Tag Archives: AT&T

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.

 

 

 

AT&T Expansion and DirecTV Merger

AT&T and Direct TV Logos

In 2014 AT&T and DirecTV announced a merger worth almost $50 billion dollars. While this proposed deal would provide a new way for AT&T to expand its footprint, the process had been stuck in the approval phase for months, although after FCC Chairman Tom Wheeler recommended last week that the deal move ahead, industry experts now believe that it will be approved formally within ten days. It appears that the main sticking point had been ensuring that AT&T adheres to the new FCC rules pertaining to broadband speeds. While this impasse persisted, AT&T was forced to file for two extensions to close the deal, the most recent only a few weeks ago.

When the deal does receive final approval, it will make AT&T the largest TV provider in the nation and will give DirecTV customers access to broadband services. Two recent filings to the FCC detail parts of AT&T’s plan to address the Department of Justice’s concerns that the merger may create a TV and broadband monopoly. The first filling stipulates that lower and middle income families will have access to DSL services, if available, at discounted prices. Upon further review of the filling, however, there are major limitations on this provision. In particular, the program will continue for only four years and for the more remote locations, will only provide speeds of 1.5 Mbps, which is too slow to support streaming services like Hulu Plus or Netflix. This low speed option has caused experts to speculate this is a different tactic in video slowdown and wonder if AT&T will be in full compliance with the Net Neutrality ruling if they do not improve this aspect of their proposal. Prices for this service would range from $5 to $10 per month, while a higher tier with speeds up to 5 Mbps would cost $10 to $20 per month.

The second filing to the FCC also addresses coverage issues, but deals with fiber internet customers. As part of its proposed merger, AT&T has promised that it will extend its 1 Gbps fiber footprint to almost 12 million businesses and homes within the next four years. This announcement comes on the heels of one made in April 2015 that AT&T was looking at nearly 100 cities where they might roll out fiber service, including Chicago, San Francisco, and Atlanta. As mentioned in the new FCC filing, AT&T has now added a new focus on the state of Florida, in particular the cities of Miami and Fort Lauderdale. The company will draw on its recent successful expansion in the state of Texas, particularly around Dallas and Austin, to implement an efficiency plan to bring its GigaPower fiber service to the Sunshine State by the middle of 2016. Whether or not these efforts are enough to alleviate any lingering concerns still held by the Department of Justice should become clear by the middle of August 2015.

 

T-Mobile Expands Offerings as Customer Totals Increase

T-Mobile coverage map showing all of North America

Over the first six months of 2015, T-Mobile has seen an increase in overall customer totals that was higher than industry analysts expected. During the recent release of subscriber figures, during the second quarter of the year the company added over 2 million new customers across pre- and post-paid accounts. This growth brings the company’s customer total to just under 60 million which, despite the increase, maintains T-Mobile as the fourth largest carrier behind Verizon, AT&T, and Sprint. Commentators in the wireless industry believe that this growth will continue throughout the remainder of the year, although long-term forecasts suggest the promotions T-Mobile has used to elevate its presence in the market will not be sustainable.

In an effort to preempt the predictions that it will not be able to sustain its growth beyond this year, T-Mobile has announced the extension of existing promotions and new ones that it hopes will allow the company to enjoy a larger footprint, both domestically and internationally. One of its most ambitious plans was the offer for any Verizon customer to try T-Mobile for two weeks, absolutely free. The latest reports indicate that this plan was successful during the first quarter but has tapered off during the second quarter, although similar programs for AT&T and Sprint transfer customers have not seen any signs of slowing down.

Similarly, T-Mobile has expanded its two most popular data plan packages. These packages both cost $100 per month, but one includes two phone numbers with unlimited LTE data, while the other offers four phone numbers with 2.5 GB of data per line. Having satisfied its customers by providing an unlimited data plan, T-Mobile is now turning its attention to the part of its consumer base that wants to upgrade phones on a frequent basis. With a new program titled Jump on Demand, for a monthly fee of $10, T-Mobile customers will have the option to upgrade their phone three times per twelve months.

As innovative as the program is to allow multiple phone upgrades annually, T-Mobile’s plan to offer coverage throughout North America, including Mexico and Canada, without roaming fees is being heralded as a game changer. In particular, this plan is attracting attention because it will be available to customers sooner than the plan proposed by AT&T months ago, which will offer similar perks. Under T-Mobile’s plan, subscribers will be able to text, call, and use web services, like email and GPS applications, while in Mexico or Canada without incurring any additional fees. The plan will go live by the start of August 2015.

Fiber footprint increases while prices drop

A bundle of optical fibers.

 

As the review process for the proposed Charter purchase of Time Warner Cable continues to advance slowly, internet users around the United States are seeing more rapid gains in the expansion of fiber options. While Google Fiber has been one of the major leaders in this expansion, CenturyLink and AT&T have also been making gains. Throwing its hat into the ring now is Comcast, which is trying to differentiate itself from the competition.

 

While the current speed people can expect from fiber is around 1Gbps, Comcast is doubling this and offering speeds of 2 Gbps. Known as Gigabit Pro, these services will be offered to households in parts of Tennessee, Florida, California, and Georgia. Ultimately, the goal is to bring these services to around 20 million homes by the early part of 2016.

 

The latest reports indicate that Comcast is expanding its Gigabit Pro service area to include more of the Midwest and western United States. Regions of Minnesota, Texas, Colorado, Utah, Washington, and Oregon will soon be able to enjoy speeds twice as fast as other service providers in the state. This latest round of expansion has industry insiders buzzing that Comcast has invested more heavily in its fiber infrastructure than previously believed. In addition to their Gigabit Pro service, Comcast plans to launch Extreme 250 by the end of the year. This service will offer speeds of 250 Mbps.

 

Although their speeds may lack what Comcast will soon offer, CenturyLink continues to offer its 1 Gbps services in certain parts of the United States. By the end of 2015, they hope to have finished connecting over one million businesses and households to their fiber service. The same is true for AT&T which is expanding its U-verse fiber footprint in Illinois and Tennessee.

 

As more of these services are being offered, prices have been dropping. Initially, AT&T had been pricing its services in the $120 range, but competition has caused them to drop prices in some areas, including in the southern United States, by up to $50 per month. Google Fiber is currently offering its services for $70 to $100 per month. Even though Comcast’s Gigabit Pro provides speeds twice as fast as its competitors, the proposed price of $299 per month may turn off many consumers. What is clear, however, is that unlike AT&T, Comcast has no plans to establish a usage cap on anyone using Gigabit Pro.

 

Sprint CFO Claims “Cut Your Bill In Half” Will Only Save 20 Percent

Sprint is starting a new promotional deal this week, targeting AT&T and Verizon Wireless customers who want to move to a Sprint contract and save a lot of money.

The original deal stated customers would be able to save 50 percent on a new contract at Sprint, simply by showing a member of staff the previous monthly contract.

Continue reading Sprint CFO Claims “Cut Your Bill In Half” Will Only Save 20 Percent

AT&T Backs Off From Delays To Fiber Deployment, Following FCC Investigation

AT&T CEO Randall Stephenson made some controversy a few weeks ago — claiming all fiber deployment had been postponed — following President Obama’s support of Title II reclassification for broadband companies.

Title II reclassification could harm AT&T’s core broadband business, by imposing regulations that would stop things like fast-lanes, price-hikes and underdevelopment.

Continue reading AT&T Backs Off From Delays To Fiber Deployment, Following FCC Investigation