Verizon prepaid customers can buy this basic phone from Walmart for just $15.88. But if you want to use this phone on a postpaid plan, Verizon charges up to $200 for the same phone unless you renew your contract.

As AT&T and Verizon discover an increasing amount of their revenue and profits come from their respective wireless divisions, they’re testing the waters to determine just how much more consumers are willing to pay for cell phone and wireless broadband services.

Verizon Wireless has spent the past year closing loopholes of various kinds and herding an increasing number of customers into mandatory data plans which can add up to $30 a month per phone to your monthly bill.  AT&T wants more if you plan on early upgrades for your cell phone.  A quick review:

Verizon Wireless Locks Down Prepaid Phone Models: Anyone who has shopped for a prepaid phone has probably noticed them dangling from hooks in Walmart and other stores at prices starting around $20.  Most of these prepaid phones are basic models or those deemed cutting edge a few years ago.  Take the LG 5600 — the Accolade.  It’s a phone your father would be comfortable with, covering the basics and designed primarily for making and receiving phone calls.  Verizon Wireless’ retail price for its “postpaid” customers (those who get and pay a bill every month) is $199.99 for the Accolade.  Of course, if you sign a new two-year contract, the phone is free.  But you can find the exact same phone, labeled for Verizon’s prepaid service at prices as low as $15.88.

Verizon claims the deep, deep discounts on prepaid phones are made back from the higher prices prepaid customers pay for airtime.  Some enterprising Verizon postpaid customers have sought these models out to replace or upgrade a worn out or broken phone without having to sign a new two-year contract.  Some other prepaid companies have also activated Verizon’s prepaid phones on their own network, including Page Plus.

Verizon has put the kibosh on both practices.  Customers seeking to activate a prepaid phone on a postpaid account must first use the phone in prepaid mode for a minimum of six months prior to its conversion to postpaid use.  Until very recently, some customers discovered a loophole around this requirement — registering a prepaid phone first on Verizon’s website and then activating it by dialing *228.  So long as a phone had never been activated, it often could be used on a postpaid account from the date of purchase.  But now Verizon tracks which phones are intended for postpaid and prepaid use, and that loophole has been closed.

Page Plus, which resells Verizon’s network, also had to stop activating Verizon prepaid phones almost a year ago.

As a result, those who want discounted cell phone service but keep Verizon’s robust network coverage have been forced to buy handsets at retail pricing, purchase one of several mostly refurbished phones direct from Page Plus, or activate an older phone no longer in use.

Avoiding the Data Plan: What drives an increasing number of Verizon off-contract customers towards “creative solutions” for upgrading their more than two year old phones is resistance to the expensive data plan required for most of their newest and best phones.  For these customers, renewing a contract means a plan change that includes $30 a month extra for data services or a phone downgrade to a basic model to avoid a data plan. Verizon’s remaining data-plan exempt handsets are:

• Verizon Wireless CDM8975
• LG Accolade™
• LG Cosmos™
• Pantech Jest™
• Samsung Gusto™
• Verizon Wireless Salute™
• Verizon Wireless Escapade®
• Samsung Haven™
• Samsung Intensity™
• Samsung Convoy™
• Motorola Barrage™

Would you renew a two-year service contract if you had to downgrade your next new phone to a basic model to avoid a mandatory data plan?

For large families accustomed to mid-level phones, the prospect of being stuck with a Jitterbug-like-downgrade or a $30 data plan has kept many from renewing their contracts, sticking with what they already own.

When AT&T announced the end of its flat rate smartphone plan, it said the lower pricing on smaller allowance data packages would represent “savings” for consumers reluctant to upgrade.  It’s hard to accept the same company that set prices so high for data usage in the first place has consumer interests at heart with usage-limited alternatives, especially when they no longer offer an unlimited option for customers who want one.

Verizon also plans to drop its unlimited plan in the near future.  Also on tap is a gradual shift away from so-called “mid-level” phones that consumers can purchase with a reduced rate, but still-mandatory $10 data plan.  Verizon increasingly will push customers between two stark choices — a high-powered, battery-eating smartphone that will give you a heart attack if you drop it or a very basic, stripped down phone with features commonly found on handsets five years ago.

This kind of pricing is driving some cash-strapped consumers to prepaid alternatives, such as Page Plus and Straight Talk on Verizon’s network and Wal-Mart’s new family prepaid plan on T-Mobile.  This is especially true if customers just want to talk and text.

AT&T’s Increases ‘Early Upgrade Price’ for Data-Friendly Smartphones by $125

Boy Genius Report obtained a copy of an AT&T memo to its sales force notifying them the price for “Early Upgrade Pricing,” traditionally charged customers who must have the latest and greatest, or accidentally lose or destroy their existing phone, is going up — way up, from $75 to $200:

Beginning Oct. 3rd, Early (Exception) Upgrade pricing for Smartphones will increase from the two-year price plus $75 to the two-year price plus $200.  This change does not apply to iPhone or Basic and Quick Messaging Phones.

Example: BlackBerry Torch $199.99 two-year price + $200 Early Upgrade fee = total price $399.99, a savings of $100 off the No-Commitment price of $499.99.

In return for just a $100 discount, customers sign a new two-year contract that begins with the phone’s replacement.  That contract includes the usual early termination fee of $325, which decreases by $10 per month.  AT&T watchers speculate the price change was designed to stop resale of relatively new phones on sites like eBay or Craigslist, where sellers charge near-retail prices and eat the formerly low penalty for an early upgrade.  It also makes the price of getting the very newest phones that much higher.

Courtesy: Boy Genius Report

Cell Phone Lobby Resists Requirement for Early Warnings Alerting Customers Their Data Allowance Is Almost Gone: “It Will Cause Customer Confusion and Frustration”

Liz Szalay had to dip into her 401(k) retirement account to pay the family’s $2000 Verizon Wireless bill, gone wild with data fees her 14-year old son ran up searching for and downloading songs.

“I would never have allowed my son to accrue such charges, if I had known,” Szalay, a secretary in Niles, Michigan, told Bloomberg News. “What I did to prevent this from happening in the future was have his Internet access completely blocked by Verizon, but not before they made off with a boatload of money.”

Had Szalay received a text and/or e-mail message warning her one of the phones on her account was approaching 80 percent of its monthly data allowance, or was already at risk of racking up huge fees, it would have been possible to stop the damage before it began.

Sen. Udall wants legislation to warn consumers before they run up enormous wireless bills. The industry calls such warnings "confusing and frustrating" for consumers.

Senator Tom Udall, a New Mexico Democrat, wants to make sure she gets that warning.  Udall drafted legislation that would require companies to warn customers when they have used 80 percent of their allotment.

“It’s difficult for the carriers to get up and argue against greater transparency on bills and notifications,” Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore told Bloomberg. “It’s becoming an issue on the front burner of regulators’ minds.”

The industry’s lobbyists are trying to block the legislation anyway.

The CTIA, the wireless industry lobbying group, is fiercely trying to kill Udall’s bill, claiming warnings will cause “customer confusion and frustration” and that carriers already offer customers the opportunity to check their usage by visiting carrier websites or via a text message.

The lobbyist solution requires consumers to be vigilant and check daily to make sure they don’t exceed any limits.  Udall’s idea puts the onus on phone companies to warn customers, who often have family members that have no idea what kind of cash bonanza they can provide a wireless provider just by using data features built into their phones.

Szalay’s son has a phone that doesn’t require a data plan, but incurs an enormous $1.99 in charges for every megabyte accessed online.  Verizon’s own website notes customers can consume 183 megabytes of data streaming music just five minutes a day for a month.  That’s $364 in data charges.  Five minutes downloading games — 440 megabytes or $875 in data fees.  One need not use their phone for hours a day to incur enormous fees for data usage.  Szalay’s son could have managed the $2,000 bill he caused using his phone for less than 15 minutes each day.

Verizon does not allow customers hit with these bills to retroactively sign up for a data plan to cover the costs, which are the same to Verizon whether a consumer incurs them on an unlimited $30 monthly data plan, or on a pay per use plan with a stinging penalty rate.

And the company objects to any government official telling them to warn customers before the overlimit fees kick in.

“We have several measures in place that allow our customers to monitor their usage and protect against overages — this is a proactive approach on Verizon’s part,” Verizon’s Smith told Bloomberg in an e-mailed statement.

How to Protect Yourself

Both Verizon and AT&T are masters of extracting a maximum amount of money from customers’ pockets.  Verizon is increasingly risking its high rating for customer service and quality by finding new ways to nickel and dime even long time customers to death.  AT&T already has earned a bad reputation and can’t drop much further unless it adopts Sprint’s old strategy of driving its own customers away.  Only through education and careful consideration of your family’s actual usage can you safely navigate around these shark-like wallet biters.

1.  Avoid cell phone company insurance plans unless you are concerned about theft.  With “early upgrade” plans, even at AT&T’s $200 price, it may not be worth paying an expensive monthly fee for insurance.  Also consider Squaretrade, a third party warranty/replacement provider.  They charge considerably lower prices than most (Google around for coupon codes offering up to 30 percent off).  If your phone breaks or is damaged, and you are not on a contract, you might find a suitable refurbished replacement through websites like eBay.  Just make sure the phone wasn’t designated for prepaid service to avoid activation hassles.

2.  If you want Verizon network quality, but don’t want to pay Verizon’s diamond-platinum pricing, consider doing business with one of the new prepaid providers offering month-to-month service that uses the same network as Verizon itself.  Walmart sells Straight Talk, but also consider Page Plus, which offers 1,200 minutes of call time, 1,200 texts, and 50MB of data use for $29.95 per month.  The only downside is that most prepaid providers don’t sell family plans, meaning each user pays the same price.  Walmart’s new prepaid plan changes that with the introduction of a shared family plan, with additional lines given discounted pricing.  But the discounts are not as good as postpaid plans offer, and the service relies on T-Mobile, which is not well-regarded for coverage outside of metropolitan areas.

3.  Smartphones, in addition to being expensive, often deliver horrible battery life.  Some won’t even make it through an entire business day.  Before seeking out one of these premium phones, consider whether you will actually use their features.  Is it worth the price of a $30 a month data plan if you only occasionally use the phone for wireless Internet?  Bragging rights come with a $200 up front price tag and a two year contract that will run up to $720 just for the data plan over two years.  If you drop it, lose it, or it gets stolen, the retail price for most of these phones is north of $500.

4.  Carriers design “gotcha” data pricing into their assumed revenue models.  They know even with online tools, nobody wants the hassle of checking their allowance for data every day, especially when most stopped checking their voice minutes allowance years ago.  While carriers occasionally waive gigantic bills, especially when the media gets involved, you can restrict data access on some or all of your phones if you do not have a data plan and don’t care about this feature.  You should support Senator Udall’s bill as well.  Carrier excuses that a warning message will cause confusion and frustration are laughable.  Getting a $2,000 wireless bill in the mail will cause far more of both.  That the industry objects to even this common sense approach illustrates just how rapacious wireless companies are for additional profits.

5. Educate everyone on your plan about the implications of using the phone to download music and games or watch video.  Unless you are on a flat rate plan, you may want to simply tell your family not to use their phones for these kinds of services without asking permission first.  This gives you an opportunity to check your allowance before Verizon gets a chance to reduce your bank balance.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Cell Phone Savings 10-12-10.flv[/flv]

We have four reports covering consumer news on cell phones that can save you money:  KSHB-TV in Kansas City takes a look at Walmart’s new prepaid family plan using T-Mobile’s network, WIVB-TV in Buffalo reports Sen. Kirsten Gillibrand (D-N.Y.) wants carriers to stop international roaming charges when customers end up making and receiving calls on a Canadian provider’s network from the American side of the border, WFTS-TV in Tampa provides tips on getting lower rates from your cell phone company and WTEV-TV in Jacksonville helps customers analyze cell phone bills for savings.  (6 minutes)

Verizon hopes to herd its smartphone owners onto limited use data plans on its new LTE high speed network

Verizon this week unveiled a list of 38 major cities where the company’s much-faster LTE wireless broadband service will launch by year’s end.  Dubbed by some as the “list of cities with NFL franchises,” Verizon’s choices delighted some, but puzzled others.

But before the celebrations get out of hand, incoming Verizon CEO Lowell McAdam warned customers need to prepare themselves, and their wallets, for major price changes.

Specifically, the company intends to treat its new 4G network, with top speeds of 5-12Mbps downstream and 2-5Mbps upstream, as a premium product with a premium price.  It comes complete with a classic Internet Overcharging scheme.

“We think there’s a place for unlimited plans,” McAdam announced, “but we think that over time, because we have finite resources, our customers are going to have to shift to a pay-as-you-use model. I would say that clearly over time we will be migrating to a bucket-of-megabytes” price schedule.

Verizon’s finite resources are more infinite than those of its customers, however.

Much like its partner-in-pricing – AT&T, Verizon is preparing to ditch its unlimited data plan for smartphone customers.  Despite the fact its new LTE network will offer a more efficient network experience for both Verizon and its customers, the nation’s largest wireless carrier wants limits on how much data customers can exchange over their new network, with overlimit fees for those who use too much.

Exact pricing has yet to be announced.

Amidst the flurry of excitement over McAdam’s appearance at the San Francisco wireless industry conference, yet more rumors of the forthcoming arrival of a Verizon iPhone also made headlines.  Apple is reportedly releasing a CDMA version of its popular phone soon, and despite the fact there are other CDMA networks in the world, reporters presumed it must be intended for the American market.

After the press conference, the list of cities to get Verizon’s new LTE network became a hot topic for debate.  In western New York, only Rochester made the cut.  For residents in Buffalo, who would like to remind Verizon they have an NFL team, the slight did not go unnoticed.  It made news on the city’s most watched nightly local newscast.

But those of us in Rochester remind our friends in the Queen City they have Verizon FiOS while we are stuck in a broadband backwater with Frontier Communications.  (Besides, the Buffalo Bills training camp is in Rochester.)  The broadband gap between the two cities could have made Rochester a ripe target for Verizon, assuming customers can afford the price of the service plan.

Folks in Austin noted they are not on Verizon’s list either, despite the Texas city’s high-tech-embracing reputation.  Houston, the Dallas-Ft. Worth Metroplex, and San Antonio did make the list.  But fear not Austin, you will be able to use LTE at the Austin-Bergstrom International Airport.

For existing Verizon customers in the chosen places, the imminent arrival of 4G may stall customers from upgrading phones until new LTE-capable models arrive in time for the holidays.  But the Data Grinch That Stole Flat Rate Wireless may still be confounded by the number of customers who let their contracts expire and stick with their existing phones, refusing to expose themselves to mandatory, overpriced data plans.

Verizon Wireless 4G LTE Initial Major Metropolitan Area Deployment

Akron, Ohio
Athens, Georgia
Atlanta, Georgia
Baltimore, Maryland
Boston, Massachusetts
Charlotte, North Carolina
Chicago, Illinois
Cincinnati, Ohio
Cleveland, Ohio
Columbus, Ohio
Dallas-Fort Worth Metroplex, Dallas, Texas
Denver, Colorado
Fort Lauderdale, Florida
Houston, Texas
Jacksonville, Florida
Las Vegas, Nevada
Los Angeles, California
Miami, Florida
Minneapolis/Saint Paul, Minnesota
Nashville, Tennessee
New Orleans, Louisiana
New York, New York
Oakland, California
Oklahoma City, Oklahoma
Orlando, Florida
Philadelphia, Pennsylvania
Phoenix, Arizona
Pittsburgh, Pennsylvania
Rochester, New York
San Antonio, Texas
San Diego, California
San Francisco, California
San Jose, California
Seattle/Tacoma, Washington
St. Louis, Missouri
Tampa, Florida
Washington, D.C.
West Lafayette, Indiana
West Palm Beach, Florida

Verizon Wireless 4G LTE Initial Commercial Airport Deployment (Airport Name, City, State)

Austin-Bergstrom International, Austin, Texas
Baltimore/Washington International Thurgood Marshal, Glen Burnie, Maryland
Bob Hope, Burbank, California
Boeing Field/King County International, Seattle, Washington
Charlotte/Douglas International, Charlotte, North Carolina
Chicago Midway International, Chicago, Illinois
Chicago O’Hare International, Chicago, Illinois
Cincinnati/Northern Kentucky International, Covington, Kentucky
Cleveland-Hopkins International, Cleveland, Ohio
Dallas Love Field, Dallas, Texas
Dallas/Fort Worth International, Fort Worth, Texas
Denver International, Denver, Colorado
Fort Lauderdale/Hollywood International, Fort Lauderdale, Florida
George Bush Intercontinental/Houston, Houston, Texas
Greater Rochester International, Rochester, New York
Hartsfield-Jackson Atlanta International, Atlanta, Georgia
Honolulu International, Honolulu, Hawaii
Jacksonville International, Jacksonville, Florida
John F. Kennedy International, New York, New York
John Wayne Airport-Orange County, Santa Ana, California
Kansas City International, Kansas City, Missouri
La Guardia, New York, New York
Lambert-St. Louis International, St. Louis, Missouri
Laurence G. Hanscom Field, Bedford, Massachusetts
Long Beach/Daugherty Field, Long Beach, California
Los Angeles International, Los Angeles, California
Louis Armstrong New Orleans International, Metairie, Louisiana
McCarran International, Las Vegas, Nevada
Memphis International, Memphis, Tennessee
Metropolitan Oakland International, Oakland, California
Miami International, Miami, Florida
Minneapolis-St. Paul International/Wold-Chamberlain, Minneapolis, Minnesota
Nashville International, Nashville, Tennessee
New Castle, Wilmington, Delaware
Newark Liberty International, Newark, New Jersey
Norman Y. Mineta San Jose International, San Jose, California
North Las Vegas, Las Vegas, Nevada
Orlando International, Orlando, Florida
Orlando Sanford International, Sanford, Florida
Palm Beach International, West Palm Beach, Florida
Philadelphia International, Philadelphia, Pennsylvania
Phoenix Sky Harbor International, Phoenix, Arizona
Phoenix-Mesa Gateway, Mesa, Arizona
Pittsburgh International, Pittsburgh, Pennsylvania
Port Columbus International, Columbus, Ohio
Portland International, Portland, Oregon
Rickenbacker International, Columbus, Ohio
Ronald Reagan Washington National, Arlington, Virginia
Sacramento International, Sacramento, California
Salt Lake City International, Salt Lake City, Utah
San Antonio International, San Antonio, Texas
San Diego International, San Diego, California
San Francisco International, San Francisco, California
Seattle-Tacoma International, Seattle, Washington
St. Augustine, Saint Augustine, Florida
St. Petersburg-Clearwater International, Clearwater, Florida
Tampa International, Tampa, Florida
Teterboro, Teterboro, New Jersey
Trenton Mercer, Trenton, New Jersey
Washington Dulles International, Dulles International Airport, Washington, D.C.
Will Rogers World, Oklahoma City, Oklahoma
William P. Hobby, Houston, Texas

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Verizon Wireless LTE Announced 10-7-10.flv[/flv]

Verizon Wireless’ announced LTE network was a common topic on local newscasts in several cities. We include WIVB-TV in Buffalo, noting that city didn’t make the cut, WCVB-TV in Boston which spent plenty of time on the resurgence of the rumored Verizon iPhone, WLFI-TV in West Lafayette, Indiana which discussed the network’s implications for Purdue University students, and a promotional video from Verizon itself interviewing visitors to a Boston pizzeria gushing over the speed of Verizon’s newest technology. (5 minutes)

It’s alive.

After a day or so of stumbling, Sprint-owned Virgin Mobile’s prepaid, unlimited Broadband2Go service went live early this morning, and Stop the Cap! gave it a try and has some tips to share to save you time and money.

More importantly, a “hidden soft usage cap” of 400GB a month, visible early this morning, disappeared by this afternoon after we made inquiries about whether “400GB” actually meant “unlimited.”  More on that below.

Buying Advice

Virgin Mobile keeps it simple with two mobile broadband devices — the Ovation MC760 ($79.99), about the size of a USB flash drive and the MiFi 2200 ($149.99), a portable “hotspot” that connects to Virgin Mobile’s wireless broadband 3G network and then converts the signal into standard Wi-Fi to share with up to five nearby computers.

We tested Broadband2Go using the Ovation MC760.

Virgin Mobile’s USB modems are about the size of a typical USB Flash Memory device

Our first recommendation is to hurry on down to Radio Shack if you intend to purchase Broadband2Go service.  Best Buy, the other retailer selling the service, inexplicably sells the Ovation MC760 for $99.99, twenty dollars more than Virgin Mobile charges itself.  We didn’t bother to check Best Buy’s in-store price which might be lower because we put together a far better deal at Radio Shack.

You can manage to grab the MC760 for as low as $59.99 by following these steps:

1. If you are new to Radio Shack’s website, your first visit to their homepage should bring a “pop-up” offering $10 off your next purchase of $40 or more (if it doesn’t try clearing out your cookies or launching the site from a different web browser).  Simply supply an e-mail address new to Radio Shack and in a few minutes the coupon will arrive in your inbox.  It can be printed and redeemed in-store or used online.  This cuts the price of the MC760 to $69.99.  But wait, there’s more.
2. Until August 28th, Radio Shack is running a sale offering a $10 instant discount off the MC760.  We first saw this online, but when we visited a local Radio Shack store, we found the same savings in-store.  That brings the price down further to $59.99 because you can combine the coupon with the instant savings, until it expires Saturday night.
3. Many Radio Shack stores insist that you buy at least $10 in “top-up” funds when buying the MC760.  Although this increases your out-the-door price, it’s money you would spend anyway for the $40 a month service. An incredibly long receipt, similar to the one on online quittung, will print at the register, including your PIN activation number to redeem your “top-up” funds on Virgin Mobile’s website.

Radio Shack offers up to $20 off the Ovation MC760 – $10 off for responding to this pop-up on their website and another $10 instant discount good until Saturday night.

Radio Shack stores stock both the old box-format packaging for the MC760, and a newer plastic security-sealed “clamshell” package (the one you’ll slice your fingers on when trying to get the thing open.)  There is no real difference between the two other than the packaging.

Getting It Activated

Although Virgin Mobile claims the Ovation MC760 works with Windows XP, Vista, Windows 7 and Mac OS X, 10.3 & higher, we found advice for Mac owners using older versions of the OS.  Check out this information for how to bootstrap the MC760 to work with your older Mac computer (your results may vary and don’t expect Virgin Mobile technical support to provide assistance.)  Linux users using Ubuntu found some success installing the MC760 as well from this website and this blog.  Let Google be your friend if you are running an unsupported operating system.

For new Virgin Mobile customers, the activation process is very simple.  You just plug in the device and the included software will automatically load and prompt you for installation.  After the process is complete, you will see a connection manager pop up.  Your first indication of signal strength will also be apparent, but do not be alarmed by the indicator showing only a connection to Sprint’s 1xRTT network.  Users do not access Sprint’s faster 3G EV-DO Revision A network until activation is complete.

Several slowly loading screens will appear during activation asking for your contact information, the zip code of where you intend to use the service the most, and payment details.  At the end, you are assigned a broadband “phone number” which serves as your account number, based on the zip code you provided earlier.

Things get complicated, however, for existing Virgin Mobile customers.  Many of those who anticipated the arrival of the service and pre-loaded their voice accounts with additional “top up” funds will discover there is no way for Virgin Mobile to activate your Broadband2Go service under your existing Virgin Mobile account.  A separate, new account must be established for the broadband service.

However, with the help of a customer service representative, you can transfer funds between your existing voice account and your new Broadband2Go account.  You’ll need to call a special toll-free number which will take you directly to Broadband2Go’s customer service department — 1-877-877-8443.  At the voice prompts, indicate you are a new customer and that you want “tech support.”  Expect at least 10 minutes of hold time and an overseas call center representative to answer.  There is no elevator music on hold with Virgin Mobile either.  You’ll hear plenty of rap and alternative music mixed with greetings from current hit artists.

The tech support representative will handle your Broadband2Go activation over the phone.  Have the device and a pen and paper handy.  Allow 10-15 minutes minimum for the representative to gather information or transfer details from your existing account to the new account.  The tech support rep will then transfer your call to the business office to handle the transfer of funds between accounts.

Our Experience

Phonenews also discovered Virgin Mobile’s “unlimited” service had a 400GB usage cap this morning…

After activation, the device reset and we found ourselves suddenly connected to Sprint’s EV-DO network with an average of three bars of signal strength.  Sprint’s nearest tower is about 0.75 miles away from our home in a flat terrain residential area.  Still, we found indoors the signal level could decline to the point the connection fell back to the far slower 1xRTT connection.  Outdoors, the connection manager’s signal level spiked to full strength.

Although Virgin Mobile sells the service as “unlimited,” the website included a usage counter this morning that stated we had just over 400GB of usage remaining.  While extraordinarily generous, that’s still not “unlimited” in our book and we asked Virgin Mobile about it.  Their explanation? It was a “soft usage cap,” and although they didn’t expect anyone to actually hit that level of usage on a relatively slow broadband connection, if they did, customer service would reset it to zero upon request.  We asked why it was included at all on an unlimited service?  We were told it was a software issue — the website was designed for usage-limited broadband measurement.  Considering the performance of 3G wireless networks, it’s not likely many would ever hit it, especially because you would need to be running traffic almost continuously across the connection to reach it.

Nevertheless, we’re pleased to report that as of this afternoon, the 400GB limit is gone, replaced by a usage counter that plainly states “unlimited.”  We applaud Virgin Mobile for rapidly responding to concerns that “unlimited” didn’t actually mean “unlimited.”

…but not for long. As of this afternoon, even that generous usage cap was gone.

One concerned reader dropped a note to Stop the Cap! wondering about something seen in the terms and conditions about “unlimited mobile Internet (but not unlimited downloaded content).”  We couldn’t find those terms and conditions, and if they were included as part of the online activation process, that’s something we missed as we had to activate by phone.  We can only think that may have something to do with the company’s Acceptable Use Policy for data products.  Like other wireless providers, Virgin Mobile does not want customers using their service for “web camera posts or broadcasts, automatic data feeds, automated machine-to-machine connections or peer-to-peer (P2P) file sharing or other systems that drive continuous heavy traffic or data sessions.”  P2P traffic, in particular, is usually a painful experience for both the wireless user and provider.  These kinds of terms and conditions are commonly found in wireless provider agreements.  We’d have a problem with Virgin Mobile if they joined some wireless ISP’s in banning use of online video, but they have not.

So does Virgin Mobile’s marketing of its unlimited Broadband2Go service pass the Stop the Cap! Honest Marketing Test?

The company claims: “Speed varies based on location and coverage with average downlink data speeds between 600 and 1400Kbps. Virgin Mobile does not restrict your speeds based on data usage caps.”

At first glance, we suspected that 600Kbps speed might be a little higher than what real-world users would actually encounter.  Signal strength can steal a lot of speed and if Sprint’s nearest cell tower encounters heavy usage at peak times, speeds can drop dramatically.

We ran several speed tests from different server locations, because results can vary dramatically.  Here is what we found from our location in Rochester, N.Y.:

Speedtest.net recommended a speed test server in the San Francisco area.  Our first test showed reasonable 3G speeds.

Interestingly, using a local speed test site showed better downstream results, although upload speeds suffered somewhat.

Finally, a speed test result using a Los Angeles test server that performed well.

Virgin Mobile’s speed and marketing claims do pass the Honest Marketing Test, although we feel they should more openly disclose the ban on P2P traffic.  It’s likely not enforced, if only because most users would grow impatient with the poor results.  Although we have not had a chance to test the robustness of Sprint’s data network and how well it hands off data signals between tower sites or peak usage, the browsing experience was definitely superior to that of the other wireless broadband service we tested — Cricket Wireless.  The speeds were better, too.

There is no way to tell whether Virgin Mobile’s owner Sprint will ultimately be able to sustain the service should a flood of new customers saturate their 3G network.  It’s a shame that although Virgin Mobile uses Sprint’s network, they do not currently allow access to Sprint’s much-faster 4G network.

Our Recommendation

For those lucky enough to have good wireless signal coverage from Sprint and are currently stuck with Hughes or Wildblue satellite fraudband service — your day has come.  Stop the Cap! can heartily recommend Virgin Mobile’s unlimited service as a great alternative to either provider.  We can also recommend this service to those stuck on .768-1.5Mbps DSL, especially if the phone company is charging you more than $40 a month for tortoise-slow DSL service.  For those on the go, this is also a great choice, assuming where you go is within Sprint’s coverage area.  Broadband2Go can even provide an effective backup if your primary Internet provider goes down.  But we do not recommend it as a replacement for higher speed DSL, cable, or fiber delivered broadband.

Because Sprint’s coverage is more spotty than AT&T or Verizon, it is important to consider where you will use the service.  Those on the edge of coverage areas may experience considerably poorer service, or none at all, when indoors.  Sprint locates their towers inside major metropolitan areas and along major highways that connect those communities.  If you are uncertain whether Broadband2Go will work where you want to use it, you can consider buying the MC760 with $10 worth of usage, which will provide 100MB of usage within 10 days.  If it doesn’t work well for you, return the modem and be out only $10 worth of usage.

Those who like the service can either top-up your account automatically to cover the $40 monthly fee with no interruption in service, or just pay for the service when you need it.  There is no activation/re-activation fee.

Overall, our first impressions are positive, although we wished existing Virgin Mobile customers could link the service to their existing accounts.  Over the next few days, we’ll take the service on the road and see how it fares.

"Without limits" is ironic from Time Warner Cable, whose CEO still believes in Internet Overcharging schemes, even if customers don't.

Time Warner Cable has stopped promoting three different service plans for its Road Runner Mobile wireless broadband service.  The company’s new promotional literature and website now promotes just one mobile plan  — National Elite, with three different prices depending on what kind of business you do with the cable company.  It also does away with Internet Overcharging schemes, promoting an “unlimited data allowance” regardless of whether you access the service over 3G or 4G networks.  That’s ironic, because Time Warner Cable’s CEO Glenn Britt is still a big believer in consumption billing schemes and usage limits.  Should Time Warner Cable ever return with new overcharging schemes, we’ll be sure to remind them about the implications of providing unlimited wireless service while trying to restrict the much larger wired pipeline Road Runner’s cable-based network provides.

As we reported last year, when Time Warner Cable introduced Road Runner Mobile last winter in North Carolina, the company offered three different service plans for customers considering signing up:

• National Elite: Unlimited access to Clear WiMax and Sprint’s 3G EVDO Rev. A network for $79.95 per month to customers who also take the Road Runner Standard or Turbo cable modem service. Time Warner promises further discounts if customers subscribe to the cable provider’s double or triple-play cable service bundle which includes cable internet access and digital phone service.
• Mobile Elite: Unlimited access to mobile WiMax for $49.95 per month and pricing also applies when bundled with the Standard or Turbo cable modem service with an additional bundle discount available.
• Mobile 4G Choice: Caps mobile WiMax use at 2 gigabytes per month and will sell for $39.95 per month if customers add at least one other Time Warner cable service.

Now, as the company introduces the service in upstate New York, customers are getting promotions online and off for only one plan — National Elite.

Pricing appears to be standardized in most regions of the country, depending on what kinds of services you already receive from Time Warner Cable:

• Current Road Runner subscribers will pay $54.99 per month for National Elite;
• Current Time Warner Cable subscribers and those without cable or broadband service will pay up to $69.99 per month.

(Several cities in Texas can obtain special pricing promotions reducing the cost to $49.99 per month for 12 months.  Ask about special promotional pricing if you intend to sign up.)

Customers can select a plan that includes a two year service agreement with a $175 early termination fee (reduced by $7.50 for each month you remain a customer) and receive a substantial discount on a wireless modem and get the $35 activation charge waived.  Non-contract customers will have to buy their equipment at full price and pay the activation fee.  4G network speeds are up to 6 Mbps for downloads, and up to 1 Mbps for uploads. 3G network speeds are up to 1400 Kbps for downloads, and up to 500 Kbps for uploads, according to the Time Warner Cable website.

Plans directly available from Clear, which actually provides the Road Runner Mobile service are different:

• Clear On-the-Go provides 4G-only service for $40 a month.  No 3G service.
• Clear On-the-Go 3G Upgrade includes unlimited 4G service and up to 5GB of 3G usage for $55 a month.
• Get Two: Home + On-the-Go includes service for one home computer and one portable computer, with no 6Mbps download speed cap, for $55 a month (add $15 for 3G service)
• Get Two: On-the-Go includes service for two portable computers, with no download speed cap, for $65 a month (add $15 for 3G service for one computer, $30 for two)

A $35 activation fee applies to non-contract customers.  If you agree to a two-year contract, you can lease your equipment from Clear starting at around $5 per month and have the activation fee waived.

Now the fine print.

Although Clear markets its 4G service as “unlimited,” the fine print suggests they can make life difficult for customers they consider “disrupting or degrading” the service for others (underlining ours):

Excessive Utilization of Network Resources. Wireless networks have capacity limits and all customers can suffer from degraded or denied service when one or a small group of users consumes disproportionate amounts of a wireless network’s resources. Clearwire, therefore, will monitor both overall network performance and individual resource consumption to determine if any user is consuming a disproportionate amount of available resources and creating the potential to disrupt or degrade the Clearwire network or network usage by others. This process of monitoring both overall network performance and individual resource consumption is consistent with the description of the nature of the Service previously described in this AUP. Clearwire reserves the right to engage in reasonable network management to protect the overall network, including analyzing traffic patterns and preventing the distribution of viruses or other malicious code.

During periods of congestion, Clearwire uses various techniques such as reducing the data rate of individual bandwidth intensive users whose use is negatively impacting other users. This temporarily limits the amount of bandwidth available to the bandwidth intensive users until the congestion has diminished, at which point Clearwire will endeavor to lift any limits it may have imposed on bandwidth intensive users during the period of congestion. Clearwire may also consider historical usage patterns when temporarily reducing the data rate of bandwidth intensive users during periods of congestion. When feasible, upon observation of an excessive use pattern, Clearwire will attempt to contact you by telephone at the telephone number you gave to us or otherwise to alert you to your excessive use of bandwidth and to help you determine the cause. Clearwire representatives also are available to explain this AUP and to help you avoid excessive use incidents. If you are unavailable or do not respond to Clearwire’s attempt to contact you regarding excessive use, or if excessive use is ongoing or recurring and repeatedly having negative effects on other subscribers of the Service, Clearwire reserves the right to immediately restrict, suspend or terminate your Service without further notice in order to protect the network and minimize congestion caused by the excessive use. While the determination of what constitutes excessive use depends on the specific state of the network at any given time, excessive use is determined by resource consumption relative to that of a typical individual user of the Service and not by the use of any particular application.

Unlimited Use Plans.If you subscribe to a service plan that does not impose limits on the amount of data you may download or upload during a month, you should be aware that such “unlimited” plans are nevertheless subject to the provisions of this AUP. What this means is that all of the provisions described in this AUP, including those that describe how Clearwire may perform reasonable network management such as reducing the data rate of bandwidth intensive users during periods of congestion, will apply to your use of the Service. The term “unlimited” means that we will not place a limit on how much data you upload or download during a month or other particular period, however, it does not mean that we will not take steps to reduce your data rate during periods of congestion or take other actions described in this AUP when your usage is negatively impacting other subscribers to our Service.

Rural Alltel wireless broadband customers are getting the axe as the company’s new owners have started pulling the plug on customers caught roaming too much with their service.

Not all of Alltel customers have become Verizon Wireless customers after Verizon bought Alltel in 2008.  In areas where Verizon Wireless already provided service, FCC rules required Alltel to sell its assets to other cell phone companies like AT&T or several regional providers.  One such company, Allied Wireless, bought the rights to use the Alltel name for its service.  But it’s not the same Alltel customers in southern Illinois remember.

Scott Sneddon, who lives near Benton, discovered that for himself when trying to log in using his Alltel Aircard.  When the service wouldn’t work, he called Alltel to learn they had unilaterally canceled his wireless broadband service because he was roaming off Alltel’s original network too often.  For the Sneddon family, that meant the Internet itself would no longer be available to them as they have no access to DSL or cable broadband service.  Sneddon received no warning and no second chance.

Sneddon is concerned because Alltel’s unlimited service plan did not carry the typical 5GB monthly usage allowance other providers enforce.  Despite having a two year contract, Alltel was able to pull the rug out from under his service because the company wanted to cut its roaming costs.  Although the Sneddon initially faced a $400 early cancellation penalty to switch providers, the media attention Alltel received made them relent — Alltel customers in similar positions who find themselves out in the wireless broadband cold will not have to pay a penalty to cancel all of their Alltel services.  Additionally, the company has promised to refund one month of service and refund all wireless broadband equipment charges incurred by dropped customers.

For rural America, incumbent wireless providers disconnecting service for customers they don’t want to serve is just another broken broadband promise.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WSIL Harrisburg Alltel Drops Illinois Customers 6-27-10.flv[/flv]

WSIL-TV in Harrisburg, Ill., shares the stories of two Illinois families left without Internet service when Alltel suddenly canceled their service “for roaming too much.”  (4 minutes)