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AT&T Tells Some Unlimited Data Customers ‘Netflix and Pandora Use’ Require Tethering Plan

Phillip Dampier April 12, 2011 AT&T, Data Caps, Wireless Broadband 10 Comments

In what one website is calling a data witch hunt, AT&T is reaching out and touching some unlimited data plan customers the company suspects of “tethering” — the practice of sharing your smartphone data plan with other devices such as a laptop, iPad, or even home computer.

Just a short time ago, Stop the Cap! reported AT&T was tracking down “heavy users” that were using over 10GB of wireless usage per month.  But now it appears AT&T is starting to contact customers using less — as little as 5GB, warning them they must sign up for a tethering plan if they intend on tethering their phones.  Only many getting the warnings are not tethering at all.  Modmyi, which has an active forum discussing the subject, reports their latest findings:

The first round appeared to be users on AT&T unlimited data plans that used more than 10GB of data in March. The latest round appears to be similar users using more than 5GB in March. It appears AT&T is on a data witch hunt. We’ve seen the message sent to users who simply use a lot of bandwidth (and never even tether/jailbreak) as well as users that use unauthorized tethering.

What’s most shocking is that many users have reported calling AT&T and were asked if they were using Netflix, Pandora, etc. Some have been told that using those services is the definition of tethering. We’re not sure if this is coming down from the AT&T top, or if this is simply non-technical AT&T customer service reps that are confused about what tethering is. However, based on the number of user reports, and the chances that users are very likely reaching different reps, this seems like deliberate AT&T rep training. Seemingly unethically, many customers are being convinced to pay for a tethering plan when they’re in fact not tethering at all.

AT&T has sought to monetize data usage across all of their networks, first imposing a 2GB usage cap on their wireless customers and now plans a 150-250GB cap on their wired broadband services.

AT&T’s Plans to Auto-Enroll Modified Phones in Data Tethering Plan Under Fire

Phillip Dampier March 24, 2011 AT&T, Data Caps, Wireless Broadband 7 Comments

AT&T customers using modified phones to share their 3G wireless connection with other devices are complaining about the company’s warning that if they don’t cease tethering their phones, they will be automatically enrolled in the company’s premium $45 a month DataPro for Smartphone Tethering plan next week.

An attorney tells Stop the Cap! if the company does that, his firm will consider filing a class action lawsuit against the company for forcing customers into service plans they did not enroll in themselves.

This controversy comes to those who have been using “jailbroken” phones, modified to restore features blocked at the factory by North American cell phone carriers.  Among the most coveted restored features is turning your phone into a mini Wi-Fi hotspot or allowing the phone to connect directly to other equipment, sharing your 3G connection with other devices, such as a laptop, iPad, or iPod.  While many phones include this capability, most carriers in the United States and Canada disable it for those not enrolled in an extra cost add-on plan covering “tethering.”  AT&T offers two such plans — $45 a month for 4GB of usage, or $25 a month for 2GB.

For several years, some AT&T customers have used tethering as a convenient way to bring connectivity to devices out of reach from Wi-Fi or a home broadband connection.

Jonathan in San Francisco shares with Stop the Cap! he is grandfathered in on an unlimited use data plan from around the time the first smartphones entered the marketplace.

“AT&T even sold me the tethering equipment at the same time they sold me the data plan, which they promised was unlimited,” Jonathan says.  “I don’t buy their subsidized phones — I buy my own unlocked phones at full retail price every few years, and AT&T has allowed me to keep my plan the way it is.”

Until he received a notification message from AT&T claiming his account “may need updating.”

AT&T says customers tethering their phones must pay for both a data plan -and- a tethering plan if they want to use the feature, a condition not part of Jonathan’s plan.

“My plan with AT&T says nothing about an extra tethering plan; it says I have unlimited data — something I do not abuse,” Jonathan says.

He is particularly upset that if he uses his phone as he always has, AT&T will slap a $45 additional monthly fee on his phone bill.

“Even worse, when I called AT&T to complain, they told me my plan is so old, they would automatically ‘upgrade’ my service plan to one that costs more and delivers less, effective Monday,” he tells us.

It turns out some customers on legacy plans cannot easily add the tethering option without abandoning the plans they have carefully held onto for years.

“The lady I spoke with said their computer billing system cannot add the feature to my account because it is so old,” he said.

Janie, one of our readers in Seattle, noticed AT&T “‘graciously’ wants to auto-enroll you in their most expensive tethering plan, not the cheaper $25 one.”

“My cousin is lucky enough to still have their $30 a month plan which provided 5GB a month, but they discontinued it for new customers so they could raise prices,” Janie writes.

Janie is upset because it was an AT&T reseller that charged her $30 extra to enable the feature AT&T now wants her to pay even more to use.

“I have no idea what ‘jailbreaking’ is, or that I was doing anything wrong — I bought the phone from an AT&T authorized retailer and had no idea there was even a problem until I called and they lectured me about ‘stealing’ service,” Janie says.  “The company disgusts me and I have never been accused by anyone of stealing, so I am canceling with them when my contract is up.”

Janie is not the only customer to have had her phone modified by someone representing the company.

We found another customer who paid an employee at an official AT&T store to modify his phone.  The employee told him if he keeps monthly usage under 10GB per month, no red flags would be raised, a statement that some might consider a red flag itself.

Just how AT&T tracks down its tethering customer-underground remains a mystery, but some have speculated usage may have been the major contributing factor.  Not everyone who quietly tethers their AT&T phone has gotten the notification message, while many of those using tethered phones as their only Internet connection have.

“If you are using your tethered AT&T phone on a laptop and running up 25GB of usage, AT&T will notice if they look,” an employee tells us privately.  “AT&T can run an audit on data usage and discover considerable amounts of money being left on the table by customers not enrolled in the appropriate plan.”

One lawyer that has targeted AT&T in the past said his firm is carefully watching to see if AT&T follows through on its auto-enrollment threat.

“We’ve found judges and government officials take a very dim view on automatically enrolling customers in anything that costs money without their direct, informed consent,” the attorney who is not authorized to speak publicly on behalf of his firm tells us.  “We are obviously taking a close look at this.”

AT&T’s e-mail notification text is below the jump.

… Continue Reading

iPhone 4 Pre-Orders for Existing Verizon Customers Begin As AT&T Retention Goes All Out

The date has arrived.  Existing Verizon Wireless customers are now invited to “pre-order” The Precious.

Strangely, Verizon’s website gave more prominence to the phone before they could actually accept orders for it:

Verizon Website 2/2/2011

Verizon Website 2/3/2011

Verizon wants you to think of its Apple iPhone as a fine wine, offering “exclusive” access to “our reserved quantity, while they last.”

When they’re gone, they’re… will be more on the way.  The Keebler Elves at Apple will certainly make more, plenty more, to sustain pent up demand for the phone on Verizon’s network.

AT&T is doing all it can to keep customers from switching.  In addition to earlier efforts to lock customers into those two-year contracts with early termination fees, lots of AT&T customers are also getting e-mail from the company reminding them AT&T is the only network that lets you talk and surf the web at the same time (with your iPhone).  They ignore T-Mobile, which also accepts unlocked iPhones and works the same way.  AT&T and T-Mobile utilize GSM technology while Verizon (and Sprint… and Cricket… and MetroPCS) use CDMA.  The latter technology, at least in its current implementation, allows users do one or the other, not both.

That probably won’t keep too many disenchanted AT&T customers from leaving, but some other factors might:

  1. Apple will release the iPhone 5 in less than six months, if things run according to schedule.  The new phone might work on Verizon’s new LTE network, something iPhone 4 does not.  Is there a hurry to upgrade now when something better is around the corner?
  2. AT&T Retention Agents are giving away the store to customers warning of their intention to depart.  Restoration of unlimited data plans, free upgraded phones to qualified customers, free accessories, and even credit for a month of service have all been offered, even as the company publicly announces it is pulling back from some of those giveaways and specials.
  3. As potentially millions of AT&T customers leave, those remaining may find improved performance from the lighter load on AT&T’s network.  Plus, the impact of the iPhone on Verizon’s 3G network remains unknown.  AT&T customers could parade themselves into new headaches on Verizon’s network.

Verizon will allow new iPhone customers access to its “unlimited data” add-on plan “for a limited time.”  Verizon plans to join AT&T in officially ending the unlimited option sometime this year, but exact pricing and plan details remain unavailable.

Customers can begin booking their departure from AT&T Feb. 9, when Verizon begins taking orders from new customers and those intending to drop their current carrier.

AT&T Allows Long-Standing Smartphone Customers to Switch Back to Unlimited Data Plans

Phillip Dampier January 26, 2011 AT&T, Competition, Consumer News, Data Caps, Wireless Broadband 2 Comments

The Associated Press reports, and Stop the Cap! can confirm AT&T is allowing some of their long-standing customers to switch back to unlimited data plans, even if they gave them up after the company introduced cheaper, limited data plan options.

After our regular reader “PreventCAPS” sent word AT&T was relenting on some requests for unlimited data plans, we spent some time late this afternoon with Jim Scott, an AT&T customer from New Rochelle, N.Y. as he navigated his way through AT&T customer service trying to get back to an unlimited data plan.

“When AT&T offered customers new, cheaper data plans, I never knew those replaced the unlimited option and I thought I could save some money downgrading to a cheaper data option,” Scott told us.

But Scott discovered the plan allowances he got didn’t save him money at all, because he exceeded them.

“I am a contractor and I spend all day on my phone moving large image files and even video of work being done on the properties I manage,” Scott says.  “Two gigabytes didn’t cut it.”

Scott tried to switch back to his unlimited plan this summer, but was told he could not, as it was no longer offered.

Enter Verizon Wireless, which is keeping its unlimited service plan at least temporarily as it introduces the Verizon iPhone.  Verizon’s imminent iPhone has become leverage for customers who want to turn the tables on AT&T.

“Thanks to AT&T’s greed, I had already made the decision to dump them for Verizon when my contract ends in February,” Scott says. “AT&T works fine in this part of New York, and the only reason I am leaving is because they don’t have a wireless data plan that met my needs.”

We worked with Scott and suggested he threaten to cancel his AT&T service and walk his future business to Verizon Wireless.  We asked him to make sure to tell AT&T the reason he was planning to cancel his service was because of the end of unlimited data option.

On a three-way call with AT&T customer service, AT&T promptly offered to restore Scott’s access to its discontinued unlimited data plan.

“All I had to say was ‘Verizon’ and ‘iPhone’ and the customer service representative immediately starting clacking away on her keyboard, and I had my unlimited data plan restored in less than five minutes,” Scott said.

The AP reports the key to success is having been a previous subscriber to AT&T’s unlimited data option.  New customers who signed up after June 2010 never had that option, and AT&T has refused to offer unlimited data to these customers.

Because newer customers are under relatively new contracts, actually following through on a threat to drop AT&T is an expensive proposition with early termination fees still well into the hundreds of dollars.  For those closer to a penalty-free exit, AT&T recognizes many of these customers already have one foot out the door.

Jose Argumedo, of Brentwood, N.Y., told the AP he and a friend were switched to an unlimited plan recently after they called AT&T’s customer service. Both have iPhone 4s, and previously had earlier iPhone models.

AT&T spokesman Mark Siegel wouldn’t confirm the option to return to an unlimited plan.

“We handle customers and their situations individually, and we’re not going to discuss specifics,” he said.

Scott says he is comfortable with his iPhone, but getting back an unlimited data plan was more important than the handset.

“If I can use the iPhone as leverage against these guys, why not?” Scott says.  “They’ve had me under their thumb for more than six months now with overlimit fees — now the table is turned.”

Stop the Cap! advises customers who want to follow in Scott’s footsteps get organized before calling:

  1. Be sure to note the number of years you have been an AT&T customer;
  2. Explain you used to have unlimited data and now want that plan back;
  3. Tell them you are prepared to drop AT&T, even at the risk of a cancellation fee, if they don’t restore your access to the unlimited data plan.

If a representative is unable to make the switch, or doesn’t have information about how to switch you back, ask for a supervisor or hang up and call back.

Sprint Hiking Unlimited Smartphone Data Plans $10 Later This Month

Phillip Dampier January 18, 2011 Competition, Consumer News, Data Caps, Sprint, Video, Wireless Broadband Comments Off on Sprint Hiking Unlimited Smartphone Data Plans $10 Later This Month

Unless you own Sprint’s premiere smartphones — the Evo 4G and the Epic, get out your wallet — Sprint is increasing the price on its unlimited data plan by $10, effective later this month.

Evo and Epic owners already pay the $10 “premium data” fee that will be extended to all smartphone customers Jan. 30 (customers on existing contracts will not be affected).

The reason for the price increase?  Heavy usage on its wireless network, which partly includes Virgin Mobile (ending its unlimited service Feb. 14) and Clearwire, which heavily throttles speeds of customers deemed to be “using too much.”

Chief executive Dan Hesse says Sprint will retain its unlimited service plans, which the company calls the best value in the wireless industry.  But the pricing change will present minor challenges as Sprint markets themselves as the least costly.

Sprint's marketing focuses on its unlimited use offers, some of which are about to get more expensive.

Sprint’s “Everything Data” plan, which also includes unlimited cell-to-cell calls will now cost $79.99 per month.  Comparable plans from T-Mobile are priced at $99.99 for that company’s 4G network and $119.98 on Verizon Wireless’ slower, but more ubiquitous 3G network.

“Sprint has been the price leader in the market,” said Jennifer Fritzsche, a Wells Fargo & Co. analyst in Chicago who has an “outperform” rating on the stock. “Sprint may be more confident in the pricing power it has with customers.”

The Wall Street Journal also shares positive views of the price increase from Wall Street:

Wall Street applauded the move, with many seeing it as a sign of pricing power returning to the wireless industry. “It is more likely that Sprint believes that consumers value unlimited and that they can get away with higher pricing,” said Jonathan Chaplin, an analyst at Credit Suisse.

The price hike also suggests that Sprint has seen stronger smartphone growth over the past three months, he added, noting that the carrier likely wouldn’t have made the change if it were still concerned about stabilizing its base on contract customers.

But some other analysts are less impressed with Sprint, especially because of challenges the company faces with its Clearwire partnership.

Patrick Comack from Zachary Investment Research has downgraded Sprint stock, particularly because of technology issues Clearwire faces.

Comack told CNBC Clearwire is stuck with defective spectrum for much of its wireless broadband service.

“It can’t penetrate walls,” Comack said, noting most Clearwire customers are trying to use wireless broadband in the 2GHz range, which presents plenty of problems from obstacles between the tower and the customer.

Comack also believes Sprint’s network simply cannot compete with Verizon Wireless, which he suspects could pick up a number of Sprint customers once it fully activates its 4G network nationwide.

Verizon Wireless network delivers significantly better coverage than Sprint, which focuses on urban and suburban markets, and the major highways that connect them.

[flv]http://www.phillipdampier.com/video/CNBC Sprint 1-12-11.flv[/flv]

CNBC: Debating Sprint and Clearwire, with Todd Rethemeier, Hudson Square Research and Patrick Comack Zachary Investment Research.  (6 minutes)

(Thanks to Stop the Cap! reader PreventCAPS for sharing the news.)

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