AT&T’s days of unlimited wireless data plans for smartphone customers officially end June 7th when the company launches new wireless data plans that all come with usage caps attached:

• DataPlus $15 a month and limited to 200 megabytes  of data.  If you exceed it, your overlimit penalty is $15, good for an additional 200 megabytes.
• DataPro $25 a month gets you just 2 gigabytes of data.  The overlimit penalty for those exceeding it is $10 which buys an additional 1 gigabyte of usage.

AT&T Smartphone customers will also be able to add tethering under the $25 DataPro plan for an extra $20 per month, with DataPro’s usage allowance applied.

Current AT&T customers can remain on their current unlimited Smartphone data plan indefinitely, even if they change or upgrade phones according to AT&T spokesman Mark Siegel.  That concession probably helps AT&T preserve anticipated demand for next week’s new iPhone launch.  Without it, customer demand could be tempered by the realization a phone upgrade could cost you your $29.99 unlimited usage plan.  If you were considering getting an AT&T phone with unlimited data, you have until June 6th to sign up for service under that plan.  After that date, you’re out of luck indefinitely.

AT&T is promoting the end of unlimited wireless broadband as a benefit to customers, claiming that 98 percent of its Smartphone customers use on average less than 2GB of data per month.  But that represents today’s usage.  AT&T’s decision to eliminate an unlimited option they claim 98 percent of their customers never exceeded would be curious without understanding the next generation of Smartphones will provide dramatic improvements in high bandwidth video streaming that will dramatically start eating into those low usage allowances.  The company’s next generation of faster wireless broadband will also include low limit plans, which makes them untenable as a home broadband replacement for all but the most casual users.

For new iPad customers, the $25 per month 2 GB plan will replace the existing $29.99 unlimited plan. iPad customers will continue to pre-pay for their wireless data plan and no contract is required. Existing iPad customers who have the $29.99 per month unlimited plan can keep that plan or switch to the new $25 per month plan with 2 GB of data.

AT&T offers up the common practice of boasting about how much you can do with a usage-limited account, based on the thousands of e-mails you'll never send, the 500 pictures you'll never take, or the 20 - one minute YouTube clips you'll never watch. Notice they never seem to include figures for streaming multimedia applications like music, movies, and TV shows or playing more bandwidth-intensive games. To do so would only upset customers further.

AT&T says customers can continue to use unlimited amounts of data when they access it over the company’s Wi-Fi network hotspots.

Wall Street is happy with AT&T’s elimination of unlimited plans, sensing higher profits and reduced costs will follow.

“The new plans appear well designed to reduce undue network stresses,” Craig Moffett, an analyst at Sanford C. Bernstein told The Wall Street Journal.

Analyst Philip Cusick at Macquarie Securities also told the Journal AT&T may see lower growth in data revenue in the short term as a result of the new changes, but will gain leverage over the heaviest data users, improving its ability to manage its network and charge for capacity. Tiered plans may also pull more customers into data plans, he said.

But because current customers can choose to remain on the grandfathered unlimited plan, existing heavy data users accused of chewing up AT&T’s wireless network can continue to do so as long as they remain customers.  AT&T will only be capping future customers who sign up on or after June 7th.

For those outraged by AT&T’s decision, fleeing to Verizon Wireless for unlimited data may not be an option for too much longer either.

Verizon Wireless Chief Executive Lowell McAdam indicated in an interview with the Journal last month that he, too, is looking at pricing based on use.

“The old model of one price plan per device is going to fall away,” McAdam told the newspaper, adding that he expects carriers to take an approach that targets a “bucket of megabytes.”

One company that doesn’t plan to end an all-you-can-eat wireless data buffet is Sprint, which now sees its unlimited data plan as a potential marketing asset.

A Sprint spokesperson spoke the words you were already thinking:

“We’re giving customers a better value. With data usage growing, customers don’t want to worry about going over their limits.”

Some customers upset that AT&T only sold an unlimited plan welcomed the lower cost options because they didn’t spend a lot of time using the data features of their phones, but several wondered why the company didn’t simply introduce lower cost options -and- leave the unlimited plan in place for those who wanted it.

Overall, AT&T is getting an earful from angry customers over the announcement — even those who don’t exceed 2GB per month.  They sense greed and overcharging.   A sampling:

If 3% are using data “a lot” now, then in another two years, it’ll be 15% and then 60%. Simply put, this is gouging customers, where pricing is decided by dudes in a board room looking at charts and graphs and sales numbers, figuring out how to gouge people for maximum profit.

Obviously AT&T is killing the unlimited plan to cut down on usage and to raise their profits. I also believe it is heavy handed to eliminate the unlimited access plan. If anything, offer other plans and raise the price of the unlimited plan. It will be interesting to see of the other players follow suit and also kill their unlimited plans (can you say “price fixing”? Sure you can!).

AT&T is always full of good ideas, like that Microcell thing. Hey, we can’t give you good service you paid for, so we are going to ask you for more money for this piece of equipment to supplement the service you are not getting.

Just another greedy ploy to make more money. They are selling air. The charges are ridiculous and this is one industry that should be under government control.

My spouse and I pay half of what AT&T would charge us for excellent Palm smartphones on Sprint. We also get turn-by-turn GPS included–something AT&T AND Verizon both charge extra for. Sprint’s network is top-notch. I can’t fathom why people continue to waste money on Verizon and AT&T.

If you’ve got a smartphone or you tether your computer, you really have no idea how much bandwidth your device is consuming. Even worse (or better if you are the phone company) customers can’t control the bandwidth that their devices consume. How often does your email client check for new messages? Can you even stop your computer from downloading a security update? What about that last application you installed, can you stop it from calling home every time you launch it? Do you even know that it does track and report your usage? That’s a huge difference between phone services and data services. You KNOW when you’ve dialed a number and talked for 10 minutes. You can’t control all the data consuming applications and services on your devices… and trying to bill customers for something that they can’t control the usage or cost must be illegal. Surely someone will address this problem soon. Surely.

[flv width=”576″ height=”344″]http://www.phillipdampier.com/video/CNN ATT Goodbye to unlimited data 6-2-10.flv[/flv]

CNN Money reports on AT&T saying goodbye to unlimited data plans for iPhones and iPads.  (1 minute)

AT&T wants to sell its iPhone customers an overpriced insurance plan to cover damaged or lost phones.

Offered by mobile phone insurer Asurion, AT&T’s MobileProtect policy will be priced at $13.99 per month, with a steep deductible — $99 for an 8GB iPhone 3G to $199 for a 32GB iPhone 3GS.  If you lose or damage your phone, Asurion will repair or replace it with a refurbished equivalent or better iPhone model (their choice).

At those prices, iPhone insurance (and collectively most cell phone insurance plans) do not represent a good deal for consumers for several reasons:

1. The upfront cost is very high in relation to the value of the phone.  Over a typical two-year AT&T contract, Asurion will collect $335.76 to insure a $700 phone;
2. Asurion’s very high deductible reduces the company’s payout exposure by up to $200.  Assuming you break your phone in the last month of a two year contract, Asurion will have $535 of your money to work with, making their cost to replace the phone just $164.
3. Asurion does not guarantee customers will get a brand new iPhone.  Replacing a lost or broken iPhone with a refurbished model can significantly reduce Asurion’s costs and leave you with a questionable replacement;
4. The deal does not extend to current iPhone owners who have older phones that statistically would likely generate a higher percentage of claims.  In fact, customers will have to purchase coverage within 30 days of purchasing a brand new iPhone, giving Asurion the likelihood mechanical problems will be handled by Apple’s traditional warranty, reducing the insurer’s exposure to expensive claims.

There are a number of alternatives.  First, protect your phone with a suitable case or cover — scratches and impact damage are among the most common issues afflicting iPhones.  A few may afford some protection from water damage if the phone gets slightly wet, although a dunk in a pool or deep puddle is probably going to present a challenge for any case or covering.

Second, consider alternative insurance from companies like Squaretrade.  The company’s iPhone insurance costs $8 per month for 24 months, or $96 paid in full for an iPhone 3G. For a 32GB iPhone 3GS, it’s $9.99 per month, or $144 for 24 months of coverage.  Accidental damage claims have a $50 deductible.  But Squaretrade can cost even less when you take advantage of regular discount codes that provide up to 40 percent off.  Just do a Google search for Squaretrade coupons and discount codes, especially around holidays.  You have up to 90 days after purchasing your iPhone to buy Squaretrade coverage.

Squaretrade does not cover loss or theft, however.  You should check with your insurance agent for a personal property policy.  Most offer coverage for personal cell phone loss or theft for under $40 per year.  Many are sold as standalone policies that do not carry a traditional deductible commonly found on homeowner’s policies.  Better yet, making a claim under many of these types of policies generally will not impact your homeowner’s insurance policy, an important consideration when your claims history can impact your renewal rate.  Ask your insurance agent for details about what their cell phone insurance policies cover and what impact any claims might have on your other policies with the company (and their renewal rates.)  Many insurers will sell these policies on a standalone basis to customers who do no other business with the insurer, so shop around.

If your iPhone goes missing, virtually all insurers require a police report and most will either mail you a brand new iPhone or reimburse you for the purchase of an identical new phone you buy yourself at the non-subsidized price.

If none of these ideas appeal to you, consider establishing a savings account and deposit $14 a month into it, specifically to cover a portion of your costs to replace your iPhone if it is damaged or lost.  Although it won’t cover the full cost of the replacement, that $14 a month will always be your money.  If nothing goes wrong and you keep your phone in good condition over 24 months, that $335+ in accumulated savings is yours to keep.  That’s a better deal than giving it to Asurion.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/KTVI St Louis Cell Phone In Water 5-26-10.flv[/flv]

KTVI in St. Louis ran this silly segment about what you can do if your cell phone takes an involuntary dip in the pool.  (3 minutes)

The CTIA is the wireless industry's lobbying group

While the phone and cable companies attempt to fight off broadband reclassification at the FCC, the wireless industry has been pulling its own weight in an effort to convince legislators everything is wonderful in wireless, and no consumer protection regulations are necessary.

The CTIA, the wireless lobbying group, has been blogging on overdrive lately, trying to sell the idea Americans are already soaking in broadband options and competition that keeps prices low and innovation high.  Why regulate an industry that isn’t broken?

If only it were true.

While Americans in larger communities do have choices for broadband, for most it’s a matter of picking the phone or cable company for service.  That’s called a duopoly.  In the wireless marketplace, it’s hardly much better.  The nation’s largest wireless phone companies, AT&T and Verizon, have essentially colluded with near-identical pricing and service plan requirements that demand customers add mandatory “options” like data plan add-ons that raise wireless bills higher than ever.

The smaller providers eke out an existence mildly competing over pricing, but with their inherent coverage limitations or history of providing poor customer service, many consumers won’t consider doing business with them.  Relying on most wireless providers for broadband threatens the kind of huge bills you see on TV news reports, as carriers limit consumption to 5GB per month, and most charge enormous overlimit fees to customers exceeding the limit.

The Federal Communications Commission recently found one in every six Americans suffer “bill shock” syndrome — that all-too-familiar panicky feeling when you open a cell phone bill and discover an extra zero on the end of the dollar amount due.  More than a third of people who experienced bill shock said their bills jumped by at least $50 — around 23 percent said the increase was $100 or more.

Settles

That amounts to more than 30 million Americans, but the CTIA’s “see no evil, hear no evil” blog carries on claiming life is good for wireless consumers.  Besides, writes Steve Largent, president of the CTIA, consumers who took their complaints to the Better Business Bureau had them resolved 97.4 percent of the time.

Of course, that begs the question why consumers had to approach the BBB about their poor service experience in the first place.

I’m not the only one asking questions.  Craig Settles, an industry analyst, co-administrator of Communities United for Broadband and author of the report “Fighting the Next Good Fight: Bringing True Broadband to Your Community,” is also pondering the industry campaign to block broadband reform.

Settles penned a piece in today’s Roll Call exposing the fallacies from the industry’s PR machine:

The state of broadband — for consumers, businesses and nonprofits — isn’t the rosy picture the industry powerhouses attempt to paint. Ignoring this reality can lead to bad policy decisions and bad legislation.

[…]

Most states may technically have 60 to 80 Internet access providers. However, in practically every state, the combined statewide market share of all but the top five or six providers might total 5 percent, if you’re lucky. In at least half of the states, data show the combined market share of the top two providers ranges from 70 percent up to 95 percent. That represents near or actual duopolies, most often with one wireless and one cable provider as the undynamic duo.

Life at the local level, which is where your true subscriber options exist, further challenges the industry’s claim that people have choices. If you count “having choices” as living in an area where several companies advertise broadband service, or consider dial-up speed as broadband, OK.

But go door to door in rural counties and small towns. The reality you often find is one major carrier providing fair to poor service to some and no service to the rest, plus some small local providers with 2 percent or 3 percent market share struggling to provide decent service in the face of endless efforts to smite them from the planet. If you’re in one of the few states with four or five providers that each have statewide market share of 8 percent to 15 percent, it’s likely each provider is concentrated in a portion of the state, creating a local reality that’s worse than state statistics.

Settles notes that claims of “billions invested” only invites more questions about what carriers are doing with all that money.  Settles questions whether its wise to brag about spending $20 billion on infrastructure costs when municipal broadband projects in states like North Carolina, with IT staffs of fewer than 12, have built superior networks delivering 10 times the speed of its competitors.

The CTIA loves to tout the innovation wireless providers bring to customers, but in many cases they are claiming credit (and often getting a cut in the action) for someone else’s innovation, especially from the third-party apps market.

Too often the real innovations in wireless broadband have often come in spite of carriers that have sought to block, control, or “manage” someone else’s vision.

[flv]http://www.phillipdampier.com/video/Freedom CTIA Ad Spot 5-2010.flv[/flv]

Watch as the CTIA wireless lobby tries to sell Americans on wireless innovation, much of which didn’t come from wireless companies at all.  (1 minute)

[flv]http://www.phillipdampier.com/video/Heath Shuler Campaign Ad.flv[/flv]

Congress doesn’t seem to know right from wrong, but we do.

It’s not right when big insurance companies write health care laws when millions can’t afford to see a doctor.

It’s not right when big oil companies write energy laws as gas prices skyrocket.

It’s not right when Congress passes trade bills that send our jobs overseas.

Congress won’t change until we change the people we’re sending to Washington.

–Rep. Heath Shuler’s 2006 campaign commercial

That was less than four years ago.  Apparently these days Rep. Heath Shuler (D-North Carolina) believes it -is- right for large telecommunications companies to censor online content, slow down Internet services they don’t want you to use, and allow the phone and cable industry to control broadband policies in this country.

Shuler’s abandonment of his mountain values was made easier with $23,000 in campaign contributions from a grateful industry.

Shuler

When those telecom checks cleared the bank, Shuler went to work for big telecom companies, becoming a leading opponent of consumer-friendly Net Neutrality.

For his supporters who once had high hopes for the Democratic congressman first elected in 2006, it’s been one disappointment after another.

Last fall, Shuler was a co-signer of a letter to FCC chairman Julius Genachowski opposing Net Neutrality.  To reiterate the point, many of the same co-signers of last fall’s letter were back on board with a second letter sent last month.

The latest letter was a godsend to AT&T, Verizon, Comcast, and other Net Neutrality opponents who are using it to suggest there is considerable bipartisan opposition to broadband reform.

Many of his constituents are not impressed with Shuler’s legislative record these days.  One of them is Dave Houck:

I have long since had it with Mr. Shuler.  I admit it, I have no more patience for him.

[…]

I campaigned for you, and phone banked for you, and made cash contributions.  Today I find out that you are against net neutrality, that you signed a letter to the FCC Chairman supporting AT&T and other large corporations — choosing corporations over the people.

In 2010 I will be voting for anybody who runs against you, Democrat or Republican, as you have consistently demonstrated in the three years you have been in Congress that you are quite simply not up to the job of representing the people of Western North Carolina.  You and the “Blue Dog Coalition” are surrogates for corporate interests; you do not have the interests of the people of North Carolina at heart.  Or at least that’s the message you are sending to me.

I’m just fed up.

North Carolina's 11th District is currently served by Rep. Heath Shuler

Similar sentiments from upset residents in his district are voiced all over Shuler’s Facebook page.  Why not add yours?

Then give his office a call or drop him an e-mail.

Ask Rep. Shuler how standing with big phone and cable companies against consumer broadband protection could ever represent western North Carolina mountain values.

Tell him trusting AT&T, Verizon, Comcast, and Time Warner Cable with our broadband future is like trusting BP to protect the Gulf Coast.

Let him know you were disappointed with his decision to sign the first letter opposing Net Neutrality last fall, but now you are simply appalled he’s done it again.

It’s not right when big phone and cable companies have the power to write their own legislation and stop pro-consumer protections like Net Neutrality.  Where is the Rep. Shuler who campaigned on doing the right thing in 2006?

If Shuler won’t change his mind on an issue as important as this, perhaps we need to take his own advice and change the person the 11th district sends to Congress.

Jim Kraft (D-District 1)

A proposal to add a monthly $4 fee to every Baltimore cable subscriber’s bill to raise money for the fiscally-challenged city has been withdrawn after the city solicitor’s office warned the legislation would violate federal law.

City councilman Jim Kraft (D-District 1) proposed the city extend the existing telecommunications tax levied on telephone lines to cable television service in a bid to raise up to $5 million dollars annually towards the $50 million required to restore funding for curtailed fire, police, and recreational facilities.

Kraft’s proposal was an alternative to a controversial four cent bottle tax on beverages that could have driven some shoppers out of the city for cheaper untaxed alternatives available in the suburbs.

Kraft called his cable TV tax proposal “a fair tax.”

“Employed or unemployed, property taxpayer or exempt from property tax — this fee is borne by all,” he wrote in a mailing to constituents.

But the proposed tax ran into the Internet Tax Freedom Act, currently extended until 2014, which bans any taxation on broadband service, a major component of today’s cable systems.  The city’s lawyers also warned Baltimore could not tax home satellite service either: “Congress has specifically exempted providers of direct-to-home satellite service from collection or remittance of any tax or fee imposed by a local taxing jurisdiction.”

America’s cities continue to face unprecedented budget challenges in light of the distressed economy.  Some cities are slashing services, others are raising taxes and fees to make up the difference.  Baltimore in in the latter category with wide-ranging proposals to up fees and taxes for everything from the hotel room tax rate, outdoor billboard advertising, and energy to new higher fines for parking and civil violations.

The bottle tax bill is likely back on the agenda as well.

[flv]http://www.phillipdampier.com/video/WJZ Baltimore New Taxes 5-2010.flv[/flv]

WJZ-TV in Baltimore delivered this rundown on the city’s large number of tax and fee hikes to close a $50 million shortfall.  (3 minutes)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WBAL Baltimore Cable TV Tax Proposal Pulled 5-28-10.flv[/flv]

WBAL-TV ran this report over the demise of the telecommunications tax for cable television.  (2 minutes)