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

Monday, June 30, 2008

Court supports telcos against cablecos

A federal appeals court Friday upheld an FCC rule designed to make it easier for telephone carriers and other competitors to offer television services. The decision was a win for companies including Verizon and AT&T which are expanding into the TV business to compete with cable companies. It could speed up their rollout of services by removing uncertainty over how long a community has to rule on applications from new competitors.

The ruling also upholds the FCC's view in the 2006 rule that phone companies aren't required to build out service into lower-income areas. Phone companies have complained that some communities held their applications hostage in hopes of negotiating funding for local projects, such as landscaping or playground equipment.

"The commission's action was an important step toward competition at a time when consumers had little choice. We are pleased the court agrees," said Verizon VP Michael Glover. The decision by the Court was a blow to state and local officials, who had hoped to keep greater control over franchising decisions.

"The federal government should not be dictating what's going on in our local communities," said Elizabeth Beaty, executive director of the National Association of Telecommunications Officers and Advisors, which represents local governments.

The FCC rule imposes a 90-day limit on decisions for local cable franchise license applications. If local governments don't act on applications within that time, they are deemed granted.

In cases where companies don't already have existing cable or phone lines in place to provide services, the FCC rule imposed a six-month time limit on approving new applications from competitors.

The three-judge panel, in a unanimous ruling, said the commission's reasons for imposing the time limits are "more than reasonable." "Due to protracted franchise negotiations, the agency found that prospective entrants were abandoning attempts to join the cable market and acceding to otherwise unacceptable franchise terms simply to expedite the process," the court said.

Phone companies had heavily lobbied the FCC to change the rule in 2006, but they have also successfully persuaded state legislatures to streamline cable-franchising laws to make it easier to offer TV service. Consequently, the FCC rule has been slightly less critical to the phone companies than it might have been, but it acts as backstop for companies in disputes with local authorities.

FCC Chairman Kevin Martin said the ruling is a win for consumers since it will lead to more choices in pay TV. To combat rising cable prices, he urged cities and towns to quickly allow new entrants to offer service. Martin said limiting build-out requirements is important for phone companies seeking to enter the cable market. "When the cable operators come in and compete with telephones to provide voice service, there's no requirement that they provide that service to everybody," Martin said. "If they don't do it on the voice side, they shouldn't on the video." (info from The Wall Street Journal)

Friday, June 27, 2008

Why does Sony make it so hard
for me to spend money with them?

Over the years, Sony's awesome brainpower has been behind the development of some amazing technology including the transistor radio, Walkman, HandyCam, Trinitron color TVs, 3.5" floppy disc, Betamax, Digital Audio Tape, CD, DVD, MiniDisc, Aibo robot dog, Playstation, VAIO computers, Blu-ray discs, Bravia hi-def TVs, and Rolly robot music player.

Unfortunately, the company's brains sometimes fail in more mundane efforts, like designing their website, supplying their distributors and answering their phone.

My day job involves selling phone systems, including music-on-hold equipment and recordings. Despite the general shift to iPods and other MP3 players, our company still sells a lot of basic Sony Walkman portable CD players.

For the last few weeks, the distributor that we buy them from has been out of stock, and they don't know when they'll get more.

I thought the logical move was to call Sony and ask them to recommend another distributor.

I went to the Sony website, and after 45 excruciatingly frustrating minutes I could not find the name of a person in the sales department for portable audio products. After another painful 15 minutes, I could not even find a phone number other than for tech support or public relations.

Finally, I went to 411.com, and found two listings for "Sony Electronics" in San Diego, and selected the listing with the more sophisticated double-zero phone number. When it was answered, I rejected the automated attendant and reached a sympathetic but frustrated lady who was powerless to help me.

She had no listing by divisions, departments, products or areas of responsibility. She said she got lots of calls from unhappy people like me, but had no way to help us.

Why do they make it so hard to spend money?

If didn't matter if I wanted to spend $500 or $5 billion. Unless I knew a person's name, Sony could not take my money.

How much business does Sony lose because of this stupidity?

How many other companies are similarly screwed up?

Desperate to get 20 CD players for my waiting customers, I went back to the Sony website and began placing the order just like a retail customer. But when I found that there was no way to avoid paying the sales tax despite our company's resale certificate, and that shipping would cost A HUNDRED BUCKS, I bailed out.

I ended up getting them at Amazon.com. They cost 56 cents less each, and I avoided the sales tax, and two-day shipping was FREE.

I still love my Sony XBR5 Bravias and my Sony STR-DA4300ES home theater receiver, but I don't like Sony Corp. as much as I used to. How do such smart products come from such a stupid company?

Why don't webpages titled "Corporate Fact Sheet" and "Corporate Information" have corporate phone numbers?

A "Contact Us" link for consumer electronics products on a FAQ page goes to a page that deals only with tech support.

The "Contact Us" section on that FAQ page has an address for sending paper mail, but has no phone number or email address.

Yesterday Sony said it will invest nearly 17 billion bucks over the next three years in its flat-screen TV and video game operations, as well as to promote business in Brazil, Russia, India and China.

CEO Howard Stringer: it's also time to make some much simpler and much cheaper changes. Your customers should not have to work so hard to spend money!

For those of you who may wonder why we simply didn't switch to another brand, here's the story: We sold Panasonic CD players for many years before switching to Sony, but Panasonic is even more dysfunctional than Sony is. They don't even show their CD players on their website and we've been unable to determine their current distributors for over a month. Samsung doesn't make portable CD players. We want to stay with a recognizable first-class brand name.

Thursday, June 26, 2008

Wi-Fi hotspots coming to Chrysler vehicles

People who purchase vehicles made by Chrysler next year will have the option of turning their cars and trucks into wireless Internet hotspots. The feature will be available as part of the "UConnect" system in most 2009 Chrysler, Dodge and Jeep models.

Wireless Internet access via laptop PC will come as a dealer-installed option in the vehicles, and it will work over cellphone links, with a monthly fee that hasn't yet been determined.

In order to access the Internet, vehicles will need to have UConnect hardware, which Chrysler will unveil to compete with Ford's "Sync" and various other in-car electronic systems.

The UConnect system will link cellphones and personal music players to the car's onboard electronics, with the ability to control an Apple iPod with radio and steering-wheel controls. The system also has navigation and real-time-traffic features, which are controlled by voice recognition or a touch screen. It also includes the company's in-car 30-gigabyte hard drive, with the options for three-channel satellite television service and satellite radio. The wireless system will be able to work while vehicles are moving so it can be used by passengers. (info from The Wall Street Journal)

Wednesday, June 25, 2008

T-Mobile launching wired phone service

Cellphone company T-Mobile USA is set to launch a nationwide service that lets customers place unlimited domestic calls with their landline phones over a broadband connection. The service, called T-Mobile AtHome, will cost $10 per month when it begins on July 2.

Customers need a wireless plan that costs at least $40 per month, and need to buy a T-Mobile Internet router for $50. The router plugs into the home broadband connection, and the customer's corded or cordless phones plug into the router.

T-Mobile USA had 28.7 million subscribers on March 31, making it the fourth-largest wireless carrier in the country. Even though its parent company, Deutsche Telekom AG, is the dominant local phone company in Germany, T-Mobile doesn't have a landline business in the US. That means that unlike AT&T and Verizon Wireless, T-Mobile hasn't been able to bundle landline and wireless service.

The service is targeted at consumers who are reluctant to "cut the cord," or abandon their landline completely in favor of wireless. T-Mobile already has a service targeting that segment, one that lets Wi-Fi-equipped cellphones use the home wireless router for calls rather than the cellular network. That improves indoor coverage and takes traffic off T-Mobile's outdoor network.

The new service has been tested in the Dallas and Seattle areas since February.

T-Mobile AtHome is similar to VoIP service offered by companies like Vonage. They provide an adapter that connects to an existing router, while T-Mobile's default solution involves switching out a customer's router if they already have one. A Vonage plan that provides free calls to the US and Canada and to landlines in some European countries costs $25 per month.

The monthly prices don't include taxes or certain fees, which vary from state to state. (info from The Associated Press)

Tuesday, June 24, 2008

Sweden approves Government bugging

Sweden's Parliament narrowly approved a law last week that gives authorities sweeping powers to eavesdrop on all e-mail and telephone traffic that crosses the nation's borders.

The law was citicized as an invasion of privacy and an infringement on civil liberties. Hundreds of protesters gathered outside Parliament last Wednesday, some handing out copies of George Orwell's novel "1984," about a fictional police state.

The right-leaning government's slim majority helped secure 143-138 approval, despite strong opposition. Supporters argued the law -- which takes effect in January -- will help prevent terrorist attacks. It gives Swedish defense officials the right to scan international phone calls, e-mails and faxes for sensitive keywords without a court order.

Swedish telecom company TeliaSonera AB and Google called the measure the most far-reaching eavesdropping plan in Europe, comparable to a US government program. After the Sept. 11 attacks, President Bush granted intelligence officers the power to monitor -- without court approval -- international calls and e-mails between people in the US and suspected terrorists overseas. Last July's "Protect America Act" extended that authority, but it expired Feb. 15, and a replacement law is being debated.

Many European countries have gradually increased government surveillance powers, including wiretapping and police searches, in a move to combat terror plots. In Sweden currently, e-mail and phone surveillance requires a court order if police suspect a crime, although the intelligence agency is allowed to spy on airborne signals, such as radio and satellite traffic.

The European Federation of Journalists argued that electronic monitoring of phone and e-mail communications contravenes international and European legal standards. The government rejects claims the law will give it unlimited powers to spy on its own citizens. It maintains it is interested only in international traffic and will filter out domestic communications.

Four ruling coalition lawmakers forced additions to the bill intended to protect individual privacy. But critics said those changes, which included monitoring by independent institutions, don't satisfy their objections to the law. "This is just as absurd as before," said Per Strom of The New Welfare Foundation think tank. "It will still create a society characterized by self-censorship and anxiety." (info from The Associated Press)

Monday, June 23, 2008

FCC won't let Verizon try to keep exiting customers

The Federal Communications Commission ruled that Verizon can't contact its customers while they are transferring phone numbers to different phone services. The Friday ruling is a victory for Comcast, Time Warner Cable, and Bright House Networks, the cable companies that complained about the practice. Verizon had been contacting its customers who asked to transfer to a cable-telephone service, offering them incentives to stay. The cable companies said the practice violated the law because it used proprietary information about customers.

The commission's decision also is a blow to FCC Chairman Kevin Martin, who had recommended that the five-member body accept a staff-level ruling that Verizon's practice was legal.

The official FCC announcement about the ruling was scheduled for today, but Martin released a statement Saturday after Commissioner Robert McDowell, a Republican, publicly voiced his decision not to accept Martin's recommendation and side with the cable companies. The two Democrats on the commission were not expected to vote with Martin

Comcast senior vice president Catherine Avgiris said in a statement that enforcement of the FCC's order is important to ensure that "consumers who choose to leave their incumbent phone provider to take advantage of new competitive and innovative services from cable companies will have their wishes respected." FCC officials wouldn't release the vote tally Saturday but said a majority of commissioners upheld the cable companies' complaint.

From Martin's perspective, Verizon's actions were no different than a cable company seeking to retain customers who want to cancel their video service. In a statement, Martin said he is concerned the decision will thwart competition. "The majority decided to prohibit some companies from marketing to retain their customers, even though the marketing practices prohibited today are similar to the aggressive marketing techniques engaged in by the complainants themselves" when they provide cable video service, he said.

Cable-industry representatives argue that any attempts they make to retain cable customers don't use the protected information associated with a phone-number transfer.

Verizon Executive Vice President Tom Tauke said the FCC ruling is bad policy because it "enables cable companies to lock in TV customers by forbidding Verizon from providing information about better voice services or prices." (info from The Wall Street Journal)

Friday, June 20, 2008

Former Nortel execs charged with fraud

Three former Nortel Networks executives were criminally charged in Canada with misstating the company's financial results in 2002 and 2003, according to the Royal Canadian Mounted Police.

Former Chief Executive Frank A. Dunn, ex-Chief Financial Officer Douglas C. Beatty, and former controller Michael J. Gollogly, were each charged with seven fraud-related counts.

Dunn's attorney issued a statement Thursday: "We are confident that the evidence will demonstrate that Mr. Dunn acted honestly and diligently in the interests of Nortel's shareholders and employees at all times, and that he will be acquitted of these charges."

Nortel fired the three executives in 2004, after discovering a pattern of dubious accounting practices. Nortel has spent the past few years sorting out the accounting mess and restating results. The Securities and Exchange Commission last year filed a civil-fraud suit against the trio and a fourth former executive, accusing them of manipulating earnings to meet analysts' expectations and boost bonus payments. Nortel has also sued Dunn, Beatty and Gollogly, seeking repayment of bonuses.

Nortel issued a statement Thursday saying it has fully cooperated with the Royal Canadian Mounted Police investigation and will continue to do so. It noted that Nortel itself "has not been charged and was not the target of this investigation."

(Info from The Wall Street Journal) (The cartoon shows legendary Mountie Dudley Do-Right, who pursued evil Snidely Whiplash, Boris Badenov and Natasha Fatale on the Rocky & Bullwinkleshow.) Dudley was in love with Nell Fenwick, daughter of Inspector Fenwick, the head of the Mountie station, but Nell was more interested in Dudley's horse.

Thursday, June 19, 2008

Verizon expands FiOS to fight cable

Verizon said it plans to expand the availability of its super-fast FiOS Internet service, further pressuring cable providers in speed competition.

The company next week will begin offering FiOS Internet service, which offers download speeds up to 50 megabits per second, to 10 million homes and small businesses throughout its 16-state territory, widening it beyond its availability in six states. While still just a fraction of Verizon's total customer base, the expansion represents a leap ahead of the geographic reach of cable providers' super-fast Internet service.

At 50 Mbps, a person could download a high-definition movie in 13 minutes, or a 60-minute Web video in eight seconds.

"The Verizon network is delivering broadband speeds that are unmatched by any competitor," said Denny Strigl, Verizon president.

Comcast said in April it would begin offering a similarly fast Internet connection in Minnesota, with plans to expand to its entire service region by 2010. But cable has been slow to push speeds at that rate.

Verizon's FiOS, which directly connects many of its subscribers to the faster fiber-optic network, is the company's $18 billion bet. In addition to the faster service, FiOS allows for the delivery of television, which Verizon hopes will allow it to protect its customer base, and take some subscribers from cable rivals. Verizon plans to make FiOS available in more than 18 million homes by 2010. The 50-Mbps service will cost customers $139.95 a month with an annual contract. Verizon plans to increase the basic and middle-tier connection speeds as well.

FiOS does a lot to erase the notion that cable Internet service is faster, a view that cable companies have been happy to exploit. Comcast executives last month said they planned to add to its series of "Slowsky turtles" commercials, which take shots at the telcos for their slower DSL connections. Even as FiOS continues to win subscribers, cable providers have held up well in winning over phone customers. Outside of FiOS, Verizon's DSL service fared poorly in the last quarter. Executives said they planned to push DSL. (info from The Wall Street Journal)

Wednesday, June 18, 2008

Investors rescue Philly Wi-Fi system

A group of Philadelphia investors agreed to take over the city's wireless Internet network, a month after its operator, EarthLink, said it would shut down the service because it was losing money.

Terms of the deal weren't disclosed. The investor group includes two directors of Boathouse Communications Partners, a Philadelphia private-equity firm that specializes in telecommunications, as well as technology entrepreneur Richard Rasansky and former Philadelphia mayoral candidate Tom Knox.

The group, which temporarily goes by the name NAC LLC, plans to change the business model. Instead of charging residents $20 a month for service, consumers will have free, ad-supported wireless access, while businesses and institutions will have to pay, said Rasansky, who is president of the group. The group also plans to expand the coverage area of the network.

Philadelphia's Wi-Fi venture was the largest municipal wireless service to be launched when it began working with EarthLink in 2006. But it suffered from low usage, drawing only about 5,000 customers in May, when Earthlink said it was backing out. EarthLink previously had expected to attract more than 100,000 subscribers.

Several low-cost and advertising-supported Wi-Fi initiatives have folded in the US as providers found they couldn't afford the costs of supporting them. EarthLink also has withdrawn from projects in San Francisco and New Orleans, and days after its Philadelphia announcement, MetroFi said it was exploring a sale and pulling out of the nine cities in which it operates, including San Jose, Calif., and Portland, Ore.

EarthLink Chief Executive Rolla Huff called the news "a positive outcome for our shareholders and the Philadelphia community." A spokesman said Earthlink plans to work closely with the network's new owner over the course of the transition. (info from The Wall Street Journal)

Tuesday, June 17, 2008

AT&T may charge extra for heavy web users

AT&T, formerly known as Dobson Cellular Systems and a few other things, is considering charging extra for customers who download large amounts of data. "A form of usage-based pricing for those customers who have abnormally high usage patterns is inevitable," spokesman Michael Coe said last week.

The top 5 percent of AT&T's DSL customers use 46 percent of the total bandwidth, Coe said. Overall bandwidth use on the network is surging, doubling every year and a half.

Most cable companies have caps on the amount of data they allow subscribers to download every month. Time Warner Cable started a trial earlier this month in which it will charge subscribers who go over their monthly bandwidth cap $1 per gigabyte.

Cable companies are at the forefront of usage-based pricing because neighbors share capacity on the local cable lines, and bandwidth hogs can slow down traffic for others. Phone companies have been less concerned about congestion because the phone lines they use to provide Internet service using DSL, or Digital Subscriber Line technology, aren't shared between neighbors, but AT&T is evidently concerned about congestion higher up in the network.

Those who mainly do web surfing or e-mail use little data and have scant reason to pay attention to traffic caps. But those who download movies or TV, particularly in high definition, can hit the caps imposed by cable companies.

Download caps could put a crimp in the plans of services like Apple's iTunes that use the Internet to deliver video. Netflix just launched a TV set-top box that receives an unlimited stream of Internet video to a TV set for as little as $8.99 per month. (info from The Associated Press)

Monday, June 16, 2008

Discount bundle without wired service coming from Verizon

For the first time, Verizon is set to give discounts to wireless customers who don't have landlines but order Internet or TV service.

In response to households dropping traditional service in favor of cellphones, Verizon will shortly introduce the Flex Double Play bundle, with discounts ranging from $8 to $12 a month for those who combine a Verizon Wireless plan with broadband or FiOS TV.

Surveys show about one in seven US households now lacking landline service. Verizon spokesman Bill Kula said, "We remain very bullish on the traditional copper-based phone service, but we also recognize that there's a growing segment of society that wants to have wireless as its principal home service."

The discount applies to DSL service with downloads at 3 megabits per second, and to FiOS fiber-optic broadband at up to 20 megabits per second. The fastest DSL plan, at 7 mbps, and the fastest FiOS, at 50 mbps, are not eligible for the bundle.

Adding FiOS TV, Verizon's cable-TV service, on top of wireless and broadband yields another $8 a month in savings. The discount does not apply to the satellite TV service Verizon markets from DirecTV.

AT&T last year started giving discounts of $4 to $5 a month to people who lack landlines but sign up for wireless and mid-tier DSL service. (info from The Associated Press)

Friday, June 13, 2008

Santa Fe overrules protest from
"electrically sensitive" to approve Wi-Fi

The City Council of Santa Fe, New Mexico has unanimously approved a plan to provide wireless Internet service in libraries and other city buildings, over the objections of those who say they are electrically sensitive. Free wireless will be available by next year at three public libraries, a convention center, city hall, the municipal airport and two recreation centers.

"My first reaction is, it's a disaster. My second reaction is, they're inviting a lawsuit," said Arthur Firstenberg, a leading opponent of the proposal. Opponents complain they are sickened by electromagnetic pollution and say it will keep them from using the libraries or attending meetings in city hall.

City attorney Frank Katz, who had been asked to determine whether the opponents are covered by the federal Americans with Disabilities Act, said there's no legal case in which hypersensitivity to wireless signals has been found to be a disability, nor has any case identified Wi-Fi as its cause. That "doesn't mean that someone couldn't bring a case," he said.

Julie Tambourine, an advocate for the disabled and homeless, said after Wednesday's meeting that the legal analysis was flawed, because it didn't take into account those with diabetes, seizure disorders, respiratory ailments and other conditions that can be adversely affected by microwave radiation. She also said the opponents could have been accommodated under federal law by having one of the three library branches be designated Wi-Fi-free.

City Councilor Patti Bushee proposed taking city hall out of the wireless plan -- "since this is the local seat of democracy" -- but that motion failed. Other councilors said wireless is a useful tool for them during meetings. The council chambers is the one spot in the city complex now with wireless.

Opponents of Bushee's motion also argued that wireless service bleeds into the council chambers from nearby businesses, so opponents wouldn't gain anything by having the city eliminate it there. (info from The Associated Press)

Thursday, June 12, 2008

Cellphone radiation best & worst list

People like my wife who are terrified that cellphones will fry their trembling paranoid brains should check out the information posted at CNET.

CNET has gathered and ranked specs on specific absorption rate, or SAR -- "a way of measuring the quantity of radio frequency (RF) energy that is absorbed by the body."

For a phone to pass FCC certification, that phone's maximum SAR level must be less than 1.6W/kg (watts per kilogram). In Europe, the level is capped at 2W/kg while Canada allows a maximum of 1.6W/kg. The SAR level listed in the CNET charts represents the highest SAR level with the phone next to the ear as tested by the FCC. Keep in mind that it is possible for the SAR level to vary between different transmission bands and that different testing bodies can obtain different results. Also, it's possible for results to vary between different editions of the same phone (such as a handset that's offered by multiple carriers).

The three "worst" cellphones were:
Motorola V195s 1.6
Motorola Slvr L6 1.58
Motorola Slvr L2 1.54

The three "best":
LG KG800 0.135
Motorola Razr V3x 0.14
Nokia 9300 0.21

If you are concerned about cellphone radiation, note that there is no conclusive evidence of damage, and that the one suit against Motorola for a brain tumor was thrown out. If you really are worried, use a headset or the hands-free speakerphone or sign language or email or write letters.

Wednesday, June 11, 2008

New iPhone may hurt unlockers

The new iPhone and the way it will be sold may kill a small industry that arose to make the first version of the famous phone available around the world.

The original iPhone, which launched in June last year, was initially available only in the US and only for use on AT&T's network. In little more than a month, hackers found a way to "unlock" the phone to make it usable on other networks, in various countries.

IPhones soon flowed out of the US., and analysts have estimated that one-third to one-half of the phones sold never made it onto AT&T's network. Apple announced a new iPhone Monday for use on 3G (third-generation) data networks. It will stem the flow of unlocked phones in two ways.

First, the phone will be sold in more countries. Apple added five countries beyond the US for the first phone, but the second one will go on sale in 22 countries on July 11. Apple has said it will add more countries and reach 70 by the end of the year. That takes away one of main incentives for unlocking.

Second, Apple is abandoning the unusual arrangement under which the iPhone was being sold. Customers could buy them from a carrier or from Apple without activating them on a service plan, and that meant customers could go home and unlock the phones - and never sign up with AT&T.

The new phone will be subsidized by carriers, which accounts for its lower price: $199 for the 8-gigabyte model, down from $399. This brings the phone's marketing in line with standard industry practices.

The carriers plan to make back what they spend on the subsidy through service fees, which means they likely will require two-year service contracts from everyone who buys the phone. AT&T said buyers will have to activate service when they buy an iPhone.

"It's looking pretty bleak for unlockers," said John McLaughlin, founder of Uniquephones.com, a company that sells unlock codes for cellphones. After being warned away by AT&T's lawyers, it doesn't help unlock iPhones. Unlocking software is available free online. Apple tried to secure the device technically with its software updates, but couldn't. It's the requirement that buyers of the new phone sign up for service in the store that will be hard to get around, McLaughlin said.

Freeit4less has posted prices on its Web site for unlocked 3G phones at $100 above store prices, but chief executive Kyle Jourdan said the company is not accepting any pre-orders given uncertainty surrounding the activation requirement. "We're just crossing our fingers and hoping for the best," Jourdan said. He speculated that Apple or AT&T may sell unsubsidized phones, which would leave an opening for his company. Freeit4less has sold about 121 unlocked first-generation iPhones and 5,104 licenses for unlocking software.

Federal law allows consumers to unlock their own phones. But selling someone the means to unlock a phone and unlock another person's phone may be illegal. At least one US carrier has won civil cases, not involving iPhones, against unlocking businesses.

AT&T charges customers who break a two-year contract within the first month a $175 early termination fee plus the $36 activation fee. That would bring the cost of the new iPhone to $411 for an unlocker, more than the old model's $399 price. That math may mean it is still attractive to unlock iPhones for use on other networks and that AT&T will lose money on unlockers. It's estimated AT&T plans to subsidize the phones by more than $200 each.

Ralph de la Vega, head of AT&T Mobility, said it and Apple are working on "penalties" for users who buy phones and don't activate them. AT&T could, for instance, bar buyers who repeatedly buy iPhones and break the contracts from buying more.

One major incentive for unlocking remains, especially for Europeans. Those who travel to other countries with unlocked phones can use local prepaid service plans rather than paying exorbitant international roaming fees to their home carriers. Uniquephones.com helps unlock 10,000 British cellphones of all kinds every day, McLaughlin said, with travelers being a core customer group. (info from The Associated Press)

Tuesday, June 10, 2008

AT&T will lose money to sell new iPhones

At the introduction of the new inexpensive iPhone on Monday, Apple boss Steve Jobs told the audience that Apple surveyed people who hadn't bought iPhones and more than half of them said their decision was based on the price. "We need to make iPhone more affordable," Jobs said.

When it launched the iPhone last June, Apple shook up the wireless world, in part by forging an unusual relationship with carriers under which it received an undisclosed portion of the carrier's monthly subscriber fees. Those arrangements are ending for the new models, though the company will continue to share fee revenue from existing customers. One reason is resistance from carriers in overseas countries where Apple is now putting increasing emphasis.

In the US, Apple's wireless partner, AT&T, will be subsidizing the new iPhone and requiring buyers to sign a two-year service contract. Gene Munster, an analyst at Piper Jaffray, estimated that AT&T might be paying Apple as much as $499 per iPhone, though Apple and AT&T would not reveal the actual number.

"We've gone back to a basic subsidy model that we use for all our other manufacturers," said Ralph de la Vega, AT&T's wireless chief executive.

Despite the price cut, users of the new iPhone 3G will have to spend more on their monthly service fees, at least in the US, than before. AT&T will charge users of the new device $30 a month for an unlimited data plan, instead of the previous monthly fee of $20, while the starting price for its iPhone voice plan will remain unchanged at $39.99. The increase will help AT&T more quickly recoup the subsidy for the iPhone. IPhone subscribers are particularly valuable to AT&T, since they pay an average of more than $90 per month for service, compared to less than $60 for other subscribers.

de la Vega of AT&T hopes the new phone, which AT&T will subsidize, will bring in huge profits for the company in the future, even though it will hurt its earnings in the short term. He said, "It seems like $199 is the right kind of price point to get significant mass-market adoption. It's going to impact earnings in 2008 and 2009 in a negative way, but will turn very profitable in the long term. We generate a lot of revenue from iPhone users, about twice as much as other customers. And I feel very confident that we're going to have very low customer turnover, based on what we've seen from the initial version of the iPhone. (info from The Wall Street Journal & AP)

Monday, June 09, 2008

JetBlue buying Verizon's Airfone for email

JetBlue Airways' LiveTV division, a provider of in-flight entertainment to airlines, said it has agreed to buy Verizon's Airfone network, a move that should increase its ability to offer email and messaging services on airplanes. LiveTV said it will take over the Airfone operations -- including 100 air-to-ground communications towers in the continental US -- and Airfone's corporate and government aviation clients on Jan. 1.

Currently, LiveTV's main service to JetBlue and a number of other carriers in the US, Canada and Australia is satellite-based television programming at seats, either free or for a small fee.

While use of cellphones is still forbidden on planes, airlines including JetBlue and other carriers are trying to respond to passengers' intense interest in email and broadband Internet services during flights. At the same time, they are struggling with questions of whether to charge customers and whether, in an era of high fuel costs, they can afford even the nominal expense of equipping their fleets with the antennas needed for the service.

AirCell LLC, a closely held provider of wireless data and voice communications built its own network of air-to-ground communications towers. This year American Airlines plans to test its air-to-ground system and Virgin America expects to broadly install it.

JetBlue last December began testing free in-flight email and instant-messaging services on one of its planes. Passengers with Wi-Fi enabled laptops or two models of BlackBerry phones can access the service, which includes email though various Web-mail providers and shopping on Amazon.com. For the test, it is using Airfone's towers for a fee. The acquisition should help LiveTV expand its test service into a product it can offer to airlines.

Continental Airlines in January entered into an agreement with LiveTV to equip its newest planes with in-flight television as well as Wi-Fi connectivity for email and instant messaging.

Airfone was a leader in in-flight communications for more than 20 years, providing credit-card operated phones on planes. But that business slumped, and in 2006, the FCC auctioned off the spectrum Airfone was using. (info from The Wall Street Journal)

Friday, June 06, 2008

German telco may have have bugged itself

German authorities are looking into allegations that Deutsche Telekom monitored phone traffic between its company officials and journalists to ferret out sources of information leaks.

The criminal inquiry comes at a sensitive time for the company, Europe's largest telecommunications carrier by revenue, threatening to undermine already rocky relations with labor leaders as management tries to restructure its German operations and considers making acquisitions abroad.

Deutsche Telekom disclosed that it had come across indications of "illegal use" of wireless and fixed-line telecommunications data in 2005 and 2006. It said it has referred the case to German state prosecutors, who have begun a preliminary probe. The company didn't disclose for what purposes the data were employed and by whom. People familiar with the matter said investigators are focusing on allegations that the data were gathered by company officials to track contacts between journalists and nonexecutive board members as well as management.

Contacts between Deutsche Telekom's labor representatives and reporters were of particular interest in 2005 and 2006, these people added, as company officials tried to locate the origins of leaks of confidential information. The leaks coincided with management efforts to push through aggressive job cuts and slash salaries in the face of stiff labor resistance. Data from as many as hundreds of thousands of calls may have been analysed.

Chief Executive René Obermann said he was "deeply shocked" by allegations of wrongdoing and that Deutsche Telekom is working with prosecutors.

The probe into alleged misuse of telephone data also could distract management as it attempts to expand wireless operations in faster-growing markets abroad through acquisitions. Deutsche Telekom recently has been weighing a possible bid to acquire Sprint Nextel.

Earlier this year, Hewlett-Packard settled claims by journalists for an undisclosed amount that stemmed from a 2006 scandal in which it obtained their telephone records as part of a probe into leaks. H-P engaged in what is called pretexting -- obtaining private phone records under false pretenses -- and the scandal led to the departure of executives and board members, including then-Chairman Patricia Dunn. (info from The Wall Street Journal)

Thursday, June 05, 2008

Verizon Wiress may buy Alltel Wireless and outsize AT&T Wireless

Verizon Wireless is in talks to buy Alltel Communications, the country's fifth-largest cellphone carrier by number of subscribers, for $27 billion. If consummated, an acquisition would be the biggest telecom deal since AT&T bought BellSouth in 2006. Adding Alltel's 13.2 million subscribers to Verizon's 67.2 million would create the largest cellphone carrier in the country, far ahead of AT&T with 71.4 million customers.

Shares of Verizon Communications, the controlling parent of Verizon Wireless, dipped after the report, closing down 38 cents, or 1 percent, to $36.98. Verizon Wireless' other parent is Vodafone Group of Britain, with a 45 percent share of the joint venture.

Alltel was a public company until it was bought by TPG Capital and GS Capital Partners last year for $24.7 billion. It has a large network covering parts of 35 states, mainly in the middle of the US.

A deal could save Verizon more than $1 billion per year. It now pays hundreds of millions in roaming charges every year to Alltel.

Verizon Wireless uses the same network technology as the majority of Alltel's network. That makes Verizon Wireless a more likely acquirer than AT&T, which uses an incompatible technology. Regulatory scrutiny of an AT&T deal would also be tougher, since AT&T is the largest carrier. (info from The Associated Press)

UPDATE Later on Thursday Verizon confirmed plans for the purchase of Alltel.

Wednesday, June 04, 2008

Time Warner Cable may "meter" Internet use

People are willing to pay extra if they use up their monthly package of cellphone minutes, but will they be willing to pay extra if their home PCs goes over their web allowance?

Time Warner Cable customers others may have to, if the company's test of metered Internet access is successful. On Thursday, new Time Warner subscribers in Beaumont, Texas, will have monthly allowances for the amount of data they upload and download. Those who go over will be charged $1 per gigabyte.

Metered billing is an attempt to deal fairly with Internet usage, which is very uneven among Time Warner subscribers, said Kevin Leddy, Time Warner Cable's executive vice president of advanced technology. Just 5 percent of subscribers take up half of the capacity on local cable lines, Leddy said. Other cable Internet service providers report a similar distribution. "We think it's the fairest way to finance the needed investment in the infrastructure," Leddy said.

Metered usage is common overseas, and other US cable providers are looking at ways to rein in heavy users. Most have download caps, but some keep the caps secret so as not to alarm the majority of users, who come nowhere close to the limits. Time Warner Cable appears to be the first major ISP to charge for going over the limit. Other companies warn, then suspend, those who go over.

Phone companies are less concerned about congestion and are unlikely to impose metered usage on DSL customers, because their networks are structured differently.

Time Warner Cable had said in January that it was planning to conduct the trial in Beaumont, but did not give any details. On Monday, Leddy said its tiers will range from $29.95 a month for relatively slow service at 768 kilobits per second and a 5-gigabyte monthly cap to $54.90 per month for fast downloads at 15 megabits per second and a 40-gigabyte cap. Those prices cover the Internet portion of subscription bundles that include video or phone services. Both downloads and uploads will count toward the monthly cap.

A possible stumbling block for Time Warner Cable is that customers have had little reason so far to pay attention to how much they download from the Internet, or know much traffic makes up a gigabyte. That uncertainty could scare off new subscribers.

Those who mainly do Web surfing or e-mail have little reason to pay attention to the traffic caps: a gigabyte is about 3,000 Web pages, or 15,000 e-mails without attachments. But those who download movies or TV shows will want to pay attention. A standard-definition movie can take up 1.5 gigabytes, and a high-definition movie can be 6 to 8 gigabytes.

Time Warner Cable subscribers will be able to check out their data consumption on a "gas gauge" on the company's Web page. The company won't apply the gigabyte surcharges for the first two months. It has 90,000 customers in the trial area, but only new subscribers will be part of the trial.

Billing by the hour was common for dial-up service in the US until AOL introduced an unlimited-usage plan in 1996. Flat-rate, unlimited-usage plans have been credited with encouraging consumer Internet use by making billing easy to understand. "The metered Internet has been tried and tested and rejected by the consumers overwhelmingly since the days of AOL," information-technology consultant George Ou told the FCC at a hearing in April. Metered billing could also put a crimp in the plans of services like Apple's iTunes that use the Internet to deliver video. Netflix just launched a TV set-top box that receives an unlimited stream of Internet video for as little as $8.99 per month.

Comcast, the country's largest cable company, has suggested that it may cap usage at 250 gigabytes per month. Bend Cable Communications in Bend, Ore., used to have multitier bandwidth allowances, like the ones Time Warner will test, but it abandoned them in favor of an across-the-board 100-gigabyte cap. Bend charges $1.50 per extra gigabyte consumed in a month. (info from The Associated Press)

Tuesday, June 03, 2008

AT&T settles suit over third party cellphone fees

AT&T customers who have seen mysterious charges for ringtones and other content show up on their cellphone bills will be eligible for refunds as part of the settlement of a group of class-action lawsuits.

Customers will able to claim refunds for charges that appeared on up to three of their bills between Jan. 1, 2004, and May 30, 2008, according to Jay Edelson, lead counsel for the plaintiffs. It is the first nationwide settlement over the business of third-party content, Edelson said. Edelson's firm has filed similar suits against Verizon Wireless, Sprint Nextel and T-Mobile.

Vendors of ringtones and daily text-message services solicit customers to sign up by entering their phone numbers on websites or by sending text messages. The charges, which can be hidden or poorly explained, show up later on cellphone bills, often as recurring charges. The cellphone carrier keeps some of the fee and passes the rest to the content provider.

Sixteen class-action suits that are part of the settlement alleged that AT&T should have been more careful in checking the services. AT&T did not admit wrongdoing. The company now requires customers who sign up for third-party services with recurring fees to confirm by replying to a text message. It also requires the content providers to send monthly reminders with instructions on how to unsubscribe from such services.

"AT&T has taken aggressive action to put industry-leading safeguards in place to protect our customers from unauthorized changes from third parties. We believe this settlement is consistent with that approach," AT&T spokesman Marty Richter said.

Richter had no estimate for how much the settlement will cost AT&T. Given that the company already let customers contest spurious charges, he said the number who will get refunds through the settlement will be small. The company will pay the plaintiffs' lawyers $4.3 million.

In some cases, Edelson said, charges for ringtones have shown up on bills for wireless laptop data cards, which have phone numbers but can't use ring tones. That points to "cramming," or providers signing up customers without their knowledge. (info from The Associated Press)

Monday, June 02, 2008

Former Siemens manager admits to bribes

A former Siemens manager on trial over alleged corruption and bribery testified that "commissions" were paid to secure orders.

Reinhard Siekaczek, a former manager at the fixed-line telephone network division, is the first to go on trial over the company's corruption scandal that came to light last year. Siekaczek is charged with 58 counts of breach of trust. Prosecutors allege that he set up a complex network of shell corporations that he used to siphon off company money over several years. The money allegedly was used as bribes to help secure contracts abroad by paying off would-be suppliers, government officials, potential customers. As the trial opened, Siekaczek acknowledged having set up slush funds.

"The whole sectoral management was naturally informed that this function was carried out by me," he told the Munich state court. "Naturally it was known to me and everyone that we pay commissions to secure orders," he said, adding that they had been handled "very discreetly" with only a very small circle of people in the know.

Siekaczek testified that his superiors had told him to create a new payment system after paying bribes abroad became a criminal offense in Germany in the late 1990s. He said judicial authorities had been on the trail of a previously established system of accounts in Austria.

He said at a meeting with four managers in 2002 he was given the job of organizing the payments. "It was naturally clear to all that this does not correspond to the law," he said, adding that their attitude was: "We're not doing it for ourselves, but for this firm." Siekaczek said he used a system of phony consultant contracts in order to generate money for commissions. "I saw no other possibility," he said. The defendant said he did not receive bonus payments for his actions. "I myself derived no benefit," he said. Siemens has acknowledged dubious payments of up to $2 billion in the wider corruption case uncovered last year. The company agreed in October to pay a $317 million fine to end some legal proceedings in Germany related to the scandal. Siemens' own investigation has found evidence of violations across the company and in several countries.

Several different countries, including the US, Switzerland, Italy and Greece, have launched investigations into suspected bribes to win contracts. (info from the Associated Press)