Canadians looking for more competitive wireless prices and faster service may think they’re going to get them if they sign on to a new campaign sponsored by Rogers Communications that calls on the Canadian government to eliminate spectrum “set-asides” for the country’s smaller wireless competitors.  Rogers wants those frequencies for itself, critics charge, and they have the resources to outbid any new player in the country’s wireless market.

From Rogers’ “I Want My LTE” Website:

[…] There are some who are supporting a Federal Government regulation that would limit who can have access to the spectrum. Such regulation would exclude select companies from the upcoming auction to license the 700 MHz spectrum band. The outcome of this auction will have a major impact on deploying LTE across Canada. If a decision is made that prevents certain companies, including Rogers, from participating in the spectrum auction, it would be a recipe for leaving Canada behind the rest of the world, stalling Canadian innovation and limiting who can access LTE.

The website offers a pre-written plea to policymakers in government to allow for an open bidding process for the forthcoming 700MHz frequencies many wireless companies crave for their robust performance.

The problem is, according to industry observers, if a wide-open, no-limits auction takes place, it’s a virtual certainty Canada’s largest wireless companies — Bell, Telus, and Rogers, would walk away with most, if not all of the auctioned spectrum.  Even worse, it will stall competition that will lead to lower prices.

“The future of affordable wireless rates is at risk, not the future of long-term evolution (LTE) networks,” said Chief Operating Officer Stewart Lyons. “Mobilicity has helped bring down the cost of wireless in Canada significantly and we need to augment our limited amount of spectrum to ensure affordable pricing continues.”

“[The] big 3 wireless carriers have more spectrum than they need and will stop at nothing to dress up and misrepresent their hidden agenda of eliminating competition so they can raise their rates back up again,” he added.

The government is not planning to ban Rogers and the others from the spectrum sale.  They just want to set aside some frequencies for bidding among the smaller, newer competitors.  But even that is too much for Rogers, who has bad memories from the last spectrum auction that allowed those competitors to become established in the first place.

Today, new cell service providers like Wind Mobile, Mobilicity and Quebecor’s Videotron are forcing larger carriers to reduce prices or lose business.

Fido is actually Rogers under a different name.

For some Canadians, wireless bills have dropped a lot since the competition arrived.  Some are leaving Rogers in favor of better prices elsewhere.

Andy Lehrer from Toronto had a cellular plan with Fido, an ostensibly independent cell phone company that is, in fact, owned outright by Rogers Communications.  Lehrer was paying Fido $150 a month for his Blackberry voice and data plan.  Today, with one of the new competitors, he pays $44 a month for a plan that offers more data and talk time.

Although new competitors still have just under 5 percent of the Canadian market, the price differences have become too enormous to ignore in many cases, especially if a customer is willing to give a new carrier a break as it works through growing pains.

Lehrer told the Globe & Mail his cellular reception is poorer, but not bad enough to make him switch back to Rogers’ Fido.

Convergence Consulting Group Ltd. notes the price disparities mean savings as much as 58 percent with new competitors’ combined voice and data plans.  For data services alone, new providers charge as much as 83 percent less.

If Rogers and the two others head home from spectrum auctions with everything up for bid, it will assuredly stall competition and help protect today’s high wireless prices.  Rogers, Bell, and Telus have never seen fit to undercut each other, adopting a rising prices raise all balance sheets-approach at doing business.  But scrappy new entrants like Wind and Mobilicity are willing to slash prices to attract customers.  But nobody will buy service if those companies cannot obtain necessary spectrum to actually compete.

Regardless of the outcome, North America in general has a long way to go to find the lower wireless prices commonplace abroad.

Divided Loyalties? -- Mayor John Marks

A growing scandal involving AT&T and the mayor of the state capital of Florida has further exposed the link between AT&T’s pay-for-play public policy agenda and the politicians willing to act as puppets for the phone company’s interests.

Tallahassee Mayor John Marks strongly promoted an Atlanta nonprofit group to participate in a $1.6 million dollar federal broadband grant to expand Internet access to the urban poor and train disadvantaged citizens to navigate the online world, without disclosing he was a paid adviser to the group.

What the rest of the city never knew is that the Alliance for Digital Equality (ADE) is little more than an AT&T astroturf effort — a front group almost entirely funded by AT&T that actually did almost nothing to bring Internet access to anyone.

The Alliance for Digital Equality, a group supposedly focused on erasing the digital divide, spends an inordinate amount of time running radio ads under the alias of “Alliance for Equal Access” for competition in cable-TV… when that competition comes from AT&T U-verse. Listen to two radio commercials run in Georgia and Tennessee, both AT&T service areas, promoting legislation that was introduced at the behest of AT&T and promoted by ADE. (2 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

In fact, an investigation by a Tallahassee newspaper reviewing the group’s federal tax returns found four of every five dollars spent by ADE went to board members, consultants, lawyers, and media companies for the purpose of promoting AT&T’s agenda against Net Neutrality and for the company’s various business interests:

Marks also didn’t mention when he brought ADE to the City Commission in September 2010 that AT&T has been paying him since the early 1990s as a lawyer and consultant.

Tax returns for ADE show it got $7.36 million from AT&T from 2007 through 2009. Among its expenses, it spent $2.7 million on consulting and legal fees, $1.2 million on travel, $1.1 million on media and communications and $931,509 in pay to officers and board of advisers members.

ADE spent nothing on projects to provide Internet access to underserved areas from 2007-09. It wasn’t created to do so. The group’s mission, as reported to the IRS, was to advocate “technology inflows to underserved communities by interacting with elected officials, policymakers at all levels of government and private sectors.”

In those interactions, ADE presented the same message as AT&T in opposition to greater price regulation of the Internet.

View the 2007, 2008, and 2009 tax returns for the Alliance for Digital Equality yourself.

Some of ADE’s officers and board members are familiar to Stop the Cap! readers as loyal AT&T advocates.  Even worse, many of them routinely play the “race card” whenever AT&T’s agenda is threatened.  Take Shirley Franklin.  She is the former mayor of Atlanta, but these days her biggest constituent is AT&T.  Last August, Franklin helped lead an attack against Free Press, a consumer advocacy group, that she said “target[ed] women, African-Americans and other minorities” after the group complained about the ties between several civil and minority rights organizations and AT&T.

ADE unsurprisingly is also all-for the merger of AT&T and T-Mobile

Julius Hollis, chairman and founder of the Alliance for Digital Equality, was even more strident.

“I am extremely disappointed in the Free Press, not only in its policies and tactics that they are attempting deploy in their strategy paper, but equally disturbing are its attempts to portray the African-American and Latino consumers as expendable in their efforts to promote Net Neutrality,” Hollis said last year. “In my opinion, this is going back to the tactics that were used in the Jim Crow era by segregationists. It’s no better than what was used in the Willie Horton playbook by Lee Atwater who, upon his deathbed, asked for forgiveness for using such political behavior tactics.”

Stop the Cap! exposed ADE ourselves as a “dollar-a-holler” advocate in August 2010 when we learned the majority of the group’s funds came from AT&T.

Anne Landman, managing editor of the Center for Media and Democracy, told the Tallahassee Democrat the purpose of groups almost entirely sponsored by a single corporate interest is to obfuscate the messenger. “It’s a nontransparent way of operating,” she said. “People don’t know who’s behind these efforts. So it’s fake, and it’s phony, and it gives people wrong information. It’s designed to purposely fool people.”

The newspaper spent months trying to track down financial reports, tax filings, and other documentation about the group, and ran into repeated resistance.  At one point, written requests sent to the group’s headquarters in Atlanta were returned unopened and marked “refused.”

ADE’s corporate influence is bad enough, but when the group uses race, gender, and economic cards to attack real public interest groups, it raises eyebrows, particularly when the group doing the attacking is financed by a corporate entity.  The Black Agenda Report, a website that can hardly be accused of racism, called out Franklin and the organization she represents.

The newspaper’s investigation also found all of ADE’s employees were actually independent contractors.  Non-profit group experts claim the entire structure of ADE is unusual because it funnels all of its money through contractors.

Tallahassee Mayor John Marks is apparently one of them, having received $86,000 as a member of ADE’s board of advisers in addition to AT&T paying him directly as a lawyer and consultant.

With the recent revelations, Tallahassee’s broadband grant is now in ruins and will be returned, unspent.  Marks is reportedly under investigation by the FBI for potential corruption.  And another AT&T astroturf effort has been exposed and has blown up in the company’s face.

[flv]http://www.phillipdampier.com/video/WCTV Tallahassee Mayor Under Fire Over ATT-ADE Ethics Scandal 3-29-11 – 9-15-11.flv[/flv]

Stop the Cap! has compiled almost a year of coverage of the burgeoning scandal in the Tallahassee mayor’s office, courtesy of WCTV-TV, which has doggedly pursued the scandal with assistance from its news partner Tallahassee Reports.  (10 minutes)

Phillip "Frontier DSL is Too Slow and Expensive" Dampier

Frontier Communications occasionally sends me mailers promoting their latest offer for DSL and/or satellite service.  The price on the front of the letter looks good — usually around $20 a month — despite the fact the best Frontier can deliver my area less than one mile from the Rochester, N.Y. city line is 3.1Mbps.  But Frontier’s fine print is infamous for bill padding extra fees, charges, and service commitments that makes the out-the-door price literally higher than Time Warner Cable’s Road Runner service, which actually delivers substantially faster speed at a lower price.

I’m not alone.

Customers in several Frontier service areas are openly wondering why they should do business with the phone company when they are charging more for less service.

In Ohio, Frontier Communications competes in some areas with Buckeye Cablevision.  Frontier sells DSL Internet in northwest Ohio for $29.99 a month.  For that, customers like Inquiry receive 6.2Mbps even though they bought 7.1Mbps service.

“Their [Internet prices] are significantly higher when comparing the other providers in northwest Ohio,” Inquiry writes. “Buckeye Cablevison has 10Mbps service for $24.95/month. And they actually give the customer 10.8Mbps.”

In areas where Frontier often finds itself the only game in town, that price is downright cheap.

Frontier's "High Speed" Fantasies

Nialis in Aliso Viejo, Calif. doesn’t know what Inquiry is complaining about.  He pays $30 a month for 1.5Mbps DSL service from Frontier.

Eric McDaniel from McDavid, Fla. found small relief when he complained about the 2.2Mbps DSL service he was paying $39.99 a month to receive.

“I now pay $29.99, and that is only because I threatened to cancel my service,” McDaniel says. “Now they give me a $10 recurring credit.”

“What are you going to do when they’re the only show in town?”

Even Charter Communications, one of America’s lowest rated cable companies, has prices and service that beats Frontier hands-down.

In some Charter areas like Wausau, Wisc., Frontier DSL comes with a two year service commitment, a $14.99 monthly Wireless Router Fee, and comparatively slow service:

Frontier Communications Pricing - Wisconsin

Customers can pay $29.99 a month (before fees) for “up to 3Mbps” DSL service from Frontier or spend $29.99 and get 12Mbps from Charter:

Charter Communications Pricing - Wisconsin

So how does Frontier Communications keep offering service at uncompetitive prices?  They have much greater success in the rural markets they favor, where cable competition rarely exists.  Plus, many consumers may not understand the impact of the speed differences they receive from different providers, tending to blame “the Internet” for slowdowns more than the provider delivering the service.  Some customers may also be attracted to valuable customer promotions that include free netbooks or television sets, and forget about the fine print service commitments that come with the deal.

As dwink9909 from Clintonville, Wisc. shared on the Frontier Broadband Reports forum: “Frontier Communications Inc. is free to charge the maximum the market will bear primarily because they are the only provider in most of the areas they serve. That’s certainly true here in Wisconsin. Six miles south of me you can get dial-up service from two dozen ISPs and broadband via wireless, cable or DSL, but here there is only a single provider for telephone and broadband. We are among the “under-served” millions who are just glad to have high speed Internet at any cost.”

Frontier is only too happy to oblige.

At least seven states including New York, California, Illinois, Pennsylvania, Washington and Ohio have announced they are joining the Justice Department lawsuit to stop AT&T’s attempted buyout of T-Mobile USA.

The merger has been heavily criticized by consumer groups for its potential to reduce wireless competition and stifle the marketplace with just two dominant carriers — AT&T and Verizon Mobile.  Now several Attorneys General have joined the voices of opposition to the merger.

“This proposed merger would stifle competition in markets that are crucial to New York’s consumers and businesses, while reducing access to low-cost options and the newest broadband-based technologies,” New York Attorney General Eric T. Schneiderman said in a statement.

Washington State Attorney General Rob McKenna said the deal would “result in less competition, fewer choices and higher prices for Washington state consumers.”

“The proposed merger would create highly concentrated markets in Massachusetts and could lead to higher prices and poorer service.” Massachusetts Attorney General Martha Coakley said.

Illinois Attorney General Lisa Madigan said the deal would “substantially lessen competition for mobile wireless telecommunications services in Illinois and across the United States.”

“Blocking this acquisition protects consumers and businesses against fewer choices, higher prices, less innovation, and lower quality service,” Madigan added.

“Our review of the proposed merger between AT&T and T-Mobile has led me to conclude that it would hinder competition and reduce consumer choice,” California Attorney General Kamala D. Harris said. “Enforcement of antitrust law is the responsibility of the Attorney General and is vital to protecting our state’s economic strength and tradition of innovation for the betterment of all Californians.”

Shuler

Although the level of opposition to the transaction continues to grow, AT&T itself claims to remain confident it can push the merger through.

“It is not unusual for state attorneys general to participate in DOJ merger review proceedings or court filings,” AT&T representative Michael Balmoris said.

Several Democratic lawmakers, most of whom receive substantial campaign contributions from AT&T, would seem to underline the company has the support of at least some in Congress.

Rep. Heath Shuler (D-North Carolina), joined 14 Democratic co-signers in a letter sent Thursday to President Barack Obama encouraging him to support the merger deal.

“By settling the proposed merger of AT&T and T-Mobile USA we can put thousands of Americans back to work and promote economic development across the country,” Shuler said. “I urge the President to strongly consider the vast benefits this merger will have on job creation and the economy and quickly resolve any concerns the Administration may have with the proposal.”

Among the co-signers: Rep. John Barrow, Rep. Mike Ross, Rep. Dan Boren, Rep. Dennis Cardoza, Rep. Joe Baca, Rep. Leonard Boswell, Rep. Ben Chandler, Rep. Jim Costa, Rep. Henry Cuellar, Rep. Mike McIntyre, Rep. Mike Michaud, Rep. Collin Peterson, Rep. Loretta Sanchez, and Rep. David Scott.

AT&T currently also has support for their deal from 11 states, many which receive very little service directly from T-Mobile: Alabama, Arkansas, Georgia, Kentucky, Michigan, Mississippi, North Dakota, South Dakota, Utah, West Virginia and Wyoming.

A court hearing is scheduled for Sept. 21 to discuss settlement options.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/KFOR Oklahoma City ATT T Mobile Merger 9-19-11.mp4[/flv]

KFOR in Oklahoma City explores the latest developments in the T-Mobile/AT&T merger case.  (2 minutes)

When broadband customers sign up for service under a “price protection agreement,” also known as a “term contract,” “minimum commitment,” or “price-lock guarantee,” few consumers realize their broadband provider will typically renew the contract for an additional one to three year term automatically “for your convenience.”

These Automatically Renewable Contracts (ARCs) require customers to notify their ISP, typically in writing, at least 30 days before their term commitment expires to prevent the provider from renewing the agreement, subjecting customers to stiff early cancellation fees if they want to change providers.

Now the independent UK regulator and competition authority Ofcom has ruled those agreements deliver few benefits to the consumers locked into them and plans to ban them effective Dec. 31.

Richards

Ofcom’s chief executive Ed Richards said: “ARCs raise barriers to effective competition by locking customers into long-term deals with little additional benefit.”

At least 15 percent of British broadband consumers are currently signed to renewable contracts, which have been used by BT, Adept Telecom, Axis Telecom, Eze Talk and iTalk.

“Our research, in particular the econometric analysis that we commissioned on the switching behaviour of BT customers, indicates a clear causal link between ARCs and reduced levels of consumer switching,” Ofcom said in a statement. “We believe this effect stems from the opt-out nature of the process for contract renewal and that any example of such a contract is likely to be harmful to consumers and to effective competition.”

Providers love the auto-renewing contract because most customers long forget about them until they call to cancel service, at which point they face a stiff cancellation fee that can run into the hundreds of dollars.  Faced with that kind of exit fee, many consumers opt to stay with their existing provider, despite better offers from a competitor.

The contracts are also popular in North America, particularly with telephone companies who face increased competition from cable providers.  If a telephone company DSL product loses the speed war with an area cable competitor, holding customers in place with term contracts assures phone companies consumers will stay put.  The more services bundled into a customer contract, the higher the termination fee, especially if a signup bonus was provided.  Phone companies have tried offering free netbook computers, free satellite television, and free HD televisions as part of contract bundles that can last as long as three years.  Some have cancellation fees of up to $500 if a customer leaves early.

Ofcom hopes the retirement of these contracts will encourage consumers to shop around for the best possible broadband and landline deals that serve their specific needs.