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iPhone Upgrades: Discount Downgrades

iPhoneAs people lined up to buy iPhones last Friday, some purchasers got less than they bargained for.

One consumer wrote to Mouse Print* saying he bought an iPhone for his fiancée to replace a more conventional phone on her existing AT&T plan. Besides paying $500, and based on material that was handed to him at the Apple store, he expected that her monthly cell bill would only rise by $20 to cover the cost of just adding a data plan.

From AT&T’s website:

Q. Do I need to switch to a different rate plan if I upgrade to iPhone?


A. If you’re an existing AT&T (formerly Cingular) wireless customer, you just need to add an iPhone Data Plan. (This may replace your current data plan. Your voice plan will stay the same) The iPhone Data Plan gives you Visual Voicemail, as well as Unlimited Data—includes both email and web—and texting, all for as little as $20. You’ll add an iPhone Data Plan and sign a new 2-year service contract during the activation process. Discount eligibility for other devices will continue from the time of your most recent contract.

Everything seemed fine for the soon-to-be-groom until he went home to activate the phone via his computer. A notice came up that said “all discounts will be lost.”  This was troublesome since his fiancée had a 15% educational discount on the calling plan that all teachers in her state can have. Since the loss of the discount seemed contrary to his understanding from Apple and AT&T, he continued the activation process. After hours on the phone and back at the store, he learned the truth.

*MOUSE PRINT:

Q. Are business customers eligible for discounts?
A. No. iPhone service is available only to consumer accounts. iPhone and associated wireless service are not eligible for corporate discounts. 

Apparently, her discount plan caused her account to be coded as a “business.”

The consumer said he was not given anything at the store to indicate he would lose the plan discount his girlfriend was receiving. Even the Apple site currently says “If you’re already an AT&T customer and want to keep your current voice plan, you can just add an iPhone Data Plan with unlimited data (email and web) and Visual Voicemail for just $20 per month.”

Worse news came when the consumer checked their refund policy:

*MOUSE PRINT: “You can return your iPhone within 14 days for a full refund, but there is a 10% restocking fee if the box has been opened.”

Our consumer is not alone in his iPhone woes. People on family plans through their employer, for example, cannot merely add an iPhone to their account. An entirely separate individual plan must be purchased, from outside the company, and without any corporate discounts. [See CNN Money story.]

All these consumers may have a good case for requiring Apple/AT&T to waive the restocking fee should they want to return their phone. Sellers generally are required to disclose key facts that might have induced prospective buyers not to make their purchase in the first place.

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Embarq DSL Only $24.95: Your Price Until Pigs Fly*

Embarq 24.95 til pigs fly Isn’t it nice to finally find a company that doesn’t play pricing games with their Internet service?  So many ads offer a low come-on price for a short period, then the price goes up. That’s what one consumer thought who recently wrote to Consumer World.

Embarq, which is the local phone company spinoff from Sprint, is advertising a fixed price of $24.95 for high-speed Internet service, and says that it is “your price until pigs fly.” [website 1/13/07]  They also say “a price that won’t budge” … “for as long as you have the service.” 

The consumer decided to sign up because he could save money by cancelling his existing NetZero dial-up service, and even cancelling his local phone service since he had a cellphone. He could now get high-speed Internet for less than he was currently paying for slower service.

Of course, Mouse Print* would not be looking at this ad unless there was more to it than meets the (pig’s) eye.

*MOUSE PRINT:

Embarq details

pigs fly 2The fine print above indicates that the company can just cancel the service, which, obviously, would immediately extinguish the $24.95 “forever” price. In addition, their standard terms and conditions page has more fine print than a phonebook, yet seems to be currently missing detailed rules about their residential Internet service. In part it reiterates they can discontinue a service with 30 days notice, but makes no mention of the customer’s right to a fixed price for life. Also, since the fixed bargain DSL service price is linked to local phone service,  local phone service prices could easily go up with regulatory approval where required.

Unfortunately, the consumer did not read the fine print, and Embarq did not direct him to it by means of using an asterisk next to the price. He didn’t realize that the $24.95 price is only available as part of a package of telephone services, that he no longer has. He didn’t know they would add a $10 Internet access charge to his bill. And he didn’t realize to get out of this mess he would have to pay a $99 early termination fee.

There is no happy ending to this story, but a moral. You have to read the mouse print, and know that most phone companies do not sell “naked DSL.”  

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Comcast PowerBoost: Download Speeds Up to 12 Mbps*

Speed is the name of the game for Internet service providers. Competitors are continually raising the stakes by advertising higher and higher connection speeds.

Comcast generally provides 6 Mbps as their regular speed. (Don’t worry about how fast this really is for purposes of this story.) But, in the past year or two, they has been promoting “PowerBoost” which is an “extra burst of speed — up to 12 Mbps — when downloading large files.”  On their website, Comcast suggests some great uses for PowerBoost:

Music, videos, online games – whenever you’re downloading something big, PowerBoost kicks right in. Imagine you’re downloading a 10 MB file, like three MP3 songs. It would take about 53 seconds with a 1.5 Mbps DSL connection. Compare that to 6.6 seconds with Comcast High-Speed Internet with PowerBoost.

Do you really get twice the regular speed with PowerBoost? Yes and no. To read their advertising, one would think that whenever you download a large file, you get the benefit of PowerBoost so the file will be delivered in half the time. Not so fast says our trusty mouse, because of a little-noticed disclosure in their footnote:

*MOUSE PRINT:

“PowerBoost provides a brief burst of download speed above the customer’s provisioned download speed for the first 10MB of a file. It then reverts to the provisioned speed for the remainder of the download.” 

Who knew that PowerBoost only lasts for approximately seven seconds?

For example, if you want to download the trial version of Microsoft’s game “Halo”, which is 134 megs, only the first 10 megs will be delivered to you at the advertised “double speed”, and the remaining 124 megs will be at regular speed.

While smaller “large” files will indeed benefit from SpeedBoost, for most really large downloads, the promise of SpeedBoost is a speed bust. And that’s not Comcastic.