TRACNotes
Vol. 2 # 23 --
June 11, 2004
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Not All Prepaid Phones are Created Alike - According to recent reports, approximately one-third of children ages 11 to 17 have their own wireless phones. Additionally, a recent study by research firm Telephia found that 30% of parents who have a teen on their wireless plan report that they often run out of minutes and end up paying overage charges. For parents fed up with their teens' out-of-control wireless phone use, prepaid phones may be the way to go. These increasingly popular phones have no contracts to sign and, importantly, users pay for their minute usage ahead of time, ensuring that talkative teens don't break the bank on monthly wireless bills. Prospective prepaid phone users should keep in mind, however, that not all prepaid phone services are created equal. In general, light users (200 minutes or less per month) may find that they save money by using pre-paid wireless phones over post-paid phones. For heavy users (600 minutes per month and up, post-paid phones may be more cost-effective. The most important tip for consumers to keep in mind, however, is that when comparing the value of particular plans, they should divide the total number of minutes used for that month by the total out-of-pocket monthly dollar expenditure to come up with the "real" per-minute rate. See the chart below for information on the most popular prepaid service providers:
| Carrier Phone Prices | Minute | Rates | The Fine Print |
| AT&T GoPhone(iii) | $89.99 - $139.99 | $19.99 for 80 minutes
$29.99 for 200 minutes
$39.99 for 400 minutes
$49.99 for 500 minutes
$69.99 for 700 minutes | Payment by automatic replenishment - the same payment is added every 30 days or when your account reaches $5. Fixed monthly payment - the same payment is made every 30 days. |
| AT&T Free2Go(iv) | $59.99 | $10 for 40 minutes
$25 for 100 minutes
$50 for 200 minutes
$75 for 300 minutes
$100 for 665 minutes | Unused minutes expire 90 days after purchase on all cards $75 and below. Unused minutes on $100 cards expire 365 days after purchase. Additional funds placed into an account before the current account balance expires cause the existing balance to be carried over to the expiration date that corresponds to the new funds added. |
| Cingular KIC Prepaid(v) | $99.99 | Option 1: 35¢ per minute weekdays, 10¢ per minute on nights and weekend
Option 2: 30¢ per minute weekdays, unlimited weekends, $1 per day access fee
Option 3: 10¢ per minute every day, $1 per day access fee | KIC refill cards are subject to an expiration period ($10 card - 30 days, $20 and higher cards - 90 days). As-you-go and automatic prepayment options available. |
| T-Mobile EasySpeak(vi) | $69.99 - $119.99 | $10 for 30 minutes
$25 for 100 minutes
$50 for 250 minutes
$100 for 665 minutes | Minutes purchased expire after 90 days (30 days with $10 card) unless card is refilled which extends unused minutes to next expiration date. |
| TracFone(vii) | $39.99 - $99.99 $19.99 for 40 minutes | $29.99 for 100 minutes
$49.99 for 200 minutes
$79.99 for 400 minutes
| Minutes expire 60 days after purchase unless additional card is purchased. |
| Verizon Wireless Prepay(viii) | $144.99 First minute is 35¢ | 10¢ per minute after that. | Refill card payment options:
$15-$29.99, expires in 30 days; $30-$74.99, expires in 60 days; $75-$149.99, expires in 90 days; $150 and above expires in 120 days $35 activation fee may apply. |
| Virgin Mobile(ix) | $69.99 - $149.99 | 25¢ per minute for the first 10 minutes | 10¢ per minute after 10 At least $20 must be added to the account every 90 days. All calls are rounded up to the next minute. |
SCAM WATCH
Verizon Wireless Warns of "Free" Phone Scam - Verizon Wireless is notifying its customers of a new scam involving individuals falsely claiming to represent Verizon Wireless. The scammers call prospective customers and offer a free wireless phone and service for "only" $3.95 (the supposed cost of shipping and handling). The caller then asks for the victim's checking account and bank routing information, purportedly to then be used for unauthorized purchases. Consumers who believe that they may be victims of this scam should immediately call local law enforcement as well as their bank and credit bureau. As a general rule of thumb, consumers should never give out personal financial information over the phone, including credit card numbers, checking account information, or social security numbers unless they are sure that the party on the other end of the line is a reputable company or organization. For more information on this scam, click here(x).
TRAC IN THE NEWS
TRAC Comments on TRO Decision - In response to the June 9 decision by Solicitor General Olsen on the triennial review order proceedings, TRAC Counsel Dirck Hargraves issued the following statement: "TRAC supports Solicitor General Olsen's decision not to seek Supreme Court review of the U.S. Court of Appeals for the D.C. Circuit March 2004 ruling that will vacate certain rules governing the way competing telephone companies connect their networks. In this high stakes negotiations it is time to move from the court room to the negotiating table. Further litigation would not serve the interest of consumers. The potential of more litigation would have created a wait and see attitude. Now all parties should be willing to sit down and conclude negotiations that will assure reasonable rates AND incentives to invest in deployment of new fiber networks to all people." Click here(xi) for the full release. TRAC Chairman Sam Simon was also quoted by the Associated Press on this issue. Click here(xii) to read his comments.
INTERESTING LINKS
FCC Main Page - http://www.fcc.gov
FCC Complaint Form - http://svartifoss2.fcc.gov/cib/fcc475.cfm
List of State Regulatory Commissions - http://www.naruc.org/displaycommon.cfm?an=15
What do you think? Got a tip you want to share? Nominate your "Scam of the Week" and your "Tip of the Week" - If we select your submission, we’ll give you a one-year free membership in TRAC and acknowledge your contribution by name in TRACNotes. Send an e-mail to trac@trac.org to submit your ideas!
©2004 Telecommunications Research and Action Center. TRAC grants unlimited rights to reproduce TRACNotes or any information contained in it provided attribution is given as follows: "Source:Telecommunications Research and Action Center. http://www.trac.org"
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