Now all prepaid and contract-free.

Clearwire customers are being informed the wireless broadband provider is consolidating service plans in a move the company hopes will simplify what’s on offer.  Following on the heels of Leap Wireless’ Cricket, which launched simplified pricing last year, Clearwire will now market prepaid, no-contract broadband to new customers effective today.

Broadband Reports has been talking with Clearwire after forum members began noticing changes on some dealer websites that eliminated 3G coverage and dropped postpaid bundles of voice and data plans.  Earlier today, the company confirmed it was getting rid of contracts, early termination fees, rental fees for devices, and activation fees.  New customers will be asked to purchase their own mobile broadband device which will work exclusively on Clearwire’s own 4G WiMax network.  You can purchase plans that work by the day, week, or month.

The most popular anticipated plan will offer “unlimited” 4G wireless broadband for $50 a month.

Gone is the bundled Sprint 3G voice option and the annoying early termination fees customers howled about when Clearwire’s advertised coverage didn’t live up to expectations.  Although Clearwire continues to pitch “unlimited mobile broadband,” their notorious speed throttles will remain for “congested cell sites.”  Customers have dropped the service over significant throttling issues in some areas, which reduce speeds to near dial-up in some cases.

Broadband Reports speculates Clearwire wants to be in the wholesale broadband business, and slowly exit the retail business that has earned them the scorn (and threatened legal action) of some of their customers.

Existing customers will be able to keep their existing plans, at least for now.

Time Warner Cable experienced another challenging quarter, continuing to lose cable TV customers who either drop or pare back their television service, often in favor of broadband.

The company reported losses of an additional 128,000 video subscribers during the third quarter, but is partly winning that revenue back with new broadband customers — 89,000 of them in the last three months.

“Broadband is a powerful service for which there appears to be unquestionable consumer thirst,” Time Warner Cable CEO Glenn Britt said on the investor call. “Over time, we will contribute more of our plant’s capacity to broadband.”

The company is also poised to expand its marketing to win new broadband customers away from their primary competition — telephone company DSL service.  Company officials remain confounded by customers who subscribe to Time Warner’s cable TV service and take broadband from “inferior” phone company-delivered DSL.  Time Warner will continue to target these customers with win-over promotions offering a year of Road Runner Standard Service at the $29.95 promotional price point.

For the company as a whole, this is the tenth consecutive quarter of year-over-year residential broadband revenue improvement, coming from a combination of higher-priced, faster speed tiers, price increases, and subscriber additions.  The company’s DOCSIS 3 upgrade has proven itself a winner for customers and the company, with 18 percent of Time Warner subscribers now choosing 30 or 50Mbps broadband services.

Wall Street expressed some concern about statements from CEO Glenn Britt that the company was going to expand capital spending on broadband to handle increasing demand, especially from online video.  That concern comes despite the fact the company’s “capital intensity” (spending) from January-September was the lowest in the history of the company.  The full year’s capital spending is on track to reach up to $3 billion, which is consistent with what the company spent last year.

Glenn Britt

So despite the plans to spend more on broadband, that spending is actually in line with previous years.

In response to an opening question from Deutsche Bank’s Doug Mitchelson, Britt delivered an extended explanation downplaying the company’s spending plans:

In a way, there’s nothing really new here. I think you’ve seen this trend for a while. Our broadband product is very strong.

As most people know, the usage of broadband is skyrocketing, as it has been for some time. And that means that we will need to spend more money on it. We have been already, both in capital and operating expenses.

The great thing about the Internet is lots of third parties dream up lots of new applications that require more speed and more bandwidth. And we anticipate that we’re going to have to devote more capacity to that over time. We will do that by gradually removing our analog signals from our — analog TV signals from our plan. We’ve been doing that over the last several years by migrating to digital using Switched Digital technology. And over the next several years, we’ll be going all digital in the TV space.

I don’t see this driving a dramatic change in our cap spending, I think, to the core of your questions. The spending has been going on for a while, and I think you’re seeing a change in mix. The video spending is going down over time. The business services is going to go up, although it didn’t this quarter. And you’re going to see the spending on broadband going up. But I don’t think the overall trajectory is mutually different.

This quarter, the company’s conference call seemed to embrace greater broadband usage, and pondering Internet Overcharging schemes like usage caps or usage-based billing never came up.  But Richard Greenfield from BTIG alluded to usage in his questions to Rob Marcus, president and chief operating officer at Time Warner Cable.

“I think we’re somewhere in the 7GB a month [range] of downstream bandwidth on a median basis,” Marcus said. “The average is much higher given the disproportionate usage by our high-end users.”

There were plenty of other facts to be gleaned from this morning’s conference call:

TV

• Whole Home DVR service has been introduced nationwide.  In the coming year, Time Warner will begin deploying “home gateways,” which reduce equipment costs;
• Time Warner is testing improved cloud-based set top boxes with home networking capabilities in parts of Syracuse, Los Angeles and Dallas.  These boxes will expand across the country in 2012.  They offer better search capability and deliver an improved user experience;
• 60% of customers reject “triple-play” offers from Time Warner and choose either “single” or “double-play” service instead;
• Much of Time Warner’s revenue growth is coming from rate increases on programming, services, and equipment;
• TV Essentials, the smaller, less expensive video package, is now available in New York City and Northeast Ohio, as well as upstate New York. It will launch nationwide by year end.  Unsurprisingly, company officials admit the less-than-attractive channel lineup has resulted in the vast majority of customers calling about the offering taking the traditional video package instead;
• Customers continue to drop ancillary services to cut their cable bill.  The increasingly expensive DVR box is a new target for cutting, and premium movie channels, adult pay-per-view, and mini-pay services all continue to suffer significant declines in business;
• The Google-Motorola deal will likely have little impact on Time Warner’s set top boxes, which primarily come from Cisco and Samsung.

Broadband

• By the end of the year, Time Warner plans to offer an Android-based TV Everywhere application similar to the existing iPad application, which will also continue to be upgraded to include on-demand offerings;
• Time Warner will make their TV Everywhere service available on game consoles, smart TVs and PCs in the near future;
• New York City customers will soon be able to select from a range of local broadcast stations on the company’s iPad app.  Other markets will start to see local channels added to this app in 2012;
• Major parts of Time Warner’s capital investments this year are: building data centers in Charlotte and Denver, conversion to all-digital in Maine to make room for enhanced broadband, and the continued rollout of DOCSIS 3.0. The company is also continuing to spend significantly on wiring commercial buildings to sell services to business customers;
• TV Essentials customers will soon be offered a “lite user” slower speed discount broadband plan to accompany their video package;
• In Los Angeles, Wideband 50Mbps customers also get 2 gigabytes of 4G/3G mobile broadband for no additional monthly charge on the company-branded Clearwire service. For Turbo Plus and Wideband 30Mbps customers, they can get the same 4G/3G capability for an additional $10 a month. Standard and Turbo customers can get it for an extra $20.  The company’s mobile broadband add-on product has not enjoyed much success with paying customers, however.  Time Warner hopes the value-added bundling of mobile broadband will attract more interest.

Phone

• Cord-cutting is now impacting Time Warner “digital phone” service, too.  Customers are increasingly reluctant to purchase phone service from any landline provider.  Now Time Warner’s regular pricing is starting to cost them business.  Executives revealed Time Warner’s “digital phone” service costs the company $9.06 to provide.  They charge consumers $30.  With that kind of profit margin, the company admits it will have to get more aggressive in pricing to attract new customers (and potentially keep existing ones);
• Time Warner lost 8,000 residential voice line customers last quarter, cushioned by net additions of 13,000 business line customers;
• The company continues to show little interest in selling cell phone products or services, either owned by themselves or others.  Mobile data remains an exception.

Crumpton

NAACP national board member and former Missouri Public Service Commission member Harold Crumpton believes that combining AT&T and T-Mobile will create 100,000 new jobs, despite the fact both companies have promoted “cost savings” from eliminating redundant services and winning “increased efficiencies.”

That’s code language for layoffs, and it has been that way with every telecommunications merger in the last decade.  But Crumpton prefers to deny reality in a guest opinion piece published today in the St. Louis Post-Dispatch:

Most mergers result in — and pay for themselves with — job losses and higher prices. Not this one.

If, to use the government antitrust lingo, there is a “relevant product market” for this merger, it would be “jobs” because jobs are the No. 1 product of the broadband factory. The AT&T and T-Mobile merger is structured as an engine of job creation — yielding 100,000 new jobs by delivering on President Obama’s call for a national high-speed broadband network. That’s far more jobs than would be lost because of AT&T and T-Mobile overlaps.

Ironically, AT&T announced the repatriation of 5,000 call center jobs and pledged not to terminate call center employees because of the merger. Two hours later, without warning to AT&T, the Justice Department filed its suit. Suffice to say that President Obama, our greatest champion of job creation, was not well-served that morning.

How will AT&T produce all these new jobs? By creating the first national next-generation high-speed (4G) mobile network. The merger is what will make the network possible, and it will do that by aggregating and redeploying spectrum T-Mobile can’t use for 4G. In this way, the network would reach 55 million more Americans than 4G currently reaches.

AT&T couldn’t have argued the case better.  Oh wait.  They have, in the company’s advocacy package mailed to the NAACP and dozens of other groups who receive the company’s financial support.  Those talking points inevitably end up in the guest editorials penned by Crumpton and others.

While the bloom is clearly off the rose of the AT&T/T-Mobile merger, thanks in part to consumer groups and the U.S. Department of Justice who filed a lawsuit to stop it, AT&T is still flailing about trying to find some way to get the deal done, if only to avoid the outrageous break-up fee self-imposed by the telecommunications giant if the deal falls apart.  AT&T’s promise to bring an end to the obnoxious practice of offshoring their customer support call centers — if the merger gets approved — has been compared with blackmail by some customers who have spent an hour or more negotiating with heavily accented customer support agents that companies like Discover Card routinely mock.

AT&T promises customers a solution to the "Peggy Problem" if their merger with T-Mobile gets approved.

It clearly wasn’t enough to move critics of the deal to reconsider — AT&T could voluntarily hire American workers who speak the language of their customers for the benefit of those customers with or without a merger with the fourth largest wireless carrier in the country.

Crumpton argues President Obama was not well served by the Justice Department.  Consumer groups argue T-Mobile and AT&T’s customers will not be well-served if this merger ever happens.

As Stop the Cap! has repeatedly argued, both AT&T and T-Mobile will construct 4G mobile broadband networks in all of the places where the economics to deploy those networks makes sense.  No more, no less, no matter if AT&T and T-Mobile are two companies or one.

Crumpton might as well have argued the merger would deliver 4G service to Sprint customers as well.  It’s the same disconnected logic.

Crumpton thinks AT&T’s high-priced, heavily-capped 4G network will somehow solve the pervasive problem of the digital divide — the millions of poor Americans who can’t afford AT&T’s prices.  Incredibly, Crumpton’s answer is to allow one of the most price-aggressive, innovative carriers in the country favored by many budget-conscious consumers to be snapped up by the lowest rated, if not most-hated wireless company in the country.

It just doesn’t make sense.  But it does make dollars… for the NAACP, which receives boatloads of corporate money from AT&T.  It’s no surprise the pretzel-twisted logic that drives merger advocates like Mr. Crumpton comes fact-free.  The money makes up for all that.

“The NAACP stands ready to work with the public and private sectors to ensure that every American has an equal opportunity to participate in and benefit from this awesome ‘broadband revolution,'” Crumpton writes.

We can only hope that is true.  The NAACP can get started by admitting publicly it receives substantial support from AT&T and it will either agree to remain neutral in corporate advocacy issues to avoid conflicts of interest, or return AT&T’s money.  After all, it sounds like they need it to build the digital divide-erasing 4G network Crumpton is purportedly so concerned about.

South Africa’s largest Internet Service Provider, the former state-owned telephone company Telkom, has introduced uncapped broadband service across the country.

Telkom’s Do Uncapped offering removes usage limits after “intensive market research” and “data usage trials” concluded South African consumers absolutely despise usage limits on their Internet access.

In fact, in overwhelming numbers, consumers preferred unlimited access over faster broadband speed packages.  Even throttled “fair use” policies which slightly reduce speeds during peak usage periods are more tolerable than restricted usage allowances, overlimit fees, and punishing “dial-up” speeds when customers exceed their usage limit.

“To feed the hunger for data, Telkom has tailored its Do Uncapped range according to consumer usage patterns derived from findings of the Company’s broadband trials on higher cap trials conducted earlier this year,” the company said in a statement.

Inexpensive, lower speed offerings are available at 384kbps and 1Mbps, but do come with certain daytime speed restrictions, especially on peer to peer traffic.  The premium 4Mbps package is truly unlimited.

South Africa’s challenged telephone network has resulted in relatively low broadband speeds when compared against Asia, North America, and Europe, but the unlimited offerings are being welcomed by Telkom customers across the country.

Because DSL service from the phone company has traditionally been slow and, until recently, expensive, many South Africans rely primarily on wireless mobile services, which can be more reliable in some parts of the country.  Some purchase wireless broadband service from providers like MTN instead of DSL from the phone company.

As a home broadband replacement, wireless mobile broadband has always meant compromising on usage, because most plans are heavily capped and some block access to certain web content.  But MTN is responding to Telkom’s move away from usage caps by removing them from its own wireless network, at least during a promotion.

MTN is kicking off the South African summer with its newest promotion, unlimited speed and uncapped wireless data access on the company’s HSPA+ network, effective Oct. 1.

The limits stay off until the end of summer — Jan 2012.

“We have seen a significant number of our customers taking up latest smartphones, tablet PCs, wireless routers and laptop deals that MTN is offering,” said Serame Taukobong, MTN South Africa Chief Marketing Officer. “This promotion is a response to the increased data appetite that comes with the usage of these devices.”

That’s an attitude foreign to North American mobile operators, who see those devices as enemies of their wireless network (or the basis for future profits).  In South Africa, consumers adopting new wireless devices and increased usage has triggered a marketplace response that eases or ends usage caps.  In North America, the opposite is happening.

MTN has slashed its mobile broadband prices over the course of 2011 for the highest speed, unlimited access package from a budget-busting $248 a month to $111 a month.  A slower speed unlimited package now sells for $37 a month.  That becomes very affordable for Internet users who use their mobile devices exclusively for access.  Even a package selling over $100 a month may be comparably affordable to an American who is required to maintain a home broadband and mobile broadband account.

MTN even allows wireless peer to peer traffic, but the company asks subscribers to be reasonable and not leave it running 24/7.

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)