Verizon Wireless's Outrage Over Alltel Ad A Bit Misplaced

from the bad-timing-is-all dept

Having just run into its own problems with false advertising, Verizon Wireless is now suing competitor Alltel, claiming false advertising in its commercials. The ads, such as the one here, make fun of Verizon Wireless and other mobile operators for forcing people to extend their contracts whenever they make changes, and claim that one of Alltel's advantage is the lack of such requirements.

Verizon Wireless doesn't just claim that this is wrong, its spokesperson states: "Whatever merit this comparison may have to other carriers, in the case of Verizon Wireless, the supposed 'advantage' is pure fiction." "Pure fiction" is a pretty strong claim, and it would be a lot stronger if it hadn't been absolutely true until just a couple months ago. Verizon Wireless did, in fact, force people to extend contracts, and only stopped the practice back in October when Sprint got sued over doing the same thing. And, of course, the Alltel ads began running well before Verizon was pressured into making this change. So, while it's technically accurate that these ads are false advertising now, it seems a bit excessive to describe them as "pure fiction," when they were absolutely true until just a few months ago.

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Apple Beware: CA Supreme Court Gives Go Ahead For T-Mobile Phone Unlocking Lawsuit

from the folks-in-cupertino-may-be-interested dept

Just a few days after a class action lawsuit was filed in California against Apple for locking down the iPhone, the California Supreme Court ruled on a different case that may have an impact on the Apple case. It's given the go ahead on a separate lawsuit against T-Mobile for locking its phones and requiring an early termination fee. T-Mobile had argued that the terms of service required that any dispute go to binding arbitration, so that it didn't make sense to take it to the courts. Of course they want binding arbitration because companies almost always win in binding arbitration. The court found that it's perfectly reasonable to take this issue to court. How the courts will actually rule on the issue could make a big difference in the Apple/iPhone case -- as there is the possibility that the courts may find that (in California at least) locking a phone to a single network is not allowed. It may depend on the specific wording of state laws, as the specifics of such a case can get rather technical. To be honest, if a mobile phone operator wants to lock a phone to only their network, and people agree to it in the contract (or agree to an ETF), then that should be a contractual issue. It's a dumb business practice -- as many operators are starting to realize. However, that doesn't necessarily mean it should be illegal.

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Sprint Realizes That People Hate Forced Contracts, Early Termination Fees

from the making-it-a-choice dept

It's become quite clear that people absolutely hate the forced two year contracts and early termination fees from mobile operators. It appears that some of the operators are finally getting the message. In discussing how it's going to offer its eventual WiMax offering, Sprint is now saying that there will be no mandatory contracts with early termination fees -- instead, it will be voluntary, based on a sliding price scale. In other words, if you're willing to take a longer contract, it'll be much cheaper. If you don't want a contract, that's fine, but you'll pay more per month. That seems perfectly reasonable and fits with typical pricing systems that lets the customer figure out how much the flexibility is worth to them. It's about time someone started offering this. Hopefully the other operators take the hint and start offering something similar for their regular phone service.

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Faking Death To Get Out Of Mobile Phone Contracts

from the you-think-maybe-there's-a-problem? dept

The introduction of local number portability was supposed to force mobile operators to improve their customer service, since now it would be easier for upset customers to simply jump to a competing carrier. Instead, it seems to have only increased the use of early termination fees that the mobile operators charge if you leave a contract early. To be fair, often these ETFs come into play when the customer has purchased a heavily subsidized mobile phone -- which sounds fair. However, the number of irate mobile users who find themselves facing huge bills just because they want to switch mobile operators suggests that the practice isn't doing much good for the reputations of mobile operators. In fact, it's so bad that some folks are willing to play dead in an effort to fool mobile operators into canceling the contract without charging the ETF -- though, as we've noted in the past, there have been times when even death wouldn't get you out of paying. It would seem to make sense for mobile operators to be a bit more understanding. Verizon Wireless, to its credit, prorates early termination fees, so the closer you are to the end of your contract, the less it costs. It's unclear why the other mobile operators haven't come up with anything similar. Perhaps they really think that locked-in but pissed-off customers are better than happy, loyal customers.

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