In Through the Looking Glass Alice is forced to deal with a land where up is down and down is up. So it is when buying telecommunications. Some of the most hated people in the land must be the marketers who dream up the various contracts on offer in Australia. More reviled than used car salesmen, less trusted than real estate agents telco contracts are the through the looking glass world of murdered language, cunning contracts and drained wallets.
Indeed the spokesman for telco contract rights could be Humpty Dumpty who said “When I use a word,” Humpty Dumpty said in rather a scornful tone, "it means just what I choose it to mean – neither more nor less."
So lets now take a deep breath and scurry furtively into the land of the telco marketers. This land like the looking glass all is not what it seems.
A typical way to sell a mobile phone contract is with a cap. Caps you might think are something like this entry from Miriam Webster
Main Entry: cap
3 a : something that serves as a cover or protection especially for a tip, knob, or end a bottle cap
b : a fitting for closing the end of a tube (as a water pipe or electric conduit)
4 : an overlaying or covering structure
6 : an upper limit (as on expenditures) : ceiling
The meaning that usage has is clear here, there is an upper limit, a ceiling, a maximum spend.
Not in telco land. In Telco land a cap is where a time limited amount of service is sold at a fixed price. When the amount of service is exceeded, then the fixed price is done away with and new charges are substituted. Always these new charges are at significantly higher rates. For example Virgin mobile will charge you 29 dollars for which you get 150 dollars of value. To give an idea of how much the rate resets by, using all your cap on the 29 dollar plan, each call costs 34 cents. After the cap is exceeded this rate jumps to 1:75.
Note that this assumes an average call length of 1:30, and that all the cap is devoted to this type of call. Its just one of many comparisons that could be made. For example on the $70 Virgin plan that rate jumps from 23 cents to 1:75 a 770 percent increase
Rather than the double speak of a cap, these plans are really cups. When the cup is full it runs over. And in so doing runs to a much higher rate.
But caps are better than just these raw facts suggest. All the telcos provide some sort of monitor so that you can know when your cap is being exceeded. Every single monitor that I have been able to find is not real time. The monitor runs somewhat in the past, thus for anyone that tries to use just their cap and no more this is virtually impossible. No telco provides a service to tell you when you are exceeding your cap.
Maybe these things are technically impossible, though being a geek I know that that is highly unlikely. Maybe the telcos simply haven’t thought of it or maybe the telcos rather like the little earner of a rate that jumps from 34 cents to 1:75 a 517 % increase.
Data it seems grows even more steeply. On an 1 Gig data plan from Virgin then first 1 gig of data is 15 dollars, the next 1 gig will set you back a cool 2097 dollars. Thats a 14000% increase.
Now lets be clear. We are all adults. These are legal contracts, They are entered into willingly by both parties and failure to understand the contract has real financial penalties, But as William Shakespeare said in the marvellous though furiously anti Semitic play the Merchant of Venice. In that play Portio defends the debtor Antonio from the unwise contract hee has entered into. A contract where the default rate is a pound of Antonio’s flesh. Portio defends with the line
"Tarry a little, there is something else. This bond doth give thee here no jot of blood; The words expressly are “a pound of flesh.”
and with this the usury of Shylock is undone.
Unfortunately for us back in the modern world there is no clever Portio to undo the usurious terms of the telcos, we have to give our pound of flesh, however metaphorical.
This brings me to my next telco set of terms. The way that bandwidth is described, sold and delivered.
When buying bandwidth there are two facets that concern us. The total amount of bandwidth measured in bytes. The speed that the bandwidth is delivered.
One way that bandwidth is delivered is with a cap, or cup, where the rate can jump from a mere 15 dollars a gigabyte to 2000 dollars a gigabyte. The second way that bandwidth can be delivered is where there is no upper limit. Usage is unlimited. Great I hear you say, unlimited for me then. But you have to remember that this is Alice land, and telcos take words that you understand and use them in ways that you have never heard before.
Again from Mirriam-Webster
Main Entry: unlimited
1 : lacking any controls : unrestricted <unlimited access>
2 : boundless, infinite <unlimited possibilities>
3 : not bounded by exceptions : undefined <the unlimited and unconditional surrender of the enemy Sir Winston Churchill>
Of course this is far far far from what the telcos mean when they say unlimited. Take Dodo for example the headline scream “No data limits, No excess charges ” But in the fine print of which there are pages and pages and pages of we find that there is a "Fair Go Policy" what this policy does is to say in essence, unlimited has a limit, and the limit is surprisingly small. Data limits are in the low megabytes 5-10. This is hardly lacking any controls, scarcely unrestricted, clearly not unconditional. In fact these limits are so clear, so pervasive that no reasonable person could think that the screaming headline No Data Limits is in any way congruent with what is actually on offer.
But then I am just a reasonable person. I am not a Telco marketer, I am not a telco lawyer.
Reasonable use Policy
The practice of hiding subject limits in the fine print is endemic in the industry. Often called Resonable use policy, or Fiar go or a variety of other terms these policies on face value require community behavioural norms. Not to use the service to extremely etc. In fact thesee policies are always used to restrict what a user can do. Often to take very broad claims of availability and to recast these to much smaller
But wait there is more. With bandwidth there is a second aspect to how your dollop of internet is delivered. The speed which it is delivered at. Here you can buy differing speeds, due to some technical constraints speed can’t be guaranteed. But the fact that speed can’t be guaranteed doesn’t stop telcos. They all advertise the headline rate usually with the charming weasel words “up to” Up to 100 of course reserves all the territory between 1 and 100. Some telcos do a quite reasonable job of explaining this.
Telstra for example says "Typical download speeds of 550kbps to 8Mbps in all capitals and selected regional areas. Speeds vary due to factors such as distance from cell, local conditions, user numbers, hardware, software and download source. Next G coverage depends on your location, device and whether you are using an external antenna. Speeds slow to 64Kbps once usage limit reached."
All very reasonable.
But here is the interesting thing. No telco in this wide brown land guarantees a minimum speed. No telco measures your speed and rebates you when things are slow. In other words the telcos happily in big headline, to sell the sizzle of speed. But in the fine print, deny they will or may deliver the roar of actual speed. For example its a lazy Saturday afternoon while I write this and a few speed tests show I am getting 4.5 Mbps much less than the 24 I am paying for. And just for giggles on a Sunday morning at 7am when surly all good fearing internet users are off to the kirk or tucked up in their beds my speed is a whopping 5.2 still not close to 24.
Roaming is another fantastic earner for telcos. Basically they offered a facility where your mobile will still work in other countries. Roaming is in fact a licence for a telco to print money. No roaming is covered by any plan and so it defaults to the highest possible rate.
There are only two things to do. Travel with no mobile phone, or when in another country buy a new sim card and install it.
No one denies that the contracts we enter into with Telcos are legal. Usurious maybe, but legal they certainly are. But with no warning systems in place its an interesting argument. Imagine you have an argument that goes something like this. You pay me 50 dollars a month and I give you telephone services. At some point in the month you exceed your cap (or cup) and now instead of charging you 50 dollars I charge you 10,000. Might you not suggest to me that had there been any form of warning you would have immediately modified your behaviour. That you had formed the intent to pay for a low priced service. You had after all entered into a 50 dollars a month contract. This alone suggests you were not desirous of paying hundreds, nor thousands and certainly not tens of thousands.
You might suggest that the overcharge rate was extortionate. That is the first part of the service could be supplied by me at a profit for 50 dollars then it was unnecessary to need to recoup 9,950 dollars for the next parts of the service. You might even suggest that I was running a racket.
There is some evidence that Telcos are becoming aware that their social contract to extort (I am sorry enforce their contracts) in this way is becoming unacceptable, and they know this. Telcos are quite flexible in forgiving large one off bills. Forgiveness on the scales I have anecdotally heard of makes one think that Telcos are in some ways trying to avoid the bad press associated with the truly worst cases.
Of course for every forgiveness story there are stories of lesser amounts being enforced.
So now we leave the land of complicated contracts, the land of Alice, the language murdering land of the Telco marketers.
A brief summary.
- Capped: means a cheap bite of service followed by much more expensive service.
- Unlimited: Is not unlimited when subject to a reasonable use policy
- Reasonable use policy: Part of a contract that significantly curtails your use of a service
- Bandwidth: Frequently another form of capping
- Speed: That which is promised but not delivered.
- Roaming: A way to gouge you on services whilst connecting through another carrier
Call to action
Its time that the social contract that Telcos currently enjoy was withdrawn. It is time that we all said, what you are doing and the way you charge is wrong.
Charge reset rates such as the cap model or the excess data charges model should always be required to follow an opt in model. In this model when the end of low charges are reached, service would be withdrawn. It would only be if the consumer chooses to opt in that higher charge rates would be implemented.
Service monitors that show how much of a service has been used should be up to date with the real world. If they are not then this alone would remove the ability for Telcos to charge excess fees.
Advertisements should be required to be about the minimum that a service delivers not the maximum. If for example you offer an unlimited service that delivers 10 megabytes a month, then rather than advertise unlimited and hide the 10 megabytes in a multipage contact. 10 megabytes must be the headline number. Similarly if you sell speed, then you need to advertise what is routinely expected to be received, if your ADSL service delivers 24 peak but only 10 on average, then 10 is what you need to advertise, not 24.
Require that for every contract, not only is the legal minimum spend described, but that the actual average and maximum spends are also described. These numbers would be derived by the telcos by looking at what real customers actually do.
Of course these are remedies that accept the current status quo. A better approach still might be root and branch reform. Should a contract where the rate can jump for standard to excess be a jump of 140 times or 14000% be allowed. I say no.
Created: 26/Oct/2009 - 12:00 AM Last updated: 26/Oct/2009 - 12:29 AM