Pay TV and AT&T Uverse and Internet and Manufacturing & Technology and Technology

AT&T's U-verse generates complaints as cable rival is rolled out

September 29, 2008

A baby born of Indiana telecom reform is having some teething pains.

AT&T's U-verse, Ma Bell's high-tech answer to cable television's troika of video/voice/Internet service, has generated several consumer complaints to state regulators since it was rolled out here in earnest last year.

The complaints range from long installation times to frozen television pictures that require rebooting the system or calling a technician.

"Customer stated loss of service with frequent freeze-ups. As many as six every four hours," reads the file for Conrad Groseclose of Carmel, who complained to the Indiana Utility Regulatory Commission earlier this year.

After four technicians tried in vain to fix the problem on different occasions, the AT&T retiree switched his service back to his cable TV provider.

There are some in the area who are still satisfied with U-verse, Groseclose told IBJ. "I guess it depends on where you live."

His was one of 786 total complaints filed against AT&T so far this year on all of its product offerings, including basic telephone, a review of IURC records shows. Under state telecommunications reform passed in 2006, the commission lost some of its jurisdiction to regulate telecom companies. But it was ordered to compile complaints for the General Assembly.

The commission is getting complaints, but its computer records aren't configured to retrieve them by U-verse complaints. It took nearly two hours of searching to get through only a fraction of 786 complaints. Of that sliver, there were 10 complaints specific to U-verse.

Even if the complaints were easy to find, other information is hard to find. AT&T has asked the commission for confidentiality regarding the number of U-verse subscribers and where the service is available. Therefore, gauging the level of satisfaction or dissatisfaction based on IURC correspondence is virtually impossible.

AT&T spokesman Chris Bauer said he could not specify the number of customers in Indiana, but said the Dallas-based company is aiming to have more than 1 million U-verse customers nationwide by year's end. Recently, AT&T made U-verse service available in South Bend.

"We have many more customers than we have complaints," Bauer said.

More competition

AT&T and legislators who backed deregulation in the form of House Bill 1279 said that easing regulation would hasten the deployment of products like U-verse and benefit consumers with more choices and more competitive prices.

The millions of dollars spent by AT&T and other telcos statewide to sway public opinion might not have been necessary. Many cable customers were already furious with years of cable TV price increases that often far exceeded the annual rate of inflation.

Nearly two years since AT&T first rolled out U-verse in parts of central Indiana, the company has lassoed an unknown number of cable customers.

"They've been able to lure customers away with the promise of lower prices," primarily, said Mark Apple, a vice president of Comcast's Indiana operations.

Indeed, soon after AT&T installs in a neighborhood the refrigerator-size equipment boxes that support U-verse, blue-shirted sales reps hit the sidewalks--some traveling in pairs like evangelists.

They're armed with laminated cards showing the U-verse channel lineup and a monthly pricing package that can be had for under $100 a month--sometimes $50 or more a month cheaper than cable or buying services from multiple providers.

The sales reps make it easy--signing up customers right on their front doorsteps.

Turn-on turmoil

For some customers, at least, getting the technical marvel up and running is a different matter.

Indianapolis-area resident Douglas Evans told the IURC that AT&T came to install U-verse on Aug. 11, but that technicians spent nine hours running up and down the street trying to get the signal to his house.

They came back the next day. "Spent four hours. Still no fix."

The next day, nobody showed up or called. On Aug. 14, he was told it would be fixed the next day. It wasn't. Same for Aug. 16 and 17.

"This is the third no-call, no-show this week," Evans stated in his complaint, which meticulously documented the names of and IDs of six AT&T operators.

"Staying home waiting on this has cost me thousands of dollars in lost wages taking off to be home, not to mention family time," he lamented in the complaint.

According to IURC records, AT&T on Aug. 25 issued Evans a "goodwill credit" of $715, which was the equivalent of six months of U-verse service.

Evans declined to talk to IBJ about his experience.

Bauer said AT&T is reducing its installation target, now at about five hours, as technicians rapidly gain more experience.

"We have one chance to make a positive first impression," he said.

Other complaints filed with the commission involved potential customers who were unable to get U-verse even though a neighbor just down the street could. That was the lament of a Greenwood resident in his complaint. AT&T responded that he was too far down the line from the equipment box--about a foot beyond the AT&T technology's 3,000-foot limit.

Bauer said AT&T is improving the specificity of service limits within a neighborhood. It's improved such that, now, customers can check first by entering their address at its Web site.

Some of the problems reported to regulators stem from limits of the technology AT&T chose for U-verse, problems that are gradually being overcome, according to industry experts.

Technical challenges

Like AT&T, telco Verizon also found itself in need of a cable-TV-like video product as Comcast and other cable giants started offering phone and Internet services the phone companies traditionally dominated.

Verizon, which serves much of northern Indiana, chose a more expensive technology to implement known as fiber-to-the-premises, or FTTP. Gobs more data can be crammed through fiber-optic cable than traditional copper wire entering the ordinary home.

AT&T, at a cost-per-customer estimated at perhaps a quarter that of Verizon's, chose fiber-to-the-node, or FTTN.

In this approach, the fiber-optic cable generally stops at the refrigerator-size box in a neighborhood (a.k.a. "lawn fridge"), which pushes and pulls data for U-verse through a neighborhood's typical nest of copper phone wires.

The AT&T system relies on novel video compression technology and equipment from Microsoft and Motorola. But squeezing all that data through the line has limitations. When AT&T rolled out U-verse, one rap against it was that only one high-definition channel could be viewed in a house at one time, which isn't a problem with many cable TV systems or Verizon's FiOs FTTP technology.

That's about to change, said AT&T's Bauer. There are plans yet this year to enable two HD streams to enter a home so residents can watch/record up to two HD programs at the same time.

Some U-verse users have also complained about artifacts such as shadowy boxes appearing in background images of HDTV broadcasts. And for whatever reason, some U-verse customers experience video freezing, requiring them to reboot their U-verse set-top boxes.

AT&T has been busy updating software and doing things, such as "bonding," to improve bandwidth. Bonding combines the bandwidth of two wires, according to broadband trade publication CED Magazine.

AT&T will have to spend more money on upgrades for U-verse to remain competitive, said a study last year by Silver Springs, Md.-based research firm Pike & Fischer. Among them: extending fiber closer to the home.

"Pair bonding and compression, AT&T's current response to its network's bandwidth limitations, will not change copper to glass [fiber optic] and will not provide AT&T with a long-term solution, in our opinion," said Pike & Fischer.

More competition

Such improvements would please Fishers resident and U-verse customer Matthew Tucco, whose service went down early this year. AT&T technicians responded but just couldn't seem to get a handle on how to fix it.

"You can only jam so much information through that bandwidth," said Tucco, who complained to the IURC. The agency reminded him of its limited arm-twisting authority, post-deregulation.

After spending several days on the phone with AT&T while he was in Mexico, he said, "Either you fix it or I'm going to somebody else."

The company got his service running. He overlooks the occasional freeze in signal.

"I think it's a fantastic product," said Tucco, saying he's also pleased with the pricing.

Cable TV companies are pleased as well--when customers come back after trying U-verse. Just what kind of migration has occurred both ways since U-verse appeared is hard to say; few providers are revealing their numbers in such a competitive environment.

"We've seen a lot of people come back," said Tim Oakes, president of the Indiana Cable Telecommunications Association, a trade group for cable operators. He opines that the early challenges of providing the triple play of video/voice/Internet hit AT&T with a painful slap of reality.

"It's hard to provide that product. It's more technically complex than most people realize."

Perhaps. But said former U-verse customer Groseclose, "Thank goodness we have a choice."

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