Martha's Vineyard

President Barack Obama’s arrival on Martha’s Vineyard brings a gift any local resident can enjoy: improved cell phone reception on the island, located off the coast of Massachusetts.

The president’s advance team and entourage rely on Verizon Wireless cell phone service, so when the president travels to a vacation spot, Verizon Wireless usually follows with one or two temporary cell towers to guarantee adequate coverage.  This summer is no different, and customers that used to have to walk outside and face the mainland for adequate reception are suddenly enjoying four bars, thanks to two traveling cell towers strategically placed on the island at Chilmark and West Tisbury.

Martha’s Vineyard is notorious for lousy cell phone reception, and the island’s small population has not justified investment for improved service.  Even when carriers explore the idea, local residents usually object to the proposed cell towers, dismissed as unsightly.

But for much of August, the island’s cell phones have been ringing as Verizon customers accustomed to simply going without service while on the island are suddenly getting rock solid service.  That puts a temporary end to the usual practice of trading knowledge of “known reception spots” — specific floors in buildings, certain sidewalks with an especially clear view to the coastline, or where unknown forces converge to deliver enough signal to make a quick call or send a text message.

The cacophony of ringtones has received a mixed reception from the locals, some of whom are unimpressed with wealthy vacationers, bankers, and politicians who call Martha’s Vineyard home for two weeks during the summer.

Rachel Fox, an entertainment lawyer from Manhattan whose family has a home on the island told the New York Times, “A lot of the people who vote here, who live here year-round, couldn’t care less if the people who invade them in the summer get to talk to their Hollywood producers in the middle of the Chilmark [general] store.”

Cell Tower on Wheels

When the president leaves, Verizon’s two cell-on-wheels-trucks leave as well, leading some 15,000 locals to ponder who is paying Verizon to haul the two towers on and off of the island and the expense to run them.  The newspaper wondered the same and didn’t get a clear answer.

Laura Williams, a spokeswoman for the White House Communications Agency, said its job was to ensure “that the president has the best communications possible wherever he travels” so that he can “remain informed and connected.” But Ms. Williams would not answer specific questions about the enhanced service, including how much it costs and who pays for it, citing security concerns.

One thing is certain, the two or three week cell phone nirvana the island enjoys in the summer only benefits Verizon Wireless customers.  Those with AT&T, T-Mobile, and Sprint find themselves with no bars in virtually all places on the island.

That suits Linda Alley, whose home in West Tisbury is located right next door to one of Verizon’s temporary towers, just fine.

“I’m not attached to my cell phone like a lot of people are,” she told the Times. “I couldn’t care less.”

Sen. Schumer

Senator Chuck Schumer (D-New York) has proposed cell phone carriers permanently disable stolen cellphones, unless and until they are reactivated by the original owner.

Currently, only Verizon Wireless shuts down stolen phones, preventing their easy reactivation.  Other carriers only disable internal SIM cards, which are easily replaced by any thief in minutes, and for a fee AT&T and T-Mobile will reactivate any phone.  Sprint only disables access to stored contact lists and contents of memory cards that often accompanying modern smartphones.  But anyone can reactivate a stolen Sprint or Nextel phone just by claiming to have acquired it legitimately from the former owner and replacing the removable SIM card.

The result of easy reactivation is a thriving black market for stolen phones, particularly in New York.

“Forty-one percent of all property crimes in New York City in the first half of this year were related to cellphones,” Schumer said, noting phones often sell for hundreds of dollars and are back in operation sometimes hours after being stolen.

SIM Card

Schumer says if carriers permanently disabled stolen phones until the rightful owners declare them retrieved, phones would become worthless to would-be thieves.

The senator notes that European carriers use each phone’s unique identification code to monitor the status of the phone.  Once reported stolen, overseas carriers will not reactivate a disabled phone without a signed statement from the original owner authorizing the transfer of ownership.

Schumer notes cell phone theft is rising dramatically in New York as more people start carrying increasingly sophisticated smartphones.

In 2009, 10,650 phones were stolen in the city.  In 2010 — 10,746.  So far this year, more than 11,320 phones have been taken by thieves.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WNYW New York Deactivate Cellphones 8-21-11.flv[/flv]

WNYW-TV in New York has raw video of Sen. Schumer’s press conference on cell phone theft.  (10 minutes)

Verizon Wireless is expected to enter the Alaskan mobile market sometime in 2013-2014, according to incumbent competitors, who expect Verizon’s largest impact will be to bleed AT&T of customers.

Alaska’s two primary local providers — Alaska Communications, Inc. (ACS) and General Communications, Inc. (GCI), are telling shareholders to relax because they don’t expect to see Big Red in the Alaskan market for at least 2-3 years.  Both companies reported net losses for the quarter, and GCI lost 2,400 subscribers recently when more than 4,000 soldiers at Fort Wainwright in Fairbanks were deployed to Afghanistan.

Both ACS and GCI have been using the current poor economic climate and their respective stockpiles of cash-on-hand to retire debt or reissue long-term-debt at more favorable low interest rates.  Both companies are also hurrying to outdo each other’s 4G wireless network deployments before Verizon Wireless shows up, making use of spectrum it acquired last August to enter the Alaskan market.  Government rules require Verizon to sign-on its new network by June 13, 2013.  But Verizon admits it will take up to five years after that to completely build a new network from scratch.

Right now, Verizon Wireless customers taking their phones to Alaska roam on ACS’ network, for which the company is compensated with an increasing amount of extra revenue.  ACS boosted earnings in part on that roaming revenue, even as it lost more of its own customers.  When Verizon switches on its own network, that roaming revenue will rapidly decline, but ACS executives reassured shareholders their knowledge and experience of construction seasons in Alaska guarantee Verizon won’t be able to get its network together until 2013 at the earliest.

But when Verizon opens their doors, Ron Duncan, CEO of GCI expects a hard fight on his hands.

“We recognize ultimately they’ll be a significant competitor, although I see AT&T share more at risk because Verizon’s main claim to fame when they get to Alaska is going to be devices. We’ll still outpace them on coverage. We’ll continue to be the only ones with statewide coverage,” Duncan said. “People who want to buy the coverage buy from us today; people who want devices buy from AT&T because AT&T gets much better devices than we do.”

Just months after Verizon announced they were headed north, both ACS and GCI accelerated plans to roll out respective “4G” networks for wireless customers, although each company is deploying different standards.

GCI

GCI’s cell phone network is a combination of some of its own infrastructure, the acquisition of Alaska Digitel, and a resale agreement to use parts of AT&T Wireless’ coverage it acquired from Dobson Communications Systems.  In and around Fairbanks, Anchorage, Glennallen, Valdez, Prudhoe Bay, Wasilla, and Kenai, GCI offers CDMA service.  In those communities and many other rural regions in western Alaska, GCI relies on AT&T Alascom GSM networks.  GCI pitches its CDMA network’s 3G wireless data capabilities, which offer faster wireless data speeds, if you can get coverage.  For wider coverage in Alaska’s smaller communities, GCI markets GSM phones, which currently only offer 2G EDGE/GPRS data speeds.  If you use a cell phone mostly for voice calls, the wider coverage afforded by GCI’s GSM network is a popular choice.  But if you want faster data, CDMA 3G data speeds are required.

Eventually, GCI’s 4G network may help deliver coverage and faster speeds in both urban and rural areas, particularly as GCI plans to invest up to $100 million to construct more of its own network, instead of relying on resale agreements and acquisitions.

GCI has chosen HSPA+ for 4G service on the GSM network, and will introduce the service in Anchorage later this month.  That’s the same standard used by AT&T and T-Mobile in some areas.  It’s not as fast as LTE service from Verizon Wireless, but is much cheaper to deploy because cell sites need not be linked with fiber optic cables — an expensive proposition.

ACS

Alaska Communications has a large 3G CDMA network in Alaska all its own.  Its coverage is primarily in eastern Alaska adjacent to major cities like Anchorage, Juneau, and Fairbanks, and where it does provide 3G data coverage, the company claims it extends further out than GCI.  ACS doesn’t offer much coverage in small villages and communities in western Alaska, however.

ACS expects to skip incremental upgrades and launch its own 4G LTE service in the future.  It may help the company regain its second place standing, lost to GCI last year, and protect it from Verizon Wireless poaching its customers.

Verizon's aggressive offers promoting adoption of more profitable smartphones delivers higher average revenue from every customer that is convinced to upgrade.

Verizon Wireless continues on its mission to seek out old customers, to explore new ways of earning more money from them, and going where other carriers have already  gone before to get customers to dump basic phones in favor of more profitable smartphones.

The company begins testing a new basic data plan on Thursday around the nation’s capital that will provide up to 300MB of smartphone data for $20 a month in an effort to reduce sticker shock for would-be upgraders confronting the smartphone fact-of-life: the mandatory smartphone data plan.

Curiously, Verizon is calling its limited promotion a “back to school” special, despite the fact some of the heaviest data users around are school age, likely to blow right past their usage allowance.

Verizon Wireless’ leaked press release:

Starting Thursday, existing Verizon Wireless customers in Maryland, Washington DC, Virginia and North Carolina will be able to add a 300 MB data plan to their smartphone or basic phone for just $20 monthly access when added to a voice plan. All new and existing customers are eligible for the promotional data plan that will be available from Aug. 18 through Sept. 30.

Customers in Maryland, Washington, DC, Virginia and North Carolina can choose from an array of 3G- and 4G LTE-enabled devices that include top sellers on all mobile operating systems including BlackBerry, Android, iOS, Palm and Windows Mobile. The plans are not restricted to specific phones but are geared to customers whose data use falls within the 300 MB allowance. Customers who go over their monthly allowance will automatically receive an additional 300 MB for an additional $20 per month.

If that doesn’t convince you to upgrade, perhaps Verizon’s version of “cash for clunkers” — a cell phone trade-in program, will.  Verizon Wireless is offering up to $100 for customers in their western region to trade-in basic phones for a shiny new smartphone, as long as they upgrade between Aug. 18-Sept. 30.

According to Phone Arena, some customers even under existing contracts may qualify:

• 1) Current customers with a basic phone that are eligible for a 2-year upgrade will have to purchase a new smartphone at the discounted upgrade price, re-sign a 2-year contract and add a smartphone data plan.
• 2) Current customers with a basic phone, but are still under a contract may be eligible for an early upgrade. If so, they purchase the new smartphone, re-sign a 2-year contract, and add a smartphone data plan.

Phone Arena had the benefit of a friendly Verizon Wireless employee willing to share the company’s employee-only documentation about the offer:

It’s Cell Company Customer Crackdown-month for AT&T and Verizon Wireless as the two carriers increasingly engage in aggressive “management” of their wireless data networks.  Days after AT&T announced it would throw customers off legacy unlimited data plans if caught using “unofficial” tethering applications, Verizon has reportedly locked out customers from accessing web pages over jailbreak apps like MyWi, redirecting requests to a Verizon Wireless $20 Mobile Hotspot offer instead.

Mobiledia reports Verizon now requires users have a hotspot-capable data plan if they want to tether data from their smartphones to other devices.  At regular prices, those plans start at $20 for 2GB of usage, with a $10/GB overlimit fee.  Certain LTE/4G customers have fared better, being offered unlimited tethering for $30 a month — an option not available to 3G phone owners.

The Federal Communications Commission’s Net Neutrality policy exempted wireless providers from observing its core principles, giving carriers carte blanche to block websites and third party applications from their networks, and Verizon has put the green light to good use.

AT&T has favored direct punitive measures against customers who don’t respond to their demands to upgrade by auto-enrolling customers in $45 tethering plans or threatening legacy customers with the loss of their unlimited data plan.

Some media reports — including those from Mobiledia — have declared third party tethering applications “illegal,” which is inaccurate.  While carriers may not like these applications and declare use of them contrary to their respective acceptable use policies, they do not violate any laws.