"Too rich for my blood."

Former Verizon FiOS customers now served by Frontier Communications in Oregon and Washington are receiving word of astonishing rate increases of as much as 46 percent from the phone company.  The massive rate increase is being blamed on “increasing programming costs” charged by the cable networks carried on a cable system that competes with Comcast, which charges far less for the same channels.

Frontier’s rate hikes are so dramatic — $30 a month for the popular standard 200-channel package, some customers are wondering whether the company is trying to sabotage their own fiber-to-the-home service.

“They sent us a rate increase letter stating our former standard package, priced at $65 a month, is now going up to a ridiculous $95 a month for basic cable,” says Tom, a regular Stop the Cap! reader. “That’s a rate increase only my health insurance company could love.”

New customers face the new rates immediately, but existing customers have until Feb. 18 before the new high price kicks in.  Many are preparing to move back to Comcast, which raised rates this year as well — but is now a relative bargain at $63 a month for a similar package.

“As much as I love FiOS, Frontier has managed to screw it up as badly as the rest of their services and now I am going back to Comcast,” Tom says. “You have to wonder if they are purposely incompetent or if it’s part of a larger plan to sabotage the Verizon FiOS network they inherited.  Either way, they’ve priced their service out of the market.”

When Tom called Frontier to complain, the company offered to rip out the advanced fiber network Verizon installed and stick a DirecTV satellite dish on his roof instead.

“Frontier is a real ‘Back to the Future’ kind of company — they just don’t get it,” Tom said.  “The operator actually told me she couldn’t understand why I would want to cancel service.”

Customers receiving new customer promotional discounts will get a real case of sticker shock when Verizon’s original promotional rates reset to Frontier’s new regular price.

“Washington County better beef up their hospitals because there are going to be a lot of heart attacks when that bill arrives,” Tom says.

The Oregonian newspaper reports customers are not the only ones to be shocked by Frontier’s enormous rate increase.  Regulators promised more competition and cheaper prices as part of Frontier’s purchase of Verizon landlines feel had as well.

“[Frontier’s rate hike] is essentially a white flag surrender and an exit from the head-to-head video competition,” lamented David Olson, director of the Mt. Hood Cable Regulatory Commission.

That’s a far cry from what Frontier Communications CEO Maggie Wilderotter told the newspaper in September when asked if the company would raise FiOS rates.

“That is not our plan. If I look across the board at our basic service pricing, I don’t think we’ve raised prices anywhere in the last four or five years,” she said.

The Oregonian quotes a Frontier representative who says the company’s relatively small customer base disqualifies them from volume discounts Verizon used to receive.

“Part of the challenge we have, compared to other providers, is that our footprint is so small,” said Frontier spokeswoman Stephanie Beasly. “They’re able to spread it out over a much larger customer footprint.”

That can’t be the whole story, said Fred Christ, policy and regulatory affairs manager for the Metropolitan Area Communications Commission, which regulates cable TV in Washington County.

“There’s more to it than programming costs. Anybody in the industry can pretty much figure that out. What more there is, we don’t know yet,” he said. “Unless programmers are trying to run Frontier out of business, why would they jack their rates that much?”

Smaller companies like Frontier generally do not try and buy programming on their own, but join group-purchasing plans like those offered by the National Cable Television Cooperative.  Municipal providers routinely purchase programming at substantial discounts.  It is not known if Frontier is a member, but they could be.

No rate increases are planned for broadband or telephone service.

Verizon FiOS pricing increased at less than half the rate Frontier will demand from subscribers in 2011. (Source: Metropolitan Area Communications Commission, Tualatin Valley, Ore.)

Frontier's Maggie Wilderotter escapes reality

Frontier Communications CEO Maggie Wilderotter has bought a first class ticket to Fiber Fantasy Island, where phone companies dream of delivering fiber-optic broadband service without actually deploying fiber.  They just tell you they did.

In an interview published today in The Oregonian, Wilderotter tries to convince residents Frontier’s arrival is good news, making promises about broadband and service improvements based on a company track record an independent observer would conclude she simply made up.

If Wilderotter’s command of the facts about her own company are reflective of “a distinct, improved image in its new territories,” Oregon is in big trouble.

Let’s review:

CLAIM: “We deploy fiber to the home all across the country. We don’t call it FiOS. We call it high-speed Internet. For our customers, the technology doesn’t matter. What matters is access, speed and capacity.”

REALITY CHECK: Frontier, as far as we have been able to determine, has not deployed fiber to the home anywhere in the country, with the exception of the FiOS network it acquired from Verizon.  Frontier Communications’ deployment of fiber optics to the home is comparable to the amount of fiber found in a box of Cookie Crisp cereal.  In their largest market, Rochester, N.Y., Frontier relies on the same legacy copper wire phone network it utilizes everywhere else.  It is highly misleading for Wilderotter to represent otherwise.  Fiber to the home means exactly that — fiber optic cable brought right to the home.  This is not a case of “you call it corn, we call it maize.”

This kitten is not an iguana.

Fiber optic cable is not also known as “high-speed Internet,” just as the cute kitten on the left is not called an iguana.  For the significant number of customers who ask Frontier to disconnect their service year-after-year, technology matters very much, and this particular phone company lacks it.  Frontier relies on the same DSL technology other phone companies and customers increasingly consider yesterday’s news.

In many Frontier service areas, there is no access to broadband because line quality will not support the service.  In Brighton, N.Y., a suburb of Rochester less than a minute from the Rochester city line, Frontier could only manage to deliver 3.1Mbps DSL speeds, and until recently Frontier was crying it needed a 5GB usage allowance because of the threat higher amounts of consumption might have on its network capacity.  Access, speed, and capacity does matter, which is why Time Warner Cable is picking up the bulk of its new broadband subscribers at Frontier’s expense.

CLAIM: “For high-speed, it means having speed and capacity in addition to reach. We’ll do add-on services. We have a terrific Yahoo-Frontier portal that will be a gateway on our high-speed Internet service. We are in the throes of putting together Wi-Fi hotspots that will be distributed throughout this market for customers.  If you’re a high-speed Internet customer of ours it’s free. We’re looking to put one at Hillsboro Stadium. Typically, we put them in hotels, convention centers, truck stops, trailer parks, outside parks, campuses for colleges, shopping centers, business campuses.”

REALITY CHECK:  Those “add-on services,” such as Frontier’s Peace of Mind, come with a price tag and are often required components of a bundled service discount offer.  As first impressions go, a company still relying on Yahoo! for a front end is not exactly on the cutting edge, nor are “portals.”  It’s like trying to impress new customers with free web space through GeoCities.  Actually, that is something Frontier could offer because GeoCities is now owned by Yahoo!

Frontier’s Peace of Mind Services

• Hard Drive Backup: $4.99 per month
• Hard Drive Backup + Unlimited Technical Support: $9.99 per month
• Hard Drive Backup + Unlimited Technical Support + Inside Wire Maintenance: $12.99 per month
• $50 early cancellation penalty if you get these services with a term commitment

Rochester’s experience with Frontier Wi-Fi has not been very impressive.  Most residents don’t even know the service exists.  The city and several suburbs offer limited Frontier pay-walled Wi-Fi service and a handful of free access hotspots in cooperation with Monroe County.  Unfortunately, many of the fee-based and free hotspots have fallen into disrepair and no longer function.  Signal strength is not impressive either, and many were not usable indoors.  We tested several of the free hotspots and discovered one only delivered a signal into a suburban parking lot, another only into an empty soccer field, and the third was not functioning at all.  Frontier’s record in Wi-Fi delivered more promises than actual service.

Those Wi-Fi services, by the way, are not free for all Frontier broadband customers.  Evidently Ms. Wilderotter is not acquainted with her own company’s products and services, nor Frontier’s own website:

So much for Wilderotter's claim Frontier's Wi-Fi network was free for all Frontier broadband customers.

CLAIM: “We deliver the highest value for the price you pay. We also have excellent customer service. We also don’t raise our rates every 12 months, no matter what.”

REALITY CHECK:  In Rochester, the out-the-door price Frontier charges its broadband customers is actually higher than that charged by Time Warner Cable, which delivers far faster connections.  In West Virginia, the state’s Consumer Advocate put together a chart depicting Frontier’s broadband prices.  Determine for yourself if it delivers the “highest value for the price you pay.”

Comparing Prices: Frontier's pricing doesn't look as exciting as Wilderotter would have you believe, as the West Virginia Consumer Advocate discovered

CLAIM: “If I look across the board at our basic service pricing, I don’t think we’ve raised prices anywhere in the last four or five years.”

REALITY CHECK: We looked and found Frontier demanding the right to increase basic service rates in New York by $2 a month each year for up to two years.  In fact, last November, the New York State Public Service Commission, at the request of Frontier, sent the company a letter authorizing a rate hike of $2 a month for customers in the state.  Even more enlightening was Frontier’s filing in August 2005 with the PSC demanding near-complete deregulation and rate relief allowing Frontier to raise rates up to $1 per month annually indefinitely for basic service.  Frontier also wanted consumer protection rules “relaxed” and ban the PSC from investigating consumer complaints.  One of the reasons they cited is that basic phone service is not the same critical service it used to be because people can communicate through blogs instead.

In fact, consumers should be asking why Frontier’s rates haven’t decreased.  From that same filing: “Frontier believes that with the decreasing costs and increasing bandwidths of new technologies and the acceleration of intermodal market entry, the market will cause rates for non-basic services in all parts of the State to decline.”

CLAIM: Local regulators tell me they did see a spike in billing complaints after Verizon took over. Any thoughts on why? — “Whenever there’s a change — you change the name on the bill, you change the format — customers tend to look at it more closely. We always expect a spike in billing calls whenever we’ve done acquisitions. It has already (settled out).”

REALITY CHECK: As Stop the Cap! has reported, Frontier’s takeover in West Virginia has hardly “settled out.”  Service interruptions, forgotten service calls, and other problems have plagued the state to the point the PSC needed new hearings to review the situation.  Many of Frontier’s billing complaints come from customers choosing to cancel Frontier service, only to find unjustified early termination fees added to their final bills, even when customers never agreed to a term contract.  That problem was so serious in New York, the state Attorney General fined the company and ordered customer refunds.  Changing a customer’s bill by adding $100 or more to the total amount due will always get a customer to look at the bill more closely.

CLAIM: “One of the big opportunities that we’re working on is the ability to display Internet content and video on the television set.”

REALITY CHECK: That “big opportunity” has been available to broadband users for several years now.

CLAIM: We also have a new site that’s called myfitv.com. We carry over 100,000 titles of free television content on this site. It’s a little bit like Hulu on steroids. It’s provided free of charge to all our customers.

REALITY CHECK: MyFitv is not “a little bit like Hulu on steroids.”  In fact, it is Hulu.  Frontier simply used Hulu’s “embed” feature to take content, slap the Frontier logo on it, and add Google ads in an attempt to rake in a few extra dollars.  You can do exactly the same thing yourself.  Meanwhile, the service is added to customer bills showing an amount of $0.00, a very inexpensive way to try and impress customers with content Frontier never developed, deployed, or created — just like their phantom fiber to the home network.

CLAIM: “We think over time the Internet will also provide different packaging, different prices, different ways to buy content than the traditional viewing platform. We also think that mobility is important. We want to make sure that whatever you do you’ll be able to take it with you.  The Sling technology is interesting, too. It’s something we’re talking about DISH Network with.”

REALITY CHECK: Every time Maggie has talked about “different packaging and prices,” it has been in the context of an Internet Overcharging scheme — limited usage allowances, extremely high rate increases for those deemed to have consumed too much, etc.  And yes, Sling technology is interesting.  A company conceived of the idea, built it, developed a marketing plan, and sold it.  That’s a concept Frontier needs to understand.  You cannot transform a legacy network with words alone.  Here’s an idea.  How about conceiving of a real fiber-to-the-home network, build one, develop a marketing plan, and then sell it.  For those in markets like Rochester, it’s the only way Frontier Communications will avoid becoming the horse and buggy carriage maker of the 21st century.

CLAIM: You’re around Seattle, around Portland, but not in them yet. Is there any possibility that Frontier would build into another company’s market? — “There’s always a possibility. It’s not a priority for us. And the reason why it’s not a priority is we’ve got a lot to do, just in the service areas that we own today. When I’m humming on all cylinders there, and I’ve been able to do everything I possibly can in those areas, then I might look to extend service areas out.”

REALITY CHECK: Translation — “when pigs fly.”  Frontier would be laughed out of the Seattle and Portland markets.

Ms. Wilderotter needs to be a lot more open and forthcoming with the press.  Frontier’s business plan makes it clear the company’s future is serving uncompetitive rural markets that will be forced to tolerate the products and pricing Frontier delivers.  Where competition exists, let’s face facts.  Frontier is not gaining market share — it is losing it, eroded away year after year by uncompetitive, substandard products at high prices.

That’s a reality you are bound to miss if you spend too much time with Mr. Rourke and Tattoo.

[The article was updated at 10:30am to include promotional and coverage information not available when the article was published late last night]

Clearwire today announced the launch of its 4G mobile broadband service for businesses and consumers in Rochester and Syracuse, New York.  Designed to deliver the Internet at speeds four times faster than 3G, CLEAR is priced comparably to many wireless broadband plans, but has no usage caps.

Pricing from their website offers customers stay-at-home and mobile service plans (or both).  Customers choosing month-to-month service have to buy the equipment up front, starting at $70 and pay a $35 activation fee.  Those who commit to a two-year service contract can lease the equipment for $4-6 a month and skip start-up fees.  Packages start at $40 a month for 6/1Mbps service.  At $55 a month, they take the speed limit off, providing occasional bursts of wireless speed up to 10Mbps.  Another $15 on top of that buys you nationwide 3G roaming.  Sales tax is not included.  Customers get a 14 day trial period to evaluate the service and can cancel within that window with no obligation, although our Jay Ovittore reports they’ll drag you through the cancellation process.

At $40 for unlimited use, CLEAR’s 4G service beats Cricket, which charges the same price for 3G speeds, but limits consumption to 5GB per month before they start throttling your speed to dial-up.  Other mobile broadband services typically charge up to $60 for 5GB of usage at 3G speeds.  Ironically, while 4G service from Clearwire is unlimited, the slower 3G speed service is not — there is a usage limit of 5GB per month on the 3G network, and then overlimit fees of five cents per megabyte kick in.

A statement from the company released early this morning talks up the fact CLEAR does not burden their 4G customers with Internet Overcharging schemes like other wireless broadband providers.

“Our residents now have a fast Internet connection that’s as mobile as they are,” said Jerry Brown, regional general manager for CLEAR. “And we’re thrilled to offer affordable rate plans with no limits on the amount of data customers use. No caps on usage, no penalties – our customers just use the Web as much as they want wherever they go – it’s that simple.”

Clearwire's coverage area in Rochester & Syracuse

In Rochester, CLEAR covers approximately 560 square miles and more than 600,000 people with service extending as far north as Lake Ontario, as far south as Canandaigua and Geneva (Ontario County), as far west as Spencerport, and as far east as Webster.

In Syracuse, CLEAR covers nearly 230 square miles and more than 265,000 people with service extending as far north as Brewerton, as far south as Nedrow, Auburn, and Cortland; as far west as Village Green, and as far east as Fayetteville and Manlius.

However, the company’s 4G coverage area is spotty in many areas in both cities.  Verifying coverage from their website is essential before considering CLEAR.  Anecdotal reports from some of our readers and others suggest 4G service from Clearwire is not nearly as robust as 3G service from some other providers, and dead zones and slow speeds have caused some to cancel service.  Here’s an example of their coverage in my part of the town of Brighton, just southeast of Rochester:

Clearwire's coverage of the 12 Corners/Elmwood Avenue area of Brighton, N.Y.

Some minor gaps in coverage are apparent near Commonwealth Drive, and if you were getting gas at the 12 Corners Mobil station or visiting Citizens Bank behind it, you’d be out of luck, but otherwise coverage looks fairly good to the west of Interstate 590.  However, a very strange gap pops up between Valley Road and South Grosvenor Road, also impacting a few apartment buildings at Elmwood Court Apartments, 3100 Elmwood Avenue.  That’s odd because although that part of Elmwood slopes slightly downwards, it’s still much higher than the homes on Valley Road or the apartments further back in the complex.  A major service gap opens up on Elmwood at Clovercrest Drive and extends into the very tony neighborhoods around Ambassador Drive and Clover Street.  But the country club set will do fine browsing away on the golf course at the Rochester Country Club further east.

In short, service can vary dramatically street by street, block by block, from nothing at all to full speed ahead.  Be sure to check your area before you commit to keeping the service, much less sign a two year contract for it.

For the rest of Rochester, if you live in the city or an inner-ring suburb, coverage is generally available.  Those further out in towns like Henrietta, North Chili, southern Pittsford, Honeoye Falls, Avon, Scottsville, Churchville, Brockport, Penfield and Perinton face significant gaps or no coverage at all.  Things improve dramatically in Ontario County in towns like Farmington and Victor and the cities of Canandaigua and Geneva.

For the greater Syracuse area, coverage pops up in Auburn and then disappears eastward until reaching Camillus.  Generally, coverage in Syracuse is not nearly as dense as in Rochester, with large gaps opening between suburbs and the city itself.  Mattydale is solidly covered, for instance, while Minoa isn’t.

Now that CLEAR has launched 4G service in Rochester and Syracuse, Road Runner Mobile, which is simply CLEAR rebranded as a Time Warner Cable service (they partly own Clearwire) will also soon be on the way.  Pricing in other Time Warner Cable cities wasn’t much different than from Clearwire direct, and some cable plans really push service contracts, which you really do not want on a service this new.  Do not commit to one unless you are satisfied with the service where you plan on using it.

Clearwire’s 4G Network in 2010

CLEAR 4G service is currently available in 44 markets across the United States, including: Syracuse and Rochester, N.Y.; Atlanta and Milledgeville, Ga.; Baltimore, Md.; Boise, Idaho; Chicago, Ill.; Las Vegas, Nev.; St. Louis and Kansas City, Mo.; Philadelphia, Harrisburg, Reading, Lancaster and York, Pa.; Charlotte, Raleigh, and Greensboro, NC; Honolulu and Maui, Hawaii; Seattle, Tri-Cities, Yakima and Bellingham, Wash.; Salem, Portland and Eugene, Ore.; Merced and Visalia; Calif.; Dallas/Ft. Worth, Houston, San Antonio, Austin, Abilene, Amarillo, Corpus Christi, Killeen/Temple, Lubbock, Midland/Odessa, Waco and Wichita Falls, Texas; central Washington, D.C.; Richmond, Va.; and Salt Lake City, Utah.

In the summer of 2010, CLEAR 4G will launch in Tampa, Orlando and Daytona, Fla.; Nashville, Tenn.; Modesto and Stockton, Calif.; Wilmington, Del.; and Grand Rapids, Mich. By the end of 2010, CLEAR 4G will also be available in major metropolitan areas such as New York City, Los Angeles, the San Francisco Bay Area, Boston, Denver, Minneapolis, Miami, Cincinnati, Cleveland and Pittsburgh.

You can read a company-provided tutorial about the service below the jump.

… Continue Reading

Comcast's usage meter is now available in 25 states

Comcast customers in at least 25 states have been notified that Comcast’s new usage measurement meter is now up and running.  Comcast introduced a 250 GB monthly usage limit in August 2008 after the Federal Communications Commission stopped the company from throttling usage-intensive file-trading applications.  Comcast has enforced the cap among those customers who regularly exceed it by wide margins, usually warning customers by phone or mail that they must reduce usage or face account suspension.  The usage meter application allows the company to direct customers to the self-measurement tool the company hopes will reduce the need for warnings.

Customers in Alabama, Arkansas, Connecticut, Colorado, Delaware, Florida, Georgia, Kansas, Maine, Maryland, Minnesota, Missouri, Nevada, New Hampshire, New York, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, Washington, D.C., West Virginia, and Wisconsin should have already or will receive e-mail from the company officially notifying them about the launch of the usage meter.

Since the meter was introduced, broadband usage and pricing has increased for many customers, but the usage cap has not.  While generous by current standards, an inflexible usage limit will increasingly trap customers who use Comcast broadband service for high quality video streaming, file backups, or file trading activities which can consume considerable bandwidth.

Informally, Comcast has allowed some residential customers to purchase second accounts if they intend to blow past their usage allowance, because the company currently offers no official provisions for those who exceed the limit.

Oregon's telephone company service areas

Frontier Communications has won approval to assume control of telephone lines serving 310,000 Oregonians.

The Oregon Public Utilities Commission Friday unanimously approved the transfer of service from Verizon to Frontier as part of a 14-state transaction.

“First and foremost we want to ensure that customers are not harmed by this transaction.  That’s why we are requiring more than 50 conditions, all aimed at making sure customers are not harmed by this sale,” Chairman Lee Beyer said. “In addition, we are requiring Frontier Communications to spend $25 million on expanding high-speed internet access to its Oregon customers by July 2013.”

In return for approval, Frontier agreed to PUC demands for customer service protections:

• A commitment that Frontier spend at least $25 million to expand high-speed broadband in Oregon by July 2013;
• No changes in “commission-regulated” retail service plans for at least three years;
• Costs of the transition must not be paid by customers in the form of rate increases;
• 90-day window to change long distance carrier without any fees;
• An independent audit, paid for by Verizon, to ensure Frontier can handle service for those customers affected by the deal;
• An opt-out provision letting Oregon’s FiOS subscribers terminate their contracts without penalty if Frontier reduces Internet speeds or drops any of its television channels.

What is missing from Oregon’s agreement?

• A prohibition of Internet Overcharging schemes like Frontier’s 5 gigabyte “acceptable use” policy that potentially limits customer’s broadband use.  Expanded broadband that customers can only use for basic web browsing and e-mail, without fear of exceeding the limit, indefinitely punishes rural Oregonians with no broadband alternatives;
• A specific definition of what constitutes “broadband” speeds.  Frontier can continue to deliver the 1-3 Mbps it routinely provides to its less urban service areas.  While better than nothing, Oregon regulators could have used the deal as leverage to win 21st century broadband speeds from Frontier, not yesterday’s ‘barely broadband;’
• Fines and penalties that will punish a provider that does not invest appropriately in high service standards to provide quality service, and a trigger to permit automatic cancellation of operating certificates should Frontier go bankrupt.

Too many of these deals offer upsides for Wall Street and little benefit to consumers, especially those dependent on their landline phone company for basic communications services.  By forcing requirements that prove costly for a provider to renege on, investors will understand their gains will only happen when they are assured Frontier is doing right by their customers, as well as their shareholders.

Oregon is the sixth state to approve the sale.

Frontier currently serves only 12,000 customers in the state, mostly in southwest Oregon, including the communities of Azalea, Canyonville, Cave Junction, Days Creek, Glendale, Myrtle Creek, O’Brien, Riddle, Selma, and Wolf Creek.

The company’s new customers will come mostly from Washington County, east Multnomah County, and from several pockets of customers in the northwestern part of the state.  Oregon’s largest telephone provider is Qwest Communications, but the state has numerous smaller independent providers as well.