Verizon Wireless's Outrage Over Alltel Ad A Bit Misplaced

from the bad-timing-is-all dept

Fri, Jan 4th 2008 2:46am — Mike Masnick

Having just run into its own problems with false advertising, Verizon Wireless is now suing competitor Alltel, claiming false advertising in its commercials. The ads, such as the one here, make fun of Verizon Wireless and other mobile operators for forcing people to extend their contracts whenever they make changes, and claim that one of Alltel's advantage is the lack of such requirements.

Verizon Wireless doesn't just claim that this is wrong, its spokesperson states: "Whatever merit this comparison may have to other carriers, in the case of Verizon Wireless, the supposed 'advantage' is pure fiction." "Pure fiction" is a pretty strong claim, and it would be a lot stronger if it hadn't been absolutely true until just a couple months ago. Verizon Wireless did, in fact, force people to extend contracts, and only stopped the practice back in October when Sprint got sued over doing the same thing. And, of course, the Alltel ads began running well before Verizon was pressured into making this change. So, while it's technically accurate that these ads are false advertising now, it seems a bit excessive to describe them as "pure fiction," when they were absolutely true until just a few months ago.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: contracts, early termination fees, mobile operators
Companies: alltel, verizon

26 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

The Swiss Cheese Monster, 4 Jan 2008 @ 4:04am

If they "stopped" in October, then I have a beef with Verizon because I made a change to my contract in December and they made me add two more years.
[ link to this | view in chronology ]
- Scott, 4 Jan 2008 @ 4:11am
  
  Re: Swiss Chz
  You still have to do that. I just did. You can only go month to month with the same plan and same phone, unless you want to pay $300 for a new phone.
  [ link to this | view in chronology ]
  - JS Beckerist, 4 Jan 2008 @ 8:38am
    
    Re: Re: Swiss Chz
    No way. Buy a new phone off ebay, you'll pay $50 for something that was 300 a year ago (Razr's are almost NOTHING now.)
    
    Take it to Verizon and make them switch your number over. They can't, under any circumstances FORCE you to extend your contract.
    
    ...only if you buy a phone at a "reduced contract" price (which is bull anyway, they're marked up like CRAZY) will you have to extend or sign a contract
    [ link to this | view in chronology ]
    - Razr's suck, 4 Jan 2008 @ 11:18am
      
      Re: Re: Re: Swiss Chz
      Razrs are "almost nothing" because they suck. Probably the worst phone ever made.
      [ link to this | view in chronology ]
- Cheeeeeeese, 4 Jan 2008 @ 9:35am
  
  Re:
  Next time don't give in to their pressure tactics so easily, that's why they had this hold over us in the first place because we let them!
  [ link to this | view in chronology ]
Alfred E. Neuman, 4 Jan 2008 @ 5:05am

And in related news ...
Pigs at the trough argue about who stinks the most.
Film at eleven.
[ link to this | view in chronology ]
- Danny, 4 Jan 2008 @ 7:23am
  
  Re: And in related news ...
  I think this is a more intersting story.
  [ link to this | view in chronology ]
Vincent Clement, 4 Jan 2008 @ 5:31am

New Business Model
Don't improve the customer experience. Don't give the customer what they want. Don't add value to your product or service.

Just file a lawsuit.
[ link to this | view in chronology ]
Huckleberry Finn, 4 Jan 2008 @ 5:39am

Why
Why is it that the wireless phone industry is pretty much the only one left with contracts. You dont have to sign a contract with a cable or internet provider anymore, why do we allow the cellphone companies to require us signing their contract?

Look at the similar companies in Europe, they have so much more freedom then us American's do with our crappy companies.
[ link to this | view in chronology ]
- Anonymous Coward, 4 Jan 2008 @ 6:44am
  
  Re: Why
  It is because by signing the contract you are subsidizing the cost of the phone. They could do away with contracts but then you would bitch that cell phones cost $300 to $1000 instead of $0 to $400
  [ link to this | view in chronology ]
- Chris, 4 Jan 2008 @ 7:12am
  
  Re: Why
  They still require contracts because they still can guarantee a certain amount of money from you. The best part... the discount on the phones suck. A couple hundred dollar a month plan and the least they could do would be to throw in a few nice phones.
  [ link to this | view in chronology ]
Bob, 4 Jan 2008 @ 6:06am

Free Phones
I think the reason the cellcos would give is that they give away phones so they have to recoup that loss over the life of the contract. It is probably bogus but that is their argument.
[ link to this | view in chronology ]
Steve, 4 Jan 2008 @ 6:26am

Long contracts are Un-American
They should make them all month to month. It is a free country. Why are we beholden to them? Free up the air waves and let more people provide new plans and create more cometition. Since when does free enterprise mean you have 3 big carriers to choose from and they are all the same when it coems to contract length BS> Fight the Power People... Altel..... sue verizon for libel for calling your ad pure fiction
[ link to this | view in chronology ]
- Surprise Surprise, 4 Jan 2008 @ 8:21am
  
  Re: Long contracts are Un-American
  Even though America is a "free enterprise" system, the government regulates parts of the economy for the benefit of the consumer. Also, Alltel wireless is one of five U.S. carriers: Verizon, Sprint, AT&T, and a mom and pop wireless company in Kentucky. Also, "libel" would be a word best used to talk about Alltel, because they continue to run these comercials when you can choose not to let the companies "Control your world" by not taking their cheap, two year contract phone. Fianlly, long contracts are incredibly american, most of us have home loan CONTRACTS, car loan CONTRACTS, and an entire industry is devoted to renting people things, contracting them to pay for the item over long periods of time.
  [ link to this | view in chronology ]
  - Cem Kaner, 4 Jan 2008 @ 1:49pm
    
    Re: Re: Long contracts are Un-American
    These carriers are still using any excuse to force customers to extend contracts. A few weeks ago, my wife and I tried to change our ATT phone contract from her name to my name. I got my "free" phone from Cingular about 4 years ago. We've been on a month-to-month contract for a couple of years. To switch the name of the person who signs the check from the wife to the husband, ATT demanded a two year contract and wouldn't negotiate it. I don't have a credit problem or a history of service problems with ATT, this was just an attempt at bullying. (Result: I canceled my service and bought a 10-cents-per-minute phone instead.) It was amusing reading an article in Consumer Reports saying that the carriers had stopped doing this a few months ago. It is even more amusing hearing them call people liars when we say they are still doing it.
    [ link to this | view in chronology ]
GPK3, 4 Jan 2008 @ 8:04am

Why is it people want free phones from companies? You wouldn't walk into Wal-Mart and at the checkout haggle the clerk and tell him/her you want this loaf of bread free. Why do it at a cell phone company? People nowadays want everything for free in By-God-America. Just because you have been with a cellco for 15 years and are happy with the service, doesn't entitle you to a free phone. Jut the same with Wal-Mart and K-Mart. You wouldn't go to K-Mart and say "Ive been shopping here for 12 years, I want $150 in free merchandise or I'm taking my business to Wal-Mart." C'mon.... you get what you pay for.
[ link to this | view in chronology ]
- dorpass, 4 Jan 2008 @ 8:35am
  
  Re: GPK rant
  Comparing a loaf of bread to a cell phone, that's genius. So when was the last time an existence of one loaf of bread helped anyone make money for 2 years straight? It is in the interest of the cell phone companies for the consumer to have a cell phone, so that you, you know, they could use their service and make money! That's where free/cheap phones come in. And for those that claim price of the phones would be $300-1000 without "subsidy," you need to look at production costs of electronics nowadays and get a clue.
  [ link to this | view in chronology ]
  - GPK3, 5 Jan 2008 @ 8:28am
    
    Re: Re: GPK rant
    Actually, Dorpis, you are incorrect. A loaf of bread brings revenue to a company that is selling it. I don't think you quite understand in your one tracked mind the comparison. As far as it being compared to an actually cell phone for 2 years, it’s the same.
    - why go to a cellco and get service?
    . brand, loyalty, great selection, quality
    
    - why go to K-mart and buy a loaf of bread?
    . brand, loyalty, great selection, quality
    
    If you want out of a contract you pay your cancellation fee and move on. If you don't like buying bread at K-mart you go to Wal-Mart and take your service there.
    
    Seems to me, Dorpass that you need to come out of your parent’s basement more often and observe how society works, rather than beating off to female wood elves in World of Warcraft and making idiot comments on a message board.
    [ link to this | view in chronology ]
Anonymous Coward, 4 Jan 2008 @ 9:45am

Contracts on old plans
If you wanted to change your plan allotment minutes only and stay on the same type of plan, then you never needed to extend contract. A contract was required (before they finally got smart) only if you changed to a new/updated plan that came out after your current type of plan. Of course they would not offer this information to you. The reps need to make their monthy contract quota.... But it's a stretch to say that is was "absolutely true" a few months back. But none the less good story Mike.
[ link to this | view in chronology ]
Alltel buyout victim, 4 Jan 2008 @ 10:20am

Unlock Phones and Lose the Contracts
Doing away with the contracts is a great idea as long as people will pay $100 - $1,000 for the handsets. Unfortunately, many won't pay much or anything for them.

The market's saturation level is so high now, that the people who would pay a real retail price are severely outnumbered by the people who can't/won't pay retail for a handset. The wireless industry cannot afford to lose all of those customers and their monthly charges.

Even if the Cellco's did do away with contracts completely (and they don't need to, as long as they allow outright purchase), every carrier locks down the "features" on the handsets. Verizon is the worst that I've seen, but Alltel does it too. Try using Bluetooth to transfer music or pictures. It won't happen. They lock your content to the handset so you have to pay them for data transfer.

Yes, there are exceptions, but not advising customers that they can buy a phone outright and locking down retail devices customers purchase is not the answer. Maybe someday the companies will realize that.
[ link to this | view in chronology ]
weirdworks, 4 Jan 2008 @ 10:45am

Ignorance is bliss
Did anyone wonder how Alltel makes money if phones cost $1000 and they don't require a contract?

Did anyone wonder how the iPhone cost about $270 to make initially netting Apple a 50% margin but other crappy phones are supposed to be $1000?

In Europe there is a strong competition in both the phone and carrier market as you can use any phone on any network. Phones are dirt cheap and carriers actually compete as opposed to just locking people in contracts.

Whoever came up with the unsubsidized phone price of $1000 is an idiot.
[ link to this | view in chronology ]
Verizon Blows, 4 Jan 2008 @ 12:28pm

Verizon is EVIL...
I never agreed to a contract extension and never signed anything and they extended my contract 2 years without notice then charged me 375 for breaking the contract.. that's why they went from first to last....
[ link to this | view in chronology ]
Craig, 15 May 2008 @ 2:11pm

Early termination fees
Pigs at the trough indeed. We just transfered service from Verizon on the day we THOUGHT our two-year contract expired. Silly us. We were four days off, and now Verizon wants us to pay a $700 early termination fee for our three phones -- for the four days we were off. If we'd started the plan in November of 2006 instead of May, it would have been prorated...
[ link to this | view in chronology ]
wirelessguru, 5 Jun 2008 @ 3:56am

GET a CLUE, GET EDUCATED, Get Something....
Contracts, contracts, contracts!!! Every wirless company sells devices at a loss because we the CONSUMER demand low, low prices. When a company sells something at a loss and they are in the business to make money they must have reassurance they have return on investment. That's why there are contracts! Don't want a contract? Buy a device at Retail price, not a 1 or 2 year contract price. Buy one from Ebay. Wireless companies provide wireless service, they are not in the phone business. They would just assume you bring in your own device and sign up. If you do this you will not need a contract. So pony up the bucks! do you really think that wireless companies purchase Blackberry's for $99? News flash....they cost much more! Try $235 - $350. Go ask Krogers or your favorite grocery if they will sell your next basket of groceries at a substancial loss on just the promise that you will be back again??? Try it.....they will think you are crazy. Other utilities such as cable don't have contracts because they don't sell you equipment at a loss.
[ link to this | view in chronology ]
Jay Thomas, 14 Jun 2008 @ 9:33pm

Verizon
I've used Verizon for three years. It stunk but it was the only way to get online. I live where cable, local internet is not possible. Verizons plans are expensive and lock you into what you really don't want. Take their USB broadband modem and get 230k max cap on the network. I got 130. Cost was $270. Access was $84/mo.

Went to Alltel and got a UT150 which goes to 3.1m and it was free. Plan is $60/mo. NO problems, no hassles, warranty, insurance and replacement is in the contract. Wasn't with Verizon. Now at 850kb to 950kb/sec with 3 bars.

Verizons modems are trash.
[ link to this | view in chronology ]
ynattirbknox, 3 Jul 2008 @ 2:33pm

No Contract
Look I have been with Verizon for almost 3 years now, and I have probably changed phones 10 times in those years. And I have never had to extend my contract. Once you become a reliable customer you can bypass the contract. They do contracts only because they don't want to be just giving phones away to people who are going to leave in 2 months. So get over it, your whole life is going to be full of contracts.
[ link to this | view in chronology ]