Apparently it’s not the $1,500 netbook; it’s the $5,000 and maybe a pound of flesh netbook. AT&T Inc. and distribution partner Radio Shack have been slapped with a lawsuit by a subscriber in Oklahoma that opened her bill for netbook 3G service only to find that she owed about $5,000 for overages to the 5-gigabyte monthly data cap on the service.
The lawsuit alleges that the carrier has engaged in “false, misleading, and inaccurate advertising of the data plan,” by not adequately explaining the costs of overages. The business model is structured like this: Customers can purchase a $99 Acer Aspire One netbook at RadioShack with embedded 3G service, with a two-year contract for AT&T's DataConnect mobile data plan that runs $60 per month. Here’s the catch: For every gigabyte a user exceeds the cap, he or she is charged $480.
The lawsuit reads: "Although the customer service summary informed plaintiff and other consumers that their first bill might be higher than expected because of a $36 activation fee, one month's service billed in advance, and prorated charges and fees for the month when the customers signed up, neither the plaintiff nor other consumers were informed, nor could they have reasonably discerned from the paperwork, that wireless Internet usage exceeding 5 GB per month would result in astronomical charges running into the thousands of dollars.”
The lawsuit is looking to become a class-action movement.
The case points out a big flaw in the carrier business model when it comes to netbooks: By offering the devices for the heavily subsidized and phone-competitive cost of $100, they become much more attractive to consumers. These Internet-optimized sub-notebooks are also purpose built for Web applications and cloud services, which drive exorbitant amounts of data usage. However, carriers are leery of over-subscription and want to provide a certain level of quality of experience to their mobile data customers, which has necessitated 3G data caps. It’s a bit of a conundrum for operators.
Calling 4G?
