We know what you are watching.

AT&T’s efforts to expand its U-verse platform to more communities is all about improving AT&T’s growing revenues in the broadband business and further monetizing customers’ broadband usage.

Those are the views of Jeff Weber, AT&T’s president of content and advertising sales. Appearing at last week’s Nomura Global Media Summit Conference, Weber also admitted AT&T is using viewer data collected from U-verse TV set-top boxes to help decide what networks to carry and which can be dropped because of lack of viewership.

Weber appeared at the conference to talk about the implications of Project Velocity IP — AT&T’s investment in expanding its U-verse platform and its proposal to transition rural landline customers to AT&T’s wireless service.

AT&T claims when the project is complete, two-thirds of its landline customers will have access to U-verse, and 99 percent of AT&T’s wireline service areas will be covered by AT&T’s mobile network.

Weber’s job primarily focuses on AT&T’s U-verse TV service — dealing with all the networks on the lineup and selling advertising time.

Although television programming is an important revenue generator for AT&T, broadband revenue is the real focus behind AT&T’s U-verse expansion.

“At the core, it is about improving the fundamental broadband business, extending our footprints to be able to cover more of our customers,” Weber said. “Because our core belief is that the broadband business is [going to be] a very good business for a long time.”

Weber

One way AT&T can further increase revenue is to limit broadband usage and charge overlimit fees for customers who exceed their monthly allowance. AT&T currently limits DSL customers to 150GB of usage per month, 250GB for U-verse broadband. The overlimit fee is $10 for each additional 50GB of usage. At present, both the usage limits and overlimit fees are not broadly enforced in many areas.

“I think very clearly incremental broadband usage is going to drive incremental revenue,” explained Weber. “Part of that assumption is that as traffic continues to grow, you need to be able to monetize that traffic in some way, shape or form. At the end of the day, it’s a pretty efficient market and a really efficient way for customers to pay. In almost every other way the more you use, the more you pay. And I don’t think that’s a radical notion and I suspect that’s a kind of thing we’ll see.”

AT&T already earns $170 a month in average revenue per U-verse customer, mostly from package sales of telephone, broadband, and television service.

Television programming content continues to be a major and growing expense for AT&T, eating into profits. Weber complained programming costs are “too high” and limit AT&T from asking subscribers to pay more when rate increases are contemplated.

Instead, AT&T is increasingly playing hardball with programmers, refusing to pay growing programming costs for certain networks and dropping others that do not have many viewers.

How does AT&T know what channels its customers are watching? The company tracks viewing habits with U-verse TV set-top boxes, which automatically report back to AT&T what channels and programs customers are watching.

“Everybody is facing [profit] margin pressure as content costs go up but the question is how will customers react to higher prices as content costs go up,” Weber said. “Everybody is having to make tough decisions and we’ve been able to use that data and make very smart decisions for our customers.”

As an example, Weber noted AT&T uses real viewer numbers during contract negotiations, suggesting that lower-rated networks deserve a lower rate. If a programmer refuses, AT&T can successfully drop a little-watched network without significant customer backlash.

Weber said the numbers are even more valuable when negotiating carriage fees for expensive regional sports networks. Weber said in one city, AT&T decided to not carry a regional network because it found the majority of customers never watched many of the sports teams featured.

Comcast’s Sportsnet for Houston is not available to some U-verse subscribers because AT&T determined the audience for the sports teams on the network was too small.

“We looked at how many of our customers watched zero of those games, one, two, all the way through 150 games for baseball and 80 games for the basketball team that we’re talking about,” Weber said, noting that if a particular viewer watched 30 or more games, AT&T considered that customer a passionate viewer likely to cancel service if the channel was dropped from the lineup.

“It was very clear the viewership intensity in that particular market was low and we didn’t need to pay the rates that were being asked and we’re not,” Weber said, calling the tracking a “perfect insight” into programming costs vs. viewership value.

AT&T also made it clear if programmers went around the company to sell channels direct to consumers over the Internet, AT&T would bring significant pressure for a wholesale rate cut, which some programmers might see as a deterrent to offering online viewing alternatives.

“If they’re going to [stream their programming online], then that’s a very different conversation and a very different value for our customer,” Weber said. “That’s a choice the content providers can make. We’re totally OK with that, but exclusivity versus non-exclusivity has materially different value for our customers, and I think we would want that reflected,” he added.

Monitoring customer viewing habits also helps AT&T earn more revenue by selling targeted commercial messages to specific viewing audiences.

“If an advertiser wanted to buy The Ellen DeGeneres Show, we know based on our data who that audience is,” Weber said. “We can go find that same audience outside of Ellen and maybe extend reach or drive [the ad] price a bit [higher]. We can also go find that same audience online or on your mobile phone.”

A Verizon Wireless upgrade that was supposed to fix bugs and introduce multi-screen, multi-window multitasking and new camera and image-related features to the popular Samsung Galaxy S3 instead has killed the phone’s 4G performance and dramatically decreased battery life. There are also reports some Verizon Wireless customers are finding themselves auto-enrolled in an unwanted caller ID with name add-on feature ($2.99/month) that leaves the phone connected to 3G or 4G service even when using Wi-Fi.

It was not an auspicious moment for Big Red, never fast with phone updates, particularly when Sprint customers earlier received a similar upgrade with no ill-effects.

Your editor spent two days last week attempting to mitigate Verizon’s mistakes, including several hours inside multiple Verizon Wireless store locations and talking to their national customer support center. In the end, it resulted in not one, but two factory refurbished phone exchanges and a $20 service credit for data service effectively disabled by a firmware upgrade.

This nightmare has a name: JZO54K.I535VRBMD3 — a software update so plagued with bugs, Verizon reportedly pulled it over the weekend after customers complained it ruined 4G wireless data service, along with the phone’s performance. The 128MB update has been available for about a week for those regularly checking their phones for software updates, and some customers began being prompted to install it last Friday.

So how can you tell if you are affected? Choose Settings -> About Device and check the “Build Number” visible at the bottom of the screen. If it ends in VRBMD3, you may be impacted. Not every customer is reporting problems, which may mean some phones are not affected or the performance degradation has been dismissed as a temporary reception problem or has only subtly affected low-bandwidth applications and has gone unnoticed.

Symptoms

1. Your wireless data signal strength meter on the phone suddenly shows much poorer reception than before the update;
2. Your battery life has declined significantly and the battery is very warm to the touch;
3. You have trouble loading web pages or accessing multimedia content with long buffering pauses or sudden loss of reception in places where signals used to be adequate;
4. Messaging services seem unstable with frequent disconnects;
5. Your phone drops from 4G to 3G service and stays connected at 3G (or less) speeds until you reset the phone;
6. Using “Speed Test” apps result in “Network Communication Issue” errors or extremely long test times with very high ping rates, very slow/inconsistent download speeds, and trouble measuring upload speeds;
7. You find icons for both Wi-Fi and 3G or 4G wireless service at the top of your phone at the same time;
8. You suddenly find your account billed for Caller ID plus Name service at $2.99 a month, despite not requesting this service.

Phillip “Verizon turned my 4G phone into a 1G phone” Dampier

The more of these symptoms you experience, the greater the chance Verizon’s update for the S3 has temporarily left your phone a shadow of its former self.

Verizon officially recognized the wireless connectivity problem May 31 when it released an internal bulletin acknowledging the software update is responsible. The company claims it has since stopped sending it out to S3 owners (we have not been able to confirm this ourselves).

Verizon blames Samsung for the defective update. Samsung blames Verizon, telling customers software upgrades are vetted, approved, and distributed exclusively by Verizon. Customers are left over a barrel until one or both companies assume responsibility and issue corrected firmware, which could take weeks.

Verizon Wireless’ technical support told Stop the Cap! the phone’s firmware is at the heart of the problem, and although it can sometimes get phones to be more tolerant of the software update, no number of factory resets, SIM card refreshes or replacements, or settings changes will fully correct the problem. Many customers can expect continued degraded 4G performance comparable to 3G speeds (or much worse) either because of slowed performance or an unstable connection until a fix is available.

The problem with multiple icons for both Wi-Fi and 3G or 4G service has to do with a single new app Verizon has forced on their customers. “Caller ID plus Name” was added to your app list in the latest update and is responsible for the dual data connections and reported instances of customers being auto-enrolled and billed for the service, even if they never specifically ran the app.

Bloatware is bad enough, but badly performing forced apps are worse. You can permanently disable the offending app and solve the double icon problem with this simple fix:

Enter Settings -> Application Manager, and select the “All” applications tab along the top. Find “Caller ID plus Name” in the list, select it, and you will see a button to “disable” the app. This may not resolve the problem of the app auto-enrolling you for a paid feature that costs $2.99 a month, so watch your bill.

Trouble

Affected customers with degraded service have several options:

1. If your phone is still under warranty, and most Galaxy S3 phones are, you can request a free handset replacement. Since Verizon created the problem, ask for a free shipping upgrade to overnight FedEx delivery. Your refurbished phone will arrive without a battery, SIM card, or back cover. Use the ones included with your original phone and your replacement handset should automatically activate. Immediately after powering up, your phone will offer a series of two or three Verizon firmware updates that you can defer. Until it can be verified Verizon has stopped pushing the defective update to customers, we recommend you avoid performing these firmware updates. If you don’t, and Verizon pushes the defective update to your replacement phone, it will likely perform no better than your original;
2. Request service credit for degraded/lost data service. Remember to also request credit, if applicable, for any Mobile Hotspot option, GPS travel, or other Verizon add-on that depends on a stable data network connection;
3. Indicate your displeasure that Verizon did not more thoroughly test the update before pushing it on customers.

Here are the suggested fixes Verizon may attempt on your phone, but we do not believe they correct the underlying problem — only updated software will:

• Removing the battery and “Refreshing/replacing the SIM card” may help refresh roaming rules or possibly correct a corrupted SIM card. Some customers reported this helped them get back data service they completely lost after the update, so it might help in certain cases, but probably will not correct the unstable 4G connection;
• Clearing the cache and cookies from the web browser is unlikely to have any effect on this problem;
• Changing the Mobile Networks setting to/from “Global” to “LTE/CDMA.” A few customers reported they got back some data service after toggling these options. The default on the Samsung Galaxy S3 running firmware from last fall was (and still remains) Global. We suspect the switch toggles the radio off and on, forcing a reconnect, which can bring back a 4G connection after the phone downshifts to 3G. But we don’t believe this will correct the speed/stability problem;
• A “factory reset” is frankly a waste of time. This will leave your phone with the same defective firmware. If you had symptoms before, you will likely still have them after resetting your phone.

If you are reluctant to part with your phone and avail yourself of any option other than requesting a service credit while Samsung and Verizon point fingers over who is responsible and and when a fix will arrive, you can make life with your phone a bit easier with these tips:

1. Stay on Wi-Fi when possible. Wi-Fi data performance was not affected by this software update;
2. Expect 30-40% reduced battery life. We suspect this (and the hot battery) is caused by the phone trying to deal with unstable 4G service, as if it was in a fringe reception zone. Keep a charger handy;
3. Try and get your phone to downshift to 3G by finding a weak reception spot (like a basement) and hope the phone drops (and remains) on 3G until it is rebooted. It appears 3G data speeds are not affected by the software bug;
4. Expect problems when using high bandwidth applications on Verizon’s LTE 4G service. We found video next to impossible to view on 4G, but audio streaming did seem to perform at lower bit rates.

Expect web browsing on 4G to be problematic on complex web pages, which may load incompletely. Try and do your browsing on mobile versions of websites or wait until you can find Wi-Fi.

“I will be dead in the ground before Verizon gets around to restoring my phone line, and I have been their customer for 72 years,” says Irene, 95, one irate now-ex Verizon customer in New Jersey.

She, like many others, lost her Verizon landline during Hurricane Sandy and has waited for its return ever since.

“She has the patience of a saint, but if Verizon was in charge of admitting people beyond the Pearly Gates, there would be a line stretching endlessly across the heavenly clouds,” shares Irene’s daughter Agnes.

Irene and her late husband had their telephone hooked up by Verizon’s predecessor three days before Pearl Harbor. For the non-history initiated, that was Dec. 4, 1941.

President Franklin D. Roosevelt called Dec. 7, 1941 a Day of Infamy. Irene’s family calls Oct. 29, 2012 “The Day After Infamy” after Hurricane Sandy slammed ashore in the northeast and wiped out phone service up and down the tri-state coastal area. She is still waiting for her dial tone to return on her 1972 rotary dial phone.

“Everyday I pick it up just to see if there is anyone there, and of course there isn’t,” Irene tells Stop the Cap! “I used to worry about the cat knocking the phone receiver on the floor, but it does not make much difference anymore.”

Irene cannot understand why Verizon is allowed to get away with such shoddy service.

“Just a few years ago, if your phone was out for three days you would have a supervisor apologizing and sending repairmen out even if their supper was waiting on the table getting cold,” Irene remembers. “Those days are over I suppose.”

Irene lives with her daughter in a home that escaped the worst of the storm, but unfortunately her phone service was not so lucky. Verizon has not provided fiber optics in her part of New Jersey yet either, so FiOS is not an option.

“You call Verizon and they are very apologetic on the phone and keep writing up service calls, but unfortunately nobody ever comes and nobody will tell us anything,” Agnes said. “We even tried praying, but Verizon answers to a different God.”

Irene’s great-grandchildren visit with cell phones in hand and cannot understand why Irene still bothers with her home phone, and the family purchased her a cell phone for Christmas to use in the interim but Irene has thrown it in a drawer.

“My phone has been with me since Richard Nixon was in the White House and it is all I have ever needed or wanted,” Irene says. “Agnes will answer the cell phone and hand it to me but the sound on it is terrible, like everyone is in the shower when they are calling.”

Agnes also dials outgoing calls for Irene, and her grandchildren helped her compose the e-mail sent to Stop the Cap! asking if we could help.

“My kids told me Verizon has installed these wireless boxes and screwing them into the wall and I don’t want that,” Irene insisted. “I just want them to fix the phone line and leave it be.”

Irene adds she has paid The Phone Company more than her fair share during the last seven decades.

But during a recent emergency family meeting, a decision was made to deal with a half-year of the “Verizon Problem” once and for all. After corresponding with us, they are signing up for Comcast phone service instead.

“The man at Comcast said I could keep my current phone and I don’t have to have an ugly box screwed into my wall, which suits me fine, but they should know I don’t care for their prices or all of that nonsense they put on the television.”

Comcast installed the family’s phone service yesterday and all is well, at least until the cat knocked the phone off the hook again.

Irene asked her last name be omitted for privacy.

Cricket wants to convince you that paying AT&T or Verizon $90-120 a month for a cell plan with unlimited calling, texting and a 1-3GB data plan is too much, because it can sell you an “all-unlimited plan” for $45.

Cricket this week launched its “Half Is More” marketing campaign online, as well as in print and television advertisements.

“When we go out and talk to a lot of consumers, we hear a lot of angst from post-paid subscribers,” Cricket senior vice president Tyler Wallis told CNET. “They’re not happy with the service they’re getting and they’re feeling like they’re getting gouged.”

They also might not like finding out their “unlimited use” data plan actually comes with a barely disclosed speed throttle that kicks in after only 1GB of usage, reducing speeds to near dial-up for the rest of the billing cycle.

Cricket defends the claim they offer “unlimited” data service by stating they do not completely sever a customer’s data connection when they reach the limit, or charge them overlimit fees. They just slow the service down… a lot. Cricket customers tell Stop the Cap! Cricket’s wireless Internet becomes almost unusable once they are placed in the usage penalty box.

Cricket also depends heavily on Sprint for roaming coverage outside of the small number of home markets where Cricket owns and operates its own network. For many customers, that means frequent roaming on Sprint’s 3G network, which is not rated well for its speed and performance.

Once throttled, customers are stuck in the slow lane until their next billing cycle begins.

Customers with light data needs might find Cricket’s plan an option, assuming they have good coverage either from Cricket itself or roaming on Sprint’s network.

Cricket’s campaign noticeably avoids comparing their plan against T-Mobile, which offers a $70 monthly truly unlimited plan or for ten dollars less, a 2GB plan with unlimited calling and texting.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Cricket Ad Unlimited 5-13.mp4[/flv]

How easy can you read the white fine print disclaimer on the white background in Cricket’s ad? Cricket advertises unlimited data but keeps its speed throttle mostly to itself. (1 minute)

Verizon Wireless: You are being watched.

Would it bother you if the advertiser on that big billboard you just drove past could find out if you later visited that business in response? Should a store like Best Buy or Sears be able to know if you are only using their showrooms to see a product you will eventually buy online? Should your phone company be able to store your complete travel history for years and then create new products and services to pitch aggregated travel observations to anyone willing to pay?

Verizon Wireless does not think you will have a problem with any of this, because it has quietly begun selling this information through its Precision Market Insights (PMI) service.

AT&T is likely not too far behind with a similar service of its own, potentially earning millions from a comprehensive data trove tracking customer locations, travel history, and web browsing habits for an undetermined length of time.

The Wall Street Journal reports shareholder demand for higher profits is pushing cell phone companies to find new revenue streams, even at the potential risk of alienating customers and privacy advocates.

PMI clients may find out more about you than you realize, even though phone companies promise they will not sell personally identifiable information about their customers.

The Phoenix Suns are PMI clients, and by tracking game attendees, Verizon Wireless was able to tell the sports team:

• 22% of game attendees are from out-of-town;
• Most spectators had children at home, ranged in age from 25-54 and earned more than $50,000 a year;
• 13% of baseball spring training attendees in the Phoenix area also went to Suns games;
• Area fast food restaurants running Suns promotions saw an 8.4% uptick in business from Verizon Wireless customers.

Such information can let the sports team target advertisers and offer evidence-based statistics that any campaign will increase sales, and by how much. Malls can use PMI to find certain types of customers that have a history of lingering in mall stores. Billboard owners can see if their ad messages resulted in higher in-store visits.

Customers using a phone under a commercial or government account are exempt from the tracking program. All residential customers are automatically opted in to take part, unless they specifically opt out.

Privacy advocates are concerned carriers are storing personal customer usage data for an undetermined amount of time, and in a form that could be personally identifiable, even if the provider decides not to sell data with that granularity to third parties. That could make cell phone companies prime targets for government/law enforcement subpoenas.

Last year, Verizon sent a notice to customers opting them in to the program unless they specifically opted out. Stop the Cap! covered the story back then, helping customers wishing to opt out.

[flv width=”504″ height=”300″]http://www.phillipdampier.com/video/WSJ Cell Companies Track Customers 5-22-13.flv[/flv]

The Wall Street Journal reports wireless carriers were at first slow to sell data on their customers’ usage habits, but not anymore. Shareholders want new sources of revenue, and wireless companies are packaging and selling customer information to get it.  (2 minutes)