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WRC-TV decided to visit with local Washington, D.C. consumers and ask them if they knew what a “gigabyte” was and how many they were using on their cell phone data plan.  Few knew, and even fewer wanted to know, preferring to pay a flat price for worry-free, unlimited data service. Unfortunately, AT&T and Verizon have discontinued their unlimited data plans (Verizon is preparing to throw people off of grandfathered plans when customers upgrade their phones), and T-Mobile throttles customer speeds to near-dial-up after their monthly allowance is reached. Only Sprint sells truly unlimited data, but many customers find Sprint’s data speeds lacking. Consumer reporter Liz Crenshaw visits with Public Knowledge to help educate consumers about what the average 2GB plan really buys.  (3 minutes)

Data provided by OSHA statistics

A new joint investigation by Frontline and ProPublica reveals serious lapses in safety for America’s cell tower workers, a career now considered one of the most hazardous and life-threatening in America.

In the last eight years, 50 climbers have died, with many more injured installing and servicing cell sites for AT&T, Verizon Wireless, Sprint, and T-Mobile. The investigation finds many of these deaths and injuries were preventable, but as America’s profitable cell phone companies outsource jobs to cut-rate subcontractors (and the sub-contractors they often use themselves), safety measures take a back seat to low-ball bidding and profits.

Efforts to hold companies accountable are stymied by the byzantine layers of third party companies hired to do the work, an under-equipped federal safety agency, and difficulty assessing where the responsibility lies when things go wrong.

From ProPublica and Frontline:

From their perch atop the contracting chain, carriers typically set many of the crucial parameters for work on cell sites, including deadlines, pay rates and even technical specifications, down to the exact degree an antenna should be angled. An analysis of cell tower deaths by ProPublica and PBS “Frontline” showed that tight timetables and financial pressure often led workers to take fatal shortcuts or to work under unsafe conditions.

“We’ve had a number of situations where we think that accidents were caused by companies trying to meet deadlines and … cutting corners on safety in order to meet those deadlines,” said Jordan Barab, OSHA’s deputy administrator.

But Barab said it’s difficult for the agency to hold cell companies responsible for safety violations involving subcontractors. In most cases, federal officials have interpreted OSHA regulations to mean that carriers can be held accountable only if they exercised direct control over subcontractors’ work or were aware of specific unsafe conditions.

OSHA has not sanctioned cell carriers for safety violations implicated in any subcontractor deaths on cell sites since 2003, a review of agency records by ProPublica and PBS “Frontline” found.

Most of OSHA’s enforcement efforts have focused on a transient cast of small subcontractors, though they, too, typically have eluded significant penalties. Over the last nine years, the median fine levied for safety violations linked to a fatal tower accident was $3,750, an analysis by ProPublica and PBS “Frontline” showed.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/PBS Frontline Cell Tower Deaths 5-23-12.flv[/flv]

Watch this segment from PBS Frontline exploring ‘Cell Tower Deaths,’ and what can be done to stop them.  (30 minutes)

Happy Days Are Always Here for Top Telecom Execs

Our friends at Fierce Cable put together a list of the top-paid telecommunications executives, and they’re in the money. Your money. While your rates keep going up, their take-home pay often is, too.

Remarkably, actual performance as executives (or lack, thereof) often had no relationship to their ultimate pay package, with a handful of exceptions:

Cable & Satellite

Brian L. Roberts, Comcast — $26.9 million: The Roberts family has dominated Comcast since the 1980s, so it is no surprise their pay packages are as colossal as the company itself.

Michael J. Lovett, Charter Communications — $20.54 million: He resigned in Feb. 2012 but got a great golden parachute: nearly double the compensation he earned the year before. Charter is one of America’s least-distinguished cable companies, usually scoring just above “pond scum” in popularity with customers. But you can take that trash talk when you walk $20 million to the bank.

Glenn A. Britt, Time Warner Cable — $16.43 million: His pay went down slightly (well, by a million dollars but with that kind of money, does it really matter?) in 2011. Britt has been around at some iteration of Time since 1972… when Nixon was still president, so he worked his way to the top. But some of his best accomplishments are irritating his customers with talk of overcharging them for Internet access.

James L. Dolan, Cablevision — $11.45 million: The Dolan family and Cablevision go together like cookies and milk, but Wall Street can’t help but bet when the family will finally cash out of cable and sell the company to Time Warner or Comcast. With $11 million in salary, stock awards, and bonuses, what’s the hurry?

Joseph Clayton, Dish Network — $9.84 million: Clayton is a Dish freshman, only coming on board 11 months ago. His salary was a paltry $467,000 in 2011. Thank goodness for the $9 mil in stock and bonus pay!

Michael D. White, DirecTV — $5.94 million: Ouch… a pay cut. White made $32.93 million the year before. Now he’ll have to clip coupons from the Sunday newspaper like the rest of us.

Rodger L. Johnson, Knology — $3.13 million: Not bad for running a company almost nobody has heard of and will soon no longer exist.  WideOpenWest bought them out last month.

The Wireline Companies & Their Friends

Stephenson: Blew a $39 billion dollar merger deal with T-Mobile, but walks away with $22 million in pay anyway.

Lowell McAdam, Verizon — $23.1 million: McAdam’s promotion paid handsomely. As former chief operating officer, he only walked home with a little more than $7 million last year. Now he’s earning every penny conjuring up ways he can do away with your cell phone subsidy -and- keep Verizon Wireless’ rates as high as ever.

Randall Stephenson, AT&T — $22.01 million: If you blew a multi-billion dollar merger deal at your company, do you think the only punishment you’d receive is a $5 million pay cut? Stephenson is the cat that fell out of the wireless merger window, and landed on his feet unharmed. Unfortunately the same isn’t true for his customers.

Dan Hesse, Sprint — $11.88 million: His pay is down about $2 million from 2010, and he recently announced he was going to take another pay cut for the team. If anyone deserves hazard pay, Hesse is the man. Wall Street hates him for not following his competitors gouging customers with higher prices and more restrictive service plans and policies. The big money crowd in New York’s financial district already has his going away party well-planned.

Jeff Gardner, Windstream — $9.78 million: His pay is up around $2 million. Windstream can afford it, acquiring companies later stripped clean of employees. PAETEC workers will learn this lesson soon enough. At Windstream, all the money rises to the top… management that is.

George A. Cope, Bell Canada — $9.6 million: His salary more than doubled over 2010 and why not. Bell is the first telecommunications company in North America to be audacious enough to demand an entire country be stripped of flat rate Internet service. That move managed to organize 500,000 Canadians that normally are resigned to the fact the revolving door at the Canadian Radio-tv and Telecommunications Commission has locked them out for years. Thanks Bell!

Glen F. Post III, CenturyLink — $8.55 million: Post saw his pay slashed from $14.5 million the year before, but merger deals like Qwest (with the corresponding huge bonus for pulling it off) only come once or twice in a career.

Hesse: Wall Street's least-wanted.

Maggie Wilderotter, Frontier — $6.72 million: No, we don’t understand it either. Her pay is down from $8.58 million, but considering Frontier’s current stock price and bottom-rated service, wouldn’t half of this money be better spent on improving broadband in states like West Virginia?

John F. Cassidy, Cincinnati Bell — $6.06 million: Cassidy earned more than two million more the year before. Cincinnati Bell is an aberration in an industry that is convinced the only good thing telecom companies can do is merge with each other to get bigger and bigger.

Paul H. Sunu, FairPoint — $4.25 million: The company that couldn’t find one customer’s business on a service call despite being literally right next door to FairPoint itself, is clawing its way back from bankruptcy and Sunu’s pay package reflects that. He only earned $775,000 the year earlier.

Ian Paul Livingston, BT — $3.8 million: British Telecom’s chief got a modest salary hike in 2011, and the U.K. phone company has done modestly better recognizing better broadband in the key to its future. BT is the AT&T of the United Kingdom, but British salaries are downright frugal compared to the high flyers on this side of the Atlantic.

David A. Wittwer, TDS Telecom — $2.29 million: You can’t complain about a cool $2 million in salary for a company with only around 1.1 million customers.

Ben Verwaayen, Alcatel-Lucent — $2.25 million: His salary dropped slightly from 2010. Alcatel-Lucent could do considerably better if they can win the public policy debate that fiber optic broadband is the wave of the future. Alcatel-Lucent is a major player.

Your contract with Sprint ends in June, but why wait, beckons the cell phone company, when you can upgrade your phone today (with a new two-year service agreement).

Two years earlier, providers wheeled and dealed upgrade-reluctant customers, particularly those considering their first smartphone, thanks to the bill shock that results when customers see a $30 mandatory data plan added to their monthly bill.  Sprint went one step further, handing 4G-capable customers Clearwire WiMAX — a technology even Russian cell phone companies can’t wait to abandon — and added a $10 premium data surcharge for the privilege.

In Sprint’s favor: their willingness to deal discounts on phone upgrades and their truly unlimited data plans. But while Sprint continues to bank on unlimited data, the bill on cheap phone upgrades may now be coming due.

The American wireless industry is increasingly taking a page from the airlines, adopting irritating fees and surcharges while curtailing the perks and rewards that used to come with customer loyalty and family plans that routinely run into the hundreds of dollars.

Equipment Upgrade Fees

Sprint, Verizon, AT&T, and T-Mobile all have a nasty surprise in store for customers who have not upgraded their smartphones in the last year or so: the equipment upgrade fee.  Sprint and AT&T both charge $36 per phone, Verizon Wireless now charges $30, T-Mobile $18.

Verizon customers are especially peeved because that wireless company used to reward loyal customers with a $50 credit off any new phone at contract renewal time. Today, instead of getting “New Every Two” discounts, Big Red will charge you $30 for every new phone when you renew your contract.

Verizon’s excuse is that the new fee will be used to offer customer “wireless workshops” and “online educational tools,” according to Verizon spokeswoman Brenda Rayney. The company also claims the fees will cover more sophisticated consultations with “company experts” that are trained to provide advice and guidance on today’s sophisticated smartphones. In other words, these fees are supposed to compensate Verizon’s store and kiosk employees.

For people like my cousin, upgrading to a new Sprint phone at contract renewal time is an exercise in frustration. In addition to the $149-199 subsidized equipment price, Sprint now tacks on a $36 upgrade fee (per phone).  What miffs him is that Sprint is treating new customers better than existing ones, willing to waive one-time activation fees (coincidentally the same $36) for new customers, but steadfastly refusing to credit equipment upgrade fees for existing loyal customers.

Sprint will tell you they are not alone charging upgrade fees, and they would be right. All four major national carriers now charge the fees, effectively a penalty when customers decide to upgrade their phones.

Many also find it nearly impossible to get companies like Verizon Wireless to waive the fees, even when some of their best customers ask.

“Verizon Wireless was willing to throw away my 12 year account, earning them more than $500 a month in revenue, over the upgrade fee issue,” reports Stan Dershau. “Our contract expired this month and it was time for new phones, and Verizon absolutely insisted that we pay $150 in upgrade fees for new equipment on our account, even after the $600 they’ll collect from the smartphones we intended to buy.”

Dershau found absolutely nobody willing to relent on Verizon’s upgrade fees. Even supervisors told him the company has a no-waiver policy that is strictly enforced, and they could do little more than offer a token service credit even if Dershau threatened to take his business somewhere else.

“I haven’t decided what to do yet, but I canceled my upgrade plans for now,” he reports.

Dershau was always able to get Verizon to waive earlier fees because of the monthly business he brings them, but those days are over.

“It’s a whole different attitude with them now,” Dershau says. “They just want money.”

AT&T's fine print.

Ben Popken recently wrote about his efforts to avoid Verizon’s $30 upgrade fee, with mixed results.

Verizon’s suggested solution is to sell your old phones back to the company through their trade-in program, using the money to offset the equipment upgrade fee. But unless you own an iPhone, Verizon’s trade-in offers are strictly low-ball, often under $30 on non-Apple phones. That leaves you with a slightly lower upgrade fee and the loss of your old phone, which Verizon may recycle or resell refurbished to someone else.

Popken explains he found one convoluted way around Verizon’s fees:

First, start a new line of service with the new phone you want. Then, port your old phone number to a 3rd party service, like Google Voice (here’s a guide from Lifehacker on doing so). Lastly, cancel the line with the old phone and port the old phone number back onto the new phone, thus keeping the new phone, the old number, and dodging the fee. But there’s a catch. It only works if you wait three months to port the number back. If you do it before then, Verizon’s system treats it like you’re continuing the same service, and they hit you with the $30 upgrade fee. Curses.

Popken forgets, however, that Google itself charges a $20 fee to port cell phone numbers to Google Voice, eliminating 2/3rds of your potential savings.

In fact, outside of purchasing a phone at the full, unsubsidized price from a third party, Verizon’s $30 fee will be visiting your phone bill sooner or later, if you decide to upgrade.

The Phone Subsidy: Slaying North America’s Sacred Cow Wireless Business Model

Consumers who crave the newest smartphones should thank their lucky stars they live in Canada or the United States, where the wireless industry heavily discounts the upfront cost of the phone when customers sign a service contract. But phone companies like AT&T and Verizon are not giving you a gift. In return for fronting a discount of as much as $400, companies set their monthly rates higher to recoup that subsidy over the life of your two-year contract.

That worked fine when cell phone companies only paid a few hundred dollars for basic phones. But today’s most popular smartphones can cost companies $400 each, and that upfront revenue hit has annoyed Wall Street for years. Even worse, while providers hand you a discounted phone, they’ve already paid the asking price to companies like Apple and Samsung, who book that revenue immediately and never have to worry about a customer skipping out on their contract.

Wall Street has been putting pressure on companies to do something about the expensive phone subsidies, and companies are responding. The equipment upgrade fee, increased activation fees, and rising monthly service charges are all a part of a greater plan to discourage customers from upgrading their phones and increase profits.

Wall Street analysts love every part of it, especially if companies can do away with equipment subsidies -and- maintain today’s pricing:

“Optimism has increased that we are witnessing the leading edge of a more disciplined, and more profitable, future,” Craig Moffett, a telecom analyst at Bernstein Research, wrote in a recent research note. The question now, he wrote, is how much carriers can increase their profits thanks to “increased discipline and pricing power.”

The answer could be quite a lot. A marketplace experiment in Spain is being closely watched by wireless phone companies worldwide and could be coming to Canada and the United States before your next two-year contract is up for renewal.

In March, Telefónica SA, Spain’s largest cell phone company, stopped subsidizing smartphones for new customers. Vodafone, which co-owns Verizon Wireless, quickly followed.

As a result, Spanish customers looking for an iPhone will now pay $800 to purchase the phone at full price, or they can sign up for an “installment plan” that will add $45 a month to their cell phone bill for the next 18 months. Both companies say the new policy won’t apply to existing customers, in an effort to discourage them from switching companies.

Telefónica anticipates the changes will slash as least 25% off of their spending. Instead of fronting subsidies to attract new customers, the phone company will increase subsidies for existing customers who agree to stay. Unfortunately for Telefónica, early results are not promising. More than 500,000 customers left the same month the new policy was announced.

A handful of smaller Spanish players see the move by both major companies as a competitive opportunity to win over new customers. Orange, for example, has not stopped offering subsidies and as a result Telefónica has lost potential new customers who signed with Orange instead. The “churn rate” of customers coming and going remains a concern for company executives. But so far, Telefónica considers getting rid of phone subsidies more important than the customers they have forfeit over the new policy.

“We are pretty firm on our strategy of trying to change the paradigm of the sector, […] devoting the bulk of our efforts to our existing customers and, therefore, trying to move away from incentivizing churn of our customers either from us or from the others,” said company CEO Cesareo Alierta Izuel. “We are very firm on this new handset strategy. We need to fight to see if the trend is going to the right direction. And again, we think it is.”

The Wall Street Journal reports Telefónica’s bold plan has caught the attention of Verizon CEO Lowell McAdam, who sees it as a potential profit booster, and McAdam expects Verizon may cautiously follow the Spanish company’s lead.

“We’ll probably offer some things like that, and then we’ll see what the adoption is like,” McAdam said. “You can’t push this on customers before customers are ready for it.”

For now, some customers are not even ready for equipment upgrade fees. My cousin’s upgrade plans remain on hold for now, as are those of the Dershau family.

“I am not going to be browbeaten into paying these unjustified fees,” Dershau said. “Where does it stop?”

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/WSJ Dodging Verizon’s New 30 Upgrade Fee 5-9-12.flv[/flv]

Ben Popken talks about trying to avoid Verizon’s $30 equipment upgrade fee.  (3 minutes)

A TV news crew from Salt Lake City that sent undercover reporters into an AT&T store, successfully reactivating a smartphone reported lost or stolen, returned Tuesday with cameras running looking for answers.

KTVX News found AT&T stores maintain activation policies that are exceptionally friendly to smartphone thieves, who can reactivate lost or stolen phones with no questions asked.

Stop the Cap! shared video from the station earlier this week showing AT&T employees making life difficult for victims of cell phone theft, but enthusiastically willing to collect money from new customers who received or purchased the stolen property.

A California class action lawsuit has been filed against AT&T over how it handles stolen cell phones.

According to the suit AT&T is, “forcing legitimate customers…to buy new cell phones, and buy new cell phone plans, while the criminals who stole the phone are able to simply walk into AT&T store and re-activate the devices using different, cheap, readily available SIM cards.”

KTVX originally sought to check whether AT&T had the same thief-friendly policies in place in Utah.  It turned out the answer was yes — AT&T will turn back on any phone as long as you “put money on it.”

Text from a California class action lawsuit against AT&T

“All you would have to do is pay for the plan,” said an unnamed AT&T store employee. “We’ll set up your account with your ID, and then put the new SIM card in there and put money on it.”

A day after the undercover operation, the TV station confronted the manager at the AT&T store just outside Valley Fair Mall, in West Valley City. He refused to answer questions.

“You can’t tell us anything about whether you know employees are doing that here?” asked reporter Brian Carlson.

“I’m not going to give you any comment on that,” he said.

The store manager referred questions to a regional AT&T representative, but the station could only reach his voicemail.

AT&T’s reactivation policies are not shared by Verizon Wireless, which claims it will not reactivate a phone reported lost or stolen on its network for any reason, except if the request comes from the original phone owner.  AT&T’s policies, according to the lawsuit, help fuel cell phone theft by making it easy for thieves to sell stolen equipment to buyers confident they can reactivate and use the equipment immediately after purchase.

AT&T says they’re working on a new plan with the Federal Communications Commission and other cell phone providers to create a centralized database of stolen phones that would keep them from being activated by any wireless carrier.  That plan could be in place by the end of this year.

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ABC4 reporters return, with cameras running, to the same AT&T store that a day earlier helpfully reactivated a phone that could have been lost or stolen, no questions asked.  (2 minutes)