All too often customers who sign up for “price lock” agreements or 12-24 month service contracts find themselves trapped when a provider finds a clever way to increase rates or introduce usage caps and still subject customers to a steep early termination fee if they want out of the deal.

In the United Kingdom, the Office of Communications (Ofcom) wants providers to tell customers at least 30 days before any price or service changes and show customers how to cancel the contract and leave without a termination fee.

Ofcom says its new rules on ISPs, landline and mobile operators are designed to stop mid-contract price hikes or service reductions.

The regulator is responding to multiple consumer complaints where providers have used “wiggle room” in contract language designed to let customers off the hook if a provider attempts a “materially adverse” change mid-contract that a customer does not accept. This language is common in both the United Kingdom and North America.

Several years ago, providers on both sides of the Atlantic began adding non-regulatory fees to customer bills to hide rate increases. The charges often sound “official,” but are in fact not. When customers demanded to cancel over charges like “regulatory recovery fees,” “rights of way fees,” or other costs of doing business now broken out on their bills, many successfully invoked the “materially adverse” clause of their contract to escape termination fees.

These days wireless carriers have gotten wise to that. When a customer now calls to demand out of their contract, companies refuse, claiming the small dollar amounts involved are not “material” changes. They often reinforce this by offering to credit a persistent customer’s account for the amounts involved.

Ofcom considers this practice an end run around the contract, and wants it stopped. The regulator is notifying providers it is now likely to regard any and all price increases of any kind to be “materially adverse/detrimental.” The regulator warns it will also treat reductions in voice minutes, texting, and data usage allowances the same as a price hike.

“Ofcom is today making clear that consumers entering into fixed-term telecoms contracts must get a fairer deal,” said Claudio Pollack, director of Ofcom’s Consumer Group. “We think the sector rules were operating unfairly in the provider’s favor, with consumers having little choice but to accept price increases or pay to exit their contract. We’re making it clear that any increase to the monthly subscription price should trigger a consumer’s right to leave their contract – without penalty.”

Ofcom has also found that some consumers were caught unawares by mid-contract price rises and were not sufficiently warned this could happen when they signed up. In some circumstances, consumers may also have not been made adequately aware of their right to exit their contract, or of the amount of time they had to exercise this right.

To address this problem, the new rules explain how providers should communicate any contract changes, pricing or otherwise, to consumers.

These measures include ensuring that letters or e-mails about contract changes should be clearly marked as such, either on the front of the envelope or in the subject header.  Notifications of price increases must also be clear and easy to understand and make customers aware of the nature and likely impact of the contract change.

Where relevant, information about the customer’s right to exit the contract should be made clear upfront – for example, on the front page of a letter or in the main e-mail message, rather than via a link. The period within which consumers can cancel their contract (Ofcom’s guidance sets out that providers should allow consumers 30 days) should also be made clear.

The new rules take effect in 90 days.

Are you still waiting for that $100 gift card Comcast promised to customers who signed up or upgraded service with their marketing partner Verizon Wireless? If you’re feeling uneasy about the situation, consider how to ask for forgiveness from a friend, acknowledging any misunderstanding and expressing your sincere regret for any inconvenience caused.

You are not alone. Multiple complaints about missing gift cards point to a rebate form promising a gift card six to eight weeks after submission, but the rebate processor has extended that time repeatedly — first to 8-10 weeks, then 10-12 weeks, and now 16-17 weeks… and counting.

If you forgot about the rebate, you may never receive it without contacting Comcast to follow-up. Others found their rebate request rejected by the rebate processor for a variety of reasons.

Customers should have made a copy of their rebate submission to keep for their records. If your rebate still has not arrived, call Comcast at 1-866-347-2229 to escalate the matter and speed up the arrival of your missing gift card.

Although high dollar rebates for cell phones are not uncommon, a large percentage of customers eligible for the rebate never follow through with a properly completed, timely rebate submission.

In many cases, a rejection notice can be overcome by contacting the cable company’s customer service department directly. Many cable companies will credit your account for the amount of the missing rebate.

Some Clearwire customers remain unhappy when speeds are throttled to “manage” the network.

Clear (formerly known as Clearwire) has announced a general rate increase of about 10 percent for customers using its legacy 4G WiMAX broadband service.

As a result, most customers will pay about $5 more per month for fixed wireless or “on the go” broadband service.

“We instituted this to remain competitive and manage our costs,” a Sprint representative told Broadcasting & Cable. “Like our competitors, we must respond to customer trends, and provide a good user experience, and as a result we will make adjustments to fees and services from time to time. Our offer is still comparable to other offerings in the marketplace.”

Some customers would argue with Sprint’s definition of a “good user experience,” as complaints continue about heavy-handed throttling of Clear’s service that makes high bandwidth applications painful or impossible to use in the evening.

Stop the Cap! reader Akos contacted us this week to complain Clear still advertises and contracts for “unlimited data and top speeds,” while not exactly being upfront about targeting certain traffic for a prime time speed throttle that effectively keeps customers from streaming video.

“They openly admit their service is being throttled by software at each tower site that activates when it detects streaming video services like Netflix, reducing speed from 1.3Mbps to as little as 20kbps, rendering it unusable,” said Akos.

The speed throttle is usually active from 8pm-1:30am daily, when traffic is anticipated to be highest. Clear speaks about its network management speed throttle in the fine print: its Acceptable Use Policy.

Akos complains Clear’s speed throttle makes it easy to blame the streaming service, not Clear itself, because customers running speed tests will not see throttled speeds.

“It fools people to think the problem is on their end or with the streaming service, so customers don’t complain to Clear,” says Akos.

As a result, people using streaming video services get about 30 seconds of uninterrupted video before the throttle kicks in bringing extensive buffering delays.

Clearwire’s Speed Throttle Subject of Lawsuits

Clear’s own 2010 marketing promises unlimited usage with no speed reductions, like those “other” providers.

Clearwire’s speed throttle has been a part of life with the wireless service since 2010. Clearwire had significant legal exposure over its choice of network management because the company routinely advertised “unlimited service” with no speed throttles or overlimit fees. At least three lawsuits were filed against the company for its undisclosed throttling practices, eventually condensed into a single class action case that was finally settled last month.

Under the terms of the settlement, Clear admits no wrongdoing, but will clearly disclose it uses “network management” practices — a term that generally means usage caps and/or speed throttles — and will give customers information about the speeds they can expect when the throttle is active. As of today, Clear has not done that. Clear also volunteered to suspend term contracts and waive early termination fees for customers complaining about speed issues.

At least seven law firms handling the case will split a total award fee of $1,887,792.91 and expenses of $62,207.09. Individual representative plaintiffs each receive up to $2,000. Everyone else identified as part of the class action case that returned a claim form prior to Jan. 3, will receive an average of less than $30:

• a 50% refund of any early termination fee charged after a customer canceled service because of speed throttling;
• a rebate of $14 for customers signing up for Clearwire before Sept. 1, 2010 and experiencing speed throttling or a rebate of at least $7 for Clearwire customers signing up on or after Sept. 1, 2010;
• plus varying amounts for each month of service prior to Feb. 27, 2012 during which Clearwire’s records show it throttled a customer’s Internet speed. Customers throttled at 0.25Mbps will receive $5.00 for each month throttled, 0.60 Mbps: $3.00, and 1.0 Mbps: $2.00.

Court documents reveal of the 2,733,406 customers identified in Clearwire’s records as being speed throttled, only 83,840 submitted timely claims as part of the class action case. This represents a claims rate of about 3.1%. Of those, 76,199 were for speed throttling, 2,331 were requests for reimbursement of early termination fees.

The Future of Clear’s WiMAX and Sprint’s 4G

Sprint purchased the assets of Clearwire Corporation in July, rebranded the network “Clear,” and as of the end of August, stopped selling WiMAX devices to customers. Although Clear will still activate existing equipment, potential new customers are being marketed broadband plans on the Sprint network instead.

Former Clear dealers have received word Sprint plans to eventually decommission its acquired WiMAX network as early as 2014, most likely by gradually converting portions of the 2.5GHz spectrum Clear’s WiMAX service now uses in favor of Sprint’s 4G LTE service in urban and high congestion areas. Clearwire itself was in the process of adopting a variant of 4G LTE technology that would gradually replace the outdated WiMAX standard when Sprint acquired the company.

Although Sprint runs its own 3G network, it partnered with Clearwire to provide 4G WiMAX for Sprint customers. In 2011, Sprint announced it would stop selling devices with built-in support for WiMAX and announced it would launch its own 4G LTE network. Sprint will adopt the same version of LTE other North American carriers are using: FD-LTE, or Frequency Division LTE, which requires one transmit channel and one receive channel. But it will also support and continue Clearwire’s upgrade to TD-LTE, or Time Division LTE, a slightly different standard that supports receiving and transmitting signals on a single frequency at slightly different time intervals, providing enhanced spectrum efficiency. At least 5,500 towers should be active with TD-LTE service by the end of this year. End users will care only to the extent their devices support one or both standards.

Sprint’s 4G LTE rollout will depend primarily on higher frequency spectrum that is disadvantageous indoors and over extended distances. Sprint’s competitors AT&T and Verizon Wireless primarily depend on lower 700MHz frequencies that penetrate buildings better and can serve a larger coverage area. But a combination of Sprint and Clearwire’s spectrum assets give Sprint the most wireless spectrum of any U.S. carrier, which means potentially faster speeds and more capacity.

• 1900MHz: Sprint’s primary 4G FD-LTE service is now available in 151 cities on more than 20,000 cell towers;
• 2500MHz: Now used by Clear’s legacy WiMAX network, will see a transition towards Sprint’s TD-LTE service which will be targeted to urban and high congestion areas from “small cell” sites;
• 800MHz: The former home of now-shuttered Nextel, Sprint will eventually launch FD-LTE service on this band which will offer better indoor and marginal area reception.

Customers can expect devices that support both FD-LTE and TD-LTE in 2014.

CenturyLink is seeking “greater flexibility” to set its own prices, terms and conditions of service without a review by Washington State regulators, even as its broadband customers complain about bait and switch Internet speeds and poor service.

Three years after the Monroe, La., based independent phone company purchased Qwest — a former Baby Bell serving the Pacific Northwest — CenturyLink continues to lose customers to cell phone providers and cable phone and broadband service. Since 2001, CenturyLink and its predecessor have said goodbye to 60 percent of their customers, reducing the number of lines in service from around 2.7 million to just over 1 million.

CenturyLink is apparently ready to lose still more after upsetting customers with a notice it intended to seek deregulation that could lead to rising phone bills.

Docket UT-130477, filed with the Washington Utilities and Transportation Commission (WUTC) proposes to replace currently regulated service with what CenturyLink calls “an Alternate Form Of Regulation.” (AFOR)

If approved, CenturyLink will “normalize” telephone rates in Washington State, language some suspect is “code” for a rate increase. For CenturyLink customers in cities like Seattle, Spokane, and Tacoma, the maximum rate permitted for basic phone service for the next three years will be $15.50 (unless a customer already pays more), before calling features, taxes, and surcharges are applied. Most observers, including the state regulator, suspect CenturyLink will limit rate hikes to $1-2 if approved. A higher increase might provoke more customers to leave.

Washington residents already pay the nation’s second highest taxes on wireless service. Now landline customers also pay more. (Graphic: The Spokesman)

“We don’t think they can do much because, in our view, all (a big rate increase) is going to do is accelerate people dropping the landline into their homes,” Brian Thomas, a spokesman for the Washington Utilities and Transportation Commission told The Spokesman-Review. “A lot of people are cutting the cord.”

Frontier Communications, which previously won its own case for deregulation within its service areas including Everett, Wenatchee, and Tri-Cities, raised rates about $1 beginning this month.

A spokesman for the company confessed Frontier’s phone service is becoming obsolete.

“It’s safe to say plain old telephone service is in the process of becoming archaic for some people,” Frontier’s Carl Gipson said. “Five years from now, it will be almost – but not quite – extinct.”

Every rate change seems to provoke a review of whether landline service is still necessary.

Earlier this year, CenturyLink jumped on board legislation that purposely increased phone rates by several dollars a month by removing the sales tax exemption on residential telephone service. Wireless companies did not enjoy the same exemption and sued for parity.

A confidential settlement with state regulators made Washington phone customers, instead of telecom companies, liable for the sales tax starting in August. As a result, some residential phone bills went up at much as $5 based on retroactively charged sales tax.

Customers sticking with CenturyLink often say it is the only broadband provider in rural towns across the state. Although better than satellite broadband, the lack of regulatory oversight and technology investments have allowed CenturyLink to sell Internet speeds it cannot provide to customers.

At a hearing held this week by the San Juan County Council, members criticized CenturyLink officials on hand for selling fast service but delivering slow speeds to the group of islands between the mainland of Washington State and Vancouver Island, B.C.

Hughes

“Last night I did a speed test at my house and I am paying for 10Mbps but only getting 4.74Mbps,” complained Councilman Rick Hughes (District 4 – Orcas West). “I am paying for 10 and I am only getting 5Mbps, so how is that fair? There has been a ton of frustration over the last two years we have worked on this broadband issue. Everywhere I go and every meeting I talk to all I hear is complaints about CenturyLink. No matter what they are paying for, it’s a poor broadband connection to the end customer.”

CenturyLink provides broadband to 88% of the territory the company serves in Washington. Like most telephone companies, CenturyLink relies on DSL in much of its footprint and has upgraded central offices, remote equipment, and the telephone lines that connect them. On the San Juan Islands, most customers used to receive 1-3Mbps, but CenturyLink claimed at this week’s hearing it spent billion on infrastructure improvements that can now deliver faster Internet service across the state. In San Juan County, CenturyLink claims:

• 58% of all qualified addresses were upgraded to 10-25Mbps;
• 66% now qualify for more than 10Mbps (but less than 25Mbps) versus 46% prior to upgrades;
• 29% of customers now qualify to sign up for 25Mbps service.

CenturyLink warned the council its speed claims were not to be taken literally, noting DSL “speed is dependent on distance from equipment; speeds drop quickly as distance increases.”

Hughes told CenturyLink officials residents appreciated the investment, but customers were still disappointed after being promised higher speeds than actually received.

“When people call customer service, there is always an excuse about why there is a problem,” said Hughes. “If people are paying for something, they want to receive it.”

“For our long-term financial interests in this county, we need to have reliable 10-25Mbps service to customers on any part of the islands,” Hughes added. “My goal has always been 90+ percent should be able to get 25Mbps or better connectivity in the county.”

The problem for CenturyLink is the amount of upgrade investment versus the amount of return that investment will generate. San Juan County is disconnected from the mainland and collectively house only 15,769 residents. But it is also the smallest of Washington’s 39 counties in land area, which can make infrastructure projects less costly.

CenturyLink committed to continue investment in its network “where economically feasible.”

San Juan County’s Orcas Power & Light Cooperative (OPALCO), a member-owned, non-profit cooperative electric utility may have a partial solution to the problem of meeting Return on Investment requirements.

OPALCO originally proposed a hybrid fiber-wireless system designed to reach 90% of the county with a $34 million investment, to be built over two years. When completed, all county residents would pay a $15 monthly co-op infrastructure fee and a $75 monthly fee for broadband and telephone service. To gauge interest, OPALCO asked residents for a $90 pre-commitment deposit. By the annual meeting in May, the co-op admitted only 900 residents signed up and it needed 5,800 customers to make the project a success.

Some residents balked at the high cost, others did not want wireless broadband technology, and some local environmental activists wanted OPALCO to focus on clean, affordable energy and avoid the competitive broadband business.

The lack of commitment forced the co-op to modify its broadband plans, offering a “New Direction” to residents in June 2013.

OPALCO elected to stay out of the ISP business and instead announced a public-private initiative, providing fiber infrastructure to existing service providers. In effect, the co-op will cover the cost of building fiber extensions where CenturyLink is not willing to invest. For a $3-5 million investment from the co-op, ISPs like CenturyLink will be able to commission OPALCO to build fiber in the right places to make DSL service better. CenturyLink would have non-exclusive rights to the fiber network and would have to pay the co-op a service lease fee.

Unlike ISPs in other communities that have shunned publicly funded fiber infrastructure, CenturyLink says it will contemplate a trial — buying bandwidth from OPALCO instead of enhancing its own fiber middle mile network — to test what level of improved service CenturyLink can offer customers.

Regardless of CenturyLink’s plans, OPALCO is moving forward installing limited fiber connections as part of an effort to develop a more modern electric grid.

“Our data communications network brings exponential benefit to our membership,” OPALCO notes. “It includes tools that allow the co-op to: control peak usage and keep power costs down, remotely manage and control the electrical distribution system, manage and resolve power outages more efficiently, integrate and manage community solar projects and improve public safety throughout the county.”

There are some drawbacks, reports Wally Gudgell from The Gudgell Group.

“It will take longer to implement, and will impact fewer businesses and households,” Gudgell writes. “While about two-thirds of the islands will eventually be covered, more remote areas will have to work with a local ISP and potentially pay more for service.  DSL coverage for homes that are further than 15,000 feet from CenturyLink fiber-served distribution hubs will be challenging. Some homeowners may need to pay for fiber to be run to their homes by Islands Network (fiber direct is costly, estimated at $20/foot).”

If you thought waiting three days for a service call was too long, you haven’t talked with Tod Robberson, editorial writer for the Dallas Morning News. AT&T has scheduled his U-verse installation 23 years from now.

Robberson has been buried in AT&T promotional mailings pushing its U-verse fiber to the neighborhood service he was ready to sign up for two years ago, but wasn’t yet available in his neighborhood. Dozens of mailings arriving this summer indicated that finally changed and he was ready to see the back of Time Warner Cable:

I phoned one day after receiving my first notice. I signed up immediately for service. The friendly sales person told me because of high demand, she couldn’t set an installation date for sooner than two weeks. Whatever. Fine. We agreed on August 19, somewhere between 9 and 11 a.m. I couldn’t wait.

Then, on August 16, they called with bad news. They needed to delay the installation for another week. Big disappointment, but I could live with it, I thought.

A week later, they called again and said there was another delay. The lines in my area needed “conditioning.” Each week since then, I’ve received a call from an AT&T person telling me about the conditioning problem. I finally offered to get out my own bottle of conditioner and do it myself. They didn’t get the joke.

Finally, today, I escalated. I talked to Gilbert in Complaints. Gilbert the Problem Solver. He heard me out. I told Gilbert that AT&T had me at hello. I was just dying to get U-verse and was very frustrated that no one at AT&T would listen. I could swear he even giggled a little when I made the “bottle of conditioner” joke. Then he did some checking around and told me that, well, truth be told, I could be waiting another year before they got around to installing my service. That’s right, one year.

Turns out that Gilbert was optimistic. I went online today with AT&T just to make sure I didn’t misread the notice I got from AT&T. Did they really tell me that service was now available? Well, I couldn’t have signed up if it wasn’t. AT&T’s system is set up to block you if your neighborhood isn’t ready.

But now, the “due date” on my installation has changed. It reads: 12/31/2036.

Dallas is home to the headquarters of AT&T and was an early adopter of U-verse. But AT&T has won the right under state law to decide when and where it chooses to deploy the service, leaving a large number of Dallas residents waiting since its introduction in 2010.

For the foreseeable future, Robberson’s tree-infested, satellite-unfriendly neighborhood is stuck with one choice for pay television and broadband: Time Warner Cable.