Get Ready to Rumble: Negotiate to Profit From Competition - In a growing number of communities nationwide, telephone and cable companies are competing to offer local phone and video service. Thanks to this competition, consumers are gaining leverage when it comes to negotiating favorable deals with carriers. For instance, TRAC just learned that Verizon New York has a program to woo back consumers who want to cancel their local phone service and switch to another company. In New York, if you call Verizon to cancel your local phone service expect to receive an express package the next day with an offer from Verizon to discount your service for six months and give you a $50.00 American Express Rewards card.
Do you remember when long distance service got this competitive? For example, in the late 1980’s and early 1990’s AT&T was doing whatever it could to keep its long distance customers, including sending vouchers worth up to as much as $200 in phone service to consumers to get them to stay or "come back" to AT&T. Eventually, a whole class of consumers became known as “Flippers.” These savvy users would flip between companies to keep getting the discounts and freebies such as the AT&T voucher checks or free frequent flier miles from MCI.
Similar competition is popping up for video services in towns where Verizon has entered the market. For example, in the Washington, DC suburb of Falls Church, Virginia, consumers can pick between Cox Cable, RCN Cable, Verizon FiOS TV, and DirecTV. In area like Falls Church, companie are now bidding against each other to match the offers being made.
It has taken a while to get to this point, but increasingly consumer are regaining their positions as kings (and queens) in the communications market place. Now we just have to be sure the offers being made are what they seem and are (or are not) worth the switch. As we receive more tips on such deals, we’ll write about them, so keep an eye on TRACNotes!
FRAUD WATCH
Voce Wireless Abruptly Shuts Down, Subscribers Out of Luck - Subscribers to “premium” wireless carrier Voce Wireless are likely quaking in their Manolo Blahnik’s. According to multiple media reports and consumer complaints, Voce subscribers awoke on Friday, February 1 to find that their expensive designer cell phones had been abruptly disconnected from the service. Voce, which operated as a Mobile Virtual Network Operator (MVNO) on the AT&T Mobility network, charged new subscribers a $500 activation fee (called an “initiation fee”) and a $200 monthly rate when it was launched in 2006. In exchange, Voce’s subscribers received unlimited airtime, a 24/7 personal concierge service, and a complimentary selection of pricey designer handsets like the Prada phone by LG, the Nokia N95, and the Motorola KRZR Gold. In 2007, the monthly fee was reduced to $118, but the unlimited airtime was reduced to 2,000 minutes and 5 MB of data per month and the free handset offer was ended. When the shut-off took effect last week, customers reported being unable to reach Voce’s telephone customer service line. The company’s storefront locations in Beverly Hills and Los Angeles were reportedly shuttered. The company also maintained a presence in Neiman Marcus and Saks Fifth Avenue department stores in seven states. The reason for the shutoff is unclear, but likely tied to the sale of the company from Faith Communications, Inc. to SunCal Midwest, a subsidiary of Chicago-based investment firm SunCal Funds. In addition to the sudden shutoff, many subscribers reported that Voce had attempted to double-bill their bank accounts and credit cards. Voce employees reported not being paid after the transfer to SunCal and were all fired prior to the shutoff. Attempts by reporters to contact Voce or SunCal executives were unsuccessful and AT&T Mobility has yet to comment on the situation. Voce subscribers faced with this situation should contact their credit card company or bank to dispute any attempts by the company to bill for services that were not received. In addition, consumers wishing to keep their numbers should contact a new carrier to begin the number porting procedure as soon as possible to avoid having their numbers released to the national pool. Affected customers may also wish to consider contacting their state Attorney General’s office or the FCC to file a complaint. Voce subscribers who run into trouble with their number port can find detailed instructions on how to address the problem by clicking here (Editor’s note: TRAC has not tested that this process works, we are simply passing the information along). Dissatisfied Voce Wireless subscribers are sharing information here or visit http://voceclassaction.com.
Study: Almost One Quarter of Wireless Calls in U.S. Below Industry Standards for Quality - Cell phone users irritated by the poor quality of their cell phone reception are not alone. In the U.S. and Western Europe, wireless consumers reported that nearly one out of every four calls (23%) was below the industry minimum standard for voice quality. Globally, 39% of calls were below the industry’s voice quality minimum standard. The figures, announced Wednesday by voice quality solutions firm Ditech (no relation to the American mortgage company), may be a significant reason that subscribers seek to switch carriers (known as “churn” in industry jargon). In the U.S., most industry metrics have shown call quality slowly improving as carriers invest more capital in upgrading their networks and building additional cellular towers to eliminate gaps in coverage. From a consumer point of view, call quality is the biggest cause of subscriber complaints to their carriers. As such, it is important for shoppers to test out call quality on a given carrier before agreeing to a service contract. Most carriers offer a 30-day window from date of service activation for cancelling service without incurring an early-termination fee. However, there is a time cost to users shopping for a new phone only to find out it doesn’t work as well as they might like. The cancellation process also involves time since the handsets must generally be shipped back to the carrier. To avoid the aggravation, TRAC recommends that consumers shopping for new wireless phone service find friends, relatives, or co-workers who have service from the carrier they are considering. As these people if you can make a call, or even borrow their phone for the weekend so that you can test out the service quality yourself in the areas you will be making the most calls. If the voice quality is unacceptable, the prospective subscriber saves significant time versus signing up for and then cancelling their own service. To read more about the Ditech study, click here.
TRAC IN THE NEWS
AT&T DSL Price Increase Should Prompt Comparison Shopping, Says TRAC - AT&T DSL subscribers may not be in a very affectionate mood this Valentine’s Day thanks to a $5 rate increase which will soon take effect. The increase affects subscribers in 13 states. The increases will affect subscribers who have bundled their AT&T local phone service with DSL as well as those customers who pay extra to subscribe to the company’s unbundled (or “naked”) service. The monthly rates for subscribers of the “Direct Elite,” “Direct Basic,” and FCC-mandated “Basic” plans will remain unchanged at $39, $19.95, and $10, respectively. New subscribers will see the price increases effective February 16. Increases for current subscribers will take effect in March. Unfortunately, options for DSL subscribers are limited. Cable modem service tends to provide faster speeds than the discount DSL plans, but at significantly higher prices. Public Wi-Fi hotspots in restaurants like McDonalds and Starbucks are comparable in price to the higher-speed DSL plans, but lack the convenience of home broadband access. AT&T DSL subscribers who can’t afford or don’t want to pay the higher price can switch to a cheaper plan, but the trade-off will likely be a slower connection. DSL subscribers who want to maintain their current service speed "will probably have to simply eat the price increase," said TRAC Research Director John Breyault in Thursday’s St. Louis Post-Dispatch. To read the Post-Dispatch article, click here.
INTERESTING LINKS
FCC Main Page: http://www.fcc.gov
FCC Complaint Form - http://svartifoss2.fcc.gov/cib/fcc475.cfm
List of State Regulatory Commissions: http://www.naruc.org/displaycommon.cfm?an=15
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