KJCT-TV caught customers lined up literally out the door of this AT&T store in Grand Junction, Colorado.

AT&T store employees in the Grand Valley of Colorado are using the company’s upgrade of former Alltel service areas to 3G service as an excuse to tell customers they need to buy new cell phones if they continue to want to use their wireless service.

Customers lined up outside AT&T stores in communities like Grand Valley, Colorado on Monday fuming over service problems than began last weekend.

“I had about an half hour wait just to find out I had to buy a new phone and they wouldn’t credit me for it or anything,” customer Josh Simpson told KJCT-TV.

AT&T employees told the television newscast the company is “getting rid of the 2G service in Grand Junction to make room for larger networks.” Employees also said customers were sent a letter informing them about the service change, but customers might have overlooked the e-mail because it looked like spam.

Local employees shrugged their shoulders as customers repeatedly complained about having to foot the bill for brand new phones, often at full price, in order to continue using their service.

“It’s a corporate decision,” one replied.

At issue is AT&T’s adopted network, acquired originally by Verizon Wireless from Alltel but spun away to AT&T as part of an agreement with federal anti-trust officials.  Alltel’s network in the Grand Valley placed more prominence on its legacy 2G EDGE network than AT&T is willing to continue.  AT&T isn’t actually discontinuing the 2G network — it is moving 2G service to less-favorable spectrum it owns in order to make room for improved 3G coverage.  That might work fine in areas less expansive and rugged than western Colorado, but in the Grand Valley, it means many customers will find they no longer have data service at all.

The ongoing tower upgrades have also disrupted cell service generally, and when customers arrive at AT&T’s stores to complain, the employees on hand attempt to upsell them more expensive phones to “fix” the problem.

Customers calling to complain are met with busy signals or general statements from AT&T telling them the changes are for their own good.  But because so many basic cell phones don’t support 3G service, upgrades to phones that do often represent a major unexpected financial hit (and another two year contract and data plan if the phone happens to be a smartphone).

“Alltel served us just fine for many years,” writes our Glade Park reader Tim. “When AT&T eventually showed up, we got everything we never wanted, and this should be a lesson for those who think AT&T will somehow ‘improve’ service at T-Mobile if they acquire them.”

AT&T customer Joan Burns told KJCT AT&T just made up her mind for her.

“I will never again sign a contract with them,” she said. “That’s bull.”

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KJCT Grand Junction ATT Customers Forced To Upgrade Cell Phones 9-19-11.mp4[/flv]

KJCT in Grand Junction reports AT&T customers may be noticing a disturbance in their cell phone service, as AT&T employees use it as an opportunity to get customers to upgrade to more expensive phones.  (3 minutes)

Get ready for Qwikster

Netflix CEO Reed Hastings apologized this morning on the company’s blog for the perceived lack of “respect and humility in the way we announced the separation of DVD and streaming, and the price changes,” imposed on customers this month.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD, plus lots of TV series. We want to advertise the breadth of our incredible DVD offering so that as many people as possible know it still exists, and it is a great option for those who want the huge and comprehensive selection on DVD. DVD by mail may not last forever, but we want it to last as long as possible.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We feel we need to focus on rapid improvement as streaming technology and the market evolve, without having to maintain compatibility with our DVD by mail service.

So we realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently. It’s hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best: In a few weeks, we will rename our DVD by mail service to “Qwikster”.

We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/YouTube An explanation and some reflections 9-19-11.flv[/flv]

Netflix CEO Reed Hastings apologizes and explains the company’s new mailed DVD service Qwikster.  (3 minutes)

Hastings promises little will change with Netflix’s DVD-rental business except the name.  But is that enough to erase the perceived price and policy changes customers are complaining about?  Some of our readers say no, and most of the 10,000+ comments on Netflix’s blog as of this afternoon were also very hostile.

“He’s re-arranging the deck chairs and calling them lounge seats, but they are really the same deck chairs,” shares reader Tom Defrancisco in Austin, who shared the story with us.  “The ship is still taking on water, and that will only get worse when the rest of Hollywood gets their piece.”

Defrancisco is referring to ongoing content contract renewals Netflix is pursuing to keep, and expand, its online video streaming.  With the potential forthcoming loss of content from Starz, which could take a significant amount of current movie titles offline, subscribers may not be willing to pay more for less content to stream.

“It’s inevitable Netflix will have to raise streaming prices in the next six months when some of their content deals are renewed, and I am asking myself if it is worth $10-12 a month to stream old documentaries, TV shows, and movies I barely care about when current movies are simply not available online,” Defrancisco adds.

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CNBC investors and analysts are calling Netflix’s announcement they are splitting up their streaming and DVD rental business a “the third strike” for the company and are telling investors to get out before it’s too late.  “Qwikster=QUITster,” says Michael Pachter, Wedbush Securities, who thinks customers are once again the big losers.  “In the last three months, customers have seen prices rise, the quality of streaming content decline, and they just made the service a lot more complicated.”  (4 minutes)

Several of our readers miss Netflix’s 1-out-DVD/streaming companion plan, which used to offer unlimited streaming and one DVD rental at a time for $9.99 a month.

“I don’t care if they call it Netflix or Qwikster or MasterWatch,” says our reader Kyle. “It’s the same thing at the same high price called something else.  Who are they trying to fool?  I think it’s very telling Mr. Hastings doesn’t even directly own shares in his own company, and has sold off tens of millions in indirect shares he controls.”

The company’s new YouTube channel is also being pelted with negative views of Netflix’s latest business moves.

VoiceOreezn:

You guys just don’t get it. You don’t care what your subscribers want, and now are trying to justify your actions. Your streaming service sucks, and the pickings are very slim. I cancelled my account. It’s not about price, it’s about greed. You started off with a good concept, (but not enough streaming movies). Now, you’re just another greedy corporation. Want people back? Give them MORE, not less. I’d be very afraid of Amazon if I were you.

Netflix stock has lost nearly 50 percent of its value since the company first announced its price increase and plan changes on July 12.  Last week, Netflix admitted it was adding fewer new subscribers than forecast since raising prices nearly 60 percent on combination streaming-DVD plans.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Cory Johnson Discusses Netflix Subscriptions 9-16-11.flv[/flv]

Bloomberg talks with Cory Johnson about the outlook for Netflix Inc., after the company cut its U.S. subscribers forecast following a price increase.  Netflix has some surprise expenses coming up.   (2 minutes)

Some analysts, including Gabelli & Co analyst Brett Harriss don’t think today’s developments will make much of a difference, telling Reuters Hastings has talked repeatedly about separating the businesses in the past.

But one thing Qwikster will bring that Netflix never had: video game rentals for Wii, Playstation 3 and XBox 360 owners.

At least seven states including New York, California, Illinois, Pennsylvania, Washington and Ohio have announced they are joining the Justice Department lawsuit to stop AT&T’s attempted buyout of T-Mobile USA.

The merger has been heavily criticized by consumer groups for its potential to reduce wireless competition and stifle the marketplace with just two dominant carriers — AT&T and Verizon Mobile.  Now several Attorneys General have joined the voices of opposition to the merger.

“This proposed merger would stifle competition in markets that are crucial to New York’s consumers and businesses, while reducing access to low-cost options and the newest broadband-based technologies,” New York Attorney General Eric T. Schneiderman said in a statement.

Washington State Attorney General Rob McKenna said the deal would “result in less competition, fewer choices and higher prices for Washington state consumers.”

“The proposed merger would create highly concentrated markets in Massachusetts and could lead to higher prices and poorer service.” Massachusetts Attorney General Martha Coakley said.

Illinois Attorney General Lisa Madigan said the deal would “substantially lessen competition for mobile wireless telecommunications services in Illinois and across the United States.”

“Blocking this acquisition protects consumers and businesses against fewer choices, higher prices, less innovation, and lower quality service,” Madigan added.

“Our review of the proposed merger between AT&T and T-Mobile has led me to conclude that it would hinder competition and reduce consumer choice,” California Attorney General Kamala D. Harris said. “Enforcement of antitrust law is the responsibility of the Attorney General and is vital to protecting our state’s economic strength and tradition of innovation for the betterment of all Californians.”

Shuler

Although the level of opposition to the transaction continues to grow, AT&T itself claims to remain confident it can push the merger through.

“It is not unusual for state attorneys general to participate in DOJ merger review proceedings or court filings,” AT&T representative Michael Balmoris said.

Several Democratic lawmakers, most of whom receive substantial campaign contributions from AT&T, would seem to underline the company has the support of at least some in Congress.

Rep. Heath Shuler (D-North Carolina), joined 14 Democratic co-signers in a letter sent Thursday to President Barack Obama encouraging him to support the merger deal.

“By settling the proposed merger of AT&T and T-Mobile USA we can put thousands of Americans back to work and promote economic development across the country,” Shuler said. “I urge the President to strongly consider the vast benefits this merger will have on job creation and the economy and quickly resolve any concerns the Administration may have with the proposal.”

Among the co-signers: Rep. John Barrow, Rep. Mike Ross, Rep. Dan Boren, Rep. Dennis Cardoza, Rep. Joe Baca, Rep. Leonard Boswell, Rep. Ben Chandler, Rep. Jim Costa, Rep. Henry Cuellar, Rep. Mike McIntyre, Rep. Mike Michaud, Rep. Collin Peterson, Rep. Loretta Sanchez, and Rep. David Scott.

AT&T currently also has support for their deal from 11 states, many which receive very little service directly from T-Mobile: Alabama, Arkansas, Georgia, Kentucky, Michigan, Mississippi, North Dakota, South Dakota, Utah, West Virginia and Wyoming.

A court hearing is scheduled for Sept. 21 to discuss settlement options.

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KFOR in Oklahoma City explores the latest developments in the T-Mobile/AT&T merger case.  (2 minutes)

Richmond's public access channels operate from offices like these in city hall. (Courtesy: WTVR)

City officials in Richmond, Va. are facing questions about where the tens of thousands of dollars in fees collected every year from cable TV customers in the city ultimately go.

WTVR-TV in Richmond received an anonymous tip suggesting most of the money collected isn’t being spent according to plan.

Ordinance 2007-32-44 requires that part of the city’s franchise fee collected from providers like Verizon and Comcast “will be used to support public, educational and government (PEG) programming.”

But a WTVR investigation found that most of the money collected since 2007 — nearly $1.2 million — was instead parked in a Richmond city bank account.

The city has only spent around $70,000 dollars of franchise funds on a new camera, microphones, some lighting and a video editing system; but only for government channel 17, the one showing the mayor and city council at work, according to the station.

That means local politicians look fine on government access channels even as public access and educational programming languishes.  In fact, nothing tells that story better than a look at the makeshift offices in place to support Public Access programming — one the size of a broom closet located inside City Hall.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WTVR Richmond Cable TV money and the city of Richmond 9-14-11.mp4[/flv]

WTVR in Richmond investigates where cable franchise fees collected by the city of Richmond are being spent.  (3 minutes)

Verizon Communications has fired six workers and suspended more than three dozen others in Taunton, Mass. for engaging in “illegal gambling.”

But some union workers suspect Verizon’s sudden interest in last winter’s Super Bowl office pool may have more to do with the company’s ongoing conflict with its union employees, who resumed work several weeks ago after a short strike.  The company and members of the Communications Workers of America and International Brotherhood of Electrical Workers are still trying to come to terms on a contract renewal agreement.

One sales representative at Verizon, wishing to remain anonymous, told Wicked Local she didn’t understand the company’s sudden interest in office pools, which have been commonplace among workers at Verizon for years.  In fact, Verizon was encouraging sales staff to participate in their own version of a Super Bowl contest tied to sales performance, although one that didn’t reward winners with cash prices. Engage in legal gambling at pnp kasino.

The sales representative echoed the sentiments of many members of the Boston media who were wondering, “What’s the big deal?”

WBZ Radio’s NightSide Weekend Commentary features Dan Rea dismissing claims that the office pool crackdown had nothing to do with Verizon’s union troubles.  Aired: September 18, 2011. (2 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Verizon says illegal activity on company property is always forbidden, and adds it took a long time to complete the investigation before finally acting with termination notices for some, suspensions for many others.

Most of the affected workers belong to Local 2222 of the International Brotherhood of Electrical Workers.

Eric Hetrick, business manager for Local 1400, another union with affected members, issued a press release late Friday afternoon stating that his local is conducting its own investigation into the circumstances of the firings and suspensions.

“Many of the affected workers have exemplary records with Verizon and some are long-term employees,” he told the Taunton Daily Gazette in an e-mail, adding that additional comment at this time would not be appropriate.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WWLP Springfield Verizon Workers Fired Over Office Pool 9-12-11.flv[/flv]

WWLP-TV in Springfield covers the firings of Verizon workers over a Super Bowl office pool.  Bonus: A completely incomprehensible interview with one local resident commenting on the potential impact on office pools elsewhere.  (1 minute)