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Wireless operators would like to believe the pricing and terms of their services are straightforward and easy to understand. But when it comes to deciphering family plans or figuring out whether you can or cannot use your smartphone as a wireless hotspot, it’s not always so clear.
In this edition of Ask Maggie, I explain to a reader who is confused about how wireless contracts work on a family plan. He complains that he was socked with a hefty early termination fee, and he wonders if it has something to do with the fact that he and his wife are on a family plan instead of individual plans.
In the second question, I advise a reader on how his uncle can leverage his smartphone’s personal Wi-Fi capability to bring low-cost Internet connectivity to his vacation home. It’s a move that could save him hundreds of dollars over subscribing to a wired broadband connection.
Deciphering the family plan contract
Dear Maggie, I was on a T-Mobile family plan with my wife. I recently canceled my portion since I thought I didn’t have a contract with T-Mobile. My wife is the one in the family who handles all this stuff so I assumed we were good to go. Lo and behold, the thieves hit me with a $200 early cancellation fee, since our agreement doesn’t expire until November. I tried to argue the point that I wasn’t on a contract, etc. also, that we’re continuing as customers on her line. But they considered it as two separate accounts. Long story short, the woman who took our call told me to write customer service at T-Mobile and register our complaint (and beg). I just sent out the letter, though i’m not expecting anything out of the effort.
My question to you is this: What is up with these family plans? Does the contract pertain to the entire family and every line on that plan or is the timeline different for each phone on the family plan?
Thanks, Charlie
Dear Charlie, I can’t speak to your specific situation, because I don’t have all the facts. But the short answer to your question is that even when you’re on a family plan, the contract term and the early termination fee applies to individuals on that account. This means that in your case, one of two things happened. 1. T-Mobile screwed up, or 2. You were actually under contract with your provider, therefore subject to the early termination fee.
To be honest, sometimes it’s difficult to know whether you are under contract with your wireless provider because you don’t actually sit down with your attorney and review your long contract and sign it like you would if you were buying a house or negotiating a swanky job.
But the truth is that when you renew service with a wireless carrier and you choose to buy a new phone from that carrier at a subsidized price, you are entering into a binding contract. The terms of the contracts are usually boiler-plate with a few variations. These contracts typically require you to pay for monthly service from that carrier for the next two years. If you cancel the service before the end of your term, you are required to pay an early termination fee. Again, these fees may vary. But every major carrier in the U.S. now pro-rates their ETFs, which means that after a certain point, the carrier will lower the cost of the ETF each month until the contract ends.
You also have the option to forgo a contract. How? One way is to let your contract term run out and continue use your existing phone. At that point you will be month-to-month. And can quit the service at any time. If you are signing up for a new contract or want to get a new phone but don’t want to take the subsidy, you can buy a new phone at full price or use some other compatible device that you or another friend or family member may have lying around. Whichever way you get yourself a new phone doesn’t matter, so long as you don’t take the carrier subsidy. Without the subsidy, you are contract free.
So what’s this all mean if you are in a family plan? The family plan itself means nothing to your contract terms. If you and your wife signed up for the new phones on the same day, then your plan expires at the same time. But if one of you had a service plan and then you added additional lines to a “family plan” then each device gets its own contract date based upon when you signed up for the service. Each of the major carriers offers information about subscribers’ individual accounts when subscribers are logged into those accounts on the Web site.
For example, Verizon customers can go to My Verizon where they can see the entire account, including each individual line or mobile number on that account. You can look at the usage by specific mobile phone number, and you can also upgrade individual lines.There is a page that shows you every phone on the account along with the corresponding upgrade eligibility date.
T-Mobile and the other two major wireless carriers have a similar set-up.
Because each individual phone on the account has its own “contract,” members of the family plan are free to cancel service whenever their specific contract has ended. And when people cancel, it does not affect the contract terms of the other people on the family plan. If there are only two people on a family plan, as is the case in your situation, the remaining individual would go to a single subscriber plan. But the remaining subscriber will not see any change to his or her own contract. In other words, the clock does not restart for the remaining subscriber.
Now to get back to your situation. As I stated earlier, there are two things that could have gone wrong. The first is that you were in fact still under a contract on your phone, and perhaps you didn’t realize it. And the second thing that may have happened is that T-Mobile simply made a mistake. Unfortunately, if it’s the former, you will likely still have to pay the early termination fee. But if it’s the latter, T-Mobile’s customer service should be able to help you resolve this. But I would double check your records to prove that you were in fact out of contract when you terminated your service.
I hope this advice was helpful. And good luck!
Using your smartphone to get cheap Net access
Dear Maggie, My uncle has a cabin in the mountains of West Virginia. This is his vacation home, so he isn’t at the cabin all the time. Anyway, he would like to explore Internet options other than DSL. He was wondering if he could connect his laptop and other devices through the hotspot option on his smartphone. He wouldn’t be streaming or downloading large files. Instead, he’s more interested in basic Web browsing, e-mail, and other essential tasks.
Do you think that would be possible? I think he has an unlimited data plan on his smartphone. Is there a better option for him?
Thanks, Kent
Dear Kent, In general, I don’t recommend that people share their wireless data with their smartphone in lieu of a wired broadband connection at home. On a per bit basis, wireless is much more expensive. In other words, you get much less data and slower speeds on wireless broadband services than you do on a traditional broadband connection, which is almost always unlimited.
But in your uncle’s case, it might be a cheaper alternative. The main reason is that wired broadband services can’t be turned on and off easily. So for people with vacation homes, they often have to pay for service all year long, even when they aren’t there. That can add up over a year since the average cost of broadband service is about $50 a month. That’s $600 a year!
Using wireless broadband can be a much more affordable way to go, so long as your uncle is truly a light Internet user and won’t need Net access at his West Virginia home all the time. But since he has an unlimited data plan, this might be a little tricky, depending on the carrier he uses.
In general, wireless carriers are leery of consumers using tethering apps or personal Wi-Fi hotspot features on their smartphone to connect multiple devices to an unlimited service plan. And most of them have put limits on how or even if this can be done.
Now, this doesn’t mean that your uncle couldn’t try doing it anyway. There isn’t an alarm that automatically goes off at any carrier headquarters that alerts the billing department that you are tethering a device to the smartphone data plan. But if the carrier notices a spike in data usage, it can infer that the smartphone is being used to connect other devices to the Internet. And if that happens, the company can automatically start charging an additional fee for tethering or switch your uncle to a different plan.
Here’s a look at how each carrier handle tethering for unlimited data customers:
- AT&T doesn’t allow its unlimited data users to use tethering apps or to use the personal Wi-Fi hotspot feature on their phones. That said it does allow the use of personal Wi-Fi hotspots for free through its new family share plans. But keep in mind that you have to share the data among all your connected devices under this plan. AT&T charges $85 a month for a plan that offers 1GB of data, plus unlimited talk and text. A plan that offers 4GB of data on AT&T with all the other unlimited and tethering freebies is $110 a month. It’s $15 per gigabyte over these limits.
- Verizon Wireless allows you to tether or to use the personal hotspot feature with a grandfathered unlimited data plan for an additional $30 a month. Customers on an existing tiered plan can use a tethering app for free and share whatever data is available for their plan. The service is called Mobile Broadband Connect. Verizon also offers a data share plan that includes tethering at no additional charge. A 1GB plan on Verizon is $90 a month and it’s $100 for 2GB and also includes unlimited, talk, text and device tethering.
- Sprint allows personal Wi-Fi connectivity on its unlimited data plans, but you have to pay extra for the service. Tethering on Sprint costs $20 a month for 2GB of data and $50 a month for 6GB of data. This means you’ll be able to use 2GB or 6GB of tethering data, but you’ll still have unlimited data as long as you’re just using your phone.
- T-Mobile USA does not allow the use of a personal Wi-Fi hotspot on its unlimited plans. Instead subscribers have to switch to a tiered offering. Plans that offer 5GB or 10GB of data include mobile hotspot connectivity. But once again the data is shared across the plan between the smartphone and whatever other devices he uses when he is tethering.
Even if your uncle has to pay extra for the ability to use his smartphone as a personal Wi-Fi hotspot, it’s still likely cheaper than paying an entire year for DSL or cable modem service. What’s more if he has to pay extra for the tether option, he can only activate the service during the months that he will need it. And then he won’t have to pay for it the rest of the time, which should save him money over the long term.
Another possible option for him is to get a Mi-Fi device from a prepaid service provider. He will have to pay for the upfront cost of the Mi-Fi device. But he may find this option useful since he won’t have to share data with his smartphone. There are tons of companies offering these options. Most of the major carriers have services like this as do cheaper prepaid brands like TruConnect, which is sold through Walmart.
Overall, I think using the personal Wi-Fi hotspot feature on a smartphone is probably the best bet for him, since it doesn’t require your uncle to purchase additional hardware. And since he isn’t a heavy data user, sharing data with his smartphone likely won’t be an issue.
My suggestion is that the next time he visits his cabin in West Virginia, he should try using the personal Wi-Fi hotspot on his phone and see what happens. If he gets a bigger bill or is forced into a new plan, then he can re-evaluate his options. I hope this advice was helpful. Good luck!
Ask Maggie is an advice column that answers readers’ wireless and broadband questions. The column now appears twice a week on CNET offering readers a double dosage of Ask Maggie’s advice. If you have a question, I’d love to hear from you. Please send me an e-mail at maggie dot reardon at cbs dot com. And please put “Ask Maggie” in the subject header. You can also follow me on Facebook on my Ask Maggie page.
