More Details on AT&T's Data Plan Changes for iPhone and iPad

[bpfesq]

I called AT&T last evening to voice my displeasure with the new pricing plans--particularly for the iPad 3G. The entire conversation was frustrating. I feel sorry for the lady who had to speak with me---not that i was rude, but there was absolutely nothing she could do. Beside that, while she was getting more talking points, i was put on hold for extended periods of time---and the waiting music was an effing commercial for the iPad 3G data plan---you know, the one that won't be in place after Monday. Talk about a kick in the balls.


The tethering charge is also rediculous. If i have a phone that is capable of acting as a tethering device---why should AT&T charge me more just so i can use it, especially if they don't give me any more data??? AT&T has nothing to do with my tethering feature--it doesn't stress their system more, it doesn't use their system in any other way... And they don't give us more data. It is a complete ripoff. Data is data. And how i use it---via iphone internet or tethering---should be of no interest to AT&T. Its like gas companies charging more for gas if you're driving your car for vacation instead of just for work.

 

[mattkap]

i checked my usage and i was at 12 gb for last month....jb tether

my brother was at 5gb....iphone addict/you tube whatever guy

yikes....

 

[raremage]

The guy on PhoneDog made a very good point. The only unfair part of this is the extra charge for tethering. It would be fine if you were getting an extra 2GB per month but instead you are paying an extra $20 per month and your laptop is sharing the same 2GB as your phone.

I said this yesterday and I still agree - this is the biggest fault in the new plan. Why do I have to pay extra to use the bandwidth I already bought?

 

[HobeSoundDarryl]

I could be wrong, but I believe if you sign up for iPad service before June 7 you get grandfathered in. If you haven't bought a 3G iPad yet, then how is this a bait and switch?

People incorrectly perceive bait & switch because the deal was use the unlimited 3G with your iPad 3G only when you need it. Turn it on when you need it and turn it off when you don't. The "grandfathering" only applies if you keep a continuous subscription. Turn it off for a month and when you want to use 3G again, you have to deal with the new plans.

Though not "bait & switch" (people should look up the definition), it is a pretty poor move on AT&T's part so soon after the launch of the 3G model... and it is pretty poor on Apple's part if they knew that this big benefit would be extended for only 30 or so days and then get changed, but presented it like it would be a long(er) term arrangement.

 

[buckdutter]

So, really, it is a contract. They went on and on about having a month-to-month service for the iPad, but then change the service. If we cancel our non-contractual-contract, we lose the unlimited plan forever?

How is that legal?

Because the contract works both ways...you are not required by contract to commit to any length of time paying the same price every month for the iPad. But AT&T is also not under contract to keep charging you the same amount for the same service. Sorry, but it works both ways.

 

[cmaier]

People incorrectly perceive bait & switch because the deal was use the unlimited 3G with your iPad 3G only when you need it. Turn it on when you need it and turn it off when you don't. The "grandfathering" only applies if you keep a continuous subscription. Turn it off for a month and when you want to use 3G again, you have to deal with the new plans.

Though not "bait & switch" (people should look up the definition), it is a pretty poor move on AT&T's part so soon after the launch of the 3G model... and it is pretty poor on Apple's part if they knew that this big benefit would be extended for only 30 or so days and then get changed, but presented it like it would be a long(er) term arrangement.

By changing the policy after 30 days, it is impossible for anyone to have exercised the feature we were promised. We couldn't even do it ONCE. They advertised a feature (heavily) and took it away before anyone could actually make use of it. If they had at least waited 61 days we theoretically could have used the feature once. Even arguing that they can't be expected to keep the terms the same forever, what they did was the equivalent of charging a toll to cross a bridge, then demanding another toll when we got half way across. We didn't get the benefit of the bargain even once. This is breach of contract on at&t's part and false advertising by apple

 

[bobpolka]

Here's hoping the FCC and FTC Probes.
Also Apple should put the new data costs on their site. The old ones are still up with no mention of the upcoming changes of service. They should at least mention them as a footnote since all ipads purchased today will not ship until after the 7th.

 

[knewsom]

I use my phone all the time. ...and I've never used more than 400MB in a month. Damned near everywhere I am, there's wifi. My wife has never used more than 200.

I'll probably keep my unlimited plan for now, but I might actually change it to save a few bux.

 

[alhedges]

By changing the policy after 30 days, it is impossible for anyone to have exercised the feature we were promised. We couldn't even do it ONCE. They advertised a feature (heavily) and took it away before anyone could actually make use of it. If they had at least waited 61 days we theoretically could have used the feature once. Even arguing that they can't be expected to keep the terms the same forever, what they did was the equivalent of charging a toll to cross a bridge, then demanding another toll when we got half way across. We didn't get the benefit of the bargain even once. This is breach of contract on at&t's part and false advertising by apple

I don't think it's a breach of contract. Offers contained in advertisements are not binding offers (that form a K when accepted); they are "invitations to bargain," which the offeror does not have to follow. (There are a few exceptions to this which I don't think apply).

On the other hand, I think that there probably is a decent false advertising claim - while the ad was not incorrect when it was made, the terms were changed so soon after the iPad 3g went on sale that it may well qualify as a "deceptive act." I'm not sure what the remedy would be, though - possibly being permitted to return the iPad for a refund.

 

[devinci99]

It seems like it was one step forward in the right direction, (offering a $14.99 plan) and 1 step back ($25/2GB replacing $30/unlimited).

I get it, I check my monthly data usage on my phone and I us no more close to 250MB/month so $14.99 will actually work for me in this economy. No point paying for more than what I'll use. But I like to be able to bump it up to unlimited rather than 2GB if i want to. They should have had a 3-tiered player, 200MB, 2GB, and unlimited.

The idea of a $29.99 value compare to $25/2GB doesn't look like a good value; even if most people don't use anywhere close to it. If this is really true $30/month should be the carrot to get most people to choose it because of perceived value. If they only use 50MB data a month, the more profit for you.

Applause for the $14.99 200 or 250/month; I see most customer would be able to save $15 a month who does not even use more than 100MB a month (like me).

Boo for $25.99 for 2GB. Bad marketing value especially in the shadow of $30/unlimited.

 

[submarine89]

And verizon is going to have Tiered usage as well...So you will end up in the same boat.

The 3G coverage will be MUCH better. However, I wonder how much Apple will let Verizon cripple their phone?

 

[Tailpike1153]

The tethering charge is also rediculous. If i have a phone that is capable of acting as a tethering device---why should AT&T charge me more just so i can use it, especially if they don't give me any more data??? AT&T has nothing to do with my tethering feature--it doesn't stress their system more, it doesn't use their system in any other way... And they don't give us more data. It is a complete ripoff. Data is data. And how i use it---via iphone internet or tethering---should be of no interest to AT&T. Its like gas companies charging more for gas if you're driving your car for vacation instead of just for work.

I remember the good old days when only Verizon customers used to complain about getting screwed over everything they wanted to use on their phones. Look what trying to copy has gotten ATT customers. ATT copied Verizon and increased the ETF. ATT sorta copied Verizon Mobile Broadband plans and now pissed off 90% of this thread. See how nothing good comes from copying.

 

[swajames]

If AT&T grandfather in the ability of current unlimited customers to stop and start the plan at will on the same terms as those available to us today, I'll be happy with that. If they don't, I'll be a part of the inevitable probes and class actions that will follow and will watch as that runs its course.

Ultimately, Apple has to chime in here. If they did not know about this change, they ought to exercise their muscle and help AT&T "see the light". If they did, well, that's probably going to be much more harmful...

 

[swajames]

People incorrectly perceive bait & switch because the deal was use the unlimited 3G with your iPad 3G only when you need it. Turn it on when you need it and turn it off when you don't. The "grandfathering" only applies if you keep a continuous subscription. Turn it off for a month and when you want to use 3G again, you have to deal with the new plans.

Though not "bait & switch" (people should look up the definition), it is a pretty poor move on AT&T's part so soon after the launch of the 3G model... and it is pretty poor on Apple's part if they knew that this big benefit would be extended for only 30 or so days and then get changed, but presented it like it would be a long(er) term arrangement.

It absolutely does meet the definition of bait and switch. AT&T and Apple offered and promoted - heavily - something that has effectively being taken off the table after less than a month and replaced with terms that are, for a significant class of customers, less favorable.

The promise was unlimited 3G data that can be stopped and restarted, at will, for $30 per month.

Not to put too fine a point on it, unless AT&T maintain the plan as promised and promoted or Apple give 3G customers their $130 premium back there's going to be some happy attorneys out there. Perhaps of greater concern to Apple, there will be way more unhappy customers than there are happy attorneys.

 

[Matt-M]

Excellent Summary from John Gruber:

The Good and the Bad Regarding AT&T’s New Data Plans
Wednesday, 2 June 2010

GOOD: The big plan, “DataPro”, now costs $25/month and gives you 2 GB per month. That’s $5 cheaper than the previous “unlimited” plan, and, according to AT&T, 98 percent of their current smartphone customers use less than 2 GB per month. Almost all current iPhone users should save some money, even if just $5 per month. (I use about 500 MB per month, on average, and the most I’ve used in the past year is 1 GB.)

GOOD: The bandwidth overage fee for DataPro is a reasonable $10 for each extra gigabyte. Verizon and Sprint charge around $50 per extra gigabyte in overage fees. If you use more than 2 GB per month, you deserve to pay more than the rest of us who do not. Why is this hard to understand?

GOOD: These plans are for all smartphones. No more discrepancies between what’s allowed for BlackBerrys or Android phones (e.g. tethering) and what’s allowed for the iPhone.

GOOD: $15/month for the 200 MB/month “DataPlus” plan is a great starting price, and AT&T claims that 65 percent of their smartphone users use less than that. I thoroughly doubt that 65 percent of their iPhone users use less than that, but I’ll bet many do.

BAD: The overage charges for that DataPlus plan are ******. They get charged more — $15 — for another measly 200 MB. That’s usurious. For $15, they should get an entire extra gigabyte.

BAD: Tethering is finally going to be supported — a year after it was supported on numerous other iPhone carriers around the world. But tethering costs $20/month and you don’t get any extra bandwidth at all. If you don’t get extra bandwidth, what are you paying for? It’s one thing to charge extra for tethering on an “unlimited” data plan, but it’s outrageous to charge $20 when the bandwidth is already capped. They should just include tethering support at no additional charge in the DataPro plan. (That’s what Rogers does in Canada, after running a six-month experiment to see how it worked out.)

BAD: Why did they change the plans for the iPad so soon after it was announced? What kind of company has a data plan for a flagship product, the iPad 3G — what appears to be the flagship product of the entire industry this year — available for just 30 days before changing the terms significantly? The “$30/month for unlimited, cancel or downgrade at any time” deal was a highly touted part of the iPad introduction. $25 for 2 GB isn’t bad at all, but it’s just downright weird for it to change so soon after the iPad 3G went on sale.

IPHONE OS 4 AND MULTITASKING

Remember too, that Pandora is coming. I know Pandora already has a popular iPhone app, but I seldom use it because it doesn’t play in the background. It will soon, and once it does, I’ll be using it. I’m sure I’m not alone. How’s that (and Skype, and other background streaming services) going to affect monthly bandwidth averages for iPhone users?

LOWER MONTHLY FEES AND MARKET SHARE

I don’t expect iPhone retail prices to drop this year. I think $99 / $199 / $299 are price points Apple wants to maintain. But these aren’t the real prices for iPhones. They’re subsidized, paid for by AT&T in exchange for all U.S. iPhones being locked to two-year AT&T contracts. Economically, the low-end iPhone could surely be “free”, and the higher models cheaper. But there’s a psychological branding angle that Apple wants to maintain. Apple wants the iPhone to be perceived as an affordable luxury item, not a cheap or free gadget.

A $99 entry-level purchase price is not going to keep many people from getting an iPhone. The biggest barrier for many consumers, I think, is the size of the monthly bill. Under the old rates — where there’s one and only one mandatory iPhone data plan, the cheapest plan you could get was $70/month: $40 for 450 voice minutes, $30 for data, and no included SMS messages. Now, under the new plan, you can pay just $55/month: $40 for voice and $15 for the DataPlus plan. That’s a lot closer to the sort of monthly charges that non-smartphone users are used to.

(Maybe I’m wrong on this, though. What if this month’s new next-generation iPhone goes on sales for $199/299, but the 3GS drops below $99, in a move for market share?)

COMPARED TO MIFI

Before I decided to get an iPad 3G, I thought about sticking with a Wi-Fi-only iPad and getting a MiFi from Verizon or Sprint. The advantage to getting a MiFi: it would work with all of my computers: iPhone, iPad, MacBook Pro. The downsides: a 5 GB plan is $60/month, and I’d wind up with another gadget (and charger) to schlep around.

AT&T’s $20 charge just to enable tethering is BS, but even combined with an iPad 3G data plan (so as to get 3G service for both an iPad and a MacBook) it’s a lot cheaper than a MiFi — especially if you can get by with the $15/month iPad plan most months, as I expect I’ll be able to. And Fraser Speirs makes the case in this piece that the schlepping/annoyance factor with the MiFi ought not be discounted:

When using the 3 MiFi, there is too much setup involved for casual use. A lot of this is down to the poor design of the 3 MiFi. Here’s what you do to get online:
▪ Power on the MiFi
▪ Wait for it to acquire the network (20 seconds, in my absolute-best-case experience - usually much, much worse)
▪ Turn on the WiFi radio - another 10 second operation
▪ Turn on the 3G radio - 10 seconds to turn on, another 10 to get to 3G status
▪ Unlock the iPad, get it associated with the MiFi, get an IP address - another 10-15 seconds
Compare to the 3G iPad: you unlock it, you’re online.

Duncan Davidson expects to save money ($20 BS tethering fee notwithstanding) as well:

Running the numbers, if I had been able to use my iPhone for data tethering over the last six months — paying the $20/mo tether charge and $10 for the overage — I would have saved $230 over paying my $60/mo bill to Sprint. Factoring in the $5/mo difference in monthly price, I can expect to save $260 over the last six months of this year if I drop my Sprint card and move to tethering via my iPhone.

So while AT&T’s new plans are not entirely good news, the good outweighs the bad overall.

 

[NinjaHERO]

I have no problem with the tiered system. But am I the only one who thinks manually controlling it is lame? Just set the tiers AT&T and charge us for whichever we fall into each month. As long as they are reasonable like these prices, it's not that big a deal.

 

[cmaier]

I don't think it's a breach of contract. Offers contained in advertisements are not binding offers (that form a K when accepted); they are "invitations to bargain," which the offeror does not have to follow. (There are a few exceptions to this which I don't think apply).

On the other hand, I think that there probably is a decent false advertising claim - while the ad was not incorrect when it was made, the terms were changed so soon after the iPad 3g went on sale that it may well qualify as a "deceptive act." I'm not sure what the remedy would be, though - possibly being permitted to return the iPad for a refund.

But the offer was accepted when I activated my iPad. A contract was formed at that point. And the terms include that term.

You are correct about ads, but your conclusion would be right only if AT&T refused to activate my contract last month.

 

[skellener]

People in the US are ripped off by your service providers.
I don't know why you would sign up to a deal which charges you for unsolicited texts and calls.

Yes. Yes we are ripped off by our service providers here in the U.S. However, charging for unsolicited texts and calls is the way they do business here. There is no choice. All the carriers do this. Ridiculous!! I never use texts myself. It's a smart phone. I have email and I have IM. I don't need it. When I signed up I was told they could NOT turn off texts even though I didn't want the service. Then whenever someone would text me I would get charged a fee. But I read that after you signed up, you could call AT&T and tell them to turn off texts. I did and they did. So if they could do that, Why the **** did I have to get it in the first place!! There is a special place in hell reserved for lawyers, cable co's, and ISP and cell carriers.

 

[Mpls Mac]

I am switching!

So here is my thought/predicament:

I am a VZW customer who is been waiting a long time for an iPhone. My contract is now up and the new iPhone HD/4Gen is my time. I have given up on Verizon getting this iPhone in the next 6 months, so here I go. But here is what I think I may do- please let me know if you guys think this will work:

- I get a huge discount through work on AT&T plans- 27% off anything $30 or more on your bill. This works for the voice plan and the current unlimited data plan. That being said, if I have the unlimited plan, I would only pay $21.80. Even IF I use under 2G of data, it is still cheaper to get the current unlimited plan.

- AT&T offers a "Buyers Remorse" program that if I don't like the phone, I can bring it back within 30 days and pay a 10% restocking fee. If I buy one of the 3G iPhone refurbs for $49, I would only pay $4.90 in restocking fee. If the new phone comes out in the next 4 weeks, I can return it and buy the new one.

The questions are:

- Is this good enough to retain my "grandfathered-in" for the new phone?
- If I return the 3G version, will I still get the subsidized price for the 4G?
- Am I confident that they will actually release the new 4G phone in the next 4 weeks
- What if for some reason they announce that a VZW iPhone is coming out in 2010, does my 30 day "buyers remorse" plan apply to the 2 yr plan, or just the device?

Thanks for your help all!

 

[skellener]

Applause for the $14.99 200 or 250/month; I see most customer would be able to save $15 a month who does not even use more than 100MB a month (like me).

Boo for $25.99 for 2GB. Bad marketing value especially in the shadow of $30/unlimited.

Yup. ALthough 500 a month would have been better for the $14.99. Checked my usage. From March back I could have done fine with that plan even at 200. But then I found a couple of really good streaming radio stations. After March my usage doubled. I would imagine it's only going to go up. So no $14.99 plan for me. I'm not even going to bother making the call to AT&T to lower my plan to the $25. 2GB. It's not worth the $5 to even talk to them for me. It should have been only $20 like with the original iPhone. I'll just keep the unlimited.

 

[skellener]

Jailbreak. Purchase MyWi for $10.

 

[Mark Booth]

Everyone's notion of how much bandwidth the "average" iPhone uses will change dramatically when:

1) Multitasking and "cloud" storage increases our daily use of streaming technology.

2) iPhone HD brings in-your-hand video conferencing (iChat) to the masses.

It would appear the days of Dick Tracy are upon us. And I think mobile device video conferencing is going to catch on in a big way. Particularly since I'm betting it will not only work iPhone to iPhone, but iPhone to Mac as well (and iPhone to iPad, once the iPad gets a front-facing camera).

At this point, AT&T knows if iPhone iChat is coming to their network or not. And if it is coming, I'm betting they are very concerned about the impact on their network. Seems like just about the right time to throttle everyone's data connection to reduce the impact (and profit from a potentially huge increase in bandwidth).

Mark

 

[CrosshairDF2]

It seems like it was one step forward in the right direction, (offering a $14.99 plan) and 1 step back ($25/2GB replacing $30/unlimited).

I get it, I check my monthly data usage on my phone and I us no more close to 250MB/month so $14.99 will actually work for me in this economy. No point paying for more than what I'll use. But I like to be able to bump it up to unlimited rather than 2GB if i want to. They should have had a 3-tiered player, 200MB, 2GB, and unlimited.

The idea of a $29.99 value compare to $25/2GB doesn't look like a good value; even if most people don't use anywhere close to it. If this is really true $30/month should be the carrot to get most people to choose it because of perceived value. If they only use 50MB data a month, the more profit for you.

Applause for the $14.99 200 or 250/month; I see most customer would be able to save $15 a month who does not even use more than 100MB a month (like me).

Boo for $25.99 for 2GB. Bad marketing value especially in the shadow of $30/unlimited.

Even better - add an iPhone option for "No Data" for $0.00 a month.

 

[HobeSoundDarryl]

It absolutely does meet the definition of bait and switch. AT&T and Apple offered and promoted - heavily - something that has effectively being taken off the table after less than a month and replaced with terms that are, for a significant class of customers, less favorable.

The promise was unlimited 3G data that can be stopped and restarted, at will, for $30 per month.

Not to put too fine a point on it, unless AT&T maintain the plan as promised and promoted or Apple give 3G customers their $130 premium back there's going to be some happy attorneys out there. Perhaps of greater concern to Apple, there will be way more unhappy customers than there are happy attorneys.

No, understand the correct interpretation about bait & switch. The "bait" is a usually a fantastic (almost too good to be true) (usually) price to lure in buyers. Then, when you get there the product is "out of stock" but "we have this similar model you can take today." That similar model is the "switch." That's not even illegal if the seller also offers a "rain check" so that they can still get the original product at the too-good-to-be-true price when it comes back in.

In this situation, you can still buy the product today. It wasn't switched to some other iPad-like product. You can still buy the service today, as offered. You can get both through June 7th, at which point you can still buy the same product but the service plans will be different.

Apple will probably claim "arms reach" by blaming AT&T for changing the plan so soon (and unexpectedly(?)). AT&T will say something nice (like 98% use less than 2Gb anyway) while thinking "where are you going to go, suckers?" And buyers will just keep on buying, because most want the iPad 3G more than they want to punish AT&T for socking it to them... again and again.

The best argument for legal potentials is this concept of the promise of getting to start, cancel then start again with $30/unlimited when needed. However, if you don't hold a contract from AT&T that grants you that service for that price, they don't have much- if any- obligation to deliver it. As others have said, contracts go both ways. The benefit in not having a contract serves both buyers and sellers. In this case, no contract means AT&T is obligated to nothing going forward, just as buyers are not obligated to giving AT&T money for nothing... or something. Recall that our system is "Let the buyer beware" NOT "Let the seller care."

Make no mistake about my take on this: it is about a crooked as it can get without (probably) breaking any laws... a very poor move by AT&T (and perhaps Apple too if they had knowledge it would be changed this quickly). But why is anyone actually surprised about this kind of behavior? Has AT&T ever done anything that benefits it's customers at their own expense?

If it gets any legal legs at all (doubtful), it might yield a situation where U.S. iPad 3G buyers who bought through June 7 could get a refund or swap for a unit without 3G, or such a remedy might only apply to people who bought between AT&T's announcement of the new plans and June 7. Such a thing would only hurt Apple- not AT&T- and probably on only a minor scale as many will choose to "just deal" rather than giving up the option for 3G should they still need it at some point (even at less attractive deals for high data users). I doubt much more than that... if that.

Once upon a time, AT&T had a near total monopoly on U.S. phone communications. It became so outrageous that the government stepped in and broke them up. Our same government has now let them consolidate their way right back into a dominant power in communications again. With only a few major players, there is insufficient competition to let capitalism naturally motivate practices that lead to better service for consumers. Now, just watch what happens: it's only a matter of time until the other majors follow this lead.

Bottom line: where will you go? Switching to the others is only making a new deal with a different devil.

 

[kerryn]

I find the charges mostly fair apart from the tethering. Like everyone else if you are paying for data by the byte what does it matter if you are using it for a phone or some other tethered device.

I wish that AT&T would introduce data plans that were tiered towards paying for usage with no manual involvement to switch tiers. You are simply charged for what you use. The tier price incrementals could also be stepped to encourage lower use and penalize heavy users. Tethering should be inclusive on all tiers.

I would like to see the following:

GB $
<.5 15
< 1 20
< 2 25
< 3 30
< 5 50
< 7 75
7 + 100
10+ 100 but starts to throttle

This is based on the idea that most users (98% according to AT&T) fall with 2GB so the $30 for < $30 should catch a few more that feel upset at losing the current $30 plan. Then after that it ramps up to catch the heavy hitters and finally tops out at $100 per month for all you can eat but will start to throttle speed above 10GB per month.

I think many people would have been happier if AT&T were more transparent and has a fair pay as you use plan.