You gotta love Verizon’s $30 upgrade fee to provide customers with the level of service and support they have come to expect. I’d rather deal with “no credit, no refunds, no checks” CricKet.

Verizon Wireless customers pay a $30 “upgrade fee” when purchasing new equipment with a new two-year contract, ostensibly to “provide customers with the level of service and support they have come to expect.”

After losing more than an hour of my life yesterday afternoon inside a Verizon Wireless store, I am here to tell you it isn’t worth it.

For the second time in seven months, Verizon Wireless has taught me they specialize in keeping customers waiting, giving them conflicting information, and proving the employees should be availing themselves of the “Wireless Workshops, online educational tools, and consultations with experts who provide advice and guidance on devices that are more sophisticated than ever.”

The latest nightmare began with an upgrade to Samsung’s Galaxy S3 that arrived with two 4G SIM cards that were initially declared useless-on-arrival. Despite early assurances that a customer service representative should be able to manage the activation of the phones without loss of our coveted unlimited data plan, it turned out a visit to a local Verizon Wireless store was recommended to swap out the 4G SIM cards enclosed in the box as part of a slightly-complicated activation.

Walking into the Pittsford, N.Y. Verizon store brought a feeling of trepidation when I realized my friend “the Verizon Wireless Welcome Kiosk” that I had been signing in at during previous visits was now missing. Instead, the store manager, armed with an Apple iPad, registered me for the inevitable queue of customers waiting for assistance.

“The wait should be around 15 minutes,” the store manager promised.

Nearly 30 minutes later, as I watched what seemed to be the only employee not on break deal with Ms. I-Don’t-Know-and-I-Can’t-Decide, the store manager returned to ask why I bothered to show up in-store to activate phones I could have managed online or by phone.

“Because I was told to,” I explained. “I have two phones that require new SIM cards and special attention to ensure I don’t lose my unlimited data plan.”

“Well, you have to activate them first,” came the reply.

That was news to me, of course, when a Verizon Wireless phone representative an hour earlier warned me specifically not to activate the phones and let a store customer service representative handle everything.

“Please don’t even attempt to activate the phones because I have had customers doing that all day who forfeited their unlimited data plans when they tried,” urged the phone representative. “You need to bring everything to the store and make sure they do it for you because I don’t want you inconvenienced.”

Good intentions, but reality always intrudes.

Phillip “Kill Me Now” Dampier

By now, 35 minutes into my 15-minute wait, several additional frustrated customers trickled in, all with the same phone. One found he couldn’t activate it even when he tried. Another needed his assigned a different number. Again, the store manager insisted the customers activate their phones before approaching a store employee.

As I wearily watched Ms. Indecision -still- taking up the time of the employee that was going to serve me next, I heard other customers casually griping about upgrade fees, the new Share Everything plan, and Verizon’s idea of customer service these days. The consensus: Verizon was shaking down their customers for more cash and also punishing people forced to walk into a store to resolve a problem. Pittsford is one of Rochester’s wealthiest suburbs, and even here customers were tapped out.

I have literally been here before. Back in December, at the same store, a remarkably unhelpful Verizon Wireless employee insisted the problems with my last phone, intermittent they might be, were not his problem if he could not exactly duplicate it while I waited. Since he did not have time to try (but had at least 15 minutes to chat up a young lady that preceded me about his holiday pie-making experiences), I was on my own, just as my warranty was set to expire.

He no longer works there.

As each new customer arrived on this remarkably warmer July day, the store manager warned the wait was growing longer and longer. He didn’t mention the customer -still- at the counter contemplating this or that and holding up the entire free market wireless economy in the process.

At this point, I was advised I could activate my phones by dialing *228 and I’d be all set. Only a year earlier, a Verizon employee told me 4G LTE customers should burn their fingers with a cigarette lighter if they ever felt the urge to try, because it would “scramble the SIM card forever.” True or false, I felt burned already.

I decided instead to call Verizon Wireless customer service, ironically, from inside the Verizon Wireless store that was supposed to be giving me “the level of service and support I have come to expect.”

“Due to (incredibly) high call volumes, your wait (is likely to be until the snow flies before someone will pick up your call).”

I then realize there are two other customers doing precisely the same thing I am, which probably explained those high call volumes.

Mr. Store Manager returned to ask if I had activated my phones yet. I explained I could not get through, but was bemused to notice the phones had now powered up with messages indicating they were in the process of activating themselves.

An hour into my 15 minute wait…

“That’s because you had your phones turned on,” came the odd explanation. “You have to turn the phones off before you call customer service.”

“I don’t think so, I seem to recall my Samsung Droid Charge activated itself in a similar fashion,” I replied.

“No, that isn’t how it works.”

Two minutes later, the phones activated themselves. I’m not certain I’ll ever know exactly why, especially after being told I had dud 4G SIM cards. But I also found it ironic that even a confused customer like myself, now dying in my personal Verizon hell, seemed to know more than the people working there, and I didn’t even take that Wireless Workshop.

Regardless, I was elated that stage of my trial had come to an end. Now I only had to have an employee swap those SIM cards out to assign the phones to the proper phone numbers. Then I could escape my excellent customer experience for good.

But there was Ms. Should-I-or-Shouldn’t-I, still tying up the growing line (the wait had now grown to perhaps an hour for customers entering the store… at their own risk.)

Suddenly, an employee miraculously returned from break and I was finally helped.

“You want insurance on these phone, right?”

“No.”

“But you have 14 days to change your mind.”

“No.”

“Which phone do you want on which number.”

“Since the phones are precisely the same, it does not matter to me.”

Those were the days.

Long pause.

The employee kept dropping below the counter to deal with an interminable number of snake-long thermal cash-register-like receipts that kept spitting out of the printer whenever he did anything on the slowly-responding computer.

After another 15 minutes, the new 4G SIM cards were in.

“Now let me show you some of the cool new features on your phone, but first enter your name and password.”

I compromised by entering my name and password but suggested we skip the training course. Besides, my personal lease renting space inside the store (and my new 2-year contract) was likely to expire before I would finally get out of there.

“We have some nice new cases to show you to protect your phones.”

“No thanks.” Now I am questioning why I bought the phones in the first place.

“Okay, now it is time to restore your apps.”

Kill me now.

As soon as the phones were up and running, back into the boxes they went, and polite thank-yous were delivered to all concerned. I then busted out of the store, more than an hour after my promised 15-minute wait, like a prisoner escaping Attica. Sure I realize I am not “free at last,” stuck on a new contract with Verizon for another two years, but I can do my time standing on my head so long as I can avoid ever dealing with another Verizon Wireless store… and keep my unlimited data.

They should pay me $30 to go through upgrading anything with them. Oh wait, just a year or so ago they did — $100 as part of Verizon’s long-gone “New Every Two” program… exorcised right along with their budget-minded voice calling options, unlimited data, and text plans suitable for the occasional text here and there. In their place, the all-new, super exciting $90 Share Everything plan… including $50 for a “generous” 1GB data allowance.

Thanks Verizon Wireless!

Despite concerns from consumer groups that a deal to exchange wireless spectrum in return for collaborative marketing between two competitors will lead to higher prices for consumers, the Federal Communications Commission seems prepared to approve it, according to a report from the Reuters news agency.

Two sources familiar with the matter told Reuters the FCC has taken the lead on the “spectrum transfer” issue, which involves turning over prime wireless spectrum currently owned by large cable operators Comcast, Time Warner Cable, Cox, and Bright House Networks to Verizon Wireless. The combined licenses the cable industry holds are in the majority of major American cities, which critics charge Verizon will acquire to eliminate any potential competitive threat from a new nationwide wireless carrier.

Verizon’s recent moves to sell off its own “excess” spectrum to its current competitors has garnered favor inside the FCC, according to sources. Verizon Wireless recently agreed to transfer some of that spectrum to T-Mobile USA, which coincidentally was a fierce opponent of the deal between Verizon and cable operators. T-Mobile’s opposition has since muted.

Licenses owned by the cable industry would have been expansive enough to launch a new national wireless competitor. (Image: Phonescoop)

The deal between Verizon and the nation’s top cable companies is worth about $3.9 billion, but the Justice Department continues to signal concerns it would ultimately cost consumers more than that. According to Reuters, Verizon remains in “tougher talks” with lawyers inside the Justice Department who are concerned cooperative marketing between the phone and cable companies would result in decreased competition and higher prices.

One source told Reuters regulators were hoping Verizon’s now-stalled fiber to the home network FiOS would bring major competition to the cable industry, which until then had only faced moderate competition from satellite dish providers. In return, Comcast and other cable operators were expected to invade the wireless phone marketplace, adding needed competition.

Instead, both sides have retreated to their respective positions — Verizon focusing on its wireless service and Comcast and other cable companies abandoning interest in wireless phones and sticking to cable-based products.

The idea that both would begin to cross-market each other’s products is “a problem” according to the Justice source not authorized to speak publicly.

Additionally, concerns are being raised over a proposed “joint operating entity” between Verizon and cable operators that would focus on developing new technologies that could lock out those not in the consortium.

No decision is expected from the Justice Department until August, but Justice officials have signaled they have several options they can pursue:

1. Sue to stop the spectrum transfer;
2. Force the companies to modify their proposal to reduce potential collusion;
3. Approve the deal but monitor how cross-marketing agreements impact on consumer markets for wireless and cable products.

Copps

Former FCC commissioner Michael Copps thinks usage caps are all about raking in additional profits while cutting back on upgrades while claiming there is a broadband “shortage.” In remarks published on the Benton Foundation website entitled “Hoodwinked,” Copps lets loose on his frustration with the nation’s Internet Service Providers and government regulators who allow them to dictate America’s broadband development:

“Sorry,” the big companies tell us. “You consumers are such data hogs gobbling up the spectrum that we’ve got to ration what you get and charge you more for it.”

While price differentials between those who consume a little data and others who consume a lot may be part of the conversation eventually, we shouldn’t even be considering that at this stage of the game. There is just too much evidence that the big broadband providers operate a scarcity-based plan that works really well for their quarterly reports, but one that would be up-ended if they went out and invested in the increased broadband capacity consumers will need.

Broadband strategist Blair Levin put it well in a recent speech: “When it comes to the wireline access network, instead of talking about upgrades, we are talking about caps and tiers. Instead of talking about investment for growth, we are talking about harvesting for dividends.”

Make no mistake: America is not going to have the telecommunications infrastructure its future so urgently needs without a national commitment, public as well as private, to increase our broadband performance by orders of magnitude. We cannot harvest our future without planting the seeds for our future. It’s something we need to talk about—before the land goes barren.

History repeats itself. In 1889, it was railroads, steel, iron, and energy. Today it is telecommunications.

My first introduction to the concept of corporate doublespeak — designed to cushion the blow of bad news behind a wall of barely-comprehensible babble came in October 1987 when I heard one Wall Street analyst refer to the great stock market crash that had just befallen the financial district as a “fourth quarter equity retreat.”

Holy euphemism, Batman!

You weren’t fired — you were “made redundant.”  The bankruptcy of Detroit automakers and the layoffs that followed were not as bad as they looked. It was merely “a career-alternative enhancement program.”

And, no, Verizon and AT&T are not engaged in should-be-illegal marketplace collusion on pricing and services. They are just practicing some harmless “price signaling.”

That’s the awe-struck view of management consultant Rags Srinivasan, who just gushes over the marketing “stroke of genius” that threatens to give customers a stroke when they open their monthly bill.

Srinivasan’s piece, worthy of the Wall Street Journal editorial page, turns up instead on GigaOm, where it gets some pretty harsh treatment from tech-lovers who hate the rising prices of wireless service.

Price signaling has always existed between the number one and number two players in any market. Agreeing to not engage in a price war is truly a win-win for the market leaders. Since outright price fixing is illegal, market leaders resorted to signaling to tell the other company their intentions or send a threat about their cost advantages.

But traditionally, it was more like flirting — ambiguous enough that the underlying intentions could be denied. Why are these two not shy about admitting to flirting now? The simple answer is the iPhone.

Not too long ago we worried about running out of talk minutes and paying overage. Service providers offered us tiered plans that offered more minutes for a higher price and unlimited minutes for an even higher price. With the additional revenue flowing directly to their bottom line, these higher priced plans were real cash cows.

For those who have any doubt about the profits from unlimited plans, I’d point out that the costs of a mobile service provider are sunk with zero marginal cost for additional minutes. And texts don’t even consume traffic channels — they piggyback on control channels.

[…] In another genius pricing move, Verizon Wireless is presenting this $100 mobile service plan to customers in a bundle — talk minutes plus data. In the past, around $70 was allocated to talk because consumers valued it more. Now subscribers pay only $40, but they still pay the same $100 total price. This is nothing short of pricing excellence, protecting customer margin while also using strong price signaling to make sure that the next biggest market share leader follows suit.

What Srinivasan calls “business at its best” and “pricing excellence” we call collusion at its most obvious. The GigaOm author says he does not want the government tinkering with this kind of marketplace “signaling,” and it does not appear likely he has much to worry about. AT&T and Verizon executives have grown increasingly brazen (and obvious) with their near-identical pricing and “me-too” plans which leave little to differentiate the two carriers from a pricing perspective. The likely result will be at least 100 million cell phone customers eventually stuck paying for unlimited voice and texting services they neither want or need.

Wireless Wonder Twins Powers Activate: Shape of anti-competitive marketplace for consumers; form of collusion.

True, AT&T charges Cadillac prices but has the customer service image of a used 1995 Kia… but they did have the original exclusive rights to the Apple iPhone and Apple devotees proved they will endure a lot. Verizon Wireless has a better network and has always charged accordingly.

Unfortunately for consumers, the also-rans Sprint and T-Mobile (and the smaller still) depend on AT&T and Verizon for roaming off the city highway and into the countryside, and they are often stuck with devices that are a step down from what the bigger two can offer.

Srinivasan would have a better argument if the wireless marketplace had not become so consolidated. Had AT&T had its way with T-Mobile, America would have just a single national GSM network — AT&T. Verizon does not consider its CDMA competitor much of a bother either, and Sprint Nextel CEO Dan Hesse has to divide his time between fighting with Wall Street over why the company has not already sold out to the highest bidder (and now wants to spend a fortune upgrading its network) and customers who consider Sprint too much of a trade-off in coverage and its dismal “4G” Clearwire WiMAX network too slow for 2012.

Srinivasan is probably too young to understand AT&T and Verizon never invented “price signaling.” A century ago, the railroad robber barons did much the same, leveraging their anti-competitive networks-of-a-different-kind to maximize prices in places that had few alternatives. Where competitors did arrive, they were typically bought out to “maximize savings and eliminate market inefficiencies.” The same was true in the steel and energy sector of the early 20th century.

The result is that consumers were turned upside down to shake out the last loose change from their pockets. Eventually, government stepped in and called it marketplace collusion and passed antitrust laws that began a new era for true competition.

How soon some forget.

Shaw Communications executives last week announced, to the relief of Wall Street, the cable company is pulling back on great deals for cable TV, Internet and phone service this summer.

In an effort to appease Wall Street analysts like Phillip Huang, a researcher for UBS Investment Bank — who fear lower prices could “spiral into a price war, which obviously would be a lose, lose situation,” Shaw has made it clear it intends to stop some of its most aggressive promotions this summer.

“When you talk about promotions in the market, we’ve been very disciplined in that regard,” Shaw executives told analysts on last week’s quarterly results conference call. “It’s a highly competitive environment and will continue to be that way and we’re going to operate in a certain fashion.”

That “certain fashion” has cost them at least 21,500 subscribers who have already left Shaw this past quarter, most headed to Shaw’s biggest competitor Telus.

But some Wall Street analysts remain unsatisfied, noting there are major differences in telecommunications pricing in Canada. Western Canadians pay substantially less for phone, cable, and broadband service than their counterparts in Ontario and Quebec. Shaw and Telus customers also have much larger usage allowances for broadband service, and Telus so far has not enforced what limits they have.

Analysts peppered Shaw executives about why they are not raising prices to match what Bell, Rogers, and Vidéotron customers further east are paying.

Jay Mehr, Shaw’s senior vice president of operations told investors to hang in there.

“We still believe that we have some good pricing power when discipline really comes back into this market,” Mehr said on the call with investors. That signals Shaw is prepared to raise prices when aggressive deals end.

Wall Street also questioned why the company does not use long-term contracts to lock customers in place:

Mehr

Glen Campbell – BofA Merrill Lynch, Research Division: […] On service contracts: You’ve been pretty firm in not using them. Your competitor clearly does. […] Can you talk about the reasons for not going down the service contract road and whether you might reconsider that position?

Bradley S. Shaw – Shaw Communications: Well, there’s arguments for contracts as you — I guess, it’s really what these contracts do. As you said, we have equipment. Our [indiscernible] space — our Easy Own plan certainly is a very consumer-friendly plan as customers are getting something, and they’re agreeing to pay for it over time. And that creates kind of a natural kind of a relationship. What we don’t want to have happen is having customers, who are feeling confined by a contract, who otherwise would like to do something else. We don’t think that’s consumer-friendly. And so we’re looking at ways that we’d have more consumer-friendly kind of relationships but that still create some kind of a longer-term relationship that you can count on. But we don’t want to have the ball and chain kind of contracts that others have adopted.

[…] From a customer point of view. But also, the nature of contracts is there needs to be an enticement to get the customer sign a contract, and that enticement tends to be what we’re seeing in the market, which is fairly significant giveaways of hardware and other devices to be able to incent that. And so it will have has an impact on your cost of acquisition, and we’re trying to manage that. As Peter said, our Easy Own program is a very customer-friendly way for people to come on and make a commitment to us. And at the end of the period, they own their equipment. They haven’t had to pay upfront, and so it’s a nice way to manage that without being heavy-handed.

Shaw’s Exo Wi-Fi service is coming soon across western Canada.

Some other developments at Shaw, reported during the conference call:

• Spending on upgrades will continue to be on the aggressive side as the company builds out its new Exo Wi-Fi network and converts cable systems to digital service, creating additional space for broadband speed increases and other services;
• Broadband delivers the highest profit margins of all of Shaw’s services, so it remains a very important part of Shaw’s package;
• Customers are gravitating towards higher speed broadband packages, delivering extra revenue;
• The company has re-priced some of its plans and offers to be more friendly to broadband-only customers;
• Shaw is working to gain approval from communities across western Canada to deploy its Wi-Fi network, with plans to begin limited promotion of the new service by late fall or early 2013. Shaw expects its Wi-Fi network to have substantial coverage across the region within three years;
• Shaw plans to work with U.S. cable operators to participate in a Wi-Fi roaming network that will allow its customers access to the Wi-Fi networks being built in the United States;
• Shaw’s “TV Everywhere” project is being designed to protect existing video revenue. Rights are being acquired across the board for broadband, tablets and other mobile devices for a robust on-demand service. But live streaming is secondary.