Your modem needs an expensive upgrade, even if you own your own.

Stop the Cap! reader Paul in Illinois e-mailed us (along with several other readers) sharing news that Frontier Communications intends to charge their DSL customers a minimum of $6.99 a month for the rental of a DSL-ready modem-router, even if customers purchased and use their own equipment for Frontier’s High Speed Internet service.  Even worse, some customers are being told the monthly combined rental fee for the company’s wireless-ready DSL equipment is a whopping $14 a month — just for the equipment.

The bad news arrived in the form of a postcard notifying customers that their current modem is “out of warranty” and a new “modem support and warranty fee of $6.99 a month will appear on your bill as of 1/12/12.”

Frontier’s alarming notice tries to scare customers, telling them their existing outdated equipment represents a potential security risk, and explains only with their new mandatory “modem support fee” will customers get “unlimited support” and a replacement modem, if necessary.

Eric, a Stop the Cap! reader and Frontier customer notes Frontier has been piling on price increases in the form of mandatory surcharges and fees this year, including a monthly $1.99 “High Speed Internet Surcharge.”

“Former Verizon customers are now being gouged an additional $9.00 per month or $108 dollars per year,” Eric notes, adding up just the cost of the modem rental and the surcharge.

Paul is especially upset because he purchased his DSL modem direct from Verizon just before the phone company sold its business in Illinois to Frontier.

“In fact, the Verizon modem is more ‘advanced’ than the Westell equipment they want to rent me,” Paul says. “The security is better on Verizon’s unit, and I got it as part of a $29.99 ‘Internet for life’ special offer Frontier now wants to renege on.”

“Frontier is running a scam from top to bottom, offering you l0wball Internet pricing that never includes the outrageous add-on fees that you only find out about on your next bill,” Paul says.

Other Frontier customers on Broadband Reports’ Frontier forum are reporting Frontier has been inconsistent explaining the fees, and some are finding promotions that were supposed to protect them from price increases do nothing of the sort.

Stop the Cap! reader Isabella in Indiana wrote us to say her contact with Frontier customer service was likely going to be her second to last.

“Not only do they intend to collect the $7 a month from customers with their own equipment, those of us with wireless are being told it will cost $14 a month for two of their wireless routers we have on their ‘double DSL line’ promotion,” says Isabella.  “The price for their 3Mbps Internet, on special, was $14.99 a month with a multi-year agreement.  The add-on fees they never tell you about are more than the advertised price of the service.”

Isabella calls her Frontier service “bait and switch Internet” and says when the company applies any additional fees to her account, she will terminate her contract and will refuse to pay a penalty, claiming Frontier unilaterally changed the terms.

“The only ‘price protection’ Frontier offers is for the benefit of their bottom line; Frontier representatives told me there was no way for me to avoid these new fees, even though I am supposed to be guaranteed no price increase for two years,” she says.

Paul also ran into a brick wall with customer service.

“They will not exempt you from the fees — for my ‘convenience’ they will be automatically added to my bill starting next month, with or without the new equipment,” Paul shares. “I am beyond outraged.”

“I am contacting my state Attorney General on Monday to file a formal complaint against Frontier for cheating customers on ‘price protection’ plans,” Paul says.

Modem rental fees offer a lucrative opportunity for broadband providers to raise prices while still advertising a low monthly price for the service alone.  Equipment rental fees often run extra and are typically only disclosed in the fine print.  But must providers will exempt customers who purchase and use their own equipment.  Frontier is apparently ending this policy, forcing some customers to pay the fee for equipment they neither need nor want.  Frontier’s $7 a month fee is particularly steep, especially for equipment that can easily be purchased new or used for prices averaging $50 or less.  Frontier will earn back the cost of the equipment within the first year, with the rest simply padding profits.

One of our readers notified us Frontier customer service agreed to “note their account” to not send the new equipment or charge the fee, despite the fact the representative repeatedly encouraged the customer to “upgrade their router.”  But the customer isn’t so sure he believes the company, telling us an earlier victory getting them to waive the “HSI Surcharge” was hollow: Frontier simply began charging it anyway, and refused to remove it despite the earlier agreement.

“What is next — special fees for reading e-mail and visiting web pages?” asks Paul.

CenturyLink announces their own Internet Overcharging scheme; customers call to cancel their service.

CenturyLink is quietly introducing usage caps for its broadband customers that will limit residential customers to between 150-250GB of usage per month.

The Internet Overcharging scheme was inserted into the company’s High Speed Internet Service Management disclosure page, and suggests heavy users are using an inappropriate amount of data, slowing down the network for other users:

The majority of CenturyLink High-Speed Internet customers make great use of their service and comply with the CenturyLink High-Speed Internet Subscriber Agreement. An extremely small percentage use their service excessively, or at such extreme high volumes, that they violate the terms of their CenturyLink High-Speed Internet Subscriber Agreement. While this high volume use is very rare, CenturyLink is committed to helping these customers find a high-speed Internet solution to better meet their needs.

CenturyLink is announcing the following Excessive Usage Policy (EUP), which will become effective in February 2012:

CenturyLink’s EUP applies to all residential high speed Internet customers and is only enforced in the downstream (from Internet to customer) direction. Video services provided by CenturyLink PRISM™ TV are not subject to the usage limits. The policy has the following usage limits per calendar month:

• Customers purchasing service at speeds of 1.5Mbps and below, have a usage limit of 150 Gigabytes (GB) of download volume per month.
• Customers purchasing service at speeds greater than 1.5Mbps, have a limit of 250GB in download volume per month.

There are no overage charges or metering fees for usage as part of the Policy.

The company exempts their own video service PRISM TV from the scheme.

“It’s another CenturyLink ripoff in action, and despite their claims that they treat all data the same, they certainly do not,” says CenturyLink customer Rob Cabella. “Their video programming is sent from local facilities, as data, down the same pipe as their broadband service, yet they conveniently leave their TV product out of the usage cap equation.”

Prism customers can watch unlimited TV, but face limited broadband usage over the exact same pipeline.

Cabella says PRISM operates much like AT&T’s U-verse.  Fiber provides service into individual neighborhoods and then standard copper phone lines deliver service the rest of the way to customer homes.

“It’s one pipe they divide up for video, phone, and Internet, but they are protecting their video service by limiting broadband use while leaving their television and phone service completely unlimited,” Cabella says.  “Video is the biggest bandwidth hog of all, and CenturyLink invites you to watch as much as you want, as long as it comes from them.”

Cabella thinks the very fact CenturyLink is offering unlimited video disproves their argument about ensuring appropriate levels of broadband usage.

“Their local facilities get overloaded to the point where they temporarily stop signing up customers, yet it’s a video free-for-all, as long as you get your video from ‘the right place’ and that sure isn’t Netflix or Hulu,” Cabella notes.

CenturyLink’s limits will apply to broadband customers signed up for PRISM or the company’s traditional DSL service.  Uploads will not count against the cap.

For the moment, overlimit fees will not be charged and the company will send warning letters to offenders that invite customers to migrate “to a higher speed if available or to a business grade data service that better fits their bandwidth usage.”

Customers who repeatedly exceed their usage limits after being notified may have their service discontinued.

Cabella isn’t waiting.

“I called my local cable company which still offers unlimited service and signed up this morning,” Cabella says. “CenturyLink didn’t even know what I was talking about when I called and said their website must have been hacked or in error.  Why would I want to do business with a company that doesn’t even have a clue what their own business is doing?  Goodbye CenturyLink.”

It has been some time since major carriers like Verizon have promoted “unlimited use” plans for broadband.  Not too many years ago, providers used “unlimited” as a major selling point for those looking to escape slower, time-limited, dial-up access.  Today, Verizon is back pitching unlimited DSL at prices as low as $14.99 per month, if you still happen to have your Verizon landline.

Verizon’s DSL pricing changes include two new price tiers for current landline customers and for those who don’t want landline service.  No annual plan contracts are required, and prices are good for one year.

For Verizon landline customers:
500 Kbps to 1.0 Mbps – $19.99 ($14.99 when ordered online)
Either 1.1-3 Mbps, 3.1-7 Mbps or 7.1-15 Mbps (speed level will depend on line quality) – $34.99 ($29.99 when ordered online)

For those who only want broadband service, prices are considerably higher:
500 Kbps to 1.0 Mbps – $29.99 ($24.99 when ordered online)
Either 1.1-3 Mbps, 3.1-7 Mbps or 7.1-15 Mbps (speed level will depend on line quality) – $44.99 ($39.99 when ordered online)

Verizon really wants customers to order service online, and will throw in a free wireless router when you do.  Activation and shipping charges may apply.  Customers also get free access at Verizon Wi-Fi locations.

Verizon is pitching these services to customers who don’t want to deal with “clogged networks or exceeding monthly dial-up time limits.”

These prices are similar to discounts AT&T offered its DSL customers last year.  It’s an effort to maintain revenue and attract price-sensitive rural holdouts who avoid more expensive broadband plans.  Verizon simultaneously announced a new pseudo-“triple play” package for areas without its FiOS fiber to the home service that uses Verizon’s network for phone and broadband service, and DirecTV for television.

“We’ve enhanced the value and simplified our HSI bundles by pricing them aggressively and removing any contract requirements and early termination fees for Verizon services going forward,” said Eric Bruno, Verizon vice president of product management.  “With these refinements, our High Speed Internet service offers the best value in broadband.”

Bruno forgets when adding new DirecTV services to a Verizon phone and broadband bundle, a two-year agreement and early cancellation fees with the satellite company will apply.

Customers contemplating service who disconnected their Verizon landline can sign up for Verizon’s least expensive landline service — the one with no local calling allowance.  Outgoing calls are billed on a per-call basis in most areas, and the monthly charge for the service can be under $10, depending on the size of your calling area.

Clearwire’s often-unclear “network management” policies are the subject of a lawsuit filed yesterday in Seattle seeking class action status.

Angelo Dennings vs. Clearwire Corporation was filed in the Western District of Washington federal court, and seeks refunds for consumers who were mislead by the company’s failure to disclose its network speed throttling and usage limitations, and charged early termination fees when subsequently canceling service.

Clearwire promises that its high-speed Internet service provides a “fast” and “always on, always secure” Internet connection allowing users to “[d]ownload pictures, music and videos.” But Clearwire does not provide an “always on,” “high-speed” connection as it promises. Clearwire purposefully slows the connection of its users because it cannot accommodate the high volume of traffic. Clearwire engages in a practice known as “throttling,” which is the intentional delay and/or blocking of Internet communications. This practice deprives Clearwire customers of the ability to “[d]ownload music and videos,” and leads to slow connection speeds.  Clearwire engages in throttling at times when demand for Internet use is highest, beginning at approximately 7:30 p.m. and ending at about 1:00-to-2:00 a.m.

If users attempt to cancel their service, Clearwire claims that, pursuant to its “contract” with them, it is entitled to collect an early termination or a re-stocking fee. The “contract” referred to by Clearwire is not a contract between it and its customers. The contract between Clearwire and its customers is simply that the customers will pay for, and Clearwire will provide, “unlimited” Internet usage at certain speeds, depending on the speed and payment plan selected in Clearwire’s stores, kiosks, or online.

The remaining “terms” invoked by Clearwire at its convenience are embedded in a document that consumers never see prior to subscribing to Clearwire’s service. Clearwire sells its services in its stores, kiosks at shopping centers, and online. Clearwire’s stores and kiosks do not have copies of this “contract” on hand for potential subscribers to read before they “agree” to its terms. Users who subscribe through Clearwire’s website never see the contract either because the link to it is at the bottom of a page, in substantially smaller font and lighter shade than all of the other text on the page. The text states: “Want to read the fine print (and who doesn’t read the fine print?) It’s all there in the CLEAR Legal Index.” No one wants to read fine print legalese and almost no one does. The statement is obviously and sharply ironic, and mocks anyone who may have been fussy enough to have considered continuing.

Despite not showing its terms to consumers, Clearwire refuses to allow users to cancel their service without paying the unconscionable fees it claims it is owed under this “contract.” These fees include an early termination fee (“ETF”), which penalizes consumers that want out before the end of the two-year term. Although Clearwire breached its contract with its customers, Clearwire insists on the payment of this ETF when customers realize they are not getting what they bargained for.

The suit argues that Clearwire has oversold its wireless broadband network, and allegedly quotes a company representative at one point telling Dennings, “Clearwire had signed up more customers than its cell towers could accommodate, and that therefore it was ‘managing’ users’ accounts.”

Attorney Clifford Cantor argues in the filing that Clearwire reduces customer speeds to 300kbps or lower when their network is congested, making the service unsuitable for most broadband applications.  Dennings, who lives near Ft. Worth, Tex., was outraged to learn Clear sold him a home and mobile broadband account that was advertised as a replacement for wired cable or DSL broadband, but was left with service he considered largely useless when throttled.  Even more upsetting, the suit alleges, Denning was asked to pay a $219 early contract termination and restocking fee when he tried to cancel service over the matter.

Cantor is asking for a court ruling declaring Clear’s policies to be unconscionable, attorneys’ fees of at least $5,000, and refunds for all impacted subscribers.

Thanks to Stop the Cap! reader Michael in Chicago for sending along a copy of the lawsuit.  He runs the “Clear/Clearwire internet not as advertised” Facebook group.

Don’t want blazing fast fiber optic broadband speeds?  Unhappy with fiber optic quality video and want to go back to putting a satellite dish on your roof?  If the answer to either question is “yes,” Frontier Communications has good news for you.

The phone company, which assumed control of a handful of communities formerly served by Verizon’s fiber-to-the-home FiOS network, has announced it will begin marketing DSL and satellite TV services to its fiber customers.

Frontier CEO Maggie Wilderotter told investors on a third quarter results conference call that FiOS broadband could be too expensive.

Wilderotter noted Verizon would not allow customers in a FiOS neighborhood to buy DSL service, which leaves budget-minded customers behind.

“Now, FiOS starts at like 50Mbps and it’s very expensive. It’s like $50 a month for a customer. So they left a whole host of customers behind from an affordability perspective who didn’t need that kind of capability on broadband.” Wilderotter explained. “We have just over the last 30 to 60 days opened up DSL in all of the FiOS markets to give the customer choice. So the customer can choose whether they want FiOS broadband or they want high-speed Internet service, typically, and in those markets we’re offering around 6 to 7Mbps.”

Time Warner Cable occasionally runs promotions helping customers break free from Frontier's multi-year service contracts.

Of course, Frontier FiOS starts at 15Mbps — not 50, and that costs $50 a month for standalone service.  For $99, ($89 in Verizon FiOS areas), customers can get broadband, cable TV and unlimited phone service.  Frontier’s “Turbo” DSL service is priced at $40 a month for up to 7.1Mbps service.

Wilderotter also noted their FiOS customers can also choose to skip fiber video and go with DirecTV.

“We think that customers should be able to choose what kind of video they want,” she said. “We have aggressive offers in the market for both DirecTV and for FiOS video, but in our vernacular, what we care about is keeping the customer, getting the customer to take more products and services from us and making sure the customer is happy with the choice.”

Wilderotter said Frontier is prepared to tolerate more congestion on its DSL circuits than Verizon permitted, which opens the door to potential traffic slow-downs down the road.

“We’ve opened up in many of these locations the opportunity to sell high-speed service up to 95% capacity on the equipment that we have out in the field. Verizon had set a parameter at 75%,” Wilderotter said.

The company continues to study whether Frontier FiOS is worth maintaining or expanding outside of the Verizon territories where it was originally constructed.

“We are still evaluating it from a financial perspective and a customer perspective, and from a cost perspective and a revenue perspective,” Wilderotter told investors. “In terms of what that does for us overall, what it does for churn, how much does it really cost to extend this capability in the markets that we’re in today — we think that analysis and evaluation will go on through the first quarter [of 2011] and then we’ll be able to make some [decisions] in terms of what we want to do with FiOS from an expansion perspective or a maintenance perspective.”

Frontier Communications CEO Maggie Wilderotter answered questions about broadband expansion and the impact of the fall elections on telecommunications policy in Washington. (11 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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Frontier's largely rural service areas provide a captive audience for the company's DSL broadband service.

In the near term Frontier has several plans to get more aggressive in the marketplace to meet its target goal of losing only 8 percent of their customers per year — a goal that illustrates legacy phone companies are still on a trajectory towards fewer and fewer customers:

1. Don Shassian, executive vice president and chief financial officer of Frontier reports expansion of DSL remains a top priority for Frontier.  The company is on track to deliver access to 300,000 additional homes by the end of the year.  Verizon delivered access to 64 percent of Frontier’s acquired territories.  Frontier wants to get that number up to 85 percent.  But part of that target is not just expanding service to unserved areas.  It’s also trying to win back customers lost to other providers through promotions and incentives.
2. Frontier plans to resume aggressive promotions in the coming weeks and months, including its “free Netbook” promotion, which provides a Netbook computer to new customers signing up for several packages of services, committing to remain with Frontier for at least two years.
3. Frontier intends to push “price protection agreements” on as many customers as possible.  Their “Peace of Mind” program locks customers into multi-year contracts with stiff cancellation penalties.  Wilderotter noted: “I think, as you know, in our legacy markets, 96% of all of our sales are on a price protection plan and we have close to 60% of our residential customers on a one-, two- or three-year price protection plans. That number is below 15% in the acquired markets. So we’re also driving for price protection plans with every sale that we’re doing in these new markets as well.”  Such contracts dramatically discourage a customer from disconnecting Frontier, because fees for doing so can exceed $300 in some cases.  Frontier has been heavily criticized by some customers and State Attorneys General for deceptive business practices regarding contracts.

Frontier continues to enjoy a lack of solid cable competition in its largely rural service areas.  Shassian reports Comcast competes with Frontier in only about 32% of homes in some areas, Time Warner Cable in about 23%, and Charter below 15%.  With reduced competition, Frontier often represents the only broadband option in town.

Frontier is also spending an increased amount of time coping with copper thefts, especially in West Virginia where the company is warning would-be thieves it will prosecute to the fullest extent of the law.

“Damage to our facilities can affect communications access in an emergency, increase company costs and consumer rates, and disrupt community phone and broadband connections,” said Lynne Monaco, Frontier’s Director of Security. “When network connections are severed by copper thieves, it endangers customers and emergency responders and poses significant risks of personal injury and property damage.”

Just last week, West Virginia state police solved another copper caper that disrupted service for some customers.

The Charleston Daily Mail reports:

Stephanie Burdette of Charleston was arrested in connection with a copper wire theft.

Trooper A.B. Ward from the South Charleston detachment went to the Fishers Branch area of Sissonville last Thursday afternoon when a Frontier worker discovered a section of the communications line missing. The worker found that 300-feet of the 400-pair line, valued at about $5,000, was missing, according to a complaint filed in Kanawha Magistrate Court.

A trooper who had worked on a similar investigation told Ward to check the home of Ervin “Tubby” Page, 49, where troopers had previously found evidence of wire burning. Ward went to Page’s home, described as a Goose Neck travel trailer parked next to the Guthrie Agricultural Center in Sissonville, and found three burn barrels about 50 feet in front of the trailer. One of them was on fire.

Page’s girlfriend Stephanie Marie Burdette, 25, of Cross Lanes, was at the scene when the trooper arrived. Ward spoke to her then checked out the barrels where he found aluminum wrap, which is used to cover the copper communications wiring, and pieces of copper cabling, the complaint said.

Frontier customers are encouraged to report any suspicious activity around telecommunications equipment and facilities by calling the company’s toll free security line 1-800-590-6605. Anyone witnessing a theft in progress should not confront the suspects but should immediately call 911 and then call Frontier. Vehicle and suspect descriptions are very useful. This is a community safety problem, and the cooperation of the public is critical.

[flv width=”500″ height=”395″]http://www.phillipdampier.com/video/WOWK Charleston Copper Thieves 11-15-10.flv[/flv]

WOWK-TV in Charleston covers Frontier’s difficulties with copper wire thieves across the state of West Virginia.  (1 minute)