Thursday, June 10, 2010

AT&T’s secret Nov 2009 mobile contract change – Elegant Evil

[Note - see the updates on this one. AT&T is falling victim to its own complexity.]

The Devil is usually an elegant gentleman. Makes sense, doesn’t it? There’s a certain elegance to the best devilishness. Tobacco industries once had that knack, but today AT&T excels.

I just learned of a small contract change AT&T made in November 2009 – eight months ago. It doesn’t impact us yet, but it will when we get our new phones and new contracts. It’s a beauty.

Before I explain what changed, let me describe what was once possible. I’ll use my son as an example – call him “John”.

John is on our family plan. We pay $10 a month for that. He had my old Nokia (out of contract), so he’s not on a subsidized phone contract. A neighbor gave him an old Samsung Blackjack (Windows Mobile); he likes the keypad so we switched SIM cards. No contract, no data plan.

Of course if he fired up a browser, on the old Nokia or the old WinMobile Blackjack the data would flow. Sprint allows customers to disable data flow on a browser-equipped phone, but AT&T does not. In this case John is enrolled in a “smart wireless” plan where I’ve set his data flow to zero (costs $5/month).

What we’d like, of course, is for him to have a phone with WiFi services – like my old iPhone. Similar to the the Blackjack, but data when WiFi is available. That’s what we were planning on.

Ok, now here’s where things get really evil.

If you have a post 11/09 contract, there’s fine print that says that if AT&T considers your phone a “smart phone”, it must have a data plan even if the phone is fully paid for and has no ongoing subsidy. If you put your SIM card in one of those phones, AT&T will detect it and automatically enroll the subscriber in a data plan. (Supposedly the least costly plan.)

A data plan, by the way, that’s pure profit for AT&T. The money is not being used to pay off a subsidized phone, and it’s not going to, say, Apple. It’s pure AT&T profit.

Old WiFi equipped smart phones (RIM, iPhone, some Samsung) etc just got a lot less valuable. If a customer is going to get dinged for data services anyway, why not get a new phone and a contract?

Wow. Philip Morris would be proud of AT&T. This is high grade evil. AT&T is still a master of the complexity attack.

See also:

Update: As noted in comments AT&T is catching up with Verizon, just as when they recently doubled or tripled the penalty for early contract termination. Those two are Scylla and Charybdis.

Update 6/11/10: It occurs to me that one of my state Senators is Al Franken, and that in Obama administration consumer protection isn’t a joke. I’ll write his office. Who knows, maybe he’s ready to take on the mobile phone companies (though he does have his hands full these days)…

Update 6/17/10: I ask the same question at an AT&T retail store and get a quite different answer (new contracts only).


Anonymous said...

I learned this lesson with Verizon a few years ago too. My daughter had an eBay Blackberry that she liked the keyboard on but didn't want/need a data plan. The first one was fine, the second time she bought one, Verizon said she had to have a data plan before they would activate it. We tried to return the phone to the eBay seller, but they wouldn't take it back either. She was out $50 as we were not going to pay for a data plan for her either.

They are all evil, but ATT happens to be our provider too with iPhones. Their cell service is awful-dropped calls, and now the bait and switch non-contract unlimited data plan is gone less than 60 days after purchasing a 3G iPad.

JGF said...

As evil as AT&T is, I think Verizon has historically been a step ahead. Recently though AT&T has made several moves to close the evil gap.

I think they'll pull ahead.

Anonymous said...

Heads up, you can have AT&T put a data block on any phone. I have one on one of my blackberries. And it's something they do routinely, in fact on my bill it's explicitly called out as a line item. Call them again, and tell them to put a data block on, and they should do it.

Now I wouldn't be surprised if AT&T told you that you had to pay for a block. They've lied to me on several occasions, and it sounds like they got you on this one.

JGF said...

That's an interesting twist! Thanks for the correction. I wonder if AT&T reps just get confused -- they may not be always deliberately lying.