On Rad's Radar? - FTC Archives

Has Verizon Stopped Repairing Copper?

2012-02-17T21:08:18Z

Over and over, I am hearing that Verizon has given up on copper. From repair issues to DSL to stripping copper out when FiOS is installed, the story seems to point to VZ looking to forget its copper plant.

in a discussion on LinkedIn about SLA's, one agent had this to say, "The absolute WORST cases I have seen have all been in the northeast where Verizon's copper is concerned. Verizon seems to have made the decision to put all efforts and funds behind their fiber build out (a good thing) but have completely sacrificed the quality behind their copper services such as T1. If your copper T1 goes down in New York, you might has well throw your hands up in prayer, because that's the only thing that will get it fixed."

Another commenter wrote, "Verizon in some places is actively ripping up copper as they lay fiber because they are not required to resell fiber to CLECs and ISPs at wholesale rates." This has been widely reported, because VZ doesn't want the expense of running to networks - copper and fiber. Plus the fiber doesn't have to be shared and the copper does. The copper means competition. Fiber means they just have to worry about cablecos, who quite frankly are kicking their butt.

Wholesale used to be a healthy business for ILEC's. Today, neither cablecos nor ILEC's want to wholesale anything. In fact, clients of mine in VZ regions have a lot of issues.

For example, "We had an outage about 3 weeks ago that lasted more than three days. This also affected [another local ISP] as I spoke him last night about the current outage. We [both have] a bunch [of customers still] out of service as well. They have been out of service since Monday. The last outage caused an exodus of customers and this one will do the same. Our guys have put in tickets, called to escalate many times. .... no one at VZ will listen. Ever. They simply close the tickets that we open."

It's a systemic problem - widespread - from the C-Suite down - the story has been that every company -- even wholesale customers - are the enemy and the Union and on-union workers must do everything they can to make it uncomfortable unless you are a direct VZ customer.

We have the case of a BK CLEC who had recorded conversations with VZ employees soliciting a customer who was down saying that it wouldn't happen if they were with VZ. [This has been a problem with both RBOC's since I got into telecom in 1999.]

Verizon faces up to $400,000 in fines after New York's Public Service Commission accused the company of not making service repairs in a timely fashion.

What do you do when the RBOC doesn't want to wholesale, doesn't want to repair, and just looks at the bottom line and the few metrics that Wall Street analysts can understand??

Many states don't even regulate the ILEC any more, so what do they do? It becomes the job of the FTC, the FCC and the court system. Talk about a deck stacked against the customer!

When our underlying telecommunications structure suffers, so too does our economic growth.

here's 2 problems with a fiber only strategy for an ILEC:

One, fiber goes out with power, so no 911 or dial-tone when the lights go out.

Two, the installation period for fiber is wicked long. Copper can be installed within two weeks. Fiber takes months. That hurts businesses. I have one moving in 3 weeks and to get 20MB of bandwidth he has to wait months. That won't work.

Ever think that just nothing in this country makes sense any more?

In the discussion about SLA's, the conclusion is to convince your clients to buy redundancy: 2 pipes. That's nice in theory but not in reality. The thing is that you have to set the expectation that if Internet or VoIP is integral to their business operations, no SLA is going to save them, redundancy and business continuity planning will. Otherwise, an outage will be a disaster that they have not planned for. It is not IF, it is WHEN.

The Leaked AT&T Document

2011-08-26T19:33:38Z

I have been sitting on this story for a while because I wanted to do a long piece about it. I'm just not going to get around to that.

The rumored breakup fee for the ATT-T-Mobile merger is like $6B. At that rate, Ma Bell will do anything to have this merger go through. Anything. Lobbying. Donating. Suing people. That's right, Ma Bell is counter-suing a law firm and its customers for suing AT&T over the merger. It's kind of ridiculous, but if customers don't speak up - in legal parlance litigate - then they don't get heard. And certainly the FTC, the FCC and the DOJ are only listening to lobbyists and CEO's - not consumers.

Allegedly in handing over discovery documents to both the DOJ and the FCC, Ma Bell delivered something in the order of 1 million documents. That's right swamped them with info. It's a legal tactic.

According to this source, " The FCC has informed AT&T that its acquisitions of the pretty-in-pink carrier will be reviewed together with AT&T's proposed purchase of Qualcomm's 700MHz spectrum. Rather than reviewing the sales separately, the FCC plans to informally join the two transactions."

I'm still hopeful that the FCC will do the right thing - like only cave in on 1 of the acquisitions. Hopeful but realistic that Ma Bell's ties to the government (specifically the NSA) means that these mergers will close.

Among the documents disclosed, according to DSLRand PCMag, is one internal letter that undermines case for acquiring T-Mobile.

"A partially-redacted letter allegedly sent from AT&T to the Federal Communications Commission suggests that the carrier is willing to pay $35 billion just to keep T-Mobile out of Sprint's hands.< br/> It argued that the combined entity would bring super-fast LTE broadband support to 97 percent of the country, rather than 80 percent without the merger. The merger would alleviate the spectrum crunch, meet America's voracious mobile broadband appetite, create jobs, and s[ir America's global competitiveness, AT&T said.

The cost of actually bringing 4G coverage from 80 to 97 percent is less than $4B!

So why buy T for 10x that at $39B??? Obviously, to take a player off the table.

The Daily Tech called it the Chewbacca defense.

Stacey at GigaOm has more about the mess here.

Forrester blogs about how this merger is like the US auto industry -- and we know how that worked out. Can you say bailout? Forrester also points out that all these mergers before the FCC and DOJ that are being approved result in HUGE job losses at a time when the economy and the White House need toadd jobs, not loss them! (One more reason to say NO!)

ATT has been gobbling up spectrum for months across the US to fill in gaps. How much spectrum do they get to have? Spectrum is a finite resource. It's public airwaves!

The ATT document is here in pdf.

A Message for Dan Hesse

2011-04-26T18:41:36Z

The merger of AT&T and T-Mobile will likely have extreme anti-competitive effects on the mobile industry. Certainly, the DOJ and the two F-Agencies (FTC and FCC) need to take note that mobile is churning the service economy of America right now and this merger could derail that. That being said, I have this to say to the CEO of Sprint, Dan Hesse:

You have lawyers and lobbyists and SVP's. Let them carry this fight for you. You need to keep your eye on the balls in the air. What are they you ask?

Clearwire - the wholesale 4G network that you need to be up and running nationwide in order for Sprint to be competitive.

Pivot - the cable cabal that you work with on Clearwire and other endeavors. If anything, you should find a way to sell deeper into the MSO market - out-of-region MPLS, FMC, VoIP origination and termination and of course Sprintlink (Internet bandwidth), which is still some of the best out there.

Sprint wireline - you need to have a message that Sprint Wireline is here to stay - and that you can talk about it for a whole hour without mentioning wireless. (So far, you can't talk about your fiber network for more than half an hour before wireless creeps into the conversation.) Your fiber may lead you to that thing stockholders call profitability.

And finally, while you have to know what your competitors are up to, you do not have to spend all your time comparing yourself to them or reacting to them. (I'm talking, of course, about Sprint Nextel Wireless network).

You have an M2M strategy that is more mature than AT&T or VZW, but you seem to lose business to them. M2M is how you leverage your networks for extra revenue. (See the original Amazon Whispernet deal.)

Your job, Mr. Hesse, is to have vsion, develop the strategy, and lead the whole company, its partners and its stockholders forward. Netscape lost because it concentrated on IE too much. Pepsi is now the number 3 soda behind Coke and Diet Coke, partly (I imagine) because they spend so much time comparing themselves to the competition. Avis spent time talking about being No. 2, but never mentioned Hertz. Smart move.

There is plenty going on in the telecom space, and the change is occurring more rapidly today than before. Tablets, games, apps, OS, gadgets, Wi-Fi, etc.

Cricket, Leap, LightSquared, US Cellular, Cellular South and even MetroPCS could make for a great alliance. Not against the merger, but for the myriad ways that you partner. Spectrum utilization. Handset fulfillment and volume buying. Bundling. App stores.

Couple that alliance with Pivot and Clearwire and you could probably beat AT&T at its game - if you get creative and focus. But focus on your game. The fastest way to lose is to focus on the other side of the net and what your opponent is doing instead of on what you are doing, how well you are executing on the plan, and the strategy you use.

Bandwidth Caps

2008-11-17T21:42:58Z

Bandwidth caps have more to do with preserving TV revenues than network management business. Yes, there are issues of last mile and node congestion for both telco and cableco networks. It is also a function of the band-aid approach that these companies take. instead of one huge upgrade (like say Verizon with FiOS), there have been baby step fixes.

It's also about preserving revenue. If you switch from watching Broadcast TV to just downloading Netflix and Amazon, how do the TV Providers make money from VOD (video-on-demand)? If you are watching shows via Joost and Hulu (and the coming network to replace Showtime), how does the big upgrade get paid for? The duopoly is preserving its content revenue - plain and simple.

Personally, the FTC should be investigating false advertising by the carriers - both on cellular data and broadband. In many cases, it is sold as Unlimited, but isn't. That's false advertising.

This will present an interesting challenge as people will switch. The duopoly is doing everything it can to compete on price and not value. Neither company is trying to court customer loyalty.

The ripple effect on this may be to stymie Internet business growth. Software and Application companies (SAAS, ASP), Web 2.0, and entertainment companies will find it hard to maintain customers and grow revenyue under a bandwidth cap.

I wonder how AT&T's partner, Apple, who makes the Apple TV and owns iTunes, feels about a cap, which will eventually flatten its revenues.

Not for nothing but these companies can't bill correctly anyway. There are certain to be many folks billed for overages where there are none. An even bigger erosion of customer satisfaction is coming.I guess we forget about Customer Acquisition costs and the lifetime value of a customer.

Online Music

2008-10-01T17:37:57Z

The news this week in online music is that Best Buy is buying Napster and now has anti-trust approval from the FTC to do so, according Yahoo news.

Also, Yahoo News reports that "After approval by the U.S. House and now a nod from the Senate, the Webcaster Settlement Bill is headed to President George W. Bush's desk for his signature. The bipartisan bill will allow copyright owners and artists, on behalf of SoundExchange, to negotiate with Internet radio services. The bill is expected to benefit all Webcasters, including National Public Radio, small Webcasters, and college Webcasters, who put their stations on the Internet." And my favorite, Pandora, who pushed a grass-roots effort to get the bill through Congress.

In other online entertainment news, Netflix adds Starz.

FTC Red Flag Rules

2008-09-26T19:58:02Z

As businesses increasingly rely on technology to store and maintain data, including customer records, the risk of identity theft also is increasing. The Federal Trade Commission ("FTC"), together with federal banking regulatory agencies and the National Credit Union Administration, has adopted new regulations intended to combat identity theft. Known as the Red Flag Rules, these new regulations require financial institutions and creditors to develop and implement a written identity theft prevention program to identify and combat identity theft in connection with new and existing customer accounts.

If you are an operator that provides service in advance of payment, then your company is a "creditor" because your company regularly extends, renews or continues credit or defers payment for goods or services. The Red Flag Rules apply to each "covered account," which is a customer account involving multiple payments or transactions for which there is a foreseeable risk of identity theft. By contrast, a single, non-continuing transaction, where no ongoing relationship exists, is not a covered account. The Red Flag Rules may also apply to some of your business customers.

All companies subject to the Red Flag Rules are required to implement a written customer protection program by November 1, 2008. This program must be designed to detect a "red flag", which is a pattern, practice or specific activity that indicates the possible existence of identity theft. The FTC has identified five categories of Red Flags and provided a list of examples of the types of red flags that fall under each category. If you are providing interconnected voice or VoIP services, the Red Flag compliance program can be combined with your CPNI program required by the Federal Communications Commission's rules.

The customer protection program must include policies and procedures for: (i) detecting warning signs or "Red Flags" of identify theft, (ii) responding to any such Red Flags in a manner that will prevent or mitigate the identify theft, and (iii) updating the Program. The customer protection program must be managed by the Board of Directors or senior employees of the company if there is no Board of Directors. Also, the customer protection program must provide for staff training and oversight of your company's service providers.

Thank to Attorney Stephen E. Coran of Rini Coran, PC for providing this info.