Bait & Switch: Buy A Lifetime Account For As Long As We Exist Or Until We Get Tired Of You

from the not-so-nice dept

Via Slashdot, we learn about how Joyent offered early customers a "lifetime account," (via TextDrive, a web hosting company it acquired) in which they promised the account would exist "as long as we exist." Well, the company still exists, but it's now sent notices to those lifetime customers telling them that their "lifetime" is apparently up on October 31:

We appreciate and value you as one of Joyent's lifetime Shared Hosting customers. As this service is one of our earliest offerings, and has now run its course, your lifetime service will end on October 31, 2012

One would imagine that the FTC might have some questions for Joyent's management on the nature of living up to the promises of what was offered. Jason Hoffman, who apparently co-founded both TextDrive and Joyent, seemed to make things worse with his defense of the decision, basically admitting that this is screwing over their earliest supporters and biggest advocates:

Having co-founded two companies that ultimately became Joyent, growing from a tiny startup to where we are today has had its ups and downs, and this is one of the toughest decisions I’ve made. In particular because I've always been the biggest advocate for pushing a shared hosting product forward, and then here I am, the only remaining "founder" that is active.

It's ironic that our biggest advocates are the ones most affected by this and I know many of you are disappointed in me. I’ve received many questions and comments about why the service is being discontinued and I'm listening and will continue to listen. And like the past, this response won't be my last.

Making the decision to discontinue the service was extremely difficult. It was driven by some simple things: the hardware is simply old (6-8 years old), it's failing, there isn't an upgrade path from it, there's more than many of you likely realize and oddly enough it's more expensive with time (while not being used much). The rest of the Joyent's business has been paying for that, and I can't make the argument as to why it can continue.

Yet, we're only here because of the initial community that trusted us, and I'm genuinely grateful for the support. I’m sorry that I've lost that trust and I've upset you. You have a right to be upset. This was a tough decision with some nuance to it and none of this is lost on me.

This seems to go back and forth. First off, it's not "ironic" that you're screwing over your early supporters and not giving them what was promised. It's a highly questionable business practice. As for not being able to make an argument for why the service can continue, one would think keeping Joyent's name and reputation from being dragged through the mud would be a potential argument. Also, avoiding possible smackdowns from government officials for selling one thing and delivering another.

I recognize that things change and businesses change over times. But the company did make the promise that these were lifetime accounts and that they'd stay up for as long as the company was around. It seems only reasonable that it should not just cut off those accounts without any sort of recompense.

Filed Under: bait and switch, ftc, lifetime account
Companies: joyent, textdrive

AT&T's Bait And Switch On iPhone Unlimited Service: We Screwed Up, So Now You Have To Pay More

from the well,-that's-convincing dept

There's lots of buzz going around concerning the news that an AT&T exec has admitted that to deal with the companies own inability to build out a strong cellular network (angering tons of iPhone users), that it's planning to put in place caps and charge more to high-end users. Of course, this is pure bait and switch. The company sold people on an unlimited data plan, failed to invest in its network, and pushed high bandwidth apps on people. And, of course, it's worth noting that while they now want to charge high bandwidth users more, they don't say anything about the low bandwidth users. No one gets a discount. AT&T is making a ton of money off of the iPhone. It could have -- and should have -- invested more of that into network upgrades. Now it's blaming its most loyal users -- the same ones who it recommended high bandwidth apps to -- and expecting that everyone will be happy with that? AT&T may discover that people start looking for other alternatives if they dump the unlimited data offering that they sold people.

Filed Under: bait and switch, iphone, unlimited
Companies: at&t

'Free Credit Score' Company Tries To Unmask Anonymous Blogger; Sues Wikipedia

from the bait-and-switch? dept

You may recall last month that Ben Stein was fired from the NY Times after it was revealed that he was pitching "free credit reports" under the brand FreeScore.com, from a company, Adaptive Marketing, whose parent company, Vertue, has a reputation for figuring out ways to make those credit reports not so free. Reuters' Felix Salmon helped expose this in a blog post entitled Ben Stein, predatory bait-and-switch merchant. An pseudonymous blogger under the name flaneur de fraude linked to Salmon's post, and quoted the "predatory bait-and-switch" part.

Adaptive Marketing didn't go after Felix Salmon for that phrase... but it did go after this anonymous blogger, starting pre-litigation discovery to try to unmask who it is. Perhaps that's because in the blog post agreeing with Salmon, the blogger detailed a rather long and detailed list of instances where Adaptive Marketing's parent company, Vertue, has gotten in trouble for shady practices involving getting recurring charges onto users' credit cards. Among the links on the blog? One to Vertue's Better Business Bureau rating, where it has a solid "F." Paul Alan Levy, who alerted us to this story and is representing the blogger, notes, "When even the Better Business Bureau disses a company, you know there must be a big problem." Levy continues:

Although the burden on a defamation plaintiff would be to prove falsity, in this case, of course, it is hard to believe that what the blogger said isn't true.   Instead of just getting a credit score, consumers are entitled to obtain their entire credit report free of charge at the government-mandated web site annualcreditreport.com.    And the ads in question solicit telephone calls in which the service of credit monitoring is at best hawked, and at worst, as many consumers have complained, slipped in -- it remains to be seen which is true.  Such services "are often overrated, oversold, and overpriced."   But regardless of whether the services are worthwhile, and whether they are charged to consumers' credit cards after a genuine consent, "bait and switch" seems to be a fair characterization of what Adaptive is doing. 

Adaptive and Vertrue have been similarly criticized in the Wall Street Journal, Washington Post and New York Times, but it doesn't claim defamation by companies that can afford to defend themselves.  So Adaptive's suit seems to be just the latest in a long line of cases in which companies that don't want to be criticized seek to cleanse their reputations through subpoenas sent as a means of intimidation to those who may not be able to defend themselves.  It remains to be seen whether the Streisand effect gives them second thoughts

The WSJ's takedown of the company is pretty thorough. The Washington Post article is actually from a few years ago.

In the meantime, the blogger in question is is pointing out both that Vertrue is also going after Wikipedia (good luck with that) and is now dealing with a Senate subpoena. Perhaps threatening an anonymous blogger for pointing out some questions about the company's past isn't such a wise move. It only seems likey to draw just a bit more attention to these questions than if the company had just left things alone. Or... even better... cleaned up its act.

Filed Under: anonymity, bait and switch, ben stein, credit reports, free credit reports, free speech
Companies: adaptive marketing, freescore.com, vertue

Dear Jim Griffin: Let's Have An Open Discussion About Choruss

from the we're-waiting... dept

Yesterday, we wrote a highly critical post concerning the details around Choruss, the recording industry's latest plan to get universities or ISPs to hand over a chunk of money in exchange for "covenants not to sue." On a private email list (which has been forwarded to me by a few members of that list), Mr. Griffin responded by claiming that my "report is factually incorrect in every respect."

I certainly hope that's true!

The points I've raised are that the industry will continue suing file sharing networks, that they'll still pursue three-strikes policies, and that Choruss will be expensive, diverting a chunk of money away from other legitimate business models, which many musicians have been establishing successfully, by adding yet another middleman. Is he saying all of these assertions are false?

Actually, Griffin doesn't address or refute any of these points at all. With respect to the last one, he actually confirms it, by claiming that Choruss will be costly to run.

The only "factual" point he disputes is a rather minor one: concerning whether the program would also cover publishers and songwriters rather than just the labels. He insists that it will, noting that Warner Music owns one of the largest publishers. That's true, but hardly eases the worries. It just suggests, again, that this is a plan for Warner and its subsidiaries, rather than for building a better system for all stakeholders. And he doesn't explain how the system can cover the necessary rights at the price points being discussed. In fact, by noting how costly the program is to run, and how it will lose money at first, it certainly sounds like he's saying "this program will start out cheap, but then we'll jack up the fees."

He claims that Choruss "cannot credibly be claimed to be a money grab -- the costs will exceed the fees," but that's highly misleading on several accounts. First, as noted, it confirms just how expensive the program will be. Second, if it's a pure money loser, than why would anyone be involved with it at all? Obviously the idea, and the whole reason why Warner Music is backing it, is that it expects this to be a money maker, eventually. Claiming that it's costly simply confirms my original point, that inserting yet another costly middleman is the last thing that we need in the process. And this just suggests that any early pricing is, once again... bait and switch. The eventual prices will have to be increased once people are locked in.

That seems to confirm my initial complaints, rather than show how they're "factually incorrect."

Mr. Griffin, (on a private email list), again tries to refute the claim that they haven't included the stakeholders in the process, by noting:

"the calendar is a clear refutation: The coming week has Choruss at SXSW, a music conference in Nashville and the music educator's conference in Boston. We've done appearances and podcasts with Educause, dozens of public meetings at colleges and a keynote at Digital Music Forum."

Yes, after coming up with the plan in back rooms, without input from the actual stakeholders, Griffin has started going out and presenting the plan to others. But there's been no open discussion with those of us worried about the inevitable consequences of his plan. There's been no explanation of why this is actually needed. There's been no attempt to actually respond to the numerous questions that we've raised about the plan and no attempt to bring the actual users into the discussion:

• Why do we even need such a plan when plenty of musicians are showing that they can craft business models on the open market that work?
• How does adding yet another middleman make the music market any more efficient?
• Will the recording industry promise to stop trying to shut down file sharing systems if this program gets adopted?
• Will the recording industry promise to stop pushing for 3 strikes if this program gets adopted?
• How will the program prevent the gaming opportunities, where artists set up scripts to constantly reload/download their songs?
• Why should music be separated out and subsidized while other industries have to come up with their own business models?
• Why should those who don't listen to much music and aren't interested in giving their money to the recording industry be required to participate if their university or ISP decides to make them?

Finally, Mr. Griffin takes a personal swipe at me, saying that no "responsible professional" would write what I've been writing. I've the highest respect for Mr. Griffin, who I do believe is very capable and very smart -- and most certainly has the best of intentions with Choruss. But it's a bad plan and he seems unwilling to address the many, many questions raised about it, other than to brush anyone who disagrees with him aside, and focus on talking to friendlier audiences. If he wants to brush me off as not a "responsible professional," that's fine. I'm willing to let anyone judge me on my work, not on what Griffin says about me. But the very least he could do is actually address the points that I've raised.

To date, his form of "discussion" has been to have Warner Music PR send me a statement saying that it's "premature" to issue any criticism of his plan. That's not discussion and that's not addressing the many, many questions raised by his plan.

But, there's some good news. That "music conference in Nashville" where he'll be presenting about Choruss next week is the Leadership Music Digital Summit... which I happen to be keynoting. So, I'd love to sit down with Griffin and see if he'll actually answer some of these questions, rather than continue brushing us off as being "factually incorrect in every respect," without actually addressing the fundamental questions raised.

Filed Under: bait and switch, covenant not to sue, jim griffin, licensing, music tax, universities
Companies: choruss, riaa, warner music group

Choruss' Music Tax Plan: Bait-And-Switch

from the ah-the-fine-print dept

Back in December, when we revealed how Warner Music, through consultant Jim Griffin and his new organization "Choruss," were quietly pushing a music tax on universities, Warner and Griffin snapped back angrily, telling us it wasn't fair to criticize the plan, because it was still being "discussed." Yet, as we then asked: where is that discussion and why isn't it taking place with the actual stakeholders? To date, the answer has been a near deafening silence. Despite having reached out to both Griffin and Warner Music directly, neither has shown any interest to actually engage in any form of conversation.

Now we're beginning to learn why.

While we discussed, in detail, why any such music tax is problematic, the details coming out make it clear that this is much worse than originally imagined. In fact, it's so bad that it can be described accurately as a bait-and-switch program designed to make people (1) pay lots of money (2) believing they're now free to file share and then find out that (3) file sharing systems will still be sued out of existence and (4) the users themselves, despite paying, will still be liable for massive lawsuits. It's basically a plan to give the record labels tons of money, handed over by universities (so users have no chance to opt-out) without actually changing anything.

After months of silence on what he was working on behind closed doors and in backrooms, Griffin recently gave a prepared speech supposedly revealing some "details" on the plan -- but as IP attorney Bennett Lincoff points out, what Griffin and Choruss are proposing is to pull the wool over universities and the public's eyes. The plan, as we originally pointed out, isn't a license: it's merely a covenant not to sue -- and that leads to all sorts of problems.

First, considering that the RIAA has been cutting back on lawsuits, that's not particularly meaningful. It'll still pushing for 3 strikes policies that will cut users off from the internet, even if they've paid up through Choruss. Furthermore, as was made clear in the speech, the RIAA won't stop trying to shut down file sharing systems. So, people who think this is a good idea because it will let them use The Pirate Bay or Limewire may discover after getting locked into this program that the lawsuits continue and those services keep getting shut down. Next, since it's just a covenant for the labels not to sue, rather than a license, it doesn't cover all of the other rightsholders, such as songwriters and the music publishers -- meaning that those who file share will still be wide open to lawsuits from those parties.

This is quite a scheme that the record labels and Griffin may pull off:

• Convince universities to buy into the program with no input from students. Universities will buy into it because they think they're "helping" deal with the "problem" of file sharing... and to avoid Congress forcing them into such agreements
• Universities pass the cost on to students (of course), so students are forced to pay for this
• Record labels get a big chunk of money for no good reason
• New expensive bureaucracy (Choruss) gets set up to siphon more middleman cash away from musicians
• Record labels don't do anything different, since they already have started moving away from suing individuals (sorta)
• The public thinks that file sharing is now legal
• Record labels continue to sue and shut down favorite file sharing networks, leaving only crappy, limited and expensive "approved" systems
• Individuals who paid up start getting sued by other rightsholders not covered by this agreement and not getting any money from it

And most of the press will eat it up as a revolutionary agreement whereby the record labels "legalize" file sharing.

Now can you understand why Griffin and Warner Music aren't open to any real conversation and will slam anyone who actually offers to take part in a conversation? A real conversation might bring out these issues, and that's the last thing the record labels want. They want everyone to believe they're working to make file sharing legal, when all they're doing is constructing a massive wealth transfer from people to the labels providing almost no benefit to consumers at all.

Filed Under: bait and switch, covenant not to sue, jim griffin, licensing, music tax, universities
Companies: choruss, riaa, warner music group

Telus Kicks Customers Off Of Unlimited Plan It Sold Them Not Too Long Ago

from the how-dare-you-use-what-we-sold-you! dept

For the last few years, various connectivity providers sold "unlimited" data plans when the reality was the plans weren't unlimited at all. Many providers are now changing the plans and instituting more clear caps, but it still seems a bit ridiculous to have marketed unlimited data plans and then pulled the rug out from under those who bought exactly what you sold them. Up in Canada, it seems that TELUS is taking it a step further. Not only did it sell people "unlimited" plans that it now regrets, it's exercising some vague language in its contract that allows them to simply cancel the plans of those who had bought into the "unlimited" plan even just a short while ago. The company is forcing users to switch from a $75 unlimited plan to a $65 plan that is limited to just one GB per month, and dumping anyone who won't switch. That would seem to be a pretty strong bait-and-switch claim. Sure, perhaps the telcos oversold these unlimited plans, but that doesn't mean they shouldn't be required to live up to what they sold.

Filed Under: bait and switch, canada, limited, unlimited
Companies: telus