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Another idiot bashes the iPhone
Posted by: Lux Interior
Date: July 11, 2007 07:49AM
To sum up the article:

"I am going to complain about AT&T and cell phone contracts in general. But I am going to pretend that these problems are exclusive to the iPhone."


I provide the article below to deny the idiot more clicks.

1) Biatch abut iPhone
3) Profit!


What's Hidden in AT&T’s 'Fine Print'?

Return to Summary:


Cost of Service, Service Requirements, Billing Issues

1) iPhone Requires a 2-Year Contract with AT&T.

“To use iPhone, you’ll need to sign up for a 2-year service agreement or a renewed 2-year service agreement."

2) Expensive: Requires $2,280, Over $1,730 in Wireless Costs.

The iPhone is expensive, but when you combine the cost of service with the iPhone, it cost at least $59.99 plus taxes and surcharges a month -- over $1,730, and the phone $500-$600.

“There are currently two versions of iPhone available. $499 for the 4GB model and $599 for the 8 GB model.”

AT&T’s offering: AT&T has a number of plans for data and wireless phone service. The iPhone plans starts at $59.99 for 450 minutes and 200 text messages, and goes to $219.00.


“Requires $59.99 Data Connect Unlimited… a two year agreement.”

3) Double Billing. You and the Caller Both Get Charged for the Same Call.

Fact: When you get called, you get charged for incoming calls and the person calling you also gets charged. This is now standard US practice for wireless plans.

4) All Use of the Networks Are Always Rounded Up to the Nearest Kilobyte or Minute.

This is from in the fine print, (as it appeared in caps).

Data usage is always rounded up:


Phone usage is referred to as “Airtime”, is always rounded up:


This practice is now standard and is anti-competitive. In the 1990’s, phone companies, to be competitive, created “6 second billing”, where the call was rounded to the nearest 1/10th of a minute. This change adds 15+% to the average bill. Moreover, the companies now have all gone to full minute billing, full kilobyte billing, so that they can make an extra minute on almost every transaction.

5) Customers Are Billed for “Network Errors” and “Network Overhead".


As one analyst wrote about “network overhead”.

”’Network overhead’ means all the bits used for any purpose whatsoever. If you resend a packet because best efforts wasn't good enough then you are charged.”

What is a”data session”?

“The definition of a ‘data session’ is itself problematic because the connection to the Internet is persistent but they can have arbitrary timeouts. They cannot identity individual connections, there aren't any, and they can't really measure by destination IP addresses. But some carriers are attempting to force you to use their caching but that's not realistic.”

What percentage of the costs of the calls are created through network errors or overhead? What is a ‘data session’ really comprised of?

6) Billed Even Though the Call Doesn't Go Through.

"Unanswered outgoing calls of 30 seconds or longer incur airtime."

According to AT&T, after 30 seconds it becomes a call, even if it didn’t connect to the called party. And in some cases, the network itself may take up the time to make the call a chargeable event. How much extra are customers being billed?

7) Bogus Fees Added to the Bill: Regulatory Cost Recovery Charge

The “Regulatory Cost Recovery Charge” is a made-up charge that should have been included in the cost of service instead of a separate line item. Most carriers are charging this fee, even though it is not government mandated or a legitimate tax. By making it a separate line item, the phone company gets more money and doesn’t have to include this line item in the advertised cost of service. According to AT&T:

"The Regulatory Cost Recovery Charge is a charge assessed by AT&T and is not a tax or government-mandated charge. This charge is subject to change from time to time as the cost of compliance changes.

"The purpose of the charge is to defray AT&T's costs associated with payment of fees and compliance with various initiatives imposed by the government. Please note that costs may be incurred and charged prior to initiation of any of the respective services."

8) $175.00 Termination Fee.

$175 has been become the industry standard on how to charge a customer for terminating service before the contract expires.

“An Early Termination Fee of $175 may be assessed against you in the event that you terminate your Wireless Service Agreement and/or selected plan before the expiration of its term.”

This is very problematic if you just bought a $500 computer-phone. The contract is 2 years so what happens if Apple finally allows the phone to be used on other networks, some of which may be faster or cheaper in 6 months?

9) International Messages Are Charged Additional Fees as Are Files Over 300Kbps.

While it cost nothing extra to send an email overseas using the Internet, AT&T has decided that all messages outside the US or larger than 300 K should cost extra:

“International messages not included. Charges for international messages sent from the U.S. are 20¢ for Text Messages and 50¢ for Picture/Video Messages. Additional charges for premium messages and content apply. Messages over 300 KBs billed an additional 50¢/message.”

10) Over Your Quota: Get Gouged: 40¢ Per Minute and 69¢ Roaming Offnet.

We could not find the rate for a phone call if the customer extends past their stated limit. However, it seems that these fees apply.

"Voice: If you have a voice-capable device, unless you request voice blocking, select a data plan that restricts voice access or select a qualified voice plan, the default rate for voice calls on the AT&T network are 40¢ per minute and 69¢ per minute for domestic roaming voice calls off the AT&T network (rates are subject to change without notice)."

Problems with the Service Offering: Unlimited is Hype.

11) The Services Are Not Secure and Can't Block Your Phone Number.

The service can't block your phone number and you get charged for incoming calls from unsolicited callers or messages.

"Caller ID blocking is not available when using the Services, and your wireless number is transmitted to Internet sites you visit. You may receive unsolicited messages from third parties as a result of visiting Internet sites, and a per-message charge may apply whether the message is read or unread, solicited or unsolicited."

12) The Current Mobile Email Service Doesn't Support Attachments.

"Mobile Email---E-mail attachments can not be sent, downloaded, read, or forwarded on the mobile device."

13) Prohibited Uses and “Unlimited” Sales Hype.

Even though the service is called "unlimited" they are simply using that word as a marketing concept, not an actual service description. You can't use the service for VOIP and worse "unlimited plans cannot be used for uploading, downloading or streaming of video content (e.g. movies, tv), music or games." Here are just some of the restrictions:

* "Data Service sessions prohibited uses include, but are not limited to, using services:
* With server devices or with host computer applications, including, without limitation, web camera posts or broadcasts, continuous jpeg file transfers, automatic data feeds, telemetry applications, peer-to-peer (p2p) file sharing, automated functions or any other machine-to-machine applications;
* as substitute or backup for private lines or dedicated data connections;
* for voice over ip;
* in conjunction with wwan or other applications or devices which aggregate usage from multiple sources prior to transmission;
* Using the services for any activity that adversely affects the ability of other people or systems to use either the services or other parties' internet-based resources including, but not limited to excessive consumption of network or system resources (whether intentional or unintentional) and "denial of service" (dos) attacks against another network host or individual user; or interference with or disruption of other network users, network services or network equipment.
* Except for content formatted in accordance with at&t's content standards, unlimited plans cannot be used for uploading, downloading or streaming of video content (e.g. movies, tv), music or games. Furthermore, unlimited plans (except for dataconnect and blackberry tethered) cannot be used for any applications that tether the device (through use of, including without limitation, connection kits, other phone/pda-to-computer accessories, bluetooth® or any other wireless technology) to laptops, pcs, or other equipment for any purpose”

14) Service Is Not Intended to Provide Full-Time Connections: Unlimited is Hype.

Don’t use the service too much or the phone company can terminate your service.

“Service is not intended to provide full-time connections, and the Service may be discontinued after a significant period of inactivity or after sessions of excessive usage. AT&T reserves the right to (i) limit throughput or amount of data transferred, deny Service and/or terminate Service, without notice, to anyone it believes is using the Service in any manner prohibited above or whose usage adversely impacts its network or service levels or hinders access to its network… You may not use the Services other than as intended by AT&T and applicable law.”

15) Wi-Fi Service is Limited.

"To ensure that the Wi-Fi Service is not being used fraudulently, AT&T limits your usage of the Wi-Fi Service to 150 uses per month."

Does that mean that if you lose signal a few times during one session, or you are traveling and go between ‘hot spots’ you can rack up lots of ‘uses’?

16) “Offnet” Restrictions

If you have a service and you happen to call other ‘offnet’ services, including wireline phones, or non-AT&T subscribers, you have to ‘limit’ your use, be charged or be terminated.

“If your usage of the Services (including unlimited data and messaging plans) on other carrier's networks ("offnet usage") during any two consecutive months exceeds your offnet usage allowance, AT&T may at its option terminate your wireless service or access to data Services, deny your continued use of other carriers' coverage, or change your plan to one imposing usage charges for offnet usage. Your offnet usage allowance is equal to the lesser of 6 megabytes or 20% of the kilobytes included with your plan, and for messaging plans the lesser of 3000 messages or 50% of the messages included with your plan.”

17) Plan Goobly-@#$%&

Anyone trying to understand their wireless plans may just throw up their arms in disqust. There are plan fees, taxes and surcharges, roaming fees, text fees, Night and Weekend Minutes, Mobile to Mobile Minutes, Anytime Minutes and Rollover Minutes, EDGE/GPRS and BroadbandConnect, offnet, AT&T Video clips, Data Connect Unlimited, WI-FI CONNECT, constraints on ‘unlimited plans including “20% of 6 Megabits offnet”, “150 uses of Wi-Fi”, and other restrictions.

If the customer only goes by what the web site displays, much of the important data – from the restrictions, the overages of minutes or text messaging, or the limitation of the plans are ALL missing or hidden. As of this writing we could not find a clear outline of the extra charges someone incurs by going over their plan minutes.

18) Comparing US and Other Broadband Countries: America Is being Laughed At.

Why did iPhone get deployed on a slow, closed network? That answer may not be known, but it is clear that iPhone is being deployed on an old-technology network, and is neither state-of-the-art nor fast. Here’s some info about the networks.


“High-speed” for AT&T’s wireless network seems to be about 200Kbps, AT&T's EDGE network was delivering roughly 40 Kbps before it was upgraded in advance of iPhone's launch. This is compared to what is called “3G”, which is a faster service, but compared to the rest of the world, especially Asia, we’re light-years behind.

America is 15th in the world in broadband and AT&T is notorious for failing to deploy previous fiber optic commitments and its new “U-Verse” service is the laughing stock of the world as the plan is to roll out inferior services using the old copper wiring to complete the broadband connection instead of a complete fiber solution. In short, when AT&T deploys it is deploying services that are inferior to what is already considered slow in most of the world, from Asia to Europe. See: []

For example, the Wall Street Journal stated that it was common for people to make a 10- second video and email it to their friends.

“When Tomomi Suzuki returned to her hometown on vacation last summer, she wanted to give friends back in Tokyo a taste of what she was doing. One night during a fireworks festival, she used her cellphone to make a 10-second video of the spectacle and e-mailed it directly to chums in the Japanese capital… ‘I do this all the time,’ the 21-year-old nightclub hostess says….In heavily networked Japan and South Korea, young people such as Ms. Suzuki don't think twice about using their mobile phones to create short movies, watch the Webcam inside their home or download pop songs…”

And one writer outlined how there was already a 40% penetration of the faster 3G wireless services by 2006.

“While it is very early days for 3G in most countries, mobile operators in Japan and South Korea have already reached 40% penetration of 3G services."

Worse, a recent story in USAToday outlined new findings, showing that America’s broadband is really a dirt road compared to Asia or Europe. Japan’s download speed is 33 times faster than America’s broadband.

"The median U.S. download speed now is 1.97 megabits per second — a fraction of the 61 megabits per second enjoyed by consumers in Japan ... Other speedy countries include South Korea (median 45 megabits), France (17 megabits) and Canada (7 megabits)."

19) The Upcoming Wireless Spectrum Auctions

The upcoming 700 MHz wireless spectrum auctions are underway and too complicated to detail here but the bottom-line is America needs open wireless networks, and it should be clear to anyone who is considering buying an iPhone that the AT&T networks should not be the only network for this innovative product.

Here’s some information about wireless spectrum from the New America Foundation.


Columbia law professor Tim Wu suggests that to make the phone itself more “revolutionary” Apple should open up the code for multiple carriers.

“If Apple wanted to be "revolutionary," it would sell an unlocked version of the iPhone that, like a computer, you could bring to the carrier of your choice. An even more radical device would be the "X Phone"—a phone on permanent roam that chose whatever network was providing the best service. Imagine, for example, using your iPhone to talk on Sprint because it had the best voice coverage in Alaska, while at the same time using Verizon's 3G network for Internet access. Of course, getting that phone to market would be difficult, and Apple hasn't tried.”

He also points to other flaws in AT&T’s deployment of Wi-Fi, among other telecom/wireless issues. []

In sum – America needs a new plan for its wireless future. The fact that AT&T has buckets of restrictions, even on ‘unlimited’ plans, and the fact that you simply can’t just take your business and phone elsewhere are serious issues.

It’s time to come to grips with America’s failure to be competitive, both locally and globally. We need new wireless services that are fast, and that are open to devices, without restrictions.

If Apple wants to be an innovator and revolutionary, it should consider how their current partner, AT&T, was the wrong choice and take steps to help to build a wireless future.

And if you’re still thinking of buying iPhone and the AT&T package – read the fine print.

NOTE: This is based on the cheapest service rate for telecom, not counting overages, etc, 20% tax rate including additional fees. And the phone is based on dividing the cost of 2 phones.
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Re: Another idiot bashes the iPhone
Posted by: RAMd®d
Date: July 11, 2007 10:29AM
Moreover, the companies now have all gone to full minute billing, full kilobyte billing, so that they can make an extra minute on almost every transaction.

I think this is one reason that Verizon is sooooooo slow to give you your voicemail and handling options. <tick tock>

If Apple wants to be an innovator and revolutionary, it should consider how their current partner, AT&T, was the wrong choice and take steps to help to build a wireless future.

That comment deserves both a "Duh!" and a "BS".

Stevie had to start somewhere. Their was/is *no* right partner at the moment. One Apple is established as a heavywieight player, THEN he has a chance to help build a *better* wireless future.

As far as building a consumer friendly wireless future, that's in the hands of the customer. We all need to put pressure on telecoms, but for the most part, that won't happen.

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Re: Another idiot bashes the iPhone
Posted by: davester
Date: July 11, 2007 10:42AM
Why didn't you post the beginning of the article? you removed the context. When look at the summary at the beginning of the article, it's pretty logical. I completely agree with him that the U.S. has one of the most expensive, poorest coverage, slowest, lowest tech cell systems in the civilized world. Here's the beginning of the article:

"Apple’s iPhone Is Telecom Bling. Reporters Missed the Real Story --- Control of the Wireless Networks, Cost of Service, Speed, and Service Restrictions:

Before you buy an Apple iPhone, you should read the ‘fine print’ in AT&T’s wireless service contract. The first question every customer should ask is ---Why did Apple, the standard for innovative techno-cool, partner with a telecom curmudgeon that has a penchant for not caring about their customers. AT&T’s “Data Connect Unlimited” wireless network used for the iPhone is slow, expensive and a downright restrictive network, not ‘unlimited” as the name implies.

Most reporters have been praising Apple’s new phone. Yet it is clear that while the phone is the new wunderkind of industrial design and customer interface, the reporters missed the main issue --- This is a wireless phone and broadband service, and an AT&T control issue -- not a techno-toy issue. And the fine print and tricks of the wireless trade are downright offensive and need to be addressed."

"In science it often happens that scientists say, 'You know that's a really good argument; my position is mistaken,' and then they would actually change their minds and you never hear that old view from them again. They really do it. It doesn't happen as often as it should, because scientists are human and change is sometimes painful. But it happens every day. I cannot recall the last time something like that happened in politics or religion." (1987) -- Carl Sagan

Edited 1 time(s). Last edit at 07/11/2007 10:43AM by davester.
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