No significant expansion for FiOS in 2011, say company officials.

A Verizon spokesman has confirmed Verizon will not be expanding its FiOS fiber to the home service into new areas in 2011, except in those communities where the company already signed franchise agreements.

It’s the second year of Verizon’s hold on fiber expansion, instituted because of objections by Wall Street, a difficult economy, and a less optimistic view by Verizon’s new management that fiber has the capacity to quickly return on investment.

For upstate New York, the end-effect of Verizon’s decision is an odd patchwork of partially-built FiOS-capable communities, mostly in suburbs amenable to Verizon’s franchise terms. Some suburbs have access to FiOS broadband and phone service, but not television.  Others have access to all three services, while many other areas have nothing but Verizon’s ordinary copper phone lines.

“If you are big on fiber, there are some outlying towns with real estate agents that list whether or not their properties have Verizon FiOS, and whether that includes television service,” says Lysander, N.Y. resident Jeff, who reads Stop the Cap! “Our town was just glad Verizon picked us for upgrades and we didn’t ask too much of the phone company, quickly agreeing to a TV franchise agreement.”

But residents in the city of Syracuse are less happy — they won’t get competitive video from Verizon and are stuck with a Time Warner Cable wired monopoly because the city “dragged its feet” on franchise negotiations.

“When it comes to bigger cities, they see Verizon’s knock on the door as an opportunity to cash in on freebies from the phone company, like upgrading their video studios for government access channels, paying substantial franchise fees, and agreeing to carry channels the city government wants on Verizon’s cable system,” Jeff says.  “When the first cable systems came to town, it was the same story; some communities dragged their feet for years trying to extract more.”

Of course, cities don’t have to wait for Verizon to take care of their growing broadband needs.  They can build their own fiber networks and deliver world class service themselves, or open the new networks up to private competitors to deliver bigger bang for your broadband buck.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WSYR Syracuse FiOS availability not planned for Syracuse during 2011 1-6-11.flv[/flv]

WSYR-TV in Syracuse reports it will be a long wait for many in central New York waiting for fiber to the home television service. (Warning: Loud Volume) (1 minute)

Disgruntled AT&T customers, and those with infinite patience for Apple’s iPhone on Verizon Wireless’ network — your long wait appears to finally be over.

After nearly a year of speculation, Verizon Wireless is expected to announce the imminent arrival of the coveted smartphone on the nation’s largest wireless carrier at a press event tomorrow.

The Verizon version of the iPhone could come at a price premium, with some anticipating the entry level version of the phone could be priced as high as $249 — $50 higher than with AT&T.  The usual two year contract applies.

Analysts predict a muted stampede, at least at first, by unhappy AT&T customers.  As many as two million customers itching to dump AT&T could jump to Verizon in 2011, but they’ll pay dearly to do so.  First, their existing AT&T iPhone won’t work on Verizon’s network, so that means a new phone and a new, two year contract with Verizon to get the best price.  Second, AT&T locked many of its customers into two year contract extensions with the release of the last iPhone in June.  No amount of whining by iPhone users, which has worked to score early upgrades and discounts in the past, will get AT&T to make the price of divorce less expensive.  The company’s price to sever ties: more than $200 for most in-contract customers with the latest version of the popular phone.

[flv]http://www.phillipdampier.com/video/CNBC Verizon iPhone Package 1-10-11.flv[/flv]

CNBC discusses the pros and cons of Verizon’s adoption of Apple’s iPhone in these two reports.  (8 minutes)

Verizon iPhone users will also give up something else: an iPhone that can multitask.  AT&T’s GSM network allowed customers to browse web pages and run applications while you talked on the phone.  Verizon’s CDMA network doesn’t support that.  As long as you talk on your phone, your data applications won’t update.  It’s an either/or proposition, at least for now.

Still, expect the iPhone to be a Verizon hit like none other.  Carl Howe, an analyst for the Yankee Group, expects Verizon to sell 16.5 million iPhones in 2011, with more than half — 9 million — coming from Verizon’s own subscriber base.

The question is — can Verizon’s three bedroom house support the entire extended family showing up on their network doorstep?

AT&T’s network suffered from the onslaught of data-hungry iPhone devotees.  As millions of Americans adopted the phone, an AT&T exclusive, the company’s wireless network groaned under the usage.  With calls dropping, data trickling, and customer service irritating, AT&T scored rock-bottom in consumer ratings.

Some wonder if the same fate could afflict Verizon’s network.  Verizon currently has the lowest percentage of smartphone customers using its network among the four major carriers.  Verizon’s pricing is typically considered the culprit.  Customers insisting on the iPhone ended up with AT&T.  But those seeking Android phones had more choices — Sprint’s unlimited data plans at aggressive price points, T-Mobile’s value-oriented family shareplans, or Verizon’s robust network coverage at Cadillac pricing.

Putting the iPhone, already a premium-priced phone some consumers can’t live without, with Verizon’s reputation for high quality service, is expected to be a winning combination, and 16.5 million customers joining Verizon’s existing 30 million smartphone customers in a single year could have a dramatic impact.

“Unless Verizon has done a lot of network upgrades in advance, it may see many of the same capacity problems that have plagued AT&T,” Howe says.

The news AT&T is about to lose its exclusivity for the phone was taken in stride by some company executives, one who used the occasion to take a swipe at Verizon’s slower speed 3G network.

AT&T public relations head Larry Solomon pointed out Verizon’s 3G network relies on 3.1Mbps EVDO Rev. A technology while AT&T delivers 7.2Mbps on its HSPA 3G network.

The iPhone is built for speed, but that’s not what you get with a CDMA phone,” Solomon told Electronista. “I’m not sure iPhone users are ready for life in the slow lane.”

Verizon Wireless is expected to unveil the new phone Tuesday morning, with its in-store availability expected within a few weeks.  For fans of unlimited usage, there is one more piece of good news: Verizon is expected to continue offering unlimited data usage plans to its new iPhone customers.  AT&T cashiered its own unlimited data plan last spring, forcing customers to keep usage under 2GB per month if they don’t want an even higher bill.  Verizon is reportedly confident its network can sustain the traffic, and will leave its data hungry customers alone… for now.

Apple Insider produced this chart comparing Verizon and AT&T's smartphone pricing.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WTTG Bloomberg Verizon iPhone Package 1-10-11.flv[/flv]

WTTG-TV in Washington delivers the news about the imminent arrival of the iPhone on Verizon’s network in a consumer-friendly fashion, while Bloomberg delves deeper into exactly what impact the move will have on existing and future customers of both AT&T and Verizon.  (9 minutes)

"Too rich for my blood."

Former Verizon FiOS customers now served by Frontier Communications in Oregon and Washington are receiving word of astonishing rate increases of as much as 46 percent from the phone company.  The massive rate increase is being blamed on “increasing programming costs” charged by the cable networks carried on a cable system that competes with Comcast, which charges far less for the same channels.

Frontier’s rate hikes are so dramatic — $30 a month for the popular standard 200-channel package, some customers are wondering whether the company is trying to sabotage their own fiber-to-the-home service.

“They sent us a rate increase letter stating our former standard package, priced at $65 a month, is now going up to a ridiculous $95 a month for basic cable,” says Tom, a regular Stop the Cap! reader. “That’s a rate increase only my health insurance company could love.”

New customers face the new rates immediately, but existing customers have until Feb. 18 before the new high price kicks in.  Many are preparing to move back to Comcast, which raised rates this year as well — but is now a relative bargain at $63 a month for a similar package.

“As much as I love FiOS, Frontier has managed to screw it up as badly as the rest of their services and now I am going back to Comcast,” Tom says. “You have to wonder if they are purposely incompetent or if it’s part of a larger plan to sabotage the Verizon FiOS network they inherited.  Either way, they’ve priced their service out of the market.”

When Tom called Frontier to complain, the company offered to rip out the advanced fiber network Verizon installed and stick a DirecTV satellite dish on his roof instead.

“Frontier is a real ‘Back to the Future’ kind of company — they just don’t get it,” Tom said.  “The operator actually told me she couldn’t understand why I would want to cancel service.”

Customers receiving new customer promotional discounts will get a real case of sticker shock when Verizon’s original promotional rates reset to Frontier’s new regular price.

“Washington County better beef up their hospitals because there are going to be a lot of heart attacks when that bill arrives,” Tom says.

The Oregonian newspaper reports customers are not the only ones to be shocked by Frontier’s enormous rate increase.  Regulators promised more competition and cheaper prices as part of Frontier’s purchase of Verizon landlines feel had as well.

“[Frontier’s rate hike] is essentially a white flag surrender and an exit from the head-to-head video competition,” lamented David Olson, director of the Mt. Hood Cable Regulatory Commission.

That’s a far cry from what Frontier Communications CEO Maggie Wilderotter told the newspaper in September when asked if the company would raise FiOS rates.

“That is not our plan. If I look across the board at our basic service pricing, I don’t think we’ve raised prices anywhere in the last four or five years,” she said.

The Oregonian quotes a Frontier representative who says the company’s relatively small customer base disqualifies them from volume discounts Verizon used to receive.

“Part of the challenge we have, compared to other providers, is that our footprint is so small,” said Frontier spokeswoman Stephanie Beasly. “They’re able to spread it out over a much larger customer footprint.”

That can’t be the whole story, said Fred Christ, policy and regulatory affairs manager for the Metropolitan Area Communications Commission, which regulates cable TV in Washington County.

“There’s more to it than programming costs. Anybody in the industry can pretty much figure that out. What more there is, we don’t know yet,” he said. “Unless programmers are trying to run Frontier out of business, why would they jack their rates that much?”

Smaller companies like Frontier generally do not try and buy programming on their own, but join group-purchasing plans like those offered by the National Cable Television Cooperative.  Municipal providers routinely purchase programming at substantial discounts.  It is not known if Frontier is a member, but they could be.

No rate increases are planned for broadband or telephone service.

Verizon FiOS pricing increased at less than half the rate Frontier will demand from subscribers in 2011. (Source: Metropolitan Area Communications Commission, Tualatin Valley, Ore.)

Verizon's new upgrade policy, courtesy of Android Central.

Verizon Wireless is making changes to their handset upgrade programs, all to the benefit of their bottom line and not to yours.

In training materials obtained by Android Central, Verizon is discontinuing its “New Every Two” handset discount program for customers who sign new contracts after Jan. 16 and will stop allowing customers to obtain early upgrade discounts on new phones before their contract nears expiration.

The “New Every Two” promotion has been a familiar part of Verizon Wireless service for years.  Customers finishing their two year contracts receive a $50 discount on their next new phone with the carrier, as long as they sign a new two year contract.

Early upgrades, which used to qualify customers for discounts during months 13-20 of their 24 month contract, are coming to an end as well.

There is some speculation the early upgrade plan is being curtailed to try and stop a rush on the rumored Verizon iPhone due early this year.

Since many customers upgrade to more expensive smartphones, the “New Every Two” program only delivers a discount, not the new free phone it provided in an earlier era.

Still, the loss of discounts will effectively give the biggest benefits to Verizon Wireless’ bottom line, allowing the company to reduce subsidies it pays on behalf of customers demanding the latest and greatest new phones.

Pagliughi

Avalon mayor Martin Pagliughi wants answers about why Verizon left hundreds of residences and businesses on the Seven Mile Island with intermittent phone service for more than a week, with no notification or explanation forthcoming from the telephone company.

The service outage, which began Oct. 28, extended all the way until Nov. 8, forcing customers to endure incomplete calls, one-sided conversations, and other problems.

Verizon blamed a piece of failing equipment for the outage — a technology card installed at a switching office in central New Jersey.  The result was disrupted service for residents of both Avalon and neighboring Stone Harbor, and Verizon officials never realized it.

Verizon officials claimed technicians missed the failing card because an alarm on the card never sounded.  Dozens of complaints from customers were ignored by Verizon customer service representatives.

Pagluighi wants to know how this could have happened.

“It was very troubling to me that in an era of mass telecommunications and putting men on the moon that Verizon could not be aware of a big problem in Avalon and Stone Harbor while dozens of complaints were coming into their representatives,” Pagliughi told the Cape May County Herald.

He added that many residents told the borough that when they contacted Verizon to complain about the lack of telephone service, Verizon reps told them their complaint was the first one from Avalon.

“This outage is not only about an inconvenience to our community, it’s really about a critical public safety issue,” Pagliughi said. “It’s time for utilities that make a lucrative business in our communities to have a greater level of accountability for the services they are paid to provide,” he said.

The mayor met with public safety officials and representatives from Verizon to create a plan to prevent a repeat occurrence.  Had the winter storm that barreled up the east coast over the weekend struck at the same time as the phone outage, public safety could have been at risk.

The newspaper reports the parties agreed to take the following actions:

• A total replacement of the technology card that failed during the telephone outage. The card will be replaced by technicians sometime during January 2011 with no anticipated interruption of telephone service;
• Verizon will draft a plan that will result in greater recognition of a community-wide problem along with proper notification of emergency management authorities in the affected region;
• A special practice “drill” will be conducted involving county and municipal emergency management officials that will test Verizon’s new contingency plan to notify a community when a phone outage occurs;
• Verizon will arrange a field trip during the first quarter of 2011 so local officials can talk with staff at a local field office to discuss communication efforts between the utility and local emergency management officials.