You gotta love Verizon’s $30 upgrade fee to provide customers with the level of service and support they have come to expect. I’d rather deal with “no credit, no refunds, no checks” CricKet.

Verizon Wireless customers pay a $30 “upgrade fee” when purchasing new equipment with a new two-year contract, ostensibly to “provide customers with the level of service and support they have come to expect.”

After losing more than an hour of my life yesterday afternoon inside a Verizon Wireless store, I am here to tell you it isn’t worth it.

For the second time in seven months, Verizon Wireless has taught me they specialize in keeping customers waiting, giving them conflicting information, and proving the employees should be availing themselves of the “Wireless Workshops, online educational tools, and consultations with experts who provide advice and guidance on devices that are more sophisticated than ever.”

The latest nightmare began with an upgrade to Samsung’s Galaxy S3 that arrived with two 4G SIM cards that were initially declared useless-on-arrival. Despite early assurances that a customer service representative should be able to manage the activation of the phones without loss of our coveted unlimited data plan, it turned out a visit to a local Verizon Wireless store was recommended to swap out the 4G SIM cards enclosed in the box as part of a slightly-complicated activation.

Walking into the Pittsford, N.Y. Verizon store brought a feeling of trepidation when I realized my friend “the Verizon Wireless Welcome Kiosk” that I had been signing in at during previous visits was now missing. Instead, the store manager, armed with an Apple iPad, registered me for the inevitable queue of customers waiting for assistance.

“The wait should be around 15 minutes,” the store manager promised.

Nearly 30 minutes later, as I watched what seemed to be the only employee not on break deal with Ms. I-Don’t-Know-and-I-Can’t-Decide, the store manager returned to ask why I bothered to show up in-store to activate phones I could have managed online or by phone.

“Because I was told to,” I explained. “I have two phones that require new SIM cards and special attention to ensure I don’t lose my unlimited data plan.”

“Well, you have to activate them first,” came the reply.

That was news to me, of course, when a Verizon Wireless phone representative an hour earlier warned me specifically not to activate the phones and let a store customer service representative handle everything.

“Please don’t even attempt to activate the phones because I have had customers doing that all day who forfeited their unlimited data plans when they tried,” urged the phone representative. “You need to bring everything to the store and make sure they do it for you because I don’t want you inconvenienced.”

Good intentions, but reality always intrudes.

Phillip “Kill Me Now” Dampier

By now, 35 minutes into my 15-minute wait, several additional frustrated customers trickled in, all with the same phone. One found he couldn’t activate it even when he tried. Another needed his assigned a different number. Again, the store manager insisted the customers activate their phones before approaching a store employee.

As I wearily watched Ms. Indecision -still- taking up the time of the employee that was going to serve me next, I heard other customers casually griping about upgrade fees, the new Share Everything plan, and Verizon’s idea of customer service these days. The consensus: Verizon was shaking down their customers for more cash and also punishing people forced to walk into a store to resolve a problem. Pittsford is one of Rochester’s wealthiest suburbs, and even here customers were tapped out.

I have literally been here before. Back in December, at the same store, a remarkably unhelpful Verizon Wireless employee insisted the problems with my last phone, intermittent they might be, were not his problem if he could not exactly duplicate it while I waited. Since he did not have time to try (but had at least 15 minutes to chat up a young lady that preceded me about his holiday pie-making experiences), I was on my own, just as my warranty was set to expire.

He no longer works there.

As each new customer arrived on this remarkably warmer July day, the store manager warned the wait was growing longer and longer. He didn’t mention the customer -still- at the counter contemplating this or that and holding up the entire free market wireless economy in the process.

At this point, I was advised I could activate my phones by dialing *228 and I’d be all set. Only a year earlier, a Verizon employee told me 4G LTE customers should burn their fingers with a cigarette lighter if they ever felt the urge to try, because it would “scramble the SIM card forever.” True or false, I felt burned already.

I decided instead to call Verizon Wireless customer service, ironically, from inside the Verizon Wireless store that was supposed to be giving me “the level of service and support I have come to expect.”

“Due to (incredibly) high call volumes, your wait (is likely to be until the snow flies before someone will pick up your call).”

I then realize there are two other customers doing precisely the same thing I am, which probably explained those high call volumes.

Mr. Store Manager returned to ask if I had activated my phones yet. I explained I could not get through, but was bemused to notice the phones had now powered up with messages indicating they were in the process of activating themselves.

An hour into my 15 minute wait…

“That’s because you had your phones turned on,” came the odd explanation. “You have to turn the phones off before you call customer service.”

“I don’t think so, I seem to recall my Samsung Droid Charge activated itself in a similar fashion,” I replied.

“No, that isn’t how it works.”

Two minutes later, the phones activated themselves. I’m not certain I’ll ever know exactly why, especially after being told I had dud 4G SIM cards. But I also found it ironic that even a confused customer like myself, now dying in my personal Verizon hell, seemed to know more than the people working there, and I didn’t even take that Wireless Workshop.

Regardless, I was elated that stage of my trial had come to an end. Now I only had to have an employee swap those SIM cards out to assign the phones to the proper phone numbers. Then I could escape my excellent customer experience for good.

But there was Ms. Should-I-or-Shouldn’t-I, still tying up the growing line (the wait had now grown to perhaps an hour for customers entering the store… at their own risk.)

Suddenly, an employee miraculously returned from break and I was finally helped.

“You want insurance on these phone, right?”

“No.”

“But you have 14 days to change your mind.”

“No.”

“Which phone do you want on which number.”

“Since the phones are precisely the same, it does not matter to me.”

Those were the days.

Long pause.

The employee kept dropping below the counter to deal with an interminable number of snake-long thermal cash-register-like receipts that kept spitting out of the printer whenever he did anything on the slowly-responding computer.

After another 15 minutes, the new 4G SIM cards were in.

“Now let me show you some of the cool new features on your phone, but first enter your name and password.”

I compromised by entering my name and password but suggested we skip the training course. Besides, my personal lease renting space inside the store (and my new 2-year contract) was likely to expire before I would finally get out of there.

“We have some nice new cases to show you to protect your phones.”

“No thanks.” Now I am questioning why I bought the phones in the first place.

“Okay, now it is time to restore your apps.”

Kill me now.

As soon as the phones were up and running, back into the boxes they went, and polite thank-yous were delivered to all concerned. I then busted out of the store, more than an hour after my promised 15-minute wait, like a prisoner escaping Attica. Sure I realize I am not “free at last,” stuck on a new contract with Verizon for another two years, but I can do my time standing on my head so long as I can avoid ever dealing with another Verizon Wireless store… and keep my unlimited data.

They should pay me $30 to go through upgrading anything with them. Oh wait, just a year or so ago they did — $100 as part of Verizon’s long-gone “New Every Two” program… exorcised right along with their budget-minded voice calling options, unlimited data, and text plans suitable for the occasional text here and there. In their place, the all-new, super exciting $90 Share Everything plan… including $50 for a “generous” 1GB data allowance.

Thanks Verizon Wireless!

Phillip "An Ex-Frontier Customer" Dampier

The other week while sitting in the dentist’s office waiting for my wallet to be drilled, I overheard a conversation at the reception desk over the latest effort by Frontier Communications to shoot itself in the proverbial foot.

“I decided to get rid of my phone line the other day and when I called Frontier to disconnect, I was told I would owe them more than $150 in disconnection fees for a contract I never knew I had with them,” opened the conversation.

“That happened to my sister as well, and she couldn’t believe it because nobody ever told her she was on a contract,” came the reply.

“I never knew I was either, and I told the representative they needed to show me where I signed up for anything like that or else I’m not paying it,” insisted the latest victim of Frontier’s phantom service contracts.

Within a minute or two, all had decided they were done doing business with the phone company that got its start more than 100 years ago as the well-regarded Rochester Telephone Corporation.  In 2012, there was no turning back after $150 “disconnect” penalties and other insults.  They were intent on being rid of Frontier once and for all.

With customer unfriendly policies like that, it comes as no surprise Frontier has been losing customers in the Rochester market for years, mostly to cell phone providers or Time Warner Cable — the latter which delivers more value and far superior broadband speed in western New York communities not served by Verizon FiOS.

Surprise... you're on a contract with a $150 cancellation penalty.

Twenty years ago, Rochester Telephone delivered excellent value, charging about half what then-NYNEX customers in Buffalo and Syracuse paid for telephone service. But as Frontier has increasingly disengaged from being an aggressive contender for telecommunications services in Rochester, people in this region of one million noticed, especially when Verizon’s fiber to the home service arrived in Buffalo, Syracuse, Albany, and beyond.

What did Frontier offer? Not much. Frontier’s local general manager Ann Burr, who used to be in charge at Time Warner Cable locally, told local media Rochester didn’t need faster broadband speeds. That’s a fitting argument for a company that doesn’t deliver them and believes 3Mbps broadband is plenty fast enough.  If you don’t like it, feel free to leave, so long as you aren’t trapped with that long-term service contract you never knew you had. (The New York Attorney General’s office has already spanked Frontier once for the practice, forcing them to issue refunds, and judging from last week’s conversation, it appears the problem has not abated.)

The fact is, Frontier offers little compelling to the landline customers they have left.

Rochester’s experience with Frontier seems apropos when contemplating the phone company’s latest quarterly results, which one analyst called “ugly.” Having listened to at least a dozen of Frontier’s quarterly conference calls with investors over the past three years, there seems to be no shortage of promises of better days to come.  Frontier is among the few companies I have heard call customer losses of 5-11% every quarter “an improvement.”

As one investor put it, the management at Frontier should win an Academy Award for feigned optimism.

This week, the company announced first-quarter earnings fell 51% thanks to lower revenue earned from the dwindling number of residential and business customers. But better days are ahead, really.

Road to nowhere?

Frontier has spent the last year treating their “system conversion” for ex-Verizon territories as the telecom equivalent of the Holy Grail.  Once achieved, the company can do anything. The reorganization underway internally at the company is supposed to improve its lackluster customer service, generate more marketing opportunities, save the company money, and open the door to a new chapter of a unified Frontier family, with ex-Verizon and always-Frontier employees coming together to do things “the Frontier way.”

How much longer investors will stick around waiting for the promised land remains an open question. The stock has already achieved a 52-week low, and if the company cuts its dividend — the primary point of attraction for investors — it will drop much lower.

Frontier’s management decisions have effectively left the company between a rock (Wall Street) and a hard place (its dwindling customers).  Much of the company’s success is predicated on rural broadband/landline service, where the company expects to face little competition.  But Verizon, the company that sold them much of their inherited network, has a little surprise for them.  After selling off the “junk” (a deteriorating copper landline network they no longer care much about), the company’s wireless division is coming back to town to poach Frontier’s customers.

Verizon’s grand plan is to pitch two products:

1. Home Phone Connect: Verizon’s landline replacement works with the customer’s home phones over Verizon Wireless’ network. Customers can share minutes on an existing Verizon Wireless plan for $9.99 a month or get unlimited calling for $19.99 a month. It comes with most popular calling features included.
2. Verizon HomeFusion Broadband: Verizon Wireless has excess capacity in rural areas, especially on 4G LTE-equipped towers, so why not put it to use? While commanding a premium at $60 a month for just 10GB of usage, customers who value speed over money may tolerate that diamond price.  If Verizon finds a way to relax that usage limit and lower prices, it could present a real competitive threat to phone companies delivering lower end DSL service.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/Home Phone Connect – Home Phone Transfer Verizon Wireless.flv[/flv]

Verizon Wireless introduces Home Phone Connect, a product designed to tell landline companies like Frontier to take a hike.  (2 minutes)

While Verizon isn’t likely to immediately grab major market share with either product, it foreshadows an intent to leverage their rural wireless network to remain a player, even in places where they have abandoned selling landline service.

How to Stop the Erosion

Turning things around? Frontier contemplates licensing U-verse from AT&T

Even in a barely-competitive marketplace, companies must invest to keep up. But that investment annoys Wall Street, which can depress the stock (and the all-important dividend). But improved service retains customers (and may even win a few ex-customers back). So news that Frontier was considering licensing U-verse technology to upgrade their major markets is a logical first step to stop the bleeding. Frontier is irrelevant delivering broadband at speeds of 3Mbps at out the door prices that meet or exceed what the much-faster cable competition charges. U-verse would allow Frontier to deliver faster broadband (up to 24Mbps is plenty fast for a lot of consumers), build its own IPTV offering instead of relying on satellite dish reseller agreements, and maintain landline customers, assuming the company prices its bundle correctly.

While we are big proponents of fiber-to-the-home service, it is clear Frontier will never spend the money to deliver it, even to their largest service areas. They will prefer the cheaper route of fiber to the neighborhood, relying on existing copper infrastructure to connect individual homes to the service. It represents a reasonable first step.

Frontier also must continue aggressive investments in their broadband network in more rural areas. Some of the company’s regional backbones remain woefully congested, and the company just doesn’t deliver the speeds it markets on its website in too many areas.

High speed should really mean "high speed"

Jameson, a Stop the Cap! reader, is a good example. He signed up for “Frontier Max DSL” which claims it can deliver up to 6Mbps in his part of east-central Indiana.  He ended up with 1.6Mbps instead, in part of because Frontier’s records were inaccurate.

I called Frontier tech support after reading some stuff on Stop the Cap! and another site, learning that since I live under 5000 feet from the DSL termination point (the Frontier building down the road) that I shouldn’t have any problems getting their highest speeds. I got lucky and got a customer support agent who understood my problem, and a tech support guy who genuinely seemed concerned about my issue. The tech guy checked Frontier’s records and I was labeled as being 30,000 feet from the building, but I’m really only around 4200 feet away, and my speeds were provisioned at 1.6mbps down and around 450kbps up. He put in a support ticket to have my speeds automatically raised up to the max I’m paying for.

Jameson ended up with around 7Mbps — a little better than the advertised speed, but only because he thought to ask and reached the right people at Frontier to follow through.

Some of our readers in West Virginia are not so lucky, having the mediocre speeds they fought to receive reduced further when a technician suddenly remotely adjusts speed provisioning on customer equipment to reduce their maximum broadband speed.

Frontier’s DSL problems don’t just exist in rural areas. We experienced it first-hand in 2009 when the company advertised up to 10Mbps speeds in Rochester, and delivered 3.1Mbps to us instead.

Consumer Reports documents this is not an isolated problem, with only two-thirds of Frontier customers getting the broadband speeds they pay to receive. If and when a competitor does better, Frontier loses another customer.

Finally, Frontier must improve its customer service. The company is notorious for giving inconsistent answers to customer questions, doesn’t always follow through on commitments, and maintains far too many “gotcha” terms and conditions on contracts that leave customers exposed to unjustified early termination fees.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CNET Verizon HomeFusion Broadband May 2012.flv[/flv]

CNET shows off the equipment used with Verizon’s new HomeFusion wireless broadband service.  (2 minutes)

Frontier Communications has confirmed a Stop the Cap! exclusive report that the company has shown an interest in a licensing arrangement with AT&T to deliver U-verse to Frontier customers in larger markets.

Maggie Wilderotter, CEO of Frontier Communications today told investors on a morning conference call that the company likes the U-verse product and is considering deploying it.

“We’ve been evaluating a lot of other alternatives of which U-verse is one of the alternatives,” Wilderotter said. “We think it’s a product that can work, not just on fiber, but it also works on copper as well. So it’s a lot more forgiving in the market.”

Wilderotter claimed the company has no immediate plans to introduce the technology, but Stop the Cap! has obtained documentation that shows the company now refers specifically to “U-verse” in internal communications, is hiring new leadership to oversee the company’s IPTV plans, and has plans to dramatically expand VDSL technology, a prerequisite for deploying AT&T’s fiber to the neighborhood platform.

Wilderotter

Frontier Communications has had a difficult time supporting its Verizon-inherited FiOS fiber-to-the-home networks in the Pacific Northwest and Indiana.  The company has found itself unable to compete effectively in the video business because it negotiates programming contracts independently, which locks Frontier out of the volume discounts that other independent providers routinely receive from participating in programming purchasing co-ops.  Frontier lost 4,800 FiOS video customers in the last quarter alone.

Wilderotter said as a result of programming costs, Frontier has no plans to pursue any additional fiber expansion to deliver video programming.

However, a licensing arrangement with AT&T U-verse could open the door to Frontier receiving the same volume discount prices for programming that AT&T already receives as part of its own operations. Because Frontier would have to significantly upgrade its existing, primarily middle-mile fiber network to reduce the amount of copper wiring in its network, the company faces significant capital investment costs wherever it chooses to deploy the more advanced broadband network.

Wilderotter hinted Frontier’s plans for the enhanced technology would be limited to a handful of cities.

“It doesn’t make sense in all of our markets,” she said. “It’s only a handful of markets other than where we have FiOS today. So there’s more to come on that over time. Video is very important. We think over the top video is probably more important than anything else.”

The most likely target for any IPTV expansion would be Frontier’s western New York operation in and around Rochester, where the company currently competes against Time Warner Cable with a mediocre DSL product that can no longer compete with the cable operator’s superior speeds and pricing promotions.  Frontier is steadily losing market share in most of its more-populated service areas.

Other likely targets for expanded broadband include larger cities in Pennsylvania, Illinois, West Virginia, and California.

Frontier's Broadband Customers (as of 12/31/11)

Chief Operating Officer Daniel McCarthy added Frontier also has plans to improve broadband speeds in most of its service areas.

“We’ve been working pretty steadily to improve the core network around the country,” McCarthy said. “You’ll see us aggressively move forward with sort of VDSL and bonded ADSL2 copper.”

Currently, Frontier only informally offers bonded service to residential customers in very limited areas, notably in parts of the Genesee Valley in western New York.  The company has been marketing an extra line of traditional ADSL service to customers elsewhere who want more broadband capacity, but that requires a second broadband modem and delivers no speed improvements.

Frontier’s time frame to deploy enhanced speeds in within 12-24 months, according the company officials.

In other developments, Frontier Communications customers formerly served by Verizon will likely find themselves choosing new service plans as Frontier prepares to migrate customers away from legacy Verizon service packages.

Wilderotter telegraphed that affected Frontier customers will see some rate increases when the new plans become effective.

“We do think that there is a pretty substantial revenue upside,” Wilderotter said. “We think the net-net is we’ll get customers on the right portfolio of products that will also be revenue enhancing for the company and we’re going to surround the products with the right kind of service experience, both online and off-line. We’re redesigning all of our online product sets for a better customer experience so they can manage their own broadband usage and actually upgrading or changing what they do with broadband themselves, if in fact, they want to do that.”

Time Warner Cable's office on Mt. Hope Avenue in Rochester, N.Y.

A major service outage Sunday disrupted cable-TV, phone, and broadband service for a large number of Time Warner Cable customers in the Rochester, N.Y. area.

Starting at around 8am, cable channels started to pixelate and freeze, broadband service began to fail, and calls to and from Time Warner Cable phone customers were, in some cases, disrupted.

Time Warner’s local service number was quickly jammed with calls, and the company placed a recording on that line indicating they were aware of the problem, which later was described as a “router problem.”

Service was finally restored in the mid-afternoon.

Time Warner Cable customers can receive credit for the service outage, but only if customers request it.

Customers can call, chat, or e-mail the cable operator and let them know credit is requested for yesterday’s outage.  A customer service representative will usually respond to e-mail requests within hours, with service credits appearing on the next bill.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WHAM Rochester Time Warner Cable Service Restored In Rochester Area 4-29-12.mp4[/flv]

WHAM-TV led Sunday’s evening news with a report about the service outage’s impact on Rochester residents and businesses.  (2 minutes)

Stop the Cap! has learned Frontier Communications is laying the groundwork to upgrade selected areas of its network to deliver fiber-to-the-neighborhood service to some of its customers, perhaps as early as the last quarter of 2012.  Documents obtained by Stop the Cap! indicate the company is negotiating with AT&T to license U-verse technology to deliver the service.

The documents suggest Frontier’s 2011 negotiations with AT&T to resell mobile phone service to Frontier customers have now expanded to include the development of improved broadband at a cost less likely to antagonize Wall Street and the company’s investors.

Sources familiar with Frontier’s operations tell Stop the Cap! although the company will continue to support Verizon-acquired FiOS fiber-to-the-home networks in Indiana and the Pacific Northwest, Frontier plans to rely on less-expensive alternatives for the rest of its service areas and has no plans to further expand the FiOS branded fiber-to-the-home service.

For the most rural customers, Frontier appears ready to partner with HughesNet to resell a satellite broadband product to customers considered unsuitable for basic DSL service.  Frontier will continue to invest and upgrade its traditional 1-3Mbps ADSL service in rural states like West Virginia, Idaho, Nevada, and South Carolina.  The company is also planning to upgrade selected cities to VDSL — a more advanced form of DSL needed to support a U-verse offering.  Perhaps one major target for such an upgrade is Frontier’s largest service area — Rochester, N.Y., where Time Warner Cable has systematically picked off Frontier’s landline customers for years with offers of faster broadband speeds and better package pricing.

Frontier's headquarters in Rochester, N.Y.

Frontier’s insistence customers don’t need faster broadband speeds, a statement made repeatedly by Frontier Rochester general manager Ann Burr, has cost the company market share, especially for high speed Internet service.  Although Frontier claims to offer speeds up to 10Mbps in Rochester, the company only manages to deliver 3Mbps in some of the city’s nearest suburbs.

An upgrade to U-verse, while not as technologically advanced as fiber to the home service, would help Frontier defend its position in more urban markets, especially as cable companies upgrade their own infrastructure to market faster broadband speeds.

AT&T U-verse sells broadband at speeds of 3, 6, 12, 18, and 24Mbps.  Time Warner Cable, Frontier’s largest competitor in upstate New York, sells speeds of 3, 10, 20, 30, and 50Mbps.

Frontier Communications has been preoccupied integrating its newest customers, acquired from Verizon Communications in 2009, with their existing IT and operations systems.  The company recently touted it completed transitioning former Verizon operations, financing, and human resources with its own information technology network nine months ahead of schedule.

Frontier has been reorganizing some of its internal departments in preparation to launch several aggressive initiatives in 2012, especially in its efforts to roll-0ut more competitive broadband — considered a landline lifesaver —  in areas where the company has lost a lot of business to its cable competitors.  The company also intends to spend tens of millions upgrading its regional and national broadband infrastructure and continue extending DSL service to presently unserved rural areas.

Another planned improvement is an overhaul of Frontier’s website, which has brought complaints from customers for delivering inaccurate information, making online bill payment cumbersome, and being difficult to navigate.

Documents obtained by Stop the Cap! also reveal the company has made progress on its plans to pitch AT&T cell phone service to Frontier customers.

Frontier signed a resale agreement with AT&T last fall and is on track to begin limited trial offers of AT&T cell phones, smartphones, and tablets — with full access to AT&T’s network of 29,000 Wi-Fi hotspots during 2012 with a more widespread rollout in 2013.  Frontier plans to offer customers the option of a single bill for Frontier and AT&T services.

Frontier’s Karen Miller told Stop the Cap! the company had no comment about today’s story.