Cofetel is Mexico's equivalent to the American Federal Communications Commission

When Big Telecom companies deliver customers little service, Mexico is one step ahead of the United States in hitting bad actors right where it hurts — in their wallets.

Mexico’s telecommunications watchdog Cofetel announced it was recommending fines for a cell phone company that dropped more calls than it completed and a cable system that promised upgrades but delivered weeks of service outages instead.

Telcel/America Movil, Mexico’s largest cellular provider controlled by Mexican billionaire Carlos Slim, was called out for dropping calls at a rate that would make AT&T customers wince.  Cofetel found more than half of all wireless calls placed over Telcel went nowhere, forcing customers to redial, sometimes repeatedly.

Cofetel reported the carrier blamed a “glitch” it failed to inform the regulator of back in November.

Cablevision (no relation to the American company of the same name) was called out for launching a system “upgrade” that left thousands of Mexico City customers with no cable or broadband service for weeks between October and November.

Cablevision's "upgrades" = outages

Cofetel said the cable company failed to get permission for the upgrade, which the regulator would have reviewed before granting permission.

Cofetel lacks the power to directly fine offenders, but has recommended the communications ministry consider imposing close to the maximum fines allowed, ranging between $93,000-$187,000 in American dollars.  The regulatory body recognizes the fines may not deliver much of a sting to either America Movil ($1.85 billion in third quarter earnings) or Televisa ($174 million in the last quarter), which is why is it asking lawmakers to authorize much higher fines for offenders.

Cofetel caught Telcel dropping more calls than it completed.

For Mexicans accustomed to bad service, major fines could provoke relief.  Mexican telecommunications companies have notoriously poor service records.  Service disruptions from light rain or wind can disrupt service across large neighborhoods.

The United States has systematically removed government oversight from telecommunications providers, suspecting consumers will simply switch providers if one fails to deliver good service.  But if both companies fail, Americans often find they have little recourse.

Hawaiian residential and business customers relying on Hawaiian Telcom for phone and broadband service are not impressed with the phone company’s performance after rain disrupted scores of phone lines around the islands.  Some customers are reporting service outages extending for days as the company tries to cope with wet phone lines.

Hawaiian Telcom, which emerged from bankruptcy in October, has been trying to keep the Verizon landline network it bought in 2005 in working order, but heavy rains can create major problems for the phone company.

The outages started on Oahu two weeks ago, but yesterday’s heavy rains exponentially increased the number of customers with no service.

Businesses reported heavy static on their landlines, if they had service at all.  Many found processing credit card transactions an ordeal, often switching to manual methods to gain credit card approvals or requiring cash for purchases.

Hawaiian Telcom told Hawaii’s KITV-TV the prolonged wet weather caused water to seep into its cables and in some cases is short-circuiting them. The solution is either to replace the lines or to allow enough time for the cables to dry out.

So far, the phone company is taking a wait-and-let-dry approach.  Unfortunately, additional heavy rains are expected to impact the islands this week.

Hawaiian Telcom is providing service credits for the outages and is assisting area businesses by offering to automatically forward incoming calls to working numbers, including cell phones.

When the rains stop, some businesses may consider whether traditional landline service is the best choice for reliability.

“It’s a safe bet we’ll have a cellular account with wireless broadband to run credit cards in the future to cover these kinds of events,” reports Stop the Cap! reader Sam, who runs a convenience store on Oahu.  “I understand relentless rain can cause problems, but we are on day six with no service in our strip mall.”

Sam is currently relying on his personal cell phone to take business calls, but hasn’t been able to accept credit cards since the outage began.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/KITV Honolulu Wet Weather Blamed For Phone Outages 12-22-10.flv[/flv]

KITV-TV in Honolulu covered the ongoing phone outages afflicting Hawaiian Telcom customers, especially on Oahu.  (2 minutes)

Frontier Communications is continuing to suffer service outages and problems across many of their respective service areas.  Some of the most serious continue in West Virginia, especially in the northern panhandle region where emergency response agencies continue to complain about sub-standard service from the phone company that took over Verizon phone lines this past summer.

Hancock County officials report their T1 line that connects emergency dispatchers with the county’s dispatch radio system was out of service again early Wednesday evening.  This Frontier-owned and maintained circuit has suffered repeated outages over the past year, and the latest outage comes after company officials promised to inspect the 12,000 foot line inch-by-inch.  Once again, the county’s emergency agency is relying on help from nearby counties and a backup radio system to communicate with at least some of the area’s police and fire departments.

Outages of 911 service are not just limited to West Virginia.  Illinois Valley (Oregon) Fire District Chief Harry Rich was forced to rely on amateur radio operators and extra staffing in county firehouses to cope with a 911 system failure caused by Frontier service problems in late September.  Rich called a public meeting in late October with Cave Junction Mayor Don Moore, Josephine County Sheriff Gil Gilbertson and Josephine County Commissioner Dave Toler to discuss the implications of Frontier’s outage and what steps the region needs to take to mitigate future outages.

In Greencastle, Indiana a Frontier phone outage disrupted service for DePauw University and the Putnam County Hospital Oct. 20.  In Meshoppen, Pennsylvania an outage caused by a downtown fire on Oct. 24 left 1,200 homes in the community without telephone service for most of the day.  Frontier has also suffered periodic copper wire thefts, particularly in the Appalachian region where illicit sales of copper can bring quick cash for those addicted to drugs.  In Eastern Kanawha County, West Virginia, some 100 customers lost service for at least a day after thieves yanked phone cables right off the poles.

Sandman

In Minster, Ohio village officials have hired a law firm to sue Frontier Communications over a wiring dispute.  Village officials accuse Frontier of being intransigent over the removal of telephone lines from poles to bury them underground.  Village Solicitor Jim Hearn told the local newspaper utility companies should be responsible for the costs of installing underground wiring.

In Wenatchee, a community in north-central Washington state, Frontier’s general manager is going all out to try and assuage customers Frontier will provide better service than Verizon.  Steve Sandman went as far as to hand out his direct number to the local media, inviting residents with service problems to call.  It’s (509) 662-9242.

Sandman promises other changes for his customers, according to The Wenatchee World:

Sandman said all Frontier technicians will be fully trained in the installation of phones, internet and TV. No more modems sent through the mail for the customer to install by themselves, he said.

“We’ll be there on the premises for complete installation,” he said. “And, if the customer needs it, we’ll provide some fundamental training on how to turn on the computer, hook up to the internet and get started using online services. Or give advice on how to use the TV remote.”

But all of these issues pale in comparison to the all-out battle forming in the state of West Virginia over broadband stimulus money awarded to help Frontier extend fiber broadband service to local government and community institutions.  One of their biggest competitors, Citynet, has launched a well-coordinated attack on what it calls “a flawed plan that does nothing to provide faster Internet speeds or lower the majority of Internet costs for West Virginians.”

Frontier will spend $40 million of federal broadband stimulus money on a network that will deliver fiber-fast speeds only to government, educational, and health care institutions.

Martin

James Martin II, president and CEO of Citynet argues Frontier is building a state of the art fiber network very few West Virginians will ever get to use, from which it will profit handsomely delivering service to government entities with which it already has contracts.  For the rest of West Virginian homes and businesses, Frontier will deliver outdated DSL service delivering an average of 3Mbps service at a time when adjacent states are enjoying service 2-4 times faster.

Citynet argues funding would be better spent on a middle mile, open fiber backbone available for use by all-comers.  Martin notes West Virginia is one of the few states in the northeast and mid-Atlantic region almost completely bypassed by the core Internet backbone.  The only exception is a fiber link connecting Pittsburgh with Columbus, Ohio, which briefly traverses the northern panhandle of West Virginia.  Citynet’s perspective is that West Virginia cannot improve its poor broadband standing — 48th in the nation, unless it has appropriate infrastructure to tap into for service.

As an example, Martin points to the community of Philippi, served by fiber to the home cable TV and broadband service.  The community’s fiber network is capable of Lamborghini speeds between homes within Philippi. But the community can only afford a single 45 megabit DS-3 connection to the outside world, provided by Citynet for just under $8,000 a month.  That line is shared among every broadband customer in Philippi trying to get out onto the Internet. The result is that Philippi residents can only buy a broadband account with speeds up to 2Mbps for $60 a month on that all-fiber network. That’s equivalent to being forced to drive that Lamborghini on a dirt road.

Martin says if the broadband stimulus money was spent on constructing a statewide open fiber backbone, they could sell the community a 1Gbps pipeline for around $3,000 a month.

Philippi's fiber optic broadband is not so fast, thanks to a bottleneck between the community and the rest of the Internet

“West Virginia is at a crossroads,” Martin said in a prepared statement. “We can build a ‘middle-mile’ solution for high-speed Internet infrastructure and create jobs, or we can stick with the status quo and watch West Virginia fall behind once again. The outcome will determine our state’s economic growth for years to come.”

The state, according to Martin, is reneging on its promise to build a broadband network that will deliver improved service to institutional users as well as at least 700,000 homes and 110,000 business in the state.

Instead, the project would only serve 1,000 “points of interest,” he said. The state’s plan would limit Internet speeds and make broadband service unaffordable, Martin argues.

“If the state were to build a true middle-mile solution, then businesses and residential Internet customers would see a significant reduction in price, as well as an increase in quality, capacity and speed,” Martin said. “Regretfully, the state chose to support a plan that relies on outdated telephone lines and a monopoly.”

Of course, Citynet does have a vested interest in the outcome of the project.  As a provider specializing in selling bulk broadband lines, they would be a prime beneficiary of a government-backed middle-mile broadband network.  Citynet’s argument that funding should be spent primarily on that network ignores the reality few new entrants are likely to enter West Virginia’s rural broadband market, with or without the benefit of a robust broadband backbone.  One of the biggest flaws of broadband stimulus spending is that much of the money will never directly provide “last mile” access to individual consumers and businesses that want broadband service where none is available.

Citynet needs to acknowledge much of West Virginia’s broadband is going to come from the phone company or a local municipality that elects to build its own network.  While cable companies deliver service in larger cities and suburban areas, large swaths of the state will never be wired for cable.  In fact, West Virginia is poorly covered even by wireless companies who see little benefit building extensive cell tower networks in the notoriously mountainous areas of the state that serve few residents.  The only existing rural telecommunications infrastructure universally available is copper telephone wires.  Like it or not, Frontier Communications will be the biggest provider of broadband in rural West Virginia.  A fiber backbone network alone delivers minor benefits to those residents who either cannot connect at any broadband speed, or are stuck with Frontier’s current 1-3Mbps DSL service.

Still, Citynet’s campaign is a useful reminder that too many broadband stimulus projects direct most of their money to networks ordinary consumers and businesses will never access.  And so long as local governments, schools, and hospitals “get theirs,” they have little interest in fighting to share those networks with consumers and for-profit businesses.

Citynet produced two radio ads criticizing West Virginia’s allocation of broadband stimulus money, and Jim Martin appeared on a local radio show to explain to West Virginia why this issue matters. (Ads from 11/2010 — Interview with Jim Martin: September 16, 2010) (18 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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Ultimately, Verizon may get the last word, even after they abandoned the state’s landline customers.  Charleston, the state capital, has been selected as one of the early communities to receive Verizon Wireless’ new 4G LTE wireless broadband network, according to WTRF-TV:

Verizon subscribers in Charleston with devices that are 4G compatible will see changes within the next six to seven weeks. The whole city is expected to be covered by the network by mid-2011, according to company officials. From there, it will be expanded to cover Huntington, Parkersburg, Wheeling, Weirton, Beckley, Clarksburg, Morgantown, Fairmont and Martinsburg by 2013.

The company also plans to expand coverage along the entire Interstate 79 corridor from Charleston to Clarksburg.

The decision to include Charleston among the 39 metropolitan areas where Verizon would deploy its 4G network left many analysts of the industry scratching their heads, although they noted in online posts that Rockefeller chairs the Senate committee that regulates the telecommunications industry.

Should West Virginians find Verizon Wireless a suitable replacement for their landlines, Frontier may have bought themselves a pig in the poke.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/West Virginia Frontier 11-4-10.flv[/flv]

WTOV-TV covers the emergency services outage in northwestern West Virginia in two reports, WBOY-TV covers the Citynet-Frontier controversy, and WTRF-TV covers the arrival of Verizon’s LTE upgrade, starting with Charleston.  (7 minutes)

Frontier Communications continues to alienate customers up and down the state of West Virginia with more service outages, billing problems, and emergency 911 service interruptions.

This time, it’s the community of Marmet that suffered an outage the company described as “temporary.”  Service to the area’s Metro 911 emergency operations center was interrupted Monday and residents knew what to do when Frontier could not deliver landline service that works — they grabbed their cell phones.

In Dunbar, the funeral director at Keller Funeral Home noticed he stopped getting calls from local area customers after Frontier took over operations July 1st.  Michael McCarty told a Charleston television station Frontier initially blamed him for the problems, but later discovered malfunctioning switching equipment was at fault and forked over a $344 refund.  McCarty’s business probably took a bigger financial hit than that when potential customers could not get through — for months.

“People would call, but it wasn’t ringing here,” McCarty told the Charleston Gazette. “There really wasn’t much we could do but wait it out.”

Two dozen complaints about Frontier’s performance are still pending at the West Virginia Public Service Commission.  The state’s consumer advocate says Frontier’s service quality in the state is not improving.  Frontier blames Verizon’s aging and poorly maintained network for most of the problems.

But many of Frontier’s complaints, not just in West Virginia, are about unfair early cancellation fees, inaccurate billing, lost service orders, and lousy customer service.  Here’s a sample:

• “The customer service representative was extremely rude and angry. We called in response to the unfair cancellation fee of $250.00. Last week we were told that we had until 9/30 to opt for other phone service without a cancellation fee. Each representative gives different information. Small business were treated horribly by Verizon and now Frontier. After the rudeness, I will never bring my business service back to Frontier!”
• “I have fought this company for six months because every month they cannot get billing right. They are the absolute WORST I have ever dealt with. They charge for services not wanted. They charge late fees when none should have been charged and then didn’t remove them after admitting their mistakes. If you have any other choice, avoid Frontier like it’s a plague, because it is.”
• “They never processed my order to transfer my service. I called back 4 times in a week to get them to do their job. On the last day, I was left on hold for 2 hours in the morning and then 1.5 hours in the afternoon, only to be told I would have to wait another 3 days for a servicemen to come out. The wait times were nothing less than abusive.”
• “Horrible folks to do business with. Verizon sold my FiOS/Phone account to Frontier and soon afterward mysterious charges for “ID protect” etc. started appearing on my bill. Whenever I call their service, it loops and hangs up. I tried the option for “we will call you back” – when it calls back , it will give another number to call back, where you have to wait again. Can’t wait to get rid of them.”
• “Frontier recently bought out Verizon’s service in my area. The automated phone tree system goes in loops and hangs up on you. Furthermore, once I finally figured out how to get someone on the line (responding to every question the automated system asked with “operator”) and moved up to a supervisor… the supervisor got very short with me when I tried to cancel my service and then hung up on me. When I called right back, I got an automated message saying the offices were closed.”

Some enterprising Frontier customers have learned their hold times will be much shorter if they opt to speak with a Spanish-speaking operator.  “Many of the call centers are in Florida anyway, so you may get a bilingual operator no matter which language you choose,” writes our reader Danielle.  “I cut my hold times from over an hour to less than five minutes this way.”

Meanwhile, one of Frontier’s primary competitors in the state, Citynet, accused Gov. Joe Manchin’s office of wasting $126 million in taxpayer money that will benefit Frontier Communications far more than state residents starved for broadband.

Citynet CEO Jim Martin urged federal officials Wednesday to suspend the grant after the state defended plans to allocate a large amount of the grant exclusively to connect state agencies.

“The state’s response clearly highlights why the federal government needs to suspend the award until there are major modifications to the plan,” Martin said. “It is clear from the state’s letter that little will be done with the federal taxpayer funds to increase the availability of adequate and competitively priced high-speed infrastructure in West Virginia. The current approach will cost the state future job growth.”

Martin is upset that more than half of the grant, $69 million dollars, will be spent on Frontier’s behalf to construct a broadband network for the state government.  The agencies who get access will still have to pay Frontier market rates for high speed broadband access, despite the fact taxpayer dollars were spent to construct the network Frontier will operate.

Manchin

Citynet wants stimulus funding diverted to construct a “middle mile” broadband network that every telecommunications company can access at wholesale rates to deliver improved broadband services to residents and businesses, not just government buildings.

Martin says the Manchin Administration is making “blatantly false” claims that the stimulus money would deliver high-speed Internet to 700,000 homes and 110,000 businesses.  Unless those homes and businesses are stuffed into government agency buildings, it won’t.

According to Martin, all of the benefits will go to only two places — state agencies and Frontier’s pockets.

“It’s a political favor to Frontier,” Martin charged.

“The citizens of West Virginia deserve transparency and accountability from their public servants, and this is even more true given the magnitude and importance of the need for broadband enablement in our state,” Martin said Wednesday. “I was born and raised in West Virginia, and I am aware of the consequences this program could have for West Virginia in terms of job growth and competing for high-paying 21st century jobs.”

Perhaps the RV tour can also help customers cope with unauthorized cramming charges greeting many ex-Verizon customers on their first Frontier bills

Frontier Communications has themselves an RV and they’re sending it on a “Great Conversations Tour” with their newest customers in Ohio, Illinois, and Wisconsin.  The company tweeted its intention to visit “10 Cities, 7 Executives, 5 Days, 3 States,” all in one recreational vehicle.

On the agenda are promises the company intends to deliver their version of broadband to a larger number of customers.

“On average, these properties that we purchased from Verizon had 62 percent broadband accessibility, and we will be looking to take that to 85 percent in two years,” says John Lass, president of Frontier’s Central Region. “In our current properties, we are averaging 92 percent broadband accessibility.”

The broadband most of those customers will end up with will range from 1-3Mbps in rural areas, perhaps up to 6Mbps in more urban ex-Verizon service areas, but everything is dependent on the quality of the lines Frontier has to work with.

That increasingly poses problems for the company, who had to cope with yet another major service outage in Illinois — the second in a month, that knocked out phone and emergency services for 28,000 residents across eight counties in central and northwestern Illinois.

The landline service failure, originally thought to be a fiber cable cut, turned out to be a hardware failure in the company’s central office in the village of McLean.  The impact was immediate as cell phone customers could not reach Frontier lines and Frontier customers in many areas could not make long distance calls or reach 911.

Peoria’s Journal-Star reported businesses were particularly impacted by the outage:

Carol Hamilton, Washington Chamber of Commerce executive director, said city business owners reported problems making landline-to-cell phone and cell phone-to-landline calls. Landline-to-landline calls were going through.

“We actually started hearing about the phone problems Wednesday,” Hamilton said. “People were getting a busy signal, or were told the number they were calling was out of order when they tried to make a call. The problem didn’t affect our office until Thursday morning.”

Frontier’s equipment failure also knocked out the Logan County computer system, and the Woodford County Sheriff’s Department computer system. Residents in those counties were instructed to call Illinois State Police posts in Springfield and Metamora for emergencies.

One local resident noted this is why he doesn’t have a landline anymore.

Since Frontier can gas up its RV and tour the countryside, Stop the Cap! can take you on a virtual RV tour of our own to visit with some disgruntled Frontier customers.  Our first stop…

Unauthorized Bill Cramming Plague Leads to Lawsuit Against Frontier

Hal Greene was reviewing his monthly Frontier phone bills when he discovered his monthly charges shot up from $230 to $290.  The Pine Bush, N.Y., resident found $39.95 charges on each of this bills for something called “Enhance SVCS Billing Inc Long Distance Calls … IBA-Services.”  He had no idea what that charge was for, and he knew he didn’t authorize it.

The Times Herald-Record picks up the story:

He called the company, Enhanced Services Billing Inc., but the company wouldn’t refund his money. He called the phone company, Frontier, which blocked the charges moving forward, but Greene never got a refund.

He went online to research the company, and found countless complaints from other consumers about ESBI, an aggregator that purports to bill for services provided by third parties.

Greene also found the contact information for a law firm, Giskan Solotaroff Anderson & Stewart in Manhattan, that was looking into the company. He called and became the named plaintiff in a class action lawsuit against Frontier and ESBI.

“I was very angry because it was so surreptitious the way they snuck that charge in there, and they’re just kind of counting on stealthing it into the bill without you noticing,” Greene said.

The suit alleges that the defendants know they are collecting charges customers didn’t authorize. It seeks monetary and compensatory damages, attorneys’ fees and further relief “as equity and justice may require.”

Representatives of ESBI and parent company BSG Clearing declined to comment. Frontier also would not comment, said spokeswoman Brigid Smith.

Greene is a classic victim of bill cramming, a practice where phone companies allow third parties to bill for services on their phone bills, in return getting a major cut of the action.

Most customers find themselves victims of cramming when they complete “surveys” or sign up for free trials of unrelated services.  Other victims purchase products from websites that offer future discounts just for “previewing” shopping clubs or credit monitoring services.  Even obtaining a “free reward” like a magazine subscription, ringtone, or avatar image for use on a social networking website could come with a very expensive “gotcha” on your landline or mobile bill a month later.

IBA charged Greene $40 a month for dial-up Internet access and other services of dubious value.

In Greene’s case, his “gotcha” was IBA Services — Internet Business Advisors, which offers a very dubious package of dial-up Internet, web hosting, and discounts at office supply stores.  For that, customers pay $20-40 or more per month.  Greene was paying for it across multiple phone bills, each with their own charges.

IBA Services is an example of how anyone can set up a business and use billing services like ESBI to sit back and wait for the checks to arrive.  Unfortunately, too often those charges are unauthorized and crammed onto phone bills.  Critics charge phone companies have a financial incentive to look the other way, as they earn a substantial percentage of the charges as a commission.  Millions are waiting to be earned at your expense.

Of course, phone companies correctly say they are required to accept third party billing services.  But what they don’t tell you is that they are not required to continue to accept those with a track record of cramming.

Stop the Cap! looked into IBA and discovered the “company” is “located” at 980 9th Street, 16th Floor Sacramento, CA 95814.  That sounds like quite a prestigious address, considering it is located in Sacramento’s US Bank Plaza.  But the 16th floor is a mighty crowded floor considering the enormous number of companies calling it home.  Those firms range from IBA to a scam operation trying to collect “fees” on behalf of the state of California to “Medical Hair Restoration.”  (That latter firm might be useful if you’ve torn all of your hair out fighting illegitimate charges on your phone bill.)

Truth be told, 980 9th Street — 16th Floor is a “virtual office” address.  A company that specializes in the practice, Regus, maintains that address as a mail drop and short term meeting space location for countless companies looking to keep their actual locations (often a home) out of public records. Additionally, utilizing a professional mailing address through a London-based service is a wise move for enhancing both your privacy and your business’s reputation. It allows you to separate your personal life from your business dealings, which is essential in today’s environment. So you can easily get a prestigious and virtual London postal address for professional correspondence. Regus itself isn’t a questionable enterprise, but some of their clients are.

For $99, we could have an address at the US Bank Plaza as well.  Best of all, Regus throws in access to high speed Internet service as part of the package price — something IBA doesn’t even offer their own clients.

Greene’s anger is understandable considering anyone can get in on this action, peddling useless voicemail service, credit repair, ringtones, shopping clubs, and a myriad of other services carrying steep monthly fees, all conveniently billed to your monthly Frontier phone bill.

IBA’s “offices” are located on a floor offering “virtual suites” and mail-drop services to clients who want to avoid disclosing their real addresses.

When we called IBA Services’ toll-free number, we were connected with a generic “customer care” department.  The representative, who would only give her first name, told us at first she had no idea what company we were calling about.

“We handle customer service calls for many different providers,” Inez told us. “When customers call, we ask for their phone number which usually brings up what provider they are doing business with.”

When she learned we were not a victim customer, she refused to answer any further questions about the company she works for or how many customers call claiming they are being crammed.

For dozens of customers who have been in similar circumstances, bill cramming quickly evolves into buck passing.

“The best part of this entire scam is that when you call Frontier, Verizon, AT&T or other phone companies, they tell customers to call the crammer directly to get the charges off the bill,” says our reader Gene who was also a victim of Frontier cramming.  “When you call the crammer, they always say you must have authorized it because they don’t bill just anyone, so you need to call your local phone company to deal with the charges.”

Marte Cliff was a victim of bill cramming on her very first bill from Frontier Communications

When customers tell phone companies the crammers refuse to credit their account and stop the charges, many will agree to place a block on future 3rd party billing, but neglect to reverse the charges.  By now many exasperated consumers just give up and eat the cost, something crammers count on.

“Frontier is happy because they got a substantial percentage of that fee and the crammer gets to walk away with whatever money they earned before the consumer noticed,” Gene says.

Marte Cliff, a freelance copyrighter who blogs from Priest River, Idaho was one of millions of ex-Verizon customers who received their first bill from Frontier over this summer.  Hers included $14.95 in charges for an “e-mail bundle.”  Cliff was alarmed:

When I opened our first bill from the new provider it was about $15 more than my normal bill, so I went looking to see why. And I found a charge from a company called Email Bundle. Why?

There was a notice – for billing questions call 888-934-7750 to reach PayOne Billing, so I did. I got a recording that told me everyone was busy and that I needed to wait. Then I got a brief busy signal and a message saying I was being transferred… and then a “looped” recording telling me a web address over and over and over.

Obviously, PayOne billing was not going to answer my call.

So I called Frontier. After 10 minutes or so of recorded messages I finally made contact with a live person… who said I just wouldn’t believe how many people had called this week over the same issue.

While Cliff doesn’t blame Frontier and got her money back, she is concerned many new customers may find it easy to miss such add-on fees, assuming they are just the cost of doing business with their new phone company.

“My bill is the same every month because I pay a flat for unlimited long distance, but other people have long distance charges and their bill is different each month,” she blogged. “They might not notice a $15 discrepancy – especially if they’re running a business and have large phone bills. And especially not since phone bills are generally so convoluted that it takes a puzzle expert to figure them out.”

Billing Services Group does business as ESBI, among other names.

ESBI, responsible for billing Greene $40 for dial-up Internet, itself has a long sordid history, having been the target of a Federal Trade Commission investigation in 2001. The biller, part of the Billing Services Group, Ltd. (an offshore entity incorporated in Bermuda), has 120 employees in San Antonio.  BSG’s financial presentations to their investors go to new heights to diplomatically explain away their questionable business practices, such as this passage from one of their recent press releases:

Background of Enhanced Service Billings and the Company’s Action Plan

Historically, enhanced service billings have been susceptible to misunderstanding between the enhanced service provider and the consumer over such issues as charges and scope of service. As a result, enhanced services have typically involved a higher consumer inquiry or complaint rate than regular telephone usage charges, which, in turn, can precipitate negative perceptions about enhanced service billings.

The Company has taken proactive measures, including the implementation of certain procedures over the last year, to minimize the level of disputed charges in connection with enhanced services. These measures include:

• Submitting enhanced service charges to each LEC (local phone company) only after that LEC has expressly approved the billing of a particular service offering by a specific enhanced service provider;
• Authenticating all enhanced product sales through the Company’s Bill2Phone™ authentication engine;
• Company employees anonymously subscribing to random enhanced services offerings to assess the quality of service and accuracy of charges; and
• Actively monitoring the level of complaints received in respect of its customers’ enhanced service offerings.

If there are perceived irregularities in the authentication of orders, quality of service, accuracy of charges or the frequency of consumer complaints involving an enhanced service provider, the Company takes appropriate action, including, if necessary, termination of billing for that customer. Each LEC in the United States requires that providers of enhanced services comply with certain end user inquiry or complaint thresholds; that is, a maximum number of inquiries or complaints in any particular month and in each LEC region. As described above, the Company actively monitors the level of consumer inquiries and complaints in respect of its customers’ enhanced service offerings and believes that the level of such inquiries or complaints is, for every one of its existing 98 enhanced service customers, below the contractual thresholds required by, among others, the largest LEC in the United States.

BSG uses the United Way logo on its site.

ESBI calls their business practices “powerful and innovative.”  Gene calls them “underhanded and deceptive.”

“These are bottom feeders that try and protect their ill-gotten gains by incorporating in Bermuda and throwing some goodwill contributions to the San Antonio chapter of the United Way to make you feel they’re ethical,” Gene says.  “When the company’s own financial presentations warn investors their future revenue is at risk from telephone company crackdowns, their long term future is an open question.”

What is also remarkable is that ESBI scores higher than Frontier Communications with the Better Business Bureau.

“One has to wonder how a bottom feeder operation like ESBI/BSG managed to earn a “D” while Frontier scored a rock-bottom “F,” Gene wonders.

How You Can Protect Yourself

1. Scrutinize your phone bill carefully, especially if it has increased recently.  Pay special attention to sections labeled “Miscellaneous,” and the long-distance, 900-number, and “third-party” charge sections on your bill. Third-party charges are charges from anyone other than your phone company. Many phone companies are trying to switch customers to “out of sight, out of mind” electronic billing with automatic payments.  That makes it easy to ignore a bill you have to click a link to see until after the amount due is withdrawn from your checking account.  Not paying illegitimate charges keeps the money in your pocket — trying to get a refund from the phone company keeps it in theirs.
2. Demand the phone company place a “3rd party billing block” on your phone line.  Frontier calls this service “Bill Block.”  I have yet to encounter a worthwhile service that needs to bill customers using 3rd party phone bill charges, so why give them the chance to try?
3. Avoid pop-ups and other online ads that promise free services in return for sharing your phone or mobile number.  Chances are the freebies also come with sneaky add-ons that will cost plenty.
4. Do not enter surveys or contests that require a phone number.  If you are a winner, they should be able to contact you by mail.  Many of these contests also include fine print authorizing the promoter to start telemarketing you later, so the prize is rarely worth the aggravation.
5. Obtain a virtual phone number from a service like Google Voice.  It’s free. You can give out this phone number to those you are not sure about.  If a crammer tries to sign that number up for unauthorized services, they’ll encounter a roadblock.
6. If you are a victim, tell the phone company you want all of those charges reversed at once — they are unauthorized.  Do not accept their request to contact these companies yourself.  They are capable of reversing the charges, letting the billing agency protest the chargeback.  They rarely do, and you don’t have to waste your time dealing with “Inez” at “customer care.”

Finally, if you are victimized, contact the Federal Trade Commission by calling 1-877-FTC-HELP (1-877-382-4357) and file a complaint.