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

[deconstruct60]

the whole point is to get rid of the really heavy users since they are money losers no matter how much they pay

If the really heavy users have some business/economic reason to use that much bandwidth, they can pay. They don't have to leave; just need to pay their proportional share of the costs.

The other point is to deter folks from wasting bandwidth just because they can. There are going to be lots of folks who can and will shift some of there high bandwidth consumption to other times and networks just because have to pay. There was no value in what they were doing, just pigging out because it is "all you can eat". For a network with congestion, it is dubious to encourage folks to consume as much as they possibly can.

 

[jbuck777]

The text in your quote is most notably not present in the portion of AT&T's TOS that lies in between these two sections, where smartphone plans without tethering are described. Hence it is not applicable to non-tethering smatphone plans.

Last i checked, the iPhone data plan that all you Americans are on does NOT include tethering. So according to what you just said, it does apply to the iPhone's data plan.

Its a soft cap for gosh sakes....you guys are jumping all over me as if I said that as soon as you hit 5GB ATT will cut you off or start charging you some ridiculous rate...all im saying is that according to their TOS, they have the right to do it if they so please. And im sure they will if they see that your constantly going over 5GB by a significant margin.

I'm on your side on this whole data/tethering topic...I have been able to enjoy tethering on my 30dollar 6GB data plan up here on Rogers since the launch of the 3GS. If you pay for "unlimited data" you should be able to use it how ever you want. Its like going to a McDonalds and paying for food, but having to pay an extra fee to be able to eat it. Thats the logic behind ATT right now.

 

[submarine89]

If the really heavy users have some business/economic reason to use that much bandwidth, they can pay. They don't have to leave; just need to pay their proportional share of the costs.

The other point is to deter folks from wasting bandwidth just because they can. There are going to be lots of folks who can and will shift some of there high bandwidth consumption to other times and networks just because have to pay. There was no value in what they were doing, just pigging out because it is "all you can eat". For a network with congestion, it is dubious to encourage folks to consume as much as they possibly can.

For a network with congestion, it is also dubious to encourage folks to buy a service that you, apparently, have little intention of providing and then blaming those folks for you modifying the terms of the agreement.

 

[alent1234]

For a network with congestion, it is also dubious to encourage folks to buy a service that you, apparently, have little intention of providing and then blaming those folks for you modifying the terms of the agreement.

when these things are sold there are assumptions of bandwidth usage. cellular data is still new and not meant for people to use 50GB a month.

and no one is going to spend a lot of money just to chase a minority of the heavy users. cheaper to dump them on the competition

 

[bpfesq]

If the really heavy users have some business/economic reason to use that much bandwidth, they can pay. They don't have to leave; just need to pay their proportional share of the costs.

What if they paid for their 2GB of data, but now they want to use their data in a different way--like tethering. Why should they pay more?


What if your internet company said, if you want to use an xbox, ps3 or game over your internet connection, that will cost you $20 extra per unit? What if they charge more for streaming video? What if they found that most bandwidth hogs use their internet for porn and had a surcharge if you are to have access to porn websites? Same if they found that most hogs stream music and surcharged for that as well??



Frankly, i wouldn't be as pissed about this if the iPad $25/30 plan had the standard 5GB cap like the other companies. That is a much more reasonable cap, IMO. 2GB is an effing joke. It turned a somewhat expensive internet toy with a somewhat reasonable data plan into something that isn't cost effective to own. Google, Microsoft, etc. arent' going to kill the iPad. AT&T will first.

 

[deconstruct60]

Wait. Because AT&T thinks i won't use all of my 2GB, they have a right to charge me more for using it in a way that will use more of my already alloted (and paid for) data? That is absolutely rediculous.

No that is exactly how the phone system works. You are mixing the scopes. It is not because you as an individual use up to the 2GB cap. It is because there are a higher number than modeled folks in aggregate using up to the 2GB cap.

For example, if everyone in your extended neighborhood pick up their landline phones at the same time, some of them will not get a dial tone.
That is because the phone system is designed for the aggregate usage not every individual one. In normal conditions, everyone doesn't pick up the phone at the same time so the system works just fine. Likewise in normal iPhone conditions the device does not consume more than one device amount of data. Tethering brings abnormal usage distribution curves.

The statistical model is used so that folks on the "lower usage" side of the midpoint in part subsidize the folks on the "higher usage" midpoint. That allows for a lower price to be offered but one which is fixed. Many folks put a higher value on a fixed price bill because they know what it is going to be every month and can plan ahead.

And actually, the analogy is quite apt if i were to reverse it.

The analogy bites because gas is measured exactly... just like electricity, water, and natural gas. It is not being sold on a statistical model of usage.No gas station gives you something other than exactly the amount pump gas and paid for (unless they jury rigged the pumps). The gas, once transfered to your tank, has zero impact on their service infrastructure. Few folks go to a gas station over an extended period of months and pay exactly the same price on every visit.

A gas station analogy would go more like this. You show up at a gas station with a gas tanker truck. You start pumping the gas out of a pump into the truck's bulk carry tank and suck the station dry. You're clueless if you think the station operation isn't either going to come out and stop you or significantly jack up the price for sucking his storage tanks dry.

 

[bpfesq]

when these things are sold there are assumptions of bandwidth usage. cellular data is still new and not meant for people to use 50GB a month.

and no one is going to spend a lot of money just to chase a minority of the heavy users. cheaper to dump them on the competition

What about the iPad? We don't want to use 50GB. Hell, if you're going to make up numbers, why not talk about us using 5,000 TB of downloads. 5 would be reasonable. 2 is a fricken joke.

 

[alhedges]

A contract is a binding exchange of promises. They broke their promise.

It's still not clear to me that it's binding.

The "Ad is binding because I activated the service" isn't a bad argument, really, but IMO it's clearly trumped by the service agreement. Which provides, specifically:

"We may change any terms, conditions, rates, fees, expenses, or charges regarding your service at any time." (They do have to give you notice of changes, and permit you to cancel your service if you don't agree with the changes).

Disputes are also subject to binding arbitration, for what that's worth.

 

[alent1234]

What about the iPad? We don't want to use 50GB. Hell, if you're going to make up numbers, why not talk about us using 5,000 TB of downloads. 5 would be reasonable. 2 is a fricken joke.

maybe they were discussing it, maybe they had a falling out. maybe they saw the OS 4 presentation and got pissed that Apple was going to strain the network again and rake in the money with the high bandwidth ads?

welcome to the world of dumb pipes like everyone wanted. they don't care what you do on the network as long as they get paid for what it costs to bring you the data.

maybe AT&T wants the same high margins as apple?

 

[mrscrouge]

quick question. I have an iPhone 3G right now , with the unlimited data plan on it. I was planning on getting the new model when it comes out, however this will not mean I'll have to change my plan to 2GB or 3GB correct? I'll be "grandfathered in" regardless of upgrading my device?

 

[jbuck777]

quick question. I have an iPhone 3G right now , with the unlimited data plan on it. I was planning on getting the new model when it comes out, however this will not mean I'll have to change my plan to 2GB or 3GB correct? I'll be "grandfathered in" regardless of upgrading my device?

Thats what ATT says as of right now....but who knows, right? Its ATT...they seem to have a way of f*cking its customers royally

 

[deconstruct60]

What if they paid for their 2GB of data, but now they want to use their data in a different way--like tethering. Why should they pay more?

If tethering meant that they used the iPhone data less it wouldn't be a problem. That is not what typically happens. typically what happens is that the iPhone continues to consume data at roughly the exact same rate and the additional device pulls even more data monthly through the pipe.

If the usage on iPhone went down in proportion to the other device going up then wouldn't not be an issue. Typically though devices with bigger screens and a wider variety of apps that suck down data tend to consume more, not less or equal to, the amount of data a typical iPhone consumes.

Same thing with a household with multiple computers sucking down data over a router. "tethering" quite often in the case of an iPhone is really installing a router and putting two (or more) devices on the other end of the 3G pipe. You assertion that data consumption is going to stay approximately the same in that context????

What if your internet company said, if you want to use an xbox, ps3 or game over your internet connection, that will cost you $20 extra per unit?

ISPs already have adjusted to models where there are multiple customers on the other end of their modems. It is accounted for in the pricing and bandwidth allocations. 3G modems don't have wired ISP bandwidth nor equivalent costs in increasing it. Econ101, when there is a limited supply and higher demand then prices go up.

Tethering self identifies you as being in a different demographic than normal. That puts you on a different payment curve. If you are a business and try to get an ISP account... prices are different too.

ISPs have the same model. There is no ISP who has backhaul network that could sustain every single customer they have pulling data at max rates concurrently. If there was a significant spike in folks who are easily identified who were the primary source of the major uptick they'd get charged more.

The vast majority of folks on cell networks are not trying to max out data consumption.

 

[bpfesq]

No that is exactly how the phone system works. You are mixing the scopes. It is not because you as an individual use up to the 2GB cap. It is because there are a higher number than modeled folks in aggregate using up to the 2GB cap.

For example, if everyone in your extended neighborhood pick up their landline phones at the same time, some of them will not get a dial tone.
That is because the phone system is designed for the aggregate usage not every individual one. In normal conditions, everyone doesn't pick up the phone at the same time so the system works just fine. Likewise in normal iPhone conditions the device does not consume more than one device amount of data. Tethering brings abnormal usage distribution curves.

The statistical model is used so that folks on the "lower usage" side of the midpoint in part subsidize the folks on the "higher usage" midpoint. That allows for a lower price to be offered but one which is fixed. Many folks put a higher value on a fixed price bill because they know what it is going to be every month and can plan ahead.

I could care less about what statistical models they use to project use. If they're selling me 2GB of data---it shouldn't matter to them how i use it. Quite frankly, they have no idea how to project tethering use with any degree of certainty.

The analogy bites because gas is measured exactly... just like electricity, water, and natural gas. It is not being sold on a statistical model of usage.No gas station gives you something other than exactly the amount pump gas and paid for (unless they jury rigged the pumps). The gas, once transfered to your tank, has zero impact on their service infrastructure. Few folks go to a gas station over an extended period of months and pay exactly the same price on every visit.

I see your point here. But i stand by the position that if you purchase a set amount of something, you shouldn't be limited on how you use it.

Try this analogy---at a golf course, you pay for 18 holes. There are several sets of tees---one set of red (for the ladies and kids), one set of whites (for old people and those who suck at golf), and one set of blues (for good players). What if golf courses charged MORE money for ladies/kids? They take forever at the golf course and hold everyone up--which cloggs up the course and makes it so less people can play.

 

[cmaier]

It's still not clear to me that it's binding.

The "Ad is binding because I activated the service" isn't a bad argument, really, but IMO it's clearly trumped by the service agreement. Which provides, specifically:

"We may change any terms, conditions, rates, fees, expenses, or charges regarding your service at any time." (They do have to give you notice of changes, and permit you to cancel your service if you don't agree with the changes).

Disputes are also subject to binding arbitration, for what that's worth.

There are two contracts at play here, and you are conflating them. There's the express contract that covers what happens in a 30-day increment. And there's the implied contract that covers what happens from increment-to-increment.

Imagine you apply to be a McDonald's franchisee and are accepted. You pay McD $250,000, build a restaurant, buy equipment and ingredients. The express contract says either side can terminate at any time. Despite this, McDonalds cannot cancel the contract after a month. It would violate the implied covenant of good faith and fair dealing, and/or breach an implied contract.

Further, the service agreement is the weakest kind of contract - it's not bargained for, but is a "take it or leave it" contract provided by the sole U.S. provider of wlan service for the iPad. Courts often throw out arbitration clauses in this type of contract.

 

[bpfesq]

Same thing with a household with multiple computers sucking down data over a router. "tethering" quite often in the case of an iPhone is really installing a router and putting two (or more) devices on the other end of the 3G pipe. You assertion that data consumption is going to stay approximately the same in that context????

OK, so now my ISP should charge me more money if i have a wireless router going to a few different computers in my house? That is *********!!

 

[deconstruct60]

Once more: I didn't say forever. But it didn't even last long enough for us to use the feature even ONCE.

Not techincally true. On May 1st could have signed up for 250MB plan. On May 3rd could have canceled. On May 15th could have changed mind and signed up for unlimited. It doesn't take 90 days for the user to issue those three directives into the AT&T system. As long as all three have been initiated then the feature is complete from the functionality executed correctly perspective.

They promised we could activate for 30 days, deactivate for 30 days, and then reactivate.

you still can even after June 7th. Again where is the missing functionality? You can deactive a plan, stay contract free for 3,30,60,etc. days, followed by activing a plan for another 30 days. Can easily reactive the account, but there are no explict terms that can reactive a specific contract in the future.

In exchange for this promise we gave them money.

the money is exchanged for the monthly contract.

A contract is a binding exchange of promises.

There was no exchange on this implied contract you are constructing. You are trying to repurpose the money for both the monthly contract ( which does not outline this at all) onto a second impled/"read between the lines" contract . You are going to be hard pressed to show that had meeting of the minds with AT&Y when they didn't explicitly promised, nor expected to provide the same contracts to folks who are off contract.

 

[dukebound85]

Taken from AT&T TOS:

The iPhone TOS does not have such a clause. Other ATT devices, such as laptop cards and their respective TOS's do

 

[essinger]

you still can even after June 7th. Again where is the missing functionality? You can deactive a plan, stay contract free for 3,30,60,etc. days, followed by activing a plan for another 30 days. Can easily reactive the account, but there are no explict terms that can reactive a specific contract in the future.

. . .

There was no exchange on this implied contract you are constructing. You are trying to repurpose the money for both the monthly contract ( which does not outline this at all) onto a second impled/"read between the lines" contract . You are going to be hard pressed to show that had meeting of the minds with AT&Y when they didn't explicitly promised, nor expected to provide the same contracts to folks who are off contract.

I think you are missing the mark here. The duty isn't owed by AT&T. The duty is owed by Apple. Apple advertised the 3G as a product you could use with unlimited mobile access in an on-again off-again manner for $29.99 a month. That was an inducement for sale. Apple had a duty to ensure that the terms underwhich they sold the device were maintained for a reasonable length of time. Apple (apparently) didn't. Apple owes any unhappy buyers of th 3G version a refund, regardless of the return policy.

 

[jamesnajera]

I think this tiered approach is more difficult than it needs to be. I would like to propose the "Flat Data Fee". Just charge $15 a GB. People don't need to be locked to a month to month data plan. If someone uses <=1GB of data they pay $15. If they use just over 1GB or <= 2GB of Data they pay $30. If they use 3GB of data they pay $45. If they want unlimited give them a flat fee of $50 dollars or whatever. This way their is no need to charge for the ability to tether, it is just an option that they can do, and if they use it, their data usage goes up, which means they may pay another $15 for another GB of data. It think that is simple.

Another nice feature with this idea, would be the ability for the service provider to inform the customer of the fact that they are close to buying another GB of data.

 

[bpfesq]

There was no exchange on this implied contract you are constructing. You are trying to repurpose the money for both the monthly contract ( which does not outline this at all) onto a second impled/"read between the lines" contract . You are going to be hard pressed to show that had meeting of the minds with AT&Y when they didn't explicitly promised, nor expected to provide the same contracts to folks who are off contract.

Honestly, the more i think about the implied contract angle of this situation, the more persuasive it gets.


AT&T announces favorable plan. I rely on the price and availability of that plan and purchase a 3G iPad. We have detrimental reliance here for sure and i think it is a good argument to say there is an implied contract that this plan will be available for a reasonable period of time.

Regardless, implied contracts, promissory estoppel/detrimental reliance claims are VERY tough to prove/win. If that is your only leg to stand on, you're in a very tough situation. Frankly, there are enough issues flying around in this mess that it would make a fantastic 1L contracts course final exam question.

 

[swajames]

you still can even after June 7th. Again where is the missing functionality? You can deactive a plan, stay contract free for 3,30,60,etc. days, followed by activing a plan for another 30 days. Can easily reactive the account, but there are no explict terms that can reactive a specific contract in the future.

But you can't do what both AT&T and Apple represented that you could, specifically maintain the ability to access an unlimited 3G plan for $30 per month which can be stopped and restarted, on the same terms, at will.

In my case, my iPad and 3G service was activated around May 18th and I will not renew until around June 16th. At that point, I no longer have the option to maintain the data plan terms which both the device manufacturer and the wireless carrier represented that I could.

While the likelihood is that I will maintain the 3G plan through automatic renewal, the point at issue is what was promised is no longer offered. More to the point, it has happened before I've even closed out one billing cycle.

While Apple's complicity and level of awareness or otherwise in this bait and switch has yet to be established, AT&T has some explaining to do.

 

[cmaier]

Not techincally true. On May 1st could have signed up for 250MB plan. On May 3rd could have canceled. On May 15th could have changed mind and signed up for unlimited. It doesn't take 90 days for the user to issue those three directives into the AT&T system. As long as all three have been initiated then the feature is complete from the functionality executed correctly perspective.

Fine. We were also promised we could do unlimited->limited->unlimited. That cannot be done in less than 61 days. Happy now?

There was no exchange on this implied contract you are constructing. You are trying to repurpose the money for both the monthly contract ( which does not outline this at all) onto a second impled/"read between the lines" contract . You are going to be hard pressed to show that had meeting of the minds with AT&Y when they didn't explicitly promised, nor expected to provide the same contracts to folks who are off contract.

There is no "read between the lines" contract. The contract incorporates, as do all contracts, an implied covenant of good faith and fair dealing. This is a textbook breach of that implied covenant. There is no meeting of the minds required, but even if there is, AT&T explicitly DID promise we could do unlimited->limited/no contract->unlimited. They plastered this all over their website, allowed their agent (Apple) to state it multiple times, issued multiple press releases stating this, etc. They said you could do unlimited->limited->unlimited. No single purchaser was able to do so, or will ever be able to do so. Breach of contract. Done.

As for trying to use the money for two purposes, I'm not. The only reason some people entered into the first monthly contract was in reliance on Apple/AT&T's false promise. Entering into the monthly contract (in fact, buying the iPad, too) is detrimental reliance on this false promise.

I'm McDonalds. You come to me and want a franchise. I say sure. Build a building (pay a third party), then enter into a month-to-month contract with me to buy hamburger patties. You go spend a ton of money building a building. Then you buy your first month's burgers from me. I change the terms of the burger supply contract - now you can pay me less, but I will only sell you 10 burgers a week, and if you go over 10, you must shut down for the rest of the month.

Believe it or not, the law is entirely clear that even though you didn't have a written promise from me not to change my terms after a month, I cannot do so. It breaches the covenant of good faith and fair dealing. You put way to much stock in the fact that AT&T calls its monthly service agreement a "contract" and assume that is the only contract at work here.

Honestly, the more i think about the implied contract angle of this situation, the more persuasive it gets.


AT&T announces favorable plan. I rely on the price and availability of that plan and purchase a 3G iPad. We have detrimental reliance here for sure and i think it is a good argument to say there is an implied contract that this plan will be available for a reasonable period of time.

Regardless, implied contracts, promissory estoppel/detrimental reliance claims are VERY tough to prove/win. If that is your only leg to stand on, you're in a very tough situation. Frankly, there are enough issues flying around in this mess that it would make a fantastic 1L contracts course final exam question.

Exactly right. And it is tough to win (jurors want to see a written contract), but it doesn't go there. There's a class action suit filed, and Apple gives away some gift cards to make it go away.

 

[WANGOOROO]

so lets stop acting like a strong consumer advocate/rights movement is unnecessary in this country. It's people like you who stick up for billionaires who want to become trillionaries because you either are one yourself, or dont know enough for your own good to realize that as much as those pretty little commercials might lead you to believe it, big business interest and consumer interests are about as polarized in this country as tea partiers and people with common sense.

You miss the point. Profit is not evil. Profit allows these companies to invest in new risky ventures or technologies, and also to reinvest in their network infrastructure.

There is not a damned thing wrong with that. Nobody should have any problem with a company or person that makes a profit. I never knew a poor person to offer employment or opportunity to people.

Would you prefer AT&T lose money? Where is the advantage in that?

Profit is the incentive for growth, innovation, and improvement.

If you are such an anti capitalist, why don't you move to China?

 

[cmaier]

Would you prefer AT&T lose money?

yes

Where is the advantage in that?

If you do a bad job and aren't punished for it, you won't improve, and competitors won't be motivated to do a better job, either.

 

[0092762]

If it's OK to charge the top 2% exorbitant amounts because they use the most data, then it must also be OK to tax the top 1% to death since they own 90% of the country then right?