Home » consumers » Recent Articles:

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)

Department of Justice Wants T-Mobile and Sprint to Create a New 4th National Wireless Carrier

Officials in the Justice Department are asking T-Mobile and Sprint to spin off a portion of their networks to lay the foundation to create a new national wireless carrier, with its own network, as a deal condition for approving their $26.5 billion merger.

Bloomberg News reports the launch of a new “fourth largest” U.S. wireless company would help win Justice Department approval for the merger deal, according to unnamed sources. Such a network could be created with the spinoff of Sprint’s Boost Mobile, a prepaid MVNO dependent on Sprint’s wireless network. Since a considerable percentage of Sprint’s existing network was expected to be scrapped after the merger won approval, Sprint could theoretically give up part of its network that would have been deemed redundant anyway to appease regulators. But Wall Street is unlikely to approve of the prospect of creating a new competitor, especially in a transaction designed to reduce the number of wireless competitors in the United States.

Boost Mobile, according to Reuters, could be worth $3 billion in a sale — potentially more if an already-built wireless network is included in the deal.

Critics wonder why the Justice Department would approve a deal merging T-Mobile and Sprint at all if officials were worried about reducing the number of wireless options for consumers. Industry observers suspect T-Mobile and Sprint would be unlikely to support such a network spinoff plan, and the resulting emergence of a new carrier likely to be even smaller than Sprint would leave it in a difficult position in a marketplace that would be dominated by three much larger national carriers planning to spend billions to develop 5G networks.

A source told Bloomberg News Justice Department antitrust chief Makan Delrahim “still wants four carriers” and remains unmoved by T-Mobile and Sprint’s arguments that combining operations would lead to more competition and lower prices for consumers. 

Many state attorneys general remain opposed to the merger, fearing that it will lead to less competition and higher prices.  They are waiting for the Justice Department to make its decision before contemplating lawsuits to block the merger if the deal wins approval in Washington.

Big Telecom and Utilities Schmoozing New Republican Lawmakers and Governor in Ohio

Phillip Dampier February 7, 2019 AT&T, Charter Spectrum, Public Policy & Gov't 1 Comment

Gov. Mike DeWine and his wife, Francis.

Ohio’s incoming Republican state officeholders are being showered in gifts, cash, food and drink to celebrate their 2018 election victories and get their start of the 2019 legislative term off ‘in the right direction’, all courtesy of Ohio’s biggest telecommunications and for-profit utility companies.

It’s the perfect opportunity for powerful state lobbyists to introduce themselves and get their feet in the doors of the incoming Republican officeholders that dominate the governor’s office and state legislature. At least $1.7 million in gifts and cash were directed to incoming Gov. Mike DeWine and his running mate, Lt. Gov. Jon Husted alone.

Some familiar companies donated the maximum $10,000 apiece to the DeWine-Husted Transition Fund, a special set-aside account to cover inauguration activities and allow incoming politicians to count stacks of $100 bills. AT&T and Charter Communications — the dominant phone and cable companies in Ohio — each maxed out their contributions just before DeWine announced a new industry-friendly appointment to the Public Utilities Commission of Ohio (PUCO) and prepares the 2019 budget for the Consumers’ Counsel, an underfunded state office that represents the interests of Ohio consumers dealing with problem utilities, phone, and cable companies.

DeWine did not disappoint his corporate benefactors, this week announcing the appointment of Samuel Randazzo, a retired lawyer with a 40 year history of representing the interests of utility companies, as the newest commissioner at PUCO.

“We are disappointed in this choice, as Mr. Randazzo has a lengthy career fighting against renewable energy and energy efficiency in Ohio,” Heather Taylor-Miesle, president of the Ohio Environmental Council Action Fund, said in a release. “This move is out-of-step with the rest of the Midwest, where governors are committing to the future of energy, instead of the past.”

Randazzo has a long record of opposing utility mandates or regulations that interfere with the industry’s ability to generate profits, and is expected to be one of the friendliest regulators for utility companies in recent Ohio memory. Where did DeWine get Randazzo’s name? Scott Elisar, an attorney in Randazzo’s former law firm, was also a member of the nominating council that presented the list of four candidates for DeWine to consider for the PUCO position.

Consumer groups are also concerned that DeWine will soon appoint another member of the Commission after current PUCO Chairman Asim Haque leaves on March 1 to pursue a new job opportunity.

Randazzo

“We recommend that [his] seat be filled with a bona fide representative of residential consumers, especially considering that the current PUCO commissioners include two former utility representatives,” a statement from the Office of the Ohio Consumers Counsel said this week.

Other newly elected officials are also getting a taste of the action, with donor contributions limited to $2,500 each. Considering the number of special interests writing checks this year, several members of DeWine’s administration are also enjoying considerable free cash, despite the contributions limit: Attorney General David Yost of Columbus, $33,500; state Auditor Keith Faber of Celina, $29,000; Secretary of State Frank LaRose of Hudson, $30,500; and state Treasurer Robert Sprague of Findlay, $15,000.

An early test of what corporate influence can buy from Ohio legislators suggests it does not cost very much to participate in “pay for play” politics. FirstEnergy Solutions, Ohio’s bankrupt utility that reported “massive financial problems” last spring, still managed to scrape together $172,000 in campaign contributions for Ohio House candidates — mostly Republican, and another $565,000 for the Republican Governors Association during the 2018 election.

FirstEnergy spent much of last year lobbying the legislature to stick ratepayers with a $30 annual rate increase to bail out some of its unprofitable power generation facilities. It failed, along with a more comprehensive proposed corporate bailout package worth $2.5 billion. FirstEnergy became one of DeWine’s biggest supporters in his race for governor. DeWine, in turn, has signaled his support for the FirstEnergy bailout rejected last year. That could explain why DeWine received five times more money in contributions from the utility than his Democratic opponent.

On the first day of Ohio’s new 2019 legislative session, by sheer coincidence, the General Assembly announced a new standing committee on power generation, which will have the authority to approve a new bailout package for the troubled utility. FirstEnergy also announced it was abandoning some of its more costly energy producing facilities. Decommissioning costs will likely be financed by new surcharges on Ohio residential and business customer utility bills.

J.D. Power Survey Rates Charter Spectrum and Frontier Among Worst in Satisfaction

Charter Spectrum and Frontier Communications are among America’s most-hated telecom companies, especially east of the Mississippi River, according to the latest J.D. Power 2018 Residential Satisfaction Study that measures customer satisfaction scores across four geographic regions of the country.

Among the best for internet access, AT&T/DirecTV took top honors in their wireline service areas in the south, north-central, and parts of the western United States where gigabit fiber upgrades have dramatically improved service over older DSL and U-verse internet products. In the east, Verizon’s FiOS network was by far the best rated ISP.

“It is clear wireline companies are putting the customer experience first, and it is paying off,” said Ian Greenblatt, Technology, Media & Telecom Practice Lead at J.D. Power. “Finding ways to make call centers more efficient and clarifying billing statements and contracts are just a few relatively easy things companies can be doing to improve the customer experience. Additionally, methods in which companies are communicating service and product updates have been evolving with the technology itself and has proven to be a valuable approach to high customer satisfaction.”

Also scoring above average for internet service:

  • West: Cable One, Cox Communications, Spectrum, Comcast/XFINITY
  • South: Comcast/XFINITY

In the eastern and north-central regions, Spectrum scored second worst for internet access, only avoiding last place because Frontier Communications, which relies primarily on DSL service in these areas of the country, did worse.

In the south, Suddenlink scored poorly, but not as bad as regional phone companies Frontier, CenturyLink, and bottom-rated Windstream, which all offer DSL service.

In the west, customers especially loathed CenturyLink, Mediacom — Consumer Reports’ perennial favorite for worst cable operator, and dead last Frontier.

Comcast appears to have improved its customer satisfaction scores slightly when compared against almost 20 years of earlier satisfaction studies performed annually by J.D. Power. In contrast, Frontier continues its decline in customer satisfaction, predominately in areas where it still only offers DSL service. Charter’s acquisition of Time Warner Cable and Bright House Networks appears to have done few favors for consumers, who dislike Charter Spectrum just as much, if not more than its predecessors.

The ratings are based on responses from 27,765 customers that returned surveys evaluating cable/satellite/telco TV, internet access and landline telephone providers. Customers were asked to rank each provider on network performance and reliability, cost of service, billing, communication, and customer service.

Exploring the FCC’s Latest Proposal to “Streamline” Rules; And What About That $225 Complaint Fee?

Pai

In an effort to “streamline” procedural rules and paperwork at the Federal Communications Commission, FCC Chairman Ajit Pai is proposing to theoretically weaken the existing informal complaints process, leaving consumers with unresolved complaints only one firm option — paying a $225 filing fee to pursue a formal complaint at the Commission regarding their internet service provider.

“This Order streamlines and consolidates the procedural rules governing formal complaints against common carriers, formal complaints regarding pole attachments, and formal complaints concerning advanced communications services and equipment,” the FCC proposal reads. “We base these rule refinements on 20 years of experience adjudicating formal complaints and conducting mediations. We find that these rule revisions will eliminate inconsistencies among various complaint proceedings, promote a fully developed record in each case, foster disposition of formal complaints in a timely manner, and conserve resources of the parties and the Commission.”

With thousands of informal complaints about the nation’s cable, phone, wireless, and satellite companies arriving at the FCC every week, and millions of comments to process on hot-button topics like net neutrality, the federal agency is trying to distance itself from being a government’s version of the Better Business Bureau. Under the Obama Administration, FCC Chairman Tom Wheeler invited consumers to bring their complaints about internet service providers to the FCC’s attention. In 2015, the FCC launched a Consumer Help Center that, like Pai’s latest proposal, also claimed to “streamline the complaint system.”

FCC’s online Complaint Center

“The first responsibility of the FCC is to represent consumers,” the agency noted in a 2015 blog post. “Facilitating consumer interface with the Commission is a major component of that responsibility.”

Three years ago, the FCC stepped up involvement in the consumer complaints process to keep an eye on the marketplace and its providers — to see whether consumers were being well-served and ferret out companies that were not responsive or “bad actors” in the industry. The best way the FCC determined that was to track and measure consumer complaints.

“The information collected will be smoothly integrated with our policymaking and enforcement processes,” the FCC wrote in 2015. “The result will be better results for consumers and better information for the agency. The insights we gain will help identify trends in consumer issues and enable us to focus Commission time, money, and resources on the issues that matter most.”

The proposed changes supported by Chairman Pai are subtle, but in the regulatory world, a few words can mean a lot — something the New York State Public Service Commission and Charter/Spectrum are debating right now. A single appendix in the 2016 Merger Order approving Charter’s acquisition of Time Warner Cable and the cable company’s interpretation of it led to threats by the PSC to de-certify the multi-billion dollar merger.

Matthew Berry, the FCC’s chief of staff, promptly attacked as “fake news” a partly specious article on the subject published by The Verge (which was substantially modified from the original this afternoon).

But Berry ignores the fact the proposal states up front it amends or changes current rules. Whether the FCC intends to make changes in its day-to-day operations as a result is a separate matter from the rules that govern the FCC’s work. The former can be changed almost at will, the latter cannot.

The section that has sparked controversy this week is: § 1.717 Procedure. It details what happens when the FCC receives an informal complaint from a consumer, either from a web-based complaint form or written complaint:

Current Language:

The Commission will forward informal complaints to the appropriate carrier for investigation. The carrier will, within such time as may be prescribed, advise the Commission in writing, with a copy to the complainant, of its satisfaction of the complaint or of its refusal or inability to do so. Where there are clear indications from the carrier’s report or from other communications with the parties that the complaint has been satisfied, the Commission may, in its discretion, consider a complaint proceeding to be closed, without response to the complainant. In all other cases, the Commission will contact the complainant regarding its review and disposition of the matters raised. If the complainant is not satisfied by the carrier’s response and the Commission’s disposition, it may file a formal complaint in accordance with § 1.721 of this part.

Proposed Language:

The Commission will forward informal complaints to the appropriate carrier for investigation and may set a due date for the carrier to provide a written response to the informal complaint to the Commission, with a copy to the complainant. The response will advise the Commission of the carrier’s satisfaction of the complaint or of its refusal or inability to do so. Where there are clear indications from the carrier’s response or from other communications with the parties that the complaint has been satisfied, the Commission may, in its discretion, consider a complaint proceeding to be closed. In all other cases, the Commission will notify the complainant that if the complainant is not satisfied by the carrier’s response, or if the carrier has failed to submit a response by the due date, the complainant may file a formal complaint in accordance with § 1.721 of this part.

At first glance, these two sections appear nearly identical. The subtle changes relate to defining, in writing, the exact responsibilities of the FCC. Weasel words like “may,” “advise,” “in its discretion,” and “consider” are red flags. When these kinds of words replace black letter words like “will,” the rules are weakened by making them discretionary. In such cases, a decision to pursue a matter is no longer a requirement, it’s an option.

In this case, Mr. Pai is proposing to reduce the FCC’s obligations to oversee an informal consumer complaint from the moment it is received to its ultimate disposition.

Under the current complaint rules, the FCC has collected a lot of information about the nature and resolution of consumer complaints. Let’s say Nancy Smith files a informal complaint against Comcast using the FCC’s online complaint center. Right now, the FCC requires Comcast to respond to Nancy’s complaint within 30 days. Comcast knows that the FCC will be monitoring the complaint and Comcast’s response. If Comcast were to ignore the letter or dismiss it, the FCC will be watching.

Consumers getting squeezed by reduced oversight.

The high complaint rates earned by telecom companies have been fodder for regulators and politicians for years, so most companies refer complaints filed with the FCC to their highest level “executive customer service” personnel empowered to resolve complaints almost anyway they can. If Mrs. Smith is pleased with the response from Comcast, the cable operator knows the FCC sees that as well. Comcast is also sensitive to the fact the FCC might one day act on unresolved issues that generate the most complaints. Over time, statistics gathered by the FCC will reveal the companies least willing to cooperate with their customers and those most motivated to resolve issues. That could count if a company like Comcast sought a merger with another cable company with a lower complaint rate, for example.

Under the proposed informal complaint rules, the FCC’s role is effectively reduced to a complaint letter-forwarder. Nancy Smith’s letter sent to the FCC under the new rules will still be forwarded to Comcast and probably arrive with a 30 day deadline to respond, should the FCC choose to maintain that requirement. In a theoretical response to Mrs. Smith, the FCC can immediately notify her it has forwarded her complain to Comcast and regardless of the provider’s response (assuming Comcast sends one), her only recourse if she remains dissatisfied is to pursue a formal complaint — the one that involves a previously established $225 filing fee and comes with a mass of terms, conditions, and requirements comfortable only for lawyers and lobbyists.

The FCC attempts to explain away the changes in a footnote (emphasis ours):

We also clarify rule 1.717, which addresses informal Section 208 complaints. See 47 CFR § 1.717. In addition to wording revisions that do not alter the substance of the rule, we delete the phrase “and the Commission’s disposition” from the last sentence of that rule because the Commission’s practice is not to dispose of informal complaints on substantive grounds. We also add a rule memorializing MDRD’s staff-assisted mediation process, which enables parties to attempt to resolve their disputes before or after the filing of a formal complaint.”

A “practice” is not a “rule” or “requirement,” however. “Substantive grounds” is also undefined in the footnote and could be subject to interpretation. After all, Mr. Pai has also claimed that repealing net neutrality would have no substantive impact on the internet.

D.C.’s lobbyists routinely make regulatory language change suggestions on behalf of their clients.

Lobbyists are paid handsomely to urge adoption of similar, subtle modifications in regulatory rules and laws because they can establish loopholes large enough to drive a truck through. In virtually every proceeding, comments routinely focus on proposed language changes. This will be the core part of the discussion at the FCC before voting on the rule change proposal as early as tomorrow – July 12, 2018.

In practical terms, the changes are designed to subtly distance the FCC from involvement in consumer disputes with their providers. Oversight is weakened in this proposal, but more importantly, the focus of the FCC’s mandate changes from “the first responsibility of the FCC is to represent consumers” in 2015 to “if the complainant is not satisfied by the carrier’s response, or if the carrier has failed to submit a response by the due date, the complainant may file a formal complaint.” Only then, assuming a consumer successfully navigates a very complicated procedure to file a formal complaint and correctly follow notification requirements, will the FCC be compelled by the rules to stay involved with a complaint from start to finish.

Keep in mind companies that frequently have regulatory business before the FCC have staff attorneys and employees familiar with the FCC’s bureaucracy and rules. A $225 filing fee is an afterthought. For the average consumer, neither is probably true.

The likely result of the change will act as a deterrent for consumers relying on the FCC to help them resolve problems. Providers will also quickly recognize the FCC is no longer as willing to scrutinize customer complaints.

Ranking Member Rep. Frank Pallone, Jr. (D-N.J.) and Ranking Member of the Subcommittee of Communications and Technology Mike Doyle (D-Penn.), who both serve on the House Energy & Commerce Committee, quickly realized the implications of the FCC’s proposed rule changes and fired off a letter to Mr. Pai this week:

We are deeply concerned that the Federal Communications Commission (FCC) is poised to adopt a rule that would eliminate the agency’s traditional and important role of helping consumers in the informal complaint process. Too often, consumers wronged by communications companies face unending corporate bureaucracy instead of quick, meaningful resolutions. Historically, FCC staff has reviewed responses to informal complaints and, where merited, urged companies to address any service problems. Creating a rule that directs FCC staff to simply pass consumers’ informal complaints on to the company and then to advise consumers that they file a $225 formal complaint if not satisfied ignores the core mission of the FCC — working in the public interest.

At a time when consumers are highly dissatisfied with their communications companies, this abrupt change in policy troubles us.

After reviewing a lot of regulatory proceedings and comments over the last ten years of Stop the Cap!, it troubles us too.

Search This Site:

Contributions:

Recent Comments:

  • Patricia Garcia: What gets me is that despite the state aid for and requirement to expand, they have refused to expand to our home or the rest of the road which has 15...
  • Doug: Time to walk away.. The cable operators know that customers like to buy by price, not necessarily amount. There is a reason why a "one pound" coffee...
  • Tim: Comcast needs to drop the $11.99 from my contract since I am no longer getting Cinemax. Hitz is garbage. I watch the original programming on Cinemax w...
  • Dona Pruitt: I am appalled at Comcast for doing this to it's customers, especially all of the older customers. I have been with Comcast since 2005. All of you are ...
  • Willie C Branagan: iI am continually repulsed by the fact that (WEAK) New York State's Attorney General keeps providing Spectrum with extensions. They are not going to ...
  • Damien Thomas: I disagree...I recently moved back here to Rochester (my hometown) from portland Oregon- my first time out west- and they have comcast which has Xfini...
  • Nona: I would like to lodge a complaint against Spectrum Assist in North Carolina. I called on July 1, 2019 and had my sister approved based on a flier th...
  • Charles Nemitz: I ordered spectrum internet online and was given a price. My first bill had a 9.99 one time charge for self install. I pay you to self install? Somebo...
  • Paul Houle: Funny but I noticed that FTR was doing some work on the lines between my house and the CO. When I took a closer look I saw that they ran a fiber opti...
  • Phillip Dampier: I would definitely suggest people who do not like this change call, complain, and threaten to cancel Comcast unless they offer you a better deal. This...
  • Amy: It's such a scam. According to Comcast data we were using 1.5TB month, Even though we have unlimited phones through Verizon. I refused to pay and now...
  • Renee Myers: Grandfathereing people out of Cinemax is not right at all. Reduce my bill, dont give me a garbage channel that has anything worth watching!...

Your Account: