Crave

The iPhone 3G S launch is well under way, and AT&T made a big deal this week with a capitulation to iPhone customers under contract (click the link for the CNET story). It promised that some 3G customers who would normally be upgrade-eligible later this summer (June, July, August) will finally be able to get their 3G S now for the new-contract prices of $99, $199, and $299.

It was a nice promise, but were you able to take advantage of it? I ask because I bought my 3G last August 31, and I pay more than $99 a month on my bill--a prerequisite according to AT&T's news update. However, after half an hour spent on the phone with customer service managers, I discovered that what I had been told on AT&T's Web site and via text message was still true: I don't qualify until 1/31/10, which is more than halfway toward the release of the next iPhone after this one.

Moreover, AT&T wouldn't specify what, exactly, determines whether a customer gets a 12-month or 18-month upgrade window. Even their official message remains gray on the matter. To make matters even more inexplicable, the manager said it was "Apple's decision," and that I needed to spend more than $99 a month just on my voice plan, not including data (required with every iPhone contract) and texting. On the other hand, our editor in chief, Scott Ard, told me he was successful, and that he was a 3G owner who had been eligible late July. What was the magic powder that sealed the deal? He's been with AT&T longer than I have, which may have helped.

Sound off: did you get an upgrade? Were you denied? Was it a pain to do, or remarkably easy? Let us know. At the least, I can feel sympathy in numbers (and wonder why I'm so excited about spending so much for a faster chip, a video camera, and a compass). For more on my AT&T rant, check out this week's Digital City podcast when it goes live.

Alltel Wireless has announced that starting June 5, it will bring back one-year service contracts for all of Alltel's new and renewing customers.

Though one-year contracts aren't new, most of the cell phone industry uses two-year service agreements for new contracts. Even if your carrier does offer one-year contracts, your new phone will likely cost less with a two-year agreement. Not so with Alltel. In fact, it says it will be the only carrier to offer the same handset pricing as you would get with a two-year contract, but with one-year agreements instead.

However, this one-year contract option is only available to customers in the 91 cellular market areas that Verizon is required to divest--some of which are being acquired by AT&T pending approval. So you might want to check with Alltel to see if you're in one of those areas.

Sprint will change course and start prorating early termination fees, the company's CEO said Tuesday. In an interview with the Associated Press, CEO Dan Hesse said the carrier could initiate the practice as early as December, after updating its billing software.

Sprint has been the lone holdout of the major carriers in trimming ETFs as customers near the end of their two-year contract. T-Mobile started prorating fees in June following the lead of Verizon Wireless and AT&T.

Though ETFs have long been the been the bane of consumers, carriers maintain that they are a way for them to recoup costs for offering free or heavily discounted new phones to customers. The Cellular Telecommunications Industry Association, which represents carriers in Washington, supports ETFs for the same reason.

Currently, ETFs are not regulated by the the federal government, but the Federal Communications Commission is considering taking some oversight. During a hearing with the FCC in June, carrier representatives said they would be willing to accept some limitations on ETFs as long as the carriers could be absolved from class action lawsuits over the fees.

The Aliph Jawbone 2. Is its radiation harmful?

(Credit: Aliph)

Q: I'm curious as to whether Bluetooth headsets also emit radiation, which could prove harmful to one's health. What can you tell me about this?
- Craig

A: Bluetooth headsets do emit radiation, but they do it at a much lower power than a cell phone. In fact, it's so low that it's almost negligible. Keep in mind that while cell phones need to connect to a tower that could be a couple of miles away, a headset has an effective range of just 30 feet. However, if the prospect of Bluetooth radiation really worries you, I would suggest using a wired headset instead.

Q: Why do Sprint and Verizon Wireless appear to get sloppy seconds when it comes to the best and brightest new smartphones? It seems as if AT&T and T-Mobile get the most interesting phones, even though their networks aren't as extensive as Verizon and Sprint. I know Sprint has the Samsung Instinct, but that phone has no Wi-Fi. Will Sprint be getting something like the Samsung Omnia for the holidays?
- Eric

The Samsung Omnia could come to AT&T.

(Credit: Samsung)

A: Though the selection of Sprint and Verizon Wireless smartphones isn't quite as extensive as with the GSM carriers (AT&T and T-Mobile), I'd say they have some very decent options. Verizon has the XV6900, the RIM BlackBerry Curve 8330, and the Samsung SCH-i760, while Sprint offers the RIM BlackBerry Curve 8330 and the Motorola Q9c, to name a few. And though it's not a smartphone by our standards, the LG Dare is a solid option as well. I'd agree, however, that the CDMA phones are lacking in Wi-Fi support. AT&T in particular does better in that department. And incidentally, if anyone is getting the Omnia, Bonnie Cha thinks it will be AT&T.

Because CDMA has a smaller global footprint, some cell phone manufacturers are less inclined to make CDMA phones. Just look at Nokia and Sony Ericsson, for example. Nokia has dabbled in CDMA phones, but it has never had a clear-cut strategy for doing so. And Sony Ericsson, on the other hand, shuns CDMA completely. The technology does get attention from Japanese and Korean manufacturers like Samsung, LG, and Kyocera, but that's mainly because they have CDMA in their own back yards. Moto spends a good deal of time in both sectors, but there again, Moto operates in a country that uses CDMA.

As for the lack of Wi-Fi on Sprint and Verizon phones, I'd blame that on the peculiarities of the carriers. In my experience, the CDMA carriers tend to be much more controlling and protective than T-Mobile or AT&T. Verizon was the last carrier to remove Bluetooth restrictions in its phone and it was only last year that Sprint and Verizon said they would start allowing unlocked phones on their networks. I'd theorize that they're slow to adopt Wi-Fi because they want to keep their customers using their calling minutes.

Q: I bought a new unlocked phone and would like to start a new account at AT&T. Can I get out of paying an activation fee and signing a contract? - Elisa

A: As a new customer you will have to pay an activation fee, even if you're using an unlocked phone. Yet, you might be able to avoid signing a contract that includes an early termination fee. The only reason carriers charge an ETF in the first place is to recover the cost of selling you a new phone at a discount. But, if you're not getting such a discount or rebate then there's no reason you should be stuck with an ETF. If AT&T tries to press you with one, I'd argue that point.

Kent German, CNET's cell phones guru, answers your questions about cell phones, services, and accessories and reports on the state of the industry. Send him a question.

Kent German, CNET's cell phones guru, answers your questions about cell phones, services, and accessories and reports on the state of the industry. Send him a question!

Starting with this edition of On Call, I've transitioned to a blog format. On Call will continue to run every two weeks, alternating between answering your questions and discussing hot-button issues for cell phone users.

Q: I would like to know how secure conversations on cell phones are? Can your office IT department tap into your calls on your company cell phone?
- Lor

A: Unlike with the older analog cell phones, it's difficult to remotely listen in on conversations over the digital cell phones used today. Of course, a company phone remains property of your company, but your IT department would need sophisticated equipment if they wanted to eavesdrop. What's more, if they hadn't secretly installed some sort of recording device on your handset, they'd need to be near you while they were doing the cracking. So in other words, it's possible, but it's unlikely. IT departments usually have better things to do.

On the other hand, it would be very easy for your company to keep tabs on the text messages and e-mails sent and received on your phone. If you're worried about snooping eyes, I'd practice discretion in those areas.

(Credit: Corinne Schulze/CNET Networks)

Q: Have you sent your iPhone wish list to Apple?
- Jacob

A: No, I haven't sent my wish list on to Apple. At this point, with the new iPhone rumored to come out this month, I think the device is a done deal. And in any case, I don't think Apple would listen to me.

Q: My parents live in Crivitz, Wisc., and have T-Mobile as their cell phone provider. Yesterday, they received a letter from T-Mobile saying that they were going to terminate their contract because they are costing the carrier too much money. Apparently, T-Mobile doesn't have native coverage in Crivitz and they have to pay other carriers for using their towers. They want to cancel my parents' service in June, but their contract isn't up until December. Doesn't T-Mobile have to stand by the contract also? Is this legal? What can we do?
- Andrew

A: Unfortunately, it is legal, and T-Mobile can do it. I found the following in paragraph six of T-Mobile's Terms and Conditions. "Coverage maps may depict coverage in areas where networks are operated by our affiliates and roaming partners; such coverage may change without notice. We are not responsible for those networks and some Services are not available on third-party networks or while roaming. We may impose credit, usage, or other limits to Service, cancel or suspend Service, or block certain types of calls, messages, or sessions at our discretion. We may suspend Service without notice if you exceed any credit limit."

Now just because T-Mobile can do it, that doesn't mean it's fair. Carriers never let their customers leave a contract without paying a fee, so it's pretty outrageous that they can pull the plug on a whim. Sadly, there's not much your parents can do. They can try negotiating with T-Mobile; depending on who they talk to, they might be able to continue their service.

AT&T wants to be more consumer-friendly.

On Tuesday the company said that it will prorate the $175 early termination fee it charges wireless customers who cancel their contracts based upon how much time they have left in their contract. This means that someone who cancels their service 23 months into a two-year contract will pay considerably less than someone who cancels the service after only six months. (All new customers are able to cancel their service with no penalty for up to 30 days after service begins.)

The company also said it will no longer require customers to extend their contracts if they make changes to their plans. AT&T's current policy automatically extends contracts for customers who change their service plans more than halfway through their contract term.

The prorated termination rates are still being worked out, but the new policy for extending contracts will take effect in November, the company said.

AT&T spokesman Mark Siegel said the changes were prompted by customer demand.

"We've been listening to customers," he said. "And they all tell us that they don't like one-size-fits all policies when it comes to early termination fees or service contracts."

These policy changes come at a time when Congress is looking more closely at the industry's consumer practices. After the much hyped launch of Apple's iPhone, which is exclusively available through AT&T, some Congressional leaders expressed concern that the industry has been too restrictive in its policies. The issue has also been highlighted by debates raging in Washington over how the Federal Communications Commission should auction a valuable sliver of wireless spectrum in the upcoming 700Mhz auction.

Last month, Sens. Amy Klobuchar (D-Minn.) and Jay Rockefeller (D-W.Va.) introduced a bill that would give subscribers greater freedom to leave cell phone carrier contracts before the agreements expire. On Wednesday a Senate subcommittee will hold hearings regarding consumer practices of the wireless industry, where the issues of early termination fees and automatic contract extensions will surely be discussed.

Siegel admitted that governmental pressure may have played a part in rethinking the company's policies.

"Our main focus is responding to our customers," he said. "But that's not to say there aren't other forces at work."

Whatever is getting AT&T to lighten its policies doesn't matter to me. I'm just glad that the company is making changes. I've always felt it was anticompetitive and unfair to lock customers into lengthy service contracts. And it made even less sense to me that cell phone operators could penalize good customers by extending their contracts because they upgraded their service plan. I mean does it really make sense that my two-year contract starts over because I am willing to pay more per month for my service? I don't think so.

Sure, mobile operators offer consumers subsidized handsets. I understand that they have to recover that cost. But is it really necessary to force someone who has had the service for almost two years to pay the same termination fee as someone who is canceling the service after only a couple of months?

In a free market, consumers must be able to have choice. And contracts with stiff penalties eliminate this choice and stifle competition.

So good work, AT&T. This is definitely a step in the right direction. Once operators truly compete on their own merits instead of relying on contracts to keep customers hostage on their networks, consumers will see huge improvements in price, quality of service, and the availability of new and cool handsets.