Want To Know Why U.S. Broadband Is A Bad Joke? Take a Close Look at Frontier Communications

from the ill-communication dept

In telecom policy circles, there's an army of "experts" who twist themselves into pretzels trying to pretend U.S. telecom is a healthy, normal, vibrant market. Blinded by partisan loyalties, sector financial links, or ideologies embedded decades ago, they're incapable of even acknowledging that Americans pay too much money for spotty, substandard service with historically terrible customer support. They're even less likely to acknowledge the corruption, regulatory capture, and lack of competition that made this dysfunction possible. If it is acknowledged, it's downplayed to a comical degree.

As in the Ma Bell days, at the heart of U.S. broadband dysfunction sits phone companies. Providers, that have long refused to upgrade their aging DSL networks despite millions in taxpayer subsidies, lobby for state laws that ensure nobody else can deliver broadband in these neglected footprints either. These are companies that have a bizarre disdain for their paying customers, delivering the bare minimum (slow DSL) at the highest rates they can possibly charge without a full-scale consumer revolt. It's not surprising, then, that many telco DSL customers are fleeing to cable, assuming they even have a second broadband option.

This dynamic often results in some almost comedic dysfunction.

Like in West Virginia, where incumbent telco Frontier has repeatedly been busted in a series of scandals involving substandard service and the misuse of taxpayer money. The graft and corruption in the state is so severe, state leaders have buried reports detailing the depth of the problem, and, until recently, a Frontier executive did double duty as a state representative without anybody in the state thinking that was a conflict of interest.

But it's not just West Virginia. Frontier has since been under investigations from New York to Minnesota for failing to upgrade or even repair its aging network, at points putting human lives at risk. The company has also been repeatedly under fire for blatantly ripping its users off. For example, it has been charging its customers a rental fee for modems they already own. Very rarely do you see state leaders stand up to the company. And you'll certainly never see any kind of substantive pushback by the current, industry-captured FCC.

Customers who can leave (usually to the other end of the duopoly, Comcast), have been fleeing whenever possible, resulting in a looming bankruptcy by the company. In a report to investors this week we're only now starting to finally see something close to truth from the company as it tries to own up to its incompetence. Frontier had apparently tried to redact much of the report detailing the scope of network neglect, but appears to have bungled that as well:

"For example, one redacted sentence says that "Frontier WV's copper network has at least 952,163 connection points that are susceptible to moisture, corrosion, loose connections, etc. that may cause interruptions of service to customers."...The failed redaction of the number of connection points was coupled with failed redactions about the age of the network. The consultant firm's report said that 46.8 percent of Frontier's West Virginia network is between 36 and 47 years old. Both the percentage and the numbers of years were unsuccessfully "redacted" by Frontier.

The report makes it clear that the company probably shouldn't have engaged in mindless M&As, acquiring unwanted aging phone networks from AT&T and Verizon in "growth for growth's sake." Many of those deals were completely bungled and saddled the company with unneeded debt. Most should have been blocked by regulators and lawmakers who were too busy kissing the company's ass. Frontier also should have invested money back into the network to build a stronger company and retain subscribers, instead of engaging in repeated stock buybacks.

There are two reasons the company didn't do better on these fronts. One is sniveling, feckless, U.S. regulators and cash-compromised state and federal lawmakers, who rubber stamp every merger thrown on their desks, and refuse to hold politically powerful monopolies accountable. The other? A lack of competition across most of Frontier's territories:

"So why would a company like Frontier not immediately hit the upgrade button and start a massive copper retirement-fiber upgrade plan to keep the company in the black? In short, Frontier has survived chronic underinvestment because of a lack of broadband competition. Nearly two million Frontier customers have only one choice for internet access: Frontier. For another 11.3 million, there is only one other choice – a cable company that many detest. Frontier has enjoyed its broadband monopoly/duopoly for at least two decades. So long as its customers have fewer options, Frontier is under less pressure to invest in upgrades."

There were ample opportunities for state and federal leaders to step in and correct these problems, while embracing pro-competition policies that minimized the need for government involvement. Instead we let a regional monopoly dictate state and federal policy, and now act surprised when the end result is a smoldering dumpster fire. Granted as Frontier stumbles toward bankruptcy most of its debt will be wiped clean, nobody in the U.S. will learn anything from the process, and a universe of "very serious telecom policy thinkers" will continue to turn a blind eye to the entire mess as history repeats itself.

Filed Under: broadband, cable, competition, corruption, dsl, fcc, promises, subsidies, west virginia
Companies: frontier

AT&T Jacks Up TV Prices Post Merger After Repeatedly Claiming That Wouldn't Happen

from the price-hikes-for-everyone dept

You may be shocked to learn this, but nearly all of the promises AT&T made in the lead up to its $86 billion merger with Time Warner wound up not being true.

The company's promise that the deal wouldn't result in price hikes for consumers? False. The company's promise the deal wouldn't result in higher prices for competitors needing access to essential AT&T content like HBO? False. AT&T's promise they wouldn't hide Time Warner content behind exclusivity paywalls? False. The idea that the merger would somehow create more jobs at the company? False.

This was all laid out to US District Judge Richard Leon during the trial (twice), who ignored all of the warnings and rubber stamped the deal without a single condition. At absolutely no point did Leon in his absurd ruling recognize the threat of AT&T owning both a monopoly over broadband and a massive media empire in charge of content needed by competitors. And when lawyers and economists warned him that kind of power would only lead to higher rates, he almost happily ignored them.

Fast forward a year or so and AT&T is already imposing another significant hike on its TV customers (both traditional and streaming). New and existing users are seeing price hikes upwards of $10 to $15 per month. It's the second price hike in less than a year. And despite being the broadcaster in this equation, AT&T blamed the hikes on broadcasters:

"In the email to customers that one customer shared with Ars, AT&T blamed the price increase on rising programming costs. Of course, AT&T itself is partly responsible for rising programming costs because it now owns Time Warner. AT&T told a federal judge last year that its acquisition of Time Warner would "enable the merged company to reduce prices," but it's been the opposite in reality."

Funny, that. One of the reason for the hikes is AT&T needs to pay down debt from its 2015 acquisition of DirecTV ($67 billion) and the 2018 acquisition of Time Warner ($86 billion). AT&T thought it could simply just merge its way to video advertising market dominance. But after hiking prices to recoup this debt, consumers are fleeing AT&T's services at an alarming rate. While AT&T is an incredible political tactician, it's just another example of how the government-pampered monopoly can't help but do a face plant any time bare-knuckled competition is required.

The saga again points to a US regulatory and legal system that has effectively given up on consumer protection or enforcing antitrust law, and the end result couldn't be more obvious (or so you'd think).

Filed Under: competition, consumer welfare, doj, fcc, fees, merger, prices, promises, tv
Companies: at&t

Telecom Union Got Hoodwinked Into Supporting AT&T's Shitty Merger

from the ill-communication dept

You may be shocked to learn this, but nearly all of the promises AT&T made in the lead up to its $86 billion merger with Time Warner wound up not being true.

The company's promise that the deal wouldn't result in price hikes for consumers? False. The company's promise the deal wouldn't result in higher prices for competitors needing access to essential AT&T content like HBO? False. AT&T's promise they wouldn't hide Time Warner content behind exclusivity paywalls? False. The idea that the merger would somehow create more jobs at the company? False.

Of course the press and public aren't the only folks AT&T misled. To glean the support of the telecom sector's biggest union, the Communications Workers of America, AT&T apparently promised that newly acquired Time Warner (and subsidiary) workers would be able to join the union. But when the time came to actually allow those employees in, guess what? AT&T suddenly declared that wouldn't be happening for the vast majority of them:

"Of about 22,000 U.S. employees who previously worked at Time Warner, AT&T claimed the agreement applies to at most 82, a union official wrote in a letter attached to a June court filing. CWA, which already represents about 90,000 AT&T employees, has asked a judge to order arbitration. In May, the company asked that the case be dismissed, saying the company has “the right to determine” which employees are covered by unionization provisions."

Granted if you spend five seconds looking at the history of major mergers in the telecom and media space, none of this should be surprising.

Merger after merger, a universe of amazing promises are revealed that post deal, never actually materialize. Any conditions that are affixed are usually theatrically hollow, and adherence to them is rarely enforced. In AT&T's case, not a single merger condition was affixed to the deal, thanks in large part to a comically-myopic ruling by U.S. District Court Judge Richard Leon, who was oblivious to AT&T's plan to use the death of net neutrality, regulatory capture at the FCC, and ownership of essential content as a competitive bludgeon in the streaming wars to come.

At some point, you'd think that major telecom unions would stop supporting megadeals that almost uniformly result in higher prices, less competition, and fewer jobs (given redundant positions are pretty uniformly eliminated a year or two after the ink is dry). But the CWA pretty routinely can't help itself; it also breathlessly supported AT&T's 2011 merger with T-Mobile, which was ultimately blocked for being exceptionally terrible. Fortunately the CWA seems to recognize the latest megamerger proposal, T-Mobile's planned $26 billion merger with Sprint, is going to be bad for the sector as well.

At some point you'd think that everybody in the chain, from unions and consumers to the press and antitrust enforcers, would realize these industry megadeals are almost always uniformly harmful. Pre-merger promises never materialize, prices routinely go up, and job losses abound; yet each and every time there's a new megadeal proposed we appear to have learned nothing, just like some purgatorial version of Charlie Brown and Lucy football.

Filed Under: mergers, promises, telcos, unions
Companies: at&t, communications workers of america, cwa

AT&T Breaks Another Merger Promise In Making 'Friends' Exclusive

from the who-could-have-predicted-it dept

Last year AT&T defeated the DOJ's challenge to the company's $86 billion merger with Time Warner thanks to a comically narrow reading of the markets by U.S. District Court Judge Richard Leon. At no point in his original 172-page ruling (which approved the deal without a single condition) did Leon show the faintest understanding that AT&T intends to use vertical integration synergistically with the death of net neutrality and neutered FCC oversight to dominate smaller competitors and tilt the entire internet ecosystem in its favor.

While the DOJ lost its original case, it was quick to appeal late last year, highlighting how within weeks of the deal AT&T had jacked up prices on consumers and competitors like Dish Network, which says it was forced to pull HBO from its lineup because it could no longer afford the higher rates.

Critics of the merger had also pointed out how AT&T would likely use the deal to increasingly make content exclusive to its own service, making it harder for competitors to access it. If you'll recall, this was something AT&T CEO Randall Stephenson also insisted wouldn't happen when addressing a Senate antitrust subcommittee pre-merger:

"Nor is there any reason to believe we could use Time Warner programming or AT&T networks to hurt related markets. Simply put, it would be irrational business behavior to do so. Time Warner's programming is more valuable when distributed to as many eyes as possible. Moreover, in order to have great programming, it is imperative that we attract great creative talent to develop it. The best way to attract that talent is through widespread distribution of Time Warner content."

Of course this week AT&T announced it would be taking content like Friends and making it exclusive to its own streaming platforms, including its new looming HBO Max service:

"AT&T will start restricting some Time Warner shows to its own streaming service, despite previously telling the government that it would distribute Time Warner content as widely as possible.

WarnerMedia, the division AT&T created when it bought Time Warner, today announced a new online streaming service called "HBO Max." HBO Max will debut in the spring of 2020 and include exclusives that will no longer be available on other streaming platforms."

On its surface this doesn't seem like that big of a deal. After all, Friends is an old show, and most users probably won't care. And it's certainly not the only show getting this treatment (Comcast NBC Universal just made The Office exclusive to its streaming platform, and Disney is also pulling Netflix content for exclusive use on its own looming Disney+ service). But more broadly, the more essential content AT&T makes exclusive to its own platform (especially and likely inevitably, HBO), the more difficult it will be to compete with AT&T. Knowing AT&T, there's going to be far more exclusives where this came from.

This is all before you even get to net neutrality and AT&T's domination in broadband, which has allowed it to behave anti-competitively in different, even more problematic ways (like only imposing arbitrary usage caps if you use a competitor's service). Letting companies like Comcast NBC Universal and AT&T Time Warner dominate both the conduit and the content will ultimately result in a universe of headaches for competitors and consumers alike. And Judge Leon's failure to see (or acknowledge) this will be a "gift" that keeps on giving for the next decade.

The other major problem these ongoing exclusives have is they increasingly force consumers to hunt and peck through a growing, cumbersome list of subscription services just to find the content they're looking for. And if subscription price and ease of use isn't managed carefully, it's simply going to drive frustrated users back to piracy. And when that happens, history suggests these companies will blame everybody and everything (ban VPNS!) but themselves for it.

All of that said, I'm not sure banning exclusive content deals is the answer. What would be at least part the answer for maintaining healthier markets? Finally realizing that endless media consolidation and mindless mega-mergers are generally harmful to the media and telecom sector (as now AT&T owned HBO and DC comics employees are just starting to figure out post merger). And that the long list of promises made in the ramp up to such super unions are almost always uniformly empty. There are fifty years of data for clear supporting evidence, especially in telecom.

Filed Under: content, friends, lies, mergers, promises, silos, streaming
Companies: at&t, hbo, netflix, time warner

After Nabbing Billions In Tax Breaks, AT&T's Promised Job Growth Magically Evaporates

from the Charlie-Brown-playing-football dept

Telecom monopolies have a pretty good racket going. They'll consistently demand all manner of tax cuts, subsidies, and other government perks in exchange for broadband networks they only half or partially deploy--or jobs that never materialize. The nation's telcos in particular have received countless billions in taxpayer subsidies to expand their broadband networks, yet time and time again we've shown how they've wiggled out of these obligations, leaving huge swaths of America left outside of the reach of fast, inexpensive, competitive broadband (that's particularly true if you're poor).

It doesn't matter how many times we go through this little stage play, it's a cycle that just never ends. AT&T's lobbying and policy folks are exceptionally good at routinely promising state and federal governments that a cornocopia of new jobs and amazing broadband investment is just around the corner, but only if AT&T gets what it wants: be that the death of net neutrality, a lower tax rate, more subsidies, or any number of protectionist or otherwise terrible laws designed largely to protect AT&T's non-competitive geographical fiefdoms. It's a cycle, and a level of institutional gullibility, that's pretty staggering in scope and repetition.

Yet somehow we never wise up. We never audit investment promises. And we certainly never hold giant telecom monopolies accountable. For example, AT&T spent most of last year promising all manner of incredible broadband investment, new jobs, and new innovations if the Trump administration was willing to give it a massive new tax cut. These cuts would, we were repeatedly told, result in a huge boon for broadband investment and "really good jobs":

"Lower taxes drives more investment, drives more hiring, drives greater wages," Stephenson said on CNBC's "Squawk Box." "All of this fits together."...For example, he said AT&T would have to add 7,000 jobs to execute on every $1 billion of capital investment. "There are jobs wearing hard hats … to put that capital into the ground or on cell towers," he said. "There are high-paying, really good jobs with great benefits. The correlation is tight — very, very tight."

The AT&T CEO said that reducing business regulations is another way to get companies to invest. Regulation is "effectively a tax on investment," he argued. "Take regulation down, you get investment up."

The Trump administration was happy to oblige, doling out cuts worth upwards of $20 billion for AT&T. But this theater ignored the fact that AT&T (and countless other companies like it) have long engaged in all manner of financial bookkeeping magic to ensure they already pay a relative pittance in taxes (especially true in telecom where complex mergers and gamesmanship like Reverse Morris Trusts can be used to endlessly dodge tax obligations). And it also ignored how many times AT&T has made these empty promises then failed to follow through.

And it's happening again. Despite its $20 billion in tax savings and record profits, AT&T continues to lay off thousands of employees in the wake of the Trump tax cuts:

"Though AT&T is earning record profits, spending billions on stock buybacks and is expecting an estimated windfall of $20bn in savings from Donald Trump’s tax reforms, it has continued to lay off workers and outsource jobs...In the last seven years, AT&T has closed 44 call centers, according to the Communications Workers of America labor union. Four closures, including the facility in Harrisburg took place this year. While some workers are able to relocate to other call centers in the US, many are left jobless. For some, their jobs are sent offshore, where workers can be paid less than $2 an hour."

Some of these job cuts reflect AT&T's waning interest in being an actual broadband company as it pivots (like Verizon) to more lucrative online advertising. Others reflect the company's efforts to manage the massive debt incurred from its endless quest to grow bigger for growth's sake via an endless wave of megamergers. Unsurprisingly (if you spend five full minutes reading a telecom history book), any real savings from tax cuts, mergers, consolidation and mindless deregulation of natural monopolies (like net neutrality) goes to executive compensation and investors, not to employees or back into the network.

Of course enriching investors and executives is the whole point. Yet we seem intent on adding a layer of bullshit onto these proceedings that try and suggest that such mindless fealty to AT&T is good for everybody, when that's simply not true. To sell the public and press on this manufactured idea, AT&T and other telecom companies (like Charter) promised employees bonuses (not to be confused with actual raises) as a direct result of the tax cuts. But there too AT&T was misleading, failing to mention those bonuses had already been secured as part of routine union negotiations:

"In a December 2017 news release advocating in favor of Trump’s tax cuts, AT&T promised bonuses of $1,000 to 200,000 employees over the next year. The news release omitted that unions had already previously negotiated those bonuses with AT&T before the tax cut bill was passed."

AT&T's broadband investment promises are also routinely hollow. One thing AT&T likes to do is take the CAPEX and network investment numbers it would have had anyway, and claim these are "new" goals only made possible if AT&T gets what it wants. Few in the press ever really bother to fact-check AT&T's math. Neither do lawmakers, who have come to rely on AT&T's generous windfalls to help fund their next election. The end result usually winds up being some scattered upgrades in more competitive areas, but huge swaths of America with decidedly last-generation DSL despite a parade of subsidies and tax breaks for AT&T (again, a trend especially notable in low-income AT&T markets).

Our immense gullibility to these bogus promises is a bit more stark to me than it is to most, having watched this play out countless times with nary a single penalty for AT&T over the last few decades. The drama played out again recently with the assault on net neutrality, a move that will result in countless anti-competitive headaches and rate hikes for captive customers, but was similarly framed as an incredible gift to consumers, innovation, American jobs and network investment. Someday we may learn our lesson and stop throwing billions at blatant grifters like AT&T, but it's abundantly clear it's not happening anytime soon.

Filed Under: broadband, job growth, promises, rent seeking, subsidies, tax breaks
Companies: at&t

Verizon Gets A Wrist Slap For Years Of Neglecting Its Broadband Networks In New Jersey And Pennsylvania

from the I-get-200-kbps-when-it-rains dept

For much of the last decade we've noted that Verizon received billions in tax breaks and subsidies for fiber optic networks that were only partially deployed. From New Jersey to Pennsylvania, from New York City to Philadelphia, newswires the last few years have been filled with complaints from consumers and governments who say the company didn't finish the job it was handsomely paid to complete, leaving a patchwork of spotty next-gen broadband availability, and entire cities filled with customers still paying an arm and a leg for circa 2002 DSL speeds.

And the problem isn't just that Verizon didn't upgrade its networks, it's that the company has been neglecting the aging DSL network equipment already in place. In 2015, for example, frustrated Verizon union employees submitted a complaint to the Pennsylvania Public Utility Commission highlighting just what Verizon's network hardware currently looks like in many parts of a state that was supposed to have been upgraded to fiber years ago:

The same can be said for a wide variety of instances where Verizon couldn't really be bothered to work particularly hard at utility pole repair:

Given Verizon's political stranglehold over federal and local regulators and legislators, efforts to hold the company accountable on this front have been decidedly mixed. The company has often added insult to injury by insisting these complaints are either "pure nonsense," or at times by trying to claim that people who would like their phone and DSL lines to be upgraded (or hey, to simply work) are just being archaic Luddites because they refuse to sign up for significantly more expensive wireless service that in many areas may not be available anyway:

"This is a classic example of how some people fear new technology so they reactively reject it instead of accepting it, no matter how irrational that fear may be," Gierczynski said. Verizon opponents believe it plans to offer non-FiOS neighborhoods what they said is inferior wireless or Voice Link services once the firm's aging, deteriorating copper wire lines stop working altogether.

"I think people are going to look back and laugh (at copper landline proponents) ... just like (those) who were part of the Anti-Digit Dialing League," he added, referring to people who resisted the seven-digit phone numbers that began in the late 1950s.

Yes, hilarious. The goal for both AT&T and Verizon over the last few years has been to effectively let these unwanted DSL customers rot on the vine, until company lobbyists can convince state regulators to purge regulations requiring they continue to serve these users, many of which are elderly. This has been done (as evident above) by suggesting that killing off fixed-line DSL networks and shoving these users to wireless is all part of a miraculous "IP transition" that will deliver untold, amazing technological advancements to local communities.

Complications arise from the fact that wireless (especially in rural areas) isn't yet a viable alternative to fixed lines. Many of these lines were also taxpayer subsidized, and are still very much in use. Not to mention the fact that Verizon took billions more from these communities to deliver fiber upgrades never delivered. That said, there has been some modest traction in recent weeks after Verizon was forced by Pennsylvania regulators to at least repair some of the worst parts of its neglected network:

"The telecom giant will repair the worst of its legacy copper network in areas without FiOS and replace 15,000 unsightly and dangerous “double poles” on Pennsylvania roadsides, according to the deal between the company and the company’s Pennsylvania unionized workers who are part of the Communications Workers of America."

The agreement falls well short of requiring Verizon to admit fault of any kind, or forcing Verizon to upgrade these networks to fiber as per a 1993 agreement with the state -- that critics say was supposed to result in uniform fiber coverage statewide. But Verizon has also been forced to strike a similar deal by the New Jersey Board of Public Utilities, who found that, again, Verizon neglected its fixed-line networks to an almost comical degree. It won't, however, be forced to upgrade the state to fiber:

"But the telecom giant won’t be wiring a wide swath of Cumberland, Burlington, Salem, and Atlantic Counties with the high-speed Fios service that has been extended to millions of residents in other parts of New Jersey, according to a settlement among state officials, Verizon, and 17 towns that complained about substandard phone service. Fios is Verizon’s branded service for internet, television, and voice services, delivered over fiber lines.

In late 2015, the 17 towns, mostly in Cumberland County, complained to the state Board of Public Utilities about downed phones and bad or no internet. Service has been particularly unreliable on rainy or damp days, which result in buzzing water-soaked copper phone lines because of their age and rundown condition, local residents and officials say."

These are important wins, but in full context they're a drop in the bucket. Time, and time, and time again communities have tried to hold the telco accountable for taking taxpayer funds, then failing to upgrade essential infrastructure. Verizon's attentions meanwhile are elsewhere. The company recently acquired AOL and Yahoo in the hope of pivoting from neglecting running fixed-line networks to becoming a major media and advertising competitor to Google and Facebook (success on that front has been decidedly mixed).

It's abundantly clear that Verizon executives are done with these communities, but these communities also have made it abundantly clear (as New York City's recent lawsuit against the telco will attest) -- they're not quite yet done with Verizon.

Filed Under: broadband, competition, fiber, new jersey, pennsylvania, promises

AT&T Already Backing Off Its Biggest Time Warner Merger Promise: Cheaper TV

from the wink-wink-nudge-nudge dept

AT&T has spent the last few months fending off critics of its planned $100 million acquisition of Time Warner. Most critics say the company's ownership of Time Warner will make it harder for streaming competitors to license the content they need to compete. Others warn that AT&T's decision to zero rate (cap exempt) its own content gives the company's new DirecTV Now streaming TV service an unfair advantage in the market. That's before you get to the fundamental fact that letting a company with the endless ethical issues AT&T enjoys get significantly larger likely only benefits AT&T.

Responding to these criticisms, AT&T CEO Randall Stephenson spent the last few months repeatedly insisting that critics have it wrong, because the merger was allowing the company to introduce a new streaming video service that provides 100 channels of TV for just $35 per month:

"I'm not surprised [by the criticism]. They're uninformed comments," Stephenson said in response to a question from Wall Street Journal editor Rebecca Blumenstein at the newspaper's WSJDLive Conference. "Anybody who characterizes this as a means to raise prices is ignoring the basic premise of what we're trying to do here, again a $35 product we bring into the market."

That $35 price point was used again and again by AT&T lobbyists and executives in selling the deal before Congress, the company insisting that only this new mega-merger could possibly make this kind of offer possible. Stephenson at several points proclaimed that the lower-cost option was "a way to drive pricing down in the marketplace," -- a surefire example of AT&T's dedication to intense video competition.

It's ironic then that the company is already backtracking and raising rates on its new streaming TV service.

As it turns out, that $35 for 100 channel offer was only a limited-time promotion. AT&T has already jacked the price of the service up to $60 per month as of January 9, and the company is already indicating that pricing for all of its streaming TV service tiers (despite now owning Time Warner content) will be going up sometime in the near future:

"After Jan. 9, new subscribers who sign up for DirecTV Now’s Go Big tier with after Jan. 9 will pay $60 per month. Existing subs will continue to pay the $35-per-month rate for now, but the company also said the fees may increase at some future date. In addition, “channels, features, and terms (are) subject to change & may be discontinued without notice,” AT&T said in a notice on the DirecTV Now website."

And this comes as the outgoing FCC is clearly warning that AT&T is using usage caps to give this new content an unfair advantage over streaming alternatives. So while AT&T is busy claiming the Time Warner Merger will help it disrupt and compete with traditional cable, it's clear AT&T executives are more interested in building cable 2.0: the same old anti-competitive shenanigans and TV price hikes we all know and love, just with a shiny new layer of public relations paint. AT&T has a long history of bogus promises to get big deals approved, but it's rare to see the company already falling short on its promises before the ink is even dry.

Filed Under: merger, promises, tv
Companies: at&t, directv, time warner

Kickstarter-Funded Game Drops DRM-Free Version It Promised, Then Promises It Again After The Backlash

from the 360-degrees dept

Readers of this site should know by now that, as a general rule, DRM is equal parts dumb and ineffective. What in theory is a way for game publishers to stave off piracy typically instead amounts to a grand digital method for making sure legitimate customers can't play the games they buy. Now, not all DRM is created equally shitty, of course -- one of the more benign forms of DRM is Valve's Steam platform. Because games purchased on the platform check in with Steam servers for product keys and otherwise encrypts the individual files for the game each user downloads, it's a form of DRM.

And because DRM is almost always annoying even at its best, there are some gamers who will only buy DRM-free games. Many Kickstarter campaigns for video games, in fact, explicitly state that backers and non-backers will have a DRM-free option for the game available, either through platforms like GOG and HumbleBundle, or directly from the developer. Duke Grabowski, Mighty Swashbuckler! was one such game, with developer Venture Moon Industries promising both a Steam release and a DRM-free release when it collected funds from backers. Then, suddenly, once the company got a publisher on board for the project, it announced that the game would only be available on Steam.

During the campaign, DRM-free copies of Duke Grabowski were promised to backers. Of course, most people expected this promise to be honored. As of yesterday, the publisher the developers have lined up told them this no longer is the case. The whole DRM-free thing has been thrown out the proverbial window and only Steam keys are being offered. Understandably, the comments section on Kickstarter is in an uproar.

The reaction has been almost universally negative, with nearly every commentor speaking out against the decision. Several backers are demanding a refund because they only backed it because DRM-free was promised. Instead of getting militant, a few backers have decided it best to petition the publisher to honor the original promises. One has even written up a template to send toDukeGrabowski@gmail.com.

Well, yes, the reaction from those who have paid for a product, even if it's a pre-payment in the form of a Kickstarter pledge, will tend to be negative when promised iterations of the game are suddenly yanked away without warning or recourse. Everyone seems to agree that publisher Alliance Digital Media was the one behind the decision, but to the end customer that makes little difference. If a developer promises a DRM-free version of its game to backers, then that developer had damned well better make sure the publisher they select is on board with that as well. Otherwise, it was a promise made without the commitment to keeping it.

As it turns out, this particular story has a happy ending, with the developer announcing on Kickstarter that the DRM-free version of the game has been promised again.

Good news! Alliance has told me that they are planning on releasing a DRM-free version of the game before the end of the year, and that more details will be coming soon. So thank you for your patience and understanding.

Which is, you know, fine, but with Kickstarter becoming a major vehicle for funding the creation of new gaming content, this kind of thing needs to get ironed out now. Because backers aren't going to keep backing without some level of trust that promises made to slurp their money from them will be kept, preferably without them having to light the torches and dig up their pitchforks.

Filed Under: crowdfunding, drm, duke grabowski, mighty swashbuckler, promises, steam, video games
Companies: kickstarter, valve, venture moon industries

New York City Threatens To Sue Verizon For Failure To Meet Fiber Deployment Promises

from the fool-me-twice dept

We've noted for years now how Verizon's modus operandi is to promise uniform fiber deployment to a city or state in exchange for all manner of subsidies and tax breaks, then walk away giggling to itself with the job only partially complete. This story has played out time and time again thanks to city and state contracts struck behind closed doors without public transparency, allowing Verizon to bury numerous loopholes in the contract language. Other times, Verizon can lobby to weaken oversight so that there's simply nobody left to hold Verizon accountable when it decides to laugh off the contract requirements.

In 2008, New York City Mayor Mike Bloomberg struck a closed-door deal with Verizon delivering all manner of tax breaks and incentives in exchange for what the city thought would be 100% deployment of Verizon's FiOS fiber optic service by 2014. Fast forward to last year, when the new city administration realized that Verizon had absolutely no intention of seriously deploying fiber uniformly across the city. This week, the city released the results of a survey it conducted that found that fiber is unsurprisingly still hard to come by:

"The city recently sampled 52,000 addresses for Fios availability, and found that outer boroughs were more likely to have access than Manhattan. For instance, 90% of Staten Island residents could likely get Fios within seven days, while the same is true for just 19% of people in central Brooklyn and 11% in upper Manhattan. About two-thirds of the more than 300 public-housing developments, which are home to more than 400,000 people, have no access to Fios, the city says.

Meanwhile, a letter from the city to the telco (pdf) complains that Verizon is in violation of at least three parts of the original agreement, failed repeatedly to deliver documentation requested during an audit of Verizon's progress, and cites at least 38,551 addresses where Verizon failed to deliver service despite order requests that are more than a year old.

Verizon, as it is wont to do, tries to spin the narrative on its head by claiming that New York City is being "adversarial":

"It is unfortunate and disappointing that the City is taking an adversarial approach to the only company that has challenged New York City’s cable monopolies,” Mr. McConville said. "The City should be working with Verizon to make choice available to more residents, not discouraging competition.”

Except Cities have every right to be adversarial with a company that has shown repeatedly that it doesn't deliver on its promises. Verizon has tried to claim that grumpy landlords are to blame for its failure to deliver FiOS evenly across the city. And while landlords can play a role in delaying some installations, reporters have subsequently discovered that the excuse just doesn't hold water and Verizon's simply not doing the work.

While it was a contract signed under a previous administration, New York City isn't blameless. Reporters at the time pointed out that the city's contract had ample loopholes and should have been negotiated in the full light of public transparency, but nobody listened. So while New York City says it's mulling a lawsuit against Verizon, that suit may run repeatedly into contract caveats carefully crafted by a company that never had any intention of uniform fiber deployment. The contract reflected this had anybody actually bothered to read it.

The amusing (or annoying) thing is that cities keep making the same deals with the proverbial devil over and over again. Philadelphia recently complained that Verizon failed to meet its obligations there as well. And While Verizon's overall FiOS deployment has been frozen, the city just struck a similar deal with Boston -- with few if any in the press bothering to note the tail of frustration and broken promises trailing miles behind the telco and its lawyers.

Filed Under: fiber, fios, nyc, promises
Companies: verizon

After Ripping Off Cities, States For Years, Verizon Makes Some Familiar Broadband Promises To Boston

from the fool-me-sixteen-times,-shame-on-me dept

We've long discussed how Verizon has a bit of a pattern of getting billions in tax breaks and subsidies in exchange for fiber broadband it only half deploys. State after state, city after city, Verizon gets politicians to sign off on cozy deals that effectively give Verizon everything it wants -- in exchange for promises of "full" city or state fiber broadband deployment. Except time, and time, and time again, cities that signed these sweetheart, loophole filled deals then stand around with a dopey look on their face when they realize they've been had.

Fast forward to this year, when Verizon surprised everybody by announcing that it would finally deliver FiOS to Boston, one of more than a dozen cities Verizon left hanging when it stopped seriously upgrading its fixed-line network -- to apparently focus on gobbling up failed 90s internet empires. The announcement crows that the $300 million dollar deal will absolutely revolutionize the city of Boston's telecom infrastructure:

"Mayor Martin J. Walsh today announced a new partnership with Verizon to make Boston one of the most technologically advanced cities in the country by replacing its copper-based infrastructure with a state-of-the-art fiber-optic network platform across the city. The new network will offer enormous bandwidth and speeds. Through an investment of more than $300 million from Verizon over six years, this change will bring increased competition and choice for broadband and entertainment services in Boston, and support the ongoing efforts to spur innovation and economic opportunity in all neighborhoods."

This announcement was quickly translated by the press as "FiOS is coming to the entire city," though if you look more carefully at the language it becomes clear that Verizon isn't actually promising that:

"This will be a fiber platform across the entire city,” Verizon Wireline Network president Bob Mudge said at an event at the Bolling municipal building in Dudley Square Tuesday. “This is not just about a fiber investment — that’s important, and it’s a fuel. But the fire and the excitement will come from the applications.”

If you study the release it's actually pretty ambiguous as to what Boston gets out of the deal. What's actually happening? Verizon struck a $300 million deal with the city that will deliver a combination of fiber, wireless service, fiber backhaul for wireless towers, and Verizon's internet of things technologies. Much of this is stuff Verizon already planned to spend money on (especially wireless backhaul), and a sizable chunk of it (especially on the IOT front) may or may not actually wind up actually benefiting anybody, as the mindlessly over-hyped IOT is wont to do.

How much actual last mile fiber is left utterly ambiguous. Learning lessons from failures of the past, Verizon isn't getting specific, though speaking on an earnings call this week Verizon made it pretty clear most of these connections will be fifth generation (5G) wireless:

"I think of 5G initially as, in effect, wireless fiber, which is wireless technology that can provide an enhanced broadband experience that could only previously be delivered with physical fiber to the customer," McAdam said. "With wireless fiber, the so-called last mile can be a virtual connection, dramatically changing our cost structure."

And while 5G wireless should be faster with lower latency than existing 4G connections, it's not truly going to be a substitute for traditional fiber. The 5G standard itself hasn't even been agreed upon yet, and most analysts don't believe 5G will see serious deployment any time before 2020. There's also a matter of cost: while Verizon FiOS is uncapped, Verizon Wireless service is capped, metered, and among the most expensive in the country, and 5G will be no exception. It's a $300 million investment, yes, but what it's being invested into isn't really clear.

But good news! Whatever mish-mash of half-promises Verizon is delivering this time may be coming soon to your city, states the telco:

"We will create a single fiber optic platform that is capable of supporting wireless and wireline technologies and multiple products," McAdam said. "In particular, we believe the fiber deployment will create economic growth for Boston and we are talking to other cities about similar partnerships."

Most reporters covering Verizon's plans can't be bothered to note Verizon's long history of not delivering what it promises, or the multiple hearings ongoing in several different states trying to hold Verizon accountable for that fact. Fast forward several years from now, and you'll likely find Boston (and any other cities excited to "partner" with Verizon without reading the fine print) complaining that Verizon delivered only a small fraction of what was actually promised. You'll also find a media incapable of tying all of these narrative threads together.

Still, on a positive note it's great to see Verizon spending anything at all on cities it has been neglecting for the better part of a decade, given this was the same company that claimed net neutrality would kill all telecom investment dead in the water.

Filed Under: boston, broadband, empty promises, fiber, fios, promises
Companies: verizon