Some of Clearwire’s very first, and most loyal customers in the Pacific Northwest are receiving an unwelcome message of thanks for their years of service with the company: a massive rate increase.

The company is nearly doubling rates for customers who were promised special “lifetime” discounts for agreeing to remain with the wireless 4G broadband service, which has been experiencing financial problems recently.

D.B. in Seattle has been a Clearwire customer for years, even before the company upgraded to WiMax speeds.  In 2009, Clearwire sent him an offer he couldn’t refuse: stay with Clear and pay just $22 a month (plus $5 modem rental fee) for life.

“Of course I accepted immediately,” D.B. writes. “Then Clear [sent me a letter recently] telling me my monthly fee was going up to approximately $47 a month with the modem fee.”

D.B. has been calling and e-mailing Clearwire asking what happened to the $22-for-life promotion he has in writing from the company, but “nobody knows anything.”

Clearwire says they have improved their service recently in Seattle, but D.B. isn’t impressed.

“I’m here to tell the world that is not true,” he says. “Plus the times I’ve had this thing freeze up has greatly increased, and usually I have to unplug the modem for five minutes [to get service back].”

Mireille in Seattle managed to get an even lower “lifetime” rate from Clearwire two years ago.

“They offered me a monthly rate of $19.95 for as long as I maintained uninterrupted Clearwire service. That means forever and ever until I cancel.,” she says.  “Last week they sent me an email letting me know that they were raising my rate to $35.95 a month (that includes a $10 a month ‘long time customer discount’) and since I was such a good customer I was being offered that rate for the life of my uninterrupted Clearwire service. Sound familiar?”

Mireille calls it something else: breach of contract.

“I spoke to three different people and no one had anything to say besides that they were sorry but they were not able offer me that rate anymore.”

Customers in the Portland, Ore. area are getting similar e-mails, and The Oregonian took note:

Clearwire Corp., a wireless Internet provider that operates as Clear, is raising prices for 30,000 customers who signed up for the service soon after its 2009 launch.

The Kirkland, Wash.-based company didn’t provide details of the rate hikes, but e-mails to customers show that monthly rates for some home Internet plans will rise from $35 to $45 beginning in October.

Clearwire said the rate hike affects both home and mobile customers who subscribed when the service was first available, at a time when rates were lower or promotional prices were available.

Clearwire still offers a home Internet plan for $35 a month, but it limits download speeds to 1.5 megabits per second — one-eighth the speed of Comcast’s standard plan. Clear’s standard plan, which now costs $45, promises downloads between 3 and 6 megabits per second.

Sprint is preparing to launch its own 4G LTE network early next year in an undetermined number of markets to increase 4G speeds and compete with AT&T and Verizon.

Sprint’s existing 4G service, based on older WiMax technology that powers the Clearwire network, has not kept up with subscriber demands, and many of Sprint’s “4G”-capable markets have speeds more in common with 3G than Verizon’s LTE or AT&T HSPA+ 4G networks.  As Clearwire continues to struggle through serious financial problems (the service has not expanded into a new market since 2010), lawsuits, and disgruntled customers, Sprint isn’t waiting around for Clearwire’s own planned upgrade to TD-LTE, which would require at least $600 million in financing to undertake.

Instead, Sprint is deploying the same technology used by Verizon for its LTE network.

CNET reports Sprint will initially use its G-block spectrum (1900MHz) for its LTE network, but the most robust coverage will come in 2013 when Sprint retires the Nextel iDEN network which currently resides in the 800MHz band, more suitable for longer range reception.

Sprint says the 4G LTE upgrade is all part of its Network Vision plan, which upgrades virtually the entire Sprint network at a cost of $4-5 billion.  But shareholders aren’t reacting over Sprint’s LTE spending, because it is included in the earlier budget already disclosed to Wall Street.

For consumers, the upgrade will mean the company that first embraced 4G will once again deliver speeds worthy of that label.  Sprint customers across the country have reported network speeds have suffered as more customers have piled on Sprint’s and Clearwire’s network.  Clearwire will remain a Sprint partner, but that wireless provider will increasingly depend on Sprint’s network, a reversal of Sprint’s current dependence on Clearwire WiMax for their existing 4G service.  Clearwire may ultimately be unable to finance its own upgrades.

Sprint also announced it will keep its unlimited smartphone data plans, because they attract customers from AT&T and Verizon who do not want limited-use plans.  But preserving unlimited data comes at a cost.  Sprint has been cutting perks all month:

1. Sprint nearly doubled its early termination fee from $200 to $350 effective Sept. 9.
2. Sprint slashed its satisfaction guarantee program for new customers from 30 to 14 days on Sept. 16.  Sprint’s guarantee allows new customers the opportunity to test Sprint’s network before committing to a two-year contract.  The company also now expects to be paid for whatever airtime charges were incurred during the trial.
3. Sprint has announced it is ending its Premier Program Dec. 31.  Premier gave customers who spend more than $89 a month on an individual cell plan the opportunity to upgrade their phones annually, penalty-free.  Members also received free minutes, discounts on accessories, early buying opportunities for the newest phones, and regular plan reviews.  Instead, customers will be dropped into the same New for You^SM Upgrade Program lower spenders receive.  But Sprint will be changing that program too:

Unlimited data... for now.

On October 2, the following changes to our New for You^SM Upgrade Program will take effect:

• New lines of service and existing customers who upgrade on or after October 2, 2011 will receive future upgrades after 20 months;
• $75 and $25 upgrade discounts will no longer be available for customers signing up for a 1-year agreement or 2-year agreement after 12 months or signing a 1-year agreement after 22 months.

Additional information for existing customers. As of October 2:

• If you’ve already qualified for a full upgrade, nothing changes. When you sign up for a new 2-year agreement and take your device offer, future upgrades will be available after 20 months;
• If you haven’t qualified for your full upgrade yet, to receive a discount you’ll wait until you qualify for your full upgrade at 22 months.

On Oct. 5, Sprint is expected to introduce the Apple iPhone on its network for the first time.  Some analysts predict iPhone will be the catalyst to drive Sprint’s unlimited data plan into the ground, because the phone has a reputation for being a favorite for heavy data users.  iPhone 5 will remain dependent on 3G networks for connectivity outside of Wi-Fi, which could drive data usage higher than any other Sprint phone.  Should that overwhelm Sprint’s 3G network before its 4G service enjoys a widespread rollout (and Apple introduces a phone that works on 4G), Sprint may find itself limiting data usage as well, as least on its 3G network.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Welcome to 4G from Sprint.flv[/flv]

Sprint’s promotional video promoting its current 4G WiMax network, powered by Clearwire.  (3 minutes)

Company-owned store or third party reseller?

Customers who see the logo of their favorite wireless phone company on a storefront might do better to look a little closer to determine if they are doing business with a company-owned store, or a third-party reseller.  A Bakersfield, Calif., man quickly learned the difference when he bought a mobile broadband service plan from Go Wireless that Verizon says no longer exists.

Allan Fox found out the hard way when his first bill arrived with a steep overlimit fee attached, and without the broadband plan he signed up for.

Fox purchased the discontinued plan from Go Wireless, a third party reseller of Verizon Wireless services.  Fox thought he was purchasing a 3GB plan for $35, with a two-year service contract.  Verizon thought otherwise, and so began weeks of a runaround between Fox, Go Wireless, and Verizon.

It turned out that Verizon no longer offered the plan Fox bought from what he thought was Verizon Wireless itself.  Go Wireless is one of several independent third party companies that resell Verizon Wireless service, often with their own terms and conditions that include early termination fees owed not just to Verizon, but also to Go Wireless.

Go Wireless’ retail stores prominently feature Verizon Wireless’ logo, with their own logo appearing in reduced size, next to a message indicating they were a “premium retailer.”  That presumably sounds better than “third party reseller.”

After several attempts to straighten out the mess, Fox wanted to cancel his contract and just move on.  But then he discovered Go Wireless would charge him a $175 early cancellation fee, even though Fox’s predicament was their fault.  That’s when Fox called a local television newscast for help.

Wirefly is a major online reseller of Verizon Wireless

KBAK-TV news waded into the middle of the dispute that had gone on for nearly six weeks.  Verizon Wireless told the station it was willing to cancel Fox’s service penalty-free, but since Fox purchased the phone from a third-party reseller, and not from a company-owned store, Go Wireless would have to credit their own cancel fee.  Go Wireless, experiencing some turnover in local management, finally agreed to waive the fee, but only after the TV station got involved.

Customers must be careful when purchasing phones or signing contracts with third party sellers — both online and in traditional stores.  Most company-owned stores display their respective carrier logos and nothing else.  Words that usually provide a clue you are dealing with a reseller include: “authorized retailer,” “authorized dealer,” “Service provided by: (name of third party company),” “authorized agent,” and a dead giveaway is a signed contract with anyone other than the cell phone company you are using for service.

Third party resellers make their money on generous commissions earned when a customer signs a new contract or renews an existing one.  That commission can be forfeit if a customer returns the phone or cancels service early, which is why third party dealers protect themselves with their own contracts that include early termination or cancellation penalties owed to them, not the wireless provider.  Some customers can find themselves exposed to $500 or more in total cancellation penalty fees owed between the wireless phone company and the reseller.

So why do people purchase phones from these resellers?  Convenience and savings.

In smaller communities, company-owned stores may be few in number (or non-existent), and in-person help can be a godsend for customers who need to figure out their phone or obtain a warranty replacement.  Online, resellers like Amazon.com, Newegg, Wirefly, and others often charge substantially less than wireless carriers charge themselves for phones.  That savings can often be more than $100.  But these resellers are not for those who are unsure about the phone they want (or the provider).  Returning a phone or canceling service means dealing with two parties — the carrier and the reseller, to end service.  The cost of doing so can be very steep, so always read the terms and conditions before buying.

[flv]http://www.phillipdampier.com/video/KBAK Bakersfield Man has Internet billing trouble 9-26-11.mp4[/flv]

KBAK-TV’s Investigation Bakersfield unit helped a local man untangle a major billing mess that began when he was sold a mobile broadband plan that no longer existed.  (3 minutes)

AT&T customers in western Colorado are furious at AT&T for suggesting expensive phone upgrades were required to get back cell phone service that actually went out because of a cell tower failure.

Stop the Cap! first reported this story earlier this week, when Grand Valley customers discovered their cell phone service (and 2G data services) suddenly stopped working last weekend.  Customers lined up inside and outside the doors of AT&T stores in the Grand Junction area to get an explanation for the service disruption, only to be told their 2G data service had been discontinued and they’ll need to buy new phones to get their service restored.

An undisclosed number of customers signed new two year contracts and upgraded to smartphones — which carry a considerably upgraded price to cover the mandatory data plan that accompanies them.

But now AT&T says a cell tower failure was responsible for customers losing access to voice calling, and any disruption to 2G service will be temporary until the company completes shifting that data service to a different frequency band.

Now customers are complaining they were defrauded by AT&T store employees who emphatically told them no cell service outage existed in the area.

“Is that fraud,” AT&T customer Bill Somerville asked KJCT-TV. “Are they taking advantage of people by not giving them the information they should have gotten?”

“They categorically lied about the status of the service and [forced] people into a new contract and new equipment,” said AT&T customer Jay Anderson.

“If that is customer care, that’s not the customer care I’d like to have,” added Somerville.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KJCT Grand Junction ATT Customers Without Service And Definite Answers 9-21-11.mp4[/flv]

KJCT-TV talked to more angry customers who feel AT&T mislead them into signing expensive new two year contracts for new phones when a tower outage actually was responsible for the disrupted service.  (3 minutes)

In a blow to their image, Texas-based AT&T has lost a major wireless customer to one of their competitors with the announcement the city of Houston is dumping the wireless company in favor of Sprint.

That the city government has been a long-time AT&T customer is an understatement — they have been with AT&T since the 1980s, when the concept of a cell phone was a brick-sized behemoth that could fit in a briefcase, but never a pocket.

But now the city has had enough of AT&T’s high prices, dropped calls, and otherwise bad service and are taking $15 million worth of their business to Kansas City-based Sprint.

“Sprint delivered for Houston on price, support, products and solutions,” said Mayor Annise Parker in a statement. “Their sales and support organizations delivered a proposal that made sense and proved the most cost effective for our city. Over the life of the contract we expect Sprint to save the city’s taxpayers nearly $3 million due to the company’s efficiency.”

Sprint will be supplying Houston government workers with more than 6,000 different wireless devices, ranging from cell phones to tablets, for both civil servants and emergency communications.