Verizon Settles Complaint Over Data Fees

Publie le 28 octobre 2010
(http://www.nytimes.com/2010/10/29/technology/29fcc.html?_r=1&ref=technology

WASHINGTON — Verizon Wireless, the nation’s largest mobile phone carrier, will pay $25 million to end an investigation into complaints that it had charged 15 million cellphone customers unauthorized data fees over the last three years, the Federal Communications Commission announced Thursday.

Verizon had announced this month that it intended to refund money to its customers for the unauthorized charges. Under a consent decree with the F.C.C. announced Thursday, the company also will pay a minimum of $52.8 million in refunds.

The $25 million settlement is the largest payment under a consent decree in the F.C.C’s history, said Michele Ellison, chief of the agency’s enforcement bureau.

“Today’s settlement requires Verizon Wireless to make meaningful business reforms, prevent future overcharges and provide consumers clear, easy-to-understand information about their choices,” Ms. Ellison said. “I am gratified by the cooperation of the Verizon Wireless team in the face of these issues and pleased they are taking the high road.”

In a statement, Verizon said: “We are a company that listens to its customers and in this case we got to the bottom of a problem and resolved the errors. We have taken this action because it is the right thing to do.”

The long road to the settlement began in November 2007, when customers first started experiencing and then complaining about mysterious $1.99 charges on their monthly phone bills for data sessions that they had not initiated.

The F.C.C. said it started investigating last January after a large number of customer complaints about the charges and after reports in 2009 in The Plain Dealer of Cleveland and The New York Times.

The charges affected customers with a “pay as you go” plan for data or Internet access. Verizon said the “vast majority” of the erroneous charges were incurred when software that was preloaded on some phones automatically contacted Verizon’s data service in what the company called an “acknowledgment” session.

Verizon said that in September 2009 it put in place a feature to limit those inadvertent charges. In addition, the company said it had sometimes accidentally charged customers for access to Web sites through links that were not supposed to lead to data charges. Many customers complained that if they had accidentally hit a wrong button on their flip phones, they would be connected to the Internet and charged a $1.99 fee.

The F.C.C. required and Verizon agreed to take steps to prevent such charges in the future. The company said those steps included software changes to remove automatic acknowledgments between Verizon data centers and phones, and new internal controls that would prevent charges when customers accessed free Web site links. In addition, the company will put in place a data charge task force to monitor and resolve complaints. The task force must report regularly to the F.C.C.

The F.C.C. and Verizon also agreed that the company would initiate customer service improvements, including clearer explanations of its pay-as-you-go data charges and ways for customers to avoid extra charges; an online video tutorial to help consumers understand their bills; and additional training for Verizon customer representatives on pay-as-you-go plans.

Verizon has begun notifying customers eligible for refunds, and it will apply credits or, in the case of former customers, mail checks for the refund amounts in October and November. Most of the credits range from $2 to $6, Verizon said. About 77 million of its customers, or roughly five out of six, are unaffected, the company said.

Customers who do not receive a refund but believe they had unauthorized data charges can appeal and receive a resolution within 30 days, the F.C.C. said.

Julius Genachowski, the F.C.C. chairman, said the settlement “will serve as a significant deterrent to others in the future.”

Mr. Genachowski added: “Today’s consent decree sends a clear message to American consumers — the F.C.C. has got your back. People shouldn’t find mystery fees when they open their phone bills, and they certainly shouldn’t have to pay for services they didn’t want and didn’t use. In these rough economic times, every $1.99 counts.”

IPad Coming to Verizon Wireless and AT&T Stores

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Publie le 14 octobre 2010
(http://bits.blogs.nytimes.com/2010/10/14/ipad-coming-to-verizon-wireless-and-att-stores/)

Apple said Thursday that Verizon Wireless would begin selling the iPad at its stores on Oct. 28.

The announcement is the latest sign that the relationship between Apple and Verizon is warming up. Verizon is expected to begin selling Apple’s iPhone early next year.

Verizon will not be selling 3G versions of the iPad, which work over a cellular data network. Instead it will sell bundles that include the iPad’s Wi-Fi models and its own MiFi mobile hot spot device, which essentially allows users to connect to the Internet in any place that has 3G service. The bundles will cost $630 for a 16-gigabyte model, $730 for a 32-gigabyte model and $830 for 64 gigabytes. Verizon will offer a monthly $20 access plan to iPad customers for up to 1 gigabyte of data. In addition, Verizon will offer all three iPad models on a standalone basis.

“We’re thrilled to be working with Verizon Wireless to get iPad into the hands of even more customers this holiday season,” Tim Cook, Apple’s chief operating officer, said in a news release.

John Stratton, chief operating officer for Verizon Wireless, said: “IPad together with the nation’s largest and most reliable 3G data network allows customers to easily connect on the go wherever they are.”

Apple also said that all 3G models of the iPad will be sold at AT&T stores, adding further distribution muscle to the iPad just ahead of the holiday season. The iPad is also expected to go on sale at Wal-Mart on Friday.

Ways to Protect Your Portfolio From Market Volatility

Publie le 10 juillet 2010
(http://www.nytimes.com/2010/07/11/your-money/11fund.html?ref=standard_poors_500_stock_index)

FOR the second time in less than 18 months, the market has taken a steep plunge and the patience of buy-and-hold investors is being put to the test.

But if investors learned anything from the previous bout of acute volatility — when the Standard & Poor’s 500-stock index plummeted to a low in March 2009 before soaring 80 percent during the next 13 months — it’s that it often pays to remain in the market, even in frightening times.

That doesn’t mean investors must stand pat with their existing portfolios, especially if they’re not well diversified. While the sharp, 12 percent slide in equity prices since April 23 has yet to become an official bear market (defined as a decline of 20 percent or more), “the chances of this correction morphing into a new bear are definitely rising,” said Sam Stovall, chief investment strategist at S.& P.

Even after a strong performance last week, in which the S.& P 500 rose 4.8 percent, the underlying economic optimism that spurred the stunning rally last year seems to be subsiding. “I’m saying to myself that the economy is still getting better, but the healing is going to take a little longer than we thought three months ago,” said David H. Ellison, chief investment officer for the FBR equity funds. “So I’ve become more defensive and have more cash in my portfolio than three or four months ago.”

Raising levels of cash isn’t the only move that fearful investors can make. In fact, they can take several small, tactical steps to position their portfolios more defensively without significantly upending their overall exposure to stocks, market strategists and money managers say.

For starters, investors seeking more stability in their domestic equity portfolios should focus on shares of dominant, industry-leading large-capitalization companies, strategists say.

“When the seas get rough, it’s better to be in a big boat,” Mr. Stovall said.

To be sure, the Russell 2000 index of small-company stocks is flat this year, versus a decline of about 3 percent for the S.& P. 500 index of large-cap stocks. But ever since market volatility surged in late April, small stocks appear to have lost their edge. They’re down more than 15 percent since April 23, compared with the 12 percent decline of the broad market.

Mr. Stovall also pointed out that small stocks climbed significantly higher than large caps in recent months — up 111 percent between the bull market’s start on March 9, 2009, and April 23 of this year. So, he said, “small stocks may have more ground to give up.”

Safety-minded investors should also tilt their portfolios toward stocks that pay dividends and have the financial strength to raise those payouts consistently over time, said Thomas H. Forester, manager of the Forester Value fund, which was the only domestic equity mutual fund that made money in 2008.

That’s because dividends provide investors with modest protection against stock price declines. Indeed, since the start of the year, the SPDR S.&P. Dividend exchange-traded fund, which tracks the S.& P. High Yield Dividend Aristocrats index, is up 3 percent when dividends are factored in. That compares favorably with the 3 percent decline for the S.& P. 500 index including dividends.

Earnings growth for dividend payers also tends to be much more stable than for other companies, Mr. Forester said. That’s an important consideration for investors who fear that this latest economic hiccup could hurt what has so far been a positive period for corporate profit growth.

When it comes to one’s foreign equity portfolio, though, the advice of strategists and money managers can seem a bit counterintuitive.

For instance, given that the slowdown in Western Europe is weighing down the global economic recovery, many investors may be thinking of reducing their exposure to that region. But David R. Kotok, chief investment officer at Cumberland Advisors, has recently raised his stake in certain parts of Europe — namely, northern Europe, where debt worries aren’t as big and where economies are still relatively healthy.

Mr. Kotok points out that healthier countries in Europe, such as Germany and the Netherlands, would also stand to benefit from the plummeting euro, since their exports are now attractively priced for foreign buyers.

Rather than cutting one’s exposure to Europe, he said, investors might consider rebalancing their European exposure through a single-country fund, such as the iShares MSCI Germany index fund, that focuses on healthier parts of the region.

THIS may also be time to consider reducing one’s exposure to emerging-markets stocks.

That, too, may seem to run counter to conventional wisdom, since many investors now favor emerging markets like China and Latin America, where economies are growing much faster than the world economy as a whole.

But Jack A. Ablin, chief investment officer at Harris Private Bank in Chicago, said, “anyone who is bullish on the emerging markets currently is looking at the economies and not the markets.” He added that “there’s often a big disconnect between economic fundamentals and market performance.”

That has certainly been true this year. Stocks in emerging-market countries have tumbled more than 9 percent over the last three months, despite those faster-growing economies. And given that emerging-market stocks are historically more volatile than those of developed markets, it wouldn’t be surprising to see them fall further should global economic worries persist.

Mr. Ablin likens the plight of investors in this worrisome economy to a car riding on a spare tire. “If I’m driving on a spare, I’m not looking for maximum speed — I’m on the lookout for nails.”

Paul J. Lim is a senior editor at Money magazine. E-mail: fund@nytimes.com.
A version of this article appeared in print on July 11, 2010, on page BU6 of the New York edition.

Are AT&T and Verizon About to Square Off Over Pricing?

Publie le 19 octobre 2010
(http://bits.blogs.nytimes.com/2010/10/19/are-carriers-gearing-up-to-battle-for-customers/?scp=1&sq=Are%20AT&T%20and%20Verizon%20About%20to%20Square%20Off%20Over%20Pricing?&st=Search)

By JENNA WORTHAM

While Steven P. Jobs, Apple’s chief executive, and Andy Rubin, the vice president of engineering at Google, fire pot shots at one another over their rival cellphone platforms, the wireless carriers are engaging in their own snipefest behind the scenes.

Several media outlets, including Engadget, a technology blog, are reporting that Verizon Wireless is preparing to introduce tiered data plans for its smartphone subscribers.

It’s similar to the one AT&T introduced in June to choke the heaviest guzzlers of the network’s capacity. But while AT&T eliminated the phone plan that allowed subscribers to pay a flat fee for unlimited data usage, Verizon, the reports say, will leave that option intact for consumers. The company will simply also introduce the option to pay $15 a month for 150 megabytes of data. Customers who exceed that amount will be charged an additional fee.

The news — even though it has yet to be confirmed by Verzion Wireless — prompted AT&T to release a statement.

“We can’t comment on our competitors’ prices, but we announced our new smartphone data plans months ago,” said Mark Siegel, a spokesman for AT&T. “They give our customers a great value. For $15 a month you get 200MB of data. For $25, you get 2 Gigs, which is more than 98 percent of our customers use, on average.”

For the last year, rumors have been swirling that Verizon will soon announce an iPhone on its network. In addition, the news that Verizon would begin selling the iPad in its stores is a signal that relations between Apple and Verizon has warmed enough to garner a mobile partnership.

Is AT&T worried about the coming competition? If so, is the option of an unlimited data plan enough to lure away AT&T customers?

Apple Plans to Offer iPhone on Verizon

Publie le 8 octobre 2010
(http://www.nytimes.com/2010/10/09/technology/09phone.html?scp=1&sq=Apple%20Plans%20to%20Offer%20iPhone%20on%20Verizon&st=Search)

SAN FRANCISCO — Facing intense competition from phone makers wedded to Google’s Android software, Steven P. Jobs, Apple’s chief executive, finally plans to make the iPhone available on Verizon Wireless, the largest wireless carrier in the United States.

After more than three years of using only AT&T cellphone networks, Apple is now making a version of the iPhone 4 for Verizon’s network, according to a person who is in direct contact with Apple. Apple and Verizon will begin selling the phone early next year, said the person, who agreed to speak on condition of anonymity because the plans were supposed to be confidential and he did not want to alienate his contacts at Apple.

Apple and Verizon Wireless declined to comment.

The arrival of the iPhone on Verizon, which has long been expected and frequently rumored, could sharply alter the dynamics of the smartphone market in the United States. The iPhone remains the best-selling smartphone. But around the world, many carriers, especially those that do not have access to the iPhone, have been promoting an array of handset models running on Google’s Android software. Collectively, those phones now outsell the iPhone.

This week, Nielsen reported that Android accounted for 32 percent of the new smartphones sold in the United States in last six months. By comparison, the iPhone accounted for 25 percent. The numbers confirm those of other research organizations.

The Android’s rapid ascent threatens to blunt Apple’s lead in the market for high-end smartphones. No other Apple product brings as much revenue for the company as the iPhone, and analysts say that seeing that lucrative market imperiled may have finally pushed Apple into ending its exclusivity with AT&T.

“Android has tremendous momentum,” said A. M. Sacconaghi Jr., an analyst with the research firm Sanford C. Bernstein & Company. Mr. Sacconaghi said that the growth of Android was in large part because the iPhone was not available on Verizon and some major carriers overseas. “Apple moving to sign up these carriers is very important to help mitigate Android momentum,” he said.

A Verizon iPhone could quickly tilt the marketplace back in Apple’s favor. For all its success, the iPhone on AT&T has been plagued by complaints of poor network coverage, especially in some major cities like New York and San Francisco. Many potential customers have chosen to buy Android handsets from other carriers to avoid problems with dropped calls and dead zones.

But many surveys show that many owners of Android handsets would buy an iPhone, if it were available on Verizon. At the same time, AT&T iPhone customers may switch to Verizon as their contracts expire, even though they would have to buy a new phone to do so. Apple’s AT&T phone, which uses G.S.M. networking technology, would not work on Verizon’s network, which uses a different networking technology called C.D.M.A.

“It is going to have a fairly disruptive impact when it lands,” said Charles Wolf, an analyst with Needham & Company.

Another factor that could be pushing Apple to end its AT&T exclusivity is the impending arrival of phones running Microsoft’s new Windows Phone 7 software. The two companies are making a joint announcement about its phones Monday. Early reviews of the devices have been positive, and Microsoft, which has faltered repeatedly in the phone business, plans to spend heavily to market the new handsets.

“Windows phones should not be dismissed,” Mr. Wolf said. “They will be a major player in the market.”

While the arrival of the iPhone on Verizon had long been expected, some industry insiders doubted that Apple would bring the iPhone to Verizon before the carrier deployed its next-generation network, known as L.T.E., or Long-Term Evolution.

But in an interview this week, Tony Melone, the chief technology officer of Verizon Wireless, suggested that those doubters could be wrong. Mr. Melone did not comment on the iPhone, but he said that while Verizon would begin introducing its new network in 38 American cities by the end of the year, the company’s older 3G network would continue to grow for several years. He also said that Verizon would continue “selling 3G devices well into the decade, possibly through the end of the decade.”

However, while L.T.E. phones will be backward-compatible so they can run on Verizon’s older 3G network, those 3G phones won’t run on the new, faster L.T.E. network.

The arrival of the iPhone to Verizon could further increase Apple’s bottom line, with some analysts predicting the company could sell an additional 10 million devices per year. But analysts say that investors have long expected Apple and Verizon to come to terms eventually, and Apple’s stock price already reflects that.

Indeed, over the last year, a flurry of reports have predicted a Verizon iPhone was imminent. On Wednesday, The Wall Street Journal reported that the iPhone would be available on Verizon early next year.

Jenna Wortham contributed reporting.

Verizon’s Results Show It Doesn’t Need the iPhone

Publie le 17 avril 2010
(http://bits.blogs.nytimes.com/2009/04/27/verizons-results-show-it-doesnt-need-the-iphone/?scp=1&sq=Verizon%E2%80%99s%20Results%20Show%20It%20Doesn%E2%80%99t%20Need%20the%20iPhone&st=cse)

Verizon’s financial results, released Monday, underscore a point I made last week: AT&T needs the iPhone more than Verizon does, so it has more incentive to outbid its rival to keep the exclusive deal.

Verizon is certainly playing it cool. In a conference call with analysts on Monday, Dennis Strigl, Verizon’s chief operating officer, responded noncommittally to a USA Today report about talks with Apple. “We’re always open to discussions with any supplier,” he said, according to ZDNet. “We have no announcements to make relative to Apple today. Historically we haven’t been dependent on any one device.”

And indeed, the company’s wireless division is doing just fine. It added a net 1.3 million customers in the first quarter. It added 1.0 million customers, when you deduct business lines and prepaid accounts.

By contrast, AT&T added a net 1.2 million wireless accounts in the quarter, of which 875,000 were consumer postpaid. Of those, 640,000 were iPhone users who didn’t already have AT&T accounts.

In other words, Verizon is growing faster without the iPhone than AT&T is growing with it. And new iPhone users represent three-quarters of AT&T’s net new accounts.

Verizon probably does have a significant interest in dragging on negotiations as long as possible. Not only does that have the potential to frustrate AT&T, but it also gives Verizon the most opportunity to assess the appeal in the market of the Palm Pre and the next crop of phones using Google’s Android and Microsoft’s Windows Mobile operating system. If the market for smartphones continues to be wide open, with innovation coming from a lot of corners, Verizon doesn’t need to bid up to win the iPhone. Indeed, the better other smartphones are, the lower the iPhone’s value will be to AT&T as well.

On the other hand, if consumers start to form a distinct preference for Apple’s vision of handheld computing and communication, as they did for its iPod media player, the value of the iPhone soars.

Another unanswerable question is the regulatory environment once the cellphone companies switch over to their new fourth-generation networks. Then it will be technically possible for a single phone to switch from AT&T to Verizon or vice versa. Whether the government will allow companies to cut exclusive deals then is not clear.

Verizon Net Beats Estimates as Smartphone Ranks Grow

Publie le 22 octobre 2010
(http://www.bloomberg.com/news/2010-10-22/verizon-third-quarter-profit-tops-estimates-as-smartphone-popularity-grows.html)

(Updates with company forecast in ninth paragraph.)

Oct. 22 (Bloomberg) -- Verizon Communications Inc., the second-largest U.S. phone company, reported third-quarter profit that beat analysts’ estimates after more customers bought smartphones and signed up for data plans to operate them.

Profit, excluding payments related to its pension fund and charges from sales and acquisitions, was 56 cents a share, the New York-based company said in a statement today. Analysts in a Bloomberg survey had predicted 54 cents per share.

Verizon has added new mobile phones to its network to boost growth as older businesses, such as home phones and wireless- voice service, stagnate or decline. Verizon has increased the number of smartphones under its Droid brand with Android operating systems. Customers paid an average of $18.61 a month for data plans, up 19 percent from a year ago.

“Verizon has been doing exceedingly well with its Android launch,” said Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York, who rates the shares “underperform” and doesn’t own any. “They’ve had a pretty steady diet of sexy new phones, and they’ve really closed the gap versus the iPhone.”

The company added 584,000 new wireless customers on monthly contracts. That fell short of the 625,000 that analyst Tim Horan at Oppenheimer & Co. had forecast. Simon Flannery, an analyst at Morgan Stanley, estimated 665,000.

Verizon declined 22 cents to $32.30 in trading before New York exchanges opened. The company fell 12 cents to $32.52 in New York Stock Exchange composite trading yesterday. The shares had gained 5.1 percent this year before today.

Improving Outlook

Revenue for the quarter was $26.5 billion. Analysts had forecast $26.3 billion, according to the Bloomberg survey. Sales a year ago, which included landline operations sold to Frontier Communications Corp., were $27.3 billion. Excluding those operations, revenue from the third quarter of 2009 would have been $25.9 billion.

Net income at Verizon, which co-owns its mobile-phone business with Vodafone Group Plc, fell to $881 million, or 31 cents a share, from $1.18 billion, or 41 cents, a year earlier.

Earnings in the second half of the year will improve by 5 percent to 10 percent over the first half of this year, Verizon said. Earnings excluding some items will be as much as $1.11 a share in the second half of the year, based on earnings per share on that basis of $1.01 through the second quarter.

Sales at the fixed-line business dropped 3.6 percent to $10.3 billion in the third quarter from a year earlier. Verizon is losing home-phone subscribers and broadband customers.

That side of the business, which contributed 42 percent of Verizon’s revenue last year, has gotten a boost from the FiOS fiber-optic network. FiOS, which sells high-speed Internet access and high-definition television service over the fiber lines, added 226,000 Web and 204,000 video subscribers.

LTE, IPhone

Verizon will start selling service on a new wireless network this quarter that will improve data speeds, making applications like streaming, high-definition video and low-delay online games possible. The fourth-generation technology, called long-term evolution, will be introduced in 38 markets by the end of the year, including Boston, New York, Washington and Miami.

LTE will give customers data speeds that are 10 times faster than Verizon’s existing 3G service, Chief Operating Officer Lowell McAdam has said.

Verizon will also start selling Apple Inc.’s iPhone early next year, two people familiar with the companies’ plans said in June. Rival AT&T Inc. has had sole domain over the popular, touch-screen smartphone in the U.S. since its introduction in 2007. AT&T activated 5.2 million of the phones last quarter, the company said yesterday.

(The company will host a conference call at 8:30 a.m. New York time to discuss results. To access the call, click on LIVE .)

Verizon Profit Falls as Customer Growth Slows

Publie le 22 octobre 2010
(http://www.nytimes.com/2010/10/23/technology/23verizon.html?_r=1&scp=2&sq=verizon&st=cse)

Despite a strong lineup of smartphones powered by Google’s operating system, Verizon Communications on Friday reported a 25 percent drop in profit and a slowing growth of new customers in the third quarter.

The company cited pension settlements resulting from layoffs and voluntary departures as the main reason for the smaller profit. Net income dipped to $881 million, or 31 cents a share, compared with $1.2 billion, or 41 cents a share, reported a year ago.

Excluding the pension-related charges and acquisitions, including the sale of four million phone lines to Frontier Communications, Verizon’s earnings were 56 cents a share — beating the expectations of Wall Street analysts by 2 cents.

Verizon Wireless also struggled to appeal to new customers in the quarter, which ended Sept. 30, adding fewer than its main competitor, AT&T, which is still luring subscribers to its service with the iPhone.

Verizon reported a net addition of 584,000 contract customers in the quarter, while AT&T added 745,000.

Still, Verizon managed to hold on to its place as the nation’s largest wireless carrier, if only by a fraction. Its total subscriber pool increased by nearly 5 percent, to 93.2 million wireless customers. By comparison, AT&T now has 92.8 million consumers.

Verizon, based in New York, has suffered from the impact of a steadily declining landline business, the result of more people giving up home phones in favor of cellphones. John F. Killian, Verizon’s chief financial officer, said there was “tremendous opportunity” in the number of customers purchasing smartphones and the lucrative data plans that accompanied them.

More than 40 percent of the company’s device sales are now attributed to smartphones, he said. “We’re performing very well in this very competitive marketplace,” he said in a call with investors and analysts.

Mr. Killian said Verizon’s portfolio of smartphones, including several that use Google’s Android operating system, were helping to spur sales.

“The Droid franchise has gone from nothing a year ago to having a lot of buzz and momentum in the marketplace now,” he said.

Mr. Killian also said he expected earnings in the final quarter of the year to improve by 5 to 10 percent. He did not discuss reports that the iPhone was coming to Verizon’s network. But he said he expected the company to gain a competitive edge against rivals with the introduction of its next-generation wireless network, LTE, which will improve the speed of data-heavy functions like video streaming.


A version of this article appeared in print on October 23, 2010, on page B3 of the New York edition