It’s a really bad time to be out of work, especially if you’re a fixed line service worker at Verizon. Good paying jobs with great benes are few and far between and the demand  for your skills is in free fall. Those still employed in the switched network trade are well advised to update their skills for a career change that will certainly come to more each year.

It’s been quite a while since I departed the world of telecom, so I think I can be objective in describing the underlying problem. The industry is so disfunctional that it more closely resembles the federal government than free enterprise. Switched service should have been ended decades ago, but that would require rule changes at the FCC and telco investment. The investment required to equip every switched customer with VoIP service is so small that the cost could easily be recovered in the first few months and that cost is falling. Changing regulations could end the guaranteed return on local fixed line service the telcos currently enjoy and could possible reopen discussion on line sharing with competitors. The last thing Verizon wants is more competition. So, no matter how compelling it would be to retrain a few of its workers and go all digital, there is no will to do so in a business unit that can’t see past the 1970’s. So, switched service continues its irrational slow march in inevitable death. My bet is the number dismissed by Verizon will be much larger in 12 months, and that fixed line service with be with us for at least another decade. What a waste.

Verizon Communications Inc., coping with subscriber losses at its fixed-line phone business, plans to cut about 13,000 jobs at the division this year after posting fourth-quarter revenue that missed analysts’ estimates. (Bloomberg)

Previously we had pointed out that the Telcos can take care of their own. They have a revenue stream (well used to, it is getting a little frayed), that is mostly never ending. The resource is finite but better than what anyone else has. So why do they want to do this to their more lesser mortal peers? —

In the dead of night, just before the latest draft of the Stevens bill came out, a helpful Telco lobbyist inserted a little provision to stack the deck in the case of judicial review. Section 1004 of the Stevens draft now places exclusive jurisdiction for all decisions by the FCC in the D.C. Circuit. This includes not just network neutrality, but media ownership, CALEA, wireless issues, anything.

Why would anyone do that you ask? Because the D.C. Cir. is, without doubt, the most activist court in the land when it comes to pressing its vision of media and telecom policy. More than any other court, the D.C. Cir. can be credited with destroying hope of telecom competition in the United States by perpetually reversing and remanding the FCC’s efforts at rulemaking and enforcement until the FCC finally gave up and effectively deregulated. The D.C. Cir. is also responsible for vacating (eliminating by judicial fiat) the rule preventing cable companies from owning television stations where they have cable systems, and overturning much of the FCC’s cable and broadcast ownership limits. Finally, through the legal doctrine known as “standing”, the D.C. Crcuit has done its best to make it impossible for regular people to challenge FCC decisions or bring individual cases on antitrust grounds.

Source: WetMachine

Why? Well to make it more costly to litigate telecom policy. So if you are a small coop outside to Duluth and are being destroyed by some arcane rule your choice would be under this suggestion having to hire a high priced heavy weight from Georgetown.

There is something else that bothers me about this that has nothing to do with Telecom. Consistency. In the history of this country we have applied the mindset that one tries a case in the jurisdiction of either the defendant or the place where the infraction occurred. Even at appellate, you remand to the closest circuit district from which the original case issued. And NOW we are going to turn this on its ear? The system as envisioned has worked reasonably well, there is no need to change it at this late date.

This provision needs to be removed. Verizon can afford to get on a damn airplane like anybody else.

In this case its Verizon again. The name of the game is a Titanic shuffle of their data rate plan. May sound like small potatoes till you see the hurdle before you as a customer –

First, the details: Verizon has introduced a new data tier at $9.99 per month with a 25MB cap—this is the cheapest data plan now offered by the company and by most US wireless carriers, and applies to all 3G devices. Why does this equate to “upping” the data charges? Because the company is ditching its $19.99 per month plan with a 75MB cap altogether—you must either go with the $9.99 plan for a third of the data or or the $29.99 smartphone plan that applies to WinMo, Android, or BlackBerry devices.

This in a sense is a variant of the give the lantern away but charge for the oil dearly. Only this is charge minimally for low oil but if you want to use the lamp every night you has to pay!

Why can’t stuff be simple? Just charge .001¢ per kilobyte and be done with it. Equitable, quick and customers can check their bills quickly. But then that would not justify the marketees salary would it?

Linky.

Yes, with all that goes on in the telecom world there is always room for a lawsuit! Only this time Verizon is not the Plaintiff —

Located at 375 Pearl Street in Manhattan, the TriBeca Trib reports that the city is now suing Verizon and real estate company Taconic Investment Partners for $53 million. Allegedly the city lost that much money after what they claim were fraudulent dealings.

When they purchased the land and air rights from the city in 1972, “the agreement called for the phone company to give the city $17 million and to build Murry Bergtraum High School. But, the city says, New York Telephone built far more usable space—1.2 million square feet—than it said it would, thereby undervaluing the deal and shortchanging taxpayers.”

What’s a couple of thousand square feet of space between friends in one of the highest priced markets in the world?

More here.

Look, I think Verizon has the duty to make a buck for its shareholders. It also in my view has a obligation to play fair with its customer base. Sometimes the two are in conflict. When that happens, sometimes the FCC takes notice –

“Late Friday, Verizon Wireless responded to the Bureau’s queries. The company’s answers, however, are not satisfying and, in some cases, troubling. In particular, I am concerned about what appears to be a shifting and tenuous rationale for ETFs. No longer is the claim that ETFs are tied solely to the true cost of the wireless device; rather, they are now also used to foot the bill for ‘advertising costs, commissions for sales personnel, and store costs.’ Consumers already pay high monthly fees for voice and data designed to cover the costs of doing business. So when they are assessed excessive penalties, especially when they are near the end of their contract term, it is hard for me to believe that the public interest is being well served.

“I am also alarmed by the fact that many consumers have been charged phantom fees for inadvertently pressing a key on their phones thereby launching Verizon Wireless’s mobile Internet service. The company asserted in its response to the Bureau that it ‘does not charge users when the browser is launched,’ but recent press reports and consumer complaints strongly suggest otherwise.

“These issues cannot be ignored. Wireless communications are an essential part of our lives, linking us to our places of business, our communities, and our loved ones. The bottom line is that wireless companies can truly earn their desired long-term commitments from consumers by focusing primarily on developing innovative products, maintaining affordable prices, and providing excellent customer service. I look forward to exploring this issue in greater depth with
my colleagues in the New Year.

Or so says Mignon Clyburn.

Verizon responded –

* most customers who terminate do so in the first year;
* no matter when a customer terminates a contract, Verizon loses more money than the ETF covers;
* based on those two points, Verizon would lose too much money if it evenly prorated the $350 ETF;
* so by unevenly prorating, Verizon can keep the initial ETF lower than it otherwise would be, but high enough over the life of the contract to adequately offset losses.

Here’s the problem with their logic. If the customers require such high support $$ then adjust you plan rates. Also please explain why we keep hearing in the press about phantom key sequences that activate services without knowledge of the customer. It might explain the additional support costs. Also if most smartphone users quit in the first year then smart money would say you slam them for $350 up to and including month 13 or 14. Then prorate monthly as the chance of leaving has decreased significantly. Eh?

Bottom line? All the carriers thought they were just selling a cell phone with the capability to view short video clips. They never thought people would spend hours watching YouTube clips, short films, etc. They were wrong, got caught flatfooted and so now they are CYA’s themselves all over the place. No sympathy fellas.

Linky.

If you’re a regular reader, you’re already well informed on the end of voice as a viable wireless business. Sprint and Verizon had invested heavily in national 3G data services for years, while AT&T lagged. Now that 4G is coming online and 3G matters to to a growing number of customers -  like those who grossly overpaid for iPhones, AT&T is playing catch up. It hurts if you’re AT&T and one of your competitors that has been out investing you in 3G calls attention to that fact in advertising.  True to AT&T’s track record it continues to prefer competing in the courts over upgrading. Perhaps AT&T customers who are experiencing poor data service should be careful about what they say publicly too.

AT&T earlier this month filed a lawsuit claiming that Verizon is misleading customers by suggesting that AT&T subscribers cannot access wireless Internet services throughout its network. In the opening paragraph of its legal rebuttal to the suit, Verizon very plainly surmised its argument: “AT&T did not file this lawsuit because Verizon’s ‘There’s A Map For That’ advertisements are untrue; AT&T sued because Verizon’s ads are true and the truth hurts.”

The rebuttal filed on Monday in a Georgia district court was in response to two complaints AT&T filed with the court asking that the Verizon advertisements be pulled from the airwaves. AT&T has called the claims in the advertisement “false” and “misleading.” And the company claims it has caused “irreparable harm” to AT&T’s wireless business. (Cnet)

Verizon representatives have responded to the press on these claims. But now the company has filed its official response to the court in a 53-page document that lays out the company’s defense.

It’s also worth mentioning that if Verizon really wanted to put the hurt on AT&T, all it would really need to do is dramatically drop 3G  prices. Since the wireless space is a cartel of spectrum licensees, that isn’t likely to happen. Still, a little competitive sparring is a good thing, There should be more of it. I’d bet even the lawyers agree.

While it’s king of the residential access hill in select areas where it’s deployed FiOS fiber service, most of Verizon’s broadband customers connect via DSL over it’s tired old twisted pair infrastructure. It could be that the Cable guys have been eating away at V’s market share. When you do not have the best offering, you compete on price. Since a price drop is bound to send Wall Street into gyrations the dark helmeted V has decided to give new customers half of a year free with a  contract.

What’s truly amazing is how little the cable guys have invested to enable them to take more market share. It’’s more like demand has driven consumers to a bigger pipe, and the cable guy is the only game in town. Meanwhile back at the FCC, “stimulus” dollars are being spent on pretty new maps. So much for big government help with broadband. How about undoing the duopoly instead?

Verizon Communications will try to boost the numbers in its DSL business by offering six months of free service to customers who commit to a one-year agreement, and the telco also announced price breaks and three months free multiroom DVR for new FiOS bundle subscribers.

The six-free-months offer is available until Jan. 16, 2010, for Verizon’s 1-, 3- or 7.1-Mbps DSL tiers service as part of a one-year agreement. In addition, customers who order new DSL bundles online also will receive a free modem and an additional $5 off qualifying bundles. (Multichannel News)

When two elephants start a fracas in the room what is the best course of action? Get the Hell out of the room of course! Well that is what is preparing to go on between Verizon and AT&T. The two are locked horns on the coverage map ads that Verizon is running in reference to their 3G wireless network

I hope the judge has a good sense of humor. He will need it for this case. –

In essence, we believe the ads mislead consumers into believing that AT&T doesn’t offer ANY wireless service in the vast majority of the country. In fact, AT&T’s wireless network blankets the US, reaching approximately 296M people. Additionally, our 3G service is available in over 9,600 cities and towns. Verizon’s misleading advertising tactics appear to be a response to AT&T’s strong leadership in smartphones. We have twice the number of smartphone customers… and we’ve beaten them two quarters in a row on net post-paid subscribers. We also had lower churn — a sign that customers are quite happy with the service they receive.

The fun part of this? Like these two companies don’t have something else to do? Like maybe lay some fiber or something? But it is par for the course in the Telco industry. Now I suspect that why AT&T did this has little to do with the ads and more to do with some underlying cross interlata agreement they have been locking horns on. You don’t burn $1,000/hr in legal costs for this kind of piddly stuff.

Endgadget has the gory details.

AT&T subscribers, we have good news and bad news. The bad news is that as of September 6th, AT&T will begin requiring that all smartphones sign up for a smartphone data plan. The good news is that customers with smartphones purchased prior to September 6th with non-smartphone data plans will be grandfathered in and will not have to upgrade their current plans. Note that if you currently use a feature phone with a data plan and you upgrade to a smartphone on or after September 6th, you will not be able to keep your current MediaNet plan.

We’ve been hearing rumblings to this effect for a few weeks now but as of this morning it’s 100% confirmed thanks to an internal email from one of our ninjas. AT&T’s claimed reasoning behind the move: to ensure customers receive a predictable bill each month. Mmm hmm. Note that this only applies to smartphones purchased from AT&T or a dealer of course, so those of you who opt for unlocked handsets should be unaffected. Hit the jump for the internal email circulated today at AT&T.

From The Boy Genius Blog

That is after shooting at it constantly over the last year. Is the idea of a smartphone plan bad? Certainly not. But the fact is having to get both a voice and data plan for the smartphone IS. But that is where they are headed.

I’ll point right back to “Who’s on First, or When Oligarchies Collide” a previous post. There are players coming on line that are not making a distinction between data and voice. They will be treating it all as data. That some of it is VoIP services is of no consequence to them. The Verizon’s and AT&T’s will learn that soon enough. American’s love simplicity. That and VoIP has a large enough presence now that consumers tend to expect it in lieu of a landline. It would be a natural extension to expect to use it in their handhelds.

The cell boys have to come to that realization and soon. Its all data now.

Linky.

When you have a government sanctioned oligarchy, which the cabal of Sprint, AT&T and VZ represents you will have these kind of shenanigans. –

Both were done in letters to Capitol Hill, to influential members of Congress. The first was done on Friday, July 17. It purported to set out a new policy for “allowing” really small cellular carriers to have access to some fancy mobile phones to sell to their customers six months after those phones are introduced by Verizon. In this case, the letter went to Rep. Rick Boucher (D-VA), chairman of the House Communications Subcommittee, House Commerce Committee Chairman Henry Waxman (D-CA), as well as senior subcommittee Republican Cliff Stearns (FL) and senior committee Republican Joe Barton (TX).

The second came late in the day on July 22. That one was yet another offer, responding to concerns from Congress that maybe the big players in the cellular industry should ease up. This letter went to Waxman.

When a major company makes such an announcement in letters to Congress, be aware. Be very aware. Those letters are intended as much for show as they are for anything substantive. They are part of a little game of “Let’s Make A Deal,” in which Congress and [insert special interest here] are the contestants and judges. The public’s involvement, or even welfare, can be minimal.

Of course they are not playing to the market. They are playing to those who have the oversight to destroy their tight little arrangement. That is why for years we have had closed access, closed CPE markets, crippled CPE, etc. So long as the cabal can play the Congressional oversight game they need not fear either the FCC or the market as a whole.

Nor do I expect the Obama administration to help in this regard. If anything guys like Axelrod will see it for what it is — a cozy arrangement they will let persist so long as they get contributions in kind. Another words its Chicago politics on the Potomac — again.

Linky.