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

Thursday, July 31, 2008

Phone companies now selling tech support

Land-line phone companies across the country are wading into the tech-support business, seeing it as a way to hold onto customers while developing a new revenue stream. As they have gotten deeper into selling Internet services, as part of bundled packages with TV and voice, technicians are often already in the house installing routers and other devices, making tech support a natural add-on.

People want the same level of IT support they get in the workplace, said Dan Alcazar, Embarq's consumer marketing officer. "When you're at home, you don't have access to these kinds of things," he said. "It became apparent that there was a business opportunity there."

Carriers also are barraged with questions unrelated to the products they sell, such as software installation, photo-sharing and spyware removal. Instead of telling customers it's not their problem, they're attempting to tackle the questions -- for a price -- over the phone, in person or with outsourced technicians, depending on the carrier.

Embarq, which has been testing its service in Florida and New Jersey, plans next month to expand to the other 16 states where it operates. Windstream launched its technical-help service this week. AT&T and Verizon Communications both have offered support to their broadband subscribers, while Verizon last month started letting customers sign up for a "device protection" option for their PC, phone or TV.

While those carriers limit their service to existing customers, Frontier Communications, whose name change from Citizens Communications is effective Thursday, is taking the unusual step of selling its help-desk services outside its coverage area and even to competitors' customers. In addition, Qwest Communications International and CenturyTel Inc. are both in the trial stages of their support initiatives.

The services cost anywhere from a few dollars a month, if customers sign up for continuing phone-based help, to $100 or more for house calls and one-time issues. In contrast, an in-home repair by Geek Squad, Best Buy's well-known support business, costs about $300.

Customer satisfaction is a critical part of these offerings, as phone companies fight to keep customers from defecting to wireless and cable operators. This type of add-on service is an important part of retaining customers, said Melinda White, head of new business operations at Frontier. For the telco, which operates in 24 states, it is also a way of gaining new customers. Unlike the other carriers, it is offering its support service nationwide and to competitors' customers after seeing a strong response in its existing territory.

"Hey, it's part of doing business," she said. "And frankly, all of our ways of doing business will need to adjust and change and grow to keep our businesses growing at the pace we need."

Verizon and Windstream outsource their help desks to Circuit City's Firedog service and HiWired, respectively. The others are determining how broad their offerings will be. For example, Verizon likely wouldn't be able to help a customer transfer files between a PC and a digital video recorder if it was provided by another vendor, said Pete Castleton, its director of corporate marketing.

Carriers are also realizing that troubleshooting requires people skills as well as technical know-how. By the time customers call, they're often already at the end of their rope. "It's a pretty emotional space," said Dan Yost, Qwest's executive vice president of product and information technology. Before Qwest rolls out its version of the Geek Squad, he said, it wants to make sure it can assist customers in a user-friendly way. (info from The Wall Street Journal)

Wednesday, July 30, 2008

Cellphone cancellation fees violate California law

The fees that cellphone carriers charge customers who break service contracts took a big hit in a California courtroom when a judge said such charges by Sprint Nextel likely violate state law.

The judge, in a tentative ruling issued late Monday, said Sprint will have to pay $18.3 million to customers who sued over the fees and credit $54.8 million to those who were charged but did not pay.

The same judge is considering other lawsuits against telecommunications companies over their so-called early termination fees, which can range from $150 to $225. This month Verizon Wireless agreed to pay $21 million to settle an identical lawsuit just as trial was starting.

Alameda County Superior Court Judge Bonnie Sabraw rejected Sprint's argument that a state court had no business deciding an issue the company said should be left for federal authorities. And while her ruling isn't legally binding outside the state, it cut to the heart of an ongoing debate in other state courthouses and in Washington, D.C., over the fairness of the fees.

The FCC is enduring intense lobbying over how best to handle the fees. Telecom companies have asked the FCC to regulate the fees and shield wireless companies from class action lawsuits in state courts, such as the one Sprint is poised to lose.

At a public hearing last month, FCC Chairman Kevin Martin outlined a plan in which the cancellation fees would be reduced over the life of the contract. Three companies -- T-Mobile, AT&T and Verizon Wireless -- already do that and Sprint said it would begin prorating its fees next year. Martin said he hoped the commission would make a decision in August.

Sprint will get a chance to change Sabraw's mind at another court hearing. But it's unlikely the judge will alter her detailed, 37-page tentative ruling, which she issued after presiding over a two-week trial in June.

Wireless carriers say early termination fees are necessary so the companies can recover the cost of mobile phones, which they subsidize when customers sign long-term service contracts. But the judge in her ruling said the contracts were "implemented primarily as a means to discourage customers from leaving" and that the company gave little regard to the cost of broken contracts. "There was no evidence at trial that Nextel did a damage analysis that considered the lost revenue from contracts, the avoidable costs, or Nextel's expected lost profits from contract terminations," the judge wrote. (info from The Associated Press)

Tuesday, July 29, 2008

Why did it take so long?
Alcatel-Lucent bosses are finished

The chairman and chief executive officer of money-losing French-American telecom giant Alcatel-Lucent will both resign later this year, the company said Tuesday, as stagnant demand and the weak dollar foiled the promises of its two-year-old merger. Chairman Serge Tchuruk and CEO Pat Russo's departures come as the world's largest telecom gear maker reported its sixth consecutive quarter of losses. The company reported a net loss of $1.73 billion for the second quarter.

Alcatel-Lucent said Tchuruk will step down Oct. 1, and Russo will resign "no later than the end of the year."

The company, which was formed through the 2006 merger of France's Alcatel and US-based Lucent, is in the middle of a painful restructuring that foresees 16,500 job cuts.

In its statement, the company quoted Tchuruk, Alcatel's longtime chairman and CEO before the merger saw him take on the non-executive chairman role, as saying the resignations were aimed at giving Alcatel-Lucent "a personality of its own, independent from its two predecessors." Russo was quoted as saying that although she was "pleased" with the company's progress, "the company will benefit from new leadership ... to bring a fresh and independent perspective."

When conceived, the Alcatel-Lucent merger was designed to boost margins through cost and R&D savings, while improving the joint company's pricing power with telecom operators, its largest customers. But intense competition in the industry means many of the savings have been used on discounts passed on to customers. Alcatel-Lucent's stock price has fallen by over three-fifths since the merger, and the company has yet to post a profit.

Russo survived calls for her resignation at Alcatel-Lucent's annual shareholder meeting in May, where she was barraged with jeers and whistles by investors furious over the company's performance. Russo was criticized by shareholders not only for the shares' slide, but also for her demeanor, her inability to speak French and, above all, her salary. In 2007, she was paid nearly $3 million.

In Tuesday's statement, the company confirmed its outlook for the rest of the year, which forecasts an adjusted operating margin in the low- to mid-single digit range and an adjusted gross margin in the mid-thirties. It also said it continues to expect revenue to decline in the low- to mid-single digit range. Alcatel-Lucent makes about half of its sales in US dollar or dollar-linked currencies and has suffered from the US currency's weakness to the euro.

In the second quarter Alcatel-Lucent reported revenue of $6.5 billion, down 5.2 percent from $6.8 billion a year earlier. Excluding the foreign exchange impact, sales were up 1.7 percent. Sales will stagnate or decline slightly in the third quarter, the company added.

The company warned that a spending slowdown by telecom carriers which began in the US could move to European operators but that this is being offset by stronger-than-expected demand for mobile telecom gear in Asia and strong demand for services like network operation and integration. Overall, the company still expects the telecom equipment and service market to be flat this year. (info photo from the Associated Press)

Monday, July 28, 2008

AOL eliminating services to reduce costs

AOL is shutting down three data storage services, including one of the Internet's earliest photo-sharing websites, as it seeks to cut costs and focus resources on advertising.

AOL Pictures, the year-old media-sharing site BlueString, and the online backup service Xdrive will likely shut down by year's end, though the company is looking to sell at least Xdrive, which AOL bought in 2005.

Company officials denied speculation Friday that the closures were meant to prime AOL for a sale. AOL parent Time Warner has been in continual discussions with both Yahoo and Microsoft though the talks have been preliminary. "The decision to sunset these products is 100 percent part of a strategy that began last year to focus on the areas where we can win and to move away from products or features that are not contributing to our growth," AOL spokeswoman Trish Primrose said.

AOL began taking a hard look at its portfolio following a 2006 decision to fully shift the company into an advertising business and pare down its legacy Internet access services.

AOL Pictures began in 1998 as You've Got Pictures and came at a time Internet users had few options to share their digital photos. Since then, services like Yahoo's Flickr and Google's Picasa have emerged, joining offerings from Kodak and others. B
All three services suffered from the fact that while data-storage costs have come down, those costs still add up, and the services contribute relatively few opportunities to display advertising.

Transition details are still being worked out. AOL likely will give existing users a way to migrate files to a competing service. It also plans to let users order a DVD of files for a fee and give instructions for downloading copies of individual files. AOL plans to formally inform its users of the changes in September. AOL said it has already shut down about 50 products, projects or brands since 2007, mostly older or little-used products like its AOL Communicator mail software.

In a July 14 memo to employees, Executive Vice President Kevin Conroy said the company now had an obligation to ensure that "every product makes a direct impact on our bottom line. There was a time at AOL when the strength of our aggregate portfolio of products more than compensated for the weakness of an underperforming product," Conroy said. "The realities of the industry and market shifts in online advertising no longer make that possible."

Conroy said AOL saw greater opportunities in areas like its video search engine Truveo and its browser toolbar, which drives traffic to search. Separately, AOL said it would rein in costs for its Weblogs unit, which runs specialty blogs such as Engadget and Autoblog. The blogs generally pay freelancers per post. Although the unit's budget has been increasing, so have the number of posts - such that costs have spiraled. The company is asking bloggers to post less often for now. (info from The Associated Press)

Friday, July 25, 2008

Another cellphone cancer scare

The head of a prominent cancer research institute issued an unprecedented warning to his faculty and staff Wednesday: Limit cell phone use because of the possible risk of cancer. The warning from Dr. Ronald B. Herberman, director of the University of Pittsburgh Cancer Institute, is contrary to numerous studies that don't find a link between cancer and cell phone use.

Herberman is basing his alarm on early unpublished data. He says it takes too long to get answers from science and he believes people should take action now - especially when it comes to children. "Really at the heart of my concern is that we shouldn't wait for a definitive study to come out, but err on the side of being safe rather than sorry later," Herberman said.

No other major academic cancer research institutions have sounded such an alarm about cellphone use. But Herberman's advice is sure to raise concern among many cellphone users and especially parents. In the memo he sent to about 3,000 faculty and staff Wednesday, he says children should use cellphones only for emergencies because their brains are still developing.

Adults should keep the phone away from the head and use the speakerphone or a wireless headset, he says. He even warns against using cellphones in public places like a bus because it exposes others to the phone's electromagnetic fields.

The issue that concerns some scientists -- though nowhere near a consensus -- is electromagnetic radiation, especially its possible effects on children. It is not a major topic in conferences of brain specialists.

A 2008 University of Utah analysis looked at nine studies -- including some Herberman cites -- with thousands of brain tumor patients and concludes "we found no overall increased risk of brain tumors among cellular phone users. The potential elevated risk of brain tumors after long-term cellular phone use awaits confirmation by future studies." Studies last year in France and Norway concluded the same thing.

"If there is a risk from these products - and at this point we do not know that there is - it is probably very small," the Food and Drug Administration says on an agency Web site. Still, Herberman cites a "growing body of literature linking long-term cell phone use to possible adverse health effects including cancer." "Although the evidence is still controversial, I am convinced that there are sufficient data to warrant issuing an advisory to share some precautionary advice on cell phone use," he wrote in his memo.

A driving force behind the memo was Devra Lee Davis, the director of the university's center for environmental oncology. "The question is do you want to play Russian roulette with your brain," she said. "I don't know that cellphones are dangerous. But I don't know that they are safe." She said 20 different groups have endorsed the advice the Pittsburgh cancer institute gave, and authorities in England, France and India have cautioned children's use of cell phones.

Herberman and Davis point to a massive ongoing research project known as Interphone, involving scientists in 13 nations, mostly in Europe. Results already published in peer-reviewed journals from this project aren't so alarming, but Herberman is citing work not yet published.

The published research focuses on more than 5,000 cases of brain tumors. The National Research Council in the US, which isn't participating in the Interphone project, reported in January that the brain tumor research had "selection bias." That means it relied on people with cancer to remember how often they used cellphones. It is not considered the most accurate research approach.

The largest published study, which appeared in the Journal of the National Cancer Institute in 2006, tracked 420,000 Danish cellphone users, including thousands that had used the phones for more than 10 years. It found no increased risk of cancer among those using cell phones.

A French study based on Interphone research and published in 2007 concluded that regular cellphone users had "no significant increased risk" for three major types of nervous system tumors. It did note, however, that there was "the possibility of an increased risk among the heaviest users" for one type of brain tumor, but that needs to be verified in future research. Earlier research also has found no connection.

Joshua E. Muscat of Penn State University, who has studied cancer and cellphones in other research projects partly funded by the cellphone industry, said there are at least a dozen studies that have found no cancer-cellphone link. He said a Swedish study cited by Herberman as support for his warning was biased and flawed. "We certainly don't know of any mechanism by which radiofrequency exposure would cause a cancerous effect in cells. We just don't know this might possibly occur," Muscat said. (info from The Associated Press)

Thursday, July 24, 2008

Nokia & Qualcomm reach settlement before trial

Peace between Nokia and Qualcomm came Wednesday as they prepared for a courtroom showdown in a long-running battle that spanned three continents.

Nokia, the world's largest cellphone maker, and Qualcomm, the world's largest maker of chips that run cellphones, agreed to settle a high-stakes licensing dispute and drop all legal complaints against each other in the US, Europe and Asia.

The 15-year licensing deal gives Nokia rights to a wide portfolio of Qualcomm's patents. Nokia will pay Qualcomm an upfront sum and ongoing royalties.

Nokia said it will withdraw its antitrust complaint filed against Qualcomm at the European Commission. Nokia filed the complaint in October 2005 with five other companies, which led to a flurry of lawsuits between Qualcomm and its rivals and several regulatory probes into Qualcomm's licensing practices.

The stakes were especially high for Qualcomm, which gets about two-thirds of its profits from licensing fees on its patents. Nearly all the rest of its profit comes from making chips.

Carriers and equipment makers will also be spared having to worry how legal uncertainties hanging over two influential companies might hamper their ability to deliver products and services. The agreement was announced after a judge delayed the opening of a trial to address the licensing fees and Nokia's complaint that Qualcomm has ignored its commitment to license its patents on fair terms.

A licensing agreement between the two companies expired in April 2007. The new pact covers a host of technologies that didn't exist or were in their infancies when the two companies signed their initial agreement in 1992 and renewed it in 2001. (info from The Associated Press)

Wednesday, July 23, 2008

Low-cost sun-powered cell tower for third world

As the telecom industry gears up to reach billions of potential cellphone users in developing countries, a Swedish-Indian start-up has developed an innovative easy-to-install radio tower that consumes about as much energy as a light bulb.

For years, telecom operators have been trying to expand into rural areas in Asia, Africa and the Middle East -- a major growth opportunity at a time when urban areas are saturated. Some two billion new subscribers are projected to start using cellphones in the next five years, and 80% of them live in developing markets. Wiring villages without reliable electricity, and where residents have little money requires a technological rethink.

To power mobile networks in remote areas today, telecommunications operators pair base stations with diesel-powered generators and batteries. These are impractical and expensive. Fuel accounts for 65% of the cost.

VNL, which has headquarters in New Delhi and Stockholm, has spent the past four years developing a simplified base station that is powered by solar panels and requires just a fraction of the electricity of typical stations.

But convincing telecom operators to buy a stripped-down base station made by a little-known start-up won't be easy. VNL is among many companies trying to develop phone technologies for poor rural areas. Telecom giants Ericsson, Alcatel-Lucent and Motorola are all looking into how they could tweak existing telecom gear to run on less electricity or on renewable energy sources.

Ericsson and Alcatel-Lucent have separately installed about 400 solar-powered base stations in Africa. In India, Ericsson has installed some 40 base stations that run on biodiesel, essentially recycled cooking oil. Alcatel-Lucent's solar base station requires about 750 watts, while Ericsson's solar base station requires about 600 watts. The companies wouldn't disclose the costs, but both require technical staff to install them over a matter of weeks.

VNL's base station will cost $3,500 and require 100 watts, about the same as a light bulb. By contrast, the GSM stations most widely used today can cost anywhere from $40,000 to $100,000. The most energy-efficient models require around 600 watts; others may need several thousand watts. VNL gleaned locals' skills to help it design a tower that doesn't require engineers to install.

An entire VNL station fits into two carts and is easily installed by unskilled field staff who may not be able to read or write. No buildings, power, or air conditioning are needed.

"We started with a clean sheet of paper, and told ourselves that we needed to design technology perfectly suited for the rural environment," says VNL Chief Executive Anil Raj, a former executive at Ericsson.

The tower is designed to make it easy for people with little professional training to install. The equipment comes with a pictorial instruction manual similar to those for Ikea's do-it-yourself furniture. It has just one button, used to turn it on. Once the pole is erected, the base station beeps intermittently until the radio antenna is rotated manually to face the direction of the mobile network. When the antenna is perfectly aligned, the sound steadies.

If VNL's base station takes root, it could make it possible for Indian telecom operators to wire more remote villages at a much lower cost and more quickly. That is one of their main objectives, because most people in India's cities already have mobile phones and price competition there is intense. India is expected to have the most rapid growth in new subscribers over the next three years, followed by China.

Beyond boosting telecom companies' bottom lines, affordable mobile-phone service promises to change everyday life in rural communities world-wide. Sirohi, who was born and grew up in Deorhi, considers efforts to put phones in the hands of hundreds of millions of people in India an endeavor similar to the one his father pursued in 1959, when he built Deorhi's first school and then served as its principal. "The needs of people who live here have long been overlooked," he said. (info from The Wall Street Journal)

Tuesday, July 22, 2008

Time Warner Cable & Verizon fighting
for Big Apple biz

As Verizon gets ready to offer TV service in New York City, Time Warner Cable is preparing to compete more aggressively with Verizon for one of its most prized markets. Verizon received final approval from local authorities last week to launch its FiOS TV service in New York. It has already begun taking TV service orders and plans to begin installing on Aug. 1.

Rich Greenfield, an analyst at Pali Capital, downgraded Time Warner Cable's stock to a sell on Monday because he thought the company was ill prepared for the heightening competition. Investors seemed to share his concerns. The stock fell 4.1% Monday.

Greenfield arrived at his conclusion in part after phoning customer-service representatives at Time Warner Cable. Some of the reps didn't know what FiOS was, and others didn't seem to have a plan in place to keep customers who talked about defecting to FiOS.

But Landel Hobbs, chief operating officer of Time Warner Cable, says the company has been taking measures to prepare for Verizon's arrival. The company's efforts have been most focused on Staten Island, the New York City borough where Verizon is expected to roll out FiOS first.

In an effort to improve customer service, Time Warner Cable has narrowed the window within which a technician will visit a customer to two hours from four. The company will also start offering discounted prices to customers who commit to longer-term contracts on video, data or phone services. Previously, "lock in" prices were available only to customers who bought all three.

Time Warner has already moved to a digital platform that allows it to offer more high-definition channels in Staten Island, and is making that switch in the rest of New York City as well. The company is also sending out sales reps to reach customers before Verizon does.

The tactics have served Time Warner well in other markets with increased competition. But Verizon has a long-term local presence in New York City plus a strong brand and a large number of cellphone customers, giving it an additional advantage that it doesn't have elsewhere. (info from The Wall Street Journal)

Monday, July 21, 2008

Nokia suing Qualcomm over patent fees

Are Qualcomm's patent royalties an unfair tax on cellphone makers, or have they helped the industry? Those questions are at the heart of a high-stakes trial that begins in a Delaware courtroom Wednesday. Cellphone giant Nokia, which says it has paid more than $1 billion in royalties to Qualcomm since the 1990s, believes it is paying too much.

Qualcomm once sold complete phones but now sells chips for cellphones, but gets most of its profits from patent fees. The company is battling Nokia and others in cases that cost $200 million in legal fees in its last fiscal year. "We are winning in the marketplace, so our competitors are trying to beat us in the courtroom," said Paul Jacobs, Qualcomm's chief executive.

Qualcomm's CDMA technology took a minority share in the 1990s but plays a role in all current third-generation networks. Qualcomm typically charges cellphone makers close to 5% of the price of each handset to license its patents. Nokia signed a licensing Qualcomm in 1992. They signed a revised contract in 2001 that expired in April 2007, touching off a flurry of lawsuits.

The Delaware case isn't likely to end them, but the winner could get leverage in negotiations over a new deal. Nokia argues that Qualcomm forfeited the right to seek injunctions in suits to enforce many patents, because it pledged a European standard-setting group to license them under nondiscriminatory terms. A victory on that point would take a big legal weapon away from Qualcomm.

Nokia also contends it has a paid-up license to Qualcomm's most important patents, and that the rest are worth much less when balanced against Nokia's own patents. "Qualcomm's expectation that we would continue on those old terms relevant 15 years ago is unreasonable," a Nokia spokeswoman said.

Qualcomm says Nokia is wrong about the value of its newer patents and its obligations to the standard-setting group. It contends that Nokia extended the 2001 pact by default -- under the same licensing terms -- by using Qualcomm inventions after it expired.

What opponents really don't like, Qualcomm executives say, is how it helps competing handset makers enter the market. It criticizes Nokia and five other electronics companies for simultaneously filing complaints against the company in 2005 with European antitrust authorities, under an effort code-named Project 17. "It was clearly a coordinated effort," a Qualcomm spokeswoman says. The Nokia spokeswoman says such code names and cooperation are nothing unusual. "There is no conspiracy here," she says. (info from The Wall Street Journal)

Thursday, July 17, 2008

Heavenly Phone can give anyone
a direct line to God.

Some clergy men and women have claimed to have a "direct line to God," and other people merely act that way. Now anyone can have a high quality communications device that implies a direct link to a Higher Power.

Imagine the reaction of visitors when the phone rings, and you answer, "This is your humble servant, how may I assist you?"

It's a great gift for any lay person or clergy person with a sense of humor, or buy one for yourself.

AbleComm's GodPhone is non-denominational, and suitable for rabbis, priests, pastors, chaplains, padres, preachers, ministers, cardinals, imams, monks, nuns, gurus, or any spiritual leader.

The phone is "office quality," not a toy, made in the USA, and has a seven-year warranty. The phone does not have buttons for dialing out. It will generally be used for answering calls or just as a passive prop.

It can be connected to a phone system with automatic dialing and programmed to call a specific number when the handset is lifted. You can also get an upgraded version with internal memory for automatic dialing, but as with prayers, there is no guarantee that God will answer you.

Price of the standard GodPhone is $100. The Auto-dial GodPhone costs $240. Both models get free shipping anywhere in the USA. CLICK for more info and ordering. AbleComm also manufactures the BatPhone and Presidential HotLine phone.

Wednesday, July 16, 2008

Canadian iPhone provider drops fees after protest

With gripes about price-gouging ringing in its ear, Rogers Communications announced a temporary reduction in data fees for Apple's new 3G iPhone.

Rogers, the only Canadian carrier that will sell the iPhone, said customers who purchase an iPhone by Aug. 31 and sign a three-year contract will receive six gigabytes of data for 30 Canadian dollars (US$29.44) a month. The carrier had been asking for C$100 a month.

AT&T, the only carrier that sells the iPhone in the US, charges iPhone users $30 monthly for unlimited data usage. Customers must sign a two-year contract.

The 3G iPhone went on sale in Canada and the US last Friday.

Rogers's price reduction hasn't placated Robert Sheinbein, who runs ruinediphone.com, a protest Web site that gathered more than 58,000 signatures protesting Rogers's iPhone pricing plan. "If they want to be fair, they should apologize and not just do a limited-time offer," he said.

Rogers said that at first it didn't have a lot of information about how customers wanted to use the new 3G iPhone. As that information became available, Rogers said it became clear that customers were eager to use the device's data capabilities to the fullest potential, so it responded with Wednesday's price initiative.

Data pricing for the iPhone will revert to the original price when the promotion ends Aug. 31. Rogers will introduce similar promotions for other smartphones, such as the BlackBerry Bold. (info from The Wall Street Journal)

Monday, July 14, 2008

OOPS. Apple software could not handle new iPhone customers

Apple's latest iPhone sold well on its first day, but the phone ran into the same kinds of problems that marred the launch last year.

AT&T, the exclusive US carrier for the iPhone, planned to activate phones in its stores to avoid the problems some customers had last year, when they had to activate phones online from home. But AT&T employees were unable to sync the devices with Apple's iTunes software, the last step in the activation process.

With customers facing long waits, AT&T eventually abandoned the in-store activation plan. "While Apple is working to resolve the issue with iTunes, we're having our customers complete this final step at home later," said AT&T spokesman Michael Coe. He said the high demand for the new iPhone around the world -- Apple launched the device in 21 countries simultaneously -- appeared to be the root of the problem.

Consumers have been eagerly awaiting the sequel to the first iPhone, which set a high standard in the wireless industry with a simple touch-screen interface and a sophisticated Web browser. The new iPhone has a similar design, but it is capable of much faster Web access. The phone also includes Global Positioning and much lower prices. (info from The Wall Street Journal)

Friday, July 11, 2008

FCC chief wants to punish Comcast

The head of the Federal Communications Commission said Thursday he will recommend that the nation's largest cable company be punished for violating agency principles that guarantee customers open access to the Internet.

The potentially precedent-setting move stems from a complaint against Comcast that the company had blocked Internet traffic among users of a certain type of "file sharing" software that allows them to exchange large amounts of data.

"The commission has adopted a set of principles that protects consumers access to the Internet," FCC Chairman Kevin Martin told The Associated Press late Thursday. "We found that Comcast's actions in this instance violated our principles."

Martin said Comcast has "arbitrarily" blocked Internet access, regardless of the level of traffic, and failed to disclose to consumers that it was doing so.

Company spokeswoman Sena Fitzmaurice denied that Comcast blocks Internet content or services and that the "carefully limited measures that Comcast takes to manage traffic on its network are a reasonable part" of the company's strategy to ensure all customers receive quality service.

Martin will circulate an order recommending enforcement action against the company among his fellow commissioners, who will vote on the measure at an open meeting on Aug. 1. The action was in response to a complaint filed by Free Press and Public Knowledge, nonprofit groups that advocate for "network neutrality," the idea that all Internet content should be treated equally.

Martin's order would require Comcast to stop its practice of blocking; provide details to the commission on the extent and manner in which the practice has been used; and to disclose to consumers details on future plans for managing its network going forward.

The FCC approved a policy statement in September 2005 that outlined a set of principles meant to ensure that broadband networks are "widely deployed, open, affordable and accessible to all consumers." The principles, however, are "subject to reasonable network management."

Comcast argues that the agency's policy statement is not enforceable and that the commission has "never before provided any guidance on what it means by 'reasonable network management.'"

If a majority of commissioners side with Martin, it will be the first test of the agency's network neutrality principles. Members of both the House and Senate have sponsored network neutrality bills, but they have never come close to becoming law. Large Internet service providers have fought against such regulation, arguing that it is a solution in search of a problem and that companies that spend billions on their networks must be free to manage traffic. (info from The Associated Press)

Thursday, July 10, 2008

Verizon will pay $21 million in early termination suit

Verizon Wireless has agreed to pay $21 million to settle a lawsuit filed by California customers upset with the company's early termination fees. Details still need to be worked out and authorized by an Alameda County Superior Court judge, said Alan Plutzik, an attorney for the customers.

"We are recovering cash" for Verizon mobile phone customers who paid fees to end their contracts early, Plutzik said. It's unclear how many Verizon customers will be eligible to share in the settlement, a decision that will ultimately be up to the judge.

Cellphone companies charge early termination fees that can range from $150 to $225 when customers cancel their service contracts before they expire. The companies have said they must charge the fees to recover the cost of phones, which they subsidize when they sign up customers for new contracts.

Customers of six companies sued the carriers in 2006 in Alameda County Superior Court alleging that the fees violate California law. Sprint Nextel faced trial first in Alameda County Superior Court last month. Judge Bonnie Sabraw has not yet issued her decision on the legality of the fees in California in that case. Jury selection began last month in Verizon's trial, which will be halted now that an agreement has been reached. AT&T Inc. is next up for trial.

FCC chairman Kevin Martin last month laid out a plan to regulate the fees, saying he was skeptical that the lawsuits would adequately resolve all pending issues about the unpopular fees. The industry supports Martin's proposal to prorate the fees in exchange for immunity from state lawsuits. (info from The Associated Press)

Wednesday, July 09, 2008

AT&T will end Dish deal

Dish Network said last week that AT&T will terminate its agreement to resell Dish's satellite TV services as of Dec. 31. AT&T may evaluate whether to make another deal with Dish in the future.

In June, Dish disclosed that AT&T had requested that Dish buy back $500 million in convertible debt held by AT&T, which raised questions about the future of their alliance. The end of the contract prompted further speculation about whether AT&T would choose to market Dish rival DirecTV services in the future instead.

AT&T indicated that the termination was procedural in nature, and a six-month notice of termination was required under the contract in order to reopen negotiations in the future.

For many years, the two satellite companies had marketing agreements with telephone companies, which helped the satcos get more customers and allowed telcos to compete with cable company attempts to launch phone and Internet service.

The long-term future of those deals has recently become doubtful as AT&T and Verizon have started to provide TV service. (info from The Wall Street Journal)

Tuesday, July 08, 2008

Alcatel-Lucent wants $1.53 billion from Microsoft

Alcatel-Lucent, the the perpetually money-losing French-American telecom equipment maker, appeared before a federal appeals court Monday asking that a $1.53 billion jury verdict for it against Microsoft be reinstated. In the case, Alcatel-Lucent says Microsoft's Windows Media Player infringed on two of its patents. At trial last year, Alcatel-Lucent argued that Microsoft's audio software violated its patents relating to MP3, the most popular file format used to store digital audio.

In August, a district-court judge said Microsoft didn't have to pay the $1.53 billion jury award because it wasn't in violation of one patent and had licensing rights to the other. On the second point, the judge cited a joint ownership agreement of the MP3 patent held by Germany's Fraunhofer Institute and AT&T Inc.

During oral arguments Monday before the US Court of Appeals for the Federal Circuit, Microsoft attorney John Gartman defended Microsoft's licensing agreement with Fraunhofer, saying that license covers the patents asserted by Alcatel-Lucent. Gartman told the three-judge panel that the joint ownership rights held by AT&T and Fraunhofer extend to any license or intellectual property that stems from their collaboration.

Microsoft spokesman David Bowermaster said the district judge's decision to reverse the jury verdict was "a triumph for common sense in the patent system" because he recognized that "Microsoft properly licensed the technology embodied in the [MP3] patent from its co-owner and industry-recognized MP3 licensor Fraunhofer."

The MP3 patents were originally filed by researchers at Bell Labs, the research-and-development arm of the old AT&T. When AT&T spun off Lucent Technologies in 1996, Lucent retained much of the Bell Labs patent portfolio. French firm Alcatel subsequently agreed to acquire Lucent in 2006, forming Alcatel-Lucent.

Alcatel-Lucent initially sued computer makers Gateway and Dell over a series of patents in 2003, and Microsoft subsequently stepped in on their behalf. Alcatel-Lucent claimed computers made by Gateway and Dell using Microsoft products infringed on its patents. A judge later divided the case into several parts based on the types of patents involved.

The US Federal Circuit Court, which hears all patent appeals, is likely to hear more about the original Alcatel-Lucent complaints against Dell and Microsoft. In April, a jury ordered Microsoft to pay $367.4 million to Alcatel-Lucent over another patent violation. Last month, a district judge upheld the jury verdict and added to the damages, saying Microsoft owed some $500 million. Microsoft plans to appeal that decision.

The litigation could spark some interest on Capitol Hill, where lawmakers have been considering changes to patent law, including relief from large damages. The $1.53 billion verdict against Microsoft is often cited as an example of out-of-control damages. (info from The Wall Street Journal)

Monday, July 07, 2008

Virgin offers unlimited calls for $79.99

On July 1 Virgin Mobile USA introduced a prepaid cellphone plan with unlimited calling for $79.99 per month, adding to the price-cutting frenzy. Virgin had been charging $99.99 for 1000 minutes per month with no limit on night and weekend calls. Verizon Wireless introduced a plan with unlimited nationwide calling in February for $99.99 per month that was quickly matched by its competitors.

Sprint Nextel, which provides the network for Virgin, charges $89.99 for its own unlimited plan, which includes free messaging. Virgin charges $10 extra per month for unlimited messaging. The prices do not include taxes and fees that can add up to $10 a month.

Virgin may be hoping with its new plan to reap a sales boost as Verizon and AT&T have since they introduced their comparable plans in February. Both carriers said more people upgrade to the unlimited plan than downgrade from more expensive plans.

The average revenue per user at Virgin Mobile was $19.93 per month in the first quarter, less than half of the average charges at the larger carriers. It had 5.1 million customers at the end of March, making it one of the largest US. "mobile virtual network operators," or MVNOs. MVNOs buy wholesale airtime from other carriers.

Virgin Mobile expects to lose subscribers in the first quarter. It is talks with South Korea's SK Telecom majority owner of Helio, another struggling MVNO. The talks could mean a combination of the two carriers.

Another prepaid carrier, Page Plus Cellular, charges $2.49 per day, or about $75 per month, for unlimited calling on Verizon's network but charges extra for roaming. Regional carriers MetroPCS and Leap Wireless have unlimited plans for as little as $35 per month, but also charge extra for roaming. (info from The Associated Press)

Thursday, July 03, 2008

Hmm... low iPhone prices not for everyone.

The $199 and $299 prices announced by AT&T and Apple for the new iPhone 3G won’t be available to everyone.

When the iPhone 3G goes on sale July 11, the $199 and $299 prices will be available only to these specific classes of customers purchasing the phone with a two-year service contract:

  • iPhone owners who purchased their current iPhone before July 11
  • Customers moving to AT&T from another carrier
  • Current AT&T customers who are eligible for an upgrade discount


  • AT&T’s existing customers who are not eligible for an upgrade discount must pay $399 for the 8GB model and $499 for the 16GB model. These customers can hold off buying until they become eligible for an upgrade discount. Eligibility is usually determined by the amount of time remaining on a contract, and payment history.

    In the future, AT&T will offer a no-contract option for $599 for the 8GB version and $699 for the 16GB version.

    Current AT&T customers who upgrade to iPhone 3G will pay an $18 upgrade fee. New AT&T customers will pay the standard $36 activation fee.

    AT&T is posting "Get iReady" tips and FAQs at www.att.com/iphone for people interested in buying the phone. The site also includes a link for customers to check their upgrade eligibility and other cellphone account information. (info from TWICE)

    Wednesday, July 02, 2008

    New iPhone will be available without ATT contract

    AT&T, formerly known as Woodbury Telephone Company and a few other things, will sell the new version of the iPhone without a service contract for $400 more than the price with a two-year plan.

    Two new models of iPhones go on sale July 11 for $199 and $299, depending on the amount of memory, with two-year AT&T contracts. The contract-free versions will cost $599 and $699 and will be sold sometime "in the future," AT&T said. The phones sold under contract are subsidized by AT&T, which expects to make the money back through monthly fees over the life of the contract.

    Without a contract, users can cancel service without incurring an early termination fee. Both contract and contract-free phones will be "locked" to work only on AT&T's network, and the monthly service plans available will be the same. The plans add a $30 monthly charge for data like e-mail and Web surfing on top of a calling plan.

    The least expensive monthly plan for the iPhone will cost $70 per month, before taxes and fees that can add $10 monthly. That plan includes 450 minutes of calls and unlimited e-mail and Web browsing.

    AT&T is working on a prepaid plan. A prepaid option was available to buyers of the first iPhone who failed a credit check. Many phones ended up being "unlocked" from AT&T's network and shipped overseas. (info from The Associated Press)

    Tuesday, July 01, 2008

    Why is it so damn hard for people to end a speakerphone conversation?

    Using the handset to shut off a hands-free speakerphone is a stupid time-waster that really drives me nuts, and I've slapped people's hands when I've caught them doing this.

    It's good to dial your calls hands-free, and then switch to a handset when a human being finally picks up. (It’s even better to use a headset.) But if you don't reach a person, or if you used the speakerphone for the entire call, you can end the call by simply tapping the speakerphone button.

    Lots of people, including my dear wife, and actor Stephen Baldwin on Celebrity Apprentice, and motorcycle maker Paul Teutul Sr. on American Chopper, will quickly pick up the handset and immediately put it down, to hang up a hands-free call. This wastes time, causes unnecessary wear on the phone, and really pisses me off!

    If I see you doing it, I'll slap your hand, too. Don't do it! I'm serious. My wife has a sore hand to prove it. (However, I probably would not slap Mr. Teutul because he could probably beat the crap out of me. I haven’t decided about Stephen Baldwin because he may have God on his side.)

    The most recent bumbling offenders are the would-be terrorists sitting in Hamdi's kitchen in You Don't Mess With the Zohan. Twice, after using the speakerphone on an old AT&T 5500 cordless to call the Hezbollah Phone Line ("for terrorist supplies, press one"), one of the guys who plans to kill Adam Sandler's Zohan character, picks up and then puts down the handset.

    It's much easier to just tap the speakerphone button.