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Wireless Companies Bid $336 Million and Counting for 28 GHz 5G/Small Cell Spectrum

Forty companies, including hedge funds, phone companies, and wireless carriers have collectively bid $336,265,480 so far for about 2,500 28 GHz licenses (out of 3,072 available) that will be a part of the buildout of 5G millimeter wave wireless service.

The FCC is currently auctioning off spectrum in the 27.5–28.35 GHz (28 GHz) band — a very large chunk of frequencies which can offer bidders the opportunity to launch a wide bandwidth cellular data service capable of very fast internet speed. But because the frequencies involved are line-of-sight, the winning bidders will have to invest in large networks of small cell antennas that will be required to reach customers.

Citigroup analysts reviewing the auction results so far told clients they suspect there are “two outsized bidders” winning many of the available licenses, including Verizon. This is not a surprise, considering Verizon already has significant spectrum holdings in the 28 GHz band. Verizon’s current 5G service relies on this millimeter wave spectrum, but is available so far only in a handful of markets. The identity of the second major bidder remains a mystery. The spectrum licenses getting no bids are mostly in rural areas with low population density.

All the other major wireless operators — AT&T, T-Mobile, and U.S. Cellular — are also bidders. Only Sprint, currently in a merger deal with T-Mobile, is missing. AT&T has not shown much interest in offering its customers millimeter wave 5G service, and T-Mobile is planning to use 5G’s technology upgrade to bolster its existing network with more capacity and speed. Dish Network, which already controls a substantial portfolio of unused spectrum, is also a bidder and could be seeking to stockpile 5G spectrum for a future venture or sales deal with one of the other wireless companies.

The qualified bidders:

8538 Green Street LLC MetaLINK Technologies, Inc.
Arctic Slope Telephone Association Cooperative NEIT Services, LLC
Aries Wireless LLC Nemont Communications, Inc.
AT&T Spectrum Frontiers LLC Northern Valley Communications, LLC
BDCIH Wireless, LLC Nsight Spectrum, LLC
Beyerle, David E Nuvera Communications, Inc.
BroadBand One of the Midwest, Inc Panhandle Telephone Cooperative, Inc.
Cellco Partnership d/b/a Verizon Wireless Pine Belt Cellular, Inc.
Central Broadband 24/28 GHz Consortium Rock Port Telephone Company
Cityfront Wireless LLC SANN Consortium
Cordova Telephone Cooperative, Inc. T-Mobile License LLC
Crestone Wireless L.L.C. TelAlaska Cellular, Inc.
Day Management Corporation Townes 5G, LLC
Frontier Communications Corporation Trace Fiber Networks, LLC
FTC Management Group, Inc. Tradewinds Wireless Holdings, LLC
High Band License Co LLC Union Telephone Company
Horry Telephone Cooperative, Inc. United States Cellular Corporation
Inland Cellular LLC Universal Electrical Contractors
LICT Wireless Broadband Company, LLC Western Independent Networks, Inc
Mark Twain Communications Company Windstream Services, LLC

Bidding starts at $200 per available county, and many rural licenses could be won for precisely that amount, with only one interested bidder offering the minimum bid.

The highest bids are just over $10,000,000 each for two licenses in the Honolulu, Hawaii market. Bids in excess of $2 million are currently on the table in these counties:

California: Kern
Colorado: El Paso
Florida: Volusia
Illinois: Winnebago
Iowa: Linn
Louisiana: East Baton Rouge
Maine: Cumberland
Missouri: Greene
Nebraska: Lancaster
Nevada: Washoe
Oregon: Jackson
Pennsylvania: Lancaster, Berks, York, Lehigh, Luzerne, Northampton, Dauphin
Texas: Cameron, Hidalgo
Wisconsin: Dane

FCC Preparing to Redefine Text Messaging as an Information Service in Gift to Telecom Industry

Pai

FCC Chairman Ajit Pai is leading the charge to define text messaging (SMS, MMS) as an “information service,” allowing phone companies a clear right to censor or block messages they do not like.

On Tuesday, Pai proposed a Declaratory Ruling that would deny a petition from consumer group Public Knowledge asking the FCC to once and for all affirm text messaging as a telecommunications service. The request goes all the way back to a 2007 dispute between NARAL — a reproductive rights group and Verizon Wireless. The wireless carrier blocked a text message campaign from NARAL, claiming it had the right to block “controversial or unsavory” text messages. It was the only wireless company to reject NARAL’s text-message program, which invited consumers to sign up for alerts and other information.

Legal experts told the New York Times private companies like Verizon probably had the legal right to decide which messages to carry, because text messaging was never defined as a “common carrier” service. Verizon Wireless at the time insisted it did not accept text messaging programs from any group “that seeks to promote an agenda or distribute content that, in its discretion, may be seen as controversial or unsavory to any of our users.”

Verizon claimed it was neutral on the subject of abortion, but the topic itself was forbidden to be discussed or raised in text messaging campaigns directed to customers.

That 2007 claim irritated then-NARAL president Nancy Keenan, who claimed Verizon was interfering with free speech and activism.

“No company should be allowed to censor the message we want to send to people who have asked us to send it to them,” Ms. Keenan told the newspaper in 2007. “Regardless of people’s political views, Verizon customers should decide what action to take on their phones. Why does Verizon get to make that choice for them?”

Pai says giving companies like Verizon the permanent right to manage the kinds of text messages allowed on their networks is a good way to stop texting spam.

“The spam rate for text messages is estimated at 2.8%, compared to a rate of over 50% for email. That’s not by accident,” Pai claimed. “Today’s wireless messaging providers apply filtering to prevent large volumes of unwanted messages from ever reaching your phone.”

Pai claimed that the effort underway to classify text messaging as a telecommunications service was anti-consumer and would open customers up to a lot more unwanted messages.

“This may not seem like a big deal, but such a classification would dramatically curb the ability of wireless providers to use robotext-blocking, anti-spoofing, and other anti-spam features,” Pai said in a blog post on Medium.

Feld

“It wouldn’t be the holiday season without Chairman Pai giving a great big gift basket to corporate special interests at the expense of American consumers,” said Harold Feld, senior vice president at Public Knowledge. “Chairman Pai proposes to grant the wireless industry’s request to classify text messages as Title I ‘information services,’ stripping away vital consumer protections. Worse, Chairman Pai’s action would give carriers unlimited freedom to censor any speech they consider ‘controversial,’ as Verizon did in 2007 when it blocked NARAL and prompted the Public Knowledge 2007 Petition.”

Feld claims Pai is only telling half the story.

“As the FCC made clear in 2016 (over then-Commissioner Pai’s dissent), text messages and robocalls are both ‘calls’ under the anti-robocall statute, and this Title II designation does not prevent filtering or other technological means to block unwanted robocalls or spam texts,” Feld said. “Indeed, Chairman Pai undermines his own argument by pointing out that email, which has always been an information service, has a 50 percent spam rate whereas text messaging, which the FCC treats as a ‘phone call,’ has a 2.5 percent spam rate.”

The FCC plans to vote on the matter, and is likely to adopt Pai’s proposal, at a meeting on Dec. 12.

AT&T and Verizon Reneging on Free Phone Deals; Customers Worn Out by Broken Promises

Phillip Dampier November 12, 2018 AT&T, Consumer News, Verizon, Video, Wireless Broadband No Comments

Wireless carriers like AT&T and Verizon Wireless have reneged on promotions offering customers free phones and “buy one, get one free” deals that leave customers on the hook for hundreds of dollars in equipment charges.

With the holiday shopping season about to begin, phone promotions will be heavily advertised. But those deals may be too good to be true, according to consumer protection groups.

The Better Business Bureau said the problems customers are reporting are serious, and growing. Since the beginning of this year, BBB president (Southern Piedmont) Tom Bartholomy said the group has received almost 6,800 complaints about wireless provider advertising, sales, and promotional practices.

“We’re talking hundreds of complaints about a similar type of situation,” Bartholomy told WSOC-TV. “[It] points to an underlying cause, an underlying concern, with those types of promotions.”

WSOC’s consumer reporter has been inundated with complaints from his North Carolina viewers about broken promises:

Rachel Seighman lives in Monroe. She said, “(I) wanted to try to get a cheaper plan for my family. So, I tried AT&T out.”  She said she got her bill and “it was going to be about $60 higher per month than they said.” So, she called AT&T.  “I was told that the price they quoted me at was not correct,” she said.

Cynthia Emrich lives in Stanfield. She took advantage of an AT&T “buy one, get one free” offer for a Samsung phone. But, she said AT&T charged her for both phones.  “So I call them and they said it would straighten itself out, and it never did,” she told Action 9.  She said she called the company every month for 2 1/2 years. “It was frustrating every month.”

Denise Reid lives in Fort Mill. She said she went with a Verizon “buy one, get one free” deal for an iPhone, but that the company charged her full price.  “They could not give me a reason as to why,” she said.  “No reason as to why.”

Joseph Mayberry lives in Hickory. He told Action 9 a similar story. All four customers said they tried to resolve things on their own but couldn’t. “I would call someone.  I would go through the long story of what happened.  I would get to the supervisor level.  I’ve got emails saying I would be credited back and a phone call would follow.  Never got the phone call,” Mayberry said.

Many customers are tripped up by the fine print in promotional offers that frequently contain complicated conditions and opaque language. Some insist company representatives assured them that the promotion was valid only to find out later they were misled. In fact many promotions contain strict provisions that, if not followed precisely, invalidate the promotion.

Here are some common tricks and fine print traps you may encounter getting your “free” phone:

  1. Many “Buy 1, Get 1” promotions require the customer to activate and maintain a new line of service to qualify for a free phone, which can cost nearly $50 a month for a plan, including additional surcharges and taxes. Customers that fail to follow through on this condition or quickly terminate the extra line after moving the device to a different line on their account were often charged full price for both phones.
  2. Some promotions require customers to sign up for a “device payment agreement” to qualify for the free phone. That is actually a contract to pay off a device with monthly installment payments at 0% interest billed to your mobile account. The free device promotion is often tied to the payment agreement. If a customer buys the first phone and pays for it upfront there is no payment agreement, and no free phone. Some promotions require customers to maintain a device payment agreement for up to 30 months. If a customer violates any terms of the promotion, such as paying the phone off early or selling it, the company might bill you for the “free” phone.
  3. Some companies take months to begin crediting your account for the monthly installments that will appear on your bill. Customers will eventually see a monthly device payment charge and a corresponding credit in the same amount for your “free” phone. But until bill credits start to appear in 60-90 days, you are responsible for the installment charges.
  4. “Free” phone promotions often conflict with other service plans and features. Customers that have signed up to receive a new phone every two years may have to turn in their “free” phone and walk away from several delayed reimbursement credits before getting they can obtain their next new device.

Many customers underestimate the true cost of complying with the terms necessary to get that “free” phone. That realization usually comes too late to return it, leaving customers with several hundred dollars in equipment fees — a costly mistake that could ruin any holiday.

It is important to carefully study the terms and conditions of all wireless device promotions. The written contract is valid, promises from overeager salespeople are not. Be wary when you see “device payment agreement” or “activate and maintain a new line of service,” or “promo credit applied to account over 24 mos w/in 1-2 billing cycles; promo credit ends when balance paid or line terminated/transferred.” If you do, it could mean you will need to set up an installment payment plan for that “free” phone, keep it on your account as a new line of service for at least two years, and avoid paying it off in advance or attempt to move the phone to a different account or provider.

If negotiating with your provider has failed to resolve a conflict over the promotion, taking your case to the media over the terms of a possibly deceptive promotion can be effective in getting what you thought you were promised. When these customers contacted WSOC-TV and the station took the complaints back to AT&T and Verizon, the company quickly gave all four customers their free phones.

“Nobody would listen to me until [WSOC] actually reached out to them. And then within two hours, I got a phone call from AT&T,” Emrich told the station.  “If it wasn’t for Action 9, I would have never got that refund.”

AT&T claimed in a statement it honors all of its deals. Verizon tried to refer complaints about its promotions to the wireless industry lobbying group — CTIA. That group does not understand why Verizon did that and claims it isn’t familiar with cell phone promotions. Neither are most consumers.

WSOC-TV consumer reporter Jason Stoogenke investigates cell phone promotions that sound too good to be true. (3:36)

Verizon pulled out of a promo for a free iPhone for this North Carolina customer. Nobody knows why. (1:16)

Verizon messed up a promotion offering two phones for the price of one and left this customer out in the cold, telling him he needed to pay full price for both phones. (1:14)

Wall Street’s Latest Great Idea: Providers Should Charge More for 5G, But Only After You Are Hooked

“You’re giving it away… you are giving it all away!” — An unknown Wall Street analyst tossing and turning in the night.

America is simply not paying enough for wireless service. Thanks to dastardly competition introduced by T-Mobile and Sprint (potentially to be snuffed out in due course if their merger gets approved), wireless pricing is no longer a license to print money. Forced to offer one-size-fits-all affordable $40-50 unlimited plans, the prospects to grow Average Revenue Per User (ARPU) have never been worse because you can’t charge people for more service on an “unlimited plan” without admitting that plan is not exactly “unlimited.”

Wall Street analysts, already upset at the thought of carriers spending more than $100 billion on 5G network upgrades, are in a real tizzy about how companies are going to quickly recoup that investment. No matter that some wireless companies have profit margins in the 50% range and customers have paid providers for a service they were assured would keep up with the times and network demand. If there is to be a 5G revolution in the United States, some insist it must not come at the cost of reliable profits — so the industry must find a way to stick consumers with the bill.

It is not common for industry analysts to go public brainstorming higher prices and more customer gouging. After all, North Americans already pay some of the highest cell phone bills in the world, only mitigated (for now) by scrappy T-Mobile and Sprint. Mark Lowenstein, a leading industry analyst, consultant, and commentator, was willing to go public in the pages of Fierce Wireless, arguing “operators should be considering charging a premium price for what will hopefully be a premium service.” That is likely music to the ears of AT&T and Verizon, both frustrated their pricing power in the market has been reduced by credible competition from a significantly improved T-Mobile.

Lowenstein fears the prospects of a “race-to-the-bottom 5G price war” which could arrive if America’s wireless companies offer a credible home internet replacement that lets consumers tell the local phone or cable company to ‘take a hike.’ Since wireless operators will bundle significant discounts for those who subscribe to both home and mobile plans, telecommunications services may actually cost less than what Wall Street was banking on.

Something must be done. Lowenstein:

In mobile, there’s been premium pricing for premium phones. And Verizon Wireless, for a few years when it had a clear network lead, was sort of able to charge a higher price for its service (but not a premium price). But today, there isn’t really premium pricing for premium services. That should change when 5G really kicks into gear.

So how do you extract more cash from consumers’ wallets? Create artificial tiers that have no relationship to the actual cost of the network, but could potentially get people to willingly pay a lot more for something they will initially get for a simple, flat price:

One simple way would be a flat premium price, similar to the “tiers” of Netflix for a higher number of devices or 4K/Ultra HD.  So, perhaps $10 per line for 5G, or $25 for a family plan. Another approach would be more akin to broadband, where there are pricing tiers for different levels of service performance. So if the base 4G LTE plan is $50 per month today, for an average 100 Mbps service, 5G packages could be sold in gradations of $10 for higher speeds (i.e. $60 for 300 Mbps, $70 for 500, $80 for 1 Gbps, and so on). An interesting angle on this is that some of the higher-end 4G LTE services such as Gigabit LTE (and beyond) could get incorporated into this, so it becomes less of a 4G vs. 5G discussion and more of a tier of service discussion.

I would also like to see some flexibility with regard to how one can purchase 5G capabilities. For example, a user might only need those premium 5G features occasionally, and might only be prepared to pay that higher price when the service is being used. Here, we can borrow from the Wi-Fi model, where operators offer a “day pack” for 5G, or for a certain city, location, or 5G-centic app or experience. 5G is going to be hot-spotty for awhile anyway, so why not use a Wi-Fi type model for pricing?

Even better, now with net neutrality in the ash heap of history, courtesy of the Republican-dominated FCC, providers can extract even more of your money by artificially messing with wireless traffic!

Lowenstein sees a brand new world of “app-centric pricing” where wireless carriers can charge even more to assure a fast lane for those entertainment, gaming, and virtual reality apps of the future, designed to take full advantage of 5G. Early tests have shown millimeter wave 5G networks can deliver extremely low latency traffic to customers from day one. That kills the market for selling premium, low-latency add-ons for demanding apps before companies can even start counting the money. So assuming providers are willing to purposely impede network performance, there just could be a market selling sub-100ms assured latency for an extra fee.

The potential of a Money Party only 5G can deliver is coming, but time is short to get the foundation laid for surprise toll lanes and “premium traffic” enhancements made possible without net neutrality. But first, the wireless industry has to get consumers hooked on 5G at a tantalizingly reasonable price. Charge too much, too soon and consumers may decide 4G LTE is good enough for them. That is why Lowenstein recommends operators not get carried away when 5G first launches.

“We don’t want to be setting ourselves up for a WiMAX-like disappointment,” Lowenstein writes. “The next 12-18 months are largely going to be ‘5G Experimentation’ mode, with limited markets, coverage, and devices. Heck, it’s likely to be two years before there’s a 5G iPhone in the United States, where iOS still commands nearly half the market.”

The disappointment will eventually be all yours, dear readers, if Lowenstein’s recommendations are adopted — when “certain milestones” trigger “rate adjustment” letters some day in the future.

Lowenstein sees four signs to start the pillaging, and we’ve paraphrased them:

  • Coverage: Wait until 30-40% of a city is covered with 5G, then jack up the price. As long as customers get something akin to 5G one-third of the time, they’ll moan about why their 5G footprint is so limited, but they will keep paying more for the scraps of coverage they get.
  • Markets: Price the service differently in each market depending on how stingy customers are likely to be at different price points. Then hike those prices to a new “nationwide” standard plan when 5G is available in the top 20-30 cities in the country. Since there may not be much competition, customers can take it or leave it.
  • Performance: AT&T and Verizon’s gotta gouge, but it’s hard to do it with a straight face if your 5G service is barely faster than 4G LTE. Lowenstein recommends waiting until speeds are reliably north of 100 Mbps, then you can let rip with those diamond-priced plans.
  • Devices: It’s hard to extract another $50-100 a month from family plan accounts if there are an inadequate number of devices that support 5G. While your kids “languish” with 4G LTE smartphones and dad enjoys his 5G experience, mom may shut it all down when the bill comes. Wait until everyone in the family can get a 5G phone before delivering some good old-fashioned bill shock, just like companies did in the golden days of uncompetitive wireless.

These ideas can only be adopted if a lack of competition assures all players nobody is going to call them out for pickpocketing customers. Ajit Pai’s FCC won’t interfere, and is even subsidizing some of the operators’ costs with taxpayer dollars and slanted deregulation to let companies construct next generation 5G networks as cheaply as possible (claiming it is important to beat China, where 5G service will cost much less). Should actual competition remain in the wireless market, all the dreams of rate-hikes-because-we-can will never come true, as long as one carrier decides they can grow their business by charging reasonable prices at their competitors’ expense.

Verizon Denies Throttling Florence Victims, But Customers Deal with Slow Speeds

Verizon Wireless claims it is not intentionally slowing data services for its customers in North & South Carolina, despite growing complaints from customers about slow speeds.

Stop the Cap! has heard from nearly 20 readers in central and eastern North Carolina and they are displeased with Verizon’s performance.

“Signal is five bars but speed might as well be dial-up,” reports one reader. “I have consistently gotten 20 Mbps or better service for at least a decade from my home and workplace on Verizon’s network, but now the speed shows it starts at around 20 Mbps but quickly declines to less than 1 Mbps within 3-5 seconds. I have an unlimited data plan and have relied on it since Spectrum went out over the weekend.”

“Of course they are throttling us,” said Paul Ingell, who moved inland from New Bern to share a room with friends near Charlotte. “As soon as you go over 20 GB, the speed throttle game begins, and they are playing it. My bill reset date was today and by gosh speeds magically returned to normal. But my sister-in-law is still being throttled. Her phone delivers less than 1 Mbps sitting right next to mine and I get around 15 Mbps. We both own the same phones and have unlimited plans.”

The Washington Post covered the alleged Verizon slowdowns as well, and one Raleigh area reader claimed he is being throttled now as well.

“We lost power/cable and were using my Verizon unlimited data plan for internet access, and were very frustrated when attempting to access pages with dynamic content,” he wrote. “This is not typically a problem in central North Carolina, a high-coverage area. It seemed clear our data was being throttled.”

Another reader in New Bern who rode out the storm said Verizon service was very poor as he attempted to get news from CNN and Google during and after the storm. Browsing was almost impossible.

“E-mails and texts were the only reasonably quick way for me to get information. Other people complained of the same issue,” the reader wrote. “Having lost power and internet, the phone was our only contact with the outside.”

First word of the claimed throttling came from a reddit thread from AbeFroman21:

My family lives in a small town in eastern North Carolina, and we were just devastated by the hurricane. Our power has been out for five days now and internet service is gone as well. Two days ago my wife and I noticed that we couldn’t retrieve our email from our phone or check Facebook [for] updates from our community about the storm or when service would be restored.

We traveled into a bigger town and called Verizon to check and see if there was a data outage and when we could expect it to be restored. Only, I was told that my unlimited plan was deprioritized for being too low tier of a plan. But if I upgraded to a higher plan my service would be restored.

There’s no outage, just corporations sucking dry a community that as already lost so much. Thanks a**holes.

Verizon categorically denies it is throttling any customers in North Carolina.

“On North Carolina, we are not throttling,” said Richard Young, a Verizon spokesman. “The most likely scenario is that the customer, who can’t connect to the internet, is in an area that has lost cell service.”

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  • Andy: They hiked the legacy ELP internet from 19.99 to 24.99 in november 2018. It used to be 14.99. The only reason these Charter spectrum effin ass holes a...
  • Frank D: Second Spectrum $20 price hike within a year. Signed up as $99/mo with time warner cable triple bundle. That became $130/mo after promo ended. Earli...
  • Dylan: Look at their prices. Absolutely ludicrous compared to many companies, especially Charter Spectrum. I pay $60 a month for 100/10 with unlimited data. ...
  • Paul Houle: For a long time communities have been frustrated in that they don't have any power to negotiate with cable companies. This town refused to enter into...
  • Ian S Littman: To be fair, you aren't wrong. Spectrum likely knows it won't have any competition for years in Lamar, so they'll quickly get take rates of >70% (re...
  • Ian S Littman: Are you in an area that can even get Spectrum service? Because in areas where they actually have to compete, they're actually pretty decent now. Yes,...
  • Ian S Littman: A more odd entry in that list is Chattanooga. The entire area has FTTH via EPB. Yet apparently folks can't swing the $57/mo starting price for 100 Mbp...
  • Ian S Littman: The issue here is that the NY PSC's threats have no teeth because, well, who will take over the cable systems if Spectrum is forced to sell? Either Al...
  • Bill Callahan: Phil, National Digital Inclusion Alliance just published interactive Census tract maps for the entire US based on the same ACS data. Two datapoints a...
  • Carl Moore: The idiots that run the cable companies must be also using drugs...a lot of people are cutting their cable services because of the higher rate and inc...
  • EJ: This will require a New Deal approach. Municipals need the ability to either be granted money or loaned money for broadband expansion. Until this is d...
  • Bob: I also got $1 increase for my 100/10 internet from Spectrum. A rep said it's for the speed increase that's coming in 2019. I complained that I was pro...

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