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Think You Can Use Smartphones In-Store? Read The Contract First
Although AT&T advertises that it offers “unlimited” data for a price, it reserves the right to limit customers’ “unlimited” use if it determines they have engaged in “excessive usage” or if their use compromises AT&T’s network capacity or results in a degradation in performance of its network. In other words, if AT&T does not build sufficient capacity for customers to use their unlimited data plan, it can kick those same customers off but continue to require them to pay.
These problems are not unique to AT&T. All contracts are written to protect the interests of the person writing the contract, and the AT&T wireless subscriber agreement is no different in that regard. Of course, if you are a retailer rolling out smartphones for associates to use in hundreds of stores, your legal department might negotiate much better terms for your contracts. While you are testing and doing pilot projects using a consumer device, you’ll probably inherit those consumer contracts. And they will definitely apply to consumers who want to make mobile payments.
AT&T contends that its current wireless agreement spells out the only uses anyone can make of its “unlimited” plan:
Except as may otherwise be specifically permitted or prohibited for select data plans, data sessions may be conducted only for the following purposes: (i) Internet browsing; (ii) E-mail; and (iii) intranet access (including access to corporate intranets, E-mail and individual productivity applications like customer relationship management, sales force and field service automation).
That’s it. Browse the Web. Send or receive E-mail. Connect to an intranet. Everything else is prohibited. That’s right: Everything else.
Web apps (which are not technically “browsing” the Internet): gone. Streaming video: gone (so forget about managers using an iPhone to keep an eye on a store’s front door, stock room or checkout lines). Anything that generates “excessive amounts of net traffic”: gone.
And if AT&T thinks that a customer is doing something in violation of the agreement, “AT&T reserves the right to (i) deny, disconnect, modify and/or terminate Service, without notice, to anyone it believes is using the Service in any manner prohibited or whose usage adversely impacts its wireless network or service levels or hinders access to its wireless network.” No proof necessary. AT&T just has to believe it.
-Marc
May 12th, 2011 at 6:59 am
Are the contract terms actually enforceable, or would a court hold them unconscionable? (Would a court actually adjudicate that question, given that AT&T claims that all contract disputes are subject to binding arbitration?)
May 13th, 2011 at 9:56 am
A court (if it ever got to a court) would ask the question, “can a consumer of wireless services agree not to use those services for certain things?” Why would a contract limiting HOW you can use the service be unconscionable? It is spelled out in the agreement. I think the contract is unfair and outrageous (and unread) and that it is NOT AT&T’s intention to prevent all other services, but that is what the agreement says, non?
May 26th, 2011 at 9:19 am
Mr. Rasch brings to light some draconian aspects of the AT&T Wireless agreement that are disturbing. Still, this is not going to stop the trend. Most retailers exploring this space will undoubtedly offer wifi access, bypassing the AT&T network entirely.