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Justice Dept. Ready to Approve T-Mobile/Sprint Merger

Phillip Dampier July 24, 2019 Boost Mobile, Competition, Consumer News, Dish Network, Public Policy & Gov't, Rural Broadband, Sprint, T-Mobile, Video, Wireless Broadband Comments Off on Justice Dept. Ready to Approve T-Mobile/Sprint Merger

The Justice Department has helped engineer an approvable merger deal between T-Mobile and Sprint that will get antitrust regulators’ blessings as early as tomorrow, according to a report in the Wall Street Journal.

The sticking point that held up merger approval for weeks was the divestiture of certain wireless assets to Dish Network, which claims it will temporarily use Sprint and T-Mobile’s wireless networks to offer a new nationwide “fourth option” for cell phone service. Dish’s new cell phone service will come from a $1.4 billion acquisition of prepaid carrier Boost Mobile, which currently relies on reselling Sprint’s 4G network. Dish would inherit Boost’s nine million customers. Dish will also be able to lease access to T-Mobile and Sprint’s existing wireless networks for up to seven years while it builds out its own network of cell towers. The deal also includes a guarantee that Dish can pay $3.6 billion to acquire 800 MHz wireless licenses held by Sprint.

The Justice Department claims that lower frequency spectrum will allow Dish to service rural communities, assuming Dish is willing to invest in cell tower construction in high cost, low return areas.

Regulators in the Trump Administration’s Justice Department claim shaving assets from a super-sized T-Mobile will preserve the competition that will be lost when Sprint becomes a part of T-Mobile. But Dish will emerge as a miniscule player with only a fraction of the 100+ million customers that AT&T and Verizon have, and at least 80 million customers signed with T-Mobile. One of the core arguments T-Mobile and Sprint made in favor of their merger was that each was too small to afford to deploy 5G service quickly and efficiently. Dish will have even less money to build out a basic 4G wireless network.

Another merger requirement for the combined T-Mobile and Sprint will be mandatory support for eSIM, which allows consumers to change wireless carriers quickly without investing in a physical SIM card. But that requirement will not impact AT&T or Verizon Wireless, which both continue to push physical SIM cards on the much larger customer bases.

If the Justice Department does publicly approve the merger, the last hurdle the wireless companies will have to overcome is a multi-state lawsuit filed by attorneys general that argue the merger will impact low-income customers and is anti competitive. That court case is unlikely to be heard until late fall at the earliest.

CNBC’s David Faber reports that T-Mobile and Sprint have settled with the Department of Justice to go through with their merger deal. (6:14)

Here’s What You Need to Know About Comcast’s Xfinity Mobile

Phillip Dampier April 10, 2017 Comcast/Xfinity, Competition, Consumer News, Wireless Broadband Comments Off on Here’s What You Need to Know About Comcast’s Xfinity Mobile

Comcast, the nation’s largest cable television operator, will compete for wireless customers with a new no-contract wireless plan that combines Verizon Wireless’ mobile network with Comcast’s installed base of 16 million hotspots installed in customer homes and businesses.

Xfinity Mobile will offer two plans — a pay as you go option for $12/GB and an unlimited calling, texting, and data plan that ranges from $45-65 a month. Customers spending about $150 or more on a Comcast X1 bundle of services will pay the lesser amount, while those with a more basic package will pay more. Customers must at least subscribe to Xfinity Internet service to qualify for the new wireless plan and live in a Comcast service area.

Comcast is powering its cell phone service with its MVNO agreement with Verizon Wireless, which grants the cable company the right to resell Verizon’s wireless network under the Xfinity brand. But Comcast hopes customers will use their devices the most while connected to an Xfinity Wi-Fi hotspot, available in most Comcast customer homes and an extensive network of businesses. To make sure that happens, devices acquired from Comcast will come pre-configured to automatically connect to Comcast’s Wi-Fi, where available.

Comcast’s “unlimited” $65 plan — likely to be the most popular option, is between $15-25 less than what Verizon and AT&T charge their customers for a comparable plan, at least for accounts with just a single device attached. Like other “unlimited” plans, Comcast has a fine print data cap: 20GB of wireless data usage per month, after which it will throttle the customer’s connection until the next billing cycle begins. Comcast intends to always impose the speed throttle once 20GB is reached, not just in areas with congested cell towers. But throttled speeds will be a less maddening 1.5Mbps instead of the usual 128kbps most carriers use to punish their data-heavy users.

Overall, the plan may deliver some savings to current Comcast customers unfazed by signing up for a “quad play” bundle of wireless, phone, TV, and internet access, especially for those bringing a single wireless line to Comcast. Customers with multiple wireless devices on a family plan may want to do the math before signing up with Comcast. Unlike other wireless carriers, Comcast does not offer a discount for additional lines. For most, the price will be $65 a month for each line. For an account with four lines, that would amount to $260 a month — $75 more than what AT&T charges for a similar four-line plan.

Comcast may also attract some interest from light users or those with devices like tablets. Comcast’s $12/GB data plan has no limits or minimum charges. If a customer doesn’t use the plan, there are no charges. If a customer on this plan approaches 4GB of usage in a billing cycle, they can upgrade to Xfinity’s unlimited wireless plan ($45-65) mid-month and then use up to 20GB of data with no extra charges or speed throttles. Customers can put some devices on an unlimited plan and others on a pay-as-you-go plan on the same account.

Early adopters ready to sign up when the service launches this May or June will need to buy new devices from Comcast. The company will sell current generation Apple iPhones, Samsung Galaxy smartphones, and a budget option from LG Electronics. Customers can pay for devices upfront or receive interest-free financing.

Comcast’s interest in entering the wireless business represents the latest effort to keep customers locked into Comcast’s suite of products and services. The more services a customer bundles with Comcast, the more disruptive it will be to switch to another provider.

“The economics really work,” Comcast CEO Brian Roberts said in January. “The goal of the business is to have better bundling with some of our customers who want to save on some of their bill and get a world-class product.”

Because Comcast will rely entirely on Verizon Wireless to provide cellular connectivity, the cost of getting into the mobile business is relatively low. Comcast struck a deal with Verizon several years ago giving the cable company “perpetual” access to Verizon Wireless, as well as any upgrades Verizon makes to its network in the future. However, Verizon still has the right to raise prices on Comcast, potentially slowing or stopping Xfinity Wireless from ever growing large enough to threaten Verizon’s profits.

Charter Communications is planning to introduce a similar wireless product in 2018.

Net Neutrality End Run: AT&T Exempts Its Own DirecTV Content from Its Mobile Data Caps

Phillip Dampier September 7, 2016 AT&T, Competition, Consumer News, Data Caps, DirecTV, Net Neutrality, Online Video, Public Policy & Gov't, Wireless Broadband Comments Off on Net Neutrality End Run: AT&T Exempts Its Own DirecTV Content from Its Mobile Data Caps

directvAT&T Mobility customers can now stream AT&T-owned DirecTV video on their mobile devices without fear of hitting their data allowance, because AT&T has exempted its own content from mobile data caps.

AT&T customers using the DirecTV iPhone app discovered the sudden exemption in an update released today, according to a report in Ars Technica:

“Now you can stream DirecTV on your devices, anywhere—without using your data. Now with AT&T,” the app’s update notes say under the heading “Data Free TV.” This feature requires subscriptions to DirecTV and AT&T wireless data services.

It sounds like the data cap exemption may not apply to all data downloaded by the app, as the update notes further say that “Exclusions apply & may incur data usage.” The service is also “Subject to network management, including speed reduction.” We’ve asked AT&T for more information and will provide an update if we receive one.

Customers can also use the app to download shows recorded on their home DVR straight to their mobile device(s) for viewing. Updates to the DirecTV apps for Android and iPad devices introducing similar exemptions are still pending as of this morning.

A description of "what's new" in the DirecTV app released this morning in the iTunes app store.

A description of “what’s new” in the DirecTV app released this morning in the iTunes app store.

AT&T is engaging in a practice known as “zero rating,” which exempts certain provider-preferred or owned content from that provider’s own data caps or allowances. Critics call zero rating an end run around Net Neutrality because users are more likely to use services that don’t count against their data allowance over those that do. The FCC’s definition of Net Neutrality prohibits providers from artificially enhancing the performance of certain websites at the expense of others, but says nothing about data caps or zero rating.

Chima

Chima

“All forms of zero rating amount to price discrimination, and have in common their negative impact on users’ rights,” said Raman Jit Singh Chima, policy director of Access, a group fighting for global preservation of Net Neutrality. “Zero rating is all about control. Specifically, control over the user experience by the telecom carrier — and potentially its business partners. We can see this is true when we look at how zero rating is implemented technically. Technologically, it is about manipulation of the network, where you guide or force the user to change the way they would otherwise use it.”

The FCC seemed to agree with Chima, specifically banning AT&T from exempting its own streaming video services and those of DirecTV from AT&T’s data caps in the agreement allowing AT&T to acquire DirecTV. But the FCC only mentioned AT&T’s caps on its DSL and U-verse home broadband services, not AT&T Mobility. AT&T took full advantage of the apparent loophole for its mobile customers.

AT&T has previously stated it does not discriminate against online content and is happy to exempt other video services from its data allowances and caps if those companies pay AT&T for the privilege.

The benefit of zero rating is obvious for AT&T. The company can now market its cell phone services to DirecTV customers with a significant advantage over competitors — free access to DirecTV video not available from Verizon, Sprint, or T-Mobile. It can also strengthen its earlier promotion offering unlimited DSL/U-verse service to those who bundle either product with a DirecTV subscription, by pitching zero rating for customers on the go.

AT&T’s competitors T-Mobile and Verizon also engage in zero rating on their mobile service plans.

House Republicans Fail in Attempt to Gut Lifeline Program

Phillip Dampier June 22, 2016 Consumer News, Public Policy & Gov't Comments Off on House Republicans Fail in Attempt to Gut Lifeline Program

lifelineAn effort by a House Republican to scale back the FCC’s Lifeline subsidy program failed on a largely party-line vote Tuesday.

Rep. Austin Scott (R-Ga.) introduced the last-minute End Taxpayer Funded Cell Phones Act, a virtual carbon copy of legislation he proposed in March – H.R. 4884, the Controlling the Unchecked and Reckless Ballooning of Lifeline Act of 2016 (CURB Act). Scott pointed to a proposed FCC fine of $51 million against Total Call Mobile that alleges the company knowingly enrolled ineligible customers for dramatically discounted cell phone service. He also objected to the FCC’s recent request for an expanded Lifeline budget of $2.25 billion annually as an example of government spending running wild.

“I have been fighting to end the unchecked spending and lack of accountability in the Lifeline program since I came to Congress,” said Rep. Scott. “While the program’s original purpose had merit, the program in its current form is wrought with fraud and abuse, and its past time for Washington to respond to the calls of our constituents to rein this program in. American citizens, who are all too familiar with ‘Obama Phones’, understand this and can agree that it is simple good governance to ensure we are curbing wasteful spending while also promoting accountability across the federal government. We have a responsibility to the American citizens to practice the same spending discipline they would in their own homes.”

Scott

Scott’s Georgia district includes the cities of Warner Robins, Tifton, Thomasville, and Moultrie.

Scott’s use of the term “Obama Phones,” didn’t sit well with his opponents, including Rep. Frank Pallone (D-N.J.), who blasted Scott and the House Republican leadership for suddenly bringing Scott’s bill to the floor for a vote.

“[House Speaker] Ryan and the Republican majority is bringing a bill to the floor that would eliminate the successful Lifeline program that provides millions of low-income Americans access to basic communications services,” said Pallone, who reminded his Republican colleagues the Lifeline program was created in 1985 during the middle of the Reagan Administration and was extended to include wireless service under the George W. Bush administration. Pallone added the Obama Administration has rooted out nearly $750 million in waste, fraud, and abuse of the Lifeline program.

“The American people know that if Republicans were really serious about battling poverty and shrinking the size of Lifeline, they would work with us to create more jobs for those that are unemployed or under-employed,” Pallone said. “The best way to lower the costs of the Lifeline program is to lift people up, not to take away their connection to a better life.”

The vote was 207 in favor of Scott’s bill, 143 against. All but one of the “yes” votes came from Republicans (seven opposed the bill). The 143 voting against were almost entirely Democrats, with just one voting in favor.

Because the bill was brought to the floor during a suspension of House rules, a two-thirds vote in favor was required to pass it. Having failed to achieve that, Scott’s bill died on the floor.

Comcast, Frontier: It’s Too ‘Hilly and Woodsy’ to Bring Broadband to Rural Connecticut

no signalAn aversion of open, hilly landscapes and trees is apparently responsible for keeping residents of rural Connecticut from getting broadband service from the state’s two dominant providers — Comcast and Frontier Communications.

In the Litchfield Hills of northwestern Connecticut, you can visit some of the state’s finest antique shops and Revolutionary War-era inns, tour vineyards and even establish roots in the Upper Naugatuck Valley in towns like Barkhamsted, Colebrook, Goshen, Hartland, Harwinton, Litchfield, Morris, New Hartford, Norfolk, Torrington, and Winchester. Just leave your cellphone, tablet, and personal computer behind because chances are good you will find yourself in a wireless dead spot and Internet-free zone.

Obtaining even a smidgen of cell phone service often means leaning out a second story window or worse, climbing the nearest church steeple. The wealthiest residents, often second-homeowners from New York or California, can afford to spend several thousand dollars to entice the cable company to extend a coaxial cable their way or buy commercial broadband service at eye-popping prices from Frontier Communications, which acquired AT&T’s wireline network in the state. But for many, dial-up Internet remains the only affordable or available option.

Despite the area’s significant number of high income residents ready and willing to pay for service, Comcast and Frontier blame hilly terrain and dense woods for staying away. Those excuses get little regard from residents who suggest it is all about the money, not the landscape.

Northwest Connecticut region is shown in green and the Litchfield Hills region in blue.

Broadband-challenged areas in northwest Connecticut are shown in green and the often “No signal” and “No Internet” Litchfield Hills region is shown in blue.

Despite the need for service, deregulation largely allows cable and phone companies to decide where to offer broadband service, and arguments about fulfilling a public need and performing a community service don’t get far with Wall Street and shareholders that constantly pressure companies to deliver profits, not expensive investments that may never pay off.

State Rep. Roberta Willis (D-Salisbury) told the Register Citizen News the status quo is not acceptable — telecommunications companies are not doing enough to build out their networks.

“You just can’t say it’s the topography and walk away,” she told the newspaper. “If electricity companies were deregulated like this there would be no electricity in my district.”

Comcast spokeswoman Laura Brubaker Crisco claims the company extended cable service nearly 62 miles in northwest Connecticut since 2005 (ten years ago) and completed nearly 100 projects extending fiber more than 10 miles in the past two years. But many of those projects overhauled Comcast’s existing middle-mile network and extended cable service to profitable new markets serving commercial customers, especially office parks and commercial storefronts. Comcast’s other priority was to reach new high-income residential developments being built as the area continues to grow. Rural customers who could not meet Comcast’s Return On Investment formula in 2005 are still unlikely to have service in 2015 unless population density increases in their immediate area.

Connecticut's effort to extend gigabit fiber statewide is dismissed as a waste of money by incumbent cable operators.

Connecticut’s effort to extend gigabit fiber statewide is dismissed as a waste of money by incumbent cable operators.

Crisco admits Comcast does not wire low density areas and isn’t surprised other providers won’t either.

Frontier prefers to blame the area’s topography for keeping broadband out.

David Snyder, vice president for engineering for the east region of Frontier Communications, told the newspaper “it’s just natural the investment and the time become more challenging.”

Frontier does say it has expanded broadband to 40,000 additional households in Connecticut since taking over for AT&T a year ago. But nobody seems to know exactly who can get broadband in the state and who cannot. The have-nots are the most likely to complain, and those businesses that serve visitors are in peril of losing business without offering reasonable Wi-Fi or Internet access. Rural families with school-age children are also at risk from having their kids fall behind those that can get broadband.

Wireless Internet Service Providers, which offer long-range wireless broadband in rural areas, complain the federal government is wasting money on studies instead of helping to underwrite solutions that can quickly bring Internet access to the rural masses.

Others believe talking to Frontier and Comcast is futile. They prefer to follow the lead of western Massachusetts, where 24 small communities across the region have joined forces to build a public fiber to the home broadband network. One estimate suggests 22 Connecticut towns covering 200,000 residents could be reached with a bond-financed fiber network completed by 2018. That network would likely reach more unserved customers than Frontier or Comcast will elect to serve over the next three years combined.

A separate effort to establish gigabit fiber broadband across the state — the CT Gig Project — promptly ran into a buzzsaw of opposition, primarily from incumbent telecommunications companies that refuse to offer that service now. With a threat to current profitable business models, it was not unexpected to hear opposition from Paul Cianelli, CEO of the New England Cable & Telecom Association — a cable company lobbying group.

He called public broadband unnecessary and “potentially disastrous.” He wants assurances no government subsidies or loan guarantees are given to the project. He also said providing gigabit service was unnecessary and faster Internet speeds were not important to the majority of customers in the state. Public broadband proponents respond Cianelli should tell that to the residents of Litchfield Hills and other unserved and underserved communities.

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