Frontier Communications continues to alienate customers up and down the state of West Virginia with more service outages, billing problems, and emergency 911 service interruptions.

This time, it’s the community of Marmet that suffered an outage the company described as “temporary.”  Service to the area’s Metro 911 emergency operations center was interrupted Monday and residents knew what to do when Frontier could not deliver landline service that works — they grabbed their cell phones.

In Dunbar, the funeral director at Keller Funeral Home noticed he stopped getting calls from local area customers after Frontier took over operations July 1st.  Michael McCarty told a Charleston television station Frontier initially blamed him for the problems, but later discovered malfunctioning switching equipment was at fault and forked over a $344 refund.  McCarty’s business probably took a bigger financial hit than that when potential customers could not get through — for months.

“People would call, but it wasn’t ringing here,” McCarty told the Charleston Gazette. “There really wasn’t much we could do but wait it out.”

Two dozen complaints about Frontier’s performance are still pending at the West Virginia Public Service Commission.  The state’s consumer advocate says Frontier’s service quality in the state is not improving.  Frontier blames Verizon’s aging and poorly maintained network for most of the problems.

But many of Frontier’s complaints, not just in West Virginia, are about unfair early cancellation fees, inaccurate billing, lost service orders, and lousy customer service.  Here’s a sample:

• “The customer service representative was extremely rude and angry. We called in response to the unfair cancellation fee of $250.00. Last week we were told that we had until 9/30 to opt for other phone service without a cancellation fee. Each representative gives different information. Small business were treated horribly by Verizon and now Frontier. After the rudeness, I will never bring my business service back to Frontier!”
• “I have fought this company for six months because every month they cannot get billing right. They are the absolute WORST I have ever dealt with. They charge for services not wanted. They charge late fees when none should have been charged and then didn’t remove them after admitting their mistakes. If you have any other choice, avoid Frontier like it’s a plague, because it is.”
• “They never processed my order to transfer my service. I called back 4 times in a week to get them to do their job. On the last day, I was left on hold for 2 hours in the morning and then 1.5 hours in the afternoon, only to be told I would have to wait another 3 days for a servicemen to come out. The wait times were nothing less than abusive.”
• “Horrible folks to do business with. Verizon sold my FiOS/Phone account to Frontier and soon afterward mysterious charges for “ID protect” etc. started appearing on my bill. Whenever I call their service, it loops and hangs up. I tried the option for “we will call you back” – when it calls back , it will give another number to call back, where you have to wait again. Can’t wait to get rid of them.”
• “Frontier recently bought out Verizon’s service in my area. The automated phone tree system goes in loops and hangs up on you. Furthermore, once I finally figured out how to get someone on the line (responding to every question the automated system asked with “operator”) and moved up to a supervisor… the supervisor got very short with me when I tried to cancel my service and then hung up on me. When I called right back, I got an automated message saying the offices were closed.”

Some enterprising Frontier customers have learned their hold times will be much shorter if they opt to speak with a Spanish-speaking operator.  “Many of the call centers are in Florida anyway, so you may get a bilingual operator no matter which language you choose,” writes our reader Danielle.  “I cut my hold times from over an hour to less than five minutes this way.”

Meanwhile, one of Frontier’s primary competitors in the state, Citynet, accused Gov. Joe Manchin’s office of wasting $126 million in taxpayer money that will benefit Frontier Communications far more than state residents starved for broadband.

Citynet CEO Jim Martin urged federal officials Wednesday to suspend the grant after the state defended plans to allocate a large amount of the grant exclusively to connect state agencies.

“The state’s response clearly highlights why the federal government needs to suspend the award until there are major modifications to the plan,” Martin said. “It is clear from the state’s letter that little will be done with the federal taxpayer funds to increase the availability of adequate and competitively priced high-speed infrastructure in West Virginia. The current approach will cost the state future job growth.”

Martin is upset that more than half of the grant, $69 million dollars, will be spent on Frontier’s behalf to construct a broadband network for the state government.  The agencies who get access will still have to pay Frontier market rates for high speed broadband access, despite the fact taxpayer dollars were spent to construct the network Frontier will operate.

Manchin

Citynet wants stimulus funding diverted to construct a “middle mile” broadband network that every telecommunications company can access at wholesale rates to deliver improved broadband services to residents and businesses, not just government buildings.

Martin says the Manchin Administration is making “blatantly false” claims that the stimulus money would deliver high-speed Internet to 700,000 homes and 110,000 businesses.  Unless those homes and businesses are stuffed into government agency buildings, it won’t.

According to Martin, all of the benefits will go to only two places — state agencies and Frontier’s pockets.

“It’s a political favor to Frontier,” Martin charged.

“The citizens of West Virginia deserve transparency and accountability from their public servants, and this is even more true given the magnitude and importance of the need for broadband enablement in our state,” Martin said Wednesday. “I was born and raised in West Virginia, and I am aware of the consequences this program could have for West Virginia in terms of job growth and competing for high-paying 21st century jobs.”

Too many inquiries can damage your credit score

While the passage of the CARD Act has protected consumers from some of the worst credit card tricks and traps, the legislation left plenty of loopholes which credit card companies are increasingly exploiting to minimize risk and generate additional revenue.  As credit card companies continue to reduce credit limits and close accounts, both permitted under the legislation, they are increasingly using “excessive credit inquiries” as an excuse for taking that action.

That’s why one Raleigh, N.C. Time Warner Cable customer was very unhappy to see not one, but two credit inquiries on his credit report from the cable company when he signed up for service back in July:

TIME WARNER CABLE - RALEIGH
Hide Details    07/13/10, 07/12/10

These “hard pulls” appear on credit reports under the “inquiries” section and are provided to other creditors as an indication of how much new credit you are applying for over a two year period.  While one or two of these inquiries are unlikely to dramatically impact your overall credit score, someone moving to a new home or planning to purchase one might run into some reluctant creditors unwilling to extend credit at the best possible rates for those who have six or more inquiries in the last 12 months.

According to Fair Isaac, the company that produces the FICO score, those with six or more inquiries on their credit reports are up to eight times more likely to declare bankruptcy than people with no inquiries on their reports.

As credit card issuers continue to be risk averse, a sudden appearance of hard inquiries on a credit report can be enough to deny you approval for a new account or help trigger a “credit review” which, in combination with other factors, can lead to a major credit line reduction or even account closure.

Pentagon Federal Credit Union, one of the nation’s best-rated credit unions, is also among the most sensitive to lots of inquiries, fearing potential customers are “pyramiding credit” through rapid fire applications.

Time Warner Cable is not alone in pulling credit reports on their new customers.  Comcast, AT&T, DirecTV and Verizon also obtain credit reports for customers signing up for cable, satellite, landline, and/or mobile service, and some customers have seen their FICO scores drop as a result.

Fair Isaac says the impact from inquiries will vary from person to person based on their individual credit histories.  For most people, one additional credit inquiry will take less than five points off their FICO score. But inquiries can have a greater impact if you have few accounts, a short credit history, are trying to rebuild credit, or are on the edge of moving from one score range to another.  Some creditors that manually check applications may ignore or discount credit inquiries from cable and phone companies, because it’s not the same as applying for a credit card, but automated systems may not be so forgiving.

More upsetting to some are why these companies are placing hard inquiries for credit reports on their subscribers’ credit files in the first place, especially when many customers had no idea they would try.

“Creditors can review credit reports and report them to credit bureaus as “soft” or “hard” inquiries,” writes our reader Tabitha, who had her credit report pulled when she called requesting a lower rate from Comcast.  “If they make a soft inquiry, that’s no big deal because no other creditors will see this on your report.  But Comcast made a hard inquiry and that does show up and it dropped my FICO score six points.”

Tabitha moved into her Philadelphia-area home eight months ago, opening a new checking account, establishing accounts with local utility and cable companies, switching her cell phone carrier, and dealing with Comcast.  Altogether, that resulted in six hard inquiries on her credit report.

And many credit card companies absolutely hate to see that.  Here’s a copy of a letter rejecting one consumer’s request for credit because there were “too many inquiries” for credit in his or her credit file:

Chase hates to see a lot of inquiries from creditors on credit reports. That alone can be sufficient to deny you credit from them. (Click to enlarge)

If Discover Card discovers a whole mess of inquiries on your credit report, you’ll discover a rejection letter from them in no time at all, as this customer discovered:

Discover Card's automated credit analyst software will reject credit requests out of hand if there are too many hard inquiries on your credit report. (Click to enlarge)

We have been able to find credit inquiries from cable and phone companies for everything from establishing service as a new customer to relocating to a new address or even upgrading or downgrading your level of service.  Establishing postpaid cell phone service almost always has resulted in a credit report pull, and most customers are aware of that when they sign up.  But should a cable company do a credit check just for calling them up and asking for a lower rate?

Bargaineering has some tips to help get these inquiries permanently deleted from your credit report from all three major credit bureaus.  It can be as easy as just writing a letter.  The Time Warner Cable customer in Raleigh called the cable company to demand they remove at least one of the duplicate hard inquiries, and Time Warner managed to do him one better by deleting all of them from his credit file, which suits him just fine.

You paid for "lightning fast" speed, but are you actually getting it? Find out!

In areas where limited competition between broadband providers has broken out, consumers are discovering their local providers advertising faster, higher priced tiers of Internet service.  But do you really get the speeds you are paying for?

There are a number of factors that can impact your speed — the quality of the lines to your home, whether you are accessing the Internet through a wireless connection, and how much congestion your provider copes with during peak usage times.  Here are some tips to consider:

If your speeds are simply awful — nearing dial-up at times —  especially when the weather is poor outside, you should first suspect a problem with your connection.  Call your provider and request a line test to determine if there is an obvious fault with the lines running to your home or business.  The usual culprits are cracked cable fittings, worn out insulation, water getting into the wiring, or squirrels that have used your phone or cable line as a toothpick.  If the line test is not definitive, request a service call to check your lines.  Phone cables are especially prone to water damage, often inside terminal boxes located well off your property.  Cable TV lines suffer from corrosion, insulation that has fallen away or cracked, or fittings that need replacement.  If critters have chewed through the outer cable, you will often also see the results on your television with a downright lousy picture.  The biggest problems always seem to appear in the spring and fall during major climate transitions.

If you notice speeds are much slower during the early evening and weekends and you are on a cable connection, your cable company has probably oversold service in your neighborhood and too many users are trying to share the line at the same time.  Cable companies can divide up the traffic by splitting the neighborhood’s connection back to the cable company in half.  The upgrade is usually done at a box or facility somewhere in the neighborhood, not at your home.  If this prime time slowdown occurs on a DSL or fiber connection, chances are the provider doesn’t have a wide enough pipeline to the Internet to accommodate customer demand in that town or city.

A squirrel's favorite chew toy may be your broadband cable or phone line.

Also remember that DSL connections from the phone company are sensitive to the distance between your home and the phone company’s central office.  Don’t pay for higher speed tiers of service if your phone line simply refuses to support those speeds.  Downgrade your service to a speed level you can realistically expect to receive in your home.

If you access the Internet over a wireless connection from a router, a major speed logjam can occur if your Wi-Fi signal faces interference from neighbors sharing the same wireless channel.  Sometimes just running a microwave oven can obliterate certain wireless connections or significantly slow them down.  If your signal strength meter shows poor or fair reception, try reorienting your wireless router.  The higher you can place the router and keep it free of obstructions the better.  Walls, floors, and even metal filing cabinets can degrade wireless signals.  Many wireless routers have two antennas.  Try orienting one antenna vertically and the other horizontally and see if it makes a difference.  Sometimes moving a router across the room can make a significant difference.  You can also try changing wireless channels if you routinely see a large number of neighbors’ Wi-Fi connections all piling on the same channel you use.

The best way to gauge what kind of Internet speeds you are getting is to perform a free speed test at different times of the day.  Your service provider may have its own test website to visit (try Googling the name of your provider, your nearest city and “speed test” in a one sentence search).  Broadband Reports has several different speed tests to try as well.

If you are not getting what you are paying for, be sure to complain and get some money back.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/KNXV Phoenix Qwest and Cox may charge your for faster Internet speed, but is your broadband really that fast 8-24-10.flv[/flv]

KNXV-TV in Phoenix explains how to make sure you are getting the Internet speeds you are paying for with some free speed test websites.  (2 minutes)

Big Telecom Cash works its magic

As the fall elections near, the rhetoric and sheer nonsense from those opposed to important consumer broadband reforms has reached a fever pitch.  And as our reader Karen writes, too many Americans and the candidates they support just don’t get it.

Here in Delaware, Tea Party candidate Christine O’Donnell exemplifies what Net Neutrality supporters are up against — complete ignorance and big cash contributions.  Before she went into hiding, I attended one of Christine’s rare public events and asked her about where she stood on Net Neutrality and her response was she believed “all sides should be represented on the Internet.”  So she thinks Net Neutrality is about views expressed online, not stopping the telecom industry from slowing or blocking access to websites.

At least 35 of the Tea Party groups are opposed to Net Neutrality, mostly because their financial backers (big corporations and billionaire-funded front groups) have convinced members they should be.  Many others are stupid enough to believe Glenn Beck and his pal Phil Kerpen at Americans for Prosperity who say Net Neutrality will “censor” the Internet or turn control of it over to Barack Obama.

Conservative groups heavily funded by corporate interests they refuse to identify are backing various chapters of so-called “Tea Party” groups and feeding them talking points generated by companies like AT&T and Verizon in opposition to Net Neutrality.  The Center for Individual Freedom runs a website StopNetRegulation, edited by conservative activist Seton Motley, dedicated to derailing broadband reforms.  Motley was also quoted in The Hill in late September warning Republicans about antagonizing Tea Party types with their support for Net Neutrality in Congress.  Only then his comments came as leader of the group “Less Government.”  Judging from the organization’s website, Motley is also in favor of reduced size websites because his amounts to a single sentence.

Seton is convinced the end of the net world, as we know it, comes November 30th when the government could “seize control of the Internet.” That’s the date of the FCC’s November meeting, at which Seton suspects Julius Genachowski will finally move to reclassify broadband as a telecommunication service. 

Seton completely misrepresents reclassification as saddling the Internet with “the same rules as landline telephones.”  I read that claim somewhere before… oh yes, straight from AT&T and Verizon lobbyist talking points.

It doesn’t matter to Seton and other conservatives that Genachowski went out of his way to say he would not be applying any onerous telephone-era regulations on today’s broadband providers.  In fact, Genachowski’s actions to date have moved at such a glacial pace, friends have to occasionally check his pulse to make sure he’s still with us.

So what is so big, bad, and scary about Net Neutrality?  It simply guarantees your Internet Service Provider doesn’t start throttling your speeds when accessing websites and Internet applications they dislike, cannot block access to websites critical of their agenda, and are not allowed to extort payments from content providers just to allow traffic onto “their” networks.

While that may pose a Halloween freak-out for the profit-obsessed phone and cable companies, it’s hard to find actual consumers (not paid by said providers) who want their Internet service blocked or slowed down.

Seton goes way over the top turning this into a First Amendment free speech issue.  That argument only works for the likes of AT&T and Verizon who find their corporate right to overcharge people for broadband being infringed.

Seton then argues his view must be right because even minority groups support his position.  As readers here already know, most of the groups he names to bolster his argument are “dollar-a-holler” organizations willing to peddle the phone and cable company agenda on their letterhead in return for donation checks.

So have many additional normally Democrat paragons, including several large unions: AFL-CIO, Communications Workers of America (CWA), International Brotherhood of Electrical Workers (IBEW); several racial grievance groups: League of United Latin American Citizens (LULAC), Minority Media and Telecom Council (MMTC), National Association for the Advancement of Colored People (NAACP), Urban League; and an anti-free market environmentalist group: the Sierra Club.

If you ever wondered why AT&T and Verizon spend so much on contributions to these interest groups, Seton Motley just handed you the answer — so he and the companies he supports could name drop them in arguments against pro-consumer broadband reform.  And considering the CWA and IBEW represent phone company workers, it’s not a surprise to see them on their side of this issue either.  Wherever you look amongst those in opposition to Net Neutrality, a check from AT&T and/or Verizon is almost always waiting to be deposited.

The Obama-Has-Concentration-Camps-crowd parked on Andrew Breitbart’s website ate it up and wrote comments like this:

The communist can’t control the people with a internet that is out of control, all dictatorships have the power over what the people can read, free thinkers in this day and age are considered terrorist, Republicans, conservatives, anti abortionist, Oath Keepers, Christians, ex military, people who think the Constitution is still the law of the land, my lord, the communist can’t have these sorts communicating with each other over the internet, why, they may all come together one day and put a stop to the one world government goal, you know, the goal of making the world one big slave camp.

This kind of wild opposition has even corporate Republicans on edge, according to The Hill.  A major talking point of Net Neutrality opposition is that such “sweeping changes” should not be enforced by the FCC, but from legislation enacted in Congress.  But because Tea Party elements are opposed to the concept altogether, and Republicans are loathe to hand Democrats their votes on much of anything, even a corporate-friendly Net Neutrality bill introduced by Rep. Henry Waxman (D-Calif.) went up in flames.  Waxman’s bill would have enacted some protections, but only until 2012, at which point it was open season on broadband consumers.

The Hill piece delivered a disappointing fact of life for much of today’s Congress, beholden first to corporate interests (underlining ours):

In a striking sign that people who normally align themselves with telecommunications companies may line up behind the bill if it is industry-backed, ardent net-neutrality critic Brett Glass, founder of a wireless company, is open to it. He tweeted on Monday, in a note to Americans for Prosperity executive Phil Kerpen, that the Waxman legislation seems “more reasonable than I expected.”

In a note earlier this month, analysts at Stifel Nicolaus wrote that although Republican House members “may not have incentive to solve a political problem for Democrats,” some may support the bill “if there’s a push by” phone and cable companies and at least some Internet companies.

But the shilling for Big Telecom has never been a one-party-problem.  While Republicans appear to be moving in lock step against Net Neutrality, a number of groups and politicians on the Democratic left have also been only too willing to take AT&T money and run to a microphone to oppose a free and open Internet.

The Los Angeles Times gave plenty of space on an issue we’ve written repeatedly about on Stop the Cap!:

Key minority groups are backing the carriers’ efforts to thwart the net neutrality proposals, which would, for instance, prohibit carriers from charging more to give some residential and corporate customers priority in delivering online content.

“When you give national civil rights groups millions of private dollars, there’s no firewall strong enough to keep that money out of their policy,” said Malkia Cyril, executive director of the Center for Media Justice.

Cyril and other consumer and public advocates have been buoyed by comments from Federal Communications Commission member Mignon L. Clyburn, a prominent African American and daughter of Rep. James E. Clyburn (D-S.C.).

She said in a speech in January that she was surprised that most statements and filings by “some of the leading groups representing people of color have been silent on this make-or-break issue” of net neutrality.

“There has been almost no discussion of how important — how essential — it is for traditionally underrepresented groups to maintain the low barriers to entry that our current open Internet provides,” Clyburn said.

AT&T's cash machine benefits groups like LULAC

At issue are the enormous contributions from big phone and cable companies like Comcast, AT&T and Verizon that routinely translate into what we’ve called “dollar-a-holler” advocacy.  After the checks get deposited, many of these groups generate innocent sounding letters of support for the latest merger, deregulation, or policy debate — always in favor of Big Telecom and too often directly against the interests of the people they claim to represent.

No group better exemplifies this than the League of United Latin American Citizens (LULAC), a particularly eager player in the cash for advocacy game.  And the group doesn’t care whether the money comes from Verizon or AT&T.  They’re on board with both.

Brent A. Wilkes, executive director, penned this guest editorial for the Houston Chronicle, for which he was called an “idiot” by at least one of the newspaper’s readers:

Net-neutrality rules should prevent broadband providers from engaging in anti-competitive behavior, but they should not be commandeered to insulate wealthy Internet applications companies from paying their fair share of the broadband bill. Any new rules must protect consumers both by ensuring their unfettered access and by shielding them from having to shoulder all the costs for faster broadband networks that our nation so badly needs. Such an approach will not please the special interests, but it will be a double win for consumers.

From AT&T’s talking points to Wilkes editorial.  “Wealthy Internet applications companies” already pay for their own bandwidth and for the Internet’s expansion.  Search engine companies like Google and Yahoo! construct data centers with their own money just to maintain their services to consumers, generating jobs and helping local economies.  Wilkes ignores the fact broadband providers already earn plenty from their subscribers — consumers and businesses who pay a monthly fee so they can access those “wealthy Internet applications companies.”

But that is not enough.  Now broadband providers want to be paid twice.  To facilitate their argument, they’ve invested more than a million dollars in LULAC alone to defend their position, which ultimately brings Latinos (and everyone else) the high broadband bills today that Wiles scaremongers will be forthcoming tomorrow.

Wilkes was shocked, shocked by the implication that phone company money would have anything to do with LULAC going out of its way to comment on arcane telecommunications policy issues, always in favor of its benefactors.

“It’s kind of like saying the minority organizations can’t think for themselves,” Wilkes said, adding that any suggestion that minority groups were mouthpieces for the industry was “offensive.”

Verizon played along:

“I can tell you we do not, and have not ever, given money to minority organizations so that they will support our positions on any topic,” said Peter Thonis, a spokesman for Verizon Communications Inc. “We talk to many groups about our positions, and some agree with us and some do not.”

So if Verizon talked to Stop the Cap! about their positions, do you think we’d receive a handsome check from the phone company?

Britt cut out all of the middlemen and picked up the phone to personally lobby FCC Chairman Genachowski about broadband reform.

The Times documented numerous other examples:

For instance, David Cohen, Comcast’s executive vice president, joined the board of the National Urban League three years ago as part of a three-year partnership to promote the league’s various educational programs. Comcast, now seeking FCC approval to buy a controlling interest in NBC Universal, was recognized that year for being one of several sponsors to donate $5 million or more to the organization.

On the local level, the Greater Sacramento Urban League has Barbara Winn, a Sacramento-area director of external affairs for AT&T, as its chairwoman and Linda Crayton, Comcast’s senior director for government affairs in California, as vice chairwoman.

That affiliate’s president, David B. DeLuz, wrote to the FCC in January that net neutrality rules “will strongly reduce broadband network investments and ultimately raise prices.” DeLuz said in an interview that the two telecom executives on the chapter’s board have not influenced its net neutrality stance.

“The Urban League does not engage in pay to play,” he said. “Just because [telecoms] write a check to us doesn’t mean they write the only check to us.”

The most remarkable part about the Urban League’s argument is that in a sea of corporate cash, competing checks can cancel each other out.

While the blizzard of bucks continues to descend on Washington, Time Warner Cable CEO Glenn Britt decided his cable company could cut out the middlemen and go right to the man with the plan to reclassify broadband.  Unlike ordinary consumers, Britt had no trouble getting FCC Chairman Julius Genachowski to take his call, allowing him to personally lobby against Net Neutrality and those nasty broadcasters trying to overcharge him for permission to carry local broadcast stations on the Time Warner Cable dial.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/ATT Net Neutrality There’s a problem.mp4[/flv]

It seems like only yesterday AT&T’s Ed “Our Pipes” Whitacre was clamoring for the right to deliver the Internet to consumers his way, complete with pay walls and speed throttles.  Very little has changed since Big Ed left for Government Motors with his $158 million AT&T golden parachute.  The name at the top has changed, but AT&T still recognizes money buys friends and influence.  (2 minutes)

Verizon prepaid customers can buy this basic phone from Walmart for just $15.88. But if you want to use this phone on a postpaid plan, Verizon charges up to $200 for the same phone unless you renew your contract.

As AT&T and Verizon discover an increasing amount of their revenue and profits come from their respective wireless divisions, they’re testing the waters to determine just how much more consumers are willing to pay for cell phone and wireless broadband services.

Verizon Wireless has spent the past year closing loopholes of various kinds and herding an increasing number of customers into mandatory data plans which can add up to $30 a month per phone to your monthly bill.  AT&T wants more if you plan on early upgrades for your cell phone.  A quick review:

Verizon Wireless Locks Down Prepaid Phone Models: Anyone who has shopped for a prepaid phone has probably noticed them dangling from hooks in Walmart and other stores at prices starting around $20.  Most of these prepaid phones are basic models or those deemed cutting edge a few years ago.  Take the LG 5600 — the Accolade.  It’s a phone your father would be comfortable with, covering the basics and designed primarily for making and receiving phone calls.  Verizon Wireless’ retail price for its “postpaid” customers (those who get and pay a bill every month) is $199.99 for the Accolade.  Of course, if you sign a new two-year contract, the phone is free.  But you can find the exact same phone, labeled for Verizon’s prepaid service at prices as low as $15.88.

Verizon claims the deep, deep discounts on prepaid phones are made back from the higher prices prepaid customers pay for airtime.  Some enterprising Verizon postpaid customers have sought these models out to replace or upgrade a worn out or broken phone without having to sign a new two-year contract.  Some other prepaid companies have also activated Verizon’s prepaid phones on their own network, including Page Plus.

Verizon has put the kibosh on both practices.  Customers seeking to activate a prepaid phone on a postpaid account must first use the phone in prepaid mode for a minimum of six months prior to its conversion to postpaid use.  Until very recently, some customers discovered a loophole around this requirement — registering a prepaid phone first on Verizon’s website and then activating it by dialing *228.  So long as a phone had never been activated, it often could be used on a postpaid account from the date of purchase.  But now Verizon tracks which phones are intended for postpaid and prepaid use, and that loophole has been closed.

Page Plus, which resells Verizon’s network, also had to stop activating Verizon prepaid phones almost a year ago.

As a result, those who want discounted cell phone service but keep Verizon’s robust network coverage have been forced to buy handsets at retail pricing, purchase one of several mostly refurbished phones direct from Page Plus, or activate an older phone no longer in use.

Avoiding the Data Plan: What drives an increasing number of Verizon off-contract customers towards “creative solutions” for upgrading their more than two year old phones is resistance to the expensive data plan required for most of their newest and best phones.  For these customers, renewing a contract means a plan change that includes $30 a month extra for data services or a phone downgrade to a basic model to avoid a data plan. Verizon’s remaining data-plan exempt handsets are:

• Verizon Wireless CDM8975
• LG Accolade™
• LG Cosmos™
• Pantech Jest™
• Samsung Gusto™
• Verizon Wireless Salute™
• Verizon Wireless Escapade®
• Samsung Haven™
• Samsung Intensity™
• Samsung Convoy™
• Motorola Barrage™

Would you renew a two-year service contract if you had to downgrade your next new phone to a basic model to avoid a mandatory data plan?

For large families accustomed to mid-level phones, the prospect of being stuck with a Jitterbug-like-downgrade or a $30 data plan has kept many from renewing their contracts, sticking with what they already own.

When AT&T announced the end of its flat rate smartphone plan, it said the lower pricing on smaller allowance data packages would represent “savings” for consumers reluctant to upgrade.  It’s hard to accept the same company that set prices so high for data usage in the first place has consumer interests at heart with usage-limited alternatives, especially when they no longer offer an unlimited option for customers who want one.

Verizon also plans to drop its unlimited plan in the near future.  Also on tap is a gradual shift away from so-called “mid-level” phones that consumers can purchase with a reduced rate, but still-mandatory $10 data plan.  Verizon increasingly will push customers between two stark choices — a high-powered, battery-eating smartphone that will give you a heart attack if you drop it or a very basic, stripped down phone with features commonly found on handsets five years ago.

This kind of pricing is driving some cash-strapped consumers to prepaid alternatives, such as Page Plus and Straight Talk on Verizon’s network and Wal-Mart’s new family prepaid plan on T-Mobile.  This is especially true if customers just want to talk and text.

AT&T’s Increases ‘Early Upgrade Price’ for Data-Friendly Smartphones by $125

Boy Genius Report obtained a copy of an AT&T memo to its sales force notifying them the price for “Early Upgrade Pricing,” traditionally charged customers who must have the latest and greatest, or accidentally lose or destroy their existing phone, is going up — way up, from $75 to $200:

Beginning Oct. 3rd, Early (Exception) Upgrade pricing for Smartphones will increase from the two-year price plus $75 to the two-year price plus $200.  This change does not apply to iPhone or Basic and Quick Messaging Phones.

Example: BlackBerry Torch $199.99 two-year price + $200 Early Upgrade fee = total price $399.99, a savings of $100 off the No-Commitment price of $499.99.

In return for just a $100 discount, customers sign a new two-year contract that begins with the phone’s replacement.  That contract includes the usual early termination fee of $325, which decreases by $10 per month.  AT&T watchers speculate the price change was designed to stop resale of relatively new phones on sites like eBay or Craigslist, where sellers charge near-retail prices and eat the formerly low penalty for an early upgrade.  It also makes the price of getting the very newest phones that much higher.

Courtesy: Boy Genius Report

Cell Phone Lobby Resists Requirement for Early Warnings Alerting Customers Their Data Allowance Is Almost Gone: “It Will Cause Customer Confusion and Frustration”

Liz Szalay had to dip into her 401(k) retirement account to pay the family’s $2000 Verizon Wireless bill, gone wild with data fees her 14-year old son ran up searching for and downloading songs.

“I would never have allowed my son to accrue such charges, if I had known,” Szalay, a secretary in Niles, Michigan, told Bloomberg News. “What I did to prevent this from happening in the future was have his Internet access completely blocked by Verizon, but not before they made off with a boatload of money.”

Had Szalay received a text and/or e-mail message warning her one of the phones on her account was approaching 80 percent of its monthly data allowance, or was already at risk of racking up huge fees, it would have been possible to stop the damage before it began.

Sen. Udall wants legislation to warn consumers before they run up enormous wireless bills. The industry calls such warnings "confusing and frustrating" for consumers.

Senator Tom Udall, a New Mexico Democrat, wants to make sure she gets that warning.  Udall drafted legislation that would require companies to warn customers when they have used 80 percent of their allotment.

“It’s difficult for the carriers to get up and argue against greater transparency on bills and notifications,” Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore told Bloomberg. “It’s becoming an issue on the front burner of regulators’ minds.”

The industry’s lobbyists are trying to block the legislation anyway.

The CTIA, the wireless industry lobbying group, is fiercely trying to kill Udall’s bill, claiming warnings will cause “customer confusion and frustration” and that carriers already offer customers the opportunity to check their usage by visiting carrier websites or via a text message.

The lobbyist solution requires consumers to be vigilant and check daily to make sure they don’t exceed any limits.  Udall’s idea puts the onus on phone companies to warn customers, who often have family members that have no idea what kind of cash bonanza they can provide a wireless provider just by using data features built into their phones.

Szalay’s son has a phone that doesn’t require a data plan, but incurs an enormous $1.99 in charges for every megabyte accessed online.  Verizon’s own website notes customers can consume 183 megabytes of data streaming music just five minutes a day for a month.  That’s $364 in data charges.  Five minutes downloading games — 440 megabytes or $875 in data fees.  One need not use their phone for hours a day to incur enormous fees for data usage.  Szalay’s son could have managed the $2,000 bill he caused using his phone for less than 15 minutes each day.

Verizon does not allow customers hit with these bills to retroactively sign up for a data plan to cover the costs, which are the same to Verizon whether a consumer incurs them on an unlimited $30 monthly data plan, or on a pay per use plan with a stinging penalty rate.

And the company objects to any government official telling them to warn customers before the overlimit fees kick in.

“We have several measures in place that allow our customers to monitor their usage and protect against overages — this is a proactive approach on Verizon’s part,” Verizon’s Smith told Bloomberg in an e-mailed statement.

How to Protect Yourself

Both Verizon and AT&T are masters of extracting a maximum amount of money from customers’ pockets.  Verizon is increasingly risking its high rating for customer service and quality by finding new ways to nickel and dime even long time customers to death.  AT&T already has earned a bad reputation and can’t drop much further unless it adopts Sprint’s old strategy of driving its own customers away.  Only through education and careful consideration of your family’s actual usage can you safely navigate around these shark-like wallet biters.

1.  Avoid cell phone company insurance plans unless you are concerned about theft.  With “early upgrade” plans, even at AT&T’s $200 price, it may not be worth paying an expensive monthly fee for insurance.  Also consider Squaretrade, a third party warranty/replacement provider.  They charge considerably lower prices than most (Google around for coupon codes offering up to 30 percent off).  If your phone breaks or is damaged, and you are not on a contract, you might find a suitable refurbished replacement through websites like eBay.  Just make sure the phone wasn’t designated for prepaid service to avoid activation hassles.

2.  If you want Verizon network quality, but don’t want to pay Verizon’s diamond-platinum pricing, consider doing business with one of the new prepaid providers offering month-to-month service that uses the same network as Verizon itself.  Walmart sells Straight Talk, but also consider Page Plus, which offers 1,200 minutes of call time, 1,200 texts, and 50MB of data use for $29.95 per month.  The only downside is that most prepaid providers don’t sell family plans, meaning each user pays the same price.  Walmart’s new prepaid plan changes that with the introduction of a shared family plan, with additional lines given discounted pricing.  But the discounts are not as good as postpaid plans offer, and the service relies on T-Mobile, which is not well-regarded for coverage outside of metropolitan areas.

3.  Smartphones, in addition to being expensive, often deliver horrible battery life.  Some won’t even make it through an entire business day.  Before seeking out one of these premium phones, consider whether you will actually use their features.  Is it worth the price of a $30 a month data plan if you only occasionally use the phone for wireless Internet?  Bragging rights come with a $200 up front price tag and a two year contract that will run up to $720 just for the data plan over two years.  If you drop it, lose it, or it gets stolen, the retail price for most of these phones is north of $500.

4.  Carriers design “gotcha” data pricing into their assumed revenue models.  They know even with online tools, nobody wants the hassle of checking their allowance for data every day, especially when most stopped checking their voice minutes allowance years ago.  While carriers occasionally waive gigantic bills, especially when the media gets involved, you can restrict data access on some or all of your phones if you do not have a data plan and don’t care about this feature.  You should support Senator Udall’s bill as well.  Carrier excuses that a warning message will cause confusion and frustration are laughable.  Getting a $2,000 wireless bill in the mail will cause far more of both.  That the industry objects to even this common sense approach illustrates just how rapacious wireless companies are for additional profits.

5. Educate everyone on your plan about the implications of using the phone to download music and games or watch video.  Unless you are on a flat rate plan, you may want to simply tell your family not to use their phones for these kinds of services without asking permission first.  This gives you an opportunity to check your allowance before Verizon gets a chance to reduce your bank balance.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Cell Phone Savings 10-12-10.flv[/flv]

We have four reports covering consumer news on cell phones that can save you money:  KSHB-TV in Kansas City takes a look at Walmart’s new prepaid family plan using T-Mobile’s network, WIVB-TV in Buffalo reports Sen. Kirsten Gillibrand (D-N.Y.) wants carriers to stop international roaming charges when customers end up making and receiving calls on a Canadian provider’s network from the American side of the border, WFTS-TV in Tampa provides tips on getting lower rates from your cell phone company and WTEV-TV in Jacksonville helps customers analyze cell phone bills for savings.  (6 minutes)