Re: iphone and 2 yeat contracts Fw: TRACNotes Volume 5 Issue 27

[David Farber <dave () farber net>]

Begin forwarded message:

From: Sam Simon <sam () simon net>
Date: July 6, 2007 5:46:53 PM EDT
To: David Farber <dave () farber net>
Subject: iphone and 2 yeat contracts Fw: TRACNotes Volume 5 Issue 27
Reply-To: sam () simon net

Dave

For IP if you wish. The ATT demand for a two year contract for  
iiPhone contracts puts the lie to the oft repeated justification for  
such fees -- that the carrier is subsidizing the cost of the phone.

I believe consumers are paying full freight for iPhones. Seems the  
two year contract and early termination are just greed.

Sam
Samuel A. Simon
Sent from My Blackberry
202-263-2901

-----Original Message-----
From: "TRAC" <trac () trac org>

Date: Fri, 06 Jul 2007 20:16:34
To:"Sam Simon" <sam () simon net>
Subject: TRACNotes Volume 5 Issue 27


TRACNotes Vol. 5 #27
  TRACNotes: News from TRAC  <https://img.getactivehub.com/an2/ 
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Volume 5 Issue 27 - July 6, 2007


IN THIS ISSUE


* WIRELESS WATCH: To iPhone or Not to iPhone,
That is the Question
* WIRELESS WATCH: Amp&rsquo;d Mobile In Trouble,
Files for Bankruptcy
* BUCKS WATCH: TRAC State-by-State Local Phone
Plan Comparison: Tennessee





To iPhone or Not to iPhone, That is the Question - The biggest event  
to hit the consumer telecommunications industry in quite some time  
occurred last week as the much-hyped Apple iPhone was released to the  
general public. Listening to the often-breathless reviews from  
industry pundits, one could not be faulted for thinking that the  
iPhone can cook and clean house in addition to its myriad other  
features. Here at TRAC, however, we’ve seen numerous telecom gizmos  
come and go and we’ve found that most consumers want a simple device  
that does what they want and doesn’t cost an arm and a leg. So how  
does the iPhone measure up and (more importantly) what are the  
“gotcha’s” that consumer should keep in mind before shelling out $499- 
$599 for the iPhone? Here are the big factors to keep in mind:

* The iPhone is exclusively available from AT&T (a.k.a. Cingular,  
a.k.a. AT&T Wireless) and will only be available to AT&T subscribers  
until at least 2009. This means that subscribers who want an iPhone  
but are currently under contract with other carriers will have to  
either pay for two wireless plans, break their existing service  
contract (and pay a hefty early termination fee), or wait for their  
contract to expire.


* iPhone service is significantly more expensive than conventional  
cell phone service. The cheapest iPhone service plan costs $59.98 per  
month for 450 minutes, unlimited data, visual voicemail, 200 SMS text  
messages, and 5,000 night and weekend minutes. By comparison, AT&T’s  
conventional “Nation 450 with Rollover” plan costs $39.99 per month  
for 450 anytime minutes and 5,000 night and weekend minutes.


* iPhone service requires a 2-year service contract. Early  
termination of the contract will cost $175. One has to wonder why  
there is an early termination fee at all. The normal excuse offered  
by carriers is that they are subsidizing the cost the phone. However,  
it is hard to make this case with regards to the iPhone. According to  
press reports, Apple is turning a profit of approximately $300 per  
phone. That may be one reason Apple’s stock is soaring.


* When not operating over a Wi-Fi connection, the iPhone’s data  
system currently operates over AT&T’s EDGE network instead of the  
company’s 3G network. Some analysts have called the connection  
“excruciatingly slow,” taking more than 100 seconds to download the  
Yahoo! home page. The highest data speeds consumers should expect are  
around 200-220 kbps, which is about 1/3 the speed of a typical DSL  
connection. In other words, don’t expect the iPhone to break any  
speed records downloading online content.


* AT&T’s customer service ratings historically have not been the  
best. While the company has made strides as reflected in recent  
rankings from J.D. Power and others, they continue to lag behind  
industry leaders Verizon Wireless and T-Mobile. While Apple and AT&T  
have gone to great lengths to make setting up the iPhone as painless  
as possible, consumers should still consider the likelihood that they  
will have to interact with AT&T customer service at some point.


* Battery replacement will cost between $80 and $100. The iPhone  
battery is not easily replaceable, so the only option when faced with  
a dead battery is to send the iPhone back to Apple for replacement,  
which costs around $80.00. For an additional $20 they will send you a  
“loaner” while your iPhone is “in the shop.”

The final word: Customers who absolutely must have the iPhone will  
likely not be dissuaded from buying one by this article. Consumers  
who have a real need (and the pocketbook to pay for) unlimited data  
usage may find the iPhone quite useful. In addition, customers who  
are considering spending $249-$349 on a video iPod and who want a new  
cell phone as well could find that the iPhone’s cost is more  
digestable. For the rest of our readers, however, it’s hard to  
recommend the iPhone at this time. The high price tag for the device  
itself and the service is unlikely to come down until other wireless  
carriers begin to offer iPhone service. In addition, later versions  
of the iPhone are likely to include even more features and the  
capability to operate of faster 3G networks. For all these reasons,  
most consumers should probably hold off on rushing out to buy the  
iPhone right away.


Amp’d Mobile In Trouble, Files for Bankruptcy - Last month Amp’d  
Mobile, the troubled wireless carrier, filed for Chapter 11  
bankruptcy protection. This comes on the heels of media reports that  
Amp’d has been unable to collect on bills owed by approximately half  
of the carrier’s estimated 175,000 subscribers. Amp’d is one of the  
approximately 40 mobile virtual network operators (MVNOs) currently  
operating in the United States. MVNO’s do not operate their own  
wireless networks as carriers like Verizon Wireless, AT&T, Sprint- 
Nextel do. Instead, they lease access to one of the existing networks  
and typically market themselves to niche market segments. Amp’d, for  
example, leases access to Verizon Wireless’ network and focuses on  
providing data content to the teen and twenty-something market. Amp’d  
offers several levels of service, including traditional post-paid,  
pre-paid, and hybrid plans. The company launched in 2005 amid news  
that it had raised more than $350 million in venture capital.  
Subscribers to Amp’d service should contact the company to inquire  
about the future of their service. Verizon Wireless had threatened to  
cut off service to the company’s subscribers, but relented when a  
deal was struck earlier this week. Needless to say, the future of  
Amp’d is very much in doubt at this time. We would recommend that  
consumers looking for a new wireless carrier look elsewhere, at least  
until the company’s financial situation becomes clearer. For more  
information about Amp’d’s bankruptcy filing, click here.



TRAC State-by-State Local Phone Plan Comparison: Tennessee - (Note:  
This is the forty-second in a series of articles comparing local  
telephone rates in each of the 50 states.) Residents of the Volunteer  
State may find that they pay significantly different rates for basic  
local telephone service depending on the area of the state they live  
in. TRAC’s survey of local phone rates in Tennessee found that  
residents can spend anywhere from a low of $28.13 to as much as  
$42.01 per month for similar levels of service depending their  
address. The largest local phone carrier in Tennessee is AT&T  
(formerly BellSouth), though there are a number of small rural  
carriers, competitive local exchange carriers, cable, and third-party  
VoIP carriers vying for consumers in the state. Subscribers to AT&T’s  
“Basic Residential Line” plan can pay as little as $28.13 in one part  
of the state for a package including unlimited local calling, Caller  
ID and call waiting, while subscribers in another part of the state  
may pay as much as $30.11 for the same level of service. Subscribers  
to one of the rural carriers typically pay between $25.40 and $37.95  
per month for basic local service with Caller ID and call waiting.  
Among the competitive local exchange carriers serving the state,  
Navigator Telecommunications offers the most competitive rate at an  
estimated $28.45 per month for their “Basic Plus” plan. Comcast, the  
largest cable provider in the state, offers their “Unlimited” local  
and long distance bundled plan, but charges more for it ($44.95 per  
month) when subscribers do not also sign up for Comcast cable TV or  
Internet service. Finally, third-party VoIP carriers such as Vonage  
and Packet8 offered the cheapest rates in our survey ($25 or less for  
unlimited local and long distance calling), but they are only  
available to customers with existing broadband connections. To view  
the full chart, click here.
A note on methodology: TRAC’s local phone plan survey takes in to  
account the prices for monthly service, the federal subscriber line  
charge, and the two most popular calling options – Caller ID and call  
waiting. Note that some local phone service plans are only offered as  
a bundle with long distance service, which skews the total cost  
comparison somewhat. TRAC’s survey covered plans being offered in a  
variety of local service areas. Plans surveyed may not be available  
in every area of the state

INTERESTING LINKS
----------------

FCC Main Page: http://www.fcc.gov
FCC Complaint Form - http://svartifoss2.fcc.gov/cib/fcc475.cfm
List of State Regulatory Commissions: http://www.naruc.org/ 
displaycommon.cfm?an=15
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