Verizon wouldn't lie to sell phones -- would they?

In previous posts, I have been unkind to my local-monopoly Internet service provider Time Warner cable and the US ISP industry in general. I've also been unkind to Verizon FiOS in their battles with Netflix and criticized their "gentleman's agreement" to abandon fiber to focus on wireless connectivity, leaving me at the mercy Time Warner Cable.

Those stories all had to do with landlines -- what about Verizon mobile? My wife had an unlimited account with a reseller of Verizon mobile service (a "mobile virtual network operator" or MVNO). She no longer needed the unlimited account, so decided to switch to Verizon.

This was shortly before the new iPhones came out, so she wanted to keep using her old phone for a month or so and, since she had been using it on the Verizon network, she assumed it would work after shifting her account from the MVNO.

To be safe, I went online and had the following chat with a Verizon salesman named Brandon:

Chat transcript -- click image to enlarge

As you see, I gave him the phone's mobile equipment ID (MEID) number and he said it was incompatible with the Verizon network and offered to sell me a new phone. I pointed out that the old phone had worked on the Verizon network for years and he suggested that it may have been blacklisted or have the wrong antenna -- like AM versus FM radio. He elaborated, saying it might be compatible with some, but not all, of their network or perhaps my wife had been roaming for five years.

Maybe the phone would not work somewhere on Earth, but it has worked everywhere my wife has been in the United States and abroad for the past five years. (She is not an early adopter :-). Here are the specs (MEID 990001106522642):

I am not a mobile phone geek -- Is there something that would render the phone incompatible with Verizon mobile service?

We ignored Brandon's warning and opened a Verizon account -- the phone worked fine (in southern California) until it was replaced with a new iPhone.

My guess is that Brandon was just telling me what he saw when he queried Verizon's database, so he was not lying. But is the Verizon compatibility database accurate and, if not, is Verizon lying in order to sell new phones? (This reminds me of the Volkswagen smog check shenanigans).

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Update 10/10/2016

Let's talk about customer service.

In spite of Verizon saying it was incompatible with their network, my wife has been using her old iPhone 4 on their network without problems. When she transferred her account to Verizon, they said she had to sign up for a billed (post-pay) account, but could then switch to an automatically-charged, pre-paid account (to get a higher data cap) whenever she wanted to.

She did that two days ago. Doing so required that she speak on the phone with three different Verizon employees -- a support person, a sales person and an account verification person. There were long waits on hold before each of those conversations and she had to explain the situation to each of the people -- there was evidently no transfer of information between them. The entire process took well over an hour.

I am posting this for two reasons:

1. Verizon has sold their FiOS landline service, but it was the lowest ranked company in the lowest-ranked industry (Internet service providers, ISPs) on the American Customer Satisfaction Index before the sale. I've not seen a ranking for mobile ISPs, but based on this experience, I would expect Verizon to look bad.
2. One frequently hears complaints about poor service from bureaucratic government agencies. Government agencies are large organizations with monopoly power. ISPs are also large organizations in monopoly or oligopoly markets. A large, private organization in a monopoly or oligopoly market is nearly as likely to provide poor service as a government agency.

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Update 10/15/2016

The customer-service saga continues.

I made two payments on my wife's pre-paid account. Perhaps because she changed her account from post-paid to pre-paid, Verizon failed to credit one of the payments and does not seem to realize that she is now post-paid and should be getting a higher data cap.

I tried to clear it up by going to the "My Plan" page on the Verizon Web site, but the page was temporarily down:

That was 25 hours ago. The page is still temporarily down.

I also tried to clear this up with a phone call or chat, but could only find sales pages on their Web site. (I got the phone number last week from a Best Buy store clerk).

Verizon is making the folks like the IRS or Department of Motor Vehicles look good.

Mobile service in the UK is cheaper than in the US

Minh Uong
New York Times

We've looked at the bad deal US landline Internet users get compared to places like Korea, Sweden, Japan or Latvia. (The list could be longer). How about mobile connectivity?

The New York Times just published a short article comparing the price charged by UK Cellular company UK Three (UK3) to that of Verizon in the US. The article compared prices for a two year contract with a subsidised Apple 5s phone.

UK3's price in this example is over $40 less than Verizon's. Furthermore, UK3 allows unlimited data transfer while Verizon has a 2 GB per month usage cap. Since UK3 is a low-cost carrier, I checked the prices of Vodafone accounts in the UK. A 3G Vodafone account with a 2 GB cap costs $72.31 per month. A 4G plan with a 4 GB cap is $79.60.

The author of the post cites one significant difference in explaining the price differences between the two nations:

Britain has forced companies to lease their networks to competitors at cost. The United States has not, allowing a formidable barrier against competitors.

The US Congress tried to spur competition in a similar manner with the Telecommunication Act of 1996, but the incumbent operators and their lobbyists defeated that attempt in courts and state houses.

William Kennard, who, as chairman of the United States Federal Communication from 1997-2001, was charged with implementing the Telecommunications Act, stated near the end of his term that “all too often companies work to change the regulations, instead of working to change the market,” and spoke of “regulatory capitalism” in which “companies invest in lawyers, lobbyists and politicians, instead of plant, people and customer service.” He went on to remark that regulation is “too often used as a shield, to protect the status quo from new competition -- often in the form of smaller, hungrier competitors -- and too infrequently as a sword -- to cut a pathway for new competitors to compete by creating new networks and services.”

Netflix blames Verizon, Verizon blames Netflix -- let's see the data.

Netflix says Verizon is a streaming bottleneck, Verizon says the congestion is upstream -- we need data not accusations.

Netflix recently showed messages like this one when they had to adjust the bit-rate on their streams to FIOS customers:

Verizon responded, claiming that the congestion was upstream from FIOS, and threatened legal action. Netflix says they will drop the messages for now.

The public and regulators need more data and transparency, not less. For example, here are Netflix data rate histories for Google Fiber, Comcast, Verizon FIOS and Verizon DSL:

This data clearly shows the improvement in Comcast speeds when they and Netflix agreed to terms in February. (One wonders how that rapid improvement was achieved and how much investment it required).

Verizon DSL is slow because of the technology. Those Verizon customers who can get FIOS are surely better off, but one wonders why Verizon fiber is so much slower than Google fiber and Comcast cable.

If Netflix congestion is upstream from Verizon, they should present data demonstrating that.

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Update 6/10/2014

Google also publishes data on YouTube streaming performance for ISPs. I checked the performance of Time Warner Cable, my not-so friendly ISP, in Los Angeles, my city.

The following graph shows YouTube video consumption for time slots beginning at 6 AM and peaking at 9 PM.

Google also reports the percent of the time an ISP delivers high definition (720p), standard definition (360p) and lower quality. For me, the worst performance, HD 81% of the time and SD 19%, occurs between 9-10 PM.

This is one more source of ISP performance data -- check it out and see how your ISP rates compared to others in your location (if there are others).

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Update 6/13/2014

The FCC will scrutinize the pay for service deals Netflix and Comcast and Verizon. They will also look at others, including Google.

FCC Chairman, Tom Wheeler, said he already had copies of the contracts, but I hope he asks the companies to provide traffic data and also disclose the cost of the infrastructure investments they make to keep service reasonable.

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Update 7/7/2014

YouTube has joined Netflix in linking to data when video delivery slows down. I was watching a YouTube video that began to stutter. When it paused to rebuffer, I saw this message:

When I clicked on the find out why link, it took me to Google's Video Playback Checklist, which lists things that might go wrong and suggests fixes -- no blame on your ISP -- so far. If none of those fixes help, they also provide a link to the Google Video Quality Report (described above). As we asked -- they show us the data.

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Update 7/19/2014

I've asked to see congestion data and to know the cost of alleviating the bandwidth shortage noted by Netflix customers and other Internet users. Mark Taylor, VP of Content and Media at Level 3, a transit provider used by Netflix, has given us some data and some costs. This diagram shows data at one of the of the ten exchange points between Verizon and Level 3:

We see that the congestion between Level 3's customer (Netflix) and a Verizon retail customer occurs in the forwarding of packets between their routers (in the same building). Both the Level 3 and Verizon networks are uncongested (green) but the links between their routers are congested (red).

That is the data for this exchange point, but what about the cost of alleviating the problem? Taylor says it is a few thousand dollars and five minutes work to install 10gb port cards in the routers. He says they have been asking Verizon to install the cards for many months and offers to have Level 3 pay for them. He says he will throw in the short cables between the routers.

If more capacity were needed after those eight port cards were installed, new equipment would have to be purchased, but that would be a small fraction of the cost of the networks the routers connect.

Note that the above diagram is based on a Verizon post describing the situation at the Los Angeles exchange point. Furthermore, it shows under utilization on the Verizon network -- no need for data caps in that case :-).

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Update 7/24/2014

David Young, Verizon's Vice President for Regulatory Affairs, has posted a reply to the claim by Mark Taylor of Level 3 that Verizon is causing Internet congestion. Young says the problem is not datacenter exchange point congestion, as Taylor claims, but congestion in the Level 3 network. In fact he says that:

Level 3 insists on only using its existing settlement-free peering links even though, as Level 3 surprisingly admits in their blog, these links are experiencing significant congestion.

This is Verizon's view of the situation -- transit providers like Level 3 are the problem:

But, when I looked back at Mark Taylor's post, I saw no such admission. In fact, Taylor says "our network has plenty of available capacity" and goes on to state that:

I can confirm once again that all of those thousands of links on the Level 3 network are managed carefully so that the peak utilizations look very similar to those Verizon show for their own network – IN BOTH DIRECTIONS (his caps).

These are conflicting statements -- who to believe?

Considering Verizon's track record, I'd give the benefit of the doubt to Level 3. Verizon promised to install FIOS fiber in my neighborhood several years ago, but subsequently changed their mind and decided instead on a "gentleman's agreement" dividing the wireless (Verizon) and land-line (cable companies) ISP markets. Indeed Verizon has a track record of broken promises -- Bruce Kushnick has documented 300 billion dollars worth of them.

That history makes me suspicious that Level 3 is telling the truth, but it is not proof. Proof would require transparency on both sides. Level 3 and Verizon should show us the data -- let's see the traffic logs for your networks. (Or at least let the FCC staff see them).

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Update 10/15/2014

I've asked to see the data. It's not congestion data, but Generator Research has estimated the cost of delivering Netflix content in their report Over-the-Top Television, 2014, which includes an estimate of the cost to Netflix and Comcast of delivering Netflix content and of the fee Netflix is paying Comcast.

Their estimate of Netflix's "fast lane" fee to Comcast is $.86 per subscriber per month. That is a small portion of the inflated monopoly/oligopoly prices we pay to Comcast and other Internet service providers. It seems to me that we should be paying more attention to the lack of competition in the ISP industry than to network neutrality.

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Update 11/9/2014

M-Lab monitors Internet performance and has published a report on ISP Interconnection and its Impact on Consumer Internet Performance.

The report concludes that

Using Measurement Lab data, and constraining our research to the United States, we observed sustained performance degradation experienced by customers of Access ISPs AT&T, Comcast, Centurylink, Time Warner Cable, and Verizon when their traffic passed over interconnections with Transit ISPs Cogent Communications (Cogent), Level 3 Communications (Level 3), and XO Communications (XO). In a large number of cases we observed similar patterns of performance degradation whenever and wherever specific pairs of Access/Transit ISPs interconnected. From this we conclude that ISP interconnection has a substantial impact on consumer internet performance -- sometimes a severely negative impact -- and that business relationships between ISPs, and not major technical problems, are at the root of the problems we observed.

It seems that interconnection between transit ISPs and ISPs that connect customers (access ISPs) is indeed the weak link in the content delivery chain.

The above figure gives an overview of download throughput between Access ISP and Transit ISP pairs during 2013. For each of the 28 graphs, the Y axis shows the % of hours with the given download throughput, and the X axis shows the download throughput (Mbps). Red, on the left, indicates sub-broadband speeds (download throughput below 4 Mbps). What this table demonstrates is not simply a proliferation of performance issues, but that these issues cannot be laid at the feet of any one Access ISP, or any one Transit ISP: no Access ISP performs badly to all Transit ISPs, and no Transit ISP performs badly for all Access ISPs. Therefore, if the problem is not at one end, and not at the other, it must be in the middle around the interconnection between the two.

For example, my ISP, Time Warner falls below 4 Mbps (red) over 30% of the time when delivering Cogent packets, but does much better with data from other transit ISPs.

Beware of the Nexus 7 and the Hush-a-Phone -- they may damage your network

I heard a rant by Jeff Jarvis on the This Week in Google podcast. It seems that he got a new Nexus 7 tablet and Verizon refused to add it to his LTE account because it had not yet been verified. He tested it with a SIM from a different device and it worked fine. He also pointed out that Google had advertised that it would work on the Verizon network and that the terms of Verizon's FCC license required open access to any compliant device.

(He has documented the story in this blog post).

Verizon said they had to certify the device -- have it tested to be sure it would not harm their network.

That reminded me of the Hush-a-Phone. In 1956, the courts overruled an FCC ban on Hush-a-Phone, rejecting AT&T's claim that it posed a risk to the network and would degrade call quality.

Here is a picture of the Hush-a-Phone -- you can decide how grave the risk was:

What if AT&T had prevailed in the Hush-a-Phone case and the subsequent case of the Carterphone, a device for patching radio calls into the telephone network? (Yeah, hams used to do that).

It seems that Verizon is unclear on the meaning of "open" -- they are still nostalgic about the good old days, when only the phone company could sell you things like phones, modems, DSL routers, answering machines, etc.

FCC approves Verizon + Comcast -- The gentleman's agreement between cable and wireless companies

Verizon Wireless on Thursday won unanimous Federal Communications Commission approval to move forward with its $3.9 billion purchase of 4G LTE spectrum from the country’s largest cable providers. The partnership also enables the cable companies to market Verizon services and in some cases sell their own services inside Verizon stores.

Here is how the industry sees the deal:

Dan Mead, president and chief executive of Verizon Wireless: “This purchase represents a milestone in the industry, and we appreciate the F.C.C.’s diligent work to review and approve the transaction.”

David L. Cohen, executive vice president of Comcast: “a smart and efficient way for Comcast to deliver a broader array of wireless services, and is an efficient deployment of this spectrum.”

And here is the opinion of Gigi B. Sohn, president and co-founder of Public Knowledge, a nonprofit organization based in Washington that promotes an open Internet:

“By allowing Verizon and the cable companies to sell each other’s services, the D.O.J. and the F.C.C. are acknowledging what has been clear for some time — that broadband competition policy in the United States has failed."

I have to agree with Gigi Sohn. The US congress tried to foster competition with the 1996 Telecommunication Act. The idea was that the incumbent telephone companies would allow competitors to use their facilities at wholesale rates to compete as retail level service providers. The telephone companies drug their feet and fought at the state and local level to keep that from happening, and they succeeded.

This is what William Kennard, who, as chairman of the F. C. C. from 1997-2001, was charged with implementing the Telecommunications Act, had to say near the end of his term:

“All too often companies work to change the regulations, instead of working to change the market.”

“[regulation is] too often used as a shield, to protect the status quo from new competition - often in the form of smaller, hungrier competitors -- and too infrequently as a sword -- to cut a pathway for new competitors to compete by creating new networks and services.”

“companies invest in lawyers, lobbyists and politicians, instead of plant, people and customer service.”

Some have argued that wireless connectivity would eventually bring competition to the Internet service industry, but it seems we have instead a gentleman's agreement in which the cable companies will provide land-line connectivity and the cell phone companies will provide wireless connectivity. Furthermore, sometimes they can sell each other's service.

My experience illustrates the gentleman's agreement. I was a Verizon DSL customer for years. I was about to leave them when I started seeing ads and billboards saying I would soon be able to get their fiber service, FIOS. After a couple years wait, they announced they would not be bringing FIOS to my neighborhood after all. Then they cut my DSL speed from 5 to 1.5 mbps! I switched to cable -- my one alternative.

My current slim hope for getting connectivity that close to what is available in Riga Latvia is Google's pilot in Kansas City.

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Update 10/5/2014

The FCC okayed Comcast's deal with Verizon, but maybe they are getting tougher now. They've put the Time Warner Cable merger on hold:

In a public letter to Comcast and Time Warner Cable executives, the FCC announced that it is hitting the pause button on its review of the proposed $45 billion merger. Citing inadequate responses by both cable companies to earlier FCC requests for additional information, the agency is stopping the clock on its 180 day review period until late October.

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Update 5/10/2015

The end game has been revealed -- Verizon will exit the wireline business within ten years:

A utility company familiar with Verizon's business plans says Verizon has told it the company plans to exit the fixed-line broadband business entirely within the next ten years. Stop The Cap directs our attention to a filing at the FCC made by Florida Power & Light, urging the FCC to reject Verizon's decision to offload its Florida, Texas and California DSL, FiOS and POTS customers to Frontier Communications.

I guess they are counting on 5G cellular, but I hope public WiFi hotspots give them some stiff competition.

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Update 11/8/2015

During a recent earnings call, Verizon CFO Fran Shammo said that FiOS will be available to about 70% of their east coast, fixed-line customers once the company finishes the sale of their Texas, Florida and California fixed-line networks to Frontier Communications.

If they stick to their plan of leaving the wireline business, they will have 100% penetration the day before selling off the last customer.

While no further sales are imminent, Shammo stated that all options remain on the table. "As I have always said you never say never," Shammo noted. "We're always open to new options and we always keep our eyes open for that but at this point we're very committed to the wireline business."

Verizon is living up to the aforementioned gentleman's agreement with Comcast. In my personal case, that means Time Warner Cable will remain my only viable Internet service provider until Google or Elon Musk or someone else comes to my rescue.

AT&T (and Verizon) hypocrisy

AT&T argues that their acquisition of T-Mobile would benefit the public because they would be able to increase their fourth-generation LTE coverage from 80% to 97% of the US population, but couldn't they do that on their own without T-Mobile?

It turns out they had an internal proposal to do just that. In a recent FCC filing AT&T estimates that they could deploy the approximately 44,000 nodes needed to achieve 97% coverage by the end of 2013 at a cost of $3.8 billion.

However, in the next paragraph they say that senior management had rejected the proposed build out since there "was no viable business case for such an expansion." The extra coverage was not worth even $3.8 billion to AT&T.

Yet they have offered $39 billion for T-Mobile. Part of that is to acquire T-Mobile customers, but those folks might not stick around since they had already decided against AT&T. Still, what alternative would they have?

That pesky competitor T-Mobile would be gone and there would be only two competitors remaining. Sprint was small and not doing so well. How long until there would be only one competitor? Sweet.

Lest you think that I am an exclusive AT&T basher, let me point out that I was a Verizon customer until last year when they treated me so badly that I left them for cable.

Furthermore, Verizon can match AT&T's hypocrisy. If you want to come unglued, check this post on Verizon<.a>.

We are toast.