Tuesday, July 17th 2007

Congress Telecoms Subcommitee Slams AT&T Over iPhone Contract, Fees

WASHINGTON - U.S. lawmakers are criticizing high early-termination fees and the inability of consumers to use mobile devices such as the new iPhone on more than one network. Before switching to another wireless provider, mobile customers usually have to pay $175 or more to terminate their current plan, and they usually have to get a new phone. How can the iPhone be a threat when millions of us can't even use it because we're not AT&T Wireless customers? Personally, I'm not in a position to pay to break my Verizon Wireless contract - which has five family phones on the plan - so I can pay $500 for an iPhone, sign a two-year contract with AT&T Wireless and still not be able to manage my e-mail in the tunnel between the Woodley Park and Dupont Circle Metro stations.

I would get one in a heartbeat - if I could get one through Verizon. I'm not saying it's a substandard phone or that it won't eventually surpass Windows Mobile phones or any other product. For me - and many other readers who have sent me e-mails about this topic - the idea of paying termination fees, buying a new iPhone and signing an AT&T contract is unrealistic. That's all I'm saying. In the U.S., AT&T has a "multi-year" contract to be the exclusive provider, according to AT&T. T-Mobile is reported by a German newspaper to be selling the iPhone in Germany on 1 November. In Europe, only half the mobile phones are sold by carriers, compared to 94 per cent in the U.S. Europeans are more accustomed to buying an unlocked phone and then finding a carrier that has good coverage where they need it, Milanesi said.
The freedom to access any content or services we want through our devices. My take on this issue may surprise some of you who have come to know that I am often in favor of legislation and regulatory measures to provide greater consumer freedom. I say let AT&T and Apple keep up their exclusive iPhone carrier contract, but only for one year.
Apple sees the iPhone, which has already sold in excess of 300,000 units, bringing new choices to cell phone users. For AT&T, the iPhone also a way to bring Internet usage within its cellular "walled garden," where Internet access can be monitored and controlled. In my opinion, I agree with the author. Having the iPhone only available to AT&T customers is no different than any other cell phone manufacturer limiting their customer base to a specific wireless provider. Or Ford only allowing Texaco gas for your vehicle.
Even though the phones become expensive paperweights if customers quit AT&T's wireless plan, the company will still charge a $175 early termination fee, Rep. Edward J. Markey, chairman of a U.S. House subcommittee on telecommunications and the Internet, was quoted as saying.AT&T profits from selling the phone at full retail price and charging a termination fee while paying no costs for production.
Well, do yourself a favor and don't ever try an iPhone. If you do, you'll just eat your early termination fees and wonder why you put up with such complete POS phone for so long. A lawmaker has criticized the termination fee that customers need to pay for their iPhone services, an Associated Press report said.

"You're stuck with your iPhone and you can't take it anywhere,'' the Massachusetts Democrat said. Markey and other lawmakers leveled their criticism in a recent hearing ostensibly to determine whether the federal government should bar states from regulating the wireless industry. Mobile carriers say it's very costly to comply with multiple state laws. The comment arose during a hearing to decide whether Congress should grant the cell-phone industry's wish of being allowed to pre-empt states from regulating wireless phone companies. Individual state public utility commission currently hold the authority to regulate both the terms and conditions of wireless service agreements. If you have any ideas or thoughts on this, let us know via the forums.
Murray, the nonprofit organization's senior counsel, testified that " ithout open access to the full range of wireless services and devices, consumers will continue to face unfair charges for service modification or termination, inability to use innovative applications, devices that have been hobbled to minimize competition, and other troublesome practices currently used by the dominant cell phone and broadband providers."
Wireless executives defended the industry, saying it's highly competitive and arguing that costs to consumers would rise if government required devices to work on all networks. Some lawmakers, both Democrats and Republicans, also expressed reluctance to tamper with what most acknowledged was a healthy and fast-growing industry. Devices that work on one U.S. wireless network rarely work on another -- in part because carriers use different technologies or have exclusive marketing arrangements with makers of handsets.
The phones, which cost between $500 and $600, are usable only on AT&T's wireless network and will remain that way until 2012, the report said. However it would invariably drive up the cost of already expensive phones. However since they are supposedly subsidized by the carriers then it shouldn't be too bad, although not enough to justify the $200 cancellation fee they charge and the 2year contract. Why is it that you have to be in a contract for a service that YOU are paying for? No other services require them, why do we let them get away with this, oh and the subsidized phone argument is crap.
Many have bought themselves out of existing contracts. Apple have a rip-roaring success on its hand - it will easily meets its current targets. As soon as the iPhone price stops dropping then. its "Goodbye Windows Mobile". I stumbled upon the headline, " iPhone a True Threat to Windows Mobile " on the blogosphere the other day and couldn't help but chuckle a bit.
I use a Blackberry. What an awesome device! It has all the funtionality and doesn't cost an arm and a leg. Those who are predicting the demise of Windows Mobile simply because of an innovative interface, think again. Do you think MS will be sitting around twiddling their thumbs while all this is swirling around? Get real.
The iPhone has set the stage for the future of mobile Internet -- but bad policies allow companies like AT&T and Verizon to shackle great gadgets to their closed networks. Not so long as I pay Verizon every month. The hackers are busy both here in the states and overseas trying to find a way to "unlock" the iPhone so it works on other networks.
The first of Apple's iPhones to ship in Europe this autumn will function wirelessly over slower EDGE networks as well as using Wi-Fi hot spots, the same as in the U.S., according to an industry analyst based in Italy.Whether the European iPhone is 2.5G or 3G and the countries in which the device is sold could affect Apple's declarations that it will sell ten million iPhones globally in fiscal 2008, Milanesi said. "Europe is culturally different than the U.S., and I'm not sure people will queue up for three days to buy an iPhone as in the U.S.," she added.
The iPhone has no instant messaging – probably because that would interfere with AT&T's billion dollar text messaging revenue stream. While Apple is a tough negotiator and didn't concede entire control of iPhone and its services to Ma Bell, it's also now a partner AT&T's cellular business. Its agreement gives Apple a percentage of the cellular services revenue AT&T pulls in from each iPhone user. Leaving VZW for at&t around here is a downgrade in itself. I agree, had Verizon and Apple been able to come to some agreement for use on their network, I might be more inclined to purchase it.
The freedom to access any content or services we want through our devices. Having spent 226 days in jail to protect his work product, he knows first hand that a free press doesn't come cheap. He is a member of the CNET Blog Network. Opponents to an open-access proposal counter that the wireless market is already competitive and that the competition forces wireless carriers to invest in new products and network improvements that benefit consumers. Steven Zipperstein, general counsel for Verizon Wireless, challenged Wu's market assessment. "Carriers are constantly expanding services and benefits to customers because they know they must fight fiercely to attract and retain those customers," he said. Just a few days ago, not long after the iPhone launched, I ducked into a Verizon Wireless store to see the new offerings in phones. The wireless industry opposes what Verizon Wireless general counsel Steven Zipperstein called "patchwork, utility-style regulation" as "unnecessary and harmful."
I've played with the iPhone. It's beautiful and has some cool features. The fact that it's locked to a GSM network with the poorest voice quality and the slowest data network made me think twice before disconnecting a reliable wireless service I've used for years and switching over. State public utility commissions have no authority over pricing on wireless plans, but do have the authority to regulate the terms and conditions of wireless service agreements.
The direct threat, however, is not to Microsoft, which has lots of other ways of taking corporations' dollars, but to the cell providers, who are now exposed as being the enemy, rather than the facilitator, when it comes to innovative mobile services. Republican Edward Markey, chairman of a key house committee on telecommunications, noted that customers who don't like AT&T's network can't move to another provider. The iPhone is locked so it can't be used anywhere except on the AT&T network. It is a proprietary architecture. The iPhone is a lynch pin in AT&T's strategy to gain critical mass for the new wireless gateway. It's possible that the iPhone is a Trojan horse that could break down AT&T's walled garden.
Among the proposals is a requirement that one block of airwaves being auctioned be accessible to all wireless devices, which would include the iPhone, it added.
Right now there is a chess match going on now between apple and and microsoft. In the past year apple has quietly moved its pieces around the board with the release of osx, the popularity of the ipod, the change to an intel chip which allows the consumer to buy a computer that can run windows or OSX. Now we have the iphone. I'm a Mac user and an iPod user. I believe that Apple will have a hard time repeating their first weekend numbers and that interest in the product will continue to downward spiral.Good article Sam. Just remember that you'll always offend the chubby Apple geeks or the at&t retail store employees/fanboys whenever they feel you are dissing their product.
Unless you agree with the thought of certain products only being available to certain wireless providers then don't waste your carpal ligaments.
Don't know if MS cells will ever be the hottest over here, but iPhone will have an impact. Why would they pick a single operator in each country, if that wasn't the case. Over here in Europe, where SMS has been around for a while and people send each other photos taken with their cell phone cameras with 3-5Mpixels. Both speed and the right protocol have to be supported. Other missing ingrediants: applications and ringtones, I want to buy them and install them. EDGE is slow and WCDMA would be better for browsing, but iPhone users won't just use it for browsing." Many users will rely on the iPhone as a phone and then download songs and videos from a computer instead of over the air, she said. Many iPhone buyers never had a PDA, and don't really care about that kind of functionality. Jobs knows this, that's why he's more or less created a nice iPod with a phone and a few fun apps thrown in. I'm typing on an iPhone now, and it is without question the coolest phone, music player, internet. aw hell, it's basically the coolest thing I've ever owned. While the iPhone buzz centers mostly on its unique user interface and cool features, its greater impact could be on how its users interact with the Internet.
Touch sensitive screens, "Visual Voice Mail", a GUI that makes placing a call or sending an email only a matter of touching a name, all illustrated before even the advent of Netscape. We are told that the inventor attempted to donate the inventions to the W3C believing they were important enough to belong to such an organization. If the iPhone is "so significant" that Congress needs to holds hearings on its impact, then the inventor's reasoning may have been well founded. I use my Iphone to do my payroll, sms is fine for messaging and don't knock it until you try it. Apple can open you up to a whole new world if you just try them. You guys are in great company. Many of the comments here are so far off topic that it makes you wonder if those commenting even read the article. This article is not about the iPhone being a piece crap though for some reason, like the majority of Apple discussions, the Apple zealots come out of the dark and go rampant. It is quite obvious what this article is about but the majority of the above comments are pointless.
I can buy the iPhone now, use call forwarding to send calls from my existing number, and reduce overall shared minute usage in the Verizon plan. The importance of having 3G with the iPhone for better browsing capabilities is unclear because "it depends on how Europeans use it", Milanesi said.
The iPhone could be revolutionary to mobile communications. The touch screen technology, the WiFi connectivity, its approach to mobile Web surfing and - my favorite - the interface for managing voice mail are all cool concepts.
The device, costing $500 to $600, is only available via AT&T, with an early-termination fee of $175. I initially did not buy the unlimited texting but after I got to using the phone i love it and I still saved money monthly because the plan was cheaper than the PDA plan I already had with AT&T even when I added the additional $20.00 to upgrade to unlimited texting.Source: NewsFeedResearcher
Add your own comment

3 Comments on Congress Telecoms Subcommitee Slams AT&T Over iPhone Contract, Fees

Maybe I'm confused but its been this way with every phone so far. I'd love to buy the PPC-6800 and take it to Verizon but that doesn't work either. I don't hear anyone screaming about that?
Either change the laws because the standards are a pain or just leave it. The iphone isn't that great.
Posted on Reply
Bird of Prey
Wait...this damn news posting was waaaay too long. Is this your personal view on it or is it that mixed with a news feed or what? Im confused.

While I personally dont like something being locked in to one carrier, me being an AT&T customer kind of makes me wish it was open to all. Of course Motoralas V3Razr and Krzr started out on Cingular then went to other carriers and they sure did improve on them.
Posted on Reply
This was to big to even try and rephrase so i just removed some numbers it had...And even that was long enough... :)
Posted on Reply