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Charter-Time Warner Cable-Bright House Merger Likely Stalled Until Next June

Phillip Dampier November 24, 2015 Charter Spectrum, Competition, Consumer News, Public Policy & Gov't Comments Off on Charter-Time Warner Cable-Bright House Merger Likely Stalled Until Next June

charter twc bhAny final approval of Charter Communication’s planned acquisition of Time Warner Cable and Bright House Networks will likely not come before next summer, as regulators in California decide to take a closer look at the blockbuster merger deal that would make Charter the second largest cable company in the country.

An administrative law judge is contemplating the merger’s impact on California, and a decision is unlikely to come before May 2016, with a final vote of the California Public Utilities Commission tentatively scheduled for June 16th. The judge agreed with consumer groups that the deal warrants evidentiary hearings — a sign the deal deserves additional scrutiny.

New York State’s Public Service Commission is also still reviewing the transaction, although it is expected to render a decision within the next few months. On the federal level, the FCC has also not held back, recently requesting answers to a number of questions regarding John Malone’s involvement in the future of “New Charter.” Malone remains Charter’s biggest single shareholder and could wield considerable control over New Charter’s operations. Considering Malone’s long history of antagonizing customers and engaging in what lawmakers called anti-competitive behavior during his realm at Tele-Communications, Inc. (TCI), regulators may not want to see history repeat itself.

What was originally anticipated by industry observers to be an ‘easy approval,’ is now looking more like Comcast’s failed bid for Time Warner Cable, as regulators seem to be in no hurry to give Charter’s deal a green light.

If regulators do ultimately approve the deal, it is likely to come with a number of conditions designed to at least temporarily protect consumers and competitors. Stop the Cap! argued in filings with state and federal regulators Charter’s proposal was uncompelling and consumers were unlikely to benefit from the deal. Time Warner Cable’s ongoing Maxx upgrade program delivers faster Internet speeds and better service than Charter’s more modest proposal offering upgrades up to 100Mbps. Time Warner Cable Maxx offers customers up to 300Mbps broadband for the price the company now charges for 50Mbps.

Wireless Carriers’ Ho-Hum Economics of Wi-Fi Calling; The Real Money is Still in Data

Phillip Dampier November 24, 2015 AT&T, Broadband "Shortage", Competition, Consumer News, Data Caps, Editorial & Site News, Sprint, T-Mobile, Verizon, Wireless Broadband Comments Off on Wireless Carriers’ Ho-Hum Economics of Wi-Fi Calling; The Real Money is Still in Data

telecom revenueThe year 2013 marked a significant turning point for phone companies that have handled voice telephone calls for over 100 years. For the first time, the volume of domestic telephone calls and the revenue generated from them was nearly flat. For the last two years, both are now in decline on the wireless side of the business as North Americans increasingly stop talking on the phone and text and message instead.

The U.S. wireline business peaked in the year 2000 with 192 million residential and office landlines. Over the next ten years, close to 80 million of those — 40 percent, would be permanently disconnected, replaced either by cell phones, cable telephone service, or a Voice over IP line. Wireless companies picked up the largest percentage of landline refugees, most never looking back.

Over one-third of more than $500 billion in annual revenue generated by telecom companies in 2013 came from voice services. Although that sounds like a lot, it’s a pittance of a percentage when compared to 2005 when AT&T, Sprint, T-Mobile, and Verizon Wireless earned most of their revenue from voice calls. Ten years ago, wireless companies principally sold plans based on the number of calling minutes included, and many customers often guessed wrong, paying per minute for calls exceeding their allowance.

At first, this represented a revenue bonanza for the wireless industry, which earned billions selling customers minute-based calling plans that came with built-in cost-controlling deterrents for long-winded talkers — the concern of using up their calling allowance.

attverizonStarting in 2008, wireless industry executives noticed something peculiar. While revenue from texting add-on plans was surging, the growth in calling began to level off. Wireless voice usage per subscriber peaked at an average of 769 minutes in 2007 and began falling after that year. By 2011, the average customer was making 615 minutes of calls a month. As customers began downgrading calling plans, wireless carriers shifted their quest for revenue towards text messaging.

For awhile, texting earned wireless companies astounding profits that required little extra investment in their networks. SMS service at most carriers was effectively priced at $1,250 per megabyte, broken up into 160 byte single messages. In 2011, over 2.3 trillion text messages were exchanged. A message that cost a wireless carrier an infinitesimal fraction of a penny to send and receive cost consumers up to 20 cents or more apiece if they lacked an optional texting plan. To further boost revenue, some carriers like Verizon Wireless began to pull back offering customers a variety of tiered texting plans with different messaging allowances, switching instead to a single, more expensive unlimited texting plan. Many customers balked at the $19.95 a month price and began exploring other forms of messaging each other.

chetan sharmaThe industry’s demand for profit eventually threatened to kill the goose that laid the golden egg. At the same time wireless carriers were raising prices on text messages and forcing customers into expensive texting add-on plans, free third-party messaging apps began eating into texting volume. By 2012, the use of SMS declined for the first time, with 2.19 trillion text messages sent and received, down 4.9 percent from a year earlier.

It took little time for the wireless industry to realize the days of offering plans based on calling minutes and texting were quickly coming to an end. Younger users began the cultural trend of talking less, texting more — but using a growing number of free alternative apps to do so. As a result, both AT&T and Verizon shifted their plans away from focusing on revenue from calling and texting and instead moved to monetize data usage. Today, both carriers offer base plans featuring unlimited voice calling and texting almost as an afterthought. The real money is now made from selling packages of wireless data.

Wi-Fi calling allows customers to make and receive voice calls over a Wi-Fi connection, not a nearby cell tower. The prospect of bundling that option into a cell phone just a few years ago would have been unlikely at some providers, unthinkable at others. It was never considered a high priority at any traditional carrier, although T-Mobile began offering the service all the way back in 2007.

Since most calling plans now bundle unlimited calling, letting calls ride off the traditional cellular network is no longer much of an economic concern.

wifi callingSome even expect carriers to eventually embrace Wi-Fi calling, declaring it superior to alternatives like Hangouts and Skype, which require an app to handle the call. A Wi-Fi call can be received by anyone with a phone.

This month, the last holdout, Verizon Wireless, capitulated and announced it had won approval from the FCC to introduce Wi-Fi calling to customers, joining Sprint, T-Mobile, and AT&T. But Verizon plans to initially limit that service, offering an app that must be installed to make and receive Wi-Fi calls. The other three carriers integrate Wi-Fi calling directly into the primary phone call app already on the phone.

The introduction of the service is unlikely to have a significant economic impact on any wireless carrier. Most have ample room on their networks to handle cell call volumes. Whether a call is placed over Wi-Fi or traditional cellular service, it will ultimately end up on the same or a similar IP-based phone switch as it makes its way to the called party.

With little revenue-generating opportunities for voice calling or SMS messaging, companies have nearly stopped the practice of monetizing individual telephone calls, preferring to offer unlimited, all-you-want calling and texting plans that used to cost consumers considerable amounts of money.

Now wireless carriers see fortunes to be made slicing up and packaging gigabytes of wireless data, sold at prices that have little relation to actual cost, just as carriers managed with text messaging for the last 20 years. A Verizon Wireless customer using 12GB of data in October that kept a now-grandfathered unlimited data plan paid just under $30 for that usage. (This month Verizon raised the price of that coveted unlimited plan by $20 a month.) Verizon charges $80 for that same amount of data on its new “XL” data plan. Verizon’s cost to deliver that data to customers is lower than it was five years ago, but customers wouldn’t know it based on their bill. As always with the wireless industry, costs often have no relationship to the price ultimately charged consumers.

Vandals Cause $1 Million in Damages Collapsing AT&T Cell Tower in Texas

att_logoOne of AT&T’s cell towers in Denison, Tex. went missing last Thursday in the 1900 block of West Crawford St. after vandals cut the tower’s supporting guy wires, causing it to collapse.

Nearby residents woke up to find the remains of the tower crumpled on the ground, with dramatically poorer cell service the result for AT&T, Sprint, and T-Mobile customers in the immediate vicinity. All three mobile providers maintained antennas on the affected tower.

Denison Police say the incident was a clear case of vandalism. After the guy wires were intentionally cut, the tower lacked sufficient support to stay standing on its own.

Nobody was injured during the collapse, but AT&T says the vandals caused $1 million in damages. A temporary cell tower is now in place. It will take three months to permanently replace the cell tower.

AT&T is offering at least a $7,500 reward for information that leads to an arrest.

[flv]http://www.phillipdampier.com/video/KXII Sherman ATT cell tower felled in Denison 11-22-2015.mp4[/flv]

KXII in Sherman, Tex. reports Denison authorities are looking to arrest the vandal(s) that destroyed an AT&T cell tower. (1:30)

Irish Consumers Try to Keep Up With Telecom Company Rate Cuts

Phillip Dampier November 23, 2015 Competition, Consumer News, Public Policy & Gov't 1 Comment

Here’s a problem most North Americans wish they had: confusing rate cuts that are coming as a result of fierce competition for your telecom dollar.

In Ireland, the problem is real and some consumers are finding themselves perplexed watching the cost of broadband, telephone, and television service dropping by as much as $159 a year from the four different providers competing across much of the country. Telco Eircom has a 35% market share (39% in 2013), UPC/Virgin Media Cable – 28% (25% in 2013), Vodafone – 21% (17% in 2013), and Sky – 12% (1% in 2013).

“Neighbors are talking to one another and comparing bills only to find some are paying less than others even though they have the same types of services,” says Richard Donahue, a Dublin resident turned compulsive comparison shopper. “Because competition is getting stronger, local providers are pushing to get customers into bundles of services to keep them from switching.”

broadband ireland

The result is lower pricing to help convince consumers to take all of their business to one provider. The ongoing drop in the price of telephone, television and broadband service has now been measured by Comreg, Ireland’s telecoms regulator. It released a report this month stating prices have “fallen significantly for the average Irish household.”

Consumers willing to make providers fight for their business are saving over $100 a year on bundled service packages. Comreg reported that even without asking, the average consumer subscribing to a package of television and broadband service has seen prices fall by nearly $75 a year across the board. Those also subscribing to telephone service are paying around $50 less a year. Only the cost of standalone broadband has remained the same, but that price has stayed close to what the Irish consider an acceptable range for Internet access — between $15 and $40 a month.

Irish cable competitor UPC (now Virgin Media) sells a package of 240Mbps broadband with an unlimited calling landline for around $50 a month.

Irish cable competitor UPC (now Virgin Media) sells a package of 240Mbps broadband with an unlimited calling landline for around $50 a month.

“Standalone broadband pricing may not be falling, but it isn’t rising either,” reports Donahue. “Service has improved with faster speeds and better reliability so you receive better value for money.”

Even mobile service prices are down by almost $90 a year, but there are some caveats.

“Ireland has one significant mobile problem yet to be sorted — the penalty for breaching allowances, which can be substantial,” Donahue said. “Comreg found almost a third of Ireland has received a warning text from a provider about nearing a limit provided by our allowances for voice minutes, texts, or data.”

Donahue adds the Irish are reticent about changing mobile providers, even if it would save them money.

“We love to complain about poor providers in this country that drop calls and leave us without coverage but 73 percent of us have not changed our provider in at least three years,” he reports. “Most don’t believe there are any savings doing so.”

Ireland appears to be a few years behind North American trends dealing with telecom services. The Comreg report found:

  • Only 9 percent of Irish households subscribe to Netflix
  • 76% of Irish mobile users still text back and forth but are gradually shifting towards app-based messaging services like Hangouts, Facebook Messenger and Whatsapp
  • 43% of those watching online video report watching less traditional live/linear TV
  • Only about 58% of mobile users browse the web with their phones
  • 60% of broadband users couldn’t tell you what broadband speeds they receive/are supposed to receive
  • 88% of those 65+ still have landline phone service, while 46% of those 18-24 still use landlines to make and receive calls.

ARRIS Cable Modem/Gateway Security Lapse Offers Hackers Two Backdoors Into Your Network

Phillip Dampier November 23, 2015 Consumer News, Wireless Broadband Comments Off on ARRIS Cable Modem/Gateway Security Lapse Offers Hackers Two Backdoors Into Your Network

arrisARRIS, one of the country’s largest suppliers of cable modems, is under scrutiny after a security researcher discovered not one, but two secret “backdoors” potentially affecting more than 600,000 of the company’s installed cable modems/home gateways that could allow hackers access to a customer’s equipment and home network.

Bernardo Rodrigues published a report of the exploits on his blog, which affect ARRIS cable modem models including TG862A, TG862G, and DG860A. Rodrigues reports only ARRIS and your local cable company can fix the security problems, and neither seem to be in much of a hurry.

The Arris Touchstone 860, which can be identified by its model number depicted on the front of the modem.

The ARRIS Touchstone 860, which can be identified by its model number depicted on the front lower right of the modem.

“Securing cable modems is more difficult than other embedded devices because, on most cases, you can’t choose your own device/firmware and software updates are almost entirely controlled by your ISP,” Rodrigues writes. Indeed, very few cable modems allow users to self-update their equipment with the latest firmware. To guarantee uniformity, that privilege is given exclusively to the cable company providing service, even if a customer owns their own modem outright.

“ARRIS SOHO-grade cable modems contain an undocumented library (libarris_password.so) that acts as a backdoor, allowing privileged logins using a custom password,” Rodrigues writes. “The backdoor account can be used to enable Telnet and SSH remotely via the hidden HTTP Administrative interface “http://192.168.100.1/cgi-bin/tech_support_cgi” or via custom SNMP MIBs.”

While exploring the potential security damage that backdoor could permit, Rodrigues stumbled on a second, open to additional exploitation by hackers.

“The undocumented backdoor password is based on the last five digits from the modem’s serial number,” Rodrigues wrote. “You get a full busybox shell when you log on the Telnet/SSH session using these passwords.”

Arris TG862

ARRIS TG862

In plainer language, one or both backdoors will allow a hacker to bypass the modem’s usual security protections and provide the intruder with full remote access to the affected cable modem. Hackers have likely already identified the security lapse and have exploited it, with some suspecting access key generators are already available allowing the user to automate attempts to reach affected modems on a significant scale.

Unfortunately for consumers, neither ARRIS or cable operators appear to be rushing to update the affected firmware to eliminate the backdoors, having waited more than two months just to acknowledge Rodrigues’ report.

For now, customers using these devices exclusively as cable modems are least likely to suffer a serious security lapse. More at risk are consumers relying on these three models as both a cable modem and home gateway providing Wi-Fi access around the home. Theoretically, hackers could use one or both exploits to gain access to your home network. Consumers using one of the affected models should contact their local cable company and ask them to replace the device with an alternative, preferably from a different manufacturer.

At least one cable company reported they are working with ARRIS to correct the flawed firmware, but early efforts have not been successful. It may be prudent for some security-conscious customers not to wait.

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