Telephone

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AOL: High Speed*, Low Price

AOL high speedHistorically, people have complained that AOL is slow and expensive. Now they have formed a partnership with Verizon [disclosure: Verizon is a financial contributor to Mouse Print’s parent, Consumer World] to offer a combination package including Verizon DSL and AOL for $25.90 a month. That price is marginally more than AOL charges for dial-up service. (Unbundling that price, $17.99 is the Verizon DSL charge, and $7.91 goes to AOL. That is a real bargain for unlimited AOL.)

AOL also promises “high speed” and “true broadband” with this package, but what they consider “high speed” may not be what you consider fast.

*MOUSE PRINT: “Fast high-speed DSL: Up to 768 Kbps connection speed.” [Insert in SuperCoups envelope, newspaper supplement, April 2006.]

Standard dial-up speed is 56Kbps, so 768Kbps is about 14 times faster. But that is not a fast broadband connection compared to other DSL speeds offered by Verizon, competitors, and by cable companies. It is actually one of the slowest broadband speeds offered to home consumers. Verizon’s “regular” speed is 3000Kbps (or 3Mbps), by comparison, for $29.95.  AT&T just announced it was raising its DSL Internet speed to 6000Kbps (or 6Mbps), and Comcast is already at that speed. RCN (a regional provider) even offers 20000Kbps (or 20Mbps).

So, what you consider fast, what competitors consider fast, and what AOL considers fast may be very different things.

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Cingular: The Fewest Dropped Calls*

Cingular Fewest Dropped Calls

Cingular has been widely advertising that it has the “fewest dropped calls.” What is the basis of their claim?

*MOUSE PRINT: The footnote indicates “Dropped calls based on nationwide experience among national carriers.”

Who did the survey/test and what exactly did it find? Cingular is not talking much on the subject and refers inquiries to the research company that did the study, Telephia. Telephia says their results are proprietary and won’t discuss them. See Boston Globe story.

The claim is also contrary to two recent reports on service quality from JD Power and Consumer Reports (subscription required).

Now it is revealed that Telephia sent a letter to the four major carriers at the beginning of May, after Cingular began running their campaign. According to a follow-up Boston Globe story:

Telephia sent a letter this month to officials at all four major wireless companies, saying it didn’t know how Cingular concluded that it drops the fewest calls. The San Francisco research firm also said it couldn’t say whether Cingular’s advertising is fair, legal, or responsible.

”While we can’t evaluate the specific analysis Cingular uses as the basis of its nationwide claim, Telephia can confirm that Cingular does have a statistically significant lower dropped-call rate than the competition across some market/time period groupings,” said Sid Gorham, Telephia’s chief executive, in the letter.

For consumers, we are still left without any substantiation, and with increasing doubt. Hey, Cingular, what is the real story? Can you hear us now?

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News: Sprint Settles Deceptive Ad Case with NYC

The New York City Department of Consumer Affairs announced yesterday that it settled a lawsuit it had filed against Sprint and Nextel over misleading advertising of cellphone plans. Consumer Affairs alleged that Sprint used fine print footnotes to change the meaning of the primary claims being made by the advertisement.  In particular, while Sprint boldly advertised “All incoming calls are free”, the mouse print indicated there was either a 10 cent per minute charge or a monthly fee associated with the service.  With respect to another claim, “Nationwide long distance included. Every minute, every day,” the fine print indicated certain circumstances when a 25 cent per minute long distance charge would apply.

Sprint Nextel will pay the city $295,000 to settle the case.  In its press release, Sprint denied breaking any NYC advertising laws and said, “DCA never contested the truthfulness of the Sprint or Nextel advertisements…”

Hmm.  It looks like Sprint’s press release may have been missing an asterisk and footnote about how it defines the word “truthfulness”.