the total amount of GigaByte usage that is downloaded and uploaded to the Internet by a household during a specific period of time, like a billing cycle. Press reports indicate that Time Warner will charge $1 for every GB above their cap.

Q: Has Frontier changed its Acceptable Usage Policy this year?
A: No.

Q: If I buy my Internet service from Frontier, will the Price Protection include consumption pricing?
A: At this time, Frontier has no plan to provide consumption pricing.

Some answers to questions Frontier doesn’t know the answers to: The official start date for the Time Warner Rationing Plan is November 1, 2009 in Rochester, N.Y.  Prior to that date, you will not be charged for excessive use.  This plan only impacts residential customers.  Business customers are not being metered.  Frontier is legally hedging their bets in the wording of their statements here.  So a few words here and there might appear to be “weasel words” that leave the door open, but that will be for legal reasons.  We will continue to monitor Frontier and keep them honest.  They have had a track record of changing their minds on things.  But if caps are your primary concern, the current best protection you have against them is a Frontier DSL account with a Price Protection Agreement in place.  Please review our article on choosing an alternative provider for more specifics.