Sprint, America’s third largest mobile phone and wireless company, has launched a marketing war on its bigger competitors AT&T and Verizon Wireless scoffing at both providers’ $69.99 “unlimited” calling plans.

“Recently AT&T and Verizon have attempted to confuse the marketplace by lowering their pricing to $69.99, but theirs are for calling only,” said Mike Goff, Sprint’s vice president of corporate marketing.

Sprint launched a new advertising campaign this morning featuring CEO Dan Hesse calling out both carriers for effectively confusing consumers.

Hesse explains most people use their cell phones for more than just making and receiving calls.  Hesse said his larger competitors charge substantially more to use data services, and that many of the latest handsets don’t qualify for the special pricing.

Both AT&T and Verizon Wireless have started to require consumers with so-called “smartphones” to sign up with a data plan, adding to the customer’s bill whether or not they actually use such services.  Sprint says their unlimited plan also bundles unlimited web browsing, texting, and GPS navigation for the same price — $69.99, available on any phone they sell.

Sprint has had its hands full trying to stem the ongoing loss of its customers to larger competitors.

AT&T has benefited from an exclusive sales agreement for Apple’s iPhone, while Verizon Wireless achieved the top spot among U.S. carriers for its perceived widest coverage area.  Sprint has neither, and historically poor customer service to boot.

Will Sprint’s new campaign make an impact?

Roger Entner, head of telecom research for the Nielsen Co., told Brandweek that AT&T and Verizon are in such a commanding position in the market right now that they are unlikely to respond to Sprint. “They have the luxury of being able to ignore [Sprint],” said Entner, who noted that both AT&T and Verizon added millions of new subscribers in the fourth quarter, many at Sprint’s expense.

Sprint has managed to at least slow customer defections.  In the last quarter of 2009, Sprint lost 148,000 subscribers.  The previous quarter, the company lost 545,000 customers.

[flv width=”640″ height=”378″]http://www.phillipdampier.com/video/Sprint Ad – Just Phone Calls 3-2-2010.flv[/flv]

Sprint CEO Dan Hesse explains why their $69.99 plan is “better” than the competition in this new advertisement.

Cablevision subscribers: Just two months after facing the loss of HGTV and the Food Network, get ready to lose WABC-TV — the ABC affiliate in New York, just hours before the Oscars telecast is set to begin.

Cablevision’s contract with Disney-owned WABC-TV will expire March 7th, and both sides have not reached an agreement.

The dispute centers around retransmission rights fees.  Currently, WABC permits Cablevision to carry its channel on their lineup for free.  But now the station wants to be paid.  WABC claims Cablevision earns $18 million a month from its broadcast basic lineup of mostly-local channels, and it’s time to share a portion of that with the station.

Cablevision has so far not agreed to the asking price.

“Cablevision’s position is that ABC7 is worth little to nothing to its business and its proposed offers have been consistently unreasonable and unrealistic,” said Rebecca Campbell, president and general manager of WABC-TV. “We think these shows are valuable, and your bill shows that Cablevision must agree since you already pay for ABC7 as part of your Broadcast Basic Tier – a service for which, as a Cablevision customer, you pay as much as $18 each month.  Cablevision charges you for ABC7 and then keeps all the money.”

WABC has started a website to educate customers how to drop Cablevision and switch to a competitor such as Verizon FiOS, or get access to the station over-the-air.

Cablevision fired back accusing ABC of asking consumers to pay a TV tax amounting to $40 million that would have to be passed onto subscribers in another rate increase.

“It is not fair for ABC-Disney to hold Cablevision customers hostage by forcing them to pay what amounts to a new TV tax,” said Charles Schueler, Cablevision executive vice president.

Both sides indicate negotiations are continuing, and some compromise may still be reached before the deadline.

[flv width=”600″ height=”356″]http://www.phillipdampier.com/video/WABC New York Cablevision viewers may lose Channel 7 on cable service 3-2-2010.flv[/flv]

WABC-TV is running this 30-second ad telling viewers about the dispute with Cablevision, along with stories on their newscasts. (4 minutes)

Charter customers thank the company for the speed increases

Charter Cable has made it clear — no metered billing and no enforcement of its “soft usage caps.”

“We have no plans to introduce metered billing,” Ketzer told Broadband Reports, adding no trials were forthcoming either.

But Charter Cable did say bandwidth consumption is a concern for the company, and a measurement tool to educate customers about their current usage was on the way.

“Right now we are gathering requirements to develop a resource so that customers can monitor and control their bandwidth resources,” said Ketzer. “This was something that our customers have been requesting and we want to meet that need.”

Separately, Charter also announced speed upgrades for many of its broadband customers.  Starting this morning, customers can briefly unplug their cable modems to reset them and enjoy some increased speeds at no additional cost.

Charter's old speed tiers (shown above) got an upgrade this morning. Prices quoted are for new customers. Existing customers: add $15 -- Internet Only customers: add $25

The new speed increases impact three of their broadband plans.  Only “Lite” speeds remain unchanged:

• Lite: Remains the same at “up to” 1 Mbps/128 kbps
• Express: Increases from 5/1 Mbps to 8/1 Mbps
• Plus: Increases from 10/2 Mbps to 16/2 Mbps
• Max: Increases from 20/2 Mbps to 25/3 Mbps

Charter advises Max customers will need to exchange their current cable modem to receive the new speeds.  They come as a result of DOCSIS 3 upgrades, which requires a modem that supports that standard.

Some Charter customers can go even faster with the company’s Ultra60 plan delivering 60/5Mbps service for $139.99 a month.  Customer promotions, typically running six months, can cut the cost to $109.99 during the promotional period.

Increasing speeds and shelving Internet Overcharging schemes like usage limits and usage-based billing build customer loyalty and bring new customers, particularly at the expense of telephone company DSL plans, which cannot compete on speed.  Most DSL providers have stopped increasing speeds beyond the maximum 6-10 Mbps they have advertised for years.  Many barely deliver 3 Mbps.

AT&T, which provides service in many Charter markets, has raised the stakes for competition as it rolls out U-verse, an advanced type of DSL service that can support video, telephone, and faster broadband.  In Reno, where AT&T has conducted usage cap experiments for more than a year, the news that Charter won’t comes as welcome news.

Stop the Cap! reader David canceled AT&T service when he found out the company was testing a usage cap in Reno.

“When we found out they were limiting us (after we signed up), we not only canceled AT&T broadband, but also disconnected our two phone lines as well,” David writes.  “We won’t do business with a company that wants to limit our broadband use and we resented being guinea pigs in the first place.”

David adds a “retention specialist” offered to waive his participation in the trial, but he wasn’t interested and is not looking back.

“Unless you deliver a clear message these ripoffs are unacceptable in a way they understand – money – they will just come back for more once the ‘experiment’ is over,” he said.

David is happy with his Charter Cable service, and estimates AT&T’s experiment cost them nearly $200 a month in revenue they used to earn from his family.

“Their cost control program certainly worked — for me.  I’m saving more money with Charter than what I was paying AT&T,” he adds. “I wouldn’t have switched except for their usage cap.”

Charter itself has some broadband usage limits, but they are almost never enforced.

Charter currently defines “normal” residential usage at around 15 gigabytes per month.  Charter’s usage allowances appear in its “excessive use” clause in the Acceptable Use Policy:

Residential service usage will not exceed 100GB of bandwidth per month for Customers subscribing to Services of 15 Mbps or less per month and 250GB of bandwidth per month for Customers subscribing to Service over 15 Mbps and up to 25 Mbps. Charter reserves the right to revise usage limits or to implement additional usage limits. In the event residential usage exceeds the above-described limits Customer will be notified and required to either limit Customer’s bandwidth consumption to permitted levels/limits or subscribe to a Service with a higher monthly bandwidth limit if a higher limit subscription is available.

Since these limits have not been aggressively enforced, they are known as “soft usage caps.”  Most Internet Service Providers have provisions for such limits in their customer agreements, although they are usually only enforced only when a customer’s usage reaches into the stratosphere (often terabytes of usage are involved) or creates a problem for the provider.

Still, some customers dropped Charter Cable even over the defined “soft caps,” switching to competitors who had no such provisions in their usage policies.  Consumers hate Internet Overcharging schemes, and will readily change providers to avoid them.

[flv width=”500″ height=”380″]http://www.phillipdampier.com/video/Charter Thank You Ad 3-1-2010.flv[/flv]

Charter Cable created this ad from customer recorded submissions sent over their Internet service (1 minute)

Bredesen

Tennessee governor Phil Bredesen has proposed increasing a tax on cable television service to help raise money for education and public safety.

The tax proposal would remove a current exemption for state residents on the first $15 of their cable bill, making the entire amount subject to the state sales tax.  The monthly cost — about $1.35.

The “cable tax” was part of a package of “revenue enhancers” proposed by the governor to create a $50 million dollar earmark targeted to preserve government jobs in education, as well as foresters and those working in the criminal justice system.

Bredesen’s proposal may stem, in part, from a lawsuit filed by satellite providers against the state.  They’re upset customers must already pay sales tax on the entire amount of their satellite service bill, while cable gets a special partial exemption.  Bredesen’s saw their point.

“You can’t tax the same service from one person and not tax it from another,” Bredesen told reporters at a press event earlier this month. “I don’t think of it so much as though we’re raising taxes across the board on television, but really we’re kind of fixing a loophole.” 

Loophole or not, many consumers and Republicans in the state legislature don’t like the proposal.

Senate Speaker Ron Ramsey (Blountville), among several other Republicans participating in a press release objecting to the tax, said raising cable rates is not an appropriate way to balance the state budget.  The Republicans called instead for spending and tax cuts to encourage businesses to create more jobs.

Governors across all 50 states are looking for creative solutions to solve state budget woes as the American economy, and tax receipts, continue to drag.  Many are proposing increases in service fees, new targeted taxes, and one state — New York, is proposing to delay sending some residents their state tax refund checks until this summer.

Republicans, who control both houses of the Tennessee legislature, suggested the cable tax would not find its way into law. 

Bredesen challenged the Republicans to come up with spending cuts or new revenue sources themselves.

“You’ve got to move beyond saying ‘I don’t like this,‘ and into ‘I don’t like this, and here’s how we plan to fix it,'” Bredesen said in a statement.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WSMV Nashville Lawmakers Propose Increase In Cable Bill 2-4-2010.flv[/flv]

WSMV-TV in Nashville discusses Tennessee’s cable tax proposal and finds out what area residents think about it. (2 minutes)

TelstraClear serves New Zealand

Some broadband customers in New Zealand are treating their monthly usage allowances as usage targets, dedicated to ringing every last penny of value out of the Internet Overcharging schemes.  That means bandwidth usage increases just because customers don’t want to leave their remaining allowance on the table at the start of a new month.

PC World New Zealand notes “caps are essentially stupid” because your allowance resets at the end of every billing cycle:

If I’m away for a month and use zero bytes, it costs just the same as if I’d used my full 20GB. This wouldn’t be so galling if some allowance were made for under-utilising my capacity. It doesn’t have to be a 1:1 thing or roll over from month to month, but some concession would be nice. Perhaps a 1:2 ratio that must be used within the next billing period; in this case an allowance to go up to 30GB in the next month seems reasonable.

That would also get around the other irritating thing about data caps, the punitive charges if you go a single byte over your limit. In the case of TelstraClear it’s $2.95 per GB or part thereof.

TelstraClear - The Internet. Overcharged.

Readers shared their two cents:

I have a 40GB cap which I regularly go over. Telscum charge $20/Gb so it hurts like hell. I tried [switching] to TelstraClear but after three months all I had from them was a bill for services I didn’t receive.

We have 20Gb shared between the three of us and it is rare to go over but we do try like you to use it all up simply because we have paid for it. There is a company in NZ that allows you to roll it over it is Trust power Kinect. A friend uses them and roughly every three months he reckons he can save a month. You do need to have your power and phone with them though and for us it would actually work out more expensive but for others it might not. I do think caps suck though and wish they could be scrapped as I think we would actually use less bandwidth.

I think this part of the world and UK is an exception when it comes to data caps. In Europe data caps are very rare (except in UK which is not typical for Europe in any aspects). Being from Sweden I was a bit surprised moving to NZ and discovered data caps as well as very slow and expensive Internet. Sweden is similar to NZ (e.g. size, population) so it’s a fair comparison. You are being ripped off!