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Text may be king, but wireless carriers are pushing Internet fees

For all the bells and whistles on cell phones these days, text messaging is the most popular feature for users. And while many are upgrading to phones that have full keyboards and wider screens to text more easily, they aren’t necessarily interested in using their phones to access the Web, according to research analysts.

That has some customers unhappy that they are increasingly required to buy data plans as explained in this previous post.

“We should not be forced to pay for data if we do not plan to use it any more than we should pay our cable or satellite company for premium channels, such as HBO or Showtime, when we do not plan to watch them,” wrote reader Stan Stinton in reaction to the post.

Stinton signed onto a Facebook fan page called “Say No to the Verizon Wireless Data Dictatorship,” which has 322 fans.

Another reader, named Cindy, wanted to buy her 12-year-old daughter an LG NV phone, which has an Internet browser and full QWERTY keyboard but isn’t quite as advanced as smart phones such as the Palm Pre or Nexus One. She was told by Verizon Wireless that she'd also have to get a $10-a-month data plan.

“She's 12, I have no intention of letting her go on Internet and do not like the idea that consumers are forced to buy the plan or be forced into a phone I might not be interested in,” Cindy wrote.

Text messaging was done by 63 percent of mobile phone users in December, up from 61 percent in September, according to a comScore study released earlier this week. The research firm also found that 28 percent of users said they browsed the Web on their phones and 18 percent of users said they downloaded Web applications on their phones. As the smart phone market evolves, more customers will use these mini-computing devices. ComScore said that last December, 17 percent of the mobile phone subscribers had smart phones, up nearly 6 percentage points versus a year ago.

Text messaging drives cell phones, according to a report released Tuesday by the research firm NPD Group. The top 10 selling cell phones had full QWERTY keyboards to make texting easier.

“By pushing users to a data plan, it helps users access capabilities they paid for in the device and not be frustrated that they shelled out for a phone that is capable of so much more,” said Ross Rubin, executive director of research at NPD. “It also helps cement a relationship with a carrier and of course is simply a source of revenue generation.”

Joel Kelsey, an policy analyst at Consumers Union, said the fees show that wireless providers are moving toward bundling services, much like the cable and telephone industries do with broadband, paid television and phone service. The bundles can be good for consumers who are looking to use multiple communications services at a discount. But additional charges and fees for things like wireless data aren't explained and, in the case for some customers, are unwanted.

Verizon requires users of mid-ranged devices – known as feature phones – to take on Internet data plans. Rubin estimates that 70 percent of cell phones today are feature phones. Verizon Wireless, the nation’s largest cell service provider, said users were accessing the Web on their phones and going over allotted plans for Internet access. They wanted a basic data plan to help keep them away from overage charges, according to the company.

AT&T said that last September that it began to automatically charge smart phone customers for data and let consumers know about the new policy at the point of sale, in brochures and through text messages to those users. T-Mobile and Sprint Nextel smart phone customers are also required to buy monthly data programs. But Sprint Nextel allows users of feature phones with full keyboards like the LG Rumor2, Sanyo 2700 and Sanyo 2700 to buy just voice and text plans.

By Cecilia Kang  |  February 10, 2010; 10:00 AM ET
Categories:  AT&T , Antitrust , Comcast , Consumers , FCC , Verizon  
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Interesting article. I am completely against this cash grab tactic by AT&T and Verizon. Their thinking is that people buy phones to use certain features and nothing else. What they don't realize is that people also buy phones for how they feel, how good reception is, looks, big number keys, etc. Why should those people be forced into buying features if they are not going to use them. Its a total rip-off.

Posted by: SBacklin | February 12, 2010 9:21 AM | Report abuse

I was reading my phone bill (VZW) recently (thrilling, I know!) and came across a $5 charge for web access under the monthly fees/taxes. I called them up and asked what it was and was told that it was for accessing the web via my phone.

My wife and I use regular, run of the mill phones and neither of us have any desire to surf the web via them (we also rarely text), so I asked them to remove it.

Guess what? They did.

Feeling lucky, I then called DirecTV and asked for a discount since I can't watch Versus. Guess what, they gave me that too!

$20/month saved in less than 20 minutes.

If you don't use a feature, call and ask for it to be removed from your bill. Chances are they just might agree to it!

Posted by: SamFelis | February 12, 2010 2:55 PM | Report abuse

Great article! Just an update on the Facebook group mentioned, Say No to the Verizon Wireless Data Dictatorship at group has increased membership by 50% in last 3 days as a result of many more people discovering the new mandatory data plan as they contact Verizon to upgrade their phones. The group now has 742 members...and counting.

Posted by: oldputter | February 16, 2010 6:32 AM | Report abuse

RE:SamFelis - Verizon's policy for the new $9.99 per month mandatory data fee is that is cannot be removed and data or internet usage cannot be blocked. If that was still an option, as it was prior to 01/18/10, then there would be no need for a group such as Say No the the Verizon Wireless Data Dictatorship.

Posted by: oldputter | February 16, 2010 6:47 AM | Report abuse

“By pushing users to a data plan, it helps users access capabilities they paid for in the device and not be frustrated that they shelled out for a phone that is capable of so much more,” said Ross Rubin, executive director of research at NPD.
“It also helps cement a relationship with a carrier and of course is simply a source of revenue generation.”

This would be true if the customer was actually using the data and chose this option. It will fracture the relationship with a carrier when it is forced on them and no choice is available. Customers are frustrated when forced to pay for a service they do not use because the company "knows better" what we need than we do.

Posted by: oldputter | February 16, 2010 10:48 AM | Report abuse

Great article but what kind of koolaid is that NPD guy drinking? Who paid him to put the "good for the customer" spin on this robbery that is going on. I do not want to pay a tax to Verizon to use their phones when I have already been required to commit to two year plans with them. This greedy money grad is going to bite them. I was Verizon's biggest promoter a month ago and now I am telling everyone I know about this so they can be educated and avoid further committing to Verizon. If this new data tax now being imposed by Verizon on phones that didn't require it before Jan 18th is such a "benefit" to customers, why wouldn't Verizon waive ETF's for those who want to leave?

Posted by: CellTalker | February 16, 2010 10:07 PM | Report abuse

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