AT&T Fighting Fines For Throttling Customers’ Data

ATT Logo with a tightened belt around it

Despite the company’s recent success in gaining approval from the Federal Communications Commission (FCC) to complete its purchase of DirecTV, AT&T has suffered from a string of legal decisions and regulatory violations that have resulted in sizeable fines. Both the FCC and the Federal Trade Commission (FTC) have taken aim at the telecom firm over what they claim are illegal and unethical practices related to AT&T’s data usage policies.

The FTC’s case began last October when the commission made clear that they were going to sue AT&T for “deceptive and unfair data throttling.” In particular, the lawsuit focuses on customers who have unlimited data plans on their mobile devices. AT&T discontinued the plans years ago, but around 20% of its customers have been grandfathered in and retain the cap-free data packages. However, according to the FTC’s suit, AT&T has actually been imposing a limit on these consumers. This has been occurring in two ways. For those customers with older 3G phone models, a 90% reduction of their speeds took place as soon as they hit 3GB of data during the monthly cycle, while those with LTE phones saw a similar reduction in their speeds after hitting 5GB per month. Ultimately, the crux of the FTC’s lawsuit is that such actions are in violation of the contract signed by unlimited data plan customers. While AT&T claims that no such violation exists, they have modified the language in their contracts to state that throttling will only occur if the user is connected to an overloaded cellular relay.

Around the same time that the FTC’s case got underway, the FCC saw an increase in the number of complaints from AT&T customers who were irritated that their connection speeds had been slowed down. This led the commission to accuse the telecom provider of violating a transparency rule that was part of the Open Internet Order passed in 2010. Although the FCC has known about AT&T’s data throttling policy for the last four years, it was only recently that the number of unhappy customers prompted Chairman Tom Wheeler to level a massive $100 million fine against the mobile service provider.

AT&T is not simply accepting its fate and has vowed to fight the $100 million fine in court, claiming that customers knew full well that their data speeds would be throttled after reaching a certain quota and that no harm came to customers as a result of the slowdown. There is no doubt that AT&T is going to stand its ground for as long as it can on the issue, knowing that the judge in the FTC case may cite the FCC’s actions as a precedent. The telecommunications conglomerate has filed a grievance against the FCC stating that the current fine is excessive and that, at most, AT&T should have to pay only $16,000, even though its policies were not illegal.

 

 

 

Comcast Customer Service Is Still A Work in Progress

Comcast Service Truck

For years, Comcast has been hounded by complaints about under-performing TV and internet service and almost non-existent customer support staff. In an effort to reverse course, the telecom behemoth announced earlier this year that they were promoting a new VP for customer experience. When Charlie Herrin took over this role he admitted that it would be a long undertaking and that results would not be instantaneous. He certainly has his work cut out for him, especially after embarrassing incidents in 2014 included a customer service representative berating someone attempting to close his account and a frustrated user being charged $1,000 after canceling his inconsistent service. The first part of 2015 hasn’t been any better, as Comcast held the top position in the annual Customer Service Hall of Shame rankings.

Herrin’s first step toward addressing the customer service issues was by making the initial interaction for new Comcast customers as pleasant as possible. This meant narrowing appointment windows for when the cable guy would arrive to set up the service. To help this process run smoothly, the company launched an app that allows customers to track the location of the cable man in real time. This way, there’s no need to put off that quick trip to the store to fill a prescription, whereas before, customers were left sitting around for six hours, never sure if they could run a quick errand for fear that they would miss the installation provider and have to make a new appointment. Despite these improvements in being able to track service technicians, Comcast isn’t stopping there. They are also instituting a new program where a customer receives a $20 credit if a technician arrives late to a scheduled appointment.

The next part of Comcast’s plan is to improve the quality of customer service providers, both over the phone and at their stores. An essential component to this transformation is hiring an additional 5,500 representatives to lessen wait times. Each of these new employees will undergo increased technical training, as well as workshops designed to improve their interpersonal communication skills. We all know that these skills will be put to the test, so we commend Comcast for recognizing that what they have been providing their employees in terms of communication and anger management techniques has not been enough.

The last part of the customer service turnaround involves physical store locations. In addition to more capable individuals running the places, Comcast is working to make it easier for customers to exchange cable boxes, pay their bills, and receive additional information about their accounts. Some locations have already received a facelift and include additional seating, video screens that show the customer’s number in line, and a special counter specifically set aside for returning and exchanging cable boxes. Furthermore, Comcast has made an agreement with the UPS Store so that customers may now return their cable boxes to any of their locations without penalty.

All of these changes certainly sound good, but Comcast has made similar, albeit less ambitious, declarations of improved customer service in the past. Until tangible results are evident, Charlie Herrin remains on the hot seat.

TV Everywhere and TiVo Expansion

TiVo Devices

In an era when cable television subscriptions are declining, many of the largest providers are working together to promote the TV Everywhere concept. Comcast, Mediacom, HBO, and others are making a concerted effort to educate their subscribers about the existence of TV Everywhere. Research studies have shown that over 25% of cable television subscribers are unaware that they have access to the various platforms which allow them to watch both network- and cable-produced shows on their computers and mobile devices. The companies developed the system in an effort to stem the tide of cord-cutting customers who are canceling their cable video services and flocking to streaming video providers, such as Netflix, Hulu Plus, and Amazon Prime.

A number of issues have haunted TV Everywhere since its development. The most serious issues involve live television broadcasts. As it stands, only a limited number of cable channels have agreed on retransmission terms that allow for their content to be carried on mobile devices at the same time that it airs on TV. The major broadcast networks, comprising CBS, NBC, ABC, and Fox, have yet to agree on terms for TV Everywhere, in large part due to issues surrounding regional affiliates and geographic overlap. Although they are considered secondary issues compared to transmission rights, problems with user authentication and passwords remain a stumbling block for TV Everywhere, according to an industry report published in late 2014. Cable companies are working to resolve these concerns and streamline the overall experience for customers accessing TV Everywhere on their phone, computer, or tablet.

Despite the adversity facing cable companies, TiVo has seen increased revenue and subscriber totals as a result of its Roamio OTA DVR. This system is designed to locate and record the freely-provided television shows disseminated by TV stations. For around a one-time cost of $50 and a monthly subscription of $15, users are able to watch live television on their TV and stream it to devices on the same wireless network. Furthermore, TiVo’s DVR system boasts integrated streaming services, including Netflix and Hulu Plus, so that consumers have access to their subscription services on the same platform that they watch broadcast television, a prime example of the type of streamlined integration TV Everywhere has yet to achieve.

TiVo has reached out to the smaller cable companies that offer both broadband internet and cable TV packages in an effort to create new working relationships. In particular, TiVo is targeting these companies so that they can generate revenue by leasing the Roamio DVRs to broadband-only customers. While this sort of arrangement is unlikely to be as lucrative as individuals subscribing to a full cable package, it could provide some economic relief for cable companies that are hurting from cord-cutter abandonment. So far agreements to establish this leasing program have been reached with Frontier and WideOpenWest (WOW), while ongoing talks continue with other providers across America.

Mobile Faceoff Mid-2015: Samsung vs. Apple

Galaxy S6 phone and iPhone 6 displayed side-by-side

With the top three selling mobile phones in the United States produced by the two companies, it may seem that the rivalry between Samsung and Apple is settling in for the long haul. However, the most recent numbers provide a window into how tumultuous the market is in the highly coveted wireless industry. Apple’s newest launches, the iPhone 6 and iPhone 6 Plus, have enjoyed considerable success, in large part because of changes to the operating system, but more importantly, finally increasing the screen size in an effort to appeal to more business users. Samsung’s most recent launches, the Galaxy S6 and the Galaxy S6 Edge, generated considerable buzz from consumers upon their release, but industry analysts speculate that this interest diminished quickly due to a lack of innovative design in the newest Galaxy models.

Despite having the iPhone 6, the number one selling phone, Apple actually lost ground in overall market presence among smartphone users in the first part of 2015. Around 80% of the American population has a smartphone, of which 31% are running a device that has iOS. Compared to this total, roughly 66% of smartphone users have a device running the Android platform. However, in terms of overall profit, Apple saw significant gains during the first few months of the year. This growth has been, in large part, sustained by foreign interest. A prime example of Apple’s profitability in a year when there are no major upgrades planned for the new iPhone is the company’s request for the production of an additional 92 million units. Most of these are destined to be sold in China, although the size of the request to Apple’s manufactures has led some analysts to speculate that the iPhone 6S and iPhone 6S Plus may have more upgrades than initially planned.

Meanwhile, Samsung is scrambling to address its sales issues. Over the last thirty-six months, the company has seen its wireless profits fall every quarter. Part of the issue with the latest phone launch was related to production trouble for the Galaxy S6 Edge screens. Even worse for Samsung though was the negative publicity generated by poor reviews on social media for the S6. Complaints on Facebook and Twitter highlighted underwhelming battery life, problems with clarity when completing calls, and overall concerns that the phone itself was unreliable. While its main line of wireless phones has not lived up to expectations, Samsung’s specialty phones, particularly the Active branch that is designed to survive screen scratches, exposure to water, and the occasional drop onto the floor from table height, has seen remarkable growth. Until it can address the reliability concerns associated with its flagship phones, Samsung may turn its attention to consumers who are looking for a sturdy mobile device that does not require a bulky, limiting case.