Dial Zero
A look at what's surprising, silly, scary or stupid in telecommunications and data

Wednesday, October 31, 2007

Free pumpkins, candy & iPhones at AT&T today

AT&T is celebrating Halloween by giving free pumpkins to customers who purchase cellphones or sign up for U-verse TV service, or add a year to existing cellphone or U-verse contracts -- if they come to an AT&T store today wearing a Halloween costume.

Some AT&T stores will host parties with costume contests and games such as bobbing for apples.

An Apple 8 gigabyte iPhone with accessory pack will be awarded to the person at each store who can grab the most apples floating in a tub of water, with his or her teeth, in 60 seconds, while blindfolded. The national champion will get lifetime free cellphone service in addition to the Apple iPhone.

Halloween candy and apple cider will be available for visitors at all AT&T stores, with no purchase or costume required.

According to company spokesman Bobby Pickett, "We are trying to establish in the minds of consumers that we are the new AT&T, and want to do things differently, and have some fun. Our employees will be in costume, and we'll have candy for trick-or-treaters. If this promotion goes well, we'll have special events on other holidays, too. Maybe we'll give turkeys on Thanksgiving, or candy and flowers on Valentine's Day. Lots of people are on the verge of getting a new phone, or are nearing the end of their contract, and the holiday give-away provides a friendly way to encourage them to visit AT&T now."

Tuesday, October 30, 2007

GooglePhone announcement could be soon

Google is close to unveiling its long-planned strategy to shake up the wireless market, people familiar with the matter say. The Web giant's ambitious goal: to make applications and services as accessible on cellphones as they are on the Internet.

In a move likely to kick off an intense debate about the future shape of the cellphone industry, Google wants to make it easier for cellphone customers to get a variety of extra services on their phones -- from maps to social-networking features to video-sharing. To get its way, however, the search giant will have to overcome resistance from wireless carriers and deal with potentially thorny security and privacy issues.

Google-powered phones would have applications like Google Maps that are already in some handsets. Google is trying to loosen the grip wireless carriers have over the software and services consumers can access on cellphones. Carriers have considerable clout, especially in the US, where they control distribution of phones to consumers through their retail stores.

Within the next two weeks, Google is expected to announce advanced software and services that would allow handset makers to bring Google-powered phones to market by the middle of next year. In recent months Google has approached several US and foreign manufacturers about the idea of building phones tailored to Google software, with Taiwan's HTC Corp. and South Korea's LG Electronics Inc. mentioned in the industry as potential contenders. Google is also seeking partnerships with wireless operators. In the US, it has the most traction with T-Mobile.

The Google-powered phones are expected to wrap together several Google applications -- among them, its search engine, Google Maps, YouTube and Gmail email -- that have already made their way onto some mobile devices. The most radical element of the plan, though, is Google's push to make the phones' software "open" right down to the operating system, the layer that controls applications and interacts with the hardware. That means independent software developers would get access to the tools they need to build additional phone features.

Developers could, for instance, more easily create services that take advantage of users' Global Positioning System location, contact lists and Web-browsing habits. They also would be able to interact with Google Maps and other Google applications. The idea is that a range of new social networking, mapping and other services would emerge, just as they have on the open, mostly unfettered Web. Google, meanwhile, could gather user data to show targeted ads to cellphone users.

Google's push comes as carriers are under pressure on other fronts to relax their hold on the wireless market. They face litigation over "locking" of phones, which prevents people from transferring devices from one provider to another.

Google helped push through controversial rules for a coming spectrum auction at the Federal Communications Commission that would result in a new cellular network open to all devices and software applications, even those not favored by an operator. Google has said it will probably bid for the frequencies. (info from The Wall Stree Journal)

Monday, October 29, 2007

Just like Comcast:
Verizon sales up, profits down

Verizon, the nation's second largest telecom company, on Monday reported that third-quarter earnings fell by a third from a year ago due to tax charges. Verizon earned $1.27 billion, or 44 cents per share, in the July-September period, down 34 percent from $1.92 billion, or 66 cents per share, a year earlier. Revenue came to $23.8 billion in the period, up 5.8% from $22.5 billion a year ago.

This year's figure includes a charge of 16 cents per share for taxes related to a minority investment in Italian cellphone carrier Vodafone Omnitel, and 3 cents per share in other charges. Excluding those charges, earnings would have been 63 cents per share, beating the average estimate of analysts polled by Thomson Financial by a penny a share.

Last year's earnings figure includes a number of businesses that have since been sold or spun-off, including the high-margin Yellow Pages business. Excluding those businesses, earnings in last year's second quarter was 53 cents per share.

Verizon shares rose 14 cents to $45.74 in morning trading Monday. The stock has risen steadily from a 52-week low of $33.98 set last November, as investors have gotten over their skepticism of Verizon's expensive fiber-optic buildout plan.

Verizon's major growth driver, cellphone operations, added 1.6 million customers, for a total of 63.7 million, just behind AT&T's 65.7 million. While Verizon has generally been slowly closing the gap with the larger AT&T (formerly known as McCaw Cellular and Barnaby), AT&T pulled ahead this quarter with an assist from Apple's iPhone, for which it is the exclusive carrier.

Verizon's other growth engine, though still much smaller than wireless, is the fiber-optic network that it is building to replace its copper phone lines. It added 229,000 fiber-optic subscribers during the quarter, up from 203,000 in the second quarter. It connected 202,000 subscribers to the TV service, FiOS TV.

At the same time, the wireline division continued to lose regular phone subscribers at a much faster rate - 3.7 million in a year. (info from The Associated Press)

Sprint Nextel will provide unlocking software when customers quit

Sprint Nextel wireless subscribers may no longer have to buy new phones if they jump to new companies. As part of a proposed class-action settlement, Sprint agreed to provide departing customers with the code necessary to unlock their phones' software.

That would allow the phones to operate on any network using code division multiple access technology, or CDMA. Competitors using that technology include Verizon and Alltel, although the Sprint handset would still have to meet those networks' technical standards to work. The codes won't work for Sprint's Nextel phones, which use iDEN technology, and don't allow switching to AT&T or T-Mobile, which use "GSM" technology.

Sprint made the offer as part of the proposed settlement of a 2006 California class-action lawsuit accusing it of anticompetitive practices. Plaintiffs claimed the software "lock" forced customers wanting to switch carriers to have to buy a new phone, throwing up a barrier to competition. A similar lawsuit was filed in Palm Beach County, Fla., and is covered by the proposed settlement.

On Oct. 2, an Alameda County Superior Court judge gave the settlement his preliminary approval. A final approval hearing hasn't yet been scheduled, said Sprint Nextel spokesman Matt Sullivan. "We believe this settlement is fair and reasonable," Sullivan said, adding that the company denies wrongdoing and settled the suit "so we can continue to focus on our business." Sprint doesn't expect to pay any financial damages as part of the settlement, other than possible legal fees.

Sprint will share the unlocking code with all current and former subscribers once their phones are deactivated and their bills are paid. The company also will add information about the locking software and how to obtain the unlocking codes in the list of terms and conditions of service given to new customers, and instruct its customer service representatives on how to connect a non-Sprint phone to the Sprint network. The settlement covers customers who bought a Sprint phone between Aug. 28, 1999, and July 16, 2007.

T-Mobile is facing a similar class-action lawsuit in California. Users of the iPhone, which is locked to the AT&T network, filed two separate lawsuits last week against the carrier and Apple Inc., claiming its use restrictions and a software upgrade that disables unlocked iPhones constituted unfair business practices. (info from The Associated Press)

Woman busted for online harassment
of ex boyfriend

Pilar Stofega, a woman in Waterford CT, has been charged with using the Internet to try to get revenge on an old boyfriend by breaking up his marriage. She was charged with second-degree harassment and breach of peace after she created phony profiles of the former boyfriend's current wife on adult Websites, with the wife's phone numbers and high school picture.

According to court documents, Stofega said she did to it "to be vindictive, knowing that the profiles would create marital problems." The plot came to life when strange men started calling a Waterford woman's house over the summer, saying they had seen her profile on an adult Website.

The man Stofega had dated eight years ago used his own computer to investigate and discovered someone had created a profile for his wife on several Websites. He was able to find out that the person behind the phony profiles of his wife was Stofega, whom he dated in 1999. He passed the information on to Waterford police, leading to her arrest.

Stofega was at the house when police served the warrant. She provided a sworn written statement in which she admitted to intentionally creating the profiles in the victim's likeness on the Websites. (info from The Associated Press)

Sunday, October 28, 2007

Web slowdown pisses-off senators

Two Senators on Friday called for a congressional hearing to investigate reports that phone and cable companies are unfairly stifling communications over the Internet and on cellphones.

Sens. Byron Dorgan and Olympia Snowe said the incidents involving Comcast, Verizon and AT&T (formerly known as SBC, Cingular, McCaw and Armando), have raised serious concerns over "power to discriminate against content." They want the Senate Commerce, Science and Transportation Committee to investigate whether such incidents were based on legitimate business policies or unfair and anticompetitive practices, and if more federal regulation is needed.

"The phone and cable companies have previously stated that they would never use their market power to operate as content gatekeepers and have called efforts to put rules in place to protect consumers 'a solution in search of a problem," they said in a letter to Sen. Daniel Inouye, the committee's chairman.

An Associated Press report detailed how Comcast interferwd with file sharing by Internet subscribers. The AP found instances where traffic was blocked or delayed significantly. Comcast (the nation's second largest Internet provider) acknowledged delaying some subscriber Internet data, but said the delays are temporary and intended to improve service for others.

Verizon Wireless in late September denied a request by Naral Pro-Choice America, an abortion rights group, to use its mobile network for a sign-up text messaging program. The company reversed course just a day later, calling it a mistake and an "isolated incident." AT&T reportedly changed a service agreement that previously permitted AT&T to cancel accounts of Internet users who disparage AT&T.

Several lawmakers, including Dorgan, earlier this year introduced legislation promoting "Net neutrality," the principle that all Internet traffic be treated equally by carriers. Equal treatment of traffic is long-standing practice on the Internet. The legislation is a response to suggestions by phone companies that they would like charge Websites extra for preferential treatment of their traffic. (info from The Associated Press)

Friday, October 26, 2007

Vonage settles Verizon patent suit;
AT&T suit still pending

Vonage, the beleaguered provider of Internet-based telephone service, said Thursday it has settled a patent lawsuit brought by Verizon for up to $120 million. The lawsuit, along with two filed by other phone companies, had cast doubt on Vonage's future.

After setbacks in the litigation with Verizon, which began in June 2006, Vonage put $88 million in escrow. The settlement caps any payouts Vonage will make on top of that amount at $32 million. If Vonage wins a re-hearing on either of the two patents at issue, its total payout will be $80 million.

The settlement was announced just after the stock market close, which saw Vonage shares down 6.2% at $1.50. In after-hours trading, Vonage stock jumped 67% to $2.50.

In March, a jury held that Vonage had infringed on three patents and awarded Verizon $58 million in damages, plus a royalty on future revenues. In September, an appeals court sent the remaining two patents in dispute back to the lower court for retrial.

"This settlement removes the uncertainty of legal reviews and long-term court action and allows us to continue focusing on our core business and customers," said Vonage attorney Sharon O'Leary.

The settlement is a major step forward for Vonage, which earlier this month settled another patent dispute with Sprint Nextel for $80 million. Thsee settlements do not end Vonage's legal troubles. AT&T sued Vonage last week, also for patent infringement.

Vonage had a substantial war chest, from an initial public offering last year at $17 per share that raised over $500 million. The legal challenges scared customers and stalled Vonage's growth. It now has about 2.5 million subscribers. (info from The Associated Press)

Thursday, October 25, 2007

Comcast profit off 54% on sales rise of 21%

TV, internet and phone service giant Comcast reported today that its third-quarter profit fell 54 percent and new customer additions slowed, amid intensified competition. Shares dropped more than 7 percent in morning trading.

Comcast earned $560 million, or 18 cents per share, in the three months ended Sept. 30 compared with $1.22 billion, or 38 cents, in the same quarter a year ago. Revenue rose by 21 percent to $7.78 billion from $6.43 billion a year ago.

The decline also reflected a comparison with year-ago results that included $669 million in one-time gains related to Comcast's purchase of Adelphia's cable assets and a swap of cable systems with Time Warner Cable. Excluding these gains, Comcast would have seen profits rise by 2 percent from last year's $548 million in adjusted earnings.

Looking ahead, Comcast said it expects a softening economy, an accelerated exit from its circuit-switched phone business and increased competition to affect fourth-quarter results. Comcast said phone companies have ratcheted up promotions as they lose customers to Comcast's digital voice service. Satellite TV providers have done the same as consumers leave to snap up Comcast's discounted triple play package of video, Internet and phone.

For the third quarter, revenue generating units, a key measure of cable subscriber growth, fell 6.7 percent to 1.4 million. It is the first quarterly decrease in at least 3 1/2 years.

Comcast added 489,000 new digital video subscribers in the quarter, down 12 percent from last year, to 14.7 million customers. The number of digital video customers is a subset of basic subscribers, which fell by 65,000 to 24.2 million. A year ago, basic subscribers rose by 11,000. However, the company pointed out that 61 percent of basic subscribers have upgraded to digital, up from 50 percent a year ago.

Comcast attracted 450,000 new high-speed data customers, down 16 percent from a year ago, for a total of 12.9 million. As for its phone service, digital voice added 662,000 consumers, up 36 percent from last year, to 3.8 million. Comcast's circuit-switched phone service, which the company is exiting, lost 138,000 subscribers for a remainder of 304,000. High-speed data revenue fell, however, to $42.86 a month, from $43.29 a year ago, reflecting the bite from promotional Internet packages touted by the phone companies. (info from The Associated Press)

Cellphone growth is slowing, but over 80% of Americans have cellphones, including babies.

The cellular industry showed signs of maturity in the first half of 2007, when penetration grew to an all-time high of 80.5 percent of the total US population, while the number of net new subscribers fell for the second consecutive year, CTIA statistics show.

The number of net new subscribers (after churn) fell 10.8 percent to 10.5 million in the first half of 2007 following a revised 4.7 percent decline in the year-ago period, the association said. That followed three years of double-digit percentage-rate surges. Nonetheless, this year’s 10.5 million first-half gain was the fifth largest first-half gain in the industry’s history, the statistics show.

With the additional 10.5 million subscribers, the subscriber base grew to 243.4 million at the end of June, up 10.8 percent from June 2006’s 219.7 million.

80.5 Percent Penetration: The subscriber-base expansion put the cellular penetration rate at the end of June to 80.5 percent of all 302.2 million men, women and children living in the United States. That’s up from 73.4 percent at the end of June 2006, 65.6 percent at the end of June 2005, and 57.7 percent at the end of June 2004. The cellular population exceeded half of the US resident population for the first time at the end of June 2003, when the penetration rate hit 50.9 percent.

Double-Digit Revenue Gains: Like maturing baby boomers entering their prime earnings years, the cellular industry earned more money in the first half, when total voice and data revues grew 12.3 percent over the first half of 2006 to $67.9 billion. The growth rate exceeded the first-half 2006 growth rate of 8.6 percent, which marked the first-ever single-digit percentage gain in first-half carrier revenues. First-half gains in previous years were 13 percent in 2005, 19 percent in 2004, and 12.7 percent in 2003.

Average June bills were up slightly despite a double-digit gain in the amount of time that subscribers talk over their phones, the statistics show. Wireless subscribers used more than 1 trillion minutes of talk time in the first six months of 2007, up about 18 percent from 850 billion minutes during the year-ago period. Wireless data revenues in the first half hit $10.5 billion, up 63 percent from the first half of 2006 to account for 15.5 percent of all wireless service revenues, up from 11 percent in the first half of 2006, the association said. (info from TWICE)

Wednesday, October 24, 2007

AT&T TV customers lost service Sunday

U-verse television customers of AT&T (formerly known as SBC, Southwestern Bell, Cingular, AT&T Wireless, McCaw Cellular, BellSouth, Southern Bell, South Central Bell, Southern New England Telephone, Pacific Telesis, Pacific Bell, Nevada Bell, and Francine) lost service around the country on Sunday.

Outages occurred from California to Connecticut early Sunday morning. AT&T was able to restore some local channels and popular cable news and sports networks within a few hours, but full service wasn't restored until Sunday night. Some customers had to reboot their "cable" boxes to get service restored.

The cause of the disruption remains under investigation. The company is reviewing its customer service policies after some users complained on Internet forums that they were unable to get customer service help when they needed it Sunday.

The outage is the latest glitch - and among the highest-profile - for U-verse, which uses a relatively untested technology to deliver television over a high-speed Internet connection. The early rollout of the product, which AT&T is hoping will help it fend off cable companies now selling phone service, was plagued by delays and questions about the software, provided primarily by Microsoft.

The service had just 3,000 customers at the end of 2006. Since earlier this year, AT&T had been ramping up service, with 100,000 customers signed up by September. It's now available in 33 markets. AT&T sees U-verse as critical in its effort to slow desertions by traditional phone customers and to win new customers. (info from The Associated Press)

Cablevision's founding family can't buy it back

Cablevision shareholders rejected on Wednesday a $10.6 billion bid by the company's controlling shareholders, the Dolan family, to take the New York-area cable TV/telecom provider private.

The deal had faced opposition from large shareholders, proxy advisory firms and Wall Street analysts who said the company, which owns Madison Square Garden, Radio City Music Hall and the New York Knicks, should have a higher value than the $36.26 per share the Dolans had agreed to pay. Cablevision's CEO James Dolan announced the results of the vote and said that the family was "disappointed" that the transaction wasn't approved, but added that his family saw it as a "vote of confidence in the prospects of Cablevision." The Dolan family controls about 65 percent of the company's vote through a special class of shares with powerful voting rights. James Dolan's father, Charles Dolan, is the company's chairman.

The defeat leaves Cablevision to continue as a stand-alone public company, a prospect that Dolan had acknowledged last week was a possibility after Cablevision's largest outside shareholder, fund manager ClearBridge Advisors, said it would vote against the deal.

The Dolans have tried several times over the past two years to take the company private, but couldn't agree on terms with a two-person committee of independent directors on their board. This May they finally got board approval to buy out public shareholders. One of the conditions was that the deal be approved by a majority of the shares held outside of the family. That prospect became increasingly doubtful as opposition to the terms grew. Besides ClearBridge, fund manager Mario Gabelli came out against the deal.

"Our valuation indicates that there's too much left on the table," Gabelli said Tuesday. "From our end, we don't want more money. ... We want to be part of the buying group." In a regulatory filing, Gabelli, who controls 8.3 percent of Cablevision's stock, said he would go to court to seek a higher price for his shares if the deal went through. His funds were prepared to exercise an appraisal right, which would force a court to determine the value of the stock and award the holder the difference if the figure was higher than the final offer.

Ironically, the Dolans' effort to take Cablevision private foundered because of the company's success. A highly regarded cable operator with customers in affluent areas around New York, Cablevision has been a leader in introducing highly profitable new services such as high-speed Internet and digital phone service that runs over cable lines. (info from The Associated Press)

Verizon fined for disconnecting heavy users

Verizon Wireless has agreed to pay a fine and reimburse users who were disconnected for "excessive" use of a cellular broadband service that was marketed as allowing "unlimited" use, New York's state attorney general announced Tuesday. A nine-month investigation found that Verizon disconnected 13,000 subscribers for exceeding an undisclosed monthly usage cap.

Under the settlement, Verizon will reimburse the terminated subscribers for the cost of the laptop cards or laptop-connected cellphones they bought to use the service. The company put the cost at around $1 million. It will also pay $150,000 in penalties and costs to the state.

The prosecutor's office said the company voluntarily stopped disconnecting customers based on their data usage in April.

Verizon's user agreement for the BroadbandAccess plan prohibits continuous streaming of audio or video and peer-to-peer file sharing, all of which generate heavy traffic. It also reserves the right to disconnect or slow down traffic for anyone using too much data, but since this spring, the cap has been explicit rather than undisclosed: 5 gigabytes of data per month.

The agreement says the plan is only to be used for Web surfing, e-mail and corporate intranet access, activities that are unlikely to generate 5 gigabytes of traffic in a month.

"We are pleased to have cooperated with the New York Attorney General and to have voluntarily reached this agreement," said Howard Waterman, a spokesman for Verizon Wireless. "When this was brought to our attention, we understood that advertising for our NationalAccess and BroadbandAccess services could provide more clarity." (info from The Associated Press)

Tuesday, October 23, 2007

Facebook sued for wrong number texting

Facebook, the popular online social network, is being sued by a woman who alleges it has profited from its members sending thousands of text messages to cellphone users whose numbers previously belonged to other people.

The lawsuit, filed Monday in a San Jose federal court, highlights the confusion and frustration that can arise when phone numbers are reassigned after a customer's service ends.

Plaintiff Lindsey Abrams alleges she began receiving unsolicited text messages apparently intended for an unidentified Facebook member shortly after she received a new mobile number from Verizon in November 2006. The messages included explicit language and unsettling remarks, according to the suit. She alleges she was charged 10 cents per message and told she couldn't block the Facebook texting without blocking mesages she did want to receive.

The lawsuit, which her lawyer will seek to have certified as a class action, contends other consumers with recycled phone numbers have been besieged with unsolicited Facebook text messages containing party invitations and unwanted sexual advances. Young children have been among the recipients of the unauthorized Facebook messages, the suit alleges, creating "frightening and dangerous" situations.

Jay Edelson, a Chicago attorney representing Abrams, said he hopes to force Facebook to take steps so its roughly 47 million members won't be able to send text messages to recycled phone numbers. "There are things that Facebook could be doing to prevent this from happening," Adelson said. "Hopefully, this suit will give them the incentive to stop it." The lawsuit also seeks unspecified damages. (info from The Associated Press)

Monday, October 22, 2007

AT&T to offer over-priced music downloads

AT&T (formerly known as SBC and Cingular and Larry) today announced a deal with digital music provider Napster (formerly known as Roxio, not the original Napster started by nappy-headed Shawn Fanning) to enable cellphone customers to download more than 5 million songs over the air, beginning in November.

AT&T Wireless customers will be able to preview songs and purchase and download the music they like with their cellphones. People can get five songs each month with the Napster Mobile Five Track Pack for a "discounted" price of $7.49, or buy single songs for $1.99 each.

That's more than twice what it costs to download a song from iTunes or Wal-Mart; and Napster's PC-based download program costs $9.95 per month for unlimited music. Earlier this year Sprint cut the price for its cellphone downloads from $2.49 to 99 cents because hardly anyone was buying.

Apple appears to be in no hurry to offer iTunes music downloads direct to its iPhones, perhaps because of the slow speed of AT&T's "EDGE" wireless data network.

Sunday, October 21, 2007

Nortel to pay $35 million for accounting fraud

Nortel Networks will pay a $35 million civil penalty to settle allegations by the Securities and Exchange Commission that the company engaged in two fraudulent accounting schemes. Nortel, without admitting or denying wrongdoing, has agreed to pay the penalty and accepts a permanent injunction prohibiting it from engaging in similar activity in the future.

In a complaint filed in federal court, the SEC alleged Nortel engaged in two fraudulent accounting schemes. As a result, Nortel was able to meet unrealistic revenue and earnings guidance it had provided to Wall Street in 2000 and again in 2002 and 2003, the SEC said.

"Starting no later than October 2000, Nortel responded to market pressures by engaging in a fraudulent accounting scheme in which it primed Wall Street's expectations by issuing unrealistic financial guidance and then used accounting adjustments that did not comport with U.S. generally accepted accounting principles, to move its revenues and earnings upward and downward as necessary to meet Wall Street's unrealistic expectations," the SEC said. "The fraud took two forms."

In one scheme, the SEC said, Nortel altered its revenue recognition policies to accelerate into 2000 revenue as needed to meet its quarterly and annual revenue guidance, particularly revenue of its optical Internet business, and created the false appearance that Nortel was weathering an economic downturn better than its competitors.

In the other scheme, Nortel allegedly reduced or increased its earnings as necessary to create the false appearance that Nortel had stabilized its operations and returned to profitability, the SEC said.

In its lawsuit, the SEC also alleged that Nortel's restatement of earnings in 2003 was a "cover-up." "The supposedly "comprehensive review" conducted by Nortel's then senior executives consisted of a superficial and sharply limited review of reserve releases," the SEC said. "The review -- and thus the first restatement -- did not in any way address the revenue recognition fraud that the company had engaged in for the fourth quarter of 2000."

Because of the restricted focus of the review, the first restatement also did not capture a significant number of the improper reserve setups and releases that the company had orchestrated in the fourth quarter of 2002 and the first and second quarters of 2003, the SEC said.

"This, in turn, concealed any pattern of fraud in the liabilities Nortel restated," the SEC said. "Nortel continued to mislead the public by claiming that the first restatement was simply a result of accounting errors that had been made during a volatile period when demand for Nortel's products dropped and the company underwent a restructuring," the SEC said.

In April 2004, Nortel announced it would restate its results a second time and said it expected to cut its 2003 earnings by half, the SEC said. The company restated about $3.4 billion in misstated revenue and at least another $746 million in liabilities for fiscal years 2001 and 2002 and the first, second and third quarters of 2003, the SEC said.

The company also terminated for cause four senior executives in April 2004, including Frank A. Dunn, its chief financial officer; and Douglas C. Beatty, its president and chief executive, the SEC said. The SEC filed civil charges against those four executives in March and amended its complaint to add four other former executives to the case last month. (info from The Wall Street Journal)

Friday, October 19, 2007

Woman attacks Comcast for bad service,
with a hammer

After repeated attempts to change her phone service from Verizon to Comcast's Triple Play during a week in August, Mona Shaw, a 75-year-old Virginia resident with a heart condition, took out her frustrations at a payment center. Shaw was arrested for disorderly conduct after bashing items in the office, while repeatedly saying, "Have I got your attention now?"

Shaw's problems began when she and her husband, Don, waited all day Aug. 13 for a Comcast worker to come to their house to install its much-publicized Triple Play service, which includes digital cable, digital voice and high-speed Internet service. The Shaws were Comcast customers already but wanted to upgrade.

No one came Aug. 13 but two days later, someone did show up. This Comcast worker didn't finish the job, told her that he needed someone else to finish it, and left some equipment. The next day the Shaws couldn't receive calls but were eventually able to make calls.

That Friday, Shaw spent the morning on the phone with Comcast and made a frustrating trip to its Manassas office that resulted in no assistance from a company manager. When the Shaws returned home, they discovered they had no phone service at all.

A cellphone call to Comcast resulted in their receiving a new phone number and a promise that someone from the company would call on Monday. In the meantime, the Shaws figured out how to plug their phone directly into the equipment the worker left.

That weekend, Shaw called the State Corporation Commission, the regulatory agency with authority over Virginia businesses. She says she spoke with the SCC's Larry Kubrock and was promised that someone from his agency would contact Comcast. The Shaws waited Monday for a call. Finally, around 4:30 p.m., Mona Shaw put a hammer in her purse and returned to the Manassas Comcast office.

"I smashed a keyboard, knocked over a monitor ... and I went to hit the telephone," Mona said. "I figured, 'Hey my telephone is screwed up, so is yours.' "

The day after her arrest, Comcast called her husband and said they could switch her to the Triple Play service but the couple would have to wait a week. He demanded that the company come out the next day and remove their equipment and told the company they were returning to Verizon for phone service.

Comcast did as her husband requested, but several weeks later the Shaws received a letter from the company thanking them for subscribing to Comcast phone service. (info from Potomac News, Photo from Washington Post)

Thursday, October 18, 2007

Apple will allow non-Apple iPhone software

In major policy reversal, Apple will allow third-party applications to work directly on the iPhone, CEO Steve Jobs announced Wednesday. Apple infuriated developers and some iPhone users when it issued a software update Sept. 27 that disabled non-Apple programs installed on the phones.

Jobs said the company intends to release a software development kit in February that will let coders create applications to work directly on the iPhone and the similar non-phone iPod Touch.

It's easy to find unofficial programs for the iPhone on the Internet. Damage to the iPhone from unofficial programs is not covered by Apple's warranty.

Apple's change does not affect the policy of keeping the iPhone compatible only with AT&T's network in the United States. Two lawsuits were filed against Apple on Oct. 5, accusing the company of engaging in monopolistic behavior and unlawfully restricting consumer choice by preventing users from "unlocking" their iPhones.

Some people have "unlocked" their phones to work on other carrier networks. The Sept. 27 software update reportedly disabled those phones. It was not clear from Jobs' statement whether the move was a response to the growing discontent around Apple's iron grip over its portable gadgets.

Apple had allowed developers to build applications that run on the iPhone's Safari Web browser but didn't let programs work directly on the iPhone software platform, which could make them easier to create and make them work more smoothly. (info from The Associated Press)

Wednesday, October 17, 2007

Drunk crashes into train while sending txt msg

In Eugene OR, Robert Gillespie crashed his car into the side of a Union Pacific freight train at about 2 a.m. Tuesday.

Police believe he was driving faster than the 35 mph speed limit as well as using his cellphone to send a text message when he hit the train. Gillespie was charged with drunken driving and careless driving. His injuries were described as not life threatening, and no members of the train crew were hurt.

When officers arrived, they found Gillespie alert and talking, but trapped in the car. They learned about the text message as they worked to rescue him. He apparently tried to brake for the train when he saw it, but he was too close to avoid crashing. (info from The Associated Press, photo from Dallas Railway Museum)

Tuesday, October 16, 2007

Verizon gave tons of customer records to Feds without court orders

Verizon Communications, the nation's second-largest telecom company, told congressional investigators that it has provided customers' telephone records to federal authorities in emergency cases without court orders hundreds of times since 2005. The company said it does not determine the requests' legality or necessity because to do so would slow efforts to save lives in criminal investigations.

Verizon also disclosed that the FBI, using administrative subpoenas, sought information identifying not just a person making a call, but all the people that customer called, as well as the people those people called. Verizon does not keep data on this "two-generation community of interest" for customers, but the request highlights the broad reach of the government's quest for data.

The disclosures, in a letter from Verizon to three Democrats on the House Energy and Commerce Committee investigating the carriers' participation in government surveillance programs, demonstrated the willingness of telecom companies to comply with government requests for data, even, at times, without traditional legal supporting documents. The committee members also got letters from AT&T and Qwest Communications International, but those letters did not provide details on customer data given to the government. None of the three carriers gave details on any classified government surveillance program.

From January 2005 to September 2007, Verizon provided data to federal authorities on an emergency basis 720 times. The records included Internet protocol addresses as well as phone data. In that period, Verizon turned over information a total of 94,000 times to federal authorities armed with a subpoena or court order, the letter said. The information was used for a range of criminal investigations, including kidnapping and child-predator cases and counter-terrorism investigations.

The letters were released yesterday by the lawmakers as Congress debates whether to grant telecom carriers immunity in cases in which they are sued for disclosing customers' phone records and other data as part of the government's post-September 11 surveillance program, even if they did not have court authorization. House Democrats have said that they cannot contemplate such immunity without first understanding the nature of the carriers' cooperation.

Congressional Democrats have been largely stymied in their efforts to have the Bush administration disclose the scope and nature of its surveillance and data-gathering efforts after the Sept. 11, 2001, attacks. Last month, the Electronic Frontier Foundation, a privacy group in San Francisco, obtained records through a Freedom of Information Act lawsuit showing that the FBI sought data from telecom companies about the calling habits of suspects and their associates, the New York Times reported. Neither Qwest nor AT&T answered the lawmakers' question as to whether they had received such requests for information. (info from The Washington Post)

Monday, October 15, 2007

Virgin Mobile stock has dim debut.
Company has trouble with phone reselling.

The much-anticipated stock offering of Virgin Mobile USA last week didn't live up to its hype. The initial public offering of the cellphone-services company ended at $15.75 a share in trading on the New York Stock Exchange, up 5% from its IPO price. The deal priced at the low end of its expected $15 to $17 range.

Founded as a joint venture between Sprint Nextel and Britain's Virgin Group, Virgin Mobile USA began offering prepaid cellphone plans in July 2002. As of June 30, the company had 4.83 million customers, and had roughly 15% of the pay-as-you-go cellphone market at the end of 2006.

Unlike many cellphone carriers, the company doesn't maintain its own wireless network. It buys network service from Sprint Nextel. The products and services are marketed under the Virgin Mobile brand, and are aimed at the US youth market.

Because the company doesn't operate its own network or stores, Virgin has lower costs than companies that build their own networks. Virgin, however, does subsidize the cost of its cellphones in order to attract new customers at a lower price point.

Its practice of luring customers by subsidizing phones caused a problem: Virgin phones have been purchased, reprogrammed, and resold in bulk for use on other wireless communications networks, cutting Virgin out of the wireless-service revenue it was hoping to attract with each low-priced phone. The lost revenue has been declining recently because of changes Virgin has made to its phones' software, as well as court cases it has won against reprogrammers. (info from The Wall Street Journal)

Friday, October 12, 2007

Apple & AT&T sued for monopolizing iPhones

Complaints over Apple's use restrictions and recent software update for the iPhone have led to lawsuits alleging Apple and its carrier partner, AT&T (formerly known as Cingular and SBC), engaged in illegal monopolistic behavior.

Two separate lawsuits were filed in San Jose on Oct. 5 - one in federal court and the other in state court and both seeking class-action status. Both cases accuse the companies of unfair business practices and violations of antitrust, telecommunications and warranty laws.

The federal case was filed by the firms of Hoffman & Lazear in Oakland and Folkenflik & McGerity in New York on behalf of iPhone owners Paul Holman and Lucy Rivello. The state case was filed by Saratoga attorney Damian Fernandez on behalf of California resident Timothy Smith.

The federal lawsuit alleges that by not allowing other carriers to serve the iPhone, the two companies conspired from the beginning to maintain a monopoly. Allegedly, the companies are unlawfully restricting consumer choice by preventing users from "unlocking" their iPhones, and Apple intentionally disabled unofficial third-party programs or rendered unlocked phones useless with its software update.

Apple issued the update Sept. 27 after warning users that any ensuing damage to iPhones with unauthorized modifications was not covered by the product's warranty. It is unclear how many iPhones were disabled or how many iPhone owners have modified their handsets.

The federal lawsuit stated it didn't know how large the affected class could be but pegged the number at 100 or more and anticipates "there will be millions." Apple has sold more than a million iPhones since it hit the market June 29. (info from The Associated Press)

Wednesday, October 10, 2007

People "hear" ringing
from phones that aren't there.

Cellphone and BlackBerry users report feeling vibrations when there are none, or feeling as if they're wearing a phone when they're not.

The first time it happened to Jonathan Zaback, a manager at the public relations company Burson-Marsteller, he was out with friends and showing off his new BlackBerry Curve. "While they were looking at it, I felt this vibration on my side. I reached down to grab it and realized there was no BlackBerry there." Zaback, who said he keeps his BlackBerry by his bed while he sleeps, checks it if he gets up in the middle of the night and wakes to an alarm on the BlackBerry each day, said this didn't worry him.

"As long as it doesn't mean a tumor is growing on my leg because of my BlackBerry, I'm fine with it," he said. "Some people have biological clocks, I might have a biological BlackBerry." Some users compare the feeling to a phantom limb, "an often painful sensation of the presence of a limb that has been amputated."

"Even when I don't have the BlackBerry physically on my person, I do find myself adjusting my posture when I sit to accommodate it," said Dawn Mena, an independent technology consultant based in Thousand oaks, Calif. "I also laugh at myself as I reach to unclip it (I swear it's there) and find out I don't even have it on."

Research in the area is scant, but theories abound about the phenomenon, which has been termed "ringxiety" or "fauxcellarm." Anecdotal evidence suggests "people feel the phone is part of them" and "they're not whole" without their phones, since the phones connect them to the world, said B.J. Fogg, director of research and design at Stanford University's Persuasive Technology Lab.

"As human beings, we're so tapped into our community, responsiveness to what's going on, we're so attuned to the threat of isolation and rejection, we'd rather make a mistake than miss a call," he said. "Our brain is going to be scanning and scanning and scanning to see if we have to respond socially to someone."

In certain circles, phantom vibrations are a point of pride. "Of course I get them," said Fred Wilson, a managing partner of Union Square Ventures, an early-stage venture capital firm based in New York. "I've been getting them for over 10 years since I started with the pager-style BlackBerry."

"Dilbert" cartoonist Scott Adams wrote on his blog, dilbert.org, that he feels the phantom vibrations, "about 10 times per day" and thinks "'Ooh, it's an e-mail with good news!' So far, the only good news is that my pocket is vibrating, and that's OK because it gives me hope that the condition might spread to the rest of my pants."

Jake Ward, a former press secretary for Sen. Olympia Snowe and current director of Qorvis Communications Inc., a public relations company in Washington, D.C., said he switched his BlackBerry from his hip to his jacket pocket six months ago, but still feels it there. "Aftershocks," he said.

For some, it's a matter of projecting hope onto their wireless device. Don Katz said he came out of retirement to work as director of wireline product management at SpinVox Inc. because he was so impressed with the company's voicemail product. He worked on its recent launch at SaskTel, the telecom company in Saskatchewan, Canada. That may be why, on a recent train trip to New York, he kept checking his phone, because he said he was sure it was vibrating. "It's like, my phone should be ringing," he said. "It's anticipatory vibrations."

(based on reporting by ELLEN SIMON for The Associated Press)

No surprise:
even more bad news from Alcatel-Lucent

Shares of Alcatel-Lucent sank nearly 14% one day last month after the world's largest maker of telecommunications equipment slashed its sales and profit forecast for the year, citing weak wireless spending in North America. The company said it now expects 2007 revenue to be flat to slightly up at a constant euro-dollar exchange rate. This compares with a previous forecast for revenue growth in the mid-single digits, which Chief Executive Patricia Russo previously defined as 4% to 6%.

This is the third time in less than a year that Alcatel-Lucent which was formed last year by the $11.6 billion merger of France's Alcatel and US-based Lucent Technologies, has disappointed investors with lower guidance or worse-than-expected results. The company warned that the lower revenue would hurt profit and margins, especially in the third quarter, where it now expects to break even at the operating level. Consensus forecasts were for operating profit growth of 5%.

Standard & Poor's analyst Clara Van der Elst said the problems go beyond soft North American demand, noting that Alcatel-Lucent is losing market share to Ericsson in 3G technology and is suffering from price competition from Ericsson and Huawei. "In market share terms, we believe the company continues to lose out," she said. DresdnerKleinwort analyst Per Lindberg, who has a hold rating on the stock, said confidence in the company may have eroded to such lows that operations could be seriously impaired. "It could even trigger talk of aborting the whole combination," he said.

The company has suffered in recent months as customers have delayed orders in the face of an uncertain portfolio. As a result, Alcatel-Lucent has lost business to its competitors, particularly to Sweden's Ericsson, which has won a series of very large deals in emerging markets such as India.

Looking to the fourth quarter, Alcatel-Lucent said it still expects sales to ramp up strongly from the third quarter. The company said it would provide a more detailed update of its plans when it reports third-quarter earnings on Oct. 31.

Alcatel-Lucent is in the process of cutting 12,500 jobs over three years, up from an original target of 9,000. At the time of the merger, the company said the tie-up would yield annual cost savings of 400 million euros in 2007, and then upped that target in January to 600 million euros, without providing any indication of where those savings would be found. (info from MarketWatch)

Tuesday, October 09, 2007

Vonage pays $80 million to settle Sprint suit
(but Verizon still wants over $58 million)

The nearly-worthless shares of Internet phone company Vonage more than doubled in value Monday after it settled a patent suit filed by Sprint Nextel. Vonage shares gained $1.42 to close at $2.57.

In September, a jury found that Vonage infringed on six Sprint patents, and ordered Vonage to pay $69.5 million in damages. The settlement Monday resolves all claims in that suit for $80 million, the companies said. Sprint also agreed to license to Vonage more than 100 patents on connecting calls between a regular telephone network and a packet-switched network such as the Internet.

The settlement does not put all of Vonage's legal troubles behind it. In March, another jury awarded Verizon $58 million in damages, plus 5.5 percent royalties on future revenues after finding that Vonage violated three Verizon patents. Litigation continues in that suit. Vonage denies infringement and says it has deployed workarounds for two of the patented technologies.

Vonage's legal troubles, and the sudden shutdown of rival Sunrocket Inc. in July, have raised questions about the future of Internet phone companies. Their subscribers use adapters to connect their phones to broadband Internet connections, and pay about $25 a month for unlimited domestic calling. Vonage was a pioneer in the market and was until last year the biggest player. Subscriber growth stalled this year, leaving it with 2.3 million subscribers at the end of the second quarter.

Potential customers have been scared off by the litigation, raising Vonage's already high cost of recruitment to $287 for every new subscriber in the second quarter. Meanwhile, cable companies rolled out VoIP service and quickly gained customers from their TV subscribers. For example, Comcast ended the second quarter with 3.1 million phone subscribers.

Vonage's stock went public last year at $17. The stock has disappointed investors, but the high initial price gave Vonage substantial cash which has allowed it to survive the litigation setbacks. According to its latest earnings report, it had $344 million in reserve cash on June 30. (info from The Associated Press)

Monday, October 08, 2007

Verizon sued for cheating TV advertisers

Verizon's plan to use a super-fast "FiOS" fiber-optic network to provide internet, phone and TV service, has hit a possible snag: a lawsuit charging the company with overstating TV subscribers.

Digital Art Services Inc., an advertising agency, alleged that Verizon committed fraud by improperly including pending customers in its published number of subscribers in the New York City region. Digital Art Services claimed the allegedly inflated numbers were used to determine advertising rates, causing it to pay more than it should have. Pending customers are those who have signed up for the network but haven't had service installed yet.

"Verizon's fraud in overstating the number of subscribers indisputably meant that purchasers of advertising time were paying for FiOS subscribers who did not exist," the complaint said.

Verizon spokesman Eric Rabe said "if the assertion is that we overstate our numbers we certainly reject that." He said, "This is a garden-variety business dispute initiated by a customer who wants to be released from a contract they agreed to."

According to the lawsuit, Verizon said it had 115,955 customers in the New York area by the end of the second quarter, but more than 38,000 were pending. The percentage of the total made up of pending customers increased to 33% by the end of June from 22% at the beginning of April, according to the complaint. The advertising rates, however, were determined by the total figure, it said.

"My only concern is how many eyeballs are looking at the screen," said Ed Szydlik, president of Digital Art Services. Szydlik said he was told that pending customers get connected within two to four weeks, so the discrepancy shouldn't matter, but he discovered that many customers weren't getting connected for months or longer. Verizon's Rabe said new FiOS customers typically get connected within a couple of weeks. (info from The Wall Street Journal)

Friday, October 05, 2007

Huge fine and more trouble for Siemens bribes

A German court ordered Siemens to pay $284 million as prosecutors closed a part of Europe's largest bribery investigation. Other probes continue, and the company faces more possible fines and criminal charges against its executives.

The fine is tied to alleged bribe payments at the Siemens telecom equipment division. German police raided Siemens's offices last November after flagging millions in questionable payments. Prosecutors suspect company managers funneled funds through sham consulting contracts to bribe potential telecom customers abroad over several years.

The penalty payment, which includes a small fine and a charge for illegal profits, is the first Siemens has faced since the current investigations were launched last year into suspicious payments. A German court in May fined Siemens as part of an earlier investigation into bribes paid by the company in Italy.

An internal investigation at Siemens flagged over $2 billion in suspicious payments. Embarrassment at the extent of Siemens officials' apparent practice of paying commissions to secure contracts forced a change of leadership earlier this year.

Siemens said it also reached an agreement with German tax authorities to pay over $200 million in unpaid taxes tied to over $600 million in suspicious transactions at the telecom unit.

Criminal investigations into financial irregularities at Siemens are continuing in several other countries, including the US, where the Justice Department and the Securities and Exchange Commission are probing Siemens's business dealings. US authorities could levy larger fines and possibly ban Siemens from public-sector contracts in the US. Prosecutors in the US have more legal tools at their disposal to go after companies than their German counterparts, who typically prosecute individuals.

German prosecutors in Nuremberg also are probing tens of millions in payments by Siemens to an employer-friendly labor group allegedly aimed at undermining the country's most powerful union. That criminal investigation led to the arrest of a Siemens board member earlier this year. (info from The Wall Street Journal)

Thursday, October 04, 2007

eBay paid wrong number for Skype

When eBay acquired Skype two years ago, the vision was of eBay buyers and sellers using the Internet telephony service to chat during auctions. That hoped-for synergy has yet to happen, and eBay says it will take a $1.43 billion charge in the third quarter related to Skype, and will replace Skype’s top executives.

“It indicates that Skype is not living up to the company’s expectations, although it is growing very rapidly,” says Rob Haley, an analyst at brokerage firm Gabelli & Co. “But eBay is still a very strong company, and Skype is a small piece of the whole.” Skype generated $90 million in revenue in the second quarter, less than 5% of eBay’s $1.83 billion total revenue.

The write-down of Skype’s value did not come as a surprise because eBay has been breaking out Skype’s revenue each quarter, Haley says. He notes eBay’s share price rose slightly Monday after the Skype charge was announced, although that came on a day when most stocks rose and the Dow Jones index reached a record high. Skype had 220 million registered users at the end of the second quarter, up 94% from 113 million a year earlier. But because users can make some Internet calls for free, more users does not always translate into more revenue.

The $1.43 billion charge consists of a $900 million write-off of Skype’s book value and $530 million in payments to certain Skype shareholders to fulfill incentive clauses of the acquisition agreement. EBay had agreed to pay those shareholders up to $1.7 billion, based on revenue, gross margin and user goals, and the $530 million payment is an indication that Skype’s performance fell well short of the high end of expectations. With the $530 million payment, the total price for Skype rose to more than $3.1 billion; by writing off $900 million, eBay reduced the book value of Skype by 29%.

At the same time, eBay announced major changes at the top of the Skype unit. Niklas Zennstrom, who co-founded Skype in 2003, resigned as CEO of Skype and will become non-executive chairman of the Skype board of directors. Michael van Swaaij, eBay’s chief strategy officer, will serve as Skype’s interim CEO until a permanent replacement is named. Henry Gomez also is stepping down as Skype’s president, returning to eBay as senior vice president for corporate affairs. (info from Internet Retailer)

Wednesday, October 03, 2007

iPhone upgrade hurts hacks
(but upgrade is optional)

Apple has issued a software update that creates problems for iPhones modified to work with a cellular carrier other than AT&T (formerly known as Cingular and SBC) and disables at least some unofficial programs installed on other iPhone handsets.

Apple warned earlier that the iPhone update - which adds access to the iTunes Wi-Fi Music Store and fixes some security flaws - could permanently disable phones running programs that untether phones from its exclusive partner's network. Several gadget enthusiast Websites and online postings from hacker communities reported that, depending on which unlocking program was used, certain modified phones no longer worked after they installed Thursday's software update. In some cases, the phones worked, but only with the original SIM card that ties the phone to AT&T. Some sites also reported uncondoned third-party applications on the iPhones became disabled after the update.

Some hackers had characterized Apple's warning as "a scare tactic." Despite Apple's history of playing cat-and-mouse games with hackers in the past, company officials insisted they were "not proactively" trying to make hacked iPhones useless.

It was unclear how many iPhone owners had unlocked their phones, but the programs - including several that can be downloaded for free - appeared to be particularly popular with European consumers. Apple isn't selling the iPhone or initiating the service in Europe until November, so the unlocking software allowed Europeans who bought iPhones in the United States to use the $399 devices.

Installing Apple's latest iPhone update is optional. (info from The Associated Press)

Tuesday, October 02, 2007

Sorehead sues Apple over iPhone price cut

Dongmei Li of Queens, NY, is so angry at Apple for chopping $200 off the price of the iPhone, that she filed a lawsuit seeking $1 million in damages. She claims Apple violated price discrimination laws when it slashed the price of the 8-gigabyte iPhone by a third, from $599 to $399, within two months of the June debut.

Apple lowered the iPhone's price on Sept. 5 and also said it would stop selling the $499 4-gigabyte model. Many early customers who paid full price didn't expect a reduction so soon, and complained.

Apple issued an apology the next day. Under its return policy, Apple refunded the $200 difference for those who bought the phone within 14 days of the reduction. And in a move to make peace with those who purchased the higher-priced phone before that period, the company offered a $100 credit at Apple stores.

According to Li's lawsuit, the price reduction injured early purchasers like herself because they cannot resell the product for the same profit as those who bought the phone following the price cut.

Li purchased a 4GB iPhone for $499 and alleged that owners of the 4GB model were given less favorable terms than those who bought the 8GB model at the premium price, according to the lawsuit.

The lawsuit also names AT&T (formerly known as Cingular and SBC), the US carrier for the iPhone, and alleges the two companies' mandatory two-year service contract for the iPhone constitutes unfair business practices. (info from The Associated Press)

Monday, October 01, 2007

Disney disconnects cellphone biz

A year after shutting down its ESPN cellphone operation, Walt Disney Co. is closing its Disney cellphone service.

Disney launched Mobile ESPN and Disney Mobile last year as mobile virtual network operators (MVNOs). The company leased wireless spectrum from Sprint Nextel and sold service to customers, but in the competitive US cellphone market, Disney struggled against the major carriers.

Disney announced in September 2006 that it was closing Mobile ESPN, eight months after its debut. The company initially remained optimistic about its Disney-branded service, which sold phones featuring Disney content and services aimed at children and their parents. However, Disney failed to get enough stores to sell phones and service.

Disney will instead license its content to bigger carriers to sell. Earlier this year, it forged a partnership with Verizon Wireless to sell ESPN sports news and video. Disney is considering offering some of its Disney-branded services through a partnership with a major carrier. Disney Mobile included services that let parents locate their kids as well as content such as ring tones and games with Mickey Mouse and other Disney stars.

Disney isn't the only MVNO company to stumble. Amp'd Mobile Inc. sought Chapter 11 bankruptcy-court protection this year, after its youth-focused service burned through $350 million in start-up funding. Disney declined to comment on how much it had invested in its MVNOs or the cost of closing them. Last year, Disney CEO Bob Iger said the company was investing $150 million in Mobile ESPN in 2006. After announcing its closure last September, Disney CFO Tom Staggs told an analysts conference that the cost of closing it would be about $30 million. (info from The Wall Street Journal)