AT&T customers with questions about their latest bill may get personalized answers through an innovative new “SimpleView” video bill explanation service the company is unveiling to their U-verse customers.

Using SundaySky’s SmartVideo technology, AT&T can generate an on-demand, customized analysis of a customer’s latest bill in a professionally produced video presentation.

“SundaySky has a pretty basic technology that is doing amazing things for us in the cost side of our business and caring for customers,” said John Donovan, chief technology officer for AT&T. “When we get new customers and they look at bills, if they have any confusion, SundaySky gives them the ability to press a link. The link dynamically builds a custom video that walks through their own bill. The impact for our company is fewer calls into customer care, shorter calls of those that come in and enormous satisfaction of the customers.”

The video accounts for new services recently added and shows how many days a customer was billed for a service. It also explains miscellaneous charges and fees that may have been added, and even thanks customers for their last payment.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT SimpleView U-verse bill demo 6-5-12.flv[/flv]

Watch this demonstration of AT&T’s new SimpleView video bill explanation, now rolling out to U-verse customers.  (3 minutes)

Our-verse

Last week, Stop the Cap! reported AT&T customers in Connecticut were being told to dump their long-standing DSL service in favor of a forced upgrade to AT&T U-verse. Now some Texans are in the same boat, only that “free upgrade” AT&T offered ended up costing one angry customer $337.

The Star-Telegram found Judith Hedges, who reports she was bullied and intimidated by AT&T’s increasingly threatening letters warning if she did not upgrade her Internet connection to AT&T U-verse, her DSL service will be summarily disconnected.

AT&T pulled the plug last week, leaving Hedges without Internet service.

Consumer reporter Dave Lieber writes, “AT&T has found a new way to lure customers to its supposedly faster U-verse service: Force them to take it.”

As AT&T installs U-verse fiber to the neighborhood service, the company has decided to stop investing in its older DSL technology, and when conditions are right, the company sends letters to their existing DSL customers imposing an “upgrade” to U-verse.

Hedges suspected the threatening letters were part of a high-pressure sales pitch to add TV and phone service, services she did not want, so she tossed the letter away. Big mistake.

AT&T is giving out different answers as to when and why they are forcing DSL customers to switch to U-verse. One told Lieber the company is now introducing forced upgrades wherever U-verse becomes established, another told the reporter the choice remains with the customer as long as the company does not decommission its DSL service in a particular exchange.

AT&T told the newspaper “the large majority of existing customers we’re reaching out to can upgrade to the same-speed package on U-verse without an increase to their broadband bill.”

But that does not always turn out to be true. Hedges signed up for the “free upgrade” to get her service back and promptly found it was more expensive than what she had. In fact, the company loaded her first bill with add-on equipment fees, installation charges, surcharges, taxes, and fees:

• AT&T U-verse temporary promotional rate: $29.95
• Internet Gateway fee: $100
• Installation: $149
• Taxes, fees, and surcharges

The total price for Hedges “free upgrade?” $337. AT&T will reserves the right to bill her a late fee if her check is not forthcoming.

“Apparently, this is the world we live in,” Hedges says. “And AT&T reigns supreme.”

Upgrade or else.

AT&T is now forcing some of their customers relying on the company’s traditional DSL service to upgrade to AT&T U-verse or face service suspension.

The latest customers impacted by AT&T’s forced upgrade are in parts of Connecticut.

“This is a reminder that within the next 30 days, your current service will change to AT&T U-verse High Speed Internet,” reads the letter mailed to customers facing the mandatory transition. Unfortunately, customers have to call AT&T to arrange for new equipment if they want their service to continue uninterrupted — existing DSL modems don’t work with U-verse.

Callers who dial the toll-free number in the letter get to order the U-verse equipment for free, but they routinely endure a hard sales pitch selling U-verse video and phone service as well, at a corresponding higher price. Customers are sent self-install kits at no charge and are offered the same rate they currently pay for DSL, sometimes with faster speeds on the U-verse network. But after one year, regular U-verse prices apply, and they are often significantly more expensive than traditional DSL service.

A Broadband Reports reader in Conn. shared a copy of the AT&T U-verse upgrade letter posted on that site's AT&T forum.

The promotional prices offered to Stop the Cap! reader Ralph were not as good as what he was currently paying for basic DSL on a promotion he purchased earlier.

“I am now paying $14.95 a month under the promotion I am on now and AT&T first tried to sell me a plan that cost $5 more,” Ralph writes. “They quickly agreed to keep my current promotional price after I told them about it, but what they will not tell me is what I will pay after the one year is up, nor can I find U-verse regular pricing on AT&T’s website.”

This special offer bundle comes with a surprise after the promotion ends -- a much higher bill.

AT&T is currently promoting Internet-only promotional pricing as follows: Basic Internet: $19.95, Express Internet: $19.95, Pro Internet: $19.95, Elite Internet: $24.95, Max Internet: $29.95, Max Plus Internet: $34.95, Max Turbo Internet: $44.95. We could not find a disclosure of what the regular prices would be after the one-year contract expired, and that bothers Ralph.

“I realize they are going to match my 3Mbps service on U-verse, but somehow I suspect the regular U-verse price is going to come higher than the DSL service I have been using,” he says.

Ralph’s intuition is correct. Stop the Cap! called AT&T at the number provided on the letter and spoke with a customer service representative at the AT&T Web Sales Center. Although AT&T will ship the required equipment (a wireless router/modem combo) at no charge, AT&T will eventually make that money back charging customers higher prices for Internet service.

Current regular pricing for Ralph’s DSL service after his promotion ends will cost him $24 a month for 3Mbps service.  U-verse charges $38 a month (off promotion) for the same speed service — a $14 monthly difference.

“That sucks,” Ralph said after we shared the news. “Why should I have to change what works fine right now?”

AT&T says keeping DSL in certain U-verse upgrade areas is not possible. In fact, AT&T’s letter warns, if customers do not call to arrange for the U-verse “upgrade” by a certain date, their broadband service will be suspended. That could be a problem for customers who also use their broadband account with an Internet-based phone line.

“There goes 911 or any other emergency calling,” Ralph reminds us. “Thanks, AT&T.”

Some customers who have completed their U-verse upgrade report AT&T messed up their subsequent billing, charging full price instead of an agreed-upon promotion. Slickdeals members report AT&T often requires constant reminding to fix billing errors that generally hand customers higher bills than they expected.

“I am trying real hard to figure out how this represents the ‘next evolution of communications’ AT&T writes about in their letter,” Ralph concludes. “All I am going to eventually get is a much higher bill for a service I don’t want or need. I guess it’s time to call the cable company again.”

Frontier Communications will not roll out a national IPTV service to compete with cable operators in all of its service areas, but is still exploring its options for providing pay-TV service in larger cities.

That decision, announced by executive vice president and chief financial officer Donald R. Shassian, came at last week’s Global Technology, Media, and Telecom Conference sponsored by Wall Street investment bank J.P. Morgan.

Shassian used the occasion to clarify remarks made during the company’s first-quarter results conference call, which caused some shareholders and analysts concern about the company’s lackluster performance, capital spending plans, and company debt that will come due early next year.

Shassian said Frontier will not deploy U-verse-like IPTV service across its entire national service area, but is considering the future option of delivering the service (and better broadband speeds) theoretically in selected markets.

Shassian also raised the prospect of modifying part of its acquired fiber-to-the-home FiOS network to fiber to the neighborhood technology that companies like AT&T are currently using. But for the foreseeable future, most Frontier customers will have to subscribe to satellite television if they want a video package with their home phone and broadband service.

Stop the Cap! was the first to report Frontier was considering licensing AT&T U-verse to use in selected larger markets where the company has lost considerable ground against cable competitors that deliver consistently faster broadband service.

Wall Street reaction to the proposal has been negative, with concerns Frontier will need to spend hundreds of millions, if not billions, to deploy such a network.

Shassian sought to distance the company from any suggestion they will further increase spending on network improvements. In fact, Shassian says Frontier will end its broadband expansion program, and the extra spending to pay for it, by 2013.

“Our capital expenditure spending will decrease in 2013 as the geographic broadband expansion of our network concludes,” Shassian said. “We expect capital expenditures to drop by approximately $100 million in 2013.”

In lieu of national IPTV service, Frontier remains committed to its resale partnership with satellite TV provider Dish Network. But Shassian did admit U-verse technology is among the options the company is exploring to remain competitive.

Surprisingly, Shassian also said the company was considering partially modifying its acquired FiOS network in Indiana and the Pacific Northwest, because of the cost savings it could deliver.

“We have been evaluating alternative platforms which could generate savings from capital expenditures, video transport and even content costs that can be significant to the FiOS video market business,” Shassian said. “I want to be clear that we have no plans to deploy IPTV across our nationwide network and therefore do not see upward CapEx pressure from any potential changes in our facilities-based video strategy.”

Asked about the potential cost savings afforded by swapping out FiOS technology for IPTV fiber to the neighborhood service, Shassian said it could open the door to expanding service in areas where existing copper-based last mile network facilities can sustain a minimum of 20Mbps broadband service. Frontier claims 1.9 million homes in its service area can receive 20Mbps today, of which 600,000 are currently within a Frontier FiOS service area.

“If we changed, we may have to change out set top boxes on [existing FiOS customers],” Shassian said.

In this clip, Frontier Communications’ executive VP and chief financial officer Don Shassian speaks to a J.P. Morgan investor conference in Boston about the company’s broadband and IPTV plans. (May 15-17, 2012) (4 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

The implication of substantially altering the company’s existing fiber-to-the-home network baffled some analysts.

One, who talked with Stop the Cap! asking not to be attributed, suspects Shassian’s role as a financial officer at Frontier may explain part of the mystery.

“He’s not the chief technology officer, and I suspect he is partly confused about the different technologies,” the analyst explains. “I can’t see Frontier tearing down their current network, but it may make sense for them to switch technology strategies when considering if and where they can expand their network.”

“Frontier’s first quarter results were more than disappointing, and the company is being exceptionally cautious about anything that requires spending right now,” the analyst said. “The next shoe to drop is another dividend cut, which would kill the stock in the market, and if we think Frontier will spend a billion to improve its network, that dividend is going down.”

Our source says he does not have much confidence in Frontier’s current management.

“They talk a nice story, but the numbers never finally add up,” he says. “Rescuing wireline is expensive and companies always promise it will cost incrementally little to expand revenue-enhancing broadband to their rural customers, but if that were true, the companies would have already done it, and without significant spending they have not.”

Frontier Communications has confirmed a Stop the Cap! exclusive report that the company has shown an interest in a licensing arrangement with AT&T to deliver U-verse to Frontier customers in larger markets.

Maggie Wilderotter, CEO of Frontier Communications today told investors on a morning conference call that the company likes the U-verse product and is considering deploying it.

“We’ve been evaluating a lot of other alternatives of which U-verse is one of the alternatives,” Wilderotter said. “We think it’s a product that can work, not just on fiber, but it also works on copper as well. So it’s a lot more forgiving in the market.”

Wilderotter claimed the company has no immediate plans to introduce the technology, but Stop the Cap! has obtained documentation that shows the company now refers specifically to “U-verse” in internal communications, is hiring new leadership to oversee the company’s IPTV plans, and has plans to dramatically expand VDSL technology, a prerequisite for deploying AT&T’s fiber to the neighborhood platform.

Wilderotter

Frontier Communications has had a difficult time supporting its Verizon-inherited FiOS fiber-to-the-home networks in the Pacific Northwest and Indiana.  The company has found itself unable to compete effectively in the video business because it negotiates programming contracts independently, which locks Frontier out of the volume discounts that other independent providers routinely receive from participating in programming purchasing co-ops.  Frontier lost 4,800 FiOS video customers in the last quarter alone.

Wilderotter said as a result of programming costs, Frontier has no plans to pursue any additional fiber expansion to deliver video programming.

However, a licensing arrangement with AT&T U-verse could open the door to Frontier receiving the same volume discount prices for programming that AT&T already receives as part of its own operations. Because Frontier would have to significantly upgrade its existing, primarily middle-mile fiber network to reduce the amount of copper wiring in its network, the company faces significant capital investment costs wherever it chooses to deploy the more advanced broadband network.

Wilderotter hinted Frontier’s plans for the enhanced technology would be limited to a handful of cities.

“It doesn’t make sense in all of our markets,” she said. “It’s only a handful of markets other than where we have FiOS today. So there’s more to come on that over time. Video is very important. We think over the top video is probably more important than anything else.”

The most likely target for any IPTV expansion would be Frontier’s western New York operation in and around Rochester, where the company currently competes against Time Warner Cable with a mediocre DSL product that can no longer compete with the cable operator’s superior speeds and pricing promotions.  Frontier is steadily losing market share in most of its more-populated service areas.

Other likely targets for expanded broadband include larger cities in Pennsylvania, Illinois, West Virginia, and California.

Frontier's Broadband Customers (as of 12/31/11)

Chief Operating Officer Daniel McCarthy added Frontier also has plans to improve broadband speeds in most of its service areas.

“We’ve been working pretty steadily to improve the core network around the country,” McCarthy said. “You’ll see us aggressively move forward with sort of VDSL and bonded ADSL2 copper.”

Currently, Frontier only informally offers bonded service to residential customers in very limited areas, notably in parts of the Genesee Valley in western New York.  The company has been marketing an extra line of traditional ADSL service to customers elsewhere who want more broadband capacity, but that requires a second broadband modem and delivers no speed improvements.

Frontier’s time frame to deploy enhanced speeds in within 12-24 months, according the company officials.

In other developments, Frontier Communications customers formerly served by Verizon will likely find themselves choosing new service plans as Frontier prepares to migrate customers away from legacy Verizon service packages.

Wilderotter telegraphed that affected Frontier customers will see some rate increases when the new plans become effective.

“We do think that there is a pretty substantial revenue upside,” Wilderotter said. “We think the net-net is we’ll get customers on the right portfolio of products that will also be revenue enhancing for the company and we’re going to surround the products with the right kind of service experience, both online and off-line. We’re redesigning all of our online product sets for a better customer experience so they can manage their own broadband usage and actually upgrading or changing what they do with broadband themselves, if in fact, they want to do that.”