Verizon Wireless 4G LTE customers experienced problems for the second Wednesday in three weeks, as another network outage plagued the “most reliable wireless network in the U.S.”

Verizon officials admitted the outage was a problem early this morning, mostly for 4G customers.  But many LTE phone owners found that switching their 4G phones to 3G service didn’t fix a thing, leaving them once again without any data service.

“When my 4G beacon switched off, the 3G beacon only stayed on a second before it was gone as well,” shares Stop the Cap! reader Roger, who lives in Denver.  “Even when I turned 4G off, 3G just would not stay enabled.”

This problem was remarkably similar to a lengthy day-and-a-half outage that brought down many of Verizon’s 4G customers on Dec. 6 and 7.

“Verizon Wireless 4G LTE service is returning to normal this morning after company engineers worked to resolve an issue with the 4G network during the early morning hours today,” the company said in a statement. “Throughout this time, 4G LTE customers were able to make voice calls and send and receive text messages. The 3G data network operated normally.”

That may be true for 3G-only customers.

Verizon’s second major national outage is starting to test the patience of some of its customers who bought service from the company based on its reliability track record.

“This is a second huge FAIL for Verizon in just a few weeks, and I’m growing annoyed,” Roger says. “I could live with a downgrade to 3G for a few hours, but Verizon 4G phones seem to have a problem stepping down to the slower network when there is a problem with their 4G LTE network.  This means 3G-only phone owners have service as usual, while the rest of us do not.”

Verizon’s 4G network is fast becoming among the world’s largest, and its penchant for service problems during the overnight hours likely means a software upgrade or patch is responsible.  As the update propagates across Verizon’s network, service problems begin to spread from region to region.

As LTE technology improves, Verizon customers are effectively beta-testers and suffer the consequences when a bad piece of software has unintended consequences.

Service credits are available on request from Verizon Wireless customer service.

As long as your life stops after 5GB per month.

Asian wireless operators are learning from their North American counterparts that artificially limiting wireless broadband consumption with usage caps and metered pricing can deliver enormous new profits companies can use to satisfy shareholders and attract higher dividend-seeking investors.

DoCoMo, Hong Kong’s CSL, and South Korea’s SK Telecom have all announced a shift towards usage-limited plans even as they launch new 4G networks that have at least three times the capacity of the older 3G networks they will eventually replace.  In fact, as Dow Jones reports, usage capping 4G wireless Internet access has little to do with congestion.  Instead, it’s a “revenue booster.”

Limiting data use and charging subscribers for excessive Web browsing on mobile devices may help boost carriers’ return on their investment at a time when many operators in the region have seen their earnings pressured due to falling voice revenue and hefty smartphone subsidies.

With the shift to charging subscribers for extra data usage, the region’s carriers are hopeful that they can boost their revenue.

While last generation 3G wireless broadband networks do face congestion issues, providers have maintained unlimited data plans until very recently.  But solving the 3G capacity crunch by upgrading to 4G has not removed the excuse to engage in Internet Overcharging.  It has only shifted the rationale for usage based pricing towards attracting increased revenue and investment.

Hong Kong-based CSL began offering 4G services in November last year for $44.85 for 5GB with an overlimit fee of $12.72/GB. At least CSL retains an unlimited use option, charging customers $60 a month for all-you-can-eat wireless broadband, a much better deal if you expect to exceed CSL’s 5GB limit.

Rogers Communications has mailed letters to rural Canadians announcing it will cease operation of its Portable Internet wireless broadband service effective March 1, 2012.

The service, which uses the Inukshuk Wireless network, delivers Internet access to over 150 communities across mostly rural-northern Canada, where DSL and cable broadband is simply unavailable.  Customers were paying $45 a month for up to 3Mbps service with a 30GB usage cap.

Rogers’ decision will now force most of those customers to use the company’s far more expensive 3G wireless network, which runs far slower and has substantially lower usage allowances.  How much more expensive?  Rogers’ 3G customers choosing the company’s 3G Flex data plan will pay between $94-104 a month (depending on speed), for a plan with a 15GB usage allowance.  Overlimit fees run $10/GB. Customers using 20GB on Rogers’ 3G Flex will pay the company $144-154 a month for slower service.

“The price disparity is absolutely enormous,” says Stop the Cap! reader Ted who uses Rogers Portable Internet service in Val Caron, Ont., located north of Sudbury.  “You might as well not bother using the Internet at all at these prices.”

Ted says Rogers Portable Internet was never a perfect solution, but it was priced similarly to what larger city residents pay for broadband.

“It’s not really WiMax, which came after Rogers introduced the service, and the speeds and ping times can be appalling if you don’t have good reception, but it was affordable,” Ted says.  “Using 3G service means even slower speeds and lower caps at double the price, which is typical for Rogers.”

Ted points out the 30GB one receives on the Portable Internet service for $45 would correspond to a bill for $25o on 3G — five times the price for worse service.

“I am talking to my wife about buying the Rocket Hub [Roger’s device for mobile broadband] so we have something, because Bell has told us not to expect DSL anytime soon,” Ted notes. “Rural Canada cannot catch a break.”

The other option rural Canadians have is satellite Internet access, but providers like Xplornet have faced withering criticism from customers for poor speeds, network speed throttling, and usage caps.

Verizon Wireless customers in New Jersey were startled Monday when the company sent out text messages labeled “Extreme Alert,” telling people a civil emergency was underway and they should seek immediate shelter.

No, Jersey Shore’s Snooki was not in the building.  It turned out to be a bungled test of the cell phone company’s emergency alert system, designed to text important information to cell phone customers located in specific geographic areas.

The fact Verizon forgot to mention “this is only a test” alarmed those receiving the warnings, as well as area 911 call centers that were subsequently flooded with calls.

Verizon admitted it sent the messages by mistake to customers in Middlesex, Monmouth and Ocean counties.

Emergency officials in all three counties began receiving calls from worried residents and the state homeland security office and emergency management center eventually posted messages on Twitter declaring the messages a false alarm.

At least Verizon didn’t charge customers for the text messages.  They, like other company-initiated communications, come free of charge.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WABC New York EAS Alert 12-12-11.mp4[/flv]

WABC’s New Jersey reporter talked with recipients of Verizon’s scary text message, and emergency officials who had to deal with the onslaught of phone calls from worried residents.  (2 minutes)

Haven't we been here before?

History is best ignored when a Wall Street Journal columnist frames an argument in favor of strengthening the hegemony of Ma Bell, and darn ‘ole past precedent gets in the way of the writer’s “facts.”

Gordon Crovitz is a media and information industry adviser and executive, including former publisher of The Wall Street Journal, executive vice president of Dow Jones and president of its Consumer Media Group.  But today he’s unofficially, unabashedly AT&T.

In a column published this week, Crovitz hosts a whine and cheese festival on behalf of poor and abused AT&T, whose multi-billion dollar takeover of T-Mobile is in tatters. Crovitz places the blame squarely on the government for ruining everything:

How soon we forget the risks of overregulation: Last week, the Federal Communications Commission flexed the same muscle it once used to quash market forces in the phone industry to quash market forces in the wireless industry.

Today’s AT&T, a spinoff from the original, needs more spectrum to catch up with market leader Verizon, also a Ma Bell descendant, to support iPhones, Androids and other devices that feature video and sophisticated apps. It wants to buy T-Mobile, a division of a German company, which doesn’t have the resources to compete in the United States on its own. But the FCC decided to apply antitrust theory from the industrial era and claims to know better than wireless companies how they should operate their businesses.

AT&T’s proposed acquisition is best understood as a private-sector solution to a government-created problem. The FCC has not been able to get Congress to approve auctions to reallocate spectrum to wireless from less valuable uses. AT&T wants T-Mobile’s bandwidth so it can extend the latest fourth-generation network to 97% of the country from 80% and improve its spotty service in congested areas.

Under laws dating to the 1920s, the FCC gets to decide if a merger is in the “public interest,” a vague standard for top-down decision making. Government is the last institution in this era of fast technological innovation to act as if it has the information and power to dictate how change happens.

Crovitz apparently prefers AT&T and its phone pal Verizon Wireless dictate how “change happens,” because the two companies control the vast majority of wireless telecommunications in the United States.  Both also charge near-identical prices for near-identical levels of service.  AT&T & VZW are completely comfortable with that status quo, especially if disruptive competitor T-Mobile is dealt with in the usual industry manner (merger/buyout).

There is nothing vague about the FCC report that condemns the merger of AT&T and T-Mobile for the anti-competitive monstrosity it represents.  In hundreds of pages Crovitz evidently never read, a careful and credible argument against the deal was laid out for all to examine.  That evidence is far more persuasive than AT&T’s heavily-redacted filings the public was not authorized to see (for ‘competitive reasons’), and a multi-million-dollar-a-holler public relations distortion strategy based on hollow promises.

Playing Catch-Up With Verizon Wireless?  Hardly.

AT&T hardly needs to “catch up” with Verizon Wireless.  Both companies own wireless spectrum they have warehoused for “future use.”  As a backdrop to the merger, FCC Chairman Julius Genachowski has already indicated the agency is hard at work carefully re-allocating spectrum to make more room for wireless services.  The “bandwidth crisis” AT&T talks about is a convenient argument for a merger, until you realize T-Mobile’s mostly-urban wireless network won’t help AT&T achieve its goal of rural wireless expansion.  T-Mobile has never provided service in rural America and never will.

Crovitz attempts to leverage Verizon Wireless’ recent deal with America’s largest cable companies as an argument for the AT&T and T-Mobile merger, suggesting that deal was a game changer.  What goes unsaid is the fact AT&T could have pursued that deal for themselves.  Did they?  No.  Despite AT&T’s public relations spin, the proposed merger with T-Mobile is much more than a spectrum acquisition. As the FCC and the Justice Department have argued, this merger is about ridding AT&T of a competitor willing to offer more services at lower prices.  That forces AT&T to respond in kind to compete, and consumers have benefited greatly from that competition. Verizon Wireless is hardly competition at all considering both companies price services nearly identically.  Beyond that is Sprint, already saddled with the financial albatross Clearwire and questions about its long term viability in a duopolistic wireless market.

Crovitz is wrong on his other “facts” as well:

Deutsche Telekom is hardly short on cash.  The company has plenty of resources and could bolster T-Mobile USA to compete if it saw fit.  It doesn’t, preferring to focus on its more lucrative European markets.  Instead of selling the operation on the open market to other players, which could include foreign providers interested in competing in the high-priced American market, it elected to be courted by AT&T.

Overconfident AT&T

Henry De Lamar Clayton, Jr.: Author of the Clayton Act

The merger illustrates AT&T’s unparalleled level of overconfidence it could deal with regulators and consumer groups who would certainly object to the deal.  The company has since spent millions it could have used to improve its network on campaign-contribution-fueled support building on Capitol Hill, a shameless dollar-a-holler astroturf campaign that pays off non-profit groups to sing the deal’s praises, and an expensive ad campaign to sucker Americans into thinking reduced competition will somehow deliver lower prices and better service.

Even former Republican FCC Chairman Kevin Martin would have likely paused over such an obvious monopoly-building operation.  The Obama Administration’s FCC chairman — Julius Genachowski —  while often too timid for our tastes, at least knows when it is time to join the chorus of opposition.

The FCC doesn’t pretend to tell AT&T how to run its business.  It does, however, serve the public interest by providing checks and balances to unfettered corporate power.  While the Wall Street Journal‘s world view of capitalism would have been favored by the most egregious robber barons, history has taught us that when big corporations get a stranglehold on vital industries, the entire economy can suffer.

Crovitz would have us ignore the massive corporate abuses of 100 years ago that eventually provoked Congress into trust-busting legislative reform, breaking up the monopolies and oligopolies that presided over the railways, early telecommunications networks, and industrial raw materials like oil and steel.  Restrained competition brought monopoly prices and blockades against would-be competitors.  What was true then is still true now, only the technology has changed.

In 1911, the economy was powered in part by railroads, which transported goods and raw materials.  Telecommunications networks like the telegraph and early telephone helped conduct business and coordinated the movement of goods.  In 2011’s growing digital economy, telecommunications increasingly represents the railroads, telegraph, and telephone all combined-into-one.  Some of America’s richest tech companies depend on broadband and communications to fuel demand for their products.  Allowing AT&T to control the largest part of that pipeline could be disastrous to everyone but that company and their shareholders.

History Repeats Itself

In 1914, the Clayton Act was passed to put a stop to increasing anti-competitive activity and abusive market tactics.  Amazingly, the problems being solved a century ago are back with a vengeance today, all thanks to the endless drumbeat for deregulation, which has fueled mergers, acquisitions, and increased concentration of market power.  That Act cracked down on:

• Price discrimination: selling products and services at different prices to similarly situated buyers;
• Tying and exclusive-dealing contracts: sales on condition that the buyer sign exclusive contracts that force an end to dealing with the seller’s competitors;
• Corporate mergers: acquisitions of competing companies to reduce competition; and
• Interlocking directorates: Boards of directors of competing companies, packed with common members.

Today’s laissez-faire attitude towards government checks and balances helped provoke the Great Recession, corporate scandals of epic proportions, and a revolving door in Washington where regulators end up working for the companies they used to regulate. Just ask former FCC chairman Michael Powell. Three years ago he worked for us.  Today he works for Big Cable’s largest lobbying group — the National Cable & Telecommunications Association.  FCC Commissioner Meredith Attwell Baker went to work for Comcast shortly after green-lighting their super-merger with NBC-Universal.

It’s All About the Money. Always.

The only thing stopping AT&T from providing wireless nirvana to rural America is its own unwillingness to spend money on behalf of customers to upgrade its network.  The company claims it didn’t see the value of spending nearly $4 billion needed to deliver expansive 4G service, but suddenly had no trouble at all finding nearly ten times that amount to purchase T-Mobile USA.

Did AT&T suddenly win PowerBall?

AT&T saw crushing a competitor Job #1.  Central Idaho’s 4G service could wait.

Crovitz later notes AT&T “was unusually blunt” criticizing the FCC report, a classic case of protesting too much.  The company got caught with its rhetorical pants down, with a series of evolving arguments for a deal that never made the first bit of sense once you began to dig deeper into their case.

In the end, Mr. Crovitz wants you to blame Big Government for AT&T’s pervasive dropped-call problem that its competitors don’t seem to have.

It’s not the company that owns and runs the network, it is that Obama and his nasty henchmen at the FCC who are responsible!  Who knew?

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg FCC Says ATT Failed to Show Public Benefit of Merger 11-30-11.mp4[/flv]

Bloomberg News reports the FCC found AT&T failed to demonstrate any real public benefit of its merger with T-Mobile USA.  (2 minutes)