Supply chain disruptions and senior scams challenged medical alert companies to meet AT&T’s 3G shutdown deadline

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As many Americans begin to adopt newer and faster 5G wireless service, an earlier-generation wireless network is winding down next week. The shutdown presents enormous consequences for certain products that still use the older 3G networks, such as alarm systems and personal emergency response systems that many seniors rely on to live independently.

AT&T‘s final 3G sunset date is Feb. 22, which means that many devices that use the network to contact emergency services will no longer connect to the internet. The company has said this shutdown is necessary to transition service toward newer networks.

Though AT&T announced the sunset date in 2019, giving companies years to prepare, the transition is happening during a particularly tumultuous time that’s complicated upgrades for medical alert firms.

The pandemic isolated its elderly customer base more than ever, frequent scams and robocalls have put them on edge for accepting claims of free new devices, and supply chain disruptions have complicated the acquisition of new equipment.

A group representing the medical alert companies petitioned the Federal Communications Commission for more time to prepare amid the challenges, but AT&T’s date remained in place, ahead of its peers’. Medical alert executives told CNBC most of the industry runs on AT&T, which means the Feb. 22 deadline for that carrier affects a broad proportion of the devices in use.

While it’s difficult to pin down the number of devices that could be left disconnected after Tuesday’s shutdown, the Alarm Industry Communications Committee, the lobbying arm of a professional monitoring industry group, found in a survey of its members that about 2 million security, fire and medical alert devices remained on 3G, including hundreds of thousands of people with personal emergency response devices.

Scams and supply chain disruptions challenge transition

In the May petition to the FCC, the AICC requested the agency provide emergency relief by extending the 3G sunset date for AT&T. It called the consequences of not doing so “harmful, even deadly” for tens of millions of people whose alarm systems of all kinds could be impacted.

The group cited several issues that impacted the ability of alarm service providers to transition in time, including the lack of availability of alarm installers because of infection with Covid-19 or caregiving responsibilities, resources being shifted to more urgent matters during the pandemic, difficulty in hiring and retaining workers, and supply chain issues including the global chip shortage.

AICC spokesperson Daniel Oppenheim said in an interview that even though AT&T gave roughly three years’ notice of the sunset, the pandemic set back the industry’s transition plans.

“It basically stole a year from us with an inability to get into people’s homes and businesses,” said Oppenheim, who’s also the CEO of Affiliated Monitoring, which operates call centers for a variety of alarm and personal emergency response companies. “And even to the extent that anyone was comfortable letting us into your home or business, we then had employees and technicians who were either unable or unwilling to do the work.”

Even once the virus became less prevalent at points, Oppenheim said the supply chain disruptions presented a new issue with as long as 52-week lead times on certain equipment.

Matt Solomon, general manager of medical alert provider LifeStation, experienced some of the challenges AICC cited in the petition firsthand.

“There were points in time where it wasn’t totally clear if we were going to get enough devices in time,” he said, citing the supply challenges. “Because the manufacturers in our industry were dealing with the same issues that everybody else was, except that, not to minimize the challenges that the auto industry … but in theory you could delay buying your new car if it wasn’t available. This, we had no choice. We had this hard deadline we were working against. It’s not overdramatic to say it was a life or death situation.”

Solomon said in order to ensure LifeStation’s customers would remain connected through the transition, it took on more inventory than it normally would and diversified its suppliers, spending millions of dollars between the upgrades and customer service.

Outreach to customers presented its own challenges.

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“You could imagine with any population that would be hard. With a senior population, it’s infinitely harder because they don’t really understand the change in the technology,” he said. “Seniors are wary. They’ve been, I think for the positive, well-trained to be suspect. They get lots of calls from lots of people all the time telling them don’t worry, it’s free, everything’s OK. And we’re calling them saying don’t worry, its free, we just need to send you a new one.”

To reassure wary customers, LifeStation reached out in multiple ways and allowed customers to call them back with the number on their invoice.

“We had to contact people in multiple different ways: email, phone calls, letters, postcards, everything but a smoke signal to get their attention,” said Bryan Stapp, president of another personal emergency response company Medical Care Alert. He said the calls to seniors offering a new free device would immediately raise defenses for many customers after years of companies including his warning them of scams.

“On one hand, we were happy that they were aware that people were trying to scam them,” he said. “On the other hand, it made our job a little bit more difficult to get them their upgrade. But we got through it.”

About a week before the sunset, Stapp said all but three of the thousands of 3G devices they set out to replace had been upgraded. Stapp said it took hundreds of thousands of dollars to undergo the transition.

But Stapp said for certain markets, the transition really needed to happen much sooner than the final Feb. 22 deadline, since AT&T shut off 3G service in some markets before that.

The upside for seniors and their families that rely on these devices is that they now have access to more sophisticated devices with more features to help track their location and safety.

Medical Care Alert also diversified more of its devices by servicing some of its new equipment through Verizon. Stapp said that should allow for stronger connectivity in areas with more Verizon coverage than AT&T.

Industry and government response

Though the FCC did not push back the AT&T deadline, it did advise the company to create new roaming options to act as a bridge after the shutdown date for certain devices, which AT&T agreed to.

The Federal Communications Commission (FCC) logo is seen before the FCC Net Neutrality hearing in Washington February 26, 2015.
Yuri Gripas | Reuters

In a statement, an FCC spokesperson said the agency “is actively monitoring the phase out of 3G networks and, based on a comprehensive record compiled by the agency, is working with all stakeholders on safeguards that will help ensure that remaining legacy phones and IoT devices have a reasonable opportunity to transition to newer networks, including new roaming options to help bridge the transition.”

The agency has provided information for consumers who might be impacted on its website.

But AICC, the alarm industry group, does not believe such solutions are enough. AICC’s Oppenheim said he’s still hopeful AT&T will push the shutdown date back and said the roaming option came so late that it’s largely infeasible to implement for many devices.

“Anything that we can do to save lives is appreciated,” said Tom Kamber, executive director of Older Adults Technology Services, a nonprofit affiliated with AARP, of the roaming option. “If that’s what they’re going to do today, then it might save some lives. And it may be a partial solution. But people are still asking for this to be delayed until the end of the year.”

“Since February of 2019, we have worked with our business customers to help them transition their 3G devices to newer technology,” an AT&T spokesperson said in a statement. “We have sent numerous communications and our account teams have also been working with them to help them get through their upgrade cycles.”

CTIA, a wireless industry group that represents AT&T and other carriers, said in a statement that the industry is prepared for a smooth transition.

According to CTIA, 99% of Americans are covered by 4G networks.

“Wireless providers have successfully transitioned customers from old to new generations before, and have been working with customers for more than two years, in many cases offering free phones and other assistance, to make the transition away from 3G even easier,” the group said in a statement. “Customers who have questions should reach out to their providers to find out more information and discuss options.”

Oppenheim said that if it weren’t for the pandemic, three years would have been sufficient for the transition, but he said AT&T would not account for those challenges. And he pointed out the 3G sunset is a larger lift than the earlier 2G retirement because of the influx of connected devices that arrived during the 3G period. Kamber said that even the extra few months between now and December would help get more systems onto the newer networks in time for the network shutdown.

“Now that there’s a little bit of opening in the pandemic restrictions that people are having, it does create a chance for people to get a technician into their home, or have been vaccinated,” said Kamber. “We think this is a year in which, hopefully, everyone who wants to and needs to make the transition is able to do it. And also the manufacturers will be able to clear a lot of the backlog of the technology in the supply chain.”

Kamber encouraged Americans to take inventory of the connected devices in their homes and, if they’ve been installed any earlier than a few years ago, to call their providers to make sure they’re running on a newer network.

“I would encourage people to think of this as like a chance to do a little bit of planning for the next generation,” Kamber said.

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WATCH: 3G shutdown could have big impact, especially among most vulnerable

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