AT&T’s record of delivering reliable landline service has remained an open question for Bakersfield, Calif. residents for more than six months, as repeated outages leave several AT&T landline customers without access to a dial tone.  Even worse, some of the customers impacted have been left without any phone service for weeks on end, including one woman whose life literally depends on a working phone.

Andrea Williams, who lives alone in her Bakersfield home, suffered a stroke and has a heart condition — making access to a phone absolutely essential to her well-being.  Williams is also legally blind, making a cell phone an insurmountable challenge.  Instead, Williams says she has memorized the location of the buttons on her long-standing cordless landline phone, a phone that was out of service just after Christmas and largely stayed that way for three weeks.

Despite having made numerous calls to AT&T trying to get the problem corrected, Williams says no one from AT&T ever showed up.  It took an investigative report from Bakersfield’s KGET-TV newsroom to finally get AT&T to respond.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/KGET Bakersfield ATT Phone Lines Crossed 12-29-10 and 1-10-11.flv[/flv]

Back in December, AT&T in Bakersfield left hundreds of customers without service or cross-connected with other customers’ phone lines.  It all culminated three weeks later in one health-challenged resident breaking out in tears when local TV station KGET finally helped get her service restored.  (5 minutes)

Fast forward to late June, and AT&T’s reliability is again up for a challenge, as some residents in the unincorporated community of Glennville, 30 miles north of Bakersfield, are fed up with repeated outages, even after eight families collectively paid $16,000 to AT&T to extend wired phone service and broadband to their neighborhood.

Around the same time Williams was experiencing problems with her phone line in December, residents in Glennville began experiencing repeated outages of their own.

“I think from December to January, it was 15 times it went out,” said resident Ray Schill.  “From February to now, [the lines have been out] another 10-15 times.”

Residents in Glennville are especially concerned because they cannot count on their landlines, and cell service is spotty to non-existent in the area.

“My major concern is we’re going to have a big problem up here — someone is going to be ill, we’re going to have a fire, someone’s going to die — who is liable,” Kathryn Ervin, a Glennville resident told KGET News.

What happens when residents call AT&T for help?

We get the runaround, says Schill, with promises extending through the months of May, June, and now July 15.

Schill doesn’t hold much confidence in AT&T’s promises, especially after the company responded to an inquiry from the state’s Public Utilities Commission which culminated in his complaint being closed-as-resolved.

Once again, KGET-TV was on the case for the benefit of its viewers, and reporter Kelsey Thomas received a remarkable response from AT&T — the company “couldn’t handle the number of people using the phones in Glennville.” (population: 280)

The company promises to “upgrade its software” to resolve the problem, but could not give Thomas a time frame for when that would be complete.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/KGET Bakersfield Folks in Glennville fed up with ATT 6-27-11.mp4[/flv]

KGET-TV gets involved with AT&T once again, this time to help hundreds of residents of Glennville, Calif., who are also experiencing trouble with the company’s landline service.  (3 minutes)

At least 41 percent of West Virginian economic development professionals responding in a new survey rate their area’s existing broadband service as “not very good,” a result that could have profound implications for high tech economic development in the state because of poor quality business broadband service.

Some of the results of the survey, conducted by Internet Service Provider Citynet:

• 77% said government involvement in steering broadband policy was “very important.”
• 78% believe modern, reasonably priced broadband Internet infrastructure is “extremely important” or “very important” in competing against other locations for jobs.
• On a 10-point scale, broadband Internet infrastructure (8.56) rates as slightly more important than road improvements (8.26) and water infrastructure (8.26).

“Seventy-eight percent of respondents say it has been their experience that businesses considering locating in their areas place high priority on access to affordable, high-speed Internet when evaluating site selections,” said Jim Martin, president and chief executive officer of Citynet. “And 66 percent say cost and capacity of broadband service are factors more than half of the time when discussing new business prospects.”

Some participants in the survey said they are losing business prospects in part due to the lack of broadband capacity, its speed or cost. Most of the professionals said they were “very familiar” or “somewhat familiar” with broadband expansion programs, such as middle-mile infrastructure, being implemented in adjoining states.

In West Virginia, most broadband expansion is being done by “last-mile” service provider Frontier Communications, which took over most of the state’s landlines from Verizon.  For most homes and businesses outside of areas where cable companies compete, Frontier provides DSL broadband service ranging from 1-3Mbps in smaller communities, perhaps 7Mbps or slightly better in larger cities.

West Virginia has proved to be one of the least impressive states for broadband owing to its terrain and large number of rural communities, providing few incentives for robust competition.  That has meant slow speed service at high prices.

Survey respondents were less than impressed:

• “I have a project pending [and] will probably lose it based on costs of broadband.”
• “The lack of high speed service in the rural areas totally extinguishes the possibility of new small business start-ups.”
• “Prospects don’t look here because of the lack of high speed, affordable, reliable broadband…. Current speeds of up to 3 mb while may be suitable for residential use are not suitable for business.”
• “Not only do too many areas still not have broadband, but too many places where people live do not have it and that affects the quality of life issue when attracting a prospect to live, work and play in WV.”
• “We were looking at a possible location of a data center and the lack of affordable, large capacity broadband was a deciding factor in them not locating in WV.”
• “We need the middle-mile and trunk-line services in West Virginia to remain competitive for many of today’s industries. What good is it if we get high-speed to every place in West Virginia, when we can only reach each other and do not have the facilities to get out of the state and into the major lines?”
• “[We] lost a company that looked at an existing building located in an area that doesn’t have high-speed access. They ended up locating in another area.”
• “You are not in the game without it.”
• “What are we waiting for?”

Citynet has a dog in this fight.  Martin has tangled with Frontier Communications in the past year over broadband stimulus funding and where taxpayer dollars are being spent in the state.  While Frontier has touted “fiber projects” in West Virginia, those are primarily directed at increasing capacity for Frontier’s middle-mile network between its telephone exchanges, in hopes of expanding DSL further out into rural areas.  The company is also trying to address congestion issues that have grown since buying out Verizon’s landline-based broadband business.

Martin has criticized state officials for supporting Frontier’s efforts because the company will end up owning and controlling the network built, in part, from taxpayer dollars.

Stop the Cap! hears regularly from ordinary consumers in the state who are dissatisfied with their broadband choices, especially when they come from just a single provider — Frontier.  Slow speeds, poor service, and repeated service outages have been documented here and by the state’s local media.  Some outages are attributable to Verizon’s poor quality infrastructure (now owned by Frontier), others to Frontier’s unwillingness to replace that infrastructure — instead choosing to repair it, even if further outages occur later.

Stop the Cap! readers will recall we pulled the plug on Frontier Communications with the disconnection of our landline back in early February.  After at least 25 years doing business with Rochester Telephone Corporation, later Frontier-Global Crossing, later Frontier-Citizens Communications, we had enough.  Frontier Communications has done nothing of merit for the metropolitan Rochester, N.Y., area since the late 1990s.  Their DSL broadband service is handily beaten in quality, reliability, and price by cable competitor Time Warner Cable, and Frontier’s lack of willingness to invest in something better for their largest service area of nearly one million people in western New York has left us cold.  After a one week experiment with Frontier’s DSL service in 2009, we dropped the service like a hot potato after it achieved an underwhelming 3.1Mbps in the town of Brighton, less than one mile from the Rochester city line.

In early February, our last remaining service — the landline — was transferred to Time Warner Cable.  But even on the way out the door, Frontier continued to disappoint.  After more than two months (and two invoices later), Frontier had still not refunded our credit balance of $26.09.  We’re a long way from Rochester Telephone, a well-regarded predecessor to Frontier which traditionally enclosed a refund check with the final bill.  Frontier makes you wait, and wait, and wait some more, reminding you they owe you money with repetitious “do not pay – credit balance” invoices for long-terminated service.

On Monday, the refund check finally arrived, in an obscure envelope resembling one of those PIN reminders banks send you.  After tearing away three sides of perforated strips, there it was — $26.09 from Frontier Communications.

The long wait is hardly a random glitch.  Stop the Cap! covered the story of a Frontier customer in California who waited several months for the phone company to refund her just over $15, and just this evening we heard from one of our regular readers in Rochester disappointed by Frontier’s hardly-rapid refund policy.

The only good news is that we weren’t overbilled on the way out the door, as one Elk Grove, Calif. customer was — to the tune of $680.

To Frontier we say goodbye and good luck (and we’ll be cashing that check faster than you sent it).

Your cable company has a problem.  Collectively, the cable industry has lost more than 2 million video customers over the past year, and the problem may be getting worse.  Some of the largest cable companies in the United States are making excuses for the historic losses:

• The bad economy
• Housing and foreclosure crisis
• High unemployment
• Family budget-cutting

But cable companies should be rethinking their excuses, according to a new report from Strategy Analytics.

“Throughout the past seven consecutive quarters of subscriber losses, the inclination of cable has been to point the finger at various external factors,” said Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics service. “Our analysis shows that neither the economy nor the housing market is to blame for these subscriber defections. The problem is one of value perception.”

Value perception.  That’s a measurement of whether or not one feels they are getting good value for the money they pay for a product or service.  Value comes in several different forms, starting with emotional — do I feel good, safe, secure, or nostalgic using the service?  Can I imagine life without it?  What about my friends and family — will I stand out if I am not buying this product?  It’s also practical — Can I afford this?  Can I find a cheaper or better alternative?  Do I really need this service anymore?

Tied into value perception is customer goodwill.  If you have an excellent experience with a company, letting go of their products comes much harder.  If you feel forced to deal with a company that has delivered poor and expensive service for years, pent up frustration will make it much easier (and satisfying) to cut them loose at the first opportunity.

In the telecommunications industry, value perception is a proven fact of life.  It began with phone companies.  Formerly a monopoly, landline providers have been forced to try and reinvent themselves and become more customer-friendly.  First long distance companies like Sprint and MCI moved in to deliver cheaper (and often better quality) long distance service.  Sprint even got into the landline business themselves, forming EMBARQ, which at its peak was the largest independent phone company in the United States.  When Voice Over IP providers like Vonage and the cable industry’s “digital phone” products arrived, they promised phone bills cut in half, and introduced the concept of unlimited long distance calling.

The value perception among consumers became clear as they began disconnecting their landlines.  The alternative providers offered cheaper, unlimited calling services, often bundled with phone features the local phone company charged considerably more to receive.  Even though VOIP is technically inferior in call quality in many instances, the value the services provided made the decision to cut the phone cord easier.

But local phone company landline losses would only accelerate with the ubiquity of the cell phone, but for different reasons.  What began with high per-minute charges for wireless calls evolved into larger packages of calling allowances, with plenty of free minutes during nights and weekends, and often free calling to those called the most.  Most Americans end the month with unused calling minutes.  As smartphones gradually take a larger share of the cell phone market, the accompanying higher bills have forced a value perception of a different kind — ‘I can’t afford to keep my landline –and– my cell phone, so I’ll disconnect the landline.’

The cable industry has traditionally faced fewer competitive threats and regularly alienates a considerable number of customers, but still keep their business despite annual rate increases and unwanted channels shoveled into ever-growing packages few people want.

This pent up frustration with the cable company has led to perennial calls for additional competition.  That originally came from satellite television, which involved hardware customers didn’t necessarily like, and no option for a triple play package of phone and broadband service.  The cable industry offers both, and by effectively repricing their products to discourage defections from bundled packages, customers soon discovered the resulting savings from satellite TV were often less than toughing it out with the cable company.

As a result, satellite television has never achieved a share of more than 1/3rd of the video market.  Many satellite customers are in non-cable areas, signed up because of a deeply discounted price promotion, were annoyed with the cable company, or didn’t care about the availability of broadband or phone service.  When the price promotion ends or technical issues arise, many customers switch back to cable.

More recently, researchers like Strategy Analytics have discovered some potential game-changers in the paid video marketplace:

• The impact of broadband-delivered video content
• The Redbox phenomena
• Competition from Telco TV
• The digital television conversion

Strategy Analytics studied consumer perceptions and found customers braver than ever before about their plans to cut cable’s cord.  According to the consumers surveyed, nobody scores lower in value perception than cable companies.  Citing “low value for money,” over half of the cable subscribers surveyed told the research firm they intended to disconnect their cable TV package in the near future.

While other researchers dismiss those high numbers as bravado, there are clear warnings for the industry.

“Much ink has been spilled on the topic of cord cutting and even skeptics are now admitting that it can’t be ignored,” said Piper.

Indeed, Craig Moffett, an analyst with Sanford Bernstein who almost never says a discouraging word about his beloved cable industry, told Ad Age Mediaworks the issue of cord-cutting was real.

“It’s hard to pretend that cord cutting simply isn’t happening,” Moffett said.

The most dramatic impact on the cable industry has been in the ongoing erosion of the number of premium channel subscribers, those willing to pay up to $14 a month for HBO, Cinemax, Showtime, or Starz!.  The reason?  Low value for money.  As HBO loses subscribers, Netflix and Redbox gain many of them.  Netflix still delivers a considerable number of movies by mail, but has an increasingly large library of instant viewing options over broadband connections.  Strategically placed Redbox kiosks deliver a convenient, and budget-minded alternative.

The loss of real wage growth, the housing collapse, and the down-turned economy do put pricing pressures on the industry, but some cable executives hope the time-honored tradition of customers howling about rate increases without ever actually dropping cable service continues.

But as new platforms emerge, some delivering actual pricing competition to the cable TV package, increasing numbers of customers are willing to take their video business somewhere else.  Some are stopped at the last minute with a heavily discounted customer retention pricing package, but that doesn’t keep them from sampling alternative online video options.  Among those who actually do leave, some are satisfied with the increased number of channels they get for free over-the-air after America’s digital television conversion.

Many others are switching to new offerings from telephone companies.  Both AT&T and Verizon deliver video packages to many of their customers, often at introductory prices dramatically lower than their current cable TV bill.  When considering a bill for $160 for phone, video, and broadband from the cable company or $99 for the same services from the phone company, $60 a month in savings for the first year or two is quite a value perception, and the inevitable disconnect order is placed with the cable company.

Ad Age‘s own survey, more skeptical about cord-cutting, confirmed that many former cable TV customers left for budgetary reasons, but many also kept their triple play packages.  They just bought them from someone else.

Also confirmed: a dramatic upswing in online viewing, sometimes paid but often ad-supported or free.

Strategy Analysts concludes in its report, available for $1,999, that the ongoing erosion of cable TV subscribers isn’t irreversible, but it requires urgency among providers to become more customer-friendly and increase the all-important value perception.

In other words: respecting the needs and wishes of your customers.

Thankfully, the cable industry is dealing with competitors like AT&T, who are willing to assassinate their current lead in value perception by slapping Internet Overcharging pricing schemes on their broadband service.  That will certainly raise the ire of their DSL and U-verse customers, many who are treating the customer unfriendly usage limits as an invitation to leave.  Their former cable companies are waiting to welcome them back.  The real question remains, will cable customers now be treated better?

Frontier FiOS is the fiber-to-home network that gets no respect, at least from the company that now runs it.

What Verizon considers its crown jewel, Frontier Communications considers an afterthought. Since buying up several million landlines from Verizon, Frontier has reluctantly adopted the fiber-to-the-home service already up and running in a handful of areas Verizon sold off.

Frontier CEO Maggie Wilderotter said Frontier would not increase pricing on its services, in fact stating they had not had a price increase in several years.  But just months after winning approval of the deal with Verizon, Frontier stunned customers and regulators with one of the largest rate increases ever seen in the cable television industry: a $30 monthly increase for basic cable.

Understandably, angry customers have been calling Frontier in droves demanding an explanation.

Stop the Cap! reader Betsy was floored when a Frontier representative actually suggested to her its FiOS network wasn’t worth the trouble, and the representative was telling all of the customers calling they should “upgrade” to satellite TV instead.

“How do you even respond to that?  I thought I heard her wrong — I had the speakerphone on, but after the Frontier rep said it, my 87 year old mother who was listening hollered ‘that’s a bunch of bull****’ from the other room,'” Betsy shares.

“My mother almost never swears,” Betsy tells Stop the Cap! “But she was living with us when our family endured satellite’s rain fade, the neighbor’s trees, the picture freezes, and the equipment issues for almost ten years — why would we go back to that?”

In fact, it was Verizon’s FiOS network which attracted the Washington State family to take the satellite dish off the roof and toss it.  So it came as quite a shock to have a Frontier representative try and get her to rip a state of the art fiber network out to go back to DirecTV.

“Does anyone at this company have a clue what they are doing?  Using their logic, we should go back to dial or hand crank telephones,” Betsy concludes.

We wondered if this was a fluke, but then we found Frontier telling customers nearly the same thing in Ft. Wayne, Ind.

The Journal-Gazette reports Frontier’s rate hike in the Pacific Northwest foreshadowed similar rate hikes likely in the midwestern city that is Frontier’s second largest market, behind Rochester, N.Y.

Frontier Communications FiOS cable customers could be facing a monthly increase of $12 to $30 in coming weeks.

Many of the affected subscribers have a $99 bundle for monthly TV, telephone and Internet services. As an alternative, Frontier will offer DirecTV satellite service free for the rest of the year for customers paying for telephone and Internet, a spokesman said Wednesday.

“We will be making more information available by Tuesday of next week,” said Matthew Kelley, adding that existing customer contracts will be honored.

“With DirecTV, it really is a chance to get three services for the price of two. The channel lineups are pretty comparable.”

DirecTV offers more than 200 channels, Kelley said.

“Don’t sign me up,” Betsy writes when we showed her the Journal article.  “Channel lineups don’t mean much when you can’t watch them.”

Betsy’s satellite dish took a beating not only from the weather and efforts to find a clear view to the sky, but also from some birds advertising for a mate.

“The woodpeckers just loved to attack the dish — the jack-hammering sound could be heard all over the neighborhood when they got going,” she said.

Frontier’s Kelley admitted the company is small potatoes in the cable world, and simply can’t compete for good programming prices.

But even those of us at Stop the Cap! know that smaller players need not negotiate programming contracts themselves — they can join one of several groups that pool smaller providers together to grab substantial volume discounts.  Municipal players manage to find reasonable cable programming prices, but a multi-state corporate player like Frontier apparently cannot.

Bruce Getts, business manager for the International Brotherhood of Electrical Workers Local 723, shrugged off Frontier’s FiOS failures.

Getts, whose union represents 700 installers, repair technicians, customer service representatives and dispatchers at Frontier told the newspaper more people are going online to watch TV anyway, so the impact of the price hike might well become moot.

Unfortunately, Frontier is the same company testing an Internet Overcharging scheme in the Sacramento area that makes online viewing an expensive proposition, even more expensive than Frontier’s FiOS rate hikes.

“I think people will rue the day they let these bozos take over our phone service,” Betsy says.  “It looks like our family has a reason to cancel service with Frontier and head to cable.”