Verizon, Too, Turns To Subsidized Netbooks

from the lock-em-in dept

We've wondered before why mobile operators say they hate the subsidies they pay to discount handset prices, but then expand their use of them to include laptops and netbooks. The trend looks like it's here to stay, as Verizon Wireless has now confirmed it will start selling 3G-equipped netbooks by the end of June, so now, in addition to tying yourself into a 2-year contract where you're paying back the cost of your cell phone, you'll soon be able to tie yourself into a long-term data-service contract to pay back the price of a laptop, too. Of course, once that contract's up, the device will still be locked to the operator from which you bought it, making it difficult (or impossible) to take your business elsewhere. Meanwhile, business is flowing the other direction, too: Dell is reportedly looking to set up a virtual operator in Japan, selling its customers network access on another operator's mobile network to use with their mobile-equipped laptops. It's an interesting contrast in models, because it's unlikely Dell will subsidize the hardware like the operators. Part of the issue with handset subsidies is that consumers are used to paying the lower subsidized prices, and so any change that raises prices will be met with disdain. But people aren't used to the benefit of subsidies for their PCs, so may be more open to paying a higher upfront cost for the hardware if it means they don't have to sign a long-term contract with a high monthly service charge.

Filed Under: netbooks, subsidies
Companies: verizon

Verizon's Claims That Its Info-Sharing Plans Are Harmless Ring Hollow

from the that-which-is-made-not-immediately-full-of-clarity dept

Over the weekend, David Weinberger, one of the co-authors of The Cluetrain Manifesto wrote that he'd gotten a 45-page pamphlet of legalese from Verizon Wireless saying he could opt out of letting the company share "Customer Proprietary Network Information" with other groups. The rather broadly worded statement, which said the company could give info like call records to "affiliates, agents and parent companies," kicked up some fuss online. GigaOM says that this is the same issue that popped up in late 2007, when Verizon sent a similar notice to its customers. Verizon's PR bloggers say that now, just like in 2007, there's nothing to worry about -- in fact, the PR person went so far as to merely cut and paste his comments on the issue from two years ago. He says that Verizon won't sell customer's info to third parties; it just needs their consent to share it among the Verizon group of companies so it can offer people bundled services.

Given the way the company is communicating the issue -- a bill insert few people will likely pay attention to, written in a format that's pretty difficult, if not impossible, for most average people to divine any real meaning from -- it's hard to accept the explanation at face value. This is representative of the lack of transparency telcos and ISPs often take on privacy issues. Instead of clearly explaining themselves and what they're doing with customer data, they shroud their efforts in secrecy and legalese, then just say "there's nothing to worry about, just move along." If there really is nothing to worry about, why can't they do a better job of making that clear to the public? Their method of communication, and the way they explain themselves, simply increases consumers' skepticism and makes it look like they've got something to hide. In addition, making the system opt-out, rather than opt-in, doesn't help either.

Filed Under: cpni, information sharing, pr
Companies: verizon

Dear ISPs: When Launching Value Added Services, How About Actually Adding Value?

from the just-a-suggestion dept

At the beginning of January, I thought it was amusing that Verizon was launching its own backup service for a stunning $31/month (with a limit of 50GB of backup storage). That seemed fairly ridiculous, given that you could get an unlimited backup service from Carbonite or Mozy for $5/month, or using JungleDisk with Amazon's S3 for exceptionally low prices as well (depending on how much you use -- but 50GB comes in at way less than $31). Now comes the news that Comcast is also launching its own backup service, with a few different price points, but starting at $5/month for only 10GB and going up from there. It's not a bad service to offer -- and, surely, Verizon and Comcast see these as ways to lock in consumers, since it now has possession of their backup data -- but it seems quite odd that these companies would offer "value added services" where the prices are more expensive than rolling your own, which doesn't come with the lock-in. And, as noted, with Comcast, using the service counts against their new broadband caps, so there isn't even a benefit there. These ISPs seem to be missing the point of these value added services. If you want to get people to use them, they should actually add value.

Filed Under: backup, isps
Companies: carbonite, comcast, jungledisk, mozy, verizon

Can't Compete? Sue For Patent Infringement!

from the it's-easier! dept

It happens over and over again... if you can't innovate to compete, why not litigate to compete? Broadband Reports points out that Charter Communications is now suing Verizon for patent infringement relating to Verizon's FiOS fiber optic internet connections. The article makes it pretty clear this has nothing to do with any "stolen" technology, and everything to do with Charter not wanting to have to compete with Verizon's faster fiber optic offering. Progress, just the way Jefferson intended, right?

Filed Under: competition, fiber optics, innovation, patents
Companies: charter, verizon

No One Can Find ISPs Who Have Agreed To RIAA's 3 Strikes Plan

from the keep-looking dept

It's been a few weeks since the WSJ announced that the RIAA was supposedly dropping its lawsuit strategy, in favor of a backroom deal with ISPs, negotiated under dubious circumstances by NY's Attorney General Andrew Cuomo, whereby those ISPs would start cutting off connections from those accused (not found guilty) of file sharing. However, since then, we've heard from a variety of ISPs who don't like the plan, and Wired went on a wild goose chase trying to find a single major ISP that has agreed to the plan and came up empty. Of course, most of them refused to comment. The only one who said anything straight up was Verizon -- who had earlier confirmed that it had no interest in doing a deal with the RIAA. The big cable companies and AT&T have shown some interest in the past -- but now refuse to admit that an agreement has been worked out.

The big question is why?

If this is such a great deal for consumers, as Cuomo and the RIAA insist, then why wouldn't an ISP want to step right up and proudly admit to such a deal? Obviously, it's because they know that such a deal is a sham, based on no legal reasoning, that will harm their position in the market and piss off customers. The RIAA will likely claim that no deals have been announced because the details haven't been finalized -- but again, that makes no sense. We've been questioning from the beginning why these negotiations haven't been more open. And with record labels like Warner Music and EMI insisting that they want to be seen as more open and willing to hold a "conversation" with critics, the fact that no one will talk openly about this backroom deal shows what a bunch of liars they are again. They don't want an open conversation. They want the government and ISPs to protect their business model, and they've convinced Andrew Cuomo to fall for it.

Filed Under: copyright, isps, music, takedowns, three strikes
Companies: at&t, comcast, cox, riaa, time warner cable, verizon

Some ISPs Push Back On RIAA Plan

from the good-for-them dept

While there was big news on Friday concerning the RIAA's supposed plan to stop suing everyone in favor of having ISPs police networks for the RIAA, it seems that some ISPs are clearly not on board with the plan (and, in fact, the details of the plan seem rather lacking). News.com has the story of one smaller ISP that has been responding to every RIAA notification by sending a request back for a billing address where he can send an invoice for the time it takes to respond to takedown requests. For the most part, the RIAA simply ignores these responses, though in some cases its representatives seem to feign ignorance, claiming "In regards to billing, we fail to understand what you mean with that!"

At the same time, it appears that Verizon is one large ISP refusing to cooperate. This is not really that surprising, given that Verizon was really the only major ISP to stand up to the RIAA's original campaign of demanding the identity associated with IP addresses without first filing a lawsuit (the end result of which was the RIAA's filing large lawsuits against multiple "john and jane does" in order to get the names). Verizon has also pushed back in the past when other big ISPs like AT&T seemed willing to act as copyright cops for the RIAA.

Filed Under: copyright, copyright cops, filtering, isps
Companies: riaa, verizon

Cable Companies Figuring Out Their Wireless Strategies: Add Value To The Core Offering

from the seems-smart dept

While the cable companies have long had trouble coming up with a good wireless strategy (including numerous false starts) it looks like some may be figuring this out, in setting up business models where the wireless acts as a free value-add that keeps customers tied to their core, profitable businesses. For example, the article discusses Cablevision:

As such, Moffett likes Cablevision's WiFi strategy because it serves as a value-added service for its customers, and it's cheap to roll out. Moreover, Cablevision is pitted against Verizon in New York, and Verizon can't match the free WiFi offering.

"Their model is to pay for the WiFi network by, well, giving it away," Moffett said. "The $300 million of capital spending required to build it, and the modest operating costs to run it, can be paid for with just a small uplift in market share--either gained or retained--in their wired broadband service. At an ARPU of $35 per month and 80 percent contribution margins for wired broadband, it would take only 160,000 incremental subscribers--just 3.6 percent share of their cable footprint--to earn a 10 percent return on investment."

This is interesting for a few reasons. First, it shows yet another case where a company realizes that even if the initial costs are huge, if the marginal costs are low, and the "free" product better ties customers to a scarce product, it can make sense to give the other product away. So, yes, once again, there can be a good ROI on a "free" product -- even one that costs $300 million to roll out.

Of course, what may be even more noteworthy is the comment about how "Verizon can't match the free WiFi offering." That's quite amusing, because, five years ago, Verizon started implementing a plan to... offer free WiFi to Verizon DSL customers in NY. And, the plan wasn't even that expensive, because it made use of all the Verizon telephone booths that were already installed. In fact, the plan was seen as a pretty big success, responsible for reducing customer churn in such a way that more than paid for the service (exactly as the analyst is predicting will happen with Cablevision's offering). Yet, the bigwigs at Verizon still decided to kill the program, because, for reasons that still escape us, some execs were worried that it would compete with Verizon Wireless' EV-DO cellular wireless offering. Wonder if they regret that decision now?

Filed Under: cable, wireless
Companies: cablevision, verizon

FCC Just Couldn't Stop Voting

from the election-day-festivities dept

Well, it's election day and apparently the FCC commissioners liked voting so much they took votes on just about everything. Amazingly, it looks like they even made some good decisions. The big one, of course, and the one that will get the most press, is the unanimous vote to free up television "white space" spectrum. While the NAB made a last ditch effort to stop this, the FCC made the right call here. This spectrum can be put to much better use, which can have a huge impact on increasing innovation and wireless technologies. This is a big win. The FCC also approved Sprint and Clearwire's deal to set up a joint venture for their WiMax operations, as well as allowing Verizon to buy Alltel. Both of those deals make sense as well, so it's good to see them approved.

Other than that, the FCC said that it's going to start looking into the pricing policies of cable companies... and Verizon. Who's missing? FCC boss Kevin Martin's best friends over at AT&T. To be honest, while it's quite likely that the cable companies and the telcos (yes, including AT&T) are abusing their oligopoly position, the answer shouldn't be having the FCC act as a watchdog over pricing policies, but for a better system to be set up that encourages real competition. In the meantime, though, can someone explain why AT&T was left out of the bunch?

Filed Under: deals, fcc, mergers, spectrum
Companies: alltel, at&t, clearwire, comcast, google, sprint, time warner, verizon

Dear Verizon: I Haven't Been An MCI Customer In Four Years

from the customer-service dept

About five or six years ago, I had landline phone service from MCI. In the age before VoIP was common, MCI had a service called "The Neighborhood" which was like many VoIP services today, but without the VoIP part. Unlimited calls for a single flat rate and such advanced (at the time!) features as emailing you your voicemails. It wasn't a bad deal, and I used it for a year or two, until I was getting ready to move. VoIP services had become popular, so I transferred that phone line to a VoIP account and canceled the MCI service in 2004. And that was that. Or so I thought. In 2006, Verizon bought what was left of a scandal-ridden MCI, and as far as I knew, the MCI brand had pretty much gone away.

Yet, in the last couple of weeks, I've received a barrage of robocalls from MCI, letting me know that my credit card is expiring, and I need to log into mci.com to update the card. The call notes that my bill is automatically charged to this credit card and if I want to "continue enjoying this convenience" I need to update soon. The call is correct in that the credit card I used back when I had MCI expired this month, but is it that hard for Verizon (or whoever it is) to recognize that the very phone number they're calling me on hasn't been connected to MCI service in four years and that the company has not, in fact, billed me during that time? And, honestly, why did they hang onto my credit card info for so long? And, finally, why call me three times a day with no way for me to tell them to knock if off? I thought perhaps this was a new form of phishing, but the call directs you to log into mci.com itself, so it sounds like it's legit. Either way, it raises plenty of questions about MCI (and now Verizon's) data handling practices.

Filed Under: credit cards, customer service, robocalls
Companies: mci, verizon

Is Public Shame Enough To Keep ISPs From Doing Bad Stuff With Your Data?

from the not-if-no-one-knows-what's-going-on dept

While there has been a lot of attention paid recently to ISPs using clickstream tracking to provide targeted ads, it seems that many people are still focused on the activities of the ad companies, such as NebuAd, which garnered some attention from Congress for its offering. However, as we pointed out recently, many ISPs have been selling your clickstream data to others for years without people knowing about it. Now, with Congress threatening to put regulations in place, the various ISPs are scrambling to push back against that possibility.

For example, Broadband Reports points out that Verizon is claiming that the chance of a public shaming will keep the company honest. While it's certainly true that a public shaming is a risk, it's also true that the sale of clickstream data is usually kept entirely secret, which would preclude any sort of public shaming. Public shaming could work if the companies were upfront and honest with how they're using data. But, since they're not, it's difficult to see how that works as a self-regulating mechanism.

Filed Under: clickstream tracking, isps, legality, public shame, regulations
Companies: verizon