TIME technology

AT&T Won’t Be Bringing Wi-Fi to Your Next Flight After All

New York City Exteriors And Landmarks
A view of the exterior of the AT&T store in Times Sqaure on February 21, 2013 in New York City. Ben Hider—Getty Images

Hopes for an ATT LTE-based airborne network are officially grounded

AT&T has nixed an ambitious plan to roll out wireless Internet on board commercial flights, choosing instead to refocus its investments on international markets and video services, the carrier said Monday.

The move comes as AT&T is in the process of buying Mexican operator Iusacell for $1.7 billion and satellite broadcasting service DirecTV for $48.5 billion. Those deals are subject to Mexican and American regulators, respectively.

“After a thorough review of our investment portfolio, the company decided to no longer pursue entry into the in-flight connectivity industry,” an AT&T spokesman said in a statement to Reuters.

AT&T unveiled its plan to offer 4G LTE-based connections in April, putting it in direct competition with existing in-flight service provider Gogo Inc. Shares on Gogo Inc. climbed 10% on news of AT&T’s decision to bow out of the market.

[Reuters]

MONEY

Why Sprint Is in Trouble

Sprint store
Andrew Harrer—Bloomberg via Getty Images

The nation's third-largest carrier is losing customers left and right.

Let’s be honest, most wireless carriers aren’t adored by their customers. But if we look at some of the data on Sprint SPRINT NEXTEL CORP. S 2.6915% it appears the company has the most unhappy customers in the wireless industry. Based on the rate at which customers leave the company and two independent surveys, the nation’s third-largest carrier is struggling to please its customers.

Churn rates don’t lie

Let’s start with the wireless industry’s plum line for how well a carrier holds on to its customers — churn rate. Churn is the percentage of customers that leave a carrier for another network. In Sprint’s most recent quarter the company had a postpaid churn rate of 2.18% — the highest of all major US carriers.

In the company’s fiscal Q2 2014 earnings release this week, Sprint said it lost 272,000 postpaid subscribers in the quarter. Net tablet additions hid some of the worst news that a whopping 500,000 phone subscribers left in the three month period. That’s terrible news for Sprint and its investors.

By comparison Verizon had a churn rate of 1.00%, AT&T’s AT&T INC. T 0% was 0.99% and T-Mobile’s T-MOBILE US INC TMUS 2.149% was 1.6% in each of their most recent quarters.

Of course there are a few factors that play into churn rates other than a customer being dissatisfied with a carrier, but on the whole the lower the churn rate the better the indicator customers are happy with their current wireless provider.

But let’s assume for a minute that Sprint has a higher churn rate than its competitors for some reason other than customer dissatisfaction. Well, then we could look to other sources for whether or not Sprint’s customers are truly unhappy.

The list no company wants to be on

A recent survey commissioned Zogby Analytics for 24/7 Wall Street showed that Sprint topped a list for one of the worst customer service companies. More than one in five survey respondents said Sprint’s service was “poor.”

This comes as Sprint was fined $7.5 million by the FCC earlier this year for violating “do-not-call” requests by its customers. To be fair, Sprint’s not the only one. AT&T is paying $105 million to settle FTC charges that it added unauthorized charges onto its customers’ phone bills.

But even before this survey came out, Sprint’s been known for its lackluster reputation among the public.

An ongoing problem

Last year Consumer Reports published a survey showing that Sprint was in dead last place among cell phone carriers, according to the publications’ readers. While the Consumer Reports took into account factors like voice calls and data, the most telling indicators came from Sprint’s customer support.

For “ease and speed of getting through phone system to appropriate support staff” Sprint received Consumer Reports’ worse-than-average rating, as did the company’s rating for how well customer issues were resolved. The highest rating Sprint got was “average” for how knowledgeable the company’s staff was. Not exactly a stellar report card.

This is isn’t helping things either

According to data from RootMetrics, in the first six months of this year Sprint had the worst performing network of all the major wireless carriers.

Source: RootMetrics

Sprint trailed the pack in network speed, call performance, and data performance, while barely beating T-Mobile for reliability and text performance.

Fortunately, Sprint’s in the process of updating its old 3G network with 4G LTE and is bringing its ultrafast tri-band Spark network to more cities. On top of that, Sprint just replaced its former CEO with billionaire Marcelo Claure, the founder of the wireless distribution services company, Brightstar. With a new network and a new leader, RootMetrics thinks Sprint’s last place finish could be short-lived.

While Sprint’s clearly making changes to reverse its place among competitors, the company needs to focus on its industry high churn rate. Competition among wireless carriers is stronger than ever, and with T-Mobile’s aggressive offers and superior network, there are some clear benefits for Sprint customers to switch to the “uncarrier” network.

I think Sprint has a long road ahead of it in changing its place in the wireless industry. The company could stand to take a few pages of out T-Mobile’s branding book. Sprint CEO Marcelo Claure reportedly asked his vice presidents “Why would anybody want to buy a Sprint phone?” after he took over the job — and they had no answer. If that’s the case, it’s no wonder why Sprint customers are likely asking themselves the same thing.

TIME Research

Why People Text And Drive Even When They Know It’s Dangerous

texting while driving
Getty Images

75% of drivers surveyed admit to texting while driving

If you’ve turned on the TV or glanced up at a billboard lately, you know that texting while driving is a bad idea. Celebrities are lending their names to public awareness campaigns, and more than 40 states have banned the practice. A new study surveyed 1,000 drivers and found that 98% of those who text everyday and drive frequently say the practice is dangerous. Still, nearly 75% say they do it anyway.

“There’s a huge discrepancy between attitude and behavior,” says David Greenfield, a University of Connecticut Medical School professor who led the study. “There’s that schism between what we believe and then what we do.”

The lure of text messages is actually a lot like the appeal of slot machines, Greenfield explains: both can be difficult compulsions to overcome for some people. The buzz of an incoming text message causes the release of dopamine in the brain, which generates excitement, Greenfield says. If the message turns out to be from someone appealing, even more dopamine is released.

Curbing this compulsion could take years for the text-obsessed, and doing so might resemble efforts to stop drunk driving, Greenfield says. People need to realize they’re part of the problem before they change their behavior, he adds.

“In order to really include oneself in a group that has a problem with texting and driving, they have to admit their own fallibility, and we’re loath to do that,” Greenfield said.

Multiple public awareness campaigns have taken to the airwaves and internet to target the practice, but it’s unclear how effective they are, given that the public seems to be largely aware of the issue. There might be more actionable solutions in the very near future, however. AT&T, which sponsored Greenfield’s study as part of its “It Can Wait Campaign,” has an app that switches on when a person is driving more than 15 mph and silences incoming text message alerts.

Read next: Why Siri Is the Worst Backseat Driver

MONEY privacy

Verizon and AT&T Snooping on Customers’ Web Activity

Verizon Wireless store
Andrew Harrer—Bloomberg via Getty Images

AT&T and Verizon are tracking their customers' web habits using undeletable "supercookies."

Verizon and AT&T are tracking the online activity of over 100 million mobile customers, according to the Electronic Frontier Foundation and multiple news outlets.

Both services are inserting a special code—dubbed a “supercookie”—into their networks’ cellular web traffic. This code is then used to track the browsing habits of customers; in Verizon’s case, it is also used to help marketing companies send mobile users targeted ads.

The Washington Post reports that Verizon has been tracking its 106 million retail customers (those without business or government contracts) since 2012. AT&T is testing a similar tracking system for advertising purposes. Customers can check if their web activity is being tracked using tools such as AmIBeingTracked.com.

Companies like Google and Facebook have long used cookies, numerical identifiers that travel with users between sites, to track their customers’ activity and send relevant advertising. But the extent of Verizon and AT&T’s snooping appears unprecedented. Unlike normal cookies, the so-called supercookies cannot be deleted by clearing browser data, and because the markers are added by the carrier at the network level, customers are tracked no matter which sites they visit.

Worse, privacy advocates say, the networks’ supercookies are shared with all unencrypted websites the user visits, making it possible for websites to piggyback on Verizon’s perma-cookie and reassign their own tracking mechanisms, effectively making normal cookies stronger.

Verizon says it is allowing users to opt out of the program (using this link) and that it has taken steps to notify customers of the tracking. But according to the Electronic Frontier Foundation, opting out of the program doesn’t actually disable the supercookie, it just means Verizon won’t share its tracking information with advertisers. That means third-party websites can still use the company’s unremovable cookie for their own tracking purposes.

A Verizon spokeswoman noted that the company changes its cookie’s identifier frequently to prevent exactly this type of piggybacking, but she declined to say how often the cookie changes (AT&T revalues its cookie once per day). EFF points out that ad networks can use their own less-powerful cookies to connect Verizon’s old and new identifiers together.

The carriers’ tracking methods are also worrying because they ignore browsers’ Do Not Track setting, which is meant to give users an easy way to opt out of surveillance. Critics contend they may even be against the law. The Post cites potential violation of the federal Wiretap Act, which “prohibits altering personal communications during transmission without consent or a court order.”

The Electronic Frontier Foundation is also considering suing the carriers for violating the Communications Act, which says carriers cannot reveal identifying information about their customers.

MONEY cellphones

Hey AT&T Customers: It May Be Time to Give Up Your Unlimited Data Plan

woman walking past AT&T store
Bloomberg—Bloomberg via Getty Images

AT&T and other wireless carriers may continue to offer unlimited data plans, but they're not the great deal they once were.

Almost half of all AT&T mobile customers are still clinging desperately to a grandfathered cellphone plan with unlimited data, according to a survey from Consumer Intelligence Research Partners (CIRP). But that choice is looking particularly unfortunate in light of the Federal Trade Commission’s latest lawsuit.

In a complaint filed Tuesday, the federal agency alleges that AT&T has been slowing data speeds for consumers on “unlimited” plans, in some cases by up to 95%. The practice of reducing data speeds for heavy users, called “throttling,” can make it very difficult to complete routine tasks like browsing the web or using GPS navigation. In some dense metro areas like New York and San Francisco, AT&T allegedly throttled users who consumed as little as 2 GB a month. Altogether, the New York Times estimates, about 25% of AT&T’s unlimited data plan customers were affected.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” FTC chairwoman Edith Ramirez says in a statement. “The issue here is simple: ‘unlimited’ means unlimited.”

AT&T calls the charges “baseless” and says it warned customers that heavy users could be throttled. But while AT&T’s alleged behavior is particularly egregious, the carrier wouldn’t be the only one to limit data use on so-called “unlimited” plans, as Ars Technica has reported.

For example, Sprint’s My Way plan promises unlimited data for the life of the line of service, but read the fine print: The carrier also throttles the top 5% of its users, as part of its “network management” strategy. Sprint says that users who consume more than 5 GB are generally at risk for throttling, though it varies by month.

Likewise, while T-Mobile has repeatedly said it does not throttle its unlimited customers, its fine print notes that the top 3% of users might see their data slowed “during times and in places of network congestion.”

Similarly, Verizon throttles the top 5% of customers still on 3G. Verizon had planned to slow speeds for the heaviest users on 4G, but it shelved that idea after receiving its own stern warning from the FTC. Maybe Verizon has less to worry about—according to CIRP, it has already moved the vast majority of its customers off unlimited plans.

In fact, Verizon hasn’t sold a single new unlimited cellphone plan in two years. AT&T hasn’t offered an unlimited plan in four years. The two biggest American carriers have been trying to wean customers off of unlimited data plans for a while now, or else the wireless companies risk becoming victims of their own success.

First Unlimited Calls, Then Unlimited Data

The unlimited model was born in the late 1990s, when AT&T launched its first One Rate phone plan, explains Kirk Parsons, senior director of telecom services at J.D. Power. Customers loved the certainty: the same bill, every month, with no separate charges for roaming or long distance calls.

That model still made sense when the phone carrier introduced data plans for smartphone users—so much sense that by 2008, AT&T actually forced all iPhone 3G customers to buy an unlimited data plan. Back then, it was a moneymaker: You could offer unlimited data because people wouldn’t use a lot of it, and it didn’t cost a lot anyways. That’s all changed.

“When smartphones started coming out, the networks weren’t up to snuff,” Parsons says. “You couldn’t actually enjoy the experience of videos and downloads. Once 3G coverage widened, then we transitioned from 3G to 4G, that’s when you really saw people using data on their phones, streaming music, watching shows.”

Now, the carriers have created a nation of data addicts. As of December 2013, Americans consumed 269.1 billion MB of cellphone data a month—far more than double what they consumed a year before. It’s just too expensive to keep up with our insatiable demand. The carriers have to buy or lease radio frequencies all around the country to provide good service, says Logan Abbott, president of Wirefly.com. There’s only so much bandwidth.

“Consider it like a nationwide wifi network,” Abbott says. “If you have everyone in your house on one wifi connection—downloading, streaming Netflix, doing data-intensive stuff—your bandwidth is going to get used up … It’s going to put drag on your network.”

Of course, if AT&T acted as the FTC claims, consumers got a really raw deal. While the other carriers say they throttle just a small fraction of the heaviest users for network management reasons, AT&T is accused of slowing service for 3.5 million of its 14 million subscribers.

Still, limited data is the way of the future. Not that AT&T customers want to hear it—there’s a reason 44% of them haven’t changed cellphone plans in over four years. “It doesn’t necessarily make sense, but they like the security blanket of never being overcharged,” Abbott says. “They have a vintage product, and they don’t want to let go.”

Paying for More Data Than You Actually Use

The truth is, if you’re an AT&T user, it might be time to give up your unlimited plan. The first thing to do is check your account to see how much data you really use—it may not be as much as you think.

Slate has prepared some handy interactive charts that show how much data you’d have to use before an unlimited plan pays off, but this is the main takeaway: If you’re only using 1 or 2 GB of data—like most typical users—you’re likely overpaying for the unlimited option. You simply don’t need that much.

If, on the other hand, you’re using a lot more, the FTC says you’re being throttled—in which case, you might as well shell out a little more money for a data plan that actually delivers the speeds advertised.

Related:

Read next: This Is the Best Wireless Carrier for You

TIME Regulation

Feds Sue AT&T for Allegedly Slowing Unlimited Data Plans

AT&T Asks U.S. Judge to Throw Out Sprint's Antitrust Lawsuit
The AT&T Inc. logo is displayed at the company's new store in Chicago, Illinois, U.S., on Friday, Sept. 30, 2011. Bloomberg/Getty Images

"The issue here is simple: 'unlimited' means unlimited."

The Federal Trade Commission is suing AT&T for allegedly misleading customers by slowing data speeds for wireless customers who had unlimited data plans but went over a certain usage point, the agency announced Tuesday.

According to the FTC, AT&T did not properly inform customers who had unlimited plans that their speeds would still be lowered after they exceeded certain data thresholds in a given month. Speeds were reduced by as much as 90 percent in some cases, making basic phone functions such as web browsing and watching video almost impossible, the FTC said.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” FTC Chairwoman Edith Ramirez said in a statement. “The issue here is simple: ‘unlimited’ means unlimited.”

AT&T throttled speeds for 3.5 million customers at least 25 million times, the FTC alleges, while it also said that customers who canceled their contracts due to the lowered speeds still had to pay expensive termination fees, the FTC alleges.

In an emailed statement, AT&T senior executive vice president and general counsel Wayne Watts called the FTC’s suit “baffling.”

“The FTC’s allegations are baseless and have nothing to do with the substance of our network management program,” Watts said. “We have been completely transparent with customers since the very beginning. We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented. In addition, this program has affected only about 3% of our customers, and before any customer is affected, they are also notified by text message.”

AT&T no longer sells unlimited data plans to new customers and has been trying to phase out the service for years, along with many other major carriers. The company announced in 2011 that it would begin throttling the data speeds of its heaviest users on a regular basis.

Wireless carriers’ practice of slowing speeds for their heaviest unlimited users has also caught the attention of the Federal Communications Commission. “Wireless customers across the country are complaining that their supposedly ‘unlimited’ data plans are not truly unlimited, because they are being throttled and they have not received appropriate notice,” said an FCC spokesperson Tuesday. “We continue to work on this important issue, including with our partners at the FTC, and we encourage customers to contact the FCC if they are being throttled by AT&T or other cellular providers.”

TIME Regulation

More Than 350,000 Customers Have Asked AT&T for a Refund After Bogus Charges

New York City Exteriors And Landmarks
A general view of the exterior of the AT&T store in Times Sqaure on February 21, 2013 in New York City. Ben Hider—Getty Images

Here's how to request yours

Hundreds of thousands of AT&T customers have requested refunds for bogus cell phone charges since the telco reached a settlement with the Federal Trade Commission last week to reimburse consumers, an FTC official told TIME Wednesday. In total, 359,000 individuals have sent in claims to the FTC seeking refunds for unauthorized charges that appeared on their cell phone bills in a practice known as “cramming.” Through cramming, third parties are able to issue unwanted, recurring charges for things like love tips and horoscopes to cell phone users.

Jessica Rich, the director of the FTC’s bureau of consumer protection, said the response from consumers was one of the largest the agency has ever seen. The only case with a larger number of claims that she could recall was a 2012 settlement with Skechers over deceptive marketing for one of its shoe lines, which garnered close to half a million consumer complaints. “We expect this to be a lot higher,” Rich said.

In total, AT&T has agreed to pay $80 million in refunds to customers for cramming charges. The telco giant will also pay $20 million in penalties and fees to the 50 states and Washington, D.C., and a $5 million penalty to the FTC. At the time of the settlement, an AT&T spokesman noted that the company was the first in the telco industry to stop charging customers for premium SMS messages in late 2013. The FTC is currently suing T-Mobile over the same issue.

It’s not guaranteed that all the people who have issued claims will actually receive refunds. An independent claims administrator will review the refund requests to determine if they are valid. “I’m expecting that most of the claims are going to be valid, but if they’re not valid, there will be a way to determine that,” Rich said.

Customers who think they were a victim of cramming can file to claim a refund until May 1, 2015.

TIME Regulation

AT&T to Pay $105 Million Settlement Over Extra Charges on Customers’ Bills

Settlement follows allegations that T-Mobile also engaged in hiding bogus charges in customers' bills

AT&T will pay $105 million to settle allegations brought by the Federal Trade Commission that the wireless carrier unlawfully billed customers for extra charges on their cellphone plans. The practice, known as “cramming,” involves charging customers $9.99 per month for unwanted features from third parties like ringtones, text message horoscopes and love tips.

According to the FTC, AT&T received 1.3 million customer complaints about the bogus charges in 2011 alone. That same year AT&T changed its refund policy so customers could only be reimbursed for two months’ worth of faulty charges, the FTC claims. The charges were listed under a line item called “AT&T Monthly Subscriptions” on customers’ bills, so many did not know they were coming from third parties.

AT&T will offer refunds totaling $80 million to customers who paid cramming charges over the years. The company will also pay $20 million in penalties and fees to all 50 states and Washington, D.C., as well as a $5 million penalty to the FTC.

“This case underscores the important fact that basic consumer protections – including that consumers should not be billed for charges they did not authorize — are fully applicable in the mobile environment,” FTC Chairwoman Edith Ramirez said in a press release.

AT&T stopped billing people for premium SMS content in December 2013. The company says it was the first in the industry to end the practice. “While we had rigorous protections in place to guard consumers against unauthorized billing from these companies, last year we discontinued third-party billing for PSMS services,” AT&T spokesman Marty Richter said in an email.

The FTC has been especially focused on bringing penalties against telecom and Internet companies over the last year. T-Mobile was accused of similar cramming practices in July, but the wireless carrier is disputing the claims in court. Apple and Amazon have also faced FTC allegations that their app store policies allowed children to easily rack up massive charges of in-app purchases on their parents’ devices.

MONEY Customer Service

3 Industries That Desperately Need Customer Service Makeovers

Chimpanzee on a telephone
Brad Wilson—Getty Images

Comcast is hardly the only company that should be doing some soul searching and commit—not only with words but actions—to making customer service genuinely better.

Because the state of customer service has been bad for so long, and because we’ve heard many times over that some or another big initiative would improve customer service dramatically only to have little or no impact, we’re skeptical about the effectiveness of any broad campaign supposedly crafted to address age-old customer grievances. Nonetheless, it was good to see Comcast’s recent announcement that a long-serving executive named Charlie Herrin had been named as the company’s new senior vice president of customer experience. “Charlie will listen to feedback from customers as well as our employees to make sure we are putting our customers at the center of every decision we make,” a message from Comcast president and CEO Neil Smit explained on Friday.

Read between the lines and it sure looks like Comcast is acknowledging that in the past, customers haven’t exactly been top of mind when it comes to company decisions. That’s no revelation to consumers, of course, who have routinely dinged Comcast for terrible customer service. In 2014, Comcast “won” the annual Worst Company in America competition as voted by Consumerist readers, the second time in recent years it has nabbed that dubious honor.

While it’s unclear what Herrin and Comcast will do to improve customer service, the first step in solving a problem is acknowledging that you have one, which Smit did more squarely when he said, “It may take a few years before we can honestly say that a great customer experience is something we’re known for. But that is our goal and our number one priority … and that’s what we are going to do.” To which the consensus reaction among consumers is … it’s about damn time. Followed by, we’ll believe it when we actually see real,meaningful change.

To be fair, it’s not just Comcast that’s sorely in need of a customer service makeover. Here are three entire business categories that are regularly bashed for not putting customers’ needs first on the agenda.

Pay TV & Internet Providers
Current Comcast competitor and likely merger partner Time Warner Cable is also a regular contender for the worst service title, as are other pay TV-Internet providers including DirecTV and Verizon.

Among the complaints are that there is a lack of true competition in the category, because roughly three-quarters of Americans have exactly one local choice for a high-speed Internet provider. A survey published this summer indicated that more than half of Americans would leave their cable company if they could, and nearly three-quarters said that pay TV providers are predatory and take advantage of the lack of competition. Among the most hated pay TV practices that consumers would love to see changed are promotional rates that are replaced by skyrocketing monthly charges, frustrating and time-consuming run-ins with customer service reps, and bundled packages overloaded with channels and options the customer doesn’t want (let’s add smaller packages and a la carte channel selection, please).

Wireless Providers
The good news for cell phone users is that customer satisfaction is on the rise, increasing 2.6% according to the 2014 American Customer Satisfaction Index (ACSI). The bad news, however, is that while we’re happier with the actual gadgets (from Samsung in particular), satisfaction with the companies providing our cell phone service—including AT&T, Verizon, T-Mobile, and Sprint—remains stagnant and below average.

Plenty of other studies also show just how frustrated and dissatisfied consumers are with wireless providers nowadays. A vote-off at Ranker.com, for example, placed AT&T at the top of the list of “Companies with the Worst Customer Service.” Among the many problems consumers have with wireless providers is that choosing a handset and data-minutes-texting package is absurdly complicated, with countless permutations, obfuscations, and mysterious add-on charges. This past weekend, a New York Times columnist presented a painstaking step-by-step analysis of why the $199 price advertised for the new iPhone 6 is a joke—because by the time fees and monthly upcharges are tacked on, upgrading to the new phone will easily run more than $600.

“Wireless service has always been one of the most complex purchases a human can possibly make,” Eddie Hold, a wireless industry analyst with market research firm NPD Group, summed up in a Consumer Reports story last year. “It’s always been horrific.”

Banks
Number 3 on the Ranker list of companies with the worst customer service, just below AT&T and Time Warner Cable, is Bank of America. Another study, from 24/7 Wall Street, used customer service surveys to put Bank of America in the #1 spot for its Customer Service Hall of Shame, and two other banking institutions, Citigroup and Wells Fargo, are in the top (bottom?) 10. (The study factored in ratings for these institutions’ banking and credit card services.)

What may come as a surprise—a sad and ironic one, at that—is that customer satisfaction with banks is apparently at a record high. The 2014 J.D. Power study on U.S. Retail Banking Satisfaction indicates that big banks and regional banks have made some strides in terms of making customers happier (or less disgusted) with their service, and that overall bank scores are higher than they’ve ever been since the study has been conducted. Yet the J.D. Power study shows there’s a long way to go: The most common reason given for switching banks is poor customer service, and millennials, minorities, and affluent consumers stand out as being particularly dissatisfied with today’s banks.

“Even with record high satisfaction, there are some banks that fall far short in meeting customer needs,” J.D. Power’s Jim Miller said via statement. “It is easy for banks to become complacent. To stay at the top of their game, banks should focus on those customers who are not satisfied. And consumers should keep in mind they have the opportunity to shop banks to find the right combination of services, products and fees to meet their needs.”

What’s your pick for the company with the worst customer service? Tweet us at @MONEY with the hashtag #unhappycustomer. Here’s what readers have already said. Add your nomination, and we may publish your feedback in a future post.

Related:
5 Packages That Could Replace Pay TV As We Know It
How to Pick a Bank

MONEY Television

5 Packages That Will Replace Pay TV as We Know It

cutting the cord
Igor Markov—iStock

The traditional cable plan is dying. Here's what's going to replace it.

If you need proof that cable providers are feeling the heat from cord cutters, look no further than AT&T’s new U-Verse package. Marketed as an online exclusive, the plan includes broadband, a small lineup of channels, HBO (including HBO GO), and a full subscription to Amazon Prime (with both streaming video and free shipping included)—all for $39 a month. The message is clear: “Keep paying for TV, and we’ll throw in some of the web services you were thinking of leaving us for.”

If might seem strange for a cable provider to subsidize its competitor’s products (and you’d be right), but AT&T’s latest offer reflects just how desperate cable companies have become to keep their subscribers. The old pay-TV model is dying, and it’s being replaced by a slew of more consumer-friendly ways to watch the tube. As we edge closer to the end of cable as we know it, it’s time to look at five new packages that are stepping in to fill the void.

The Oh-God-We’ll-Do-Anything Package

That’s essentially what AT&T is now offering. By discounting the same web services most of their cord-cutting customers are likely fleeing toward, the company is trying to keep anyone they can on the cable bandwagon for just a little while longer. It sounds like a good deal, but cable refugees should read the fine print. AT&T is only offering the $39 price for your first year on the service. After that, the plan’s price is likely to skyrocket, making this package a bit of a bait-and-switch.

Re/Code’s Peter Kafka succinctly summarizes the logic behind AT&T’s newest product, writing that cable providers “[would] rather have subscribers paying a small fee than none at all, but they’re also telling themselves that those subscribers will ‘trade up’ ” to a more expensive plan. But as Kafka points out, it’s a gamble, and giving subscribers a sampling of cable competitors might not be the best way to ensure they stick around.

The Discount Cable Package

Having hundreds of channels sounds nice, but which channels does the average watcher actually need? The networks? Local sports? Maybe HBO? If that’s your answer, a growing number of cable companies are offering packages that offer exactly that, and nothing more, at a discount price. Comcast is selling internet, local channels, and HBO for $49.99 a month. (Comcast might be feeling ambivalent about this plan, since, as Re/Code notes, the company apparently stopped promoting it, but interested parties can still find the deal here.) Verizon has an almost identical plan for $50, and AT&T is offering its aforementioned discount plan at an even lower price.

The catch? Verizon’s deal is for one year only, and Comcast promises just 12 months of its “Internet Plus” plan at the introductory price. Once that year runs out, subscribers may find these discount plans are yet another ploy to keep cord-cutters on board and gradually reconvert them to costlier options.

Cable for Cord-Cutters

It might sound like an oxymoron, but that appears to be exactly what Sony is trying to do with its yet-to-be-released Web TV service. The tech giant has already signed a deal with Viacom to carry 22 of the company’s channels, including MTV and Comedy Central, and plans to ultimately stream an even larger selection of networks exclusively over the internet.

However, instead of using this new transmission method to shake up TV offerings, the Wall Street Journal reports Sony is planning to put together a traditional cable-like package with roughly 100 channels and a comparable monthly bill. According to Viacom and others involved with the project, Sony plans to lure would-be cable quitters using a new, more powerful user interface that promises to make media consumption of all kinds more intuitive and enjoyable.

The Un-Cable Provider

If T-Mobile has become the un-carrier for wireless service by rejecting typical industry practices, Dish seems to be doing the same thing for cable. The satellite provider is planning to launch a new Web-TV service as well, and like Sony’s offering, it wouldn’t require any setup or installation fee. But according to the Journal, Dish is going even farther than Sony by building its Web TV package around a leaner selection of most-watched channels—all for a lower price than current pay-TV plans. Dish has already partnered with Disney to build out its content lineup, and is required by that agreement to also carry 10 of the top 30 channels when the service debuts.

A Hodgepodge of Streaming Web Services

For many TV fans, ditching cable for the Netflixes and Hulus of the world is already the status quo. Cable providers may not let customers pick and choose which channels to receive, but through a careful selection of streaming services, including free ones like YouTube and Twitch, TV addicts may have stumbled across the next best thing. This alternative is looking even more attractive ever since HBO announced in September that it was ‘seriously considering’ offering HBO GO to those without cable plans as a standalone product. Combine online HBO with a growing number of cable-less sports options, and the very idea of single package TV service may become increasingly old-fashioned.

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