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

[cmaier]

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.

But those of us who already bought an iPad 3G DO have a contract that has a term requiring AT&T to allow us to start-stop-start unlimited. It's not a term of the monthly contract, but it's a term AT&T imposed on themselves. They advertised it. In response to their ad, we ordered iPads (in contract law terms, we made a contract offer, the terms of which corresponded to AT&T's stated terms of service, including start-stop-start. ) AT&T billed our credit cards and activated our service. Hence they accepted our offers, and a contract was formed. A contract need not be in writing, and start-stop-start need not be in the written terms of the monthly activation contract for it to be binding on AT&T. Further, every contract has an implied term of good faith and fair dealing. So while AT&T can argue that it was not obligated to maintain start-stop-start at $30 forever, they cannot argue that they can stop it before we could even do it ONCE.

Those who haven't already activated with AT&T may not have a contract with AT&T (I could make a legal argument that they do), but they have a contract with Apple that requires start-stop-start.

 

[swajames]

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.

The missing point is that the bait was the representation that one could get unlimited 3G data, for $30 per month, with the ability to stop and restart the service at will. The switch is that post June 7th, that is no longer possible. The plan is grandfathered, but the ability to stop and restart on the same terms is not. Bait and switch is used in many different ways and in many different contexts, what AT&T (and Apple by possible/probable extension) is doing here is nothing more and nothing less than a bait and switch in the generally accepted sense - what was offered is no longer available but a less favorable alternative is.

 

[raccoontail]

I used 16gb of data last month. So it would suck for me big time.

I've never understood the original "all you can eat" pricing that forces lighter users to subsidize heavy ones. (Probably why I don't eat at unlimited buffets either). I think the new pricing is a big improvement - I'm personally sticking with my original EDGE iPhone unless the upcoming model is a HUGE improvement... call drops on EDGE are rare compared to 3G.

 

[systimax]

After reading all the threads can someone answer this?

My wife and I have the family talk plan. Both phones are in her name.

I have a BB she has a 3GS iphone.

She would like to upgrade to the new iPhone and I would like to replace my BB with a the new iPhone.

The idea is that I want her unlimited plan that she can grandfather and she wants the the $15 plan.

Is it possible once we have the phones to tell ATT to apply the grandfather plan to my number and the 15$ plan to her number?

 

[HobeSoundDarryl]

But those of us who already bought an iPad 3G DO have a contract that has a term requiring AT&T to allow us to start-stop-start unlimited. It's not a term of the monthly contract, but it's a term AT&T imposed on themselves. They advertised it. In response to their ad, we ordered iPads (in contract law terms, we made a contract offer, the terms of which corresponded to AT&T's stated terms of service, including start-stop-start. ) AT&T billed our credit cards and activated our service. Hence they accepted our offers, and a contract was formed. A contract need not be in writing, and start-stop-start need not be in the written terms of the monthly activation contract for it to be binding on AT&T. Further, every contract has an implied term of good faith and fair dealing. So while AT&T can argue that it was not obligated to maintain start-stop-start at $30 forever, they cannot argue that they can stop it before we could even do it ONCE.

Those who haven't already activated with AT&T may not have a contract with AT&T (I could make a legal argument that they do), but they have a contract with Apple that requires start-stop-start.

Appreciate your thinking here. So then the question becomes: are you willing to pay for legal services to sue to find out if a court will back you on this? Whining about it won't make AT&T change anything. I would guess the answer is no. Why? Because the savings over even the life of your iPad 3G is probably not going to be worth even 8 hours of legal counsel (which won't even get you to court).

How about class action? First you need someone to initiate class action. Is there enough money to win in a settlement for a class action firm to take this one on? If you've been with Apple for a while, you know how class action goes. Unless you’re the attorney who ultimately works the settlement, the end users end up with <= $100, sometimes just a few dollars, many years later.

See how this goes: there isn't much money in this for the time it's been available and for the amount of units sold in the U.S. to be very interesting to a class action firm. You'll certainly never get anything if you tried to take on AT&T legal counsel direct. End result, we end users are basically bent over.

The best resolution is for this to prove to be the straw for millions of AT&T subscribers, who then punish AT&T as a group by taking their business elsewhere. However, if iPads and iPhones, etc are exclusively locked to AT&T, are millions willing to give up the many other benefits of such devices for the relatively minor differences in service costs for new plans vs. old.

I'm not defending AT&T at all. I see them as one of many devils. I just know that whining about it- even group whining- doesn't make the devils change their profit motivations. Get masses to hit them in the pocketbook and changes might follow. Otherwise, AT&T (and similar) will simply enjoy more profits by making such decisions- the ultimate, established barometer of whether management is making good or bad decisions.

 

[cmaier]

Appreciate your thinking here. So then the question becomes: are you willing to pay for legal services to sue to find out if a court will back you on this? Whining about it won't make AT&T change anything. I would guess the answer is no. Why because the savings over even the life of your iPad 3G is probably not going to be worth even 8 hours of legal counsel (which won't even get you to court).

How about class action? First you need someone to initiate class action. Is there enough money to win in a settlement for a class action firm to take this one on? If you've been with Apple for a while, you know how class action goes. Unless you’re the attorney who ultimately works the settlement, the end users end up with <= $100, sometimes just a few dollars, many years later.

You know I'm an attorney, right? (I'm not suing anyone, though).

 

[firewood]

This is breach of contract on at&t's part and false advertising by apple

Do you have a copy of the AT&T contract in question? Where did they guarantee future prices after a cancellation?

You might have a better case with your false advertising claim. But I note a massive amount of stores raised their prices after Memorial day, some quite significantly over what was advertised before the weekend.

 

[HobeSoundDarryl]

The missing point is that the bait was the representation that one could get unlimited 3G data, for $30 per month, with the ability to stop and restart the service at will. The switch is that post June 7th, that is no longer possible. The plan is grandfathered, but the ability to stop and restart on the same terms is not. Bait and switch is used in many different ways and in many different contexts, what AT&T (and Apple by possible/probable extension) is doing here is nothing more and nothing less than a bait and switch in the generally accepted sense - what was offered is no longer available but a less favorable alternative is.

First until June 7, it is still THE PLAN that is available. There is no "switch" until that plan is no longer available. Buyers of iPads right now can use their knowledge of the new plans to still buy or not buy. Buyers of recent iPads can choose to return them if they don't like the new plans. Buyers of iPads on order- ordered before the new plan was announced- but have not yet shipped, can also return and/or cancel their orders.

For "bait & switch" to be bait & switch, the key is recognizing a loss for the buyer. Apple is still willing to sell you the same iPad 3G advertised before this plan change was announced. AT&T is still willing to sell you the same plan before this change was announced... except- and this is the ONE potential legal issue- the $30 unlimited plan that is still available through June 7, no longer has a start & stop & start again element to it.

Buyers have no written contract obligating that service plan from AT&T. So the key is for those who want to try to make a case for an implied/oral contract to be upheld... and then have a court decide for how long such an arrangement should be available to buyers... will be an expensive proposition (AT&T has the deep pockets to fight anything & everything) or- in a class action- will result in a settlement years from now for probably less than $100 for participants.

I understand the anger/outrage/etc. AT&T cares about AT&T and not end users, unless those end users as a group make them care by hitting AT&T in the pocketbook. If we are not willing to dump AT&T (and thus dump iphones & 3G iPad service through AT&T), they are basically rewarded for making such decisions.

If AT&T sees mass defections associated with this decision, it will change. If they see profits continue to rise, they'll pat themselves on the back, enjoy their annual bonuses, and celebrate a job well done.

 

[cmaier]

Do you have a copy of the AT&T contract in question? Where did they guarantee future prices after a cancellation?

You might have a better case with your false advertising claim. But I note a massive amount of stores raised their prices after Memorial day, some quite significantly over what was advertised before the weekend.

Contracts need not be in writing (subject to your local version of the Statute of Frauds), though in this case there is a writing - the advertisements, the terms of which are incorporated into the contract that is formed when I offer AT&T my money in exchange for them activating my iPad 3G subject to the terms they, themselves, advertised, and they accept my offer by activating my iPad.

 

[HobeSoundDarryl]

You know I'm an attorney, right? (I'm not suing anyone, though).

I did perceive that about you, but all the more reason to recognize that this won't go anywhere relative to motivating a change for AT&T. I can imagine Apple making case-by-case concessions for those who want to swap their iPad 3G for a non-3G model, but even there I wonder how many would really do it. After all, 3G- even with the less appealing new deal from AT&T- still has the perceptual benefit of getting to use it when it is needed.

Even with this new knowledge, if I was going to buy an iPad, I'd still buy the 3G version, even if the new deal for on-demand 3G was $100/2gb. Why? Because the on-demand part of the deal implies that I would only activate that when I really needed it, otherwise using WIFI for the rest of the time. My use of the device would be motivated to try to always use WIFI (or have it pre-loaded for the big trip) so that I wouldn't have to use 3G (at $15, $25, $30, or $100). However, if I found myself in a situation where I really needed to connect- and could not get to an open WIFI hotspot, I'd rather have the option than not have it... even if the new deal went gouging nuts. I would guess I am not alone in this, which is why I wouldn't anticipate many cancels of 3G iPads for non-3G as a result of this move by AT&T.

 

[cmaier]

I did perceive that about you, but all the more reason to recognize that this won't go anywhere relative to motivating a change for AT&T. I can imagine Apple making case-by-case concessions for those who want to swap their iPad 3G for a non-3G model, but even there I wonder how many would really do it. After all, 3G- even with the less appealing new deal from AT&T- still has the perceptual benefit of getting to use it when it is needed.

I would suspect that if there's enough of an uproar, Apple will reimburse early buyers with some gift cards or something. It's too late for the first buyers to return their iPad 3Gs, and we really did not get what we paid for (the right to start and stop unlimited data - if my usage is 5GB, 0GB, 5GB, 0GB, this is a major difference in price - $60 is what we were promised, $150 is what it will cost now). I do think there will be a class action suit - I've already heard chatter about it.

 

[HennesMedia]

If the New iPhones has Video Chat, the data cost will be high!

Just thinking here. If the new iPhone has Video iChat, the data used for that would be out of this world. Who would use the mins to talk. I think most with the Video chat will use that. AT&T is trying to cut that off first for the mins usage will go down a lot and data will go up. My self I will keep my plan so I will not be charge for the Video chat.

 

[swajames]

First until June 7, it is still THE PLAN that is available. There is no "switch" until that plan is no longer available. Buyers of iPads right now can use their knowledge of the new plans to still buy or not buy. Buyers of recent iPads can choose to return them if they don't like the new plans. Buyers of iPads on order- ordered before the new plan was announced- but have not yet shipped, can also return and/or cancel their orders.

For "bait & switch" to be bait & switch, the key is recognizing a loss for the buyer. Apple is still willing to sell you the same iPad 3G advertised before this plan change was announced. AT&T is still willing to sell you the same plan before this change was announced... except- and this is the ONE potential legal issue- the $30 unlimited plan that is still available through June 7, no longer has a start & stop & start again element to it.

Buyers have no written contract obligating that service plan from AT&T. So the key is for those who want to try to make a case for an implied/oral contract to be upheld... and then have a court decide for how long such an arrangement should be available to buyers... will be an expensive proposition (AT&T has the deep pockets to fight anything & everything) or- in a class action- will result in a settlement years from now for probably less than $100 for participants.

Others, including an attorney posting in this very thread, think you're wrong on many of these points.

I cannot return my iPad - it was bought more than 14 days ago. Furthermore, my AT&T renewal date for the 3G plan, and it would be my first renewal, is after June 7th... I can not continue with the terms that AT&T offered me and which I accepted. Not even once. That is the switch. And I strongly suspect that it will not pass muster and enough people will care about it to force the issue.

 

[HobeSoundDarryl]

I would suspect that if there's enough of an uproar, Apple will reimburse early buyers with some gift cards or something. It's too late for the first buyers to return their iPad 3Gs, and we really did not get what we paid for (the right to start and stop unlimited data - if my usage is 5GB, 0GB, 5GB, 0GB, this is a major difference in price - $60 is what we were promised, $150 is what it will cost now). I do think there will be a class action suit - I've already heard chatter about it.

Wouldn't part of the trick in a class action involve proving that your future usage would have been something like that: 5Gb, 0Gb, 5Gb, 0Gb? How would a court accept such speculation about personal usage (so that the dollars would be big enough to make this interesting)?

Wouldn't AT&T show average usage by many of the same people in the class action suit as being below 2GB/month (as implied by the 98% quote)? Wouldn't the court appreciate hard facts about usage vs. a bunch of class action claimants implying "but my usage would be a lot higher with the originally quoted deal"?

And since the crux of the "switch" is this loss of use it when needed, then cancel, then use it when needed again, wouldn’t AT&T argue that claimants could not show heavy use above the cheaper 2Gb max plan for lots of months, but only some months (because they wouldn't have it turned on in other months)? And even then the monetary issue would be the difference vs. the new 2Gb plan, not the entire amount, right?

I just don't see this having much in the way of legs in being very interesting for the potential money involved for a class action firm (maybe someone looking for some fame at taking on the big boys). And I still picture the end result of something successful as translating into a settlement of less then $100. Don't you?

And you're probably right about the end remedy: gift cards from Apple.

 

[stealthman1]

The iPad is unlocked take your business elsewhere...crickets...
Where is the Verizon data plan for iPad that spanks AT&T??????? Where is it?

Good luck on that TOS breach thing...I'm quite sure that AT&T has the right to amend/cancel the TOS at any time in the language and is only obligated to perform services in monthly increments.

 

[HobeSoundDarryl]

Others, including an attorney posting in this very thread, think you're wrong on many of these points.

I cannot return my iPad - it was bought more than 14 days ago. Furthermore, my AT&T renewal date for the 3G plan, and it would be my first renewal, is after June 7th... I can not continue with the terms that AT&T offered me and which I accepted. Not even once. That is the switch. And I strongly suspect that it will not pass muster and enough people will care about it to force the issue.

Take it into an Apple store and tell them you bought it because of this plan and now that plan has changed less than 30 days later. I'll bet they let you return it or swap it for the version without 3G. If not, raise your voice a bit, sling the word "crooked" around, ask for the manager. I bet they let you return it or swap it for the version without 3G.

What I don't think has any chance of happening is getting AT&T to grandfather the use-it-when-you-need-it unlimited deal... unless forced to do so in courts (at great expense by those trying to force the issue- your iPad 3G will probably be bricked by the time that got final resolution) or motivated to do so by mass defections, so that they can see they've gone too far with this move (unfortunately, I bet AT&T revenues simply continue to go higher even with this change of plans).

Cell plans- even the whole arrangement of long-term contracts for service- have always been (legally) crooked. The biggest problem is that more and more people are willing to reward that ongoing game by playing- and paying- for that kind of service. If the market demanded month-to-month (no contract) and/or pay-as-you-go and/or prepaid only plans, the sellers would bend to keep the money flowing in. Instead, the money keeps flowing in no matter how ridiculous the plans, the service, etc. Until that changes, don't expect the sellers to change their ways to better serve the suckers who play- and pay- for this kind of service.

 

[cmaier]

Wouldn't part of the trick in a class action involve proving that your future usage would have been something like that: 5Gb, 0Gb, 5Gb, 0Gb? How would a court accept such speculation about personal usage (so that the dollars would be big enough to make this interesting)?

Wouldn't AT&T show average usage by many of the same people in the class action suit as being below 2GB/month (as implied by the 98% quote)? Wouldn't the court appreciate hard facts about usage vs. a bunch of class action claimants implying "but my usage would be a lot higher with the originally quoted deal"?

The 98% figure proves my point. In a given month, 2% of people go over. The next month, 2% go over. It's not necessarily the same 2%. Discovery would get to the real figures, and we'd find out how many people see-saw usage.

Additionally, expert witnesses can opine on the monetary value of the two variations of the plan, based in part on AT&T's own valuation of bandwidth (ranging from $10-$15 a gigabyte).

 

[knewsom]

How many times do I have to tell you guys!? VIDEO CHAT IS NOT GOING TO BE ALLOWED OVER 3G!

Can you possibly imagine a world in which ATT would allow it!? The same ATT that's waited a YEAR to allow tethering, and now charges $20 just to do so??? I didn't think so.

 

[HennesMedia]

How many times do I have to tell you guys!? VIDEO CHAT IS NOT GOING TO BE ALLOWED OVER 3G!

Can you possibly imagine a world in which ATT would allow it!? The same ATT that's waited a YEAR to allow tethering, and now charges $20 just to do so??? I didn't think so.

I bet they would if they can get Big $$$ from it. Just think if they can charge for ever GB of use from the Video chat and that video chat uses 1 gig a day lets say. that can add up quick.

 

[HobeSoundDarryl]

The 98% figure proves my point. In a given month, 2% of people go over. The next month, 2% go over. It's not necessarily the same 2%. Discovery would get to the real figures, and we'd find out how many people see-saw usage.

Additionally, expert witnesses can opine on the monetary value of the two variations of the plan, based in part on AT&T's own valuation of bandwidth (ranging from $10-$15 a gigabyte).

Maybe so, but we're not talking about 2% of all Apple iDevice users, just iPad 3G users who purchased their iPad 3G for use with AT&T until June 7. Throwing out that all those who received it within the last 14 days could return it, lets assume that number is 500K (or pick your own number- I'm under the impression that it can't be higher than 1M given recent info about worldwide sales). 500K * .02 = 10K. So now we're talking about 10K people being affected month to month at best (assuming AT&T is truthful about the 98% quote).

If we use your example of 5Gb via 3G every other month, the $30/month plan would include that 3Gb above the new 2Gb plan at $25/month. If the new plan would value each Gb at $15 as you share, those extra 3Gbs would be valued at $45. $45 times the 6 months = $270 * 10,000 = $2.7M. Let's just pretend that AT&T wouldn't point out the $10 month savings of $25 vs. $30.

If we put the gross "prize" at $2.7M, and then we deduct from it the costs of going to court, paying the class action firm, getting input from expert witnesses, etc, what is likely to end up as the net prize years from now? Let's imagine that somehow after dukeing it out with AT&T attorneys (maybe Apple's too) for the next few years that somehow there is a net prize of even $1M left. Let's also imagine that all 10K participate in the suit. $1M/10K = $100 each.

If we argue that these users would get 2 years out of their iPads, that might imply a net of $200 each. But we would also be asking a court to arbitrarily decide how long AT&T would be held to having to offer 3G on-demand unlimited service when it was not expressly communicated/contracted. Users would want to argue it was forever, and AT&T would say that they could change it at any time since it was their service and that each customer had canceled the service before the change in the new plan actually affected them.

Which leads back to the question: where's the money in this to make it worth some kind of legal action? Sure the class action firm would probably take a nice chunk of a settlement, but I just can't see the "outraged" individuals taking more than about $100 in the net, probably as Apple gift cards- if it even got to that point.

 

[Mark Booth]

How many times do I have to tell you guys!? VIDEO CHAT IS NOT GOING TO BE ALLOWED OVER 3G!

Can you possibly imagine a world in which ATT would allow it!? The same ATT that's waited a YEAR to allow tethering, and now charges $20 just to do so??? I didn't think so.

The fact that AT&T will now be charging for chunks of bandwidth is, in my mind, PLENTY of proof that video iChat WILL be allowed over 3G!

I guess we'll know on Monday!

Mark

 

[swajames]

Which leads back to the question: where's the money in this to make it worth some kind of legal action? Sure the class action firm would probably take a nice chunk of a settlement, but I just can't see the "outraged" individuals taking more than about $100 in the net, probably as Apple gift cards- if it even got to that point.

The part I've bolded answers the question.

 

[HobeSoundDarryl]

The part I've bolded answers the question.

Great. So some attorney can make a "nice chunk" of some amount probably not larger than $2.7M, while all those expressing so much outrage, etc here end up with next to nothing. What's the win in that for these applicable iPad 3G owners? Is it in how such a paltry amount will stick it to AT&T (and perhaps Apple)? Will that teach them a lesson? Or will they just take the extra profits they realize from all of the post-June 7 customers paying extra for that extra 3G and easily settle this case while laughing all the way to the bank?

 

[swajames]

Great. So some attorney can make a "nice chunk" of some amount probably not larger than $2.7M, while all those expressing so much outrage, etc here end up with next to nothing. What's the win in that for these applicable iPad 3G owners? Is it in how such a paltry amount will stick it to AT&T (and perhaps Apple)? Will that teach them a lesson? Or will they just take the extra profits they realize from all of the post June 7 customers paying extra for that extra 3G and easily settle this case while laughing all the way to the bank?

No, the point is that the probability of costs, the probability of losing and the reality of further poor PR when AT&T is losing that battle already to Verizon ought to be enough to convince AT&T that doing the right thing by existing customers is the cheapest, simplest option. Those signing up after June 7th can make their own decisions on the new AT&T plan, I simply expect AT&T to honor the letter - and the spirit - of mine.

 

[cmaier]

Which leads back to the question: where's the money in this to make it worth some kind of legal action? Sure the class action firm would probably take a nice chunk of a settlement...

As I pointed out, I'm a lawyer