US Telcos Continue To Embrace Apathy As A Business Model

from the blatant-disinterest-isn't-a-strategy dept

For more than a decade we've noted how the US broadband industry's biggest problem is a lack of healthy competition. In countless markets consumers either have the choice of a terrible phone company or a cable giant. The nation's phone companies have spent the last decade refusing to upgrade (or in some cases even repair) their aging DSL lines, because they don't see residential broadband as worth their while. That, in turn, is giving giants like Comcast and Spectrum an ever greater monopoly in many markets, reducing the already muted incentive to compete on price or shore up comically terrible customer service.

While that may be great for cable companies, execs, and investors, it's not so great for consumers whose only choice of broadband is aging DSL from an apathetic telco. Instead of upgrading its customers to fiber across more than 20 states, US telco CenturyLink (recently rebranded "Lumen") announced it would be selling much of the company's copper DSL and phone network to private equity firm Apollo. Under the $7.5 billion dollar deal CenturyLink will keep the customers it actually cares about, then throw the (mostly rural) customers it doesn't care about at a private equity firm that isn't likely to upgrade them either.

Apollo, primarily famous for acquiring old newspapers, lobotomizing them, then stripping them for parts, claims it will upgrade many of these users to fiber. But that doesn't seem particularly likely given their track record, or the track record of similar deals like this, which basically involves shuffling ownership of aging DSL lines nobody wants to actually upgrade, then milking the assets until the next sale. Many of these customers have been stuck on expensive, slow DSL for the better part of fifteen years as they get shuffled from disinterested owner to disinterested owner:

"It will be interesting to see if Apollo can do better than other past forays with buying copper networks. I can’t think of one of these mega-deals where buying copper networks has gone well. I think back on the purchases by Frontier, Fairpoint, Iowa Telephone, Windstream, Citizens, and others that never panned out – and those deals were for copper that wasn't as ancient as is coming in this sale. Some of the rural customers in this sale have seen the name of the incumbent telco change several times – but they haven’t seen improvements in copper for decades."

The cycle of apathy is directly responsible for the surging interest in local community and municipal broadband networks, often run by people who actually give two flying shits about the communities they're dealing with. Of course instead of embracing those alternatives as a productive way to shore up overall broadband access (during a plague, no less), many US policymakers have instead demonized and tried to ban them.

Filed Under: broadband, competition, dsl, rural broadband, upgrades
Companies: centurylink, lumen

Broadband Monopolies Keep Getting Money For Networks Never Fully Deployed

from the round-and-round-we-go dept

As we've noted a few times, there's an underlying belief in American tech policy that if we just keep throwing money at entrenched broadband monopolies we can lift US broadband out of the depths of mediocrity. But as we've noted more than a few times, heavily subsidizing a bunch of regional monopolies, while not doing anything about the conditions that created and insulate those monopolies, doesn't result in much changing. It's especially ineffective when you don't really punish ISPs for decades of taking taxpayer money in exchange for network upgrades that almost always, like clockwork, wind up unfinished.

The latest case in point: in 2015, regional monopolies CenturyLink and Frontier Communications took nearly $800 million in taxpayer funds to expand broadband to underserved areas they deemed too expensive to wire themselves. And guess what happened:

"The deadline to hit 100 percent of the required deployments passed on December 31, 2020. Both CenturyLink and Frontier informed the FCC that they missed the deadline to finish deployment in numerous states."

CenturyLink rather coyly acknowledged that it failed to meet deployment milestones in more than 25 states. Frontier failed to meet its deployment targets in around 17 states. Under the law, ISPs have a year from the point they finally inform the FCC that haven't done what they promised to... actually do what they promised.

And while that same law says the the government can take back taxpayer funding "equal to 1.89 times the average amount of support per location received in the support area," plus another ten percent of the carrier's total funding in that area, that often never happens. ISP lawyers routinely tap dance over, under, and around those milestones; and penalties are particularly pathetic when there's a captured regulator like outgoing FCC boss Ajit Pai at the helm.

A shining example of this lack of accountability is Frontier Communications, which we've long held up as a stunning example of monopolization and corruption in states like West Virginia. This is a company that time, and time, and time again has failed to meet its obligations tied to taxpayer subsidies, and in some instances was even caught defrauding the government. The federal response to this? To throw yet more taxpayer and ratepayer money at the company via the recent, scandal-plagued Rural Deployment Opportunity Fund auction:

"CenturyLink and Frontier are both getting more money from the FCC in the new Rural Digital Opportunity Fund, with CenturyLink getting $262.4 million spread over 10 years and Frontier getting $370.9 million over 10 years.

"Sen. Shelley Moore Capito (R-W.Va.) recently urged the FCC to block Frontier's new funding, saying that "Frontier has a documented pattern of history demonstrating inability to meet FCC deadlines for completion of Connect America Fund Phase II support in West Virginia."

Folks in DC (especially the Ajit Pai types) claim they're focus is "lifting burdensome regulations to boost network investment." In reality, they've effectively ceded all policy decisions to regional monopolies, which they're utterly incapable of holding accountable for much of anything. When the data then shows that this clearly and obviously only results in less competition, stifled investment, wasted money, and mediocrity, the impulse is almost always to pretend that this data isn't real... then double down on the same decisions that brought us there. Rinse, wash, repeat.

Now with COVID highlighting broadband's importance in an entirely new way, there's a massive new push to solve the problem by throwing more money at it. But until and unless policymakers embrace polices that specifically target the dominance of entrenched monopolies, driving more competition to market, we're not getting off this ridiculous hamster wheel.

Filed Under: broadband, broken promises, fcc, promises, subsidies, taxpayers
Companies: centurylink, frontier, frontier communications

US ISPs Drop Usage Caps, Pledge To Avoid Kicking Users Offline During Coronavirus

from the every-bit-helps dept

While it required some nudging, several of the nation's biggest ISPs this week announced they would be suspending their usage caps and overage fees as millions of Americans prepare to hunker down to slow the spread of COVID-19. Comcast, AT&T, and Centurylink all stopped imposing such limits for at least the next 90 days. Critics (and even leaked Comcast memos) have long made it clear such restrictions (particularly on fixed line networks) aren't technically useful in managing congestion as the industry once claimed, and are little more than glorified price hikes on captive customers.

The speed at which such restrictions were dispatched (during a time when overall bandwidth consumption is up, no less) supports industry executive claims that such limits are arbitrary, confusing, and unnecessary.

That said, numerous ISPs say they're taking additional steps to ensure users can stay online during the outbreak. For example, a coalition of several dozen ISPs struck a voluntary "Keep Americans Connected Pledge" that they wouldn't kick users offline during the outbreak for lack of payment due to Coronavirus, and wouldn't impose late fees either. From the FCC announcement:

"Given the coronavirus pandemic and its impact on American society, [[Company Name]] pledges for the next 60 days to:

(1) not terminate service to any residential or small business customers because of their inability to pay their bills due to the disruptions caused by the coronavirus pandemic;

(2) waive any late fees that any residential or small business customers incur because of their economic circumstances related to the coronavirus pandemic; and

(3) open its Wi-Fi hotspots to any American who needs them.

To be clear, this is a good thing. Those struggling during the obvious economic difficulties to come should not be kicked offline during a pandemic. That said, this is all voluntary and there's no genuine legal mandate for ISPs to do follow up. Given this FCC's tendency toward giving industry a pass for pretty much anything, it's unlikely it would penalize any ISP for non-compliance barring the most obvious instances of attention-grabbing misbehavior. At lobbyist behest, the FCC has stripped away much of its industry oversight as it applies to everything from sneaky fees to transparent billing, making this sort of thing notably more difficult to actually police.

Again, that's not to say that much of these efforts won't be a good thing in the weeks or months to come. Comcast and Spectrum in particular lay claim to tens of thousands of hot spots across the United States, and opening them up to the general public should prove greatly beneficial. Especially if the nation's libraries -- often the first place lower income Americans go to connect to the internet -- are forced to close their doors. Other ISPs, like T-Mobile, have announced they're effectively getting rid of caps and will be giving all of the company's customers unlimited data:

Starting now - ALL current T-Mobile and Metro by T-Mobile customers who have plans with data will have unlimited smartphone data for the next 60 days (excluding roaming).

Providing T-Mobile and Metro by T-Mobile customers an additional 20GB of mobile hotspot / tethering service for the next 60 days – coming soon.

In the weeks and months to come, Americans will face notable financial hardships as the country struggles with business closures as the country attempts to "flatten the curve." At the very least, they won't have to worry about usage restrictions and consumption fees that shouldn't have existed in the first place.

Filed Under: broadband, broadband caps, coronavirus, covid-19, usage caps
Companies: at&t, centurylink, comcast, t-mobile, verizon

Oh Look, More Giant ISPs Taking Taxpayer Money For Unfinished Networks

from the round-and-round-we-go dept

For more than a decade we've highlighted how the U.S. simply adores throwing taxpayer money at giant telecom companies in exchange for networks they then only half deploy. Whether it's on the city, state, or federal level, we've thrown untold billions at mono/duopolies which in turn dodge their obligations under these agreements with little to no real penalty. While sometimes this money winds up being used as intended, just as often this money winds up being pocketed by executives and shareholders with little discernible impact on America's broken and uncompetitive broadband markets.

The latest case in point: both Centurylink and Frontier have informed the FCC they've failed to meet FCC required broadband milestones after receiving millions in taxpayer subsidies:

"CenturyLink notified the Federal Communications Commission that it "may not have reached the deployment milestone" in 23 states and that it hit the latest deadline in only 10 states. Frontier similarly notified the FCC that it "may not have met" the requirements in 13 states. Frontier met or exceeded the requirement in 16 other states. Under program rules, the ISPs were required to bring Internet access to 80 percent of funded locations by the end of 2019 and must hit 100 percent by the end of 2020."

Keep in mind, these deployment goals aren't exactly what you'd call difficult. Under the terms of the FCC's 2015 Connect America Fund Auction, the two ISPs agreed to expand access to DSL at speeds of 10 Mbps down and 1 Mbps (1 Mbps!) up in exchange for big taxpayer payouts. In CenturyLink's case, the company is slated to net $505.7 million annually for six years to deploy service to 1,174,142 homes and businesses in 33 states. For Frontier, the company received $283.4 million annually for six years to bring access to 774,000 locations in 29 states.

Keep in mind these customers aren't even really getting broadband, which is defined as at least 25 Mbps by the FCC. What these territories are getting is overpriced, slow DSL, belched up from somewhere around 2003 or so from two companies that have a long, sordid history of atrocious customer service and a failure to upgrade or repair their aging networks. In most markets that's giving giants like Comcast and Spectrum an even bigger monopoly, resulting in higher rates for all broadband users as competition wanes.

Unsurprisingly, throwing billions at companies for antiquated broadband service (that's never fully deployed anyway) doesn't really fix things. In large part because we don't fully understand the problem we're trying to fix. Despite a lot of claims to the contrary, we don't actually know where broadband is deployed. US broadband maps are notorious garbage, and the telecom lobby has fought tooth and nail against efforts to fix them. Why? It's two-pronged: better maps would only highlight a lack of competition (potentially prompting somebody to actually fix it), and it helps them obscure the waste and fraud on the subsidy end.

Ideally, the FCC would step in here and punish both companies for failing to meet arguably modest goals or not being honest about where broadband is available. But there's little real indication that's actually going to happen. Just ask Verizon, which was given billions in subsidies and tax breaks by countless states and cities in exchange for fiber it never fully deployed. Or AT&T, which routinely receives billions in tax breaks, subsidies, and regulatory favors in exchange for jobs and broadband deployment that somehow never fully materialize. The penalties for both companies have been utterly nonexistent.

There's a chorus of telecom sector sycophants and Trump FCC officials that throw face-fanning tantrums every time some podunk town in Nebraska decides to spend a million bucks to build a better alternative to Comcast. But you'll notice those same folks never have a single sour word to say about the multi-decade tendency to throw billions of dollars at unaccountable monopolies in exchange for networks they never fully deploy. These folks are usually pretty easy to spot: like Pai, just look for the folks going comically out of their way to even acknowledge the limited competition and high prices that plague the US broadband sector.

Were you to do a proper audit of the telecom sector over the last 30 years, I'd all but guarantee the amount of money thrown at the sector could have funded a fiber optic line to every home in America several times over. Instead, thanks in large part to revolving door regulators and cronyism, we've built a system that throws unaccountable billions at giants like AT&T and Comcast, in exchange for substandard broadband, terrible customer service, and an eternal fountain of empty promises.

Filed Under: broadband, competition, dsl, failed obligations, fcc, subsidies, taxpayer funds
Companies: centurylink, frontier

Washington And Oregon Fine CenturyLink For Completely Bogus Broadband Fees

from the gullibility-surcharge dept

For decades, broadband providers have abused the lack of meaningful competition in the telecom market by not only refusing to shore up historically awful customer service, but by raising rates hand over fist. This usually involves leaving the advertised price largely the same, but pummeling customers with all manner of misleading fees and surcharges that drive up the actual price you'll be paying each month. And by and large regulators from both major political parties have been perfectly okay with this practice, despite it effectively being false advertising.

CenturyLink (combined by the merger of Qwest, CenturyTel and Embarq) has been exceptionally talented when it comes to such fees. A few years ago the company began charging its broadband customers an "Internet Cost Recovery Fee," which the company's website explains as such:

"This fee helps defray costs associated with building and maintaining CenturyLink's High-Speed Internet broadband network, as well as the costs of expanding network capacity to support the continued increase in customers' average broadband consumption."

But the cost of maintaining broadband networks is what your entire bill is supposed to be for. Again, breaking out such additional bullshit surcharges and burying them below the line is designed to do one thing: help providers falsely advertise a lower rate. And while the "internet cost recovery fee" was only a few bucks per month, it's a fairly lucrative scam when spread across millions of CenturyLink's US broadband subscribers over the last five years.

With the federal government now largely comatose on such issues, states have been forced to step up to the plate and try to fill the void. As a result, Centurylink was forced to settle a lawsuit by Oregon's AG requiring it cease the practice and shell out $4 million to impacted consumers. That settlement comes several weeks after a similar settlement with Washington State's AG to the tune of $6.1 million:

"CenturyLink deceived consumers by telling them they would pay one price, and then charging them more,” Ferguson said. “Companies must clearly disclose all added fees and charges to Washingtonians. If you believe that a company has charged dishonest fees, please contact my office.”

In states where telecom regulatory capture is more prevalent (read: most of them), absolutely nothing is being done to thwart this practice, which extends to other fees like the misleadingly named "regulatory recovery surcharge" or the widespread "local sports surcharge" and $10 per month "broadcast TV" fees.

Keep in mind, these are precisely the kind of consumer enforcement actions the Trump FCC attempted to ban with its net neutrality repeal, which didn't just repeal net neutrality but attempted to neuter nearly all state and federal oversight of one of the least-liked and uncompetitive industries in America. The courts argued the FCC overreached, noting it can't eradicate its telecom protection authority, then try to ban states from stepping in to fill the void. The fact they even attempted the gambit should tell you all you need to know about the Ajit Pai FCC.

Filed Under: bogus fees, broadband, competition, consumer protection, extra fees, ftc, hidden fees, oregon, truth in advertising, washington
Companies: centurylink

Hidden Fees Mean US Cable & Broadband Bills Can Be 45% Higher Than Advertised

from the ill-communication dept

For years we've talked about how the broadband and cable industry has perfected the use of utterly bogus fees to jack up subscriber bills, a dash of financial creativity it adopted from the banking and airline industries. Countless cable and broadband companies tack on a myriad of completely bogus fees below the line, letting them advertise one rate -- then sock you with a higher rate once your bill actually arrives. These companies will then brag repeatedly about how they haven't raised rates yet this year, when that's almost never actually the case.

Despite this gamesmanship occurring for the better part of two decades, nobody ever seems particularly interested in doing much about it. The government tends to see this as little more than creative marketing, and when efforts to rein in this bad behavior (which is really false advertising) do pop up, they tend to go nowhere, given this industry's immense lobbying power. And given the US broadband sector remains painfully uncompetitive in most markets, actually voting with your wallet is often impossible.

How bad is the problem, really? A new study by GlobalData found that what you'll actually pay to your cable TV or broadband provider can often be upwards of 45 percent higher than the advertised price:

"In some cases, the final cost is as much as 45% over the advertised rate. For example, Xfinity’s $40 ‘Starter Internet plus Basic’ TV bundle jumps to $58 per month once the additional $18 in equipment costs are added. Prices can also vary based on location.”

According to GlobalData’s research, Verizon had the highest additional costs in August at $24 per month, followed closely by Frontier and Optimum with around $17-$18 in additional equipment fees. AT&T and Google Fiber offered the most cost transparency in bundle price with zero additional equipment or technology fees.

AT&T is let off the hook here and they shouldn't be. This is a company that recently tried to charge its broadband customers upwards of $500 more a year if they simply wanted to opt out of snoopvertising and online data tracking. The broadcast and cable fee problem isn't a subtle one. Companies like CenturyLink have gotten so cocky they've charged their broadband users a "internet cost recovery fee," which it claims helps the ISP "defray costs associated with building and maintaining CenturyLink's High-Speed Internet broadband network." Except that is, in case you didn't know, what the rest of your damn bill is for.

Of course it's a problem that's everywhere, and not just in the telecom sector. Hotels routinely still charge users obnoxious "resort fees" (legislation to hamper those efforts exists but faces an uphill climb against lobbyists), and airlines and banks have of course perfected the nuisance as well. But both parties appear to have embraced the practice as a form of capitalistic creativity, despite the fact that when you strip away the bullshit justifications, it's little more than false advertising. And, apparently, most US regulators and lawmakers are cool with that.

Filed Under: broadband, cable, fees, hidden fees, truth in advertising
Companies: at&t, centurylink, comcast, frontier, verizon

Broadband ISP CenturyLink Is Blocking Users' Internet Access Just To Show An Ad

from the ill-communication dept

US telco CenturyLink is under fire for temporarily disabling the broadband connections of broadband customers in Utah unless they click on an ad for CenturyLink security software. Even more oddly, the telco is repeatedly (and falsely) trying to blame a new Utah law for its ham-fisted behavior.

It began when a CenturyLink user in Utah posted to Twitter that his CenturyLink broadband line suddenly and mysteriously stopped working. Using what appears to be JavaScript ad injection (an already contentious practice), Centurylink then sent the user a notice stating his broadband connection would not be restored until he acknowledged receipt of the message, which appears to be a glorified advertisement for CenturyLink's @Ease filtering and security software:

In a blog post first spotted by regional Utah news outlets and subsequently Ars Technica, the user explains how he was initially under the impression that CenturyLink had tried to block him from visiting a phishing website, only to realize later that the ISP was really just temporarily holding his connection hostage until he engaged with a product ad:

"At first glance I was worried that I had somehow been redirected to a malicious website and that this was some kind of phishing attempt... After all, I didn't navigate here. I attempted to do another search but still ended up at this same notice. I considered the idea that maybe my ISP had detected some kind of threat coming from my network and that's why I was seeing this official looking page. Eventually, after reading over the page several times, I clicked "OK" and my internet was back."

When criticized, CenturyLink repeatedly told the user and many reporters (myself included), that it had to block user access in this fashion due to a new Utah law:

Except that's false. Utah is, Techdirt readers will be aware, home of what has been a near-constant stream of ridiculous efforts to filter porn, a technically impossible task (something backers of the idea refuse to learn). And while this new law in question is dumb, it's not quite that dumb. The law requires ISPs to inform users that filtering software is available to them as a sort of half-measure toward combating porn. ISPs can do this in a number of ways; the law specifically recommends either including mailers in user bills or sending an email.

The law does not require that ISPs sever access to the internet in order to show them ads for an ISP's own software, something CenturyLink executives appear to have come up with on their own. That's something the bill's author himself confirmed when asked by the impacted user on Twitter:

Users on Reddit indicate this wasn't isolated to just this user -- all Utah CenturyLink customers appear to be experiencing this unnecessary, heavy-handed nonsense. Now it's possible CenturyLink could argue it was just over-complying to adhere to the law, but since the law is pretty clear an email is ok, this argument doesn't hold up. More likely, CenturyLink executives either thought they'd use the law as a marketing opportunity, or wanted to bring attention to the dumb new law. Unfortunately that's not really accomplished by behaving stupidly yourself.

Of course this is the kind of ISP behavior our since-discarded net neutrality rules were designed specifically to prevent. And while a few days of press shame may drive Centurylink away from the policy if users are lucky, that's really no substitute for an attentive FCC that actually cares about keeping the internet free from idiotic monopoly ideas exactly like this one. The battle over net neutrality has always been about slippery slopes, and letting an ISP interrupt internet traffic to market its own products--and then lie about it--is slippery as hell.

Filed Under: ads, blocking, broadband, filters, injection, packet injection, utah
Companies: centurylink

US Has Some Of The Most Expensive Mobile Data Prices In The Developed World

from the pay-more,-get-less dept

While the U.S. wireless industry likes to talk a lot about how ultra-competitive it is, that's generally not the case. While there's more competition in wireless than in the fixed-line broadband sector (where there's virtually no competition at faster speeds due to upgrade-phobic telcos and cable's growing broadband monopoly), much of the competition in wireless tends to be theatrical in nature. Most of the major four carriers still usually outright refuse to compete on price, something you don't get to have a choice about in a truly competitive market.

While T-Mobile's disruption of the market (which has its limits) has certainly helped improve some of the worst aspects of US wireless (like long term contracts and international roaming price gouging), Americans have long paid more money for mobile data than most of the developed world. A new report out of Finland by Rewheel has once again driven that point home. According to the firm's latest data, U.S consumers pay the fifth-highest rate on average per gigabyte for smartphone plans across OECD and European countries, and the highest prices on average for mobile data services provided via things like mobile hotspots.

All told, U.S. smartphone plans are more than four times higher than in most EU countries, and up to sixteen times higher across much of Europe:

The study comes on the heels of another important study showing that streaming video quality over U.S. networks is some of the worst quality in the developed world -- in large part because carriers have begun erecting artificial barriers consumers then have to pay even more to overcome. For example, Verizon now throttles all video by default on its unlimited data plans to 480p (or around 1.5 Mbps), requiring you jump to a more expensive tier if you want streaming to actually work like the originator intended.

The new Rewheel study was quick to point out that whereas the US market should see more serious price competition due to having four major carriers, that's not the case. US pricing tends to more directly compare to countries where there's just three major wireless competitors and real price competition is somewhat suppressed. And while the study doesn't explain why, we've noted repeatedly how much of this is thanks to the monopoly companies like AT&T, Verizon, and CenturyLink enjoy over the business data services (BDS) market that feeds everything from ATMs to cell towers.

In other words, even if you're a scrappy competitor like T-Mobile that somehow manages to beat back the giants at spectrum auction and in DC lobbying, you'll still need to pay them significant sums just to connect your towers to core networks, tightening your margins and driving up your costs. The FCC's own data has indicated that roughly 79% of the BDS market is dominated by just one company, usually AT&T, Verizon, or CenturyLink.

Meanwhile, having regulators like Ajit Pai who are now no more than giant rubber stamps for industry interests means none of these underlying problems are going to be fixed any time soon. In fact, Ajit Pai's "solution" to this problem was to literally redefine the word competition at the FCC to try and hide that the problem exists at all. With that kind of leadership, it shouldn't be too surprising why US consumer mobile bills are so high compared to their European counterparts.

And researchers at Rewheel were quick to hint that it's going to get worse with the looming merger between T-Mobile and Sprint, which actually will reduce the sector to three competitors, proportionally reducing any genuine incentive to actually compete on price. The firm was quick to pour a little cold water on the idea that merger mania and fifth generation (5G) upgrades will somehow fix the sector's deep-rooted issues:

"Judging from the excessive gigabyte prices, US operators are charging today for 4G mobile broadband (see Verizon’s striking $710 100 gigabyte hotspot plan--in Europe 100 gigabyte mobile broadband typically costs between €10 and €20) merger promises concerning affordable 5G home broadband should be critically reviewed and if verified must be made binding."

And this is all before you get to the real cost impact of killing things like the FCC's broadband privacy rules, net neutrality, and other consumer protections, which were some of the only things standing between US carriers and even more aggressive, creative nickel-and-diming of American consumers. Should ISPs and the FCC win the court challenge to the net neutrality repeal next Spring, you can expect a hell of a lot more "creative" efforts to jack up US consumer bills even higher.

Filed Under: ajit pai, broadband, data, fcc, wireless
Companies: at&t, centurylink, t-mobile, verizon

The Cable TV & Broadband Sector Has A Nasty Billing Fraud Problem

from the sleazy-surcharges dept

As we've well discussed, the broadband and TV sector not only has some of the worst satisfaction scores in modern history. A lack of real competition has long allowed the industry to double down on all manner of bad behavior, whether that's net neutrality and privacy violations, or just unprecedentedly-awful customer service. But in recent years the industry has developed another nasty habit: billing fraud involving everything from falsely signing customers up for services they never ordered to entirely bogus fees designed to let companies falsely advertise lower rates.

T-Mobile was accused last year of signing users up for services they neither wanted nor ordered. Centurylink has similarly found itself in hot water for the same thing on a larger scale, the company now facing lawsuits in more than a dozen states for the practice. Washington State also recently sued Comcast, noting that the company not only routinely signs its customers up for a "Service Protection Plan" they never ordered, but consistently misrepresents what the plan actually does. You may or may not notice a pattern here.

Now Cox Communications, the nation's third-largest cable provider, is being accused of the same thing. A company whistleblower has accused company employees of repeatedly... you guessed it... fraudulently signing customers up for services they never ordered to nab bonuses they didn't actually earn:

Speaking only to the I-Team, two whistleblowers are convinced some Cox Communications sales reps in Northern Virginia are cashing in by signing up customers for services they didn't authorize. Why? To reach monthly bonuses of $12,000 or more.

"How far they're going for a commission payout, to affect thousands of people, it's a heinous, greedy act," said former Cox Communications employee Anna Wilkinson.

Wilkinson, a former sales rep, claims to have notified her bosses at Cox but says nothing changed.

That last bit, where the employee informs management and nothing changes, is par for the course in such stories. In the CenturyLink example above, a whistleblower states she brought the fraudulent behavior to company leadership and was promptly fired for it. The company then launched an investigation into itself and found, miraculously, that it had done absolutely nothing wrong. Lawsuits in numerous states, however, continue.

Also a recurring theme: complaints are routinely made to the FTC but pretty rarely result in action, especially if the company in question is a larger, deeper-pocketed or politically-powerful potential litigant. That is, you'll recall, the same FTC that's supposed to protect us all from net neutrality violations in the wake of the neutering of federal net neutrality law and FCC authority over such companies by the Trump administration.

Of course ripping off customers via erroneous subscriptions to never-ordered services is just part of the problem. The TV and telecom sector also has a nasty habit of imposing all manner of bogus fees to customer bills. Fees that are completely made up and buried below the line for one misleading purpose: to falsely advertise a lower rate at the point of sale, then jack up your monthly bill once you've already had services installed. And again, you'd be pretty hard pressed to find a regulator or lawmaker from either party willing to do much about it.

On the TV side of the equation, this is likely only to result in greater cord cutting as users flock to cheaper, less dysfunctional streaming competitors. But given the rise of regulatory capture and waning competition in the broadband sector, it's a problem that's pretty clearly not going away anytime soon.

Filed Under: billing fraud, broadband, competition, ftc, subscriptions, tv
Companies: centurylink, comcast, cox, t-mobile

CenturyLink Tries To Dodge Broadband Billing Lawsuit By Claiming It Technically Has No Subscribers

from the impressive-tap-dancing dept

Broadband ISP CenturyLink has been on the receiving end of an ocean of lawsuits accusing the company of billing fraud after a whistleblower (who says they were fire for bringing it up to management) revealed systemic efforts to routinely overbill users and sign them up for services they never asked for. And while CenturyLink tried to claim an investigation of itself found no wrongdoing (shocking!), State AGs like Minnesota's Lori Swanson say in their complaints (pdf) that they've found plenty of evidence proving that billing fraud was a routine occurance at the broadband provider.

Most of these lawsuits have since been combined into one class action suit. And CenturyLink has since developed a fairly creative attempt to dodge legal liability for its misdeeds: by claiming it doesn't technically have any customers. Technically CenturyLink has 5.66 million broadband subscribers as of last year, but a new brief filed by the company tries to argue it's not culpable because "CenturyLink" is technically just a holding company that manages 10 subsidiaries around the country:

"That sole defendant, CenturyLink, Inc., is a parent holding company that has no customers, provides no services, and engaged in none of the acts or transactions about which Plaintiffs complain," CenturyLink wrote. "There is no valid basis for Defendant to be a party in this Proceeding: Plaintiffs contracted with the Operating Companies to purchase, use, and pay for the services at issue, not with CenturyLink, Inc."

Customers signed up for business relationships with those 10 companies (Qwest Corporation; Embarq Florida, Inc.; Embarq Missouri, Inc.; Carolina Telephone and Telegraph Company LLC; Central Telephone Company; CenturyTel of Idaho, Inc.; CenturyTel of Larsen-Readfield, LLC; CenturyTel of Washington, Inc.; CenturyTel Broadband Services, LLC; and Qwest Broadband Services, Inc.), most of which are just holdover names left over by the company's 2011 acquisition of and earlier fusion with CenturyTel and Embarq. Domains for those companies all resolve to CenturyLink.com.

Because customers signed user agreements with those ten subsidiaries holding them to binding arbitration, CenturyLink lawyers argue that CenturyLink proper can't technically be sued for wrongdoing. You'll recall that thanks to AT&T and a 2011 Supreme Court decision, companies can now strip away your legal rights via fine print, instead forcing you into binding arbitration, where the corporation is victorious more often than not. And while the class action system is arguably broken (unless your criteria involves helping lawyers buy new boats), the arbitration system we've supplanted it with is arguably worse.

Needless to say, the plaintiffs trying to hold CenturyLink accountable for routinely ripping them off aren't impressed by the company's strategy:

"We reject these heavy-handed, anti-consumer tactics and the absurdity of these shell entities that CenturyLink claims to operate under," Meiselas said..."The arbitration clauses they're trying to enforce post-date the litigation," he said.

"The arbitration clauses they're trying to enforce post-date the litigation," he said.

Even with Supreme Court ruling ISP efforts to shovel users into binding arbitration isn't always successful, depending on state law. For example a US District Court judge in California recently ruled that AT&T couldn't force customers into binding arbitration because California law prohibits some aspects of mouseprint arbitration efforts. CenturyLink, meanwhile, is one of several U.S. telcos that have been hemorrhaging customers thanks to their refusal to seriously upgrade their aging copper networks at scale. Between that and the company's billing shenanigans (which include imposing fees for doing absolutely nothing), CenturyLink's effort to have zero customers may just prove successful yet.

Filed Under: billing, fraud, subscribers
Companies: centurylink