After an outpouring of complaints from UK mobile data customers, T-Mobile’s UK division has announced it is backing off implementing ‘new and improved’ usage caps of 500MB per month, down from the 1-3GB customers used to enjoy.  But the change of heart will only apply to existing customers.  New customers will find themselves second class citizens of the T-Mobile family — stuck with a 500MB allowance other customers won’t have to cope with.

The company claims it changed its mind after hearing from customers, but we suspect the real reason for the sudden change was word the British regulator OFCOM was considering an investigation, suggesting T-Mobile could have violated its own contract with customers by not providing 30 days of advance notice.

There were also reports angered customers seeking an early end to their contract were meeting resistance from T-Mobile’s customer relations department.  Customers who quit early face steep early cancellation penalties, despite the fact they should be waived if a mobile provider materially changes the service consumers thought they were getting when they signed up.

Another object lesson learned: Internet Overcharging schemes often start with “generous” allowances that some providers will lower if it means reducing demand on their networks, without ever bothering to lower prices for customers.

Despite promises from AT&T and their astroturf friends that telecom deregulation would result in lower prices for Ohio residents, the company announced this week it was -increasing- prices for basic landlines — the service Ohio’s poorest rely on most from the phone giant.

AT&T Ohio residential customers are receiving notices with their recent bills that effective Jan. 7, monthly service will increase by $1.25, the maximum amount allowed under Ohio’s new deregulation law.  Before taxes, fees, and surcharges, Ohio phone rates for basic residential service will increase from $14.25 to $15.50.

It’s the fourth rate hike in four years for Ohio landline customers who were promised savings as a result of telecommunications deregulation.

But in fact AT&T’s lobbyists recommended and got language in the legislation that actually reduced the competitive test required for AT&T to win approval of rate increases.

Under old Ohio law, AT&T had to show they had at least five competitors in a service area; today that number has been reduced to just two, leaving virtually the entire state wide open to unfettered rate hikes.

“It is unfortunate residential consumers will have to pay more for basic landline service, especially during these difficult economic times,” Consumers’ Counsel Janine Migden-Ostrander told the Times-Reporter.

The Ohio Consumers’ Counsel tried to have the rate increase rolled back, arguing under the new law, AT&T Ohio failed to show proof that even two competitive services are available.

But AT&T’s lobbyists made sure the company really did not have to respond, because the new law provides for automatic approval if Ohio’s Public Utility Commission fails to deny rate hike requests within a 30 day window.  In this case, they did not rule on the Consumer Counsel’s appeal within 30 days, which effectively ceded the issue to AT&T’s favor.

While large numbers of Ohio residents continue to drop landline service in favor of cell phones or phone service from the cable company, Ohio’s rural and poor consumers are the least likely to cancel landline service, and face the brunt of the rate hikes, even as they cannot buy (or afford) products like U-verse AT&T said would be possible with statewide deregulation.

Verizon’s silence on data plan pricing for the coveted Apple iPhone is deafening.  In the absence of definitive information, Verizon’s refusal to comment Tuesday about what it plans to charge its data hungry iPhone customers has triggered rampant speculation.

On Monday, the Wall Street Journal reported Verizon was going to keep pricing stable for its unlimited data plans and extend them to iPhone owners, if only to further tweak AT&T’s stingy data plan allowances and pricing:

Verizon Wireless, the country’s largest wireless carrier, is confident enough in its network that it will offer unlimited data-use plans when it starts selling the iPhone around the end of this month, a person familiar with the matter said. Such plans would provide a key means of distinguishing its service from rival AT&T Inc., which limits how much Internet data such as videos and photos its customers may use each month.

But that was before Verizon officials conspicuously avoided answering direct questions about data plan pricing at Tuesday’s press event.  Verizon’s FAQ for those interested in the iPhone doesn’t help (underlining ours):

Are there minimum service and data pricing requirements?

Yes, iPhone customers will need to choose from any of the current Nationwide plans. Customers will also be required to activate a data package, pricing will be announced at a later date.

ComputerWorld seemed to deliver the highest predicted inflation rate of Verizon’s data pricing — guestimating it will cost iPhone owners up to $120 a month for unlimited wireless data:

“Data plans for Verizon iPhone could range from $20 to $90 a month or even $120 unlimited a month,” Rob Enderle, an analyst at Enderle Group told the publication. “The iPhone uses an awful lot of data, so they will have to charge heavily for data and it will be fairly expensive.”

If Verizon wanted to find some way to kill Apple iPhone addicts’ enthusiasm for the phone on Verizon, charging a potential $330 a month for a single line plan is probably the way to do it.

Verizon Wireless has seen some success getting their off-contract customers who have stubbornly refused to upgrade their phones to jump on board the smartphone craze… by lowering their prices.

The entry fee for smartphones on most carriers includes the up front cost of the device (often $199 for the most coveted phones) and a $30 monthly mandatory data plan.  That’s a price too high for many consumers to pay in this economy, and the result has been an increase in the number of customers letting their two-year contracts expire.

AT&T has tried to reduce the bite with a paltry $15 monthly plan that only includes 200MB of usage per month, which is nearly pointless for smartphone users who want to really use the multimedia features the phones were designed to provide. Verizon responded with a holiday season promotional offer charging $15 a month for an even lower 150MB per month, with widespread speculation the “limited time only” part of the offer will soon become “available every day.”

But for most smartphone customers who plan to regularly use data-hungry applications, neither “budget plan” will suffice.  That leaves one alternative for Verizon customers — the $29.99 unlimited plan.  Ouch.

To prod price-sensitive customers, Verizon has offered family plan members the option of upgrading their old phones to new smartphones, and has sweetened the deal with a $10 price break.  While technically a credit on the “additional line” charge, some Verizon employees pitch the discount as a reduction in price for the mandatory data plan.  Where $30 a month sounds obscene, $20 a month sounds somewhat better.

The offer has proven sufficiently successful that Verizon has now extended it until Jan. 30 (note just prior to next month’s iPhone introduction) and any customer who has not upgraded their phone in the last 180 days qualifies.  A new, two year contract is required and the offer is good if you want to add a new secondary line.

Unfortunately, the offer does not extend to the primary line.  Verizon would probably see an even larger number of upgrades if the offer extended to every legacy phone on a customer’s account.

The $9.99 credit applies for 24 months.  Over the life of the contract, that is worth $240 in savings per smartphone, which isn’t bad from America’s Cadillac wireless carrier.

AT&T claims every family should have access on the go, which is why they are “introducing” Smartphone data plans for the family.  Only one problem.  There is nothing new about the data plan, which still starts at $15 per month, per line, for up to 200MB of usage.

AT&T changed the plan’s name, but left the same high price in place.  An Internet Overcharging scheme is still an Internet Overcharging scheme no matter how a wireless company pitches it.

The plan, which throws in AT&T Wi-Fi, which customers can also already get, “is designed for families that primarily surf the web, send and receive personal email and visit social networking sites,” says AT&T spokeswoman Mari Melguizo.

But a real data plan for families would let every user on the account share from one data plan, billed once on the account, not per phone.  That’s not on offer from AT&T, although analysts predict the next wave of smartphone upgrades will come only when data pricing comes down, especially on accounts with multiple phones.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/ATT Family Smartphone Data Plan Ad.flv[/flv]

AT&T’s new ad for the same old, overpriced product.  (1 minute)