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AT&T Internet customers, your service contract is changing

March 29, 2011|David Lazarus

All eyes might be on AT&T's pending acquisition of T-Mobile, but AT&T Internet customers shouldn't overlook some significant changes the company has just made to their service contract.

Perhaps the most noteworthy addition is a new provision that allows AT&T to limit the online activities of heavy users. Customers who hog bandwidth by downloading high-definition movies or vast quantities of digital music slow the pipeline for everyone else, said AT&T spokesman John Britton.

So now AT&T says it will impose caps on data use or limit a customer's download speed — or even impose additional fees — if they're slurping too much online soup.

"People have a right to behave however they want online," Britton said. "But we have a right to manage the bandwidth so that everyone has a good experience. This is targeting the top 2% of people who use about 20% of the bandwidth."

As of May 2, AT&T will crack down on any DSL user who exceeds 150 gigabytes per month, which is the rough equivalent of downloading 50 high-definition movies. Customers who receive the company's U-verse broadband service will have a cap of 250 gigabytes.

That may sound like plenty of bandwidth, but factor in digital music, pictures and other content, and some people may see their allotted usage go quickly.

Art Brodsky, a spokesman for the digital-rights group Public Knowledge, said the onus should be on network providers to provide enough bandwidth for customers, not on customers to accommodate the provider's shortcomings.

"Lopping off the top 2% of users seems like blunt-force trauma," he said.

AT&T's growing clout has been closely scrutinized since the company announced last week that it would spend $39 billion to acquire T-Mobile and create the country's largest wireless service, with about 130 million customers.

At the same time, AT&T is one of the biggest providers of broadband Net access. The company is duking it out with cable giant Comcast for first place among high-speed Internet service providers.

Comcast now heads the pack with nearly 17 million subscribers, according to Leichtman Research Group. But AT&T is a close second with 16.3 million Net customers (twice as many as rival Verizon).

Comcast already has similar network-management rules in place. Representatives of Verizon and Time Warner Cable said that although they're closely following what AT&T and Comcast are doing, they have no such limitations planned — at least for the moment.

Meanwhile, AT&T's contract changes include a few other eye-opening provisions.

The company has inserted language allowing it to unilaterally upgrade a DSL user's service to U-verse.

On the one hand, this is cool because U-verse is faster and more versatile than DSL.

On the other, AT&T says U-verse would come with "applicable rates, terms and conditions, which may differ from your previous DSL service rates, terms and conditions."

In other words, AT&T might charge you more for a level of service you never wanted or asked for.

Britton said he couldn't imagine the company actually doing this to customers, but he acknowledged that this is what the new contract says.

One other provision of note: AT&T's contract now stipulates that the company can cancel your service "if you engage in conduct that is threatening, abusive or harassing" to the company's workers, or for "frequent use of profane or vulgar language" when dealing with service reps.

AT&T won't charge early termination fees to anyone it decides to cut off. I don't want to put ideas into anyone's head, but if you're cheesed about usage caps, higher fees or a forced march to U-verse, some strategic cussing might come in handy.

Just saying.

Title-loan bill

Because of the tough economic times, many people are putting up their cars and trucks as collateral for high-interest title loans, also known as pink-slip loans. As I wrote last month, California law allows title lenders to charge any interest rate they like for loans of more than $2,500.

That may now change.

State Assemblyman Roger Dickinson (D-Sacramento) has introduced a bill that would cap title-loan interest rates at 36% annually. As it stands, many such loans now come with annual rates of as much as 200%.

"There's hardly any regulation for these kinds of loans," Dickinson told me. "And more and more people seem to be turning to them because of the unavailability of traditional forms of credit."

Aside from the high interest charged, title loans are particularly insidious because missing even a single payment can result in repo men snatching away your wheels.

Dickinson's bill — AB 336 — also would require lenders to inform borrowers about the consequences of defaulting on a title loan and to provide a complete schedule for how long it will take to pay off the debt.

Lawmakers shouldn't hesitate to pass this much-needed protection for cash-strapped California consumers.

David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to david.lazarus@latimes.com.

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