PardonMyFrench

Confessions of a 10 Year AT&T Vet - I Like Google Voice

Those of you who read this website might not know that I worked at AT&T for 10 years.  In fact, after my first year of graduate school I started as an intern at an internal consulting group called Business Operations Analysis - kind of a nerd factory of nerds that was even part of Bell Labs for a short while.  After about 4 years in BOA I joined the consumer marketing groups and stayed there for about 6 years progressing up the ranks to Division Manager of a 25 person group called eAT&T or OneRate Online.  I dropped a lot of direct mail (probably about 100 million) and made millions of outbound telemarketing calls over those 6 years of marketing. 

One of those campaigns was for a product called TrueConnections.  TrueConnections is/was a follow-me 500# so that your callers called one number and you could program the number to ring at various numbers you owned.  Of course AT&T charged you for it and back in the mid 90s it seemed pretty cool, but as I recall it was too niche of a product targeted at Road Warriors and we didn't sell many plans.  Personally I didn't really use mine and didn't have much use for a product like that until last week.  That's when I got my Google Voice invite.

Now some of my AT&T brothers and sisters will turn their noses up at this product and when it first came out I didn't care for it either.  However, after setting it up last week I'm hooked.  Here's my experience with it so far:

1. Domestic calls are free.  I get that - no big deal, but if you don't make international calls, what's better than free?
2. Yes there's some issues with making calls on its network using your iPhone but I don't care.  I have one of those all you can eat plans with AT&T and have some rollover minutes.  I want Google Voice for the inbound calling features, not the outbound so the iPhone fight doesn't impact me.
3. It took me about an hour to pick out my number.  You can try coming up with a vanity number but I couldn't come up with one I liked, besides I'm not convinced a vanity number isn't a pain for dialers.  In the end I chose a local number that I think is easy to remember - 908.867.8001.
4. Setting up which numbers ring when you dial my Google Voice # was a piece of cake as is the user interface.
5. Ok - then came the time consuming part which took me about 2 hours.  In order to really get some use out of Google Voice you need to organize your contacts and put them into groups.  Each one of these groups can have different ring options and different voice mail greetings.  For example:

• Vendors that you don't want to hear from go straight to voice mail
• Friends and Family ring my three numbers, but the home phone only rings after 6 PM
• Connell Donatelli and Campaign Solutions co-workers get a special greeting

So after a few hours of organizing my contacts and then a few minutes setting up my voice mail greetings I experienced the last really cool part (so far) of Google Voice.  After someone leaves you a message you get an email or a text message notification that you have a new voice mail.  And, if that isn't cool enough Google does an ok job of transcribing the voice mail into text.  My experience with it so far is that this feature isn't something to rely on but cool none the less.

A single number for people to call you on for free?  Email notifications, transcription of voice mails to text, and individual greetings and call routings by group - those are a lot of cool features.  

I like Google Voice and so will my AT&T brothers and sisters.

PardonMyFrench,

Eric

Career Planning Lessons for AT&T Employees via Brett Favre

Like most sports fans I'm sick and tired of the Brett Favre stories.  I'm not sick and tired about whether he is going to play again; I'm more sick of the teary goodbyes when he announces his retirement (see this video when he starts breaking up around the 27 second mark). 

Anyway, I also started thinking, if Brett Favre wants to come back, why shouldn't he?  After all...

• His whole life revolves around football
• He's been playing professional football for 17 years and if you add in college that totals 21 years
• He is still productive even though he has slowed down, after all he is almost 40
• Has never missed a game in his 17 years
• Companies still want him around as do his customers

That started reminding me of my former AT&T associates especially the ones that are still there.  My old advice on this was that these employees should get out of that place because it is in a death spiral especially if you are located in NJ.  Friends of mine that got out of there are doing just fine proving that there is life after AT&T.  Some folks that left and took jobs with other NJ telecommunications companies (ex - Lucent) typecast themselves even more when they didn't learn new skills or a new industry.  I often felt bad for these telecom drones in addition to the NJ employees of AT&T.   Now I've had a little change of heart.

You see the old AT&T demanded a lot of your time, commitment, and most importantly loyalty.  Nearly all of these employees gave it and in return we built friendships that lasted forever, had good jobs, and great rewards.  A lot of people married co-workers ensuring AT&T talk and thoughts 24/7.  Some people built skills by taking different jobs within the company and they used these skills when they quit or were laid off.  Some folks still cling to their former cubicals.  BTW - my wife and I still remember my telephone number from Basking Ridge (908.221.7723) even though it hasn't worked in 9 years.

Anyway back to Brett Favre and the obvious link to AT&T.  Look if you like your job, you are still good at it, your customers and co-workers still want you, why shouldn't you stay there?  As long as you can still perform and someone wants to pay you, what's wrong with staying in the ONLY JOB YOU'VE EVER KNOWN?  Nothing. Nothing wrong at all.

PardonMyFrench,

Eric

AT&T's More Bars Network vs Can You Hear Me Verizon Network

I've been testing out my iPhone for about a month now and my conclusion is that the iPhone is by far the greatest cell phone currently on the market, but AT&T's network is either the worst or the best depending on where you are.  And before you flame me for not knowing anything a little back ground first.  I worked at AT&T for 10 years and pioneered from a marketing perspective marketing bundles of wireless and wireline communications starting in 1995.  The program I volunteered to work on called Cheetah in 1995 is widely considered the first marketing of a free cell phone for a new account.

I of course had an AT&T Wireless cell phone - one of those bricks back in 1995 and stuck with AT&T until about 2000 when I left AT&T.  I got a Verizon phone not because I was angry at AT&T but because of the horrible dropped calls I'd get on NJ transit and on Route 78.  After years of upgrading, I  had to get the latest iPhone because my Verizon phones just could not deliver on good wireless internet surfing and the applications were sub par.

Well driving around to NYC the past few days I've noticed that AT&T's network still SUCKs on Route 78 and Route 287.  It is so bad, that I've begin to seriously doubt AT&T's claim of of More Bars in More Places.  They may have more bars, but that doesn't stop the calls from being dropped.  Around my house, in my town, and neighboring towns the service is crystal clear, but once I get on one of those two highways, my old Verizon phone works a lot better.  Plus, on a recent trip to DC the iPhone was unusable but Verizon was fine.

Net, net around my home in Long Valley and Chester NJ the AT&T/iPhone is awesome, but once out on the main roads, Verizon seems to be a better shot.  The phone itself is something that I can't put down and often replaces my laptop even in my house.  AT&T's 3G is blazing fast when you get it too.  For me, unfortunately, I'm a two cell phone kind of guy now.

PardonMyFrench,

Eric

AT&T Lessons for Obama on Saving Jobs

I worked for the old and better AT&T for 10 years and it was on retention marketing. Those years were during the the great winback wars with MCI and Sprint where a new customer could get $100 or more for switching back.

You remember those days? You had to stay for 6 months and then you could start the process again. People would complain that as a long time customer they couldn't get a check or at least a good offer. Well here's why and why I wonder how Obama will measure saves - saved jobs that is.

The reason a new customer got $100 is because all of their revenue was new and the business case worked as long as they stayed for 6 months or so. Winback = new job created by Obama's spendulus plan. On the retention side you never knew who would leave AT&T so you applied our customer leave rate and came up with a number of potential people who would leave.  This number was then multiplied by a save rate (% of people who would stay because of an offer) and this number was who we saved.  Think saves as jobs saved by Obama's spendulus plan.

So the reason winback got better offers was because their entire new revenue was put up against the cost of the offer.  Retention offers were much worse because you could only apply the full cost of the offer against a smaller % of the people that received it.  Measuring winbacks = easy count, measuring saves = derived number with a lot of assumptions.

So I ask you, how is the Obama Administration going to measure a saved job?  The stated goal of the spendulus plan is to save or create 3 to 4 million jobs.  See for yourself the language used state by state in the details supplied by the White House.  Now if Obama's plan creates 3+ million jobs that's awesome and easy to measure.  You take the private sector employment number when Obama took office and see when you get 3+ million jobs and then you're in.  Easy.

However, what happens if it doesn't grow jobs?  Then how do you measure saving a job?  Is that saving one from going overseas?  How do you know a job will leave?  How do you know a job will go away?  If all of those PHDs at Bells Labs couldn't figure out who is likely to leave a telecommunications company does anyone really think the Government can figure out which jobs will leave?

I really wonder how the Obama administration will measure a saved job?  What does Obama mean when he markets his spending plan and says the goal is to create or save jobs?  Anyone answer for me?  I'd like to know because some other people are starting to ask what it means to save a job.

PardonMyFrench,

Eric

AT&T Lessons for Obama on Saving Jobs

I worked for the old and better AT&T for 10 years and it was on retention marketing. These years were in the great winback wars with MCI and Sprint where a new customer could get $100 for switching back. You remember those days? You had to stay for 6 months and then you could start the process again. People would complain that as a long time customer how come they couldn't get a check or at least a good offer. Well here's why and why I wonder how obama will measure a saved job.

The reason a new customer got $100 is because all of their revenue was new and the business case worked as long as they stayed for 6 months or so. Winback = created job. On the retention side you never knew who would leave AT&T so you applied our customer leave rate and came up with a number of

iPhone purchase

Yes I finally broke down and bought one. It was because of the apps . So far the only thing I don't like is the keyboard to type. My fingers make mistakes often.

PardonMyFrench,

Eric

I Did Not Buy The New iPhone

Yes, I did not buy the new iPhone.  I do believe it is the coolest phone on the planet and for that price it is off the charts a great value.  However, as I've written before the problem with the iPhone is the AT&T Wireless network especially in the areas where I use the phone the most. 

Since my Dad died (thanks for the comments) I've had to carry around his cell phone.  He also had a huge amount of monthly minutes with a ton of rollover minutes (more on that in a second).  So I've been trying to use his phone using AT&T's voice network.  You know what I found out?  It sucks in the areas I make calls.  Washington Township-Long Valley NJ, spotty coverage.  Route 78?  Stinks with plenty of dropped calls.  Route 287?  Almost as bad.  County Route 517 - useless.  Heck I could put up with all of that until my boss Becki called me from a train ride she was taking between NYC and DC and she couldn't talk for me for more than 1 minute without the call dropping or the quality degrading so badly it was totally useless.  And, that was on her iPhone.  So for where I make my calls AT&T's Wireless Voice network is substandard.

So I turned back to Verizon.  After a ton of research I settle on the Verizon Wireless XV6800.  It isn't an iPhone but I love it.  It connects to WiFi networks and has a nice large screen.  It comes with a ton of features and is Windows based so it feels familiar to me.  It comes with Microsoft Office and syncs nicely with my Outlook.  It has a slide out keyboard and the phone automatically rotates the screen which makes for easy web surfing.  I bought a 2 GIG data card for plenty of music and video files.  However, the best thing about it is that I get to stay on Verizon's Wireless Network where my CALLS GO THROUGH AND I CAN TALK WITHOUT DROPPING OFF (Can you hear me now AT&T?).

If you need a new wireless phone and you are in the areas that I frequent, the iPhone is sexy but the AT&T network is a hag.  Go with a brand new Verizon phone like the XV6800.  BTW - the rollover minutes was a plan idea that was very similar to one I cooked up while researching new wireless bundle plans for the old and better AT&T.  I called it the EZPass plan and it was credit card based.  We tested it in focus groups but it didn't really pop probably because we didn't cook up the name of rollover minutes which is brilliant. 

PardonMyFrench,

Eric

   

AT&T's TrueVoice Wished They Got The Light Bulb Treatment

I saw this article in Wednesday's Wall Street Journal called Bye Bye Light Bulb and it got me thinking about AT&T's TrueVoice "product".  Basically the article says how lucky manufacturers like GE and Phillips are that the US Government passed a law to outlaw the old version of the light bulb in favor of energy saver versions by 2012/2014.  These new bulbs already available on the market costs $3 instead of the 50 cents for the old ones, but theoretically save you money in electrical bills.  According to the article:

"Yes, the $3 bulb lasts longer. Yes, it cuts your electricity bill. Mr. Moorehead says that when every one of those four billion light sockets has an energy-saving bulb in it, the country will be saving $18 billion a year on its electric bill. That's $4.50 per bulb -- and the bulb makers are standing by to make sure a substantial portion of those "savings" get transformed into profits for them."

Wow isn't that convenient.  A product that nobody wants (5% market share) convinces the government of passing a new law and wham, you have instant product sales.  Now, the problem (and the link to TrueVoice) is that their selling proposition is that these new bulbs will help you save money on your electrical bill.  Pay more upfront for future savings, but if the savings was so good why aren't the sales there now?  Perhaps the American public doesn't want to pay for phantom product results.  Now to AT&T TrueVoice.

When I first came over to the marketing side at AT&T they were promoting TrueVoice.  TrueVoice which as I recall was being promoted by a new AT&T Marketing VP Dan Clarke as producing better call quality from your home phone.  This call quality proved by Bell Labs would allow AT&T to charge more money for a long distance call.  Problem was customers didn't think their home call quality was bad and when compared with the competition MCI and Sprint (remember them) the difference wasn't discernible.  Sure Bell Labs could prove it, but people just didn't care.  And, AT&T stopped promoting it because it didn't make a difference.

Unlike the light bulb guys, AT&T couldn't have the government mandate acceptable call quality.  Think about it.  Companies that have products that you just buy and are tough to differentiate (milk, light bulbs, pencils, coffee filters, home phone service) just need to somehow convince the government that it is to the American people's benefit to own their new product instead of the old one. Think Organic Milk industry.    Having the US Government speak up on an industry's sales woes is a true voice that anyone can hear a difference in.

PardonMyFrench,

Eric

FCC's Kevin Martin's Confusing Telecom Regulation Policies

I have to be blunt; I'm very confused and a little upset over what Kevin Martin at the FCC believes is good competition and what is bad competition.  I'm reacting to today's editorial in the Wall Street Journal called The FCC Plays' "Monopoly" which of course could be just opinion, but there are certainly some scary points raised in it:

• Chairman Martin plans to push a slew of new regulations on cable operators
• he wants to force cable companies to reduce, by as much as 75%, the already regulated rates they charge to lease channels to programmers
• is expected to show that cable has finally reached the 70% threshold that gives the FCC the green light to impose more regulations. Mr. Martin achieves this result essentially by cooking the books. He has cherry-picked data and single-handedly changed the methodology for determining penetration rates.

Now, I'm certainly not a lover of cable service and in fact hate their service and prices and haven't used them for almost 10 years; opting instead for DirectTV.  Yes, I have a convoluted system for these services.  I use DirectTV for TV, Embarq the worst brand name ever for phone and DSL, and Verizon for wireless. 

In beautiful Long Valley I have no choices for phone service.  I can choose Embarq which I did or crappy cable.   Oh and if you've ever tried to call me on my wireless phone when I'm home you know that if the phone rang at all you were greeted with more static than you'd hear by listening to WFAN in a lightning storm.  That's why I've written over and over again how the FCC and Kevin Martin don't understand the telecom industry and why consumers are getting charged more money for terrible service.  Now, not to be outdone, the Wall Street Journal wrote today "we're beginning to wonder if the head of the Federal Communications Commission knows the first thing about the cable industry he regulates."

Can cable use a little bit of a hair cut on their prices?  Sure.  Same with your local phone company.  Can cable use more competition?  Sure, but unlike the local phone market where there isn't any competition, you at least have two satellite providers and perhaps a local phone company fighting for your TV viewing time; and that's not all if you want to count watching TV programming on the internet.

There is way more competition for your cable time than your local phone service.  Not sure why Martin wants to squeeze cable companies more than he does with local phone companies.  I guess that's what has me so confused regarding what he chooses to regulate.  BTW  - MarketWatch has more detail on Kevin Martin not getting much support for his initiative and where the data is coming from (not to be used by the FCC according to the source)

PardonMyFrench,

Eric

AT&T Joins The Other Vultures Circling Around Vonage's Carcass

I laughed out loud when I saw this article in the New York Times called AT&T Is Latest to Sue Vonage Over Patent and also this other article in the Wall Street Journal.  I laughed not because another teleco jumped in to sue Vonage, but because I was wondering what took AT&T so long to jump in for the the fun.  You see back when I worked at the older and better AT&T I saw the Product Management plans for AT&T's IP Telephony product which I believe was called at the time Click2Dial.  That would have been around 1999 or so and maybe even as early as 1998.

The plans were very complicated and involved a PC with a 2 phone setup.  AT&T of course marketed it with our old narrow band product AT&T WorldNet which I believe to this day still has the same amount of subscribers as it did back then which was around 2.1 million.  AT&T's product at the time was way ahead of itself relying on very very techie folks who also happened to use WorldNet (kind of an oxymoron wouldn't you say).  I remember getting the plans because the Product Team was trying to find ways to cross sell the product with little marketing and I was running either our wireless bundled marketing campaigns or what we called eAT&T which was a strategy to try to get customers to sign up for LD and/or online care and billing via the internet.  Needless to say, I don't remember ever dropping Click2Dial into any plans of mine because the target audience was so small and the product was so complicated back then.

AT&T had the plans and the product back then and it was widely known through out the halls of Basking Ridge NJ.  So, while you normally would think I'd be gloating about another nail in the Vonage coffin, but even I a frequent Vonage basher has to wonder what took the new, new, new AT&T so long to figure out whether they should sue Vonage.  Sure AT&T claimed they were negotiating with Vonage for 2 years but now they were forced to sue.  Me, seems like somebody there decided it was better to get a piece of whatever is left before someone else puts Vonage out of business.

PardonMyFrench,

Eric

Vonage RIP

OK - it has been trading in the $1 range since Wednesday and I think it is safe to say, you can remove it from your radar screen.  I don't know about you, but I'm tired of all the posts I've made for the past two years on them even though they were some of my best.  I'd list them all out here, but that seems like a waste so for the full posts hit this link.  However, my first post What The Vonage was one of my favorites.

Just as their stock started trading on the $1 range they started a blog banner buy which is very funny and a little interesting.  Very funny because their ads are running on my blog right now (see screen shot), but what makes it interesting is if this is a last ditch effort to keep their once mighty ad spending going or are they trying to reach out to some influential bloggers.  Usually when I advertise on blogs its because it is either a) cheap or b) I'm targeting a certain group of readers and bloggers.

Well good luck to some of my former AT&T comrades that are working there now.  It is a real shame the executives mismanaged this company; it could have been a great place to work in NJ.  Oh speaking of NJ, I'm off to Springsteen's rehearsal show at Continental Arena.

PardonMyFrench,

Eric

The Disappearing Fewest Dropped Calls Claim by AT&T

I saw this article in the LA Times called AT&T Changes Cell Ad Mantra and I had to laugh while kicking myself at the same time.  The article writes this in case you don't want to signup for the free subscription:

AT&T's boast was about "fewest dropped calls" -- until recently. Now, it's about "more bars in more places."Why did AT&T ditch its long-running advertising campaign? A spokesman for the wireless unit of AT&T Inc. said it was due to a decision to focus on coverage, "because this is what our customers tell us over and over again is important to them." Ira Spiro, a West Los Angeles lawyer representing an AT&T customer in a federal lawsuit against the company, called that explanation "folderol."The hostilities over fewest dropped calls -- which sent AT&T and Sprint to court last year -- continue.

OK, so why did I kick myself?  Well when they first started to promote "fewest dropped calls" I tried looking for the survey that they were backing the claim up with, but couldn't get access to it.  After hours of searching, I finally came close to an AT&T press release and gave up when I couldn't find the actual study.  I also trashed my post which was basically going to say "see how the new, new AT&T plays around with data" because I couldn't back that claim up.  Now obviously the LA Times has better resources and was able to put out the post I couldn't.

OK, so why did I laugh?  Of course I never believed that claim.  I personally (on the marketing side) led the marketing of AT&T's first direct mail (and OTM) campaign promoting their wireless service during the project code named Cheetah and as you can see from my Why AT&T/iPhone Won't Live Up to The Hype post, I thought AT&T's biggest problem was their shaky network.  All you new iPhone/AT&T users see what I mean by shaky network; that's why I didn't buy the iPhone and won't until Verizon comes out with a clone or the iPhone somehow ends up on that network. 

Since I was on that AT&T wireless bundling team from 1995 - 2000 or so, I had an AT&T Wireless phone, but dropped it when I was traveling back and forth to Jersey City while with Harrisdirect.  AT&T's less than stellar network kept dropping my calls on Route 78 in Newark.  I've been using Verizon ever since and will not switch until their network has trouble...Wireless service is about the network, phones come and go.

So what else is funny?  How some lawyer at AT&T probably got suckered by the marketing team into allowing these ads.  I of course know nothing on how the new, new, AT&T works, but back in the Long Distance wars of the 90s the lawyers took claims very seriously and you couldn't run an ad like this without supporting documentation that would stand up in court.  Plus, as I recall the old and better AT&T had an arbitration agreement with MCI and Sprint to defend claims without going to court.

Surprised that the claim isn't running anymore?  You shouldn't be especially if you bought an iPhone and are not stuck with AT&T's network and sub-par customer service.

PardonMyFrench,

Eric

Add Censorship to A List of Problems with AT&T

This new, new, new really it is new AT&T is quite an out of control beast and resembles nothing of the old and better AT&T I worked at for 10 years.  Sure we cared about making money but everyone I worked with bled AT&T blue and actually cared about what consumers thought and the type of service they receive.  Not this one.  This new AT&T is a power hungry, consumer controlling, regulatory evading, anti-competitive corporate monster. The new AT&T:

• Could care less about you as a customer
• Nickels and dimes customers with hidden fees
• Eliminates competition through regulatory tricks and acquisitions
• and this lack of competition raises your prices and eliminates choice

Now you can add censorship to the list of anti-competitive and anti-consumer issues with this new powerful AT&T.  You can read the post from Pearl Jam to see what happened and how dangerous the new AT&T is; Pearl Jam does a far better job than I can in expressing what happened at the concert on Sunday.

Back about a year ago I wrote a post called Since When Has The Net Been Neutral which contained plenty of great comments.  Basically I argued that with less regulation and more competition the network owners should be able to charge what they want; however, that is not the world we live it today courtesy of AT&T and the FCC.  Yes, your world of no competition delivered to you by AT&T. 

See, with no competition for your household you are beholden to a company to deliver your services and things like accidental censorship can happen.  How easy was it for someone to cut off the concert's feed?  Seems pretty easy.  Heck, even as the AT&T spokesman said they were looking for profanity that's a problem for me too.  Determining what someone watches or listens to, should be up to the adults not the job of the FCC, AT&T, or any other centrally located body.  It is a parent's job to control what a child watches, not some person working at AT&T that needs a job.  The FCC should set ratings and guidelines so that parents can make informed choices.

The heart of Net Neutrality comes down to no competition at your household so a company can control pricing and content.  The way to guard against this problem is to increase competition, not stifle it which has not been this FCC's track record.   Don't be so relaxed to think that everything is fine in the country as long as you can make a call.  Watch what is going on and don't be fat dumb and happy and just pay your bills.  Keep your services separate if you can and continue to shop around.  The only way to make someone like AT&T feel some pain is to turn away their products and offerings - even if that means waiting for an iPhone clone from Verizon.  To a company like the new AT&T, we are all just human batteries powering the AT&T Money Matrix.

PardonMyFrench,

Eric

And Another iPhone I Told You So...

Yes.  I wrote it.  iPhone will be a great launch for Apple and be a problem for AT&T.  Why - you can read my reasons in this post which all have to with AT&T's bad customer service, shaky network and the way they treat their customers.   Plus, good old AT&T just loves to nickel and dime customers which surprise is new news to a bunch of iPhone hungry AT&T newbies.

You can see this engadget poll of the number of people that have had trouble with AT&T activating their phone (no surprise for people that have dealt with AT&T for a while).  The poll is running at 38% of the people have problems.  Finally, you can read more about problems if you hit this link from B.L. Ochman who has a nice summary.

I wrote it before and I'll write it again.  iPhone will be a big deal for Apple and a big problem for AT&T.

PardonMyFrench,

Eric

See I Told You, Apple Will Look Great with iPhone while AT&T Will Take A Beating

Now that everyone realizes that you need a 2 year contract with AT&T to get the new iPhone and it will be extremely difficult for current AT&T/Cingular customers to get it, the complaints have already started.  See this post from Om Malik at GigaOM called No Contract, No iPhone for You. 

Simple reason you see.  AT&T makes less money when an existing customer gets the phone.  They don't get new revenue on the books.  Sure there is a retention play, but that is hard to prove the value of it.  Sounds ridiculous I know, but the quant-jocks at AT&T assume that x% will leave anyway and in order for a retention play to work, it needs to significantly lower the amount of people that would have left anyway.  That my friends is called a Save Rate and it is hard to prove out significantly.

Hate to see it, but this was my prediction for the iPhone.  Apple wins BIG and AT&T takes it on the chin with upset current customers, service issues, and of course that network of theirs will cause people headaches. I'll sit on the sidelines with my Verizon Treo and wait for the iPhone or a copycat version and use it on Verizon's great network.

PardonMyFrench,

Eric

FCC and Jay Rockefeller Want To Control Your TV Remote

(FYI - READERS COMING OVER FROM ALL THINGS DIGITAL SHOULD SCROLL DOWN TO THE PREVIOUS POST)

The FCC and Senator Jay Rockefeller (Democrat from West Virginia) have nothing better on their mind than to continue to try and figure out how to control what gets piped into your television set.  I've wrote about this quite a few times including, The FCC Thinks Your Parenting Skills Suck and Really The FCC and Senator Jay Rockefeller Think Your Parenting Skills Suck.  I just don't get why the Senate continues to try and waste their time with this cooked up scheme by the FCC's Kevin Martin. 

What got me fired up on my train ride back from DC was when I read this article by Amy Schatz from the WSJ called Television Violence gains Focus in Congress. Amy wrote a good article, but what surprised me the most was that it was buried on page B4 in the bottom left almost like the Journal didn't think it was very important.  What kills me the most about this crappy Kevin Martin idea is what they think should be censored or not.  If this Rockefeller Censorship Bill would pass it would give new Censorship Czar Kevin Martin the ability to enforce rules on airing violent programming between 6 am and 10 PM when children could be watching.  It would exempt sports, news, and documentaries.

1. IF THE FCC WANTS TO PROTECT KIDS IT SHOULD NOT EXEMPT ANY PROGRAMS.  I wonder why they decided it?  It couldn't have anything to with a lobbyist or two could it?
2. NEWS IS THE MOST VIOLENT SHOW ON TV.  Check out this link and picture from Channel 7 in NY for tonight.  What's there?  Beatings, Iraq war, kids dead in a car crash, police dog kills another dog.  All great headlines for your pre-schooler right?
3. AND DON'T GET ME STARTED ON DOCUMENTARIES.  THEY ARE VIOLENT TOO.  WHY DID YOU THINK DAVID CHASE USED THEM IN THE SOPRANOS?

That's the problem with bills like this.  The Government should not be intervening and deciding what is violent or not.  They should set guidelines and ratings that inform parents about what they can expect.  When the Government decides that News and Sports are exempt it is their attempt to control what you should see.  Let me repeat this.  NEWS IS THE MOST VIOLENT SHOW ON TV BECAUSE IT IS REAL.

As the folks over at televisionwatch.org have written 92% of parents believe they should be the ones who control the TV not the Government.  There is a ton of information on their site including polls and tools for parents.  Get involved.  Do something other than lay on the couch and let Rockefeller and Martin control your TV.  How about something simple as write your Senator?  You can find the list and contact information at the NRSC.org website.

PardonMyFrench,

Eric

What The Vonage Walking The Plank?

I saw this post today from GigaOM who always does a fine job of reminding me to make a post on Vonage.  Om Malik points out the Vonage has a $3.99 per month save offer for current clients as well as outlining why Vonage is nearing the end.  BTW, that save offer is probably there so that when they start to go under they can keep a few customers on the books for the acquiring company. 

Anyway, I checked in with the WSJ and it really looks like they are at the end with their current defense of "oh we believe the judge gave bad instructions to the jury but didn't object at the time because it wouldn't have mattered anyway".  That's the same sort of line when your boss yells at you for not pointing out something to them or your wife yelling at you and you just want to crawl away and hide.

I wonder why one of the judges asked if there was some middle ground?  Who cares.  Seriously.  If someone broke the law and then milked millions out of people who bought their worthless stock, than why shouldn't it be allowed to go under.  Its about time they get what they deserve which is a little payback.

PardonMyFrench,

Eric

A Few Reasons Why AT&T/iPhone Won't Live Up to The Hype

On the eve regarding AT&T's big launch, I thought I'd give you my opinion why the iPhone can't possibly live up to the hype for AT&T.  However, before I do, let me give you readers a little background on my favorite subject me, so you don't think I'm some blithering idiot blogger who doesn't know anything about wireless.  If you already know, feel free to skip the next paragraph.

From 1995 through 1999, I was part AT&T's Wireless Bundling Marketing team that was charged with marketing AT&T Wireless Service to AT&T's Long Distance customer base.  My group was charged with running the direct marketing (yes Direct Mail and Telemarketing), working with AT&T Wireless to generate wireless offers, developing bundled offers (free phones, 30 free minutes of LD minutes per month, bundling the bills), and other marketing functions.  Back in Basking Ridge NJ people among other less flattering names, used to call me Bundle Boy and my marketing plans dropped millions of millions of direct mail per year and made millions and millions of outbound telemarketing calls.  It was quite an operation until AT&T Wireless built their own capabilities and we all moved on.  I signed (not my real signature) almost every direct mail piece that was dropped and you can see the picture on the right from the original mailing in 1995.

 My Top Reasons Why AT&T/iPhone Can't Live Up to The Hype:

1. $499 price point:  That's a non-starter for a tremendous amount of people (consumers).  18 months ago I shelled out $500 for the Treo 700W because I could expense otherwise, I never would have paid that much for it.
2. Monthly Fees:  You need to get a voice and data monthly plan and that costs more money per month.
3. It's The Network Stupid:  No matter how great the hardware, it has to connect to the wireless and data network.  I dropped AT&T Wireless about 6 years ago because it couldn't hold my signal on Route 78 while I drove past Newark NJ.
4. The other wireless companies aren't going to sit around watching their customer fly out the door.  See this article from Walter Mossberg at the WSJ.  They have a smaller window of opportunity than past years.
5. Wireless is a complicated business to switch carriers.  You have contracts, phones, calling plans, data plans, call quality, and etc.  Back in the day, AT&T Wireless thought that "antenna chasing" was too difficult a process and it still is. Besides, it isn't like a large % of these 1 million inquiries that AT&T is promoting will turn into customers; it doesn't work that way off of requests for more information.
6. Apple is almost in a no-lose scenario, but AT&T looks like it can be the big loser here.  Apple is entering a market it isn't in today so even if it doesn't live up to the hype it can still boost its earnings.  Meanwhile, AT&T can take it on the chin because they are:
   1. Paying for the TV commercials (it appears that way)
   2. Has customers in place that will migrate
   3. Gets stuck servicing them because you have to figure out is it a network problem or a phone problem
7. The customer migration issue is a problem because in the wireless business you need NEW customers to help pay for the price of the phone; re-upping existing customers on plans, while good for customer service, has less of an impact on the income statement
8. I thought the world has moved away from one hit wonders into more of a Long Tail of Marketing?  I believe in the Long Tail and with all of the reasons above, I think they have an uphill battle to please an enormous base of customers.
9. How many IT departments out there will allow them on their platform?

Anyway, my prediction goes like this.  The iPhone is an absolute home run, heck a grand slam for Apple.  They get into the market and provide a great product; so they are starting virtually from scratch and have nowhere to go but up.  Demand too large, they say "oh sorry" and the hype builds more.  Meanwhile, AT&T takes it on the chin for building too much demand with TV ads, internet ads, radio ads, stores, direct mail, print, heck anything else they can stick a message on.  Plus, too much of the base migrates which adds pressure to their numbers or worse yet, the base gets pissed off because they can't get a phone.

In the end, Apple WINS BIG and AT&T BARELY SURVIVES until a cheaper phone shows up.

PardonMyFrench,

Eric

Hey BusinessWeek: Telecom Is Back From The Dead Because RBOCs Killed Competition

I read this week's BusinessWeek cover story called Telecom: Back From The Dead and I couldn't help notice how they glanced over the RBOC's shrewdness to get rid of their only real competition for wireless and wireline - the former telecom providers like AT&T, MCI, and Sprint.  Here are a couple of excerpts from the article which got me a little fired up:

If the old telecom world was dominated by bloated regional monopolies, the new world is a competitive mosh pit stocked with sinewy players. That's reflected in how much more productive the industry has become. While telecom revenues are now 19% higher than they were in 2000, that money supports just 1.1 million workers, down nearly 30% from boom-era levels. "It has gotten unrelentingly competitive in every area: broadband, land line, and wireless," says AT&T's new CEO, Randall Stephenson.

For the big carriers such as at&t, Verizon, and Qwest, the main challenge is to slow defections of traditional land-line customers while producing faster revenue growth in new markets such as wireless, Internet service, pay TV, and advertising. The carriers must overcome their reputation for being "dumb pipes" and prove they can fill their networks with innovative bundles of products and services that strike a chord with customers-

I really beg to differ with the new, new AT&T's new CEO Randall Stephenson.  There is less competition for the services he's mentioned not more.  His comments are ridiculous and just political spinning so they can go out and gobble out more companies whenever they can while the FCC barely pays attention to their own data.  There may be competition on the data and infrastructure side which is outlined in the article, but there is no competition less than 30 minutes from the old AT&T's and now current Verizon Corporate HQ in Basking Ridge NJ.

The article lays out the RBOC's strategy for the past 10 years as shown on that second paragraph above.  (My words first) Get rid of the real competition so that it is easier to slow defections of traditional land-line customers while producing faster revenue growth in new markets such as wireless, Internet service, pay TV, and advertising. 

Back in my earlier career at AT&T, we were taught the 5 P's of marketing:  Product, price, place, promotion, and POLITICS.  There was plenty of marketing back in those days - do you remember them?  The phone calls, the offers, the price wars, and etc.  Those are gone?  Why?  Because the Baby Bells were better than the old AT&T, MCI, and others in working the political angle and the RBOCs were able to enter the LD/Internet market while making it nearly impossible and costly for the LD competitors to get into their market.  Now a few years later, they don't market unless it is a new service and certainly don't spend any time on wireline programs.  That world is silent.

Is the country better off?  I don't know.  Again, back in the day, there were grumblings that people didn't want to deal with switching providers and it was all just a game.  Well a few years later, the game is over and the RBOCs face no battles over their turf.  This allows them to expand and spend on new areas, while it totally turns wireline into the cash cow that they always thought it should be.  They get to set prices at whatever they want, cut back on headcount, lower marketing all while spending in growth areas.  That's what brought them back from the dead.

Don't believe me?  Well ask a veteran of the telecom wars from the 90s.  Need something recent?  Check out this interview with AT&T new CEO Randall Stephenson where he slips up (yeah right) and says IPTV will be our next multibillion-dollar revenue stream. We're working hard to have the largest video platform in the U.S. [AT&T later clarified to say that statement applies only to the states it serves.].  They only need to focus on their own area which is a huge competitive advantage and that's courtesy of the FCC.

PardonMyFrench,

Eric

AT&T's Carrier Cost Recovery Fee Just Another Reason to Dump Them

This morning I walk out to get my mail and I find a tiny postcard sticking on the side of my mail box.  And, great news its from one of my least favorite companies, the New, New, New, Gosh We Just Rebranded Cingular to be Associated with Bad Customer Service AT&T.  In this postcard is a clever announcement (we used to call them tombstone ads) that effective July 1st 2007, AT&T's Carrier Cost Recovery Fee will increase to $2.39.  Yes.  $2.39 just so they can do what?  Pump up their payments to former competitor squashing retiring CEOs $100s of millions of dollars.  Seriously, what reason can AT&T have for raising this fee or having it in the first place?

Well, they give you all of this mumbo jumbo to make it look like it is some requirement to charge this to you.  The postcard says This fee helps AT&T recover costs associated with providing state-to-state and international long distance services including expenses for national regulatory fee and programs and connection and account servicing charges (whew that's a lot of "ands").  They do say at the end that it is not a tax or charge required by the government.

I checked with one of my old AT&T friends and he told me he believes it was instituted to help telecommunications companies keep lawyers on staff to fight the Government.  I'm laughing as I type this, but he swears that's why its there.  When the old pricing group cooked this one up they pitched it to cover legal fees.  Of course, the geniuses at SBC know a good revenue generating thing when they see one, so of course they had to raise it to pay for Whitacre's country club and $1 million consulting fees.  In case you need a refresher on what this AT&T Tax is, here are a few articles I found laying around:

• NY Times - A Monthly Mystery
• 35 Most Outrageous Fees

So, what can you do about it?  Well, if I was still a customer, I'd call in to complain and when I did, I'd make sure I'd get a live American rep so I can talk their ears off and jack up the costs to these blood suckers (not the reps, but the senior AT&T management team).  Then, I'd figure out a way to move my calling plans around to be as cheap as possible.  If all else fails, I'd switch telecom providers, but that's the real catch isn't it?

Back in the day, you could switch long distance carriers, but sadly that's gone.  There isn't any competition just 30 minutes from Verizon's current HQ and AT&T's former HQ in Basking Ridge NJ.  Your choices are your local carrier (one of them), your cable provider (one of them), and maybe if you are lucky a wireless provider.   VOIP quality when I've used it is barely terrible and lord knows I'll never test out Vonage.  Thanks to the FCC there is barely any competition for telecommunications services, outside of wireless, so of course AT&T can try to slip a price increase by you.

Back in the day, price increases had to be offset by price decreases.  At least when the FCC believed AT&T had monopoly pricing power.  Of course now, the FCC could care less while these companies just milk hard earning Americans for a service that unfortunately they have few options.  Now, when there is barely competition not back in the 80's when checks to switch were handed out as often as coupons in your Sunday paper (are they even still there?) is when we need the FCC to police AT&T.  Thanks FCC.  Thanks a lot.

PardonMyFrench,

Eric

Really The FCC and Senator Jay Rockefeller Think Your Parenting Skills Suck

In Wednesday's WSJ I woke to find an editorial piece called FCC TV which reminded me about a post I made a month back called The FCC Thinks Your Parenting Skills Suck.  The post was pretty much a typical PardonMyFrench rant, but I unfortunately didn't have a lot of data on the subject, that is until this morning's WSJ.  Here are the highlights before I dive into rant #2 on how ridiculous Kevin Martin from the FCC is for trying to take over parenting skills.

• The FCC says its authority to regulate TV violence derives from the Supreme Court's 1978 Pacifica decision. That's the George Carlin "seven dirty words" ruling that upheld the agency's right to regulate broadcasts because there was no way to block what was coming into homes or car radios. But that ruling says nothing about regulating cable. And subsequent attempts to censor Internet and video game content have been rejected by the courts on grounds that less restrictive alternatives are available
• Some 86% of U.S. households subscribe to cable or satellite TV, and both services provide conscientious parents with multiple filtering tools
• 67% of households have no children under 18 in residence, and those that do often opt to monitor personally what their children watch rather than rely on technology.
• nearly 70% of children have a TV in their bedroom.

Thanks to the Journal I have more than enough data to back this up.  The FCC doesn't have the right to regulate cable, internet, video games, and etc for the what they believe is inappropriate content.  That's why it is begging congress to give them the power and you have Democrats like Senator Jay Rockefeller only to happy to oblige or as the Journal wrote "promptly thanked the FCC for its "meaningful guidance" and promised to introduce a bill incorporating some of the recommendations in the next few weeks."

This is disgusting.  That's a parent's responsibility not a centralized Government's job.  As I wrote in that original post, what is a violent show?  I can't even let my kids watch nightly news shows when I'm channel flipping (not that I would even have that crap on). Kevin Martin's lame idea to offer a la carte channel programming DOES ABSOLUTELY NOTHING IN HIS LAME ATTEMPT TO REGULATE WHAT COMES INTO YOUR TV.  You can find violence on nearly every channel on TV.  Leave PBS on too long because your kids were watching Sesame Street and a BBC news programs pops on with loads of violence.

Seriously, the best way for the Government to make sure inappropriate shows don't appear is to leave it to parents to protect their kids and leave it to parents to determine what their children can or can't watch.  And, make sure that broadcasters understand that a show's rating means that you can't have breasts popping out in a football game. Kevin Martin and the rest of the FCC must have some other ulterior motive besides trying to drum up work for their bloated salaries, don't they?  Stay out of my way, I don't need you to help me be a responsible parent. 

PardonMyFrench,

Eric

Vonage, Completely Clueless and Wasting Marketing Dollars

Ok, so this isn't exactly fresh news and has been reported in a number of places including the Wall Street Journal a few days back, but I just have to make this post critiquing Vonage's lame attempt at running a print ad campaign to highlight how they are champions of competition.  Let's take a look at the almost always ridiculous Vonage press release:

• Vonage today launched a national grassroots communications campaign to educate and mobilize consumers about preserving the freedom to choose their phone service provider. The campaign, called "Free to Compete," will raise awareness of the importance of consumer choice.
• "We want to highlight the choice that Vonage offers to the public: a choice to receive great phone service at a great price," said Jeffrey Citron, Vonage's chairman, chief strategist and interim chief executive officer. "We think this issue warrants national attention because when competition is stifled, consumers literally pay the price. Vonage is the target today, but what other innovative companies might be next?"

First of all as Wikipedia points out: "A grassroots political movement is one driven by the constituents of a community. The term implies that the creation of the movement and the group supporting it is natural and spontaneous highlighting the differences between this and a movement that is orchestrated by traditional power structures." Some grassroots movement right?  Plus, it is ridiculous to think that Vonage needs to point out the importance of consumer choice.  So, let's see how important the community thinks of this grassroots movement:

1. As you can see from the Alexa chart, their movement peaked back on April 26th which coincides with their ad campaign and now like their stock price is sliding down.
2. As of right now they have two customer videos loaded and three email submissions on the site; these are probably all friends of their PR manager.  Notice how the videos are professionally edited and how they look into the camera?  That is really smooth looking consumer generated content isn't?  Maryann looks like a professional actress...
3. Their awesome CGC videos on YouTube have 732 and 3,240 views proving once again that just loading up commercials in YouTube is a worthless endeavor.  What's even funnier is this real consumer generated content that shows up in the toolbar to the right of their videos (because it is related) ripping on Vonage.  Of course this video has twice as many views.
4. Their news and press section is completely lame
5. There are a whopping 60 links according to Technorati
6. I wonder how many people have actually signed their petition when you remove friends, family and agency testers..

So not only is this not a grassroots movement it looks like it is not resonating with people anywhere.  Plus, as I noticed when I saw one of their wasteful ads in WSJ but GigaOM beat me to the punch with a post, they had their ads edited by the Wall Street Journal before they allowed it to run.  The line removed was "Now, Verizon has chosen to attack Vonage in the courts. Why? Could it be all about the money?"  As someone that has been dragged kicking and screaming into print campaigns, this garbage ad cost them at least $90K per page and to top it all off they were so quick to flush their marketing dollars down the drain, they couldn't even work in a day or two for WSJ approvals and re-edits.

Some grassroots movement huh?  The money wasted on this could have gone to keeping someone's job until the company goes bankrupt or is bought by Sprint, or improving whatever is left of their service, or just trying to flow it to the bottom line to give any investors a little bit of a surprise bump in stock price.  This just another desperate attempt by a company that is hopelessly lost and if I had to guess this is just their CEO trying to save face with investors...

PardonMyFrench,

Eric

Vonage's Sleight of Hand

I woke up yesterday morning after my big night out in NYC to see this article in the WSJ called Vonage Says Patent Suits Could Lead to Bankruptcy and I was surprised because that's not their normal press releases that look like celebrations.  Oh wait, this wasn't a press release, silly me, this was something buried in a SEC filing where you need to be more methodical and realistic because the Government reads it.  Did their press releases which is their news to the community at large even mention doom and gloom? Let's take a look at their recent press releases:

• March 23: Vonage Enjoined:  Company Expresses Confidence....Mention of bankruptcy?  No.  However we get this:  "We are confident Vonage customers will not experience service interruptions or other changes as a result of this litigation," said Mike Snyder, Vonage's chief executive officer.
• March 26: Vonage Comments on Recent Court Proceedings....Mention of bankruptcy? No.  What do we find in that press release?  The following upbeat messages...."To paraphrase Mark Twain, the rumors of Vonage's death have been greatly exaggerated," said Mike Snyder, Vonage's chief executive officer. "Friday's events represented one small step in what is sure to be a long legal battle. "The fact is we've been preparing for this verdict and the possibility of an injunction for months," Snyder added. "For the market to react the way it did to the recent rulings shows an unfortunate lack of understanding of the judicial/appellate system, a lack of appreciation of Vonage's resourcefulness, or, perhaps, both. Anyone who's counting Vonage out is making a huge mistake."
• April 6:  Vonage Receives Temporary Stay....Mention of bankruptcy?  No and pretty much a bland press release.
• April 9:...Vonage Continues to Operate as Usual Mention of bankruptcy?  No but you do get this nugget from them: Vonage will continue to provide digital telephone service to existing customers indefinitely by paying into escrow a quarterly royalty of 5.5% throughout the appeals process. Separately, the District Court required Vonage to post a bond of $66 million to secure Verizon's damages judgment. Vonage is pleased that existing customers will not experience any interruption in service. The Company continues to believe it will succeed on appeal and continues to work on designing around the Verizon patents.

Now onto their SEC filing from April 17th that you can find here.   I'll have the details of the filings on the post continuations because this post is getting too long, but in summary it talks about massive layoffs, bankruptcy, lack of new customers, failure to maintain a stock price to stay on the NYSE, and other horrible results. 

You know why I'm so fed up with this?  I've seen my PR and corporate communications co-workers put these together and it takes weeks even to just get final approvals from compliance and legal which means while they were releasing these upbeat releases they were working on this doom and gloom end states for the SEC filing.  And, I wonder how much they tell their customers.  Did they send out an email or call them?  I'm guessing no.

This is just more magic tricks from this joke of a company trying to get as much money out of investors and customers before they go belly up. Shameful and disgusting.

PardonMyFrench,

Eric

P.S.  One more article from the WSJ called With Vonage, It's Risky to Follow the Leaders which talks about their insiders buying and selling Vonage.  What's funny is this gem at the end of the article "InsiderScore.com research director Ben Silverman said that while insiders have been active buyers, hedge funds and institutional investors haven't been. "There has not been institutional support for the name," Mr. Silverman said. "It seems pretty rare to me that you see a stock that hated."

Finally a Smart Move at Vonage

No, not by that ridiculously run company, but by their ex-CEO Michael Snyder who jumped off that sinking ship and left the architect of this disaster Jeffrey Citron in charge to go down with it.  You can read the details in this WSJ article called Vonage Says CEO Resigns, Sets Cost-Cutting Plans or if you want to read the details in an always entertaining PR release from Vonage you can find it here.  BTW - Vonage must have two PR authors - the one that takes happy pills before they write a release or the one that is more rationale and writes realistic releases.

Not only is the CEO getting away, they are cutting marketing costs (geniuses right?), general and administration costs (read head count reduction), and still have problems with Verizon.  They did say they had an average CPA of $275 which is still horrible in the telecom world (it should be way under $100) and their churn is awful at 2.4% and that probably doesn't take into account all of their patent problems which just started creeping up.

This company is going down fast and surely the only reason Citron is taking over is because he has a personal stake in not just money, but in his own personal reputation with some serious investors.  For an interesting spin on this, read this link that I posted a few days ago called Vonage:  The Conspiracy Theory.  You'll see this interesting view:

        Despite all the King's men (major phone companies for this story) out for blood against Vonage I can't help but think these major investors would like to get their money back.  Not only would these investors like to get their money back, but these guys want to make a profit, they want a good ROI (Return on Investment)......Even Enron went on for years before the scandal erupted and the investors and board of directors made millions before they lost everything.  How many companies do you think faced similar fates but the news just never got out or received the attention it deserved?

PardonMyFrench,

Eric

Down in Vonageland

Vonageland.  You know, that roller coaster of a company that is now on that last drop before you crazy investors and customers get off the ride. 

Vonageland, where paying $300+ to sign up customers just to play the share game to prop up a stock that a carnival strong man couldn't keep in the air. 

Vonageland, where after those customers decide to leave from that crappy company they tell the investor community that they fixed their churn and then in small print, only read by analysts, explain that the fix was due to allowing non-paying customers to stay on the system longer.

Vonageland where PT Barnum like exaggerations of losses in courtrooms appear to be monumental victories for this company conjuring up visions of Barnum hoaxing people into believing he actually had George Washington's nanny on display.

Vonageland where they turn customers into investors only to have their stock get pummeled and in the process, lining the pockets of brokers, financial advisors, and of course the founders and CXOs of the company.  At least for all of Barnum's hoaxes he believed deep down he was entertaining people; there is nothing entertaining about losing your shirt on a stock.

Well folks, it looks like Vonage is finished, or nearing the end.  As this NY Times article explains Vonage was given a death sentence and then a temporary reprieve from the gallows prompting them to finally get real with their press releases by announcing that Vonage receives temporary stay in Verizon patent litigation, continues to sell service.  I guess even their PR department can see the end because they didn't issue a classic Vomit release like "We Won and Continue to Win in Court!!!"  You know, it is never a good sign when you see a press release saying that you can temporarily add new customers.

Anyway, what gets me is at the end of the article there is this mystifying quote from Gigi Sohn a lawyer with Public Knowledge a firm that clearly doesn't have much when it allows this quote to get out from Ms. Sohn "Any time a company is told they can’t add new customers it’s pretty serious,” Ms. Sohn said. “I’m not sure the judge fully understands what this could do to a relatively small company like Vonage.”

Ms. Sohn said Verizon was unfairly using its patents as a competitive weapon. “I think Verizon is pulling out all the stops to put Vonage out of business,” she said.

You know what?  I think the Judge knows that when a small company steals patents and misleads investors and customers regarding their product, he knows exactly what it can do.  It will put them out of business which is where they belong.

PardonMyFrench,

Eric

PS:  LA Times has an article on Vonageland too...

**********UPDATE*************

It seems I spoke (really wrote) too soon and the Vonageland PR writers were back to their usual stunts.  From today's press release we get this award winning fiction from their PR team:  "Vonage Holdings Corp. (NYSE: VG), a leading provider of broadband telephone service, today stated that it views the Court of Appeals' granting of a temporary stay on Friday allowing Vonage to continue to add customers as the first step toward resolving this matter in Vonage's favor. The stay will remain effective while the Appellate Court considers making the stay permanent."

Well, I guess nobody else believed them because their stock is being pummeled by 10% today.  At 3:52PM ET: 3.02  0.35 (10.39%) 

Vonage Buries Head in Verizon Sand

Ahh, back to one of my favorite subjects, Vonage.  Sorry I didn't post this sooner, but besides being in meetings on Friday, I had family obligations all weekend long. 

On Friday Federal Judge Claude Hilton agreed with Verizon that Vonage shouldn't be allowed to use Verizon's VOIP technologies, but gave them two weeks to come up with a work around and/or come up with a reason to stay the execution, err I mean injunction.   Of course, this probably won't kill Vonage, but perhaps their looming suit with Sprint might.  This ruling sent the stock down to $3, but as of Monday showed a little bounce.  I guess traders figured this wasn't the death blow, yet or was convinced by this Vonage press release.

Yes, a Vonage press release which should only be read when you had a few cocktails or when you are so depressed that you need someone else's misery to brighten your outlook.  The title is classic which is solely aimed at the traders to boost the stock price while people in the company cash out.  " Vonage Comments on Recent Court Proceedings, Outlook for Appeal and Market Overreaction" with a subtitle that the company is confident in their appeal.  Nice, a press release solely directed at traders to boost their stock price and to brag how they knew this was coming and prepared accordingly.   Yes - just like the Titanic prepared to hit an iceberg.

And, just in case you missed it - according to the press release "Vonage's accomplishments continue to validate its business model and strategy. The company has achieved 19 consecutive quarters of double digit revenue growth, doubled revenues to $607 million in 2006 alone, and added nearly 1 million net subscribers last year."  Wow, that's great, right and of course all of those other people that have been dumping this worthless piece of stock are crazy right?  Yes, well they neglected to tell you that their brilliant strategy lost $266 million last year.

Oh and that customer count they bragged about?  Well, their churn was still high for 4Q last year, but it was slightly better because these geniuses decided to leave more people on their service by increasing the grace period for non-payment.  "As part of our effort to improve customer satisfaction and increase retention, we extended our customer grace period for non-payment in order to better resolve customer accounts that may be past due. This increase had a one-time positive impact of 10 basis points on our average monthly customer churn for the fourth quarter."  Or how about (via the same financial release) that their average cost per sale was $249 for the year, $306 for the 4Q all while lowering marketing costs.  I've said this before, optimizing a marketing campaign should never result in a raising of CPA unless of course you are completely clueless.

Ahh the Vonage press release.  Why issue this?  Who knows but the one thing Vonage has been successful at was getting uninformed investors to buy into this worthless company from day one and why stop now?  Please tell me you have some master plan for recovering any money from this or that you somehow bought at $3 and are waiting for a big day in the market to make your 10% back or so.  One of the many Jim Cramer sayings that I've always remembered is "Bulls make money, bears make money, but pigs get slaughtered."  Here's hoping you have a plan, little piggie ;-)

PardonMyFrench,

Eric

Vonage Spin Out of Control

I know two Vonage posts in a day, but their press release is laughable.  Seriously, this is the type of commentary that gets investors confused.  That's why you must get different points of view whenever you invest your own hard earned money.  That's why I stressed to you this week in a post called Only The News That's Fit to Sell, that you need to read multiple sources if you are concerned about a subject or want to invest in stocks.  Here's what the brilliant PR folks at Vonage said about their ruling yesterday:

Vonage Vindicated on Four of Seven Patents

HOLMDEL, N.J., March 8, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- We are delighted that the jury rejected Verizon's meritless claim that we infringed their two billing patents. Of the seven patents Verizon originally sued on, they prevailed on only three and we expect that verdict to be reversed on appeal. The jury's damage award represents a 70% reduction from Verizon's $197MM claim. The jury also unanimously rejected Verizon's claim that Vonage willfully infringed its patents.

In addition, we don't believe there is any basis to support Verizon's request for an injunction and we will have the opportunity to present our position to the trial court shortly. If the trial court does impose an injunction, we will seek an immediate stay from the Federal Court of Appeals. Vonage's customers should see no change to any aspect of their phone service.

That's awful and misleading and before you say "oh come on you are too harsh" read it again and figure out what they are selling.  They are selling that their service will still be good and that you shouldn't dump their stock (which people are doing right now).  Just more bad spinning on an awful stock.

PardonMyFrench,

Eric

Someone Please Take Vonage Out Back and Shoot It

I was looking through my posts the other day because I had quite a few visitors read through the best posts tab at the top and I thought, hmmmm I haven't written a What The Vonage Post in a while.  And those my friends, are some of your favorites.  Anyway, I'm obviously up very late due to a late dinner and I was reading through my RSS Feeds and saw this article from Business Week called What the Verizon Verdict Means for Vonage. And of course this just made me sick....

Its not bad enough that their phone quality and customer service suck, or that their former marketing plans were wasteful and untargeted or that they screwed their own customers in investing in a worthless company, now they lost a patent infringement lawsuit versus Verizon and have another one pending with Sprint.  This my friends is a poorly run company and why you MUST READ THE PROSPECTUS before you invest in an IPO.  I'll explain why later.

According to the BW article, What The Vonage must pay $58 million dollars in damages plus a whopping 5.5% per subscriber per month.  On top of that an injunction will most likely be handed down and if that doesn't scare its customers off, I'm not sure what will.  Of course this piece of ripped paper for a stock will appeal and most likely look for some company to buy out their remaining suckers err I mean subscribers and put this mistake where it belongs - in the IPO trash heap of all time.  According to the article this ruling will add $1.6 per line per month in costs which will further push its numbers in the tank.

Now one lesson for all you wanna be IPO investors is to read the prospectus.  If you would have, you would have noticed this paragraph at the top of pager 15..

We may be subject to damaging and disruptive intellectual property litigation. 

        We have been named as a defendant in three suits currently pending that relate to alleged patent infringement. See "Business—Legal Proceedings—Patent Litigation." In addition, we have been subject to other infringement claims in the past and may be subject to infringement claims in the future......

        Parties making claims of infringement may be able to obtain injunctive or other equitable relief that could effectively block our ability to provide our services and could cause us to pay substantial damages. In the event of a successful claim of infringement, we may need to obtain one or more licenses from third parties, which may not be available at a reasonable cost, if at all.

Seriously this was bad news from the start and I mean right from the very start.  A co-worker of mine at Harrisdirect once said to me back in 2004 that I should look into working at Vonage.  I told her, no way, that company is all about price and provides no real value.  Of course I was wrong on part of that.  It did provide value to the original owners who made a killing on the IPO while you investors got stuck buying a piece of paper that wasn't worth using to wipe down your dirty windshield.

PardonMyFrench,

Eric

FCC Failed Telecom Policy Impacts Satellite Radio

In yesterday's Newark Star Ledger there was an article called Let Us Entertain You which highlighted the FCC's wrong thinking on telecommunication mergers and why they are completely clueless on XM and Sirius' plan to merge.  The article's sub-title says it all: Bundled packages catch on.  But consumers have yet to see any savings from Verizon, cable TV companies.  You know why that is?  Simple.  When the FCC allowed the Baby Bells to buy up the long distance companies they eliminated their competition.  Now in NJ we have none.

I live a 30 minute country drive from the old and better AT&T's corporate HQ that is now serving as Verizon's HQ in Basking Ridge NJ and I have little competition.  I have Embarq (the worst brand name ever, but good customer service) for Local and my choice as a competitive alternative is Comcast's crappy bundle.  And, since I can't stand cable I use the one alternative presented to me which is DirectTV; that's it folks.  Nothing else.  Does Verizon have plans to invade Embarq territory?  Nope.  Phone calls offering me to switch services?  Nope.  That's long gone.  You see as that article pointed out, prices are not going down because there is no competition.  Zilch.  Nothing.  This is what happens when the FCC doesn't have a clue and allows companies to merge, stifling competition.

Now over to Satellite Radio where the FCC once again is traveling down a clueless road - similar to a chicken running around a farm with its head cut off.  Every single time someone gets in their car there is competition for that person's entertainment.  At my finger tips I can choose between FM radio, AM radio, tape (who still uses that), CDs, and of course XM Radio.  If that isn't an ongoing competitive battle for my listening ears I don't know what is.

The other day I was traveling into NYC and needed traffic reports.  Wham, I jumped over to AM radio instead of XM's poorly delayed NY traffic.  Isn't that consumer choice at its best? Doesn't that mean that an advertiser on AM radio pitched me a commercial?  Sure it does.

I don't know how the FCC can justify eliminating the well documented and experienced telecommunication wars where we saw and enjoyed lowered prices; plus, all parties were ready to invade everyone else's business.  Now - silence and Net Neutrality problems thanks to the FCC's wrong thinking.  (And if you think this has nothing to do with Net Neutrality, you are reading the wrong blogs.  It is about controlling access to your household and broken promises). It is this wrong thinking that may cause problems for a product that surely benefits consumers in a completely competitive environment found at an arm's length every time you are in your car.

PardonMyFrench,

Eric

Xm and Sirius - Still Fired Up

I'm still fired up today on a few articles found in the WSJ called Sirius-XM's Fate Hinges on Definitions and How Sirius-XM Deal Would Affect Listeners.  Both articles screamed to me that folks that don't like this merger or say it isn't in the public's interest don't live in the real world.  As I sit and listen to my XM radio, I don't understand how the FCC could allow SBC to buy Bell South and say that is in the public's interest and this deal is not.  If Kevin Martin and the rest of the talking heads at the FCC would realize is that when you buy a new car it comes equipped with AM (free), FM (free), CD player (free), Tape player (free but who cares), and Satellite Radio (costs good money per month). 

Looks to me like there is plenty of competition right?  Satellite radio costs money while everything else, umm, does not.  Seriously, how many of you continue to pay for Satellite after the promotional period is over?  Not many when compared with new car sales.  Unlike the telecommunications arena, which the FCC seems more than happy to re-write who competes with who and what is in the public interest or not, they seem to be resistant to this.  I wonder why?  Maybe you can use the following reasons mentioned in the first WSJ article:

• The radio industry opposes the deal
• The FCC could seek eventual return of some FCC-awarded radio spectrums
• The Howard Stern problem

Well, if these really are issues that the FCC wrestles with as part of this deal, it looks to me like the have other motives.  Howard Stern and indecency?  Please, that's ridiculous.  I have little kids and they drive in my car.  Do you know what I do?  I make sure XM's comedy channel is NOT ON when they are in the car.  Same as any parent should do.  WE DON'T NEED OR WANT THE GOVERNMENT TO TELL PARENTS HOW TO POLICE THEIR MEDIA.  As opposed to the Janet-Jackson Super Bowl problem when a football game burst into a boob-fest (parents not expecting this), these channels are well-known by the consumers of satellite radio.

Radio spectrum and the radio industry, hmmm, I wonder what kind of influence this has on the decision making, but if the radio industry opposes this, doesn't that mean they are in the SAME COMPETITIVE industry?  Please, this will simplify things for consumers, collapse content so I can get the NFL, and have limited impact on prices paid because these two don't compete with each other they compete with the free equipment that has like 100 years of experience under their belts.

PardonMyFrench,

Eric

XM and Sirius, Perfect Together

So, of course you have heard by now that XM and Sirius want to merge together to form one company, but the folks at the FCC, according to the WSJ, will face a high hurdle due to the 1997 ruling that created the industry.  I also watched the interview found on the same WSJ article with former FCC Chairman Michael Powell and he provided good insight into what can occur.  What I don't get is, why the FCC can't see that this is good for consumers?

I've been an XM subscriber for 3 years and have a second one installed in my office.  I'm hooked and don't mind paying the monthly fee, so very often I'm asked about the service.   Very often I'm asked about the differences between the two and other than the content offerings, I don't think there is much difference between them; a few years back I helped out one of my agencies of record with a pitch for Sirius (they didn't win it but I got a free lunch out of it). My car came loaded with XM so that's why I have them.  If I had to choose over again, I'd probably pick Sirius because of the NFL package and unique programming channels.   

In fact, I owned both stocks up until about 6 months when I cut my losses with XM and used the proceeds to by Archer Daniels.   When people asked me which one to buy, I'd always say both because they were the only two in the category.  I kept Sirius because I believed they had more mojo, but that was it.

Now, if the FCC doesn't let them merge because of competition or what's best for the consumer, I think I'll vomit.  Found on the Powell video was a screen shot from the LA Times that showed that there are 80 million FM/AM users and 14 million satellite radio owners.  If that doesn't prove that there is competition than I don't know what will.

How can the FCC approve SBC to buy AT&T and then Bell South and stand behind that as good for the consumer?  XM-Sirius doesn't have pricing power because, well AM/FM is free and access to those waves are free - this is the direct opposite of telecommunications and net neutrality.  The RBOCs have pricing power which is what scares people on net neutrality; they also own the pipe (with cable companies) while radio does not.

According to the 1997 FCC report and order, the FCC wrote "in the Notice, we pointed out that satellite DARS will face competition from terrestrial radio services, CD players in automobiles and homes and audio services delivered as part of cable and satellite services  and asked whether these delivery media, coupled with fewer than four DARS providers, could ensure an effectively competitive audio services market."  I don't understand why 2 is competitive but 1 is not when you compete with the services the FCC wrote about way back in 1997.

As a big user of satellite, I think this is great for consumers and will simplify their choices and provide even more content.  Unlike the telecommunications world, I don't see how this harms consumers....

PardonMyFrench,

Eric

Verizon Shows AT&T How To Service

I had a great customer experience today with Verizon Wireless and I thought I'd share it with you readers because the background is similar to the awful experience I had with AT&T a while back that caused me to leave a forfeit any chance at all those great services that I'll never see.  You see like AT&T, I am not in Verizon's footprint for local and I'll be shut out.  I only have one chance for service and unlike the new, new, really we want your business AT&T, Verizon wanted to keep it.

So, here's what happened.  Like a good customer, I had online statements and credit card billing (same as AT&T) for my Verizon Wireless service.  A month back I had to switch my credit card and went online to do it and received no error message.  However, it didn't take so I went back in and updated it again.  Then Verizon went to bill me and wham, it didn't take (now 2 months late) so they generated some hate mail and a late charge.

Now I'm upset because I did everything I was supposed to do and still got the cold shoulder.  I picked up the phone, called credit and collections, paid my bill, and of course complained to the person on the other end of the phone.  She couldn't help me with my credit or bill setup problem, so she transferred me which further fired me up; figuring she was playing the transfer the irate customer phone game.

Now enters customer service woman #2, who got an earful of why I didn't deserve to be treated this way.  She agreed, removed my charge, and then stayed on the phone when I went through the process of restarting my credit card billing.  Sounds good so far right?  Wait it gets better.  While going through the process, customer service woman #2 looked up my account and realized my calling pattern changed and I was paying for too many minutes that I haven't used in months.  So, she downgraded me which saved me $20 per month. 

Now that is a GREAT CUSTOMER SERVICE CALL.  Sure Verizon looks like they lost $20 per month, but was smart enough (unlike the new, really bad service AT&T) to value my business and take a longer term view.  It is too bad that the FCC won't provide an environment to let these two compete against each other because Verizon would eat AT&T's lunch and have Cingular for dessert - ooops, AT&T already ruined that.

PardonMyFrench,

Eric

RIP Cingular - We Hardly Knew Yah

I guess it is finally over.  The folks from the New, New, New, Really Our Marketing is New AT&T started killing the Cingular brand today according to this article from the NY Times.  I wrote about this a long time back in a post called Rebranding Cingular to AT&T Wireless - More From The Marketing Geniuses at AT&T and subtly wrote about it in the post called AT&T's Ad Guru Talks About Bungling, Err I Mean Bundling.   Obviously, I think it is a poor decision to rebrand Cingular who took an old brand (AT&T Wireless) known for poor call quality and service and made it very exciting and cool.  Plus, lets not forget about all the goodwill it generated with their failed IPO which laid the ground work for other telecom IPOs (like Vonage) to stiff their customers. 

Back in the day, I remember than Chairman of AT&T Bob Allen complained about call quality at AT&T's corporate HQ in Basking Ridge so they installed a cell tower there.  I personally stopped using AWS when I commuted from Long Valley to Jersey City along Route 78 and couldn't figure out why I had dropped calls in Newark. 

What really annoyed me the most was this comment from AT&T's Senior VP of Advertising Wendy Clark which just seemed like some token research to back a plan that already was started in motion when the acquisition was announced:

“What consumer and business customers want is a single provider of services for the way they live and work today,” Ms. Clark said, “and if it’s one company, they want it under one name.”

You know what, I've seen similar research when I was wireless bundle boy with AT&T and the research showed similar results.  However, you know what those pesky consumers consistently do?  They un-bundle their services.  You know why?  Companies fail to recognize these valuable customers and with credit card billing you can make these bills go away anyway.  Plus, the only meaningful bundle is when the device bundles the service so until you don't need a wireless phone separate from your home phone separate from your TV which is separate from your internet; so, it doesn't matter if multiple companies service you.  Finally, the real reason consumers want one company is because they think they will be getting a bottom of the bill discount.  There I said it.

Sadly, Cingular will join the brand name scrap heap as soon as AT&T's Marketing department spends like $100 million to rebrand it.   I guess what really upsets me the most is that I won't be there to spend it ;-)

PardonMyFrench,

Eric

Vonage Is The Walking Dead in Earthlink Deal

I saw this article called Vonage to Sell Wi-Fi Internet In Earthlink Deal in Monday's WSJ and all I kept thinking was, when will someone offer them 10 cents on the dollar to put this company out of its misery.  This announcement is somehow supposed to boost the shares?  My friends, Superman could not boost this company.  So now they can offer DSL by reselling Earthlink's DSL and bundling it with Vonage.  Wow.  I'm sure this will be another losing proposition for share holders as well as customers.

According to the article Earthlink resells their DSL usually for around $10 and Vonage sells their service for $24.99 per month.  As someone that personally designed home calling and internet bundles back in the mid to late 90s for AT&T, I'm sure this bundle will either be $44.99 per month or if they are really crazy and can pull the wool over their CFO's eyes, maybe $39.99 per month.  The problem with this bundle is that it is going to be way too complicated for a non-techie person to understand and install without significant help and that means customer calls which will eat into profit (if they even built any in to begin with).  This bundle needs new equipment, a tech to come out to the house for the install, and a software install.  I'm guessing it won't be their tech which means increased costs.  I'm pretty techie and it took me many long nights on the phone with Sprint (now Embarq, the worst brand name ever) to get my DSL installed properly.  Bundle care and billing is quite difficult to pull off and depending on the bundled price point they offer, this deal will probably lose money from them with every new ad.

The other comment which I found funny is this quote from Vonage's Chairman Jeffrey Citron regarding AT&T's stand alone DSL forced by the FCC when they tried to extract net-neutrality language from AT&T/Bell South merger (which they did not do) "The phone giant agreed to offer stand-alone DSL Internet service -- one form of broadband -- for $20 or less per month, rather than requiring consumers to buy phone and Internet service in a package. "That opens up the market for us dramatically," said Jeffrey Citron, Vonage's chairman and chief strategist."

You know why that is funny (sad kind of funny)?  Because it opens up another small market of people that don't realize they are getting ripped off by that slow DSL offer and who might be convinced with some slick advertising what a great deal Vonage is.  I'm sure this will (not) help their 2.6% monthly churn problem, but what they really need are price conscious techie people, but they are not going to be on slow DSL and won't be swayed by funny advertising.

PardonMyFrench,

Eric

AT&T Pulls Wool Over FCC Eyes

I just don't get it.  What am I missing here.  The FCC lets AT&T off the hook when it comes to any real net neutrality conditions (see this post called AT&T Knows When to Fold 'em and comments that follow) and allows the purchase of Bell South to go through.  This is definitely not a victory for consumers and can only help the pipe owning RBOCs.  What gets me is that the only thing and I mean the only thing that matters is the last mile to the household.  And, what this merger does is allow AT&T to buy up more home lines to charge whatever non-competitive rates they want with no repercussions and no reason to go invade other territories.

Back in the day (circa 1998) there were plans for RBOCs to invade LD and for LD companies to invade RBOCs.  Not so anymore.  You aren't in their territory you get nothing.  No offers.  No good TV service.  Just crappy stand alone DSL or Call Advantage.  Don't believe me?  See this screen shot for the lovely offers available just 25 miles from the old and better AT&T's HQ and current Verizon HQ.  Verizon is worse with only DSL available in my area but because I'm on the border I have some long term hope.

You think you are getting some great smoking Wireless now that the geniuses at the current AT&T are going to rename Cingular to AT&T Wireless?  I doubt it especially if you are out of territory.  Back when I ran wireless/LD bundle marketing programs for AT&T the reason we did it was that we can offer discounts to keep people on multiple services.  The new, new, new gosh we promise we won't do no evil AT&T won't do that unless they already have a pipe into your house.  Why?  There is no reason that they couldn't have offered something in the past if you were out of territory.   This BS mentioned in the article about having a partner was just a convenient excuse to get the deal through - "With full control of cellphone operator Cingular Wireless, formerly a joint-venture with BellSouth, the San Antonio-based phone company will begin selling AT&T-branded wireless services to its large pool of corporate phone and Internet customers, allowing it to offer discounts for bundles that were impossible when Cingular was a separate entity."

Why do I think this is BS?  Well back in the early days of bundling, the old AT&T had the same problem in certain regions.  I believe we had a deal with Airtouch (might have been PAC Bell - my memory is fading as I approach 40) and I got on the phone to negotiate special offers for our customers in that territory with my Airtouch counterpart who was only too happy to cut a deal to get customers.  To top this announcement off, it mentions how AT&T will want to sell advertising on wireless phones which will of course do wonders for reinforcing the previously bad customer service that the old AT&T Wireless name had, especially in the NY Market.

This deal is all about letting the owners of the last pipe to the house, hold on as long as possible until a better service comes along.  Meanwhile all the people stuck out of territory,on basic land line service, or further out on the TV roll out schedule get shafted with uncompetitive service and prices until a better day.  If the FCC thinks that this deal is ok, then why not let AT&T buy up all of the other RBOCs and let Comcast buy up all the other cable companies?  How do you think that will go for consumers?

PardonMy (angry) French

Eric

What The Vonage Is Going On Here? - Part 2

Part 2 of my post started yesterday.  I figured you don't like to read long articles so I broke it up :-P

Now, you might be saying, oh come on you are being too tough on them.  It is a growing market, right?   Yes it is.  According to the FCC, there were 24.7 million cable lines at the end of 2005 which was a 3.4 million increase over 2004.  With Vonage's customer base at 2,057,844 that is a less than 9% penetration.  (I didn't count DSL because you have to keep a line to maintain DSL to have Vonage go over it; pretty much wiping out your savings.)  I know rough math and I mixed annual numbers around, but give me a sec to prove this out.  According to Comcast, they added 483,000  voice customers during 3rd quarter 2006 and since they are one of many cable companies with this service, you'd have to assume that going forward, Vonage will not be able to keep pace and will fall behind.  And, that doesn't even factor in Skype.  Besides Vonage's lousy marketing, they have probably hit their peak market penetration and the cable companies will continue to  out market share them going forward.

Next, when I was surfing the internet I got hit with this horrible pop-up ad.  I guess the geniuses that brought you an increase in CPA with a budget cut figured that they would borrow a page from the X-10 Camera playbook and start running pop-ups.  The problem is that a) people hate pop-ups b) they most likely get hit with a filter c) people really hate them.  Back in the day, the X-10 online marketing manager was a real genius because they sold tons of these on the internet and for the most part pop-ups work for ROI focused companies that can make these leave behinds fun when they embed their marketing within a game.  Or in X-10's case, sex.  The problem with the Vonage ads is that they are both boring and annoying.  And, to top it off, pretty much every line has some sort of caveat on it.  My favorite part of this horrible ad is the line that says "Save up to 50% or more".  Please, how does someone save "up to" and "or more" at the same time?  It is this kind of language that helps fuel churn and that's in addition to the cash offer borrowed from an old MCI winback strategy of  - when all else fails, use cash.

Finally, the folks over at Motley Fool named Vonage The Worst Stock to Own in 2007.  'Nuff said on that subject.

What the Vonage is going on here?  Clearly they can't sell this service without spending a ton of money to pay people to take it.  They have share pressure from all over including Skype and may have enrolled as many tech junkies as they possibly can.  Their strategy and marketing plan looks to me like someone used a ruler to extrapolate their early numbers and said - "look at all the money we can make", forget about competition and customer service.  I'd say in 2 years or in the next economic slowdown, Vonage will  be gone leaving behind their rich founders and poorer investors.

PardonMyFrench,

Eric

What The Vonage Is Going On Here? - Part 1

Yes.  It has been a long time since I visited with my second least favorite telecommunications company, Vonage.  Quite frankly the reason was I get a little bored with the subject and move onto something else.  However, day after day I receive visits from people searching on subjects like "vonage complaints site" (today), "vonage pop-up ad" (12/26), "vonage marketing complaint address" (12/25), and etc - you get the idea.   The people have spoken (or searched) and who am I to disappoint my fans.

So, what have been holding back?  A lot.  First off, this moronic, idiotic commercial with the pretty blonde getting hit on the head with a Vonage box.  Yes.  It has been around for a while but it still bugs me.  Why?  Well clearly they are making her out to be dumb, but even after she gets hit in the head with the box, she still acts stupid by running into the water to play with the sharks.  Seems to me the shark playing blonde is a metaphor for all the Vonage customers who got swindled when they bought into the Vonage IPO.  I think the ad is more insulting to these customers than to blondes everywhere in the world.

Next up, I've been noticing that Vonage has been cutting back on their online advertising spend.  Back in the day, they were the number one waster, err I mean, spender in online advertising.  One would think that with the ROI potential of online and the fact, that their service works with, umm, broadband customers, that they should be able to manage their marketing spend.  As this chart shows courtesy of TNS by way of ClickZ, they have cut their online marketing spend to 55% over a year ago.  So, with that chart, you'd think they were reducing their cost per acquisition, right?  Wrong.  These marketing geniuses saw their cost per subscriber go UP by 6% over 2nd quarter to $254.  I can tell you one thing as someone who has managed plenty of marketing campaigns in the telecom world is that when you starting trimming your budget, your CPA should go down; the last piece you should cut are good performing programs.  Oh by the way, their churn also went up by 13% to 2.6% due to this lame reason "The increase is attributable in part to the rapid growth in subscriber lines throughout 2006 and resulting impact on customer care."  Nice.

See tomorrow for Part 2 (yes it is already written).  BTW, if you are looking for the Reagan/MSN post, scroll down to about the middle of the page or hit this link

PardonMyFrench,

Eric

Open Letter on AT&T Merger to FCC Chairman Kevin Martin

To:  FCC Chairman Kevin Martin
CC:  WSJ Editorial Page
Date:  12/20/06
Re:  AT&T Merger with Bell South, Net Neutrality or Why There Is Still No Phone Competition in Long Valley, NJ

Mr Martin,

I know it must be tough for you these days as the last check into this bad for consumer deal between the new, new, we swear we won't do no evil AT&T and Bell South.  Especially now that Robert McDowell decided to abstain from voting on the merger which results in a 2-2 tie between Republicans and Democrats at the FCC.  Wow to think how billions hang in the balance between 4 people.  That's quite a challenge, so let me, as a 10 year veteran of the old and better AT&T give you some advice.  Sure this is free, but if you study the downfall of  AT&T you will realize that the current uncompetitive environment is much of a result of bad management by C. (how) Michael (bought Excite@Home and TCI high and sold them very low) Armstrong and lies and underdeliveries by the Baby Bells of the promised made in the Telecommunications Act of 1996.

I submit to you my recent experience with home service in beautiful Long Valley, NJ which is a mere 30 minutes via a country road to the old AT&T HQ and now the current Verizon HQ in Basking Ridge NJ.  Back in the day when that building was filled with veterans of the long distance wars, people actually switched carriers and received offers.  In fact, towards the end of my time there we had plans to invade the local business and the Baby Bells had plans to invade ours.  I can remember the first time Bell Atlantic/Verizon actually started appearing on outpic reports (just in case you don't know what an outpic is that's when someone actually switches their LD carrier).  A funny thing about Long Valley is that both Embarq (the worst brand name ever) and Verizon split local service here.  You can bet that Verizon would love to have the whole town, but sigh they don't want to invade the territory because well they don't have to because why rock the boat.  This is what happens when regulators like yourself allowed the telecommunications industry to become an oligopoly - the kind where prices don't drop because they know the outcome  - no response.

So what did I get as an credit card billed, online care, all you can eat long distance customer that never bothered AT&T when I wanted to switch?  Nothing.  Zilch.  Oh I did get a lousy customer service rep located in India who after giving me my outpic (there's that word again) confirmation number offered to give me 7 cents instate LD for a lousy monthly fee (ugh), AT&T CallAdvantage (why would I want crappy VOIP), or get this WorldNet dial-up (words can not describe the futility).  I thought for a second the rep was going to offer me cash to stay (you remember those tricks), but then he caught himself when he realized that I was out of territory (probably forever) so I can't have local or their great TV service that may arrive by 2020.  He could have offered some wireless offer because I used to have AT&T Wireless Service back when I was AT&T's bundle boy, but sadly, the new, forgetful AT&T doesn't care about bungling, err I mean bundling wireless and LD anymore. 

Why the lack of save programs or wireless bundles?  Simple.  There is no competition in a state like NJ and won't be for the near future.  And, that Mr. Martin gets to the heart of the Net Neutrality argument.  Yes.  Net Neutrality.  See I agree in concept that if you lay the pipes for high speed than you should be able to charge whatever you want.  What makes this easier for the Baby Bells is that they are allowed to have a virtual monopoly in a region and charge whatever they want for local service, because there is no competition.  They don't need to waste valuable dollars in customer care or marketing or promotions because they don't need to.  What's an angry customer supposed to do?  Switch to the equally frustrating cable companies?  Yeah right.  Fact is Net Neutrality is an issue because they are controlling both ends of the pipe thanks to regulators like yourself who hide behind free markets that don't exist (take some notes WSJ).

Yes, I do believe in our economy, free markets, and that if all things being equal, competition will give consumers more choices and better prices.  However, it doesn't work when you allow each Baby Bell to have a virtual monopoly in their territory, resulting in no alternatives for consumers.  Use your own experience and see if you can switch services.  Competition doesn't exist and this merger shouldn't be allowed to go through without significant concessions.

PardonMyFrench,

Eric

Baby Bells Wrestle with Telecom Past

I saw this article called Supreme Court Case on Baby Bells May Affect Antitrust Enforcement in Tuesday's Wall Street Journal and my reaction was - of course they did everything they could to stifle competition; the problem is, as the article points out, is to prove it.  I didn't spend much time on the old AT&T's local side of the business and from 1996 (Telecommunications Act) through 2000 I was either wireless/LD bundle boy or implementing AT&T's consumer online marketing strategy*.  However, as wireless bundle boy I was often in meetings with the managers of the local offers who tried to convince me to add local into my marketing mix; unfortunately, I didn't agree because it was hard enough selling wireless plans on the phone let alone adding in local.

So, that's a long way of saying that I didn't have the plans and don't have any documentation, but here's what I do remember.  In the early days of the Telecom Act, AT&T tried to resell local service in very competitive states like Connecticut.  However, AT&T was buying the service from the LECs at retail rates with a discount on top of it and then offered this bundle to residential customers.  Basically, an expensive white label product from AT&T's enemy at the time.  Of course when you lumped marketing and promotional costs on top of this product, AT&T quickly started losing money.  And, when C. Michael Armstrong came in as AT&T Chairman, this practice stopped and then we move to selling local service via UNE (unbundled network elements or buying individual parts of the local service and then repackaging them). The LECs then tried to set their own resale prices to force AT&T out while capturing the long distance market. 

I left in June 2000, but in the end we know what happened which was MCI collapsed due to playing with their books and the old AT&T stopped marketing to residents to pretty themselves up for purchase by SBC which formed the new, new, new, really it is new AT&T.  For a little more history, check out Armstrong's speech given to the Senate in June 2001 on the state of telecom competition.

This reminds me of two stories.  One was back in 1997 when I interviewed for a marketing position with Teleport a competitive local company for businesses headquartered in Staten Island.  Besides being very late for the interview because of a major accident on the Outerbridge Crossing, I took one look at a US map of their local service and thought to myself, AT&T is going to buy Teleport and I'll end up right back where I started.  Of course, when the CMO asked me what I thought of the company I mumbled something about the commute instead of telling him the truth. 

The second story had to do with sticking it to a Division Manager named Andy M. who was walking along the long third floor corridor on his way to see then head of Consumer Long Distance Jack McMaster when I caught up with him.  I was also on my way to see Jack to talk about career plans when Andy decided to smugly tell me that I was sure to get bumped because he had more important things to discuss with Jack namely to brief him for his meeting with Armstrong on AT&T's 7 (or 9) State Local plan.  Jack of course took the 15 minute meeting with me and we talked about the Yankees, my career, a promotion, and general guy talk.  6 months later Jack made good on his promise and promoted me to Division Manager.

Anyway, back to the article.  So while I have no concrete proof, I saw from AT&T's perspective the LECs putting up stumbling blocks.  At the end of the day what really matters is local competition right?  Well, according to this chart from the FCC local competition peaked back in June 2004 and now is on a downward trend.  And, that peak reached 14% of all lines nearly 8 years after the Telecom Act of 1996 was supposed to foster competition.  Think it doesn't matter now with VOIP, wireless, cable, and etc think again.  The LECs get pricing power without any real competition and that really gets to the heart of the Net Neutrality Issue.

PardonMyFrench,

Eric

My Really Bad Service From AT&T Won't Stop

Yes, the bad service continues but obviously based on AT&T's last earnings call which featured a 74% increase in profit they obviously don't care.  You know why they don't care?  Simple, they are in acquisition mode and buying up all of the competition.  According to this article in the Wall Street Journal, voice revenue was way up and data almost doubled in revenue; heck even directory assistance revenue stayed flat.  You know why you can keep revenues like DA flat?  It is because there is no competition. 

Sure, the FCC and the Justice Department are betting that eventually there will be this all out battle for your TV set, wireless, and phone but that's a long way off.  For example, according to the article, AT&T has about 3,000 subscribers for its high-end TV/internet service - wahoo.  In the meantime, they get monopoly style pricing as they squeeze everything out of their wireline business including decent service.

Back in the good old days when a customer like me called into complain about why they were still receiving a bill, that was a sign to try to win me back with promises of good service and an offer or two.  Nope, not anymore. 

When I called in, the rep "tried to explain to me" why I'm getting an error message (see this link) when I call.  When I tell him AT&T already admitted their mistake, he put me on hold for a second.  Then the uncustomer service rep goes through his "save pitch"...

Bad Offer #1: "How would you like dial-up service?"  My answer:  You still actually sell that piece of garbage?

Bad Offer #2: "Well how would you like AT&T Call Advantage?" My answer:  You treat me like crap for wireline, why would I think the service or product would be better for VOIP?

Bad and Final Offer #3: "How about $3 off your local toll calls?"

That's it.  That's their script for a long time AT&T customer.  Of course, I used to also have AT&T WorldNet for dial-up and AT&T Wireless Service. Heck, I launched the bundling of wireless and wireline services while I was with the old and better AT&T. 

The amount of wireless, mobile web, internet, TiVo, and wireline usage I have would make Bill Gates salivate, but all I'm worth to the New, New, New, Trust Us It Is New AT&T is $3 off my monthly toll.

This is the first and only customer service call I've made to AT&T for as long as I can remember.  I paid all of my bills via credit card and used e-customer care from the day it was launched via AT&T One Rate Online.  In fact, the very last pricing plan I built for AT&T is still being promoted.  The plan AT&T 5 cent eWeekends is available and obviously must be popular.  I remember fighting to get that offer through the Pricing Department.

Hopefully, that's my last call into AT&T forever.  I'm obviously not worth anything to them over the long term because I'll never be in their footprint unless the government lets them buy up all phone lines in the US.  Think of the net neutrality problems when that day arrives.

PardonMyFrench,

Eric

Really Bad Customer Service Brought to You By AT&T

I was an employee of the old and better AT&T for 10 years; my final title was Director (really division manager in the old titles) e-AT&T where I managed our online consumer marketing group.  Prior to that I helped build and launch telecommunications first wireline/wireless bundle called AT&T's Personal Network.  As part of that bundle we created what we called Genie customer service reps.  These were our best representatives and they were trained to handle all aspects of your telecommunications needs - long distance, wireless, 800 services, rewards plans, and whatever else you need.  As VP Jack McMaster described when we had a meeting with him - the Barbara Eden version of Genie.  In fact, the reps were so good and proud of their service they started calling themselves Genie reps. 

Fast forward 7 years to a telecommunications world lacking in competition and of course customer service.  A world where the new, new, new, really it is new AT&T provides terrible customer service.  Sadly my Genie reps are now probably laid off.

For the past month when we periodically made an instate long distance or long distance call, we'd get the following error message "the carrier you selected is unable to compete your call."  Thinking the problem was Embarq (the worst brand name ever), I placed a call to their customer service who told me it was not their problem and I should call AT&T.  I told them I worked there for 10 years and it is most likely your problem, probably someone trying to get my Long Distance.  I called AT&T and they confirmed (or lied) that it was Embarq's problem because they are seeing a notation on my account that says LEC Denied.  Ahha, I said to the AT&T rep, it is Embarq's fault and I called back.  Embarq was helpful, opened up a trouble ticket and told me to call back in whenever I hear that message.  That call was today.....

Since When Is The Net Neutral Again?

A while back I made a post called Since When Is The Net Neutral? and it generated a lot of great comments.  At the end of the day, the conclusion I came to with the help of PCLiberal (whoever he is) is that we are losing the battle of the last mile to the household and the rallying cry of net neutrality should be about local competition and not about content or hampering the little guy.  The issue was dead for me from a post perspective, because well, once a topic gets too hot and picked up by bigger sites I don't look original any more.

Well, my fellow MarketingProfs blogger Ann Handley wrote a good post called Dumb is The New Smart and it has to do with using humor to discuss boring, but important subjects like Net Neutrality.  Without stealing Ann's thunder too much, I republished my comment below.  As you can see, when people use humor to discuss important issues based on facts, it can become very effective.  When humor is used to confuse people or distort facts for the sake of making it funny is when it becomes an issue.

PardonMyFrench,

Eric

----------------------------------------------------------------------------------

Good post Ann. I went through the site and I agree with you that using humor to tell this boring story is a great idea. What I like best about this is that they do a great job of getting to the heart of the issue which is the RBOCs have a legalized monopoly at the local level and now command pricing power at our access points. That's the heart of the issue and not if you are going to have access to content.

When I was at AT&T (the older version), we had plans to compete at the local level as I'm sure MCI and Sprint did. Sadly, the government allowed the SBCs and Bell Atlantics (Verizon) of the world to buy up the competition and form giant telecom companies. So these guys are dead on accurate.

Anything that gets the real message out and steers it away from the content argument is a great idea. If it makes us laugh too, well it is better the crying over spilt content.

PardonMyFrench,

Eric

Now, It Is Ok To Antenna Chase

Way back when I was working at AT&T, I volunteered to work on two double secret probation projects called Cheetah and Panda.  These were AT&T's first efforts to market cellular (Cheetah) and paging (Panda) to the AT&T long distance customer base.  We in the LD world had to work with our McCaw cellular counterparts in understanding the products, offers, and incentives to create the direct mail piece, inbound call scripts, and TV ads.  This was back in 1995 when you didn't have wireless gizmos attached to your body and hardly anyone understood how the product worked.

The group we had was very small, and as I recall there was only one marketing manager (me) on the project and my job was to write the marketing brief, review creatives, work with sales execution, and negotiate the offers.  Two big decisions I recommended were the use of 1800336TRUE for inbound calls and what I believe was the first official use of a free cellular phone with a new account sign-up.  Both were significant because people never forgot that 800 number (AT&T finally shut it off last year) and the free phone offer is often the price of admission into wireless service.  One other recommendation I made which was shouted down was comparing service with our competitors.  I was told that Craig McCaw called that antenna chasing and with a growing market it wasn't needed.

As this Sunday NYTimes article explains, now with over 70% penetration in the US, cell phone carriers now focus ads on each other in order to steal market share. What was once taboo in the industry now looks common place as I must have seen the Sprint/Nextel wireless data card ad (mentioned in the article - see ad below) about 100 times while watching football this weekend.  I'm sure with this strategy shift, you'll see more offers to switch, better promotions, and better prices.  It used to happen in the LD world, but with mergers that the FCC allowed to create super local/LD carriers, those incentives have long since evaporated.  I'm still waiting for a phone call from my local provider Embarq (the worst brand name in history) to call me with an offer to switch.

Well, at least we consumer can enjoy some good old fashioned name calling, promotions, and fun advertising in the wireless world.  My antenna chasing idea wasn't so bad, it was just 10 years ahead of its time.

PardonMyFrench,

Eric

AT&T's $14,000 Per Life Phone Plan

A friend of mine sent me this story found over at Yahoo! News called Widow Rented Rotary Phone for 42 Years.  In this sad but true story, it seems Ester Strogen was paying up to $29.10 per month to rent two of those built like a tank rotary phones for years totaling up to $14,000.  The calculation was done by her family which ended the relationship.  What's up next, the Strogen family figures out that Ester is not on a promotional discount plan and is instead paying one of the highest LD rates in the US by being on basic schedule?

As I recall, my grandparents were also paying to lease two rotary phones which I quickly ended over protests by my grandparents; these protests were echoed by Ester at the end of the article when she says "I'd like to have my rotary back".  You know what, you get what you pay for.  Sure the lease phone option is a ripoff (BTW - it is managed by Lucent), but so are a lot of things in life.  The bills are there, you have to read them, right?

It is just one of the pricing tactics that I'm sure the New, New, New, Gee I'm Telling You It Is New AT&T is still employing.  That's right the secret of the basic schedule.  Just as people (most likely Seniors) are paying to lease their phones, the same sort of people can't be bothered to look at their phone rates.  And, AT&T knows who they are and guess what?  They won't go out of their way to tell these people.  Why should they when they are supplementing people that are on a calling plan.  The basic schedule folks are paying a $3.95 monthly charge plus 39 cents (that's right) per minute peak, 33.5 offpeak and 10 cents on weekends (gee what a bargain).

That's what a lack of competition will do for you.  I still have AT&T for LD, but only because my local carrier Embarq (the company with the worst brand name) would charge me extra because I have two lines and coupled with DSL I can't sign up for bad sound quality via VOIP.  Don't believe me?  When was the last time you received any phone call, email, direct mail from AT&T telling you about some new service or promotion.  They are just happy to let you sit there and pay your bill every month.  Just like all of the other people on basic schedule or still renting rotary phones.

PardonMyFrench,

Eric

What The Vonage Is Going On Now?

Haven't visited with Vonage in a while and then I spotted this article over at ClickZ that looked at the Top 50 Advertisers by Media Value in July,2006.  And, just what got me excited?  No, one of my campaigns did not appear on the list.  It showed that Verizon Wireless and NOT Vonage was the top ad spender.  In fact, not only was Vonage not the number waster err I mean spender of ad dollars, the raw number seemed a lot lower than past months.  Yes everyone knows that the numbers are over-reported, but unless TNS Media Intelligence changed their methodology I think it is significant.  Perhaps someone at Vonage has been reading my past posts!

Vonage's highest spend this year was reported at $31.7 million during January 2006 and now has dropped to $12.6 million.  That is a huge cut and before you scream seasonality I put this chart together and you can see how far behind 2005 their spending is.  Also, using the raw numbers you can see that comparing July's reported numbers with their average monthly spend for 2nd Quarter shows a 27% decrease in spend.  Hmmm, that number looks familiar to me.

A UBS research report summarized by way of a GigaOM article called Vonage Slowing Down? showed that UBS believes Vonage's daily net ads have slowed down from 2,800 per day to 2,200 per day and that AP Calc students translates into a 27% decrease.  One could only conclude based on this huge coincidence, that someone in Vonage is starting to take an ROI approach to their wasteful spending and has cut back on their ad spending.

I'm sure that's what the Vonage is going on with their waste.  Probably their media agency of record is feeling almost as much pain as is their shareholders - check that, nobody is feeling more pain than their shareholders (see chart below).

PardonMyFrench,

Eric

FCC Hangs Up on Bell South Surcharge, Verizon Next?

I was thrilled when I read this article in Saturday's Wall Street Journal called Bell South Drops Surcharge Plan for High-Speed Internet Offering.  It seems Bell South tried slipping through a new surcharge on high-speed internet customers after the FCC dropped the Universal Service Fund to DSL customers.  The USF was probably adding about $2 to your bill every month and removed because well, as a DSL customer you were already paying for it on your phone line.  Bell South changed their mind about charging the $2.97 regulatory cost recovery fee, but it looks like good old Verizon is sticking with it.

Verizon sent an email to customers telling them that good news you do not have to pay the USF but you are going to start getting a supplier surcharge for roughly the same amount.  According to the article the FCC sent Verizon a letter of inquiry into the matter which Verizon spokesman Eric Rabe said "We increased prices but the impact was less because the government was removing this.  We're not keeping that money.  We're charging more for things we need to cover."  Man, that is really lame.  How does this come about?  Simple - it is just a telecom pricing shell game.

This game was invented during the divestiture of the really old AT&T that spawned these cry babies.  Back in the old pricing days you had something called pricing headroom which meant that if you were going to raise prices on one product you had to take the "savings" passed onto customers from a price decrease; this price decrease is what created the headroom.  That way the old AT&T couldn't just use its monopolistic power and raise rates.  So, what probably happened here with Bell South and Verizon is that their pricing teams wanted to raise rates while holding their promotional rates (you know the low advertised ones) the same and figured they could slip one fee as another one was removed.

You see, the old AT&T used to do that with calling card and operator handled calls - we'd raise those while offering you smoking great dial-1 rates.  The poor road warriors of the past would get socked for a more expensive calling card call to fund the winback battles with the crooks from MCI and Sprint.

This is just a really lame attempt to raise rates without raising the promotional ones you see on TV.  That way they can still advertise a $14.95 rate (like the one shown) without the extra money to cover some phantom costs.  Just another example of what your new world delivered by companies that don't want competition will look like.

PardonMyFrench,

Eric

(see link for links to follow other articles on the subject).

Huh? What? - Oh You Must Have VOIP

I often get asked this which is "I can't believe you don't have VOIP!  I mean I understand why you don't like Vonage, but what about Skype?  Don't you like cheap calls?" 

You know what my answer is - the phone quality is awful, I don't make international calls, I have an all you can eat calling plan with the worst brand named company in the telecom industry Embarq, and finally I have DSL which really doesn't cost effectively work with VOIP (see Vonage's so sad, too bad for you comment).  People usually laugh when I say the quality sucks, because well it does, but they get soooo much more for their money.  Really?  How about just the ability to make a good sounding phone call?

• 9 months ago I couldn't reach my friend Art because I kept getting fast busy signals or what we telecom vets call network busy signals.  Do you remember the last time you got a network busy signal from your wireline carrier?  I don't.
• 5 months ago when I tried to call my ad server's help desk, the phones didn't ring or got routed to the wrong number; plus voicemail was disabled.  I think Joe's pizza answered the phone a few times!
• I was on an international call via Skype with 5 other business associates and the sound quality was the WORST I ever experienced.  I might as well have stood on the Empire State Building and shouted across the Atlantic Ocean.  Ever since then I refuse to be dialed in on VOIP calls.
• Finally, while trying to have a conversion with my friend Jeaneen we discovered that her VOIP provider could not dial my cell phone; this was yesterday.

Well I guess I'm not the only one who has noticed the horrible call quality.  As reported in today's Wall Street Journal there is an interview in the Talking Tech column by Lee Gomez that looks at call quality as measured by a company called Brix Networks.  You can read the article itself but what was most comforting to me and proved I wasn't imagining the really terrible call quality was this quote from Brix's CTO Kaynam Hedayat "...we found that in a VOIP environment the ACQ (acceptable call quality) was around 80%.  We also found that ACQ is actually dropping over time."

Well that looks to me like I've been proven out at least for 2006.  The article gives some reasons why the quality is degrading and possible solutions.  BTW - You can also track your call quality via Brix's website. 

Until the call quality and service is fixed, I'll just stick with good old wireless and wireline service and leave all that big VOIP savings on the table.  For me, the only chance I have of switching to VOIP would be to buy Vonage itself and with the way the stock is going, it probably won't be too far out in the future. 

PardonMyFrench,

Eric

Yuck - Embarq Is A Bad Brand Name

Many moons ago back when I was a novice blogger (I really hate that term), I wrote a quick little post entitled Embarq - The Worst Brand Name Ever? but I never really answered that question.  And, guaranteed day in and day out I get a large portion of my traffic from people searching on Embarq, so I thought, hmmm, I guess I should answer that question. 

Now before I do let me say for the record that I do NOT have an axe to grind with Embarq (formerly known as Sprint).  Pretty much every customer service call I've had with them has been helpful.  Sure I had some trouble getting my DSL going, but now it works fine.  My two problems with them are that I can't get bundled pricing on my main phone line with my second line and the fact that they wasted dollars on this new terrible brand name with a logo that looks like a puke green paper airplane.   

Back to the question at hand.  Well the folks at TrendIQ, Jeaneen Andrews one of my favorite ex-AT&Ters (the old and better version) and Paul Feldman, did an analysis of Embarq's internet search activity and categorized it into a few useful charts to prove that Embarq is a truly an awful brand name.  In a nutshell the folks at TrendIQ can analyze search activity, blog posts, and general news to look at trends of a brand.  And according to this analysis on Embarq, it looks bad.  I'll save you the trouble of reading through the charts which does take a small amount of concentration and closely approaches rocket science.  However, if I'm reading these charts correctly:

1. Home Page Topics - Embarq is more closely associated with B2B than B2C to the approximate tune of 65% to 35%.  A look at their homepage doesn't display that imbalance.
2. State References - At first glance this looks pretty good except there are several states where they don't offer wireline service that are high up on the list including NY, MI, and GA,
3. Top Markets/Industries - While Telecom is their #1 industry which it should be, financial services (?) and software are way up on the list too.  Plus, there are other extraneous industries like real estate, travel, insurance and media/entertainment that are extremely strong.

There's a fourth study but I think you get the hint.  As I guessed way back in March, the name Embarq can not be conveying the message of communications, speed, or other telecommunications brand references.  When your brand name is associate with financial services, insurance, travel and real estate more than internet (DSL), than I'd say you have a problem.

So what should Embarq do assuming that the brand name is here to stay.  Well judging from the three TrendIQ charts, they need to be laser focused on their message (are you business or consumer, local, DSL, etc), explain what business they are in, and focus the advertising in states where they have wireline coverage.  And then blast it out on TV, XM Radio via Google, and nice big internet branding units. 

Embarq really is a bad name, the service is good, the brand name is bad.  However, with focused advertising they can work key metrics and brand awareness to make lemonade out of a lemon of a brand name.

PardonMyFrench,

Eric

Vonage Wasteful Ad$ Fund Spyware

In the article called How Vonage Funds Spyware, Ben Edelman proves how Vonage's massive, and as I've written before, wasteful online advertising campaign is funding spyware companies.  According to Ben Edelman:

1. 12 instances of Vonage's ads appearing in awful spyware companies
2. Vonage's ads appear in pop-up spyware vendors like 1800solutions, DirectRevenue, and (un)eXact Advertising and that they paid $31,750 to DirectRevenue in a month in 2005 with a high of $110 per click sent to the Vonage site
3. They are also appearing in a smaller Spyware company (not) Targetsaver
4. It also appears that Vonage is involved with a company called Vendare (myphonebillsavings.com) who receives traffic from DirectRevenue

Now I'm sure that Vonage does not want to be involved with these spyware companies.  However, with the amount of money I'm guessing that they pay per month, they need to do a much better job of controlling this.  In the posts I referenced above, they are not doing a very good job on ROI for the advertising dollars and that was before their IPO that raised money for even more advertising.

Look, I have run very large online campaigns - not $20 million per month - but very large and I was never accused of being involved with spyware companies.  Sure you have to watch where you appear in content, PPC networks, and CPA vendors but there is no excuse for not having a good handle on where your ads are appearing.  The money they are spending and the lack of visibility into this just fuels spyware companies.

Come on Vonage, you can do better than this.  Here's what I would do if I was running that campaign:

1. Get your media agency to track this down and stop it. 
2. Have them research where your ads are appearing and only pay vendors that can prove where the ads are running. 
3. Hire a bunch of college students to manually go through every site that is recommended by your CPA networks.  If a vendor won't let you opt-out then drop them because they know who they are paying.
4. Set a range on your CPA.  Any placement (yes I wrote placement) and vendor/publisher that is outside of your upper range drop ASAP
5. Determine what your point of advertising diminishing return is
   

Regarding point 5 above, if this means that there is a maximum threshold you can spend per month in banner advertising that is less than the money you are wasting today, then that's ok.  Personally, I believe that each company has a point of advertising diminishing returns and with the amount of money you've been spending over the past few years, I'm sure you can figure out what that amount is.  So, scale it back instead of wasting money.  Try spending it in other ways - more creative advertising (online or offline), CRM, promotions, anything else but pouring money down the spyware toilet.

You have enough $$$ to force more visibility.  So use your marketing $$$ and clout to change the game.  That is what I did with a lot less money.

PardonMyFrench,

Eric

Community 1, VerizonWireless 0

So, it is time for my annual summer vacation in Avalon NJ and I had a problem.  I thought we were renting a home with broadband access, but my wife selected one without it.  I need broadband access because unlike past vacations when I worked for corporate America, I'm planning on working through part of the vacation.  So, I decided to bite the bullet and look for some equipment to connect my laptop to my Treo 700W with Verizon's Wireless Broadband access.

My first problem was I could no longer find any links to pick up the equipment.  Plus, I read somewhere that Verizon disabled a feature on the phone to prevent connecting to it to save on usage.  That's the first problem.  I'm already paying for broadband access with a phone totaling $180 per month (includes 2 family plans).  So, with the monthly access for broadband and voice minutes you'd think they would love for me to use the networks.  Not so.  I am still upset by that; that's some customer service.  Can you hear me now?  I'm a pissed off, high paying customer.

So I figured out a work around, by searching for DUN Treo700W in Google and it took me to a link for PDANet software that allows you to connect your laptop to your Treo 700W's wireless broadband access using nothing more than your cable. 

It cost me $34, but this work around is great.  Unlike the reviews, I've yet to surf at DSL speeds, most likely due to my locations, but right now I'm connected at 2.4M/s which isn't bad.  I can get email and browse most web pages, but it is a little slow to render some pages.  Plus, video is spotty so it is not worth watching.

It is too bad that Verizon disabled the link.  Why shouldn't I be allowed to surf the wireless broadband network?  Don't I already pay enough for service?  Now, I paid some group of programmers $34 to reactivate my access.  At least the internet community came up with a solution.  Can you hear me now?  Wise up Verizon.

PardonMyFrench,

Eric