Friday, September 25, 2015

ATT Stumbles as Apple Moves Ahead with New Upgrade Program

AT&T keeps losing the battle, and the war, against Apple:


Notice that all three carriers have quickly launched programs to counter Apple's new upgrade program… except AT&T.  I expect it will eventually come in with the worst deal to try to play catch up in the most half-assed way possible.

Thursday, September 17, 2015

Why Carriers Should Stop Selling Phones

So Walt Mossberg says that AT&T should close all its stores, stop selling smart phones, and basically get out of the way of customers and smart phone manufactures.  Agreed:


Key to his piece is Apple's latest announcement that it is going to start offering unlocked iPhones under an installment plan, which Walt correctly suggests is a great way to push carriers out of the retail market for smart phones all together.

Of course, this all comes about because the bozos at AT&T hate Apple and keep trying to think of ways to punish customers that want iPhones.  Despite the fact that AT&T owes it's entire cellular service to having been lucky enough to have a monopoly on the early iPhone, they hate the popularity of the iPhone because it gives Apple too much power.  Power AT&T wants.  So historically, AT&T stores have done everything they could, including having salespeople lie, to discourage customers from buying iPhones.  They punished early iPhone customers who had unlimited plans by throttling them, and they dismissed the iPad as not needing a cell connection.

Recently, they abandoned subsidized iPhone sales, forcing customers to pay full price on installment plans.  The idea was to make customers realize how darned expensive iPhones were compared to Android phones.  "So you still want an iPhone?  It's going to cost you an extra $18 a month."

Of course, like all of AT&T's anti-Apple moves, it completely backfired.  Apple now has it's own installment plan.  It's not cheap, but it's likely to be a big hit anyway.  And guess what, now that Apple has loaded that gun, it could lower prices, create incentives, or offer other perks that would make getting your iPhone from Apple a no brainer.   If Apple got serious about it, there is no way AT&T or any other carrier could compete in selling iPhones.

Meanwhile, AT&T still offers marginal service at the worst prices in America, and terrible prices compared to services around the world.  Maybe, instead of thinking of "clever" ways to undercut Apple, they should work on providing good service at a good price.  While they still have the time to do it.

Saturday, July 18, 2015

The Google Fiber Threat to AT&T

AT&T's deliberate neglect of America's land line infrastructure was supposed to be a classic win/lose.  AT&T wins/America loses.  After buying up local phone providers across the country, AT&T then generally abandoned land lines, often reneging on their promises to upgrade to fiber optics.  Profits from their land line monopolies were then shifted into building out mobile service.  AT&T won because customers were forced to pay for lousy land line service, or shift into more expensive mobile plans.  Customers lost because… well, AT&T was screwing them.  Particularly hurt in this scam, were some of the poorest Americans in rural areas where they had little choice but to use AT&T's expensive second rate services.

Of course, this was all dependent on AT&T retaining monopoly control of land lines, and not having much competition in the mobile sector.  AT&T assumed it could kill any competition in mobile by simply merging with or buying up any competing companies.  Unfortunately, AT&T is so universally hated, for screwing their customers, that even corrupt politicians couldn't stomach letting it merge with T-Mobile.  So it faces serious competition in the mobile sector from T-Mobile as well as Verizon and Sprint.  That competition isn't going to go away any time soon.

On the land line front, AT&T simply assumed no one would bother to compete.  After all, AT&T kept telling everyone it didn't make any economic sense to invest in fiber land lines.  Well, bad news.  AT&T is now facing serious competition in land lines from Google fiber.  Google just announced they are going to start wiring public housing:


Providing free and fast internet service to poor people is a really nice thing to do.  Of course, Google has some good business reasons to do it, not the least of which is that it makes politicians think Google is invested in making America better, not simply ripping it off like AT&T.  But there is another reason Google is doing it.

Providing fast/free/cheap internet is really easy.  For years AT&T has been trying to tell everyone about how hard it is to provide internet service, how data hogs ruin everything, and how everyone should be ready to pay more.  It's a lie.  Internet technology is following Moore's law.  Every year it gets faster and cheaper to provide.  Local governments can provide it at almost no cost, third world nations can do it for very little money, and Google can do it easily as an afterthought.

This problem has already been brewing for years because Americans pay more for worse service than many poor people in third world countries do.  Meanwhile, other countries like South Korea provide amazing service for very little.  And some European countries provide great service for free.  AT&T has really been holding back America from getting fast cheap internet.  If poor people can get free/cheap/fast internet service, why do middle class and rich Americans have to overpay for slow internet?  The answer is they won't put up for it for much longer.  Think of it as trickle up economics.

Google Fiber is increasingly going to be a huge problem for AT&T.  It screws up their plans to abandon land lines, and it screws up their plans to overcharge for mobile.  How is AT&T going to continue to explain why it is overcharging for slow speed internet service, when, thanks to Google, people in public housing are getting faster service for free?  How is AT&T going to keep up the myth about data hogs and how fiber land lines can't be profitable.  

Mobile service is great.  But land lines are still very important to customers and to America's infrastructure.  Businesses prosper with fast fiber access, and poor Americans also benefit from the educational opportunities fast internet provides.  This stuff is simply too important to America's future to be ignored.

There's still a little time for AT&T to try to turn the ship around.  They really need to think seriously about treating customers, even poor customers, better by providing great service at reasonable prices.  If they don't, there are others that will do it for them.  That would be another classic win/lose.  American wins/AT&T loses.

Thursday, June 18, 2015

Isn't Time for AT&T to Stop Trying to Punish It's Customers?

AT&T just got a big fine for it's past actions trying to force customers out of their grandfathered Unlimited data plans:

AT&T Fined $100 for Throttling Customers

Now, it's important to remember, these are long time AT&T customers.  They're people who bought original iPhone (long before it became popular) and have stuck with AT&T's marginal service through thick and thin for one main reason, they liked the idea of unlimited data.  And AT&T has done everything they can to try to punish them for not accepting a pay-per-bit data.  And guess what, Sprint, T-Mobile and Verizon would love to take these customers away.

This is just part of a pattern with AT&T management which is completely focused on their own unobtainable goal of resurrecting a 1950's monopoly over phone service rather than serving customers in 2015 America.  It isn't working, it's hurting the company.  The efforts to buy out and shut down T-Mobile simply made it stronger with huge infusion of billions of dollars of AT&T money, money that could have gone to improving AT&T service, but is now being used to improve T-Mobile service.

Sure, AT&T has limited monopoly powers in certain areas where other companies can't provide good enough coverage.  They have monopoly power over local hard wire access in some areas (which they have generally abused by not investing in improvements).  But AT&T's abuse of these limited monopoly markets have only convinced customers, business and the government that no one wants to give AT&T any more control over the market than it already has.  It's losing almost every regulatory battle these days.  No one is going to approve any big mergers that give it more power.  People are fed up with a company that takes customers for granted.

AT&T execs tried to convince the world that "unlimited" data plans weren't technically and financially possible.  It was a lie, it didn't work, and T-Mobile and Sprint (as well as just about every international company) offer them.  Customers love them.  Unlimited is the future.

AT&T, give up on your war against Unlimited.  You already lost.  Stop assuming you can force customers to do business the way you want, and start listening to what they want.  Because whether you like it or not, you have real competition in the world, and better be ready to compete.

Monday, March 31, 2014

Why the Government Needs to Provide Internet Access

Vox, a new "explain-the-news" website has put up this wonderful video explaining in very simple terms why internet access in the United States is horrible and why the government needs to step in and do something about it:

Why the Government Needs to Provide Internet Access

This is the problem for AT&T.  It set off, as a matter of policy, many years ago to try to rebuild a communication monopoly that the government had correctly, and thankfully, broken up.  That's their underlining goal and they seem determined to ignore the fact that they are playing with fire.  They assumed that they can simply buy off politicians and the public will put up with third world country service at first world country prices.  I just don't think it's going to work.

As Susan Crawford thoughtfully points out, this is bad for business and bad for America and the public is getting really angry about it.  AT&T should have kept their heads low and built out their service to at least an acceptable level of quality/price.  Instead, they have simply charged as much, or more, than the market will bare, while exploring every possible option to break net neutrality and double and triple dip.

This is the kind of thing that starts revolutions.  People will rise up on issues that fundamentally effect their quality of life everyday.  And internet access is critical to modern life.  It doesn't help matters that many businesses are also fed up.  The question is whether AT&T can change course soon enough to prosper in a world of competition.  Right now it isn't looking like it will.

Tuesday, March 25, 2014

Why AT&T's Attack on Netflix Might Shoot Itself in the Foot

So Netflix caved in to Comcast and started paying to play in order to have decent internet connections to its subscribers.  It's part of the erosion of net neutrality that has been a dream of ISP providers since they started buying up all the little guys and forming a nice information oligarchy.  Of course, now that Comcast got their cut, AT&T and Verizon want theirs.   As Cory Doctorow points out, this is simply extortion.

But the question in my mind is whether they're winning this war, or if they won a battle they may regret.   Because the cat is definitely out of the bag now.  The big ISP players are at war with the internet as we know it, and forces are lining up against them.  Netflix, itself, might have given in to Comcast just to force the debate, as we can guess from this terrific posting by Reed Hastings:


Of course, AT&T had to reply and make their own argument that net neutrality sucks.   Jim Cicconi tries his best to spin it:


As usual, AT&T only has one argument as to why it should screw over not only it's own customers, but also other business and the the future of technology.  It's the tired and unsuccessful divide and conquer technique.  "Why should those greedy Netflix customers have all the fun?  Don't you hate those Netfix customers, wanting free bandwidth!?  Netfix doesn't want to pay their own share!  Let Netflix pay, and charge its subscribers more!"

It's a spin on the successful welfare queen political tactic where you divide the poor against each other by saying some are getting more than others.  The goal is to get them to hate each other more than the rich people taking advantage of them.  The rich people are obviously AT&T (and the other ISPs) and the poor people are Americans since we pay more for the some of the worst service in the civilized world.

So now, not only to we overpay for third world service, but AT&T wants individual companies to provide it with payola if they want their popular offerings available.  This is classic double dipping, and it should be illegal.  The problem for AT&T is these deals are supposed to be done in back rooms, without the public knowing what is going on.  Reed Hastings is breaking rank by going public about it.  So AT&T feels the need to respond.  But they don't have much of an argument.  Except divide and conquer.  "You think your service sucks now?  You think you're over paying?  Yeah, well if those assholes who subscribe to Netflix have their way, you'll pay even more.  Why should they get a free lunch.  Make them pay.  And maybe… we might not charge you as much for our shitty service."  Hey, it seemed to work for the Republicans, why not?  It's a riff on the old "data hog" argument where AT&T tried to convince everyone that it was a great idea to charge pre-bit (also double dipping) because data hogs were watching too much porn.

The problem is, the Republicans "welfare queen" attack was taking advantage of long standing racism.  I'm not sure AT&T will be so successful whipping up hatred of people who like "House of Cards."  On top of that, the Republicans weren't getting much in the way of a black vote anyway, so covertly blaming them for all the problems in the world wasn't so dangerous.  But Netflix subscribers are probably the best customers AT&T could have.  People who really want to use their service.  So attacking their best customers doesn't seem to be a good business or political move.

Politically, AT&T already lost its attempt to buy T-Mobile and paid a huge price.  I blame it in part their rush to charging a pay per bit model which undermined their promises of great low cost service once the merger was approved.  No one believed them.  AT&T still needs the good will of politicians to advance it's long term interests.  Attacking a large upscale sector of their own customer base probably isn't a good idea.  Netflix customers are voters.  They can write their congressmen.  They can lobby to have their cities provide free internet service or take advantage of Google's fiber efforts.

On the business side, what is AT&T going to do if Netflix decides to pay off everyone… but AT&T?  With a solid deal with Comcast in place, Netflix could make a quiet deal with Verizon and then punish AT&T by not making a deal and making them explain why their Netflix service sucks.  Or by moving very slowly to make a deal, and leaving AT&T out in the cold for as long as possible.

While there is clearly not enough ISP competition in the United States, there is some.  Apple fans are learning that AT&T is not the best place for iPhone customers.  (Try Sprint.)  Does AT&T really want to be known as the ISP you never use if you love Netflix?

Wednesday, January 29, 2014

T-Mobile Gloats Over AT&T's Latest Idiotic Move

I didn't write this.  Honestly, I didn't.  But it sure reads like I did:


Not often does a major corporation find itself compelled to issue whimsically sarcastic press releases.  But, as the press release points out, AT&T's poorly thought out reaction to T-Mobile's chess moves must be laughed at.  They are giving customers an extra reason to leave and test T-Mobile.

As I said before, AT&T really needs to figure out what marketing niche they want to compete in.  Do they want to compete on price?  Or on service?  Or coverage?  Or simply flail about without a long term plan other than to be Number 2 to Verizon and more expensive than Sprint or T-Mobile?