Ready for this? It’s a long one, so buckle up. It’s also a bumpy one.
A few years ago, I had some difficulty with internet connectivity at my house, at the time provided by Time Warner. Despite my best efforts, I couldn’t fix it, and after countless—literally—hours on the phone, I was visited, at my home, by the Senior Vice President of Internet Technology who tried (along with the team of folks he brought) to troubleshoot the problem. After a great deal of experimentation, the team determined that the wires coming into the house, and down the pole, and in fact, all the way to the central switching station were really old. They were designed for transmitting cable television, and weren’t really capable of properly shielding internet signals. In essence, Time Warner was selling a product they couldn’t deliver, and somehow it fell upon my shoulders as a paying customer to point this out to them. Think about it: If you went to McDonalds and ordered a Big Mac but was given only a plain bun minus two all beef patties, minus special sauce, minus lettuce, minus cheese, minus pickles, minus onions, don’t you’d think someone would notice before they wrapped up the plain bun and gave it to you? Don’t you expect as a consumer, at minimum, to receive what is advertised, what you order, and what you pay for?
The Time Warner Vice President replaced my cable modem, graciously credited my bill for one month of service, and offered to pay for a year’s worth of internet for free, and “boost” signal strength. (This idea never made any sense to me, because more signal would seem to just compound the problem… but I digress.)
That was about ten years ago and the problem never got better. In fact, after the year of free internet expired Time Warner started charging an extra $10 for the “boost.” About two years after that, the Internet service had not improved and I did some more searching. Oddly, the “boost” would have provided 4/40 internet speeds, well below the “blazing fast” stated speeds that they were advertising at the time and which the modem that they provided was not capable of receiving. The whole thing sounded like a scam to me. While slow internet speeds are excusable from time to time, it seemed unusual that the speed should—consistently—be slow slow for more than a decade. Meanwhile, the price of the lacklustre service seemed to be the only thing moving at a “blazing fast” speed, it more than quintupled over a ten year period.
Why stay with Time Warner, you ask? It’s a monopoly in our area, and I had one choice for high speed internet: Time Warner or nothing.
When I was a little kid, we had two phones in the house, a yellow one with a very long cord mounted on the wall in the kitchen, and a green desk-type model that sat on the bookshelf next to my parents’ bed. They were hard-wired and, indeed, owned by the New York Telephone company. My childhood friend Kim also had two phones in her house, one slightly smaller white wall model in the kitchen and a powder blue desk model in their family room. Both were amazing to me because our phones at home were rotary (that is, they had a dial), Kim’s were TouchTone (or push button). At that time, telephone subscribers could pay extra ($1.79/month or $6.38 today, or just under $80 per year in today’s dollars) for the TouchTone feature, because it provided quicker dialing and allowed subscribers to use emerging technologies like calling a special number to find out time and temperature, pressing * for time, and # for temperature, once connected. At the time, it was truly amazing.
Without getting in to lengthy details, the regional “local” phone companies (New York Telephone, in my case) were owned by a larger company, American Telephone and Telegraph (AT&T), which the government deemed in the early 1980s to be a monopoly, and “broke up the bells.” Nevermind that the AT&T system was the most efficient in the world and the envy of every civilized country. So much so, in fact, that AT&T provided services to set up telephone equipment to many countries in the world including Telefonica (in Spain, which at that time was ruled by Franco, a dictator), throughout Central and South America, Japan, Morocco, and scores of other places. Regardless, had—according to the United States government—grown too big to function usefully. [I could, at this point, write a whole separate article about the ramifications of this breakup on international signals intelligence data collection and the advent of the KROY device, but I’ll hold off on that for the moment to stick to my original point.]
Following the breakup, I was shopping at GoldCircle with my mom, and I was simply amazed at the display of telephones now available for purchase in the store! Some even were “cordless” models. Amazing. I pondered this change at the time quite seriously. If the phone company owned our phone before, who owned it now? If you could buy a TouchTone model off the shelf at GoldCircle or K-Mart, how would the phone company know this, and how would they charge you the special fee each month to make it work? I started asking these questions of my parents and specifically of my Grandmother, who walked with me to the library on the corner one Saturday afternoon to search out some answers. We found an article in Time or Newsweek that explained—via a cartoon-like diagram—how the breakup of the bells would work. Perhaps the most disturbing visual, however, was the fractured bell system logo on the cover of the magazine. It made me think of the entire ordeal as a giant step backward. Well, the article answered a lot of the questions I had. The phones and wires inside our house (for which my parents (and everyone else) had paid a monthly “rental” fee) were now owned by us. The local telephone company owned the poles and wires and exchange buildings, and AT&T owned the long distance wires and long-distance exchanges that ran between the exchange buildings. TouchTone was now free to all who had a TouchTone compatible device (which, you could now buy right off the shelf at GoldCircle.)
So, what about my sister who only had her phone for two months by this point? Hadn’t she paid significantly less to “own” her phone than my parents or grandma who had been paying for years? The answer: yes.
That inequity and unfairness stuck with me: my sister had paid about $3.87 for her phone, where my parents had paid nearly $788.00 for theirs, and my grandma had paid well over $1500.00 for hers. Also, how could TouchTone have cost the phone company $1.79 to provide last month, but this month, it was magically free to provide and didn’t cost the phone company anything? That didn’t make sense…but a lot of things about the breakup of a monopoly didn’t make much sense.
Despite the fact that during this time, there were very sturdy pay telephones were seemingly everywhere, on every corner and crevice and cost only 10¢ to use and were staffed by a friendly and helpful lady when you dialled “0” radio telephones (like the kind used by Mr. Drummond in the back of his limousine in the opening credits of Diff’rent Strokes) were beginning to emerge. By 1990, I had one. The phone was provided by a very local Buffalo Telephone and was a giant brick made by Sony, and I was a little confused if it charged me whenever it was on, or whenever I used it. The battery lasted about an hour, would get really hot, connectivity was spotty and unreliable and it cost $19.00 a month and 35¢ per minute to use. That was pricey, considering that the newly deregulated long distance market provided long distance calls at 10¢ a minute. Again, the question nagged at me: why, last year, did it cost $1.35/minute to call somewhere 40 miles away and now it was only 10¢? How did the radio telephone work? Why did it cost 35¢ to call my mom in the kitchen when I was only using air and no wires were even involved?
Over time, the radio phone became a cell phone and they became smaller and smaller. Buffalo Telephone was taken over by a company called Cellular One, which was taken over by NYNEX Cellular, which merged with Bell Atlantic, which was taken over by a company called Cellco Partnership LLC, which we know as Verizon Wireless.
Over the 1990s and early 2000s, the “baby bells” that fractured from AT&T in the 1980s embarked on a pursuit that would merge, takeover, and re-amalgamate the telephone market. Along with AT&T, companies like ITT and GTE got into the telecom game and started buying up baby bell companies like Bell South. One of the earliest mergers was between New York Telephone and New England Telephone which merged to create NYNEX. Thousands of other similar companies merged and emerged. Meanwhile, new companies cropped up to provide long distance services to customers and some to businesses directly. Sprint, MCI, WorldCom, and others cropped up. Sprint pioneered fibre optic transmission and laid the first trans-national fibre optic cable in North America. Call quality improved so much so that, at least according to Sprint, you could hear a pin drop. With the increased quality prices dropped and competition flourished.
And then something odd happened. The little baby companies started to join forces and became bigger and bigger. Then these larger companies, like MCI WorldCom, were plagued by corruption scandals. Verizon, for example, is a beheamoth company that in scale is about 132x the size of the its original forebearer, New York Telephone and provides service to about 300x the number of subscribers than New York Telephone did.
I have been a Verizon Wireless customer for years. So many years in fact, that I have been with he same phone company longer than it has been with me. I began my relationship with Verizon back in 1990 when it was still Buffalo Telephone. I have suffered with Verizon as it has grown along the way. I held out—and was loyal to Verizon—when Verizon didn’t have the iPhone. I have paid more than my fair share. I’ve lived through days of unlimited data and data plans. I have pretty much seen it all.
I do a fair amount of international travel. I live about 5 minutes from the Canadian border, so close in fact that my phone sometimes “roams” to a Canadian provider when I’m out running or riding my bike. I visit Canada about once each month. For the first 24 years with Verizon, the rules for international travel were simple: Verizon uses CDMA, so you can’t use your phone abroad, period. The could “loan” (read: rent) you a phone that would work, but Verizon phones didn’t use the same standard as the rest of the world (which, incidentally used and continues to use GSM). In Canada, I could use my CDMA Verizon phone, to the tune of $2.08/MB for data and 69¢ a minute to talk. Needless to say, I didn’t use my phone in Canada unless it was truly an emergency. A little over a year ago, Verizon announced a $2/day “travel pass” to Canada. A flat rate fee that would allow American customers to use their phones in Canada. I was elated. I don’t think it would be all that useful for folks that live in Texas or Nebraska, but for folks that lived in border communities, it was a godsend. Magically, my phone worked in Canada! Then, about 9 months ago, with little fanfare, Verizon *really* stepped up to the plate. Out was the $2/day travel pass, and boom, your phone *just worked* in Canada and Mexico. The minutes and data would come off your plan, just like you were at home. Amazing. Progress. All of a sudden, Verizon customers were part of a global community that T-Mobile and AT&T customers had been part of for the past decade. It was great.
Just like the break up of the baby bells three decades earlier, something that used to cost a significant amount of money was now free. Why did it cost $2.08/mb to use my phone in Canada a month ago, but was now pennies, and then free? Amazing? Or Unfair? Again, I had more questions than answers.
Then, things got even better. The world renouned design collaborative, Pentagram, stepped in and gave Verizon a bit of a makeover. They refreshed the pathetic logo that had plagued Verizon for decades and cleaned up the Verizon website (so that it actually worked). This coincided with Verizon’s reaction to pressure from aggressive expansion efforts by T-Mobile executive, John Legere to steal away Verizon customers. Verizon continued to step up to the plate, matching the pressure step for step. Verizon, miraculously, was changing its corporate culture. Verizon introduced a simplification of fees and “tiers” of service, S, M, L, XL. Simple. Easy. It worked. It was GREAT. And nowhere in the press release, promotional collateral, or fine print was there ever a mention of a data cap while roaming abroad.
After more than two decades of being a Verizon hater/basher, I became a Verizon bragger. An evangelist. I told EVERYBODY that would listen about how great Verizon had become. About how they finally got it. About how they had re-trained their customer service agents to be knowledgable and helpful. I was thrilled.
For about nine months. Old habits, it seems, die hard.
This past week, passing through Canada on my way to a month-long trip to Europe, I was stunned to have my data throttled in Canada while using my Verizon phone on the Bell network. The data speed dropped from fast to … well nothing. So, I phoned Verizon and spoke with a customer service representative. She was as perplexed as I was. She couldn’t figure out why this would happen. Then, after about an hour on the phone, she came back to tell me that about a week before, Verizon had very quietly rolled out a restriction to customers traveling in Canada. Data, while “roaming” in Canada, was now capped at 500mb. After 500mb, the speed would be “greatly reduced” … in my case, to zero.
So, here’s a company that finally, after two decades had gotten it right. And then, without any forewarning, they blew it. No text message to warn you about impending doom, or a forecoming data throttle. Just boom: no data. Verizon chose to do this without warning customers. There was no press release—as there had been in the pervious year—to triumphantly announce a change in service. Though, this time, Verizon was taking rather than giving, so I suppose they wouldn’t want to announce, “hey, we’re back to screwing our customers and squeezing them for every dime, like we’ve done for decades!” However, that’s exactly what they did. Thanks for your money, customer. Fuck you. Love, Verizon.
Actually, about four months ago, Verizon (again to great fanfare) introduced an “unlimited” plan. I considered changing, but in the fine print, found a stipulation for the unlimited plan that would indeed throttle speeds for the new plan after 500mb of use in Canada. No thanks, I’d continue to pay for my 30gb XXL plan and keep a limitless use in Canada. Somewhere along the way, as Verizon implemented the plan internally, wires got crossed (which, I suppose, is excusable to a certain degree, considering that they are a wireless company) and everyone with a Verizon plan seems to have been throttled when using data in Canada in excess of 500mb. This isn’t what I signed up for. It’s not what I agreed to. It is an unethical breach of contract.
To spin this, here’s the customer equivalent: I decided this past Wednesday that I only want to pay Verizon $7/year for service. I will pay it, religiously every December 1. That is all. I don’t need to tell Verizon, I’m just going to do it. Do you think Verizon would stand for that? Certainly not. My service would be cut in a month. However, it’s exactly what Verizon has done to its customers. The “rules” for international roaming in Canada, have, in fact changed 4 times in 8 months. The constantly shifting and changing set of rules is unnecessarilly confusing. That’s a lot of change for a busy person to track…and simply is not in line with the simplicity toward which Verizon was so ardently striding about a year ago. What happened? One of three things:
1. Verizon decided that it was too pricey to provide service in Canada and they needed to recoup the loss. I find this one hard to believe because the number of Verizon customers actually using service in Canada has to be quite low.
2. Verizon simply made a mistake rolling out its new provisions for the Unlmited plan with adversely impacted existing customers and accidentally changed the terms of service to which the customers had agreed.
3. Verizon simply doesn’t give a fuck about anything except making a buck.
My guess is that it’s a combination of 2 and 3.
Verizon, if you don’t know, has a long history of screwing its customers and regulatory authorities. In fact, the City of New York is suing Verizon right now because they screwed the city on FIOS rollout. FIOS, if you don’t know is a super high speed fibre optic service that promised to bring truly fast internet speeds to every household. To do this, Verizon (and other Telcoms) would have had to invest significantly in a wired infrastructure. When it became clear that wireless speeds (with the introduction of 5G, which will likely be rolled out shortly after 2020) would soon exceed wired speeds, Verizon literally took millions of dollars in incentives from the City of New York (funded by the taxpayers) and ran. They didn’t fulfill their promise, and didn’t provide reasonable access to FIOS service in the City. So, the City is suing. You can read the original complaint here courtesy of The Consumerist. You can read all about it the background at ARSTechnica.
Which brings me back to Time Warner. Despite the fact that my internet service sucked for 14 years monopolies have a unique attribute. They are accountable to government regulators, and the regulators are often frustrated by their lack of enforcement power in the face of what seems to them one tiny injustice after another. I complained about my internet to the New York State attorney general. He listened. After a year-long investigation, the AG announced a class action suit against Time Warner for duplicitous and deceiving advertising related to its internet offerings. A week later, Time Warner was sold to Spectrum. Oddly, about a month after the Spectrum takeover, my internet speeds more than tripled despite the fact that nothing else changed: no new modem, no new cables or wires had been laid.
Within this climate of abuse from Verizon, Time Warner, and others, we—as consumers and taxpayers—wind up paying exorbitant fees for services that are not properly provided. This bait and switch and breach of goodwill must end. Despite my best efforts to interface with Verizon customer service representatives to remedy the erroneously imposed data caps while roaming abroad, I have received no resolution as of the publication of this post. Therefore, as of this writing, I have sent a letter under separate cover to ask the Attorney General in the State of New York, to investigate this issue at Verizon. The situation is substantially similar to that of Time Warner in that the customer is being shafted at the mercy of a giant company with a monopoly or near monopoly on the Telecom market. Rules can change and policies can be updated, but it should be done so transparently and to benefit the customer. In this case, it was not. And clearly, I’m not the only one that feels this way. Fellow blogger Edward Pizzarello has a great running comment stream and his own perspective about this latest Verizon-sham on his blog, Pizza in Motion.
The moral of the story: big companies often turn a profit, dollar by dollar on the back of the consumer and taxpayer. Until someone complains, most consumers will accept the abuse and chalk it up to the power of the monopoly. We as customers are not powerless. The time has come for consumers to complain and for the government to break up all telecom monopolies they are not too big to fail, but too big to function in a competitive environment.
What is your experience with Verizon? Add your comments to the stream below.
I will keep you up to date as this story develops.