10-digit dialing is a nuisance in Canada too, where British Columbia and Alberta customers were told to dial the area code for every call.

Verizon FiOS’ “digital phone” product is a far cry from Verizon’s traditional landline service.  Some central New York customers now getting hooked up to the fiber-to-the-home service report they are frustrated because they have to dial an area code for every phone call, even those to friends and neighbors right next door.

Verizon told WSYR-TV that unlike traditional landline service based in your neighborhood, Verizon FiOS phone service is, in fact, a nationwide Voice Over IP (VOIP) service, and uses servers across the country to process phone calls.  Although many traditional VOIP services have since learned ways around the area code limitation, Verizon has not made a similar effort to allow customers to pre-designate an area code.  That would permit Verizon’s servers to assume any seven digit number dialed was within a particular area code and complete the call accordingly.

Instead, Verizon advises customers to learn how to use the included “speed dial” feature to make dialing more convenient.

Verizon’s competitors, including companies like Comcast and Time Warner Cable are quick to point out seven digit dialing is available from them, except where multiple overlaid area codes in the same geographic area exist.  So far, parts of western and central New York have endured area code splits, but for now each service area maintains just a single area code.

[flv width=”400″ height=”290″]http://www.phillipdampier.com/video/WSYR Syracuse Dialing area code for Verizon FiOS 1-25-12.mp4[/flv]

WSYR in Syracuse answers viewers’ suggested stories.  Today, it’s about why Verizon FiOS customers are forced to dial 10 numbers for every phone call.  (1 minute)

Years ago, phone companies could not simply raise rates willy-nilly.  They had to justify rate increases before an oversight body, usually on the state level.  But after spending millions to lobby state lawmakers to deregulate the phone business, AT&T is set to recoup their investment with a dramatic 25 percent rate increase for landline phone service in the state of California.

Some residential customers have kept basic landline service as a last resort, switching to “measured service,” where customers pay a small charge for every call they make or receive a calling allowance that covers several calls a day.  Measured service can deliver substantial savings over traditional flat rate service.  But now AT&T is targeting these “budget customers” for some stunning rate hikes.

Starting March 1st, AT&T is raising rates by nearly 25% for measured service — from $12.37 to $15.37 a month — a $3 increase.  After your calling allowance is exhausted, each additional local call will cost three cents per minute.

Customers with flat rate service will also pay AT&T $1.05 more — $21 a month (before taxes, fees, and surcharges) for basic flat rate, unlimited local calling.

Best of all (for AT&T), the company does not have to explain or justify the rate increase.  That attitude was evident when reading the Los Angeles Times‘ account of the rate hike, complete with an arrogant, shoulder-shrugging AT&T spokesman:

Lane Kasselman, an AT&T spokesman, said fees for measured and flat-rate calling plans are going up because, well, because.

“Goods and services go up,” he told me. “That’s how our economy works.”

The increase is expected to hit seniors and low income consumers the hardest — they are the biggest constituency of the 10 percent of AT&T customers who choose measured-rate, budget service.  They are also the least likely to have cut the cord on their traditional landline service in favor of a cell phone or competing Voice Over IP provider.

AT&T hints that the rate increase is partly to push customers into multi-service bundles that include phone, Internet, and television service.  By hiking the price of individual services, the bundled price suddenly seems to deliver the best “savings” for customers.

Critics call that price pumping — artificially raising the price of a-la-carte services to create phantom savings for the company’s higher-revenue bundled service packages.

A San Francisco advocacy group calls it something else.

“It’s extortion, pure and simple,” said Regina Costa, telecom research director for the Utility Reform Network, or TURN, a consumer group. “There’s no proof that these price increases are justified.”

Thanks to California’s deregulation of the landline phone business, no proof is required.

A western Indiana fiber-to-the-home project first envisioned more than five years ago is finally moving forward as it wins unanimous approval at the Tippecanoe County Redevelopment Commission.

Lafayette and West Lafayette, Ind., home to prestigious Purdue University, has a broadband problem.  Broadband advocates claim current providers Comcast and Frontier Communications underserve Tippecanoe County.  The former has put western Indiana on the “long list” waiting for service upgrades, and Frontier Communications offers little more than slow speed DSL in the region.  While Purdue arranges for its own Internet connectivity, off-campus students and area residents have had to make due with what the local cable and phone company offers, which isn’t much according to the locals.

“Comcast service has recently improved, but there is a big difference between Comcast service in a city like Chicago and what they deliver this part of Indiana,” shares Stop the Cap! reader Nick Jefferson, who tipped us to the recent developments.  “Frontier is a complete waste of time, and they have alienated customers across Indiana after taking over from Verizon Communications.”

In 2005, Tippecanoe County officials met with Verizon to encourage construction of its FiOS fiber-to-the-home network in western Indiana, as it had planned for the eastern Indiana city of Fort Wayne.  But Verizon sold off its Indiana landline operations to Frontier Communications, which has since shown little interest in expanding the fiber to the home network it inherited.  Now the county is considering financing a fiber network itself, to be ultimately run and administered by Cinergy MetroNet, which already provides service in the Indiana communities of Connersville, Greencastle, Huntington, Madison, New Castle, North Manchester, North Vernon, Seymour, Vincennes, and Wabash.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WLFI Lafayette Ultra-high-speed net may be headed here 3-21-11.flv[/flv]

WLFI-TV explained the basics of the new fiber-to-the-home network and how it will be paid for in this report from March, 2011.  (2 minutes)

The $40-50 million project would not come out of taxpayer funds directly.  Instead, a novel financing approach would cover construction costs over a 15-20 year period using a combination of MetroNet investor funds and a “tax increment financing” district, which would provide a temporary tax abatement during the period the network is being paid off.  Taxpayer dollars would not be exposed — the financial risks would be to MetroNet and its investors alone.

A fiber to the home service would provide a network capable of gigabit broadband speeds, but historically Cinergy has offered lower speeds to their other Indiana customers, albeit at highly competitive pricing, along with packages of video and phone service.

Larry Oates, head of the West Lafayette redevelopment commission for the project, says the fiber network delivers more than just the promise of better broadband service

“This project could be a great economic development tool,” Oates told The Exponent. “It is up to the businesses and residents who live here to decide what to do with it. We are just facilitating their potential.”

The County Commissioners will decide later whether to give the project a final approval.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WLFI Lafayette Tippecanoe County moves forward with plans for Fiber to Home 1-9-12.mp4[/flv]

WLFI in Lafayette reports Tippecanoe’s fiber to the home network has gotten unanimous approval from the country redevelopment commission.  (2 minutes)

Customers of some of the largest cable, phone, and satellite companies will pay an average of 3-6 percent more for service in a series of rate increases taking effect between now and the end of February.

AT&T U-verse

If your introductory offer has expired, expect to pay more for just about everything as of Feb. 9.

Cable TV:

• U-family will increase from $54 to $57,
• U100 will increase for some from $54 to $59 and for others from $59 to $64,
• U200 will increase from $69 to $72/U200 Latino will increase from $79 to $82,
• U300 will increase from $84 to $87/U300 Latino will increase from $94 to $97,
• U400 will increase from $109 to $114,
• U450 will increase from $117 to $119/U450 Latino will increase from $127 to $129.

For high speed Internet customers who ordered their current speed before June 12, 2011, effective with the February 2012 billing statement, the monthly price for Basic will increase from $19.95 to $25, Express will increase from $30 to $33, Pro will increase from $35 to $38, Elite will increase from $40 to $43, and Max will increase from $45 to $48. If you are paying a monthly high speed Internet equipment fee for the Residential Gateway, the amount will increase from $4 to $6.

For Voice Unlimited, effective on February 1, 2012, the monthly price will increase from $33 to $35.

AT&T blames increased programming costs and “the cost of doing business” for the rate increases.  AT&T is increasing broadband pricing despite enjoying further cost reductions from their Internet Overcharging scheme implemented in 2011.

Comcast

Comcast implements rate increases at different times of the year throughout its national service area.  But a preview of what is forthcoming can be seen in south Florida and Minnesota, where Comcast’s new rates for 2012 have increased an average of 5.8 percent.  That comes after a 2 percent rate hike last year.  It’s a bitter pill for many customers to swallow, because Comcast has also been moving popular cable channels like Turner Classic Movies into the more expensive Digital Preferred package.  The price of that full basic package will now run just short of $85 a month. Customers in Minneapolis are staring down these new rates:

• Basic 1: no change in most franchise areas.
• Digital Economy: increases from $29.95 a month to $34.95 a month, or 16.7 percent.
• Digital Starter: increases from $62.99 a month to $66.49 a month, or 5.6 percent.
• Digital Preferred: increases from $80.99 a month to $84.49 a month, or 4.3 percent.

Comcast blames increased programming costs and upgrade expenses associated with its now completed DOCSIS 3 project.  Comcast also has converted many of its service areas to all-digital service, which has opened up additional room to sell more expensive broadband packages, add additional HD channels, and make room for new product lines relating to home automation and security.

Cox Cable

Broadband Reports readers are sharing anecdotal evidence Cox has begun its own 2012 rate increase campaign.  In Florida, cable TV rates are up yet again:

Prices for Cox TV and Cox Advanced TV will be as follows:

• Cox TV Starter will change from $19.55 to $22.85/mo.
• Advanced TV will change from $5.50 to $4.20/mo.
• Advanced TV Standard Definition receivers will change from $5.55 to $6.99/mo.
• Advanced TV High Definition, High Definition/DVR & DVR receivers will change from $7.45 to $7.99/mo.

Advanced TV Paks will change:

• Any 1 Pak (excluding Variety Pak) from $4.00 to $4.25/mo.
• Any 2 Paks (excluding Variety Pak) from $8.05 to $8.50/mo.
• Any 3 Paks from $12.00 to $12.50/mo.
• Variety Pak will be $4.00/mo.

Premium pricing will change:

• 1 premium channel from $13.99 to $14.99/mo;
• 2 premium channels from $23.99 to $24.99/mo;
• 3 premium channels from $30.99 to $34.99/mo;
• 4 premium channels from $36.99 to $44.99/mo.
• (Pricing for the 3rd and 4th Premium channels will be grandfathered at the current price for existing customers.)

Cox’s Preferred Internet tier is increasing from $49.99 to $53.99 a month.  Basic phone service increases from $11.75 to $13.18, and popular calling features like Caller ID are also increasing (from $5.95 to $9.00 per month).

Rates vary in different franchise areas.

DirecTV

The satellite TV provider will raise rates on Feb. 9 by 4 percent on average. Its costs are going up by more than that, the company said on its website: “The programming costs we pay to owners of TV channels will increase by about 10 percent.”

DirecTV defends its rate increase, noting it will introduce new features in 2012 that include more than 170 HD channels and the most 3D viewing options of any television provider.  The full breakdown is provided from DirecTV:

Consumer Tips

1. Customers who subscribe to bundled services will see the fewest rate increases.  The more services you bundle, the lower the typical cost of each component within the bundle.  It rarely pays to have one company as a TV provider and another delivering your broadband because standalone service pricing is increasingly the most expensive option.
2. Ask for an extension of your introductory or promotional rate.  Request pricing from the competition and be prepared to summarize it with your current provider when arguing for a lower rate.  If your current provider thinks you are serious about jumping to another provider, they may lower your rates to keep your business.
3. Be prepared to switch.  Cable companies base their retention offers on several factors: what the competition offers, how long you have been a customer (2+ years guarantees a better retention deal) and how you pay your bill.  If you are a late payer, expect a much more difficult time negotiating a lower rate.  You may encounter a brick wall if you are labeled a “flipper” that jumps between providers’ introductory pricing offers.  But even these customers will be welcomed back, with lower rates, when they inevitably return.  They just won’t get their promotional offer renewed.
4. Some companies reserve their most aggressive pricing for customers who actually schedule a disconnect or turn in their equipment.  Cable companies have gotten wise to empty threats from negotiating customers.  If you schedule a complete service disconnection two weeks in advance, some companies will take you seriously and call you with the most aggressive “win back” offers available, especially if you turned in your cable equipment.
5. Dump extras overboard.  Premium channel pricing has skyrocketed recently after remaining relatively stable for nearly two decades.  HBO is now at or above $15 a month in many areas.  As customers try to economize, premium movie channels are usually the first to go, and many cable operators are starting to lose preferred wholesale volume pricing discounts.  They are passing along new, higher prices to the dwindling number of premium customers left.  Scrutinize your cable bill carefully for potential savings.  Look for mini-pay tiers of HD channels you never watch, consider downgrading your “digital phone” package to local-only calling if you rarely make long distance calls, and consider tossing “Turbo” broadband speed packages that only incrementally increase download speed.  Many customers originally signed up to obtain higher upload speeds, but as cable companies boost speeds for all of their customers, the extra boost may no longer be worth the money.

Wall Street is encouraging Verizon Communications to sell off its landline telephone operations to clear a path for a potentially-profitable merger with British mobile phone company Vodafone Group Plc.

Analysts at Goldman Sachs Group are behind the research report, which suggests Verizon’s recent non-aggression treaty with Comcast and Time Warner Cable makes the sale of Verizon’s landline phone and FiOS fiber to the home network more likely. Verizon will earn a percentage of every cable TV/phone/broadband subscription sold, effectively making Verizon’s own wired network redundant. Potential buyers could include Frontier Communications, CenturyLink, or Windstream, which all have business plans that depend on landline networks fewer Americans are using.

Should Verizon clear away its legacy landline and FiOS networks, Goldman Sachs suggests, a merger with Vodafone would be a “clear fit” for the two companies.

“The remaining wireless and enterprise businesses would have faster growth and a clear fit with Vodafone’s assets and strategy, making it a more attractive merger partner,” Bloomberg News quotes from the report.

“Given that it no longer faces the threat of integrated cable competitors, Verizon could potentially spin off its remaining [landline] assets,” along with “large” pension and benefit liabilities, the Goldman analysts added.

Verizon would also eliminate its ongoing dispute with the two largest unions representing its landline workers — Communications Workers of America and the International Brotherhood of Electrical Workers.  Both unions are still trying to negotiate a new contract with Verizon after a brief, but contentious, summer strike. Verizon Wireless is almost entirely non-unionized.

Vodafone’s share price has been rising recently, perhaps anticipating a potential merger that would give Vodafone a stronger hand in the U.S. marketplace.

Verizon’s investment in its landline network, along with interest in expanding its well-regarded FiOS fiber to the home service, has remained stalled for the past few years.  Recently, the company indicated an interest in moving away from fiber optics to serve broadband customers, and rely on its wireless LTE 4G network instead.

Verizon’s new CEO Lowell McAdam comes from Verizon’s wireless division, and has not shared his predecessor’s enthusiasm for fiber upgrades.

Merger Partner?

While the prospect of an all-wireless future for Verizon may seem good for shareholders, consumers are likely to pay the price:

1. The Justice Department is reviewing the antitrust implications of the non-aggression treaty between Verizon and its cable competitors;
2. The sale of Verizon’s landline network to an independent provider could doom the company’s fiber optic network and limit rural Verizon customers to 1-3Mbps DSL;
3. Verizon Wireless’ prices reflect its market share and lack of strong competition.  The company’s LTE wireless network, although fast, has suffered from reliability problems and is heavily usage-limited.  It may prove unsuitable as a home broadband replacement for rural customers;
4. Reduced competition for telephone, video, and broadband will likely result in higher prices for existing cable subscribers, too.

Verizon is hardly the first phone company to ponder getting out of the phone business.  AT&T has been lobbying to rescind rural universal service requirements for years.  If successful, AT&T could abandon its rural landline network and provide customers with higher-priced cell phone service instead.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CWA Parody of Verizon Video.flv[/flv]

Verizon’s unionized workers are still fighting for a new contract, and released this parody video in response to a company-produced DVD mailed to union workers’ homes.  (3 minutes)