Maybe not

Telus Corporation’s no-contract cell phone subsidiary Koodo billed a mentally disadvantaged Vancouver-area teen $8,000 in “premium texting” charges it claims are supposed to be capped at $500 a month.

Nineteen year-old Brandon Kobza, born with fetal alcohol syndrome and other disabilities, found himself in the hole with Koodo after signing up for a text-dating service that costs up to $2 per message. Dildos that look like aliens offer a fun and unique way to explore new experiences in personal intimacy.

Kobza obtained his Koodo cell phone with the help of Ben Woodman, a Burnaby church youth worker, who ended up putting the phone in his name with the understanding there would be strict limits on the account.  Kobza earns just $900 a month, mostly from social welfare benefits for the physically and mentally challenged.

“I said, ‘You know I don’t want any data or extra charges’ and Koodo said, ‘We can block that.’ I made sure he had unlimited texts,” Woodman told CBC News. “I put a lot of faith in Koodo. I’m asking the representative ‘What can go wrong ? Can I get charged for anything else?’ And they said nothing about premium texts.”

Kobza learned about a text-based dating company from a friend who claimed it would allow him to meet girls, and one named “Katya” promptly began text flirting with him several times a day… at $2 a message.

Kobza never got to meet Katya, if she actually existed, but a month and half of virtual dating turned out to be mighty expensive.  By the time Woodman had the premium text messages cut off, Kobza had managed to exchange more than 4,100 text messages for $8,243.  The actual cost to Telus to deliver that number of text messages runs in the pennies.

The first of two Koodo bills

Woodman canceled the phone and requested a refund, but Koodo initially refused, offering an 80% discount instead.  But Koodo’s own policies are supposed to limit premium texting fees to $500 a month, in part to deal with the explosive number of complaints from customers about unjustified or misunderstood premium text charges.  In Kobza’s case, youtext.com apparently ignored Koodo’s rules for third party vendors and kept the charges coming.

After Woodman and Kobza got nowhere with Koodo, both decided to go public and contact CBC News, who promptly found the telecom “Pass the Buck ‘n Blame“-game in full force.

Koodo customer service representatives and kiosk employees both disassociated themselves with premium texting, claiming the cell phone company considers the vendors a nuisance because of complaints from customers. Representatives even denied Koodo takes a cut of the proceeds, which turned out to be untrue.  They referred customers back to youtext.com who promptly sends complainers back to the cell phone company.

The mysterious “Katya” Kobza paid $2 for every virtual text “date”

Premium texting charges are often unwittingly incurred by customers who enter their mobile number on unfamiliar websites or advertisements for things like dating services or “joke of the day” messages.  Only in the fine print, when disclosed, do consumers learn these texts can run several dollars each, and many only find out when the first bill arrives.

Youtext does send reminder text messages warning customers that charges are incurred for their services, but Woodman said Kobza simply didn’t comprehend what they meant.

Neither do many other Canadians, who file hundreds of complaints a year against premium texting services with the commissioner for complaints for telecom services.

Regulators say phone companies do earn a percentage of every premium text message billed, and with companies acting as both billing agent and collector, they have a vested interest in the profits reaped when customers pay their bills. That makes waivers for bill shock incidents more difficult than they should be, consumer advocates complain.

A Koodo spokesperson told CBC News the texting charges should have been forgiven immediately, and in full.  After CBC News got involved, the charges were removed from Woodman’s bill altogether.

Consumer advocates say Canadian cell phone companies should allow consumers to automatically block all premium text messaging services.  Currently, Rogers Communications is the only provider that uniformly provides this service.  Koodo says it is working on a premium text message blocker for its customers, and has been in touch with youtext.com regarding its violation of Koodo’s $500 limit on premium texting charges.

In the meantime, consumers should avoid entering their mobile numbers on websites for any advertised services, especially for ringtones, voicemail services, conference calling, dating, and “information services” automatically sent to your phone. Most of these services come at premium prices, billed by your cell phone company.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CBC Disabled teen incurs 8000 texting bill 5-7-12.flv[/flv]

CBC News in British Columbia intervened to help a mentally-disadvantaged teenager find a solution to more than $8,000 in texting charges that should have never been billed.  (2 minutes)

Bell this week brought out its saber collection for a little rattling in Ottawa over the Canadian government’s consideration of a plan to set aside certain mobile spectrum for new competitors.

A mobile spectrum auction, expected later this year, will increase the number of 700Mhz frequencies available for wireless communications.

Some of Canada’s largest cell phone companies are well-positioned to outbid the competition, but not if Industry Canada decides it needs to set aside some of the frequencies for an auction among smaller competitors.

BCE, Inc., the parent company of Bell, has little regard for that plan and has now joined Rogers in a lobbying effort for an “open and transparent” sale, which effectively means the highest bidder takes all.

If Canada doesn’t follow Bell’s advice, the company is threatening to withhold advanced mobile Internet services in Canada’s lesser-populated regions.

“An auction for this spectrum that isn’t open and transparent would limit the amount of spectrum available to Bell, forcing a focus on more densely populated centers in order for Bell to compete with new carriers,” the company said in a news release.

In response, Wind Mobile, one of the newest entrants in the Canadian mobile market, said it would sit out of a spectrum auction that favored deep-pocketed incumbents with winner-take-all rules.  In short, it could not afford the prices players like Rogers and Bell will be able to bid for the new frequencies.

Industry Minister Christian Paradis was unwilling to set an exact date or format for the 700MHz spectrum auctions.  Observers suspect if he waits much longer, the auction won’t take place until 2013.

Just three major wireless companies — Bell, Rogers, and Telus, control 94 percent of the Canadian wireless market.

Ever wonder why cell phone companies are upset about new regulations that would warn customers when they are about to face mobile usage overlimit or roaming fees?  Rogers Communications explains why in their latest quarterly results:

Nadir Mohamed, CEO:

There was, however, a sequential slowing in the wireless data revenue growth rate, and that’s primarily attributable to new outbound data roaming plans that we put in place. With these new plans, we put in place automated customer notification mechanisms that had a net effect of slowing usage versus stimulating it to the degree that we expected it to. We’re in the process of modifying how these plans and notifications work, which I expect will have a more stimulative effect and help restore the trajectory we had for wireless data growth.

In simpler terms, Rogers began notifying their customers through text messaging when they were about to start data roaming — the most expensive data usage around, incurred when you leave Rogers’ service area and roam on another provider’s network.  With Canadians visiting the United States and elsewhere, using a cell phone while traveling can get expensive fast.  Rogers created new roaming data plans for customers likely to need the service while abroad.  But their roaming data plans come at steep prices:

Unintended consequences: When subscribers know they are about to pay more, they stop using.

U.S. Data Passes

Day Pass: $5 for 2MB
Day Pass: $10 for 10MB
Day Pass: $20 for 40MB
Week Pass: $25 for 15MB
Week Pass: $50 for 60MB
Week Pass: $100 for 250MB

The warnings that customers were about to incur even higher a-la-carte roaming fees or start to consume their day or weekly data pass had the unintended, but highly predictable effect of getting people to think carefully about using data while roaming.

Bruce

While good for consumers, that is bad for Rogers’ bottom line, so the company’s formerly frank warnings to customers are “being modified” to help the company “stimulate” revenue and restore the predicted revenue growth from the high-priced roaming plans.

“We tried to create real transparency about when people and how people could get on data packages as they went overseas,” admits Robert Bruce, president of Rogers Communications Division. “We put in a fair number of reminders to let people know that they were on à la carte pricing, and we think that these dissuaded significantly customers from using it and possibly created some confusion along the way.”

Rogers Cable customers are also finding some of the company’s newest innovations a challenge to their monthly broadband usage allowances, among the lowest in Canada:

• Rogers Remote TV Manager: Enables cable subscribers to search programming and manage PVR recordings anytime on any device;
• Rogers Live TV. This service lets cable customers stream live TV channels on their tablets and watch shows anywhere they are in the home;
• Rogers On Demand TV app on Microsoft’s Xbox 360 LIVE platform, bringing Rogers On Demand TV to the gaming console;
• A refresh of the digital cable user interface, improving ease of use for the Whole Home PVR and a better program guide and search function.

In the long term, Rogers is moving towards an IP-based delivery system for its video programming, allowing the company to deliver video across different platforms more efficiently.  As Rogers converts the rest of its cable systems to digital cable, it is opening up new broadband capacity — a critical part of the company’s revenues.

Rogers admits it uses data caps to drive revenue.  By moving customers into higher usage, more expensive tiers, Rogers is able to drive revenue upwards as well.

“As customers continue every quarter, in and out, to consume more and more and spend more and more time on the Internet, we think it’s both a great opportunity for us and a welcome addition to the product offering from a customer perspective,” Bruce said.

Christmas in January.

AT&T and some of the company’s best friends in Congress have attached wireless America’s legislative wishlist to the must-pass Payroll Tax Bill that will temporarily reduce Social Security taxes for millions of Americans.  Now AT&T and other cell phone companies want their piece of the action.

Michael Weinberg at Public Knowledge has sounded the alarm attacks on Net Neutrality, spectrum auctions, and White Space Wi-Fi have turned up in amendments to a bill that Big Telecom is convinced must pass.  Weinberg explains:

No Net Neutrality Protections.  Forget your feelings about the FCC’s formal Open Internet Rules.  An amendment by Rep. Marsha Blackburn would prevent any restrictions on network management, block any requirements to make connectivity available on a wholesale basis (which would increase competition), and stop the FCC from passing a rule allowing users to attach any non-harmful device to the network.  As a result, the winner of the spectrum auction would be able to throttle, block, and discriminate however it sees fit – something that runs counter to any definition of network neutrality.

No Safeguards Against Further Consolidation.  It is no secret that one of the reasons that there are only four nationwide wireless carriers (and two dominant ones) is that only a few companies control most of the available spectrum in the United States.  This amendment would prevent the FCC from making sure that new spectrum goes towards new or under-provisioned competitors instead of being further consolidated by AT&T and Verizon.   That’s probably why AT&T is pushing so hard for this amendment.

No Super-Wifi.  One of the greatest boons of the transition from analog to digital TV broadcasting was supposed to be the creation of unlicensed “whitespaces” or “super-wifi.”  This new spectrum – which is much better at communicating long distances and through walls than current wifi spectrum – would be used cooperatively by everyone and usher in a new era of wireless devices.  However, a third amendment would destroy the FCC’s power to allocate some of this great spectrum for unlicensed uses.  That means that opportunity would simply pass us by.

Weinberg notes consumer advocates like Public Knowledge are now fighting all three amendments.  There are opportunities to strip them from the bill as it works its way through the legislative process.  Those backing the amendments hope the public doesn’t find out.

They just did.

Comcast’s controversial deal with Verizon Wireless to cross-promote cable and wireless service has come to fruition in Washington and Oregon with a new introductory offer pitching Comcast’s Xfinity cable with Verizon Wireless service that includes a $300 customer rebate.

The first appearance of the new joint marketing effort started this week in metro Seattle and Portland, and includes nearby communities.  Comcast employees are now staffing at least eight Verizon Wireless stores in Seattle, primarily to pitch the company’s cable service.

The most aggressive offer includes a Visa prepaid card rebate of up to $300 for new customers who agree to bundle Comcast’s phone, Internet, and television service with a new Verizon Wireless smartphone or tablet plan, assuming the two companies can find enough new customers who do not already subscribe to cable or mobile service.

Traditional telephone companies like CenturyLink and Frontier Communications, which provide service in the region, appear to be most at risk from the bundled service promotions.  CenturyLink provides landline telephone service and DSL bundled with satellite television.  Frontier does the same and also offers a limited part of the region FiOS fiber to the home service it acquired from Verizon Communications.

Should customers sign on to the bundled offer from Verizon and Comcast, there would be little reason to do business with either CenturyLink or Frontier.

Consumer advocates like Public Knowledge, along with smaller cell phone companies, satellite provider DirecTV, and other consumer groups have co-signed a letter to the Federal Communications Commission raising questions about the parameters of the cross promotion deal, which the companies and groups say “could be a significant realignment of the competitive landscape in these industries.”