Tag Archives: att

Consumers say they’re paying too much for poor Internet service

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Big Internet service providers hit all time low in customer satisfaction ratings, according to the latest American Customer Satisfaction Index (ACSI) telecommunications company rankings. The survey ranks telecoms companies and service offerings on a 100-point scale. ISPs dropped from an overall industry average of 64 out of 100 in 2017 to 62 this year, and overall the broadband industry is making people very unhappy.

According to ACSI, it’s a case of the bad just getting worse…

Internet service providers (ISPs) are down 3.1% to 62—an all-time low for the industry that along with subscription TV already had the poorest customer satisfaction among all industries tracked by the ACSI.

Customers are unhappy with the high price of poor service, but many households have limited alternatives as more than half of all Americans have only one choice for high speed broadband. Every major ISP deteriorates this year except for Comcast’s Xfinity, which is unchanged.

Verizon’s FiOS fiber to the home service is still top rated with a score of 70, and AT&T wasn’t far behind with 68. Charter Communications and Comcast are below the industry already dismal customer satisfaction average – both scored 60. Suddenlink wasn’t much better at 61, both it and Charter saw a year over year decrease of 5 points.

Frontier Communications and Cox Communications bring up the rear among major California ISPs, with customer satisfaction ratings of 54 and 59, respectively.

As a group, small ISPs did better than average, but still not great, getting a combined score of 63.

On specific aspects of service, call centers are the biggest pain point for consumers, getting a 59 out of 100 rating, while bricks and mortar store staff are well regarding, topping the benchmarks at 76. But all customer experience ratings are down from last year’s…

Internet service is less reliable (69), more prone to outages (68), and performance during peak hours is worse (68). Video streaming quality is unchanged (68), but overall data transfer speed is lagging compared with a year ago (–3% to 67), as is the quality of email, storage, and security (–3% to 69).

The rankings are based on an email survey conducted this past March and April. More than 45,000 customers responded.

Cable, telcos hit rock bottom in consumer satisfaction rankings

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The broadband industry is pissing off its customers. According to the latest American Customer Satisfaction Index (ACSI) telecommunications company rankings, the consumer businesses at the very bottom of the list are subscription television service (a rating of 62 out of 100), Internet service (also 62), video-on-demand service (68) and fixed line telephone service (70).

In other words, the misery caused by your local telco is only exceeded by the pain inflicted by your cable company. Both do a worse job of keeping you happy than the U.S. post office, airlines and health insurance companies (but not by much – they’re tied with social media platforms for fifth worst with a score of 73).

Mobile phone service isn’t much better. It rates a 74. Just above it at 75 are video streaming services and both investor-owned and municipal utilities.

Over-the-top (OTT) video providers like Netflix offer consumers better and friendlier service than cable and telcos, with devastating effect according to ACSI…

OTT operators have raised the bar by providing greater personalization, lower prices, more mobility—and much better customer service. As a result, cable and satellite television customers think they are paying higher prices for lesser value and receiving poor service to boot.

The effect is widespread. The entire sector faces repercussions as many of the same large companies offer service for internet, television, and voice via bundling. Subscription television and internet service providers rank last among all industries tracked by the ACSI. The implication is clear: moving in on the video streaming market won’t be enough to keep TV subscribers unless customer satisfaction improves as well.

Consumer electronics companies do the best, topping the list at 85 out of 100. Of course, there’s nothing like a cold drink to go along with a binge watching session, so breweries and soft drink makers are in second place with an 84. Online retailers and credit unions round out the top five with a score of 82.

Judge ignored fundamental economics in approving AT&T, Time Warner deal, justice department says

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The judge who unconditionally blessed AT&T’s purchase of Time Warner’s content companies “rejected fundamental principles of economics”, according to a motion filed by the federal justice department as it launched its appeal of that decision…

The “assumption” the court criticized was the fundamental economic principle, recognized in case law, that the merged firm would maximize its corporate-wide profits (rather than instruct Turner and DirecTV to operate independently at the expense of overall profits to the parent corporation). This basic economic axiom of corporate-wide profit maximization forms the basis for much of corporate and antitrust law.

The brief opened with a stark warning about the danger of allowing AT&T to use its monopoly/duopoly control over broadband access to maximise its return on its Time Warner investment…

The government’s lawsuit challenging AT&T’s acquisition of Time Warner concerns the future of the telecommunications and media industries in the United States. Its outcome could determine whether the participants in these industries will be permitted to merge into vertically integrated firms that control valuable programming content as well as the means of distributing that content directly to end-customers in a manner that hurts competition and therefore consumers. If AT&T is permitted to control Time Warner’s most valuable media assets, the merged firm will have both the incentive and the ability to raise its rivals’ costs and stifle growth of innovative, next-generation entrants that offer attractive alternatives to AT&T/DirecTV’s legacy pay-TV model—all to the detriment of American consumers.

The Washington, D.C. appeals court agreed to the justice department request to put the case on a fast track. It set out a schedule for written arguments, with the final briefs due in mid-October. That’s just for the first round, though. If the appeals court decides to take up the case, a decision will likely be many months away.

Not so fast, doc. Justice department appeals AT&T Time Warner decision

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In a terse filing, the federal justice department gave notice last week that it is appealing a judge’s decision to allow AT&T to buy Time Warner’s content companies, with no strings attached.

The justice department didn’t outline a specific goal, but one possibility is that it wants AT&T to give up some of its new empire, perhaps Turner channels such as CNN. According to a story in Variety by Ted Johnson, it could turn out to be a risky maneuver…

Larry Downes, senior industry and innovation fellow at the Georgetown Center for Business and Public Policy, said that the Justice Department’s appeal carries risks for the government. Leon’s decision does not hold precedent, he noted, while the D.C. Circuit decision likely would.

“The court could use the opportunity to comment generally on the legal standards for opposing vertical mergers, for example, or reaffirm in broad terms the general principles of consumer harm that have guided antitrust law for the last forty years — rejecting, in effect, recent calls for expanding antitrust to take into account the economics of online platforms that don’t charge consumers and therefore don’t raise prices when they acquire other companies,” he said via email…

“The DOJ is really gambling — and could wind up losing not just this case but its ability to challenge future deals in a wide range of industries currently undergoing disruption,” he said.

Perhaps. But federal trust busters won’t get anywhere by rolling over and playing dead either. Immediately after the decision, Comcast saw daylight and moved to add Fox to its menagerie of captive content. AT&T followed up with a price hike for its Internet video service, DirecTv Now, repudiating lawyerly claims it made during the trial that consumer costs would come down.

Vertical mergers – where a company acquires its supply chain – aren’t always anticompetitive. But it always will be when dominant, monopoly model Internet service providers like AT&T and Comcast can manipulate broadband traffic to favor in-house content, as the end of network neutrality allows them to do.

AT&T sees Frontier’s two buck phone suck, then raises TV prices by $5

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It might be the least surprising telecoms story of 2018: AT&T is raising prices in a sneaky cash grab similar to what Frontier did last year. AT&T raised the “administrative fee” it tacks on to bills from 76¢ to $1.99 per month. That’s on top of whatever price it tells consumers they’re going to pay.

According to a story by Aaron Pressman in Fortune, AT&T’s explanation is that it pays for “items like cell site maintenance and interconnection between carriers”. In other words, standard costs of doing business. Which is what your monthly rate supposedly covers. But AT&T can tack two bucks onto your bill by burying it in the taxes it’s obligated to collect, so you think it’s something they’re required to do.

They’re not. AT&T figured out that that by scamming customers out of a couple of dollars a month they can add a billion dollars a year to the bottom line.

Some of AT&T’s price increases are upfront. The company just raised the price of its DirecTv Now online subscriptions by five bucks. AT&T’s explanation to Brian Fung at the Washington Post was “we’re bringing the cost of this service in line with the market — which starts at a $40 price point”.

In other words, if they raise their price to match the competition, no one can really do anything about it. That’s the kind of pricing strategy that monopolists use in a duopoly or similarly restricted market. They can’t extract the maximum rent from customers because there is some choice, but if everyone keeps ratcheting up their rates, they’ll still be clocking up profits above and beyond what they can get in a truly competitive market.

The DirecTv Now price hike is 180 degrees away from what AT&T told a federal judge would happen if it was allowed to buy Time Warner. The company trolled lower prices past the judge, who obliged with a green light and no conditions. Which means AT&T is free to do what it wants with its much bigger video business.

And pretty much everything else it offers, including broadband service, which it operates in a cosy duopoly with cable companies. Except where it doesn’t and it’s a monopoly.

Keep a close eye on your bill.

Weak net neutrality language offered to save California assembly’s “integrity”

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Network neutrality rules have another chance in Sacramento tomorrow. The California assembly’s privacy and consumer protection committee takes up senate bill 822, after it was eviscerated – to use the author’s verb – by the communications and conveyances committee last week. Anything might happen, but the cards on the table now point toward modest and rickety repairs, rather than complete reversal of the damage.

The privacy and consumer protection committee published its staff analysis of the bill, which suggested simplifying it by referencing the now-repealed 2015 net neutrality decision by the Federal Communications Commission, and telling Internet service providers to comply with the rules it laid down – no more, no less. That would be consistent with what the communications and conveyances committee chair, assemblyman Miguel Santiago (D – Los Angeles), claimed he was doing. He was actually trying to gut SB 822 completely, which he and his wingmen – assemblymen Evan Low (D – Santa Clara) and Eduardo Garcia (D – Riverside) – succeeded in doing, with help from most of the other committee members, republican and democrat alike.

But taking Santiago at his word is a convenient fiction for the privacy and consumer protection committee staff, who diplomatically wrote

In order to preserve the integrity of the institution and the committee hearing process, it is improper for one committee to wholly undo the exact amendments of the prior committee.

Integrity might seem like a poor choice of words in this context. Santiago, Low and Garcia are reliable friends of AT&T, and Wednesday’s committee hearing was an exhibition of pure political muscle.

There are problems with simply incorporating the defunct Obama-era FCC net neutrality decision by reference. It was crafted by then-FCC chair Tom Wheeler, who saw himself as an active referee on the telecoms playing field. Rather than try to write detailed rules, Wheeler laid out three “bright line” principles – no blocking, throttling or paid prioritisation – and left the details to be decided by commissioners as the game progressed. For example, zero rating wasn’t explicitly banned, although the FCC was moving in that direction. Although the FCC’s decision is chock full of policy analysis and examples, it’s weak on thou shalts and thou shalt nots. It’s a very poor basis for enforcement by courts that interpret and apply laws, rather than make policy as the FCC does.

So the California legislature has a choice. It can pass an unenforceable bill or it can add enough detail and depth for courts to make meaningful rulings, as SB 822 tried to do. Or it can create its own referee, which seems to appeal to no one.

It’s a safe bet that, as he did last week, SB 822 author, senator Scott Wiener (D – San Francisco), will continue negotiations behind the scenes, right up until tomorrow afternoon’s hearing. It’s far from certain, though, whether he’ll have any more success.

Judge allows AT&T to buy Time Warner, no strings attached

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A federal judge decided yesterday that AT&T may buy Time Warner’s video and motion picture content companies, including HBO, CNN and the Warner Brothers movie studio. Judge Richard Leon, who was appointed by president George W. Bush, put no conditions on the acquisition. He simply ruled “the government’s request to enjoin the proposed merger is denied”.

The 172 page decision does an excellent of outlining the current state of the video distribution market. AT&T wants to buy Time Warner so its DirecTv and other video services – delivered via satellite and mobile and wireline networks – can better compete with the likes of Netflix, Comcast (which also owns an extensive stable of content companies) and Amazon. Leon’s decision picks apart, and ultimately rejects, the federal justice department’s claim that the deal would “substantially lessen competition in the video programming and distribution market”.

What the decision doesn’t do is examine AT&T’s ability to use its monopoly/duopoly control over consumer Internet access in the U.S. to freeze out competing programming and online content distributors, and to raise prices for captive subscribers. That concern is particularly high this week, with the end of federal network neutrality rules that might have prevented that kind of harm.

AT&T will use its online muscle to make the most of this $85 billion purchase, as Leon’s decision makes clear

AT&T witnesses testified that they believe the company’s future lies in the use of online and mobile wireless connections to access premium video. As John Stankey, the AT&T executive who will be tasked with running Time Warner should the merger proceed, explained, AT&T acquired DirecTV in 2015 not in an effort to double down on the satellite business—a concededly mature and indeed declining asset—but to “pick up a lot of new customers that we could work on migrating” to new, innovative products necessary to compete in the future.

It’s possible that the federal justice department will challenge Leon’s decision, and could ask an appeals court to put the deal on hold while it’s under review. That’s all speculative, though. As of now, AT&T and Time Warner can close the sale next week as planned.

FCC allows more time to debate the death of independent ISPs

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An attempt by incumbent telephone companies to cut off competitors’ access to leased lines was slowed down a bit by the Federal Communications Commission on Friday. The deadline for reviewing a request by telco lobbyists that has the potential for killing off many, if not most, independent Internet service providers was extended by two months.

USTelecom, a lobbying front for big telcos, such as AT&T and Frontier Communications, as well as small incumbents, asked the FCC to eliminate rules that require telcos to lease copper DSL circuits and other facilities on a wholesale basis to “competitive local exchange carriers” (CLECs). The lobbyists invoked a fast track procedure – a petition for forbearance – that skates around some of the FCC’s usual due process when major decisions are made.

It would be a major decision. Without wholesale access to telco copper, most independent ISPs, which typically register as CLECs, would be left without a wireline pathway to subscribers.

The FCC is still considering a motion made by another lobbying group, Incompas, which represents a variety of content, equipment and independent telecoms companies. It asked the FCC to simply dismiss USTelecom’s petition, because it didn’t include the complete set of back up information that the fast track process requires.

The California Public Utilities Commission seconded that request, at least to the extent that “all of the data USTelecom relies on to support its petition…must be in the record”. Yesterday, Central Coast Broadband Consortium (CCBC) filed a letter with the FCC, also asking it to toss out USTelecom’s maneuver

In its petition, USTelecom proposes a radical overhaul of telephone industry regulation. Extraordinary conclusions require extraordinary evidence. USTelecom’s petition3 is a mundane recitation of self-interested opinion backed by the barest summary of cherry picked data. Full disclosure of all underlying data is essential for proper consideration of its request.

Full disclosure: I drafted and filed the CCBC’s letter.

Additional information and comments are now due on 6 August 2018, with rebuttals due a month after that.

Telcos ask FCC to kill broadband competition

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Wireline telephone companies, big and small, don’t want to be forced to share their lines with competitors. So last month, their lobbying front in Washington, D.C. – USTelecom – asked the Federal Communications Commission to scrap rules that require them to sell wholesale lines and other services to smaller companies that don’t own infrastructure.

These competitive local exchange carriers (CLECs) resell those services to retail customers, usually after adding their own equipment or other resources to the mix. You might not think of them as competing telephone companies, though. These days, they lease copper lines to provide Internet service, most commonly via some flavor of DSL, but also using other, more advanced technologies. Competitive, independent Internet service providers would be a better label.

USTelecom is using a fast track procedure called a petition for forbearance. If the petition is “complete as filed” – in other words, includes all the supporting data behind the request – then the FCC has 15 months to accept or reject it. If the clock runs out, it’s automatically granted. So the FCC tends to set short deadlines for public comments. In this case, the FCC allowed about a month for opponents and supporters to weigh in, and another two weeks for rebuttals.

That’s an awful short time for such a major decision. If the FCC goes along with the incumbent telcos’ request, it will put a lot of CLECs out of business, and dramatically change the competitive landscape, such as it is, for broadband service.

There’s another problem: the rules requiring telcos to lease out DSL and other broadband-ready lines on a wholesale basis are really telephone rules, designed to create a competitive market of sorts for POTS – plain, old telephone service. USTelecom is correctly claiming that fewer and fewer people are using POTS, preferring (or at least accepting) mobile phones and VoIP (voice over Internet protocol) service delivered via unregulated landlines as a substitute. If it so chooses, the FCC can kill an entire sector of the broadband market by simply accepting USTelecom’s argument that legacy POTS doesn’t matter anymore.

Comments on USTelecom’s petition are due next Thursday, and rebuttals two weeks after that. The California Public Utilities Commission will file comments – California law requires it – but it’s requesting a three month extension to gather information from telcos. As a memo adopted by the commission yesterday puts it, “contrary to what USTelecom argues, the effect might be to freeze the smaller…CLECs out of a number of markets”.

Other groups are similarly asking for more time, and challenging the completeness of USTelecom’s filing – it’s long on rhetoric and simple graphs, but lacks the kind of detailed data one might wish the FCC to examine.

Assuming, of course, that the FCC hasn’t already made up its mind.

Santa Cruz gets more fiber, more gigabit service

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AT&T’s recent fiber to the home (FTTH) upgrades in Santa Cruz mean that Cruzio isn’t the only Internet service provider bringing gigabit class infrastructure into town (unless you have a sneaking suspicion that it’s a competitive response – in that case you can thank Cruzio for it too). U.C. Santa Cruz’s Jim Warner tracked it down…

AT&T has been working on an FTTH deployment in parts of west Santa Cruz. The work has progressed to the point where some addresses are showing availability of gigabit service in AT&T’s on-line service availability tool. When you enter a “good” address – one where gigabit service is already available – you see, among other things, a web offer for “fiber” service at 100 Mbps and 1,000 Mbps download and upload speeds (subject to the usual disclaimer: “actual customer speeds may vary and are not guaranteed”).

The 100 Mbps packages is capped at 1 terabyte a month; the gigabit package offers “unlimited data”.

An example of what FTTH looks like “on the pole” is in the picture above. The thin curved lines that appear to loop back into the new tap are not fibers. They are simply plastic retainers to keep the protective caps from falling to the ground. To be ready to serve any address, one of the taps needs to be placed on almost every pole.

It is harder to see what’s going on underground. We need to wait for details about the project to know if areas where utilities are underground (rather than on poles) will be included.

The quality of AT&T’s craftsmanship is highly variable and not all of it looks as clean as in the picture presented. So far, I’ve seen FTTH work in the area bounded by Walnut Ave., California St., Almar Ave. and King St. This is a poor way to gauge the scope of their project, though. I visited the AT&T retail store but discovered staff get no special advance information about what the company is working on.

Wireline carriers, such as AT&T and Comcast, each get one foot of vertical space on each pole for their service. AT&T has attached their new fiber network to their legacy copper network to avoid needing to completely rearrange the pole or pay for another foot of pole space.