Farewell, Ma Bell

Today SBC AT&T turned off the phone service that we've had at our house in San Jose for nearly 10 years. I think this will mark (with a few brief exceptions) the first time in my adult life that I’ve not had telephone service with AT&T — over 30 years' worth.

As a high school phone hacker (not quite a phone phreak), I owned my own phones back before that was allowed. I had service in college (except my first year in a dorm) at UCLA and at MIT, and when I moved back to California permanently after college I turned on service the minute I had an apartment. The only exceptions were a) during a summer spent in Dublin my service was suspended when my apartment-sitter ran up the long distance bill and b) as a newspaper reporter, there were a few months where I couldn’t afford to pay the phone bill until I gave up my 1BR and moved in with someone else.

AT&T's loss was not due to their normal reason. Unlike our teenager — who I expect will have only a personal (mobile) number for her life — our household is keeping a landline.

And it’s not like I’m mad at The Phone Company — as I was at various points during the past 30+ years, even to the point of (in high school) making our own student film called “We Hear You,” a low-budget ripoff of “The President’s Analyst.” (I did special effects and played the bad guy driving my dad's menacing-looking sedan).

Nope, we’re switching (for now at least) to phone service from our cable company, for four reasons. One, it’s cheaper — mainly because US long distance is free. Two, they came up with a clever way to solve the power failure problem (which was highly salient for San Diegans after last fall). Third, our respective parents both have it and since neither of them are technically savvy, it must be pretty seemless.

Finally, it’s not just that it’s replacing AT&T with cable, but which cable company it is. In SoCal we get Cox, an innovative responsive company that did a great job for us (particularly on Internet) when we lived there before. If we were staying in the Bay Area, there’s no way we’d ditch AT&T for Comcast, which has been terrible and is a ruthless monopolist that would make ol’ Ma Bell blush.

So bye-bye, Ma. It’s been good knowin’ ya, and perhaps our paths will cross again.

Comcast: Charging more for less

Monopolies are bad for consumers and society (and of course death to competition). To my mind, telecom monopolies are the worst, particularly now that they’re fighting the threats to their core business.

Our local cable TV provider, Comcast, is pushing a double whammy to try to raise revenue, and hiding behind misleading (and most likely untrue) claims as to why it needs to charge customers more in a down economy.

First, without notice last month it dropped 11 channels (including TV Land and SyFy) from its cheapest service — “Limited basic”. When I called to ask, the switch was attributed to the digital switchover. (It dropped a 12th channel last year). As best I can tell, it dropped the channels not because it needs to drop them, but because now it has the technology to more finely control channel choices — and wants to force consumers off the basic service to more expensive plans.

The Mercury-News this morning reported that Comcast plans to raise rates 1.5-9% on the three least expensive services — priced at $15, $46, and $60. Its honesty here is even more suspect. (Ironically, the Merc and its sister papers won a full-page of “tombstone” legal notices by Comcast announcing the price hikes in 9 separate jurisdictions.)

According to the Merc,

Comcast attributed the price hike to rising costs, including an increase in the cost of TV programming, and investments in new technology.

"These investments make it possible to deliver continued innovations such as more high-definition (HD) networks and video-on-demand (VOD), converged services, multi-platform content and new services that consumers demand," the company said in a statement.

The problem with this claim is that none of these new services are going to the basic cable customers who are paying the 9% rate increase. It’s a smokescreen for using its monopoly power to raise profits — presumably because it can’t extract the money from its most expensive plans.

The Merc continued

Mindy Spat, communications director of The Utility Reform Network, a San Francisco-based consumer advocacy organization, said Comcast appears to be taking advantage of its lower-end customers.

She noted that many Bay Area consumers who were unable to tune in the new digital broadcast signals signed up for limited basic cable to continue to get the local channels after the old analog ones were switched off earlier this year. With the increases, Comcast also appears to be trying to push customers into higher-tier packages, she charged.

"If consumers had choices, they certainly would not choose Comcast," Spat said. "But they don't, and Comcast is taking advantage of the fact."

TURN is an activist group to the left of Consumers Union and to the right of ACORN. This may be the first time in my life I’ve agreed with TURN, perhaps suggesting the degree of the company’s naked assertion of monopoly power.

Openness in the news

A few tidbits highlighted in the inner pages of a friend’s WSJ this morning. All are about (to some degree) IT openness.

Comcast is partnering with Clearwire (and thus Sprint) to resell its WiMax service to its existing cable modem subscribers. In integrating its offerings, Comcast is seeking to increase switching costs. More fundamentally, either this suggests that Comcast realizes that revenue growth in its core business is over, or it decided it needs to bundle in-home and coffee shop Internet access for residential users to compete with AT&T (DSL + Wi-Fi hotspots) and other integrated telecom companies.

Meanwhile, Clearwire is eager to generate revenue and win WiMax adoption before the more widely endorsed LTE tsunami comes flooding in.

The EU has forced major mobile phone makers to adopt a standard recharger plug by 2010. Nominally to reduce the number of chargers in landfills, of course it’s really about forcing an open standard to reduce switching costs. While I think this is exactly the sort of trivial economic micromanagement that governments should avoid, fortunately the government didn’t have to push too hard as European and US telecom trade associations had previously brokered the plan.

Alas, the format is the relatively new (and incompatible) micro-USB instead of the ubiquitous mini-USB that I already have on all my hard disks and some of my existing cameras and cellphones.

Dell is rumored (by the WSJ and earlier reports) to be planning an Android device aimed squarely at the iPod Touch. This makes a lot of sense, since for many users, the value of the iPT comes from its WebKit web browser, a mail client, Google maps and an RSS reader. Assuming Android has gotten around to fixing their awful email client, the open source (and thus inherently commoditized) platform makes perfect sense for the company that seeks to copy Apple’s new technology innovations (and old production innovations) as its core commodity business declines.

As with other Dell technology efforts, it would enable the low R&D company to build upon the R&D efforts of others, a classic (if decades old) example of open innovation.

Not quite a love-hate relationship

In yesterday’s Merc, the column by Vindu Goel was entitled “Our love-hate relationship with Comcast.” I’d say he’s half right, which is more than we usually agree.

Comcast has been spending hundreds of millions with its Slowsky (and other) ad campaigns trying to make people think that it has a better Internet service than anywhere else, while SBC (aka AT&T) is attacking Comcast and other cable TV over misleading teaser prices. Apparently hyperbole and dishonesty is normal for telecom advertising (like laundry detergent of 40 years ago) but there’s clearly more of a factual basis to the AT&T attacks.

Comcast claims to have 16 megabits/second; all I know it isn't in my neighborhood. I don't know if we have poor infrastructure, too much shared bandwidth or it's just the normal latency problems, but under normal conditions the responsiveness is no better than DSL and noticeably worse than at work. We had Cox in San Diego for nearly a decade, and boy I wish I could have that service up here.

What is, clear, however, is that Comcast is a monopoly and acts like it in its pricing. It reminds me of 20 years ago, when people were mad at DEC for acting as though its customers had no other choice. Once they did — through POSIX, Unix, and Open Systems — buyers deserted DEC in droves.

Comcast will never have a cable TV competitor (in those markets where it has the franchise), but it certainly will face relentless competition from substitutes. About its only hope is that once SBC gets good TV market share that its arrogance will eventually match Comcast's. For consumers, that would be the nightmare scenario.