In Order to Have a Free Market, You Need to Have Choices

One of the great things about a “Free Market” is that if you don’t like the company you are getting services from, you can always go somewhere else. 

Well, except if you’re dealing with Internet Service Providers and live in North Carolina.  Then you’re pretty much screwed.  You see, Governor Bev Purdue says that she will neither sign nor veto H.129.  Now for those who do not know, H.129 is a bill that would put restrictions on cities that currently provide internet service to its citizens (Wilson, Salisbury, Morganton, Davidson, and Mooresville), and would significantly hinder any efforts by other cities to pursue their own municipal internet services. The obvious winners in this action are Time-Warner cable and AT&T, who have spent a lot of money improving their services, er, buying politicians, er, let’s just say, they’ve spent a lot of money over this. 

Some of the provisions in H.129 state that cities:

• Shall provide nondiscriminatory access to private communications service providers on a first-come, first-served basis to rights-of-way, poles, or conduits owned, leased, or operated by the city unless the facilities have insufficient capacity for the access and additional capacity cannot reasonably be added to the facilities.
• Shall not use city resources that are not allocated for cost accounting purposes to the city-owned communications service  to promote city-owned communications service in comparison to private services or, directly or indirectly, require city employees, officers, or contractors to purchase city services
• Shall not subsidize the provision of communications service with funds from any other noncommunications service, operation, or other revenue source, including any funds or revenue generated from electric, gas, water, sewer, or garbage services.
• Shall not price any communications service below the cost of providing the service, including any direct or indirect subsidies received by the city-owned communications service provider and allocation of costs associated with any shared use of buildings, equipment, vehicles, and personnel with other city departments.

The bill ensures that companies like Time Warner Cable and AT&T will continue to be the dominant players in most North Carolina markets, even with higher pricing and speeds that often lag far behind what cities themselves can provide for its residents.

Never mind the fact that these municipalities decided to vote to band together and provide its own municipal services.  And why did they do that?  Because the Internet service providers were dragging their feet and underserving the market.  The community did not have a choice that was fast and inexpensive, so they created one.  And because they are offering their community an alternative that is better, the telecoms run and pay off politicians to curtail it. Because as we all know, municipalities should not have an “unfair advantage” over the private sector.  In this case the unfair advantage is a service that is better, faster and cheaper.  You know, those same arguments that are used when a government decides to outsource a municipal service to a private company. 

Funny how that works.

And Then There Were Three (for now)

Is it really surprising that AT&T’s plan of innovation includes buying out T-Mobile, their competitor in the GSM arena?  As Om Malik points out in his post about the merger:

T-Mobile has been pretty experimental and innovative. … AT&T, on the other hand, has the innovation of a lead pencil.

So what does this mean, other than the probable demise of some really great commercials featuring Charles Barkley?  Let’s look at this, shall we?  This leaves AT&T, Verizon and Sprint as the three major wireless companies in the US.  There are smaller companies out there, but we’re not talking about them.  Three major companies.  For the whole US.  Don’t like AT&T?  You would have Two other major choices.  So much for that invisble hand

Now before we go any further, let me point out that we have all ready heard AT&T say that in no way would this affect prices.  As their press release said so quickly:

“The U.S. wireless industry is one of the most fiercely competitive markets in the world and will remain so after this deal. … The U.S. is one of the few countries in the world where a large majority of consumers can choose from five or more wireless providers.”

Only one small problem with that. It always seems as if less competition allows companies to drive the price up whenever they please, since there is no incentive for them to keep prices low.  T-Mobile USA has been fairly aggressive in offering cheaper voice and data plans which has kept the prices in the market low enough. That thorn in AT&T’s side will be gone.  After that, where are you going to go?  Verizon?  Why? They will be following suit with the same excuses as AT&T because suddenly they can.  Sprint?  Possibly, but for how long before Verizon buys them?  Cricket?  US Cellular?  Pardon me while I laugh, French-like at you. 

No, the only real winners here are AT&T and Deutsche Telekom.  And given the climate in Washington, this deal will pass.  It may take a few months until all the screaming from consumers dies down, but it will indeed pass.  So enjoy the Barkley commercial while you can.

Reach Out And Cap Someone

Oh, AT&T.  The company that gave us Ernestine Tomlin’s famous line “We don’t care, we don’t have to.  We’re the Phone Company” is at it again.  If you stream over Netflix, expect to be pissed off, because this really applies to you.  If this goes forward without a huge fight from consumers, expect every other telecommunication an cable company out there to follow suit. 

According to DSL Reports, AT&T will be sending out notices this week informing their customers that starting in May, the company will be implementing a new 150GB monthly usage cap for all DSL customers and a new 250 GB cap on all U-Verse users.  This is how it will work: only users who exceed the new usage cap three times — across the life of your account, not per month — will be forced to pay these new per byte overages. Overages will be $10 for every 50GB over the 150 GB or 250GB limit they travel. 

The company says the caps will only affect about 2 percent of their DSL customers, asserting that the average customer uses about 18 GB each month . A statement AT&T provided to GigaOm also noted that “importantly, we are not reducing the speeds, terminating service or limiting available data like some others in the industry.”

No, nothing like that.  By the way, the average High-definition movie is around 3GB.  So if you watch one HD movie per evening, you’re taking up over half of your allotment per month.  If you have a family, that could start to add up.  Quickly.

Keep in mind that AT&T is an investor in bandwidth-intensive services like OnLive’s HD game streaming platform. And of course included in that bandwidth cap are all those advertisements that people slog through in order to get what they need over the net.  But the predominant question that DSL Reports asks is the one we know the answer to:

…does AT&T scale these caps and overages to accommodate for the dropping cost of bandwidth and hardware moving forward, or will they bend to inevitable investor pressure and continually tighten the metered billing noose?

If you don’t know, ask Ernestine Tomlin.  She’ll be more than happy to answer your question.

It’s A Festivus Miracle!

Today is Festivus. In accordance with tradition, I submit my 2010 Airing of Grievances. The following have disappointed me over the past year, in no particular order:

• Carol Bartz for still not figuring out what Yahoo is, $@#$#%#^^$%!!!!!!!!!!!. Of course no one else has either, but really, she is the head Hooligan, so she should have some idea.
• Steve Jobs for not allowing Chris Chang’s company to make a really cool action figure of him. Yeah I know, someone would put a mini Darth Vader helmet on it and then make a viral video which would piss him off to no end. But really, Steve, I promise I wouldn’t skewer you too much.
• Ray Ozzie for not gathering the Microsoft developers French revolution style and storming Ballmer’s office for cancelling Courier. Of course I get the fact that Ray didn’t want his breast exposed as in the painting. But still, it would have been awesome.
• Every single TV maker in the world. 3-D. Really? After all these years and the only thing you can offer as an advancement in 3-d technology is polarized glasses? Really?
• Google. Before rolling out Google TV, don’t you think it would have been a really keen idea to get the networks to buy into it?
• Apple. Ping. The less said, the better.
• Airlines that think that voice recognition is really cool. It isn’t. It’s annoying. I have to say the same thing five times before the system recognizes it, or else do my impression of Lillith from Frasier.
• The TSA. Come on guys, I’ve been looking for a real good grope, and nothing. Am I that undesirable? I feel cheated.
• People on Facebook who immediately are up in arms when a change is made to the system. There’s a life out there. Go get one.
• By that same token, Facebook. You know if you set everyone’s privacy to the highest and let them decide to open themselves up, you wouldn’t have so many people out there screaming. Just a thought.
• Apple again for pretending to be East Germany over losing an iPhone, complete with Stasi-like raids in the middle of the night.
• Steve Jobs again, this time for telling left handed people that the iPhone is perfect and they are not.
• Viacom, for still continuing with a lawsuit that has been thrown out of court once.
• Microsoft for allowing Kin to see the light of day.
• Telecom companies that have made a standard like 4G a marketing tool. When you do things like that, then we know you aren’t telling the truth about anything, OK?
• And finally, to politicians who decry Net Neutrality really loud. Please to note that those who cry the loudest are the ones who have received huge amounts of money from the telecom companies. I still think that our legislators need to wear NASCAR jumpsuits with patches of the companies and groups who have sponsor them. Now that would be transparency I could get behind.

Object Lessons

While school is out for many people, there are still plenty of lessons to be learned. Like these. 

The Object: The new iPhone. 
The Lesson:  Wait a few weeks until it is in the store.  At least that way your credit card information will not be broadcast over the web.  AT&T strikes once again.  Apparently, Titanic has nothing on these guys.  From Gizmodo:

The first iPhone 4 pre-order day was a total disaster, with collapsed AT&T and Apple servers unable to take any orders, multiple incorrect purchases, reservations that didn’t reserve anything, physical stores closing or having to take order with pen and paper, and, the worst of all, people entering into AT&T’s account servers and seeing different customers’ information on screen.

By itself, that’s a major security problem. But it gets worse. According to emails sent by readers, the ordering system is mistakenly showing and using the wrong customers’ personal information.

AT&T: Your world delivered…to the wrong person.  P.S.  This is not attributable to hackers.  This is attributable to the larger problems the hackers were trying to point out.  You know, the guys the FBI just threw into in jail. 

The Object: Bebo
The Lesson: Buy low, sell high.  Not the other way around, morons. 

AOL finally got rid of Bebo, for the fantastic price of …swoosh… ten million dollars.  That’s just a bit less than the $850 million AOL paid for the social network in 2008.  Yes, you read it right.  AOL bought the social networking site Bebo for nearly one billion dollar and just sold it for peanuts two years later.  As someone said, AOL is a place where ingenuity goes to die. Apparently, one can add the phrase “business sense” in that as well. 

The Object: LinkedIn
The Lesson: Just because your network is virtual, it does not mean your contract is any less real.  Take the case of TEKSystems vs. Hammernik currently being argued in federal court.  Case in point from IDG:

The lawsuit alleges that after Hammernik left TEKsystems in Nov. 2009, she "communicated" with at least 20 TEKSystems contract employees and "connected" with about 16 of them using the LinkedIn professional network.

TEKsystems contends that Hammernik’s actions were on behalf of her new employer and constituted a violation of the non-compete and non-solicitation contracts that she signed when joining TEKsystems as a recruiter in Jan. 2007.

The lawsuit raises the interesting legal question of whether the mere act of connecting with other professionals on a social networking site constitutes a violation of non-compete and non-solicitation contracts.  This is an interesting case that so far has flown under the news radar.  Depending on the ruling this could be huge for some folks who use social networking sites for business purposes.

Well, there’s the bell.  Class is out for the day.  Remember, read chapter three and there will be a test on it tomorrow…

 

WordPress Tags: Failure, AT&T, AOL, TEKSystems, Lawsuits

Now Playing: Stone Temple Pilots – Shangri-La Dee Da – Days of the Week

The More You Know (And Shooting Star…)

Oh, the things you learn on a given day!

AT&T is phasing out all-you-can-eat plans in favored of metered access. Which should you get?  Answer: The plan from another company.

According to the Business Insider, of course Apple is going to do search.  The only difference is that Steve will tell you what you need to search for.

HP CEO Mark Hurd just told investors at the Bank of America Merrill Lynch tech conference that his company "didn’t buy Palm to be in the smartphone business.”  Of course they didn’t.  They bought it for the patents.  Phones come and go – patents are forevah.  I would have been upset if he had said that they bought Palm because the Pre is one bitchin’ phone, dude. 

Dell will be offering the Streak to US customers direct from its website — unlocked — starting next month for $500.  And they say delusion is dead.

It is unknown if Jay Yarrow had a stroke, drank too much the night before is is simply playing the world at the moment, but his write-up on Asus’ EeePad has to be either one of the shoddiest pieces of journalism I have ever seen, or else the best imitation of a 13 year old Apple fanboy review of a competitor’s product.  

“…your friends will laugh at you if you buy an asus eee pad.  And if you are a parent and you buy your son or daughter an Eee Pad, your kid will be sad.” 

Professional journalism right here folks.  Read it and weep.

And finally, come to find out, magazines want to charge more for an iPad susbscription.  “Readers won’t see it that way, but they’ll need to adjust their expectations”, said Andrew Degenholtz, president at ValueMags, a magazine-subscription marketer.  Well, if the level of quality is that of  Jay Yarrow, I’ll quote Samuel Goldwyn.

“Include me out”.

WordPress Tags: HP, AT&T, Dell, Asus, Applestan

Now Playing: Yello – You Gotta Say Yes to Another Excess – No More Words

Unlimited Downloads? There’s a Cap For That

OK, maybe I bash AT&T too often.  But face it, when a company does what this company has done, with all the grace of a three legged elephant trying to piss in a Dixie cup, it’s not like it’s difficult. 

As we all know, that bastion of service, AT&T, has had trouble keeping up with wireless data usage, leading to dropped connections and long waits for users trying to run programs on their devices.  That is putting it mildly.  I know, they are struggling, ever valiantly, to improve their state of the art system to get it somewhere near Verizon in about five years or so.  So in the meantime, they have decided that their main problem is their customers.  I kid you not. 

According to ZDNet, at a  UBS conference in New York, its head of consumer services, Ralph de la Vega, told investors that it will also give high-bandwidth users incentives to "reduce or modify their usage."  Because using your iPhone to do what the Great God Jobs intended it to do is, well, causing problems.  I mean, who would have ever expected that people would use their phones to stream music or watch TV while waiting in an airport lounge?  Those are the things of dreams and commercials-they’re not for real life.  I mean, that is what you use that thing called a computer for!  Those three percent of people out there are hogging 40 percent of the pipe!  They must be stopped!  And apparently, that way is a cap.  Which isn’t sitting all that well with some customers.  Go figure.

Um, Ralph, nice try at shifting the blame.  But the fact is, even though you paid Luke Wilson some serious coin to toss around postcards and not mention the difference between your pitiful 3G network and that other phone service you sell, the fact is, if three percent of your users is enough to bring your system to its knees-your problem is not your customers.  This, coming from a company that calls a 30% dropped call rate for Manhattan “an improvement”.

But hey, for the period July through September you guys made 3 billion.  So to heck with those pesky customers.  Charge them more for bad service.  It’s not like you need them or anything. 

Now Playing: Glen Campbell – Wichita Lineman – Wichita Lineman

WordPress Tags: AT&T, caps, business, failure

There’s a Lawsuit for That

Oh my.  Apparently AT&T finally got tired of Verizon’s claims that AT&T’s 3G coverage is, well, spotty.  AT&T took matters to federal court claiming Verizon Wireless’ latest TV ads are misleading, and falsely indicate that AT&T has gaps in wireless coverage.  AT&T is seeking an emergency injunction to stop the ads. It also seeks unspecified damages, accusing Verizon of false advertising, and claims the ads harm AT&T’s ability to compete. AT&T also said Verizon’s ads are causing AT&T to lose "incalculable market share" and goodwill with customers.

Of course the questions concern the maps in the Verizon ads.  If you have seen the ads, Verizon’s map  of the US is almost all Verizon red.  The AT&T map, however, has a lot of white and very little AT&T Blue.  The ads concerns itself with 3G coverage only, which is quite different from regular phone and texting service.  After all, why buy an iPhone if you can’t use most of its features?  Unfortunately, some people have taken the white voids as meaning that AT&T has no coverage at all.  Then again, there appear to be a large supply of people in the US who think that Sarah Palin could run the country.   I’m guessing it’s the same bunch. 

But back to the maps in the commercials.  Gizmodo, being a site that prides itself on getting all things mobile right, compared the 3G maps for themselves.   And guess what?

The maps that Verizon chose do seem to represent the same thing—3G coverage only. Yes, AT&T lawyers, if I’m right about this, it means that had Verizon cheated, their map would have been even redder than the one in the ad. So what’s say we spend more of that iPhone subscription money on fixing the network (near my house, please!) and less money on frivolous lawsuits.

Ouch.  Now, I loves me some technology and I know that AT&T’s problem has been a network that is as ancient as it is untrustworthy.  And as much as they would love to think otherwise, suing your competitors for the public’s stupidity is well, par for the course for Ernestine Tomlin’s employers.  As for improving their service?  I’m pretty sure there are some applications for that, but AT&T doesn’t want to seem to want to use them.  I guess they’re too expensive for the shareholders. 

Now Playing: The Main Ingredient – The Main Ingredient – The All-Time Greatest Hits – Everybody Plays the Fool

WordPress Tags: Phones, Lawsuits, Lawyers, AT&T, Stupid people

Hello, My Name is Justice and I’ll Be Your Server Today…(Part Two)

Oh, it is On.  If you haven’t been keeping up with the headlines, when last we left the bizarre love triangle between ATT, Google and Apple, Apple had basically thrown Google’s clothes out on the street at ATT’s prompting.  Then the FCC decided that maybe some investigation into all this might help all this out.  Round one went to Google, who looked totally innocent, while AT&T looked like, well, what we’ve always expected them to look like; an archaic phone company that is credited with the invention of busy signals, dropped calls and poor customer service.  And completely out of their element. 

And that, as they say, is when the fight really started.

In September, Ma Bell asked the Federal Communications Commission to investigate Google Voice on the grounds that it was preventing consumers from calling certain numbers, which AT&T argues violates the principles of net neutrality.  Google, of course, didn’t agree with such a portrayal of Google Voice and argued that since it’s not a traditional phone service, it shouldn’t be treated as such. The company instead referred to Google Voice as an Internet application.

On October 9, the FCC decided, what the hell, and investigate Google Voice, especially after congressional members asked it to do so.  Google replied saying that it’s blocking Google Voice calls to rural areas because they’re directed to free conference call lines and sex hotlines engaged in the dubious practice of so-called traffic pumping

Today, in response, AT&T brought out Nuns.  That’s right, a convent of Benedictine Nuns who apparently can’t receive, or make, Google Voice calls, either. 

Oh snap!

But sideshow aside, the FCC is soon going to find themselves in uncharted territory.  They are opening a can of worms concerning traffic pumping and that will take them beyond Google Voice into the practices of other VoIP providers, such as Speakeasy and MagicJack.  So be it.  They need to.  But really though, it rings hollow for AT&T to get all preachy about Net Neutrality when dealing with Google, given the past few months.  As someone pointed out, the Internet is the Internet and the phone system is the phone system.  While the two work together at points, they are indeed different legal animals-at least for now.  And therefore, the idea of AT&T whining about Net Neutrality while talking about the phone system is nothing but a bait and switch, or worse yet, a naked power grab that has everything to do about controlling the debate over Net Neutrality.  Remember, Net Neutrality is something the telcos does not want to see happen.  Google does.  Control the debate-control future rules.  Discredit the main prophet of Net Neutrality in the process and there’s the bonus point. 

But still the point AT&T makes has some merit – it seems unfair for Google Voice to act as a layer on top of the telcos that shunts the expensive calls to the underlying telcos, and does the free ones themselves.  But like many things in this world, it may be legal, even though it may not be right.  It will prove interesting just what the ruling turns out to be.

Now Playing: Blondie – Parallel Lines – Hanging on the Telephone

WordPress Tags: Business, Government, AT&T, Google, FCC