> ? Breach of Promises ? <----> ? "Bait & Switch" ? <

> ? Failure to honor "Guarantees" ? <

04 Apr 98 ----07 Apr 98

Effective December 15, 1997 -- No email forwarding

Effective May 1, 1998 -- No Unlimited Access

NOTE: The Internet is a dynamic medium, as such it must be recognized that "LINKS" to certain documents referenced in this discussion may be moved, removed, or revised. As of Saturday - April 4, 1998 - all LINKS to documents referenced work. It must also be recognized that some of the documents referenced are published "within" the AT&T WorldNet® Service area and as such may not be generally accessable by the entire Internet community. Hyperlinked text, where the address is not specifically identified has had the link identified by the addition of "Link =" text identification of the address

The following >lengthy< discussion is the result of many hours of search and research - that could only be readily available to me as an informed and responsible consumer of internet service. Where the works of others have been incorporated, it's source address has been cited. Portions of those matierals included here are believed to be incorporated under the "fair use" provisions of copyright for the purpose of comment and criticism.

R.E. (Rick) Langdon - April 4, 1998


In February & March 1998 -- AT&T WorldNet® Service confirmed their "mega corporate mentality" and ignored what had put them in a leading position as a nationwide Internet Service Provider. Have they "forgotten" what put them in that position? Have they "forgotten" that there are inumerable competitors available for this market? Are they in collusion with many of the other "major" ISP's in their actions? Have they consulted with their "parent" company concerning the impact of their actions?

Let's examine AT&T WorldNet® Service's growth, history, and actions

- YOU DECIDE -

"THE BAIT"

Mid February 1966 - AT&T® Announces the launch of AT&T WorldNet® Service (and led the way with their promotion of "unlimited access" at $19.95/ month - establishing what would become the standard - flat rate pricing for unlimited access). Where the terms "Unlimited Access", "Unlimited Usage", "Untimed Access", or "Untimed Usage" are used, they are used in my comments with the same meanings - that meaning which should be reasonably construed by subscription to an access plan titled the "Unlimited Usage Plan For AT&T Long Distance Service Customers".

2 April 1996 - Link = http://www.jol.com.jm/thelwelr/rjr/quotes2.html (extracts from articles in the "New Your Times" - Comments atributed to MCI's Vinton Cerf, and from the "Seattle Times" re. article AT&T overwhelmed by demand for WorldNet:)

Despite being "miffed" other ISP's are following AT&T WorldNet® Service's lead in providing flat rate - unlimited Internet access service. By mid March - AT&T had received over 212,000 requests for the AT&T WorldNet® Service software

22 May 1966 - Link = http://www8.zdnet.com/pcweek/news/0520/22matt.html (Article from "PC Week Online)

Approximately 9 weeks after going online, AT&T WorldNet® Service claims 150,000 accounts

29 Sept 96 - Enticed by AT&T's low-cost / flat rate unlimited usage plan, a long satisfactory customer relationship with AT&T, AT&T's "rock solid" history of performance in providing communications service, fed up with "Spam" at AOL, and eager to explore all of what the "web / internet" had to offer, I signed on with AT&T WorldNet® Service.

20 Oct 96 - sign on with Tripod - AT&T WorldNet® Service indicates personal web space is coming, but no indication when. Tripod is a developing, advertising supported, "Net Community" offering free web hosting.

1 January 1997 - I retire, and start using our unlimited access, to explore and learn "the web". I bring my "work ethic" with me to this new medium and probably spend anywhere from 5 to 14 hours a day online - almost certainly averaging 9+ or more - when I was at home and using the service. However, during this same time period, Jan 97 > March 98 inclusive, (65 weeks) there have been about 9 or 10 weeks - aggregate - that I have not used the service at all. I have no historic records for time spent connected because our access account is for "Unlimited Usage" and AT&T WorldNet® Service offers no record of connect time. When Usage information and monthly statements are queried the following statement is returned - "At&T WorldNet Service has no usage information to report at this time. This may be because: (1) You have no unbilled usage or (2) You are an unlimited-access user utilizing a local telephone number." I have not personally installed a "timer", although there are connect timers available, just as for most of this time I have not worn a watch. What's time when you don't have to watch a clock? Relaxing and Unstressfull !!

13 January 97 - Link = http://members.tripod.com/~RickinBham/Index.html (our "home page")

We publish our "first" web page at Tripod after waiting for "promises to be filled" from AT&T WorldNet® Service

Our web sites now include 148 pages, 611 files, 9.0 Mb of 15 Mb at Tripod, included in this total is our most active feature, our "Travelin Partners ICQ List" which currently includes 126 members from 32 countries.

--- MORE BAIT & PROMISES ---

8 April 1997 - AT&T WorldNet® Service announces AT&T PWP (Personal Web Space) and solicites "Beta Testers" (no details available re. space allocation, additional space availability, or cost).

14 April 1997 - Link = http://www.internetworld.com/print/1997/04/14/ispinterview.html (extracts from an article on "Internet World Daily" or "ISP World" titled "The Goal: No Busy Signals"

AT&T WorldNet® Service President Tom Evslin discusses "stratagy" in an interview with "ISP World", makes the promise to forward email for two months

In addition, in this same interview he speaks of the "bonding" that takes place between a customer and their ISP 6 May 1997 - AT&T PWP finally becomes available for "Beta Testers" - Beta Testing to be completed and reports submitted by 7 May 1997 (Are they really looking for Beta Tester/Customer feedback?)

7 May 1997 - I submitted a lengthy AT&T PWP "Beta Test" Report - the tools available are crude, the "service" seems like it's being rushed to "roll out" (1 June release is the proposed date of general availability) - feedback is to a "newsgroup" ?? -- "as INSTRUCTED" (not as requested). Pre release pricing for PWP space $1.95/mo for 2 Mb, $4.95/mo for 5Mb.

If memory serves, at that time 2Mb of space was free at Tripod, and under Tripod's "Premium membership" 5Mb was available for $3.00/mo.

June 1997 - AT&T WorldNet® Service makes AT&T PWP space available "...Effective immediately, all AT&T WorldNet Service members regardless of price plan will receive 2 megabytes of Web space, FREE. Information and pricing on 5 megabytes of Web space will be available in the near future." ( It's now 10 months later with no additional space available. more broken promises? More "bait"? )

27 July 97 - Link = http://www.audionet.com/events/att/internetworld/ns/ (I'm not sure if this page is internal to WorldNet or external at AudioNet - the page title is "~~~AT&T WorldNet(sm) Service: -- Tom Evslin's Keynote Speech ~~~"

AT&T WorldNet® Service President Tom Evslin delivers the keynote speech at "Summer Internet World '97" in Chicago. "...AT&T WorldNet Service is the largest direct Internet access provider in the United States, with more than 900,000 dial customers. ..."

At present there does not seem to be any reliable information concerning the number of WorldNet consumers/subscribers, I've seen published or quoted numbers rangeing from 850,000 published in "Board Watch Magazine's ISP review". A note on the lead in page to the National ISP Reports indicates "...Every provider releases accurate contact information, but some are reluctant to release the number of subscribers or dial-up ports. Our database defaults to 0 in this case. If a provider has 0 subscribers or 0 ports, then it did not provide that information. The prices listed are fees for monthly services. ...".

Reviewing the subscription numbers that have been cited:

Mid Feb '96, launch announced - subscribers = 0

22 May 96 - 150, 000 subscribers claimed

22 July 97 - 900,000 subscribers claimed

01 Apr 98 -- I have not been able to find any recent cites for subscribers or a breakdown between "Hourly Plan" subscribers and "Unlimited Usage" plan subscribers - my gut feeling would be in the range of 1.2 to 1.5 million with >75% subscribed to the "Unlimited Usage" price plan. WorldNet has offered no information concerning subscribers recently that I've been able to find, or any indication of user/modem ratios. I feel, if anything, my assumptions for subscriber count and plan ratios are conservative. In addition, although claims are made as to connect time (which indicates that they do - in fact - time connections) no connection duration statistics have been published. Also, no subscriber demographics have been published - that I know of - to identify the proportion of multi user households, retired user households, disabled user housholds, etc. - subscribers who might tend to use the "Unlimited Usage Plan" at a rate higher than "the average subscriber" - but still within the terms underwhich they were encouraged to subscribe.

What has been "Proudly published" are monthly reports indicating that WorldNet is an industry leader in meeting their goal of "No Busy Signals". With these CSR claims published, the WorldNet contention that "heavy users" are impacting their CSR to an unacceptable degree - just don't wash. My personel experience in Birmingham, Alabama has been EXCELLENT - in all likelyhood > 99% CSR on the first dial and rarely, if ever, a need to dial more than twice to connect - typically at a reported connection rate of 26400 (very rarely lower) with a 28800 modem. Based on satisfaction with the service, and my reputation as a heavy computer user since the mid 80's, I've probably influenced 40 to 60 subscriptions to the service locally and an additional 15 - 20 nationally.

MARCH 1998 - AN "INTERESTING" MONTH

12 March 1998 - Link = http://www.zdnet.com/chkpt/adt0312nk/www.anchordesk.com/story/story_1864.html

Ziff Davis's "Jesse Bersts Anchordesk" runs an article "Another major ISP eyes strategies for dealing with heavy users. AT&T WorldNet may just disconnect you."

This as a result of an 11 March 1998 Reuters Wire Story. Link = http://www.zdnet.com/zdnn/content/reut/0311/293392.html

Jesse asks... "So what's fair here? If you're paying for unlimited access, does an ISP have the right to bump you off? Join the debate in our Rants & Raves forum." (The response is staggering!!)

Did it take a month before subscribers took note of what was happening ... dig into the TOS ... and generate enough "HEAT" to force AT&T WorldNet® Service to make a statement and "show their hand"?? Are we expected to search and research all areas of the services website on a regular basis in an attempt to "discover" changes that may be buried deep within??

Looking around a bit more - at this time (mid March) I found that the "price plans" had also been revised .....

Because I have been on the "unlimited" price plan since I joined the AT&T WorldNet® Service, I "may" be wrong .... but I believe the original "hourly price plan" was: Interestingly, coincident with this December 15th change in hourly price plan (and perhaps as a "stratigic" move in anticipation of "changing the name and terms of the "Unlimited Usage" plan to the "Standard" [150 hour] - plan) the email forwarding promise made .. is broken. Link = http://www.worldnet.att.net/wnsearch/care/ccforums/emailclients/mailfaq.html#question14a AT&T WorldNet® Service's own "proudly published" figures for system reliability and CSR (Connect Success Rate) DO NOT support their contention that "heavy users" are adversly effecting the service!!

From: The Club House Link = http://www.worldnet.att.net/wnsearch/care/teamattwn/clubhouse/inverse.html

- This cite is quoted in it's entirety -

AT&T WorldNet Service Reliability Report

How does the AT&T WorldNet Service Connect Success Rate compare to the Industry average?

For the period January 8 through January 22, 1998

AT&T WorldNet Service is pleased to report that for the January 1998 measurement period, AT&T WorldNet Service outperformed the industry average on the ability of members to connect on the first try during measured 24-hour periods, evening peak hour periods and business peak hour periods. During this measurement period, AT&T WorldNet members were able to connect on the first try 95.4% of the time during 24-hour periods, 92.3% of the time during evening peak hours, and 93.9% of the time during the peak business hours.

AT&T WorldNet Service contracted with Inverse Network Technology, Inc., an independent firm that measures the performance of Internet service providers, to make this important measurement for three time periods.

The Details The following measurements, updated for January 1998, show on average how often members connected with AT&T WorldNet Service on the first try, as compared to the experience of members on average throughout the Internet and Online industry.*

The first period, Peak Usage for Evening Hours, is that of heaviest use, from 6 p.m. to midnight, local time, measured at 42 access numbers for AT&T WorldNet Service in the United States. The second measurement is an average of how often members were able to connect on the first try to these access numbers over a 24-hour period. The third measurement is Peak Usage for Business Hours from 9a.m. to 5p.m., local time.

Peak Usage Evening Hrs.-- 24-Hour Average ----Peak Usage Business Hrs.

----------92.3%----------------------95.4%--------------------93.9%-----AT&T WorldNet Service

----------89.3%----------------------93.7%--------------------93.1%-----Industry Average

Since January 1997, when the first AT&T WorldNet Service Reliability challenge was issued, AT&T WorldNet Service has continued to add additional modem capacity to maintain and improve call connect success rates. Check here every month to see the latest results.

Thank you for using AT&T WorldNet Service.

* The Industry Average consists of the following 13 providers: AT&T WorldNet Service, AOL, CompuServe, Concentric, EarthLink, IBM, MCI, MindSpring, MSN, NETCOM, Prodigy, Sprint Internet Passport, and UUNet.

16 March 1998 - Link = http://www.zdnet.com/chkpt/adt0316nk/www.anchordesk.com/story/story_1874.html

Ziff Davis's "Jesse Bersts Anchordesk" runs an article "AT&T Worldnet backs off time limits for heavy Internet users. Still seeks to reduce heavy usage during peak hours."

"... WORLDNET DROPS TIME LIMITS After a heavy outcry in newsgroups, AT&T's Worldnet opts to drop the idea of logging members off the service after three hours. Like other Internet service providers offering unlimited usage, Worldnet is coping with heavy Internet traffic during peak hours. A small percentage of users are sapping a large percentage of resources. Some providers, like America Online, have hiked fees; others, such as IBM's Global Network, scrapped the unlimited usage option. Click for full story. What's the answer here? Join our Rants & Raves forum and discuss the issue with other AnchorDesk readers. ..." ( Link = http://www.zdnet.com/zdnn/content/msnb/0313/294490.html )

NOTE: Despite this "announcement" the AT&T WorldNet® Service Agreement HAS NOT been modified to remove the provisions to do just this that were added 02/10/98 .... without notification. I do believe that AT&T WorldNet® Service is monitoring and reporting the single most important, measurable, goal for an Internet Service Provider, Connection Success Rate. This is how they presented and sold their service, as an Internet Access Provider - not as a content provider. Also their reported statistics indicate two "peaks" - a "business hours peak" and an "evening hours peak" this is understandable, and probably includes (but doesn't define) 16 to 18 hours of a day. However, what concern is it to us as users/subscribers to the service - it is the advertisers responsibility to meet the demand for the advertised goods or services created by their advertisement and promotion, unless the advertisement or promotion specifically discloses a limitation of quantity.


THE LAST STRAW - ? - CORPORATE DOUBLE SPEAK

"THE SWITCH"

31 March 1998 - Link = http://www.worldnet.att.net/care/teamattwn/coachescorner/newletter.html

- This cite is quoted in it's entirety -

Letter from the President

"...Coaches' Corner Letter from Dan Schulman March 31, 1998 Dear Members:

Hello again. Its been a few weeks since my last letter, and I sincerely appreciate all the input I have received from you. Youve made it crystal clear that reliable, fast access and superior customer care are what you want and expect from WorldNet. Im writing to tell you what were doing in response to your feedback.

As I explained in my previous letter, there has been increased blocking in selected cities because the number of subscribers is growing, and the average amount of time spent online has increased to 25 hours per month. This additional usage greatly increases our network costs and strains our network capacity, which, if not managed carefully, can jeopardize our ability to provide superior network performance and high-quality service.

AT&T WorldNet Service is absolutely committed to providing industry-leading network performance and customer care at a fair price. Inverse Technologies, an independent tester of ISPs, has consistently rated WorldNet as industry-leading. This is a commitment we take very seriously. In order to provide this level of service while effectively managing increasing usage, we are taking the following actions.

Pricing Beginning May 1, 1998, we will revise our $19.95 pricing plan. You will get 150 hours of access a month for the same $19.95, and pay 99 cents for each additional hour. Were calling this our Standard Plan, and the 97 percent of you who are paying $19.95 a month today will see no change in your bills. In fact, the average WorldNet customer on this plan will be able to increase their usage up to six times without additional charges. (Emphasis added)

In making this change, we were guided by our commitment to provide AT&T WorldNet Service at a fair price. Rather than raising the price of our service for everyone, or put on session timers in our busy period (which also affects all members), we decided to adjust our pricing structure in a way that will impact only our very heaviest users, those who currently use WorldNet more than 150 hours a month. Although three percent of our customers will see a change in their bill as a result, network performance will significantly improve for everyone. (Emphasis added)

In a related action, and in order to encourage our hourly customers to explore and enjoy all the Internet has to offer, on May 1, 1998, we will also change our hourly plan. Youll still get 10 hours of access a month for $9.95, but were cutting the cost of additional hours from $2.50 an hour to 99 cents an hour, a reduction of 60 percent.

Network Enhancements On another front, Im allocating another several million additional dollars to add incremental network capacity in selected cities where customer demand is highest. In the last month alone, we have enhanced capacity in 16 cities that were experiencing levels of blocking above our strict measures of quality. Additionally, were also speeding our deployment of 56K access in our network so members can get the information they need more quickly, reducing the average session length.

Spam Control Were moving aggressively to reduce a sharp increase in spam, which annoys many of our members and consumes network capacity. Were using a process called outbound queue monitoring, which "flags" outbound messages that have spam characteristics such as large "To" lists. We then match the senders name against known offenders and, if appropriate, we sideline the message and refer the user it to the Abuse Desk.

Planned Service Enhancements We will shortly communicate some exciting service enhancements and improvements that will, in combination with the above measures, not only improve access availability to AT&T WorldNet Service, but will make WorldNet more feature-rich. Over the next several months, we will be offering you the opportunity to subscribe to additional e-mail ids on an existing account, instant messaging and the option to increase the size of your personal web pages. I believe that these new options will make the total AT&T WorldNet Service experience more complete and cost effective.

I want to thank all of you for your input, understanding and continued support of AT&T WorldNet Service. Your input, as always, is a critical part of our continuing effort to provide you with industry-leading network performance and a superior online experience at a fair and reasonable price.

DAN SCHULMAN President AT&T WorldNet Service ..."


COMMENTS ON THE PRESIDENTS LETTER

This change is presented as a "revision" to the "Unlimited Usage" price plan - while in reality it is a termination of that plan and the introduction of a "Standard" (150 Hour + rate/hr) price plan - this is the switch.

Double Speak? While the proposed action is specifically targeted at "heavy users" and is presented at a move to restrict connect time by users - increased usage by all (except "heavy") users is being encouraged. The "average" user is advised that they can increase their use of the service by a factor of 6 (I assume without detriment to the service or Connect Success Rates). And, the consumer subscribed to the hourly price plan is also encouraged to increase their connect time - 1. by the December change to this price plan which increased base time from 5 to 10 hours, and now with the proposed plans reduction on price of additional hours from $2.50/hr to $0.99/hr. (Again I assume without detriment to the service or CSR.)

Spam Control - This action seems to be more than a bit convoluted. Responsible members of the Internet Community are concerned about receiving UCE aka "spam" email. It is, and always has been a violation of the AT&T WorldNet® Service agreement to use the service to send "spam" email. Now the service intends to put a block or hold on mail with "large To lists". Most email programs have the functionality to create mailing lists - and many users (myself included) use this functionality for mass mailings to subscribed membership lists. AT&T WorldNet® Service does not offer "listserv" capabilities - we have to use the capabilities included with our mail client. "Spam", in my opinion, is the delivery of email which is unsolicited, contains no return tracability to it's origin, and lately even includes nothing to indicate that it is addressed specifically to MY email address!!! Complaints to WorldNet about receiving this type of mail have generated nothing but "form letter responces", probably from an "autoresponder".

Planned Service Enhancements: (My opinion, they are all to little - to late, and do nothing to enhance ISP reliability)

additional e-mail ID's - There are many advertiser supported services currently available for the establishment of "free" email addresses - from true email servers to online/web based email to free dedicated dial-up email only services. (the list is to long to include examples)

instant messaging - Again there are many free or advertiser supported, services currently available providing instant message capabilities (and more) - see IRC, AOL IM, ICQ

option to increase web space - The service was late with this to begin with and is WAY BEHIND advertiser supported hosting services where this is their only product - see TRIPOD, GEOCITIES. and many others


A FEW DEFINATIONS - FROM WEBSTER'S

Main Entry: un·lim·it·ed Pronunciation: -'li-m&-t&d Function: adjective Date: 15th century 1 : lacking any controls : UNRESTRICTED 2 : BOUNDLESS, INFINITE 3 : not bounded by exceptions : UNDEFINED - un·lim·it·ed·ly adverb

Entry Word: unlimited Function: adj Text: 1 Synonyms LIMITLESS, boundless, endless, immeasurable, indefinite, infinite, measureless, unbounded, unmeasured Antonyms limited, measured 2 Synonyms TOTAL 5, all-out, full-blown, full-out, full-scale, totalitarian Antonyms limited

Entry Word: limitless Function: adj Text: having no limits <the limitless black of deep space> Synonyms boundless, endless, immeasurable, indefinite, infinite, measureless, unbounded, unlimited, unmeasured Related Word bottomless, countless, incalculable, incomprehensible, inexhaustible, innumerable, undrainable, unfathomable, vast, wasteless Contrasted Words bound, bounded, finite, fixed, limited, measurable; comprehensible, fathomable; confined, restricted Antonyms limited

NOW, LET'S EXAMINE SOME OTHER WORDS:

Main Entry: fraud Pronunciation: 'frod Function: noun Etymology: Middle English fraude, from Middle French, from Latin fraud-, fraus Date: 14th century 1 a : DECEIT, TRICKERY; specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right b : an act of deceiving or misrepresenting : TRICK 2 a : a person who is not what he or she pretends to be : IMPOSTOR; also : one who defrauds : CHEAT b : one that is not what it seems or is represented to be synonym see DECEPTION, IMPOSTURE

Main Entry: de·ceit Pronunciation: di-'sEt Function: noun Etymology: Middle English deceite, from Middle French, from Latin decepta, feminine of deceptus, past participle of decipere Date: 14th century 1 : the act or practice of deceiving : DECEPTION 2 : an attempt or device to deceive : TRICK 3 : the quality of being deceitful : DECEITFULNESS

Main Entry: de·cep·tion Pronunciation: di-'sep-sh&n Function: noun Etymology: Middle English decepcioun, from Middle French deception, from Late Latin deception-, deceptio, from Latin decipere to deceive Date: 15th century 1 a : the act of deceiving b : the fact or condition of being deceived 2 : something that deceives : TRICK - de·cep·tion·al /-sh&-n&l/ adjective synonyms DECEPTION, FRAUD, DOUBLE-DEALING, SUBTERFUGE, TRICKERY TRICKERY mean the acts or practices of one who deliberately deceives. DECEPTION may or may not imply blameworthiness, since it may suggest cheating or merely tactical resource <magicians are masters of deception>. FRAUD always implies guilt and often criminality in act or practice <indicted for fraud>. DOUBLE-DEALING suggests treachery or at least action contrary to a professed attitude <a go-between suspected of double-dealing>. SUBTERFUGE suggests the adoption of a stratagem or the telling of a lie in order to escape guilt or to gain an end <obtained the papers by subterfuge>. TRICKERY implies ingenious acts intended to dupe or cheat <resorted to trickery to gain their ends>.


SOME OPINIONS

From: The National Fraud Information Center Link = http://www.fraud.org/

Fraudulent Schemes on the Internet Link = http://www.fraud.org/internet/intstat.htm

Remarks to the Senate Permanent Committee on Investigations by Susan Grant Director of the National Consumers League's National Fraud Information Center/Internet Fraud Watch Programs

"...A Snapshot of Internet Fraud Top Ten Subjects of Reports to Internet Fraud Watch 1997

2.Internet Services - charges for services that were supposedly free, payment for online and Internet services that were never provided or falsely represented;

...

Con Artists on the 'Net

...

We believe that the Telemarketing Sales Rule should be expanded to cover promotions via the Internet and online services so that federal and state prosecutors can go into federal court to take action on interstate violations. It would also aid enforcement efforts if the enabling statute was amended so that states could sue in federal court when either the defendants or the victims are located within their jurisdictions. Currently, jurisdiction is victim-based.

...

Respectfully submitted by: Susan Grant, Vice President for Public Policy Director, National Fraud Information Center/Internet Fraud Watch Programs National Consumers League 1701 K Street NW, Suite 1200 Washington, DC 20006

(202) 835-3323 ..."

INTERNET FRAUD WATCH HOTLINE: 1-800-876-7060


Interestingly, AT&T is part of a group (Project OPEN) The Online Public Education Network, who's focus, among other things is protecting online consumers from fraud. Link = http://www.fraud.org/internet/open.htm

And, from Project OPEN's website: Link = http://198.5.6.207/project-open/conpro.html

Extracts / results from: FindLaw - Link = http://www.findlaw.com ... search for "deceptive trade practice"

"hit" http://www.seflin.org/cpad/cpadtrde.3.html

Title: Misleading Advertising and Deceptive Trade Practice"


Extracts From: FindLaw ... search for "bait and switch"

"hit" http://www.source.net/corpinfo/deceptionpol.html

Title: FTC Deception Policy Statement

"... (emphasis added)

I. SUMMARY

Certain elements undergird all deception cases. First, there must be a representation, omission or practice that is likely to mislead the consumer. n4 Practices that have been found misleading or deceptive in specific cases include false oral or written representations, misleading price claims, sales of hazardous or systematically defective products or services without adequate disclosures, failure to disclose information regarding pyramid sales, use of bait and switch techniques, failure to perform promised services, and failure to meet warranty obligations. ...

n4 A misrepresentation is an express or implied statement contrary to fact. A misleading omission occurs when qualifying information necessary to prevent a practice, claim, representation, or reasonable expectation or belief from being misleading is not disclosed ....Omissions may also be deceptive where the representations made are not literally misleading, if those representations create a reasonable expectation or belief among consumers which is misleading, absent the omitted disclosure. ...

Second, we examine the practice from the perspective of a consumer acting reasonably in the circumstances. If the representation or practice affects or is directed primarily to a particular group, the Commission examines reasonableness from the perspective of that group. ...

Third, the representation, omission, or practice must be a "material" one. The basic question is whether the act or practice is likely to affect the consumer's conduct or decision with regard to a product or service. If so, the practice is material, and consumer injury is likely, because consumers are likely to have chosen differently but for the deception. In many instances, materiality, and hence injury, can be presumed from the nature of the practice. In other instances, evidence of materiality may be necessary. ...

Thus, the Commission will find deception if there is a representation, omission or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer's detriment. ....

Marketing and point-of-sales practices that are likely to mislead consumers are also deceptive. For instance, in bait and switch cases, a violation occurs when the offer to sell the product is not a bona fide offer. n14 The Commission has also found deception where a sales representative misrepresented the purpose of the initial contact with customers. n15 When a product is sold, there is an implied representation that the product is fit for the purposes for which it is sold. When it is not, deception occurs. n16 There may be a concern about the way a product or service is marketed, such as where inaccurate or incomplete information is provided.n17 A failure to perform services promised under a warranty or by contract can also be deceptive. n18 ...

n14 Bait and Switch Policy Protocol, December 10, 1975; Guides Against Bait Advertising, 16 C.F.R. @ 238.0 (1967). 32 Fed. Reg. 15,540. ...

III. THE ACT OR PRACTICE MUST BE CONSIDERED FROM THE PERSPECTIVE OF THE REASONABLE CONSUMER

The Commission believes that to be deceptive the representation, omission or practice must be likely to mislead reasonable consumers under the circumstances. n19 The test is whether the consumer's interpretation or reaction is reasonable. n20 When representations or sales practices are targeted to a specific audience, the Commission determines the effect of the practice on a reasonable member of that group. In evaluating a particular practice, the Commission considers the totality of the practice in determining how reasonable consumers are likely to respond. ...

n20 An interpretation may be reasonable even though it is not shared by a majority of consumers in the relevant class, or by particularly sophisticated consumers. A material practice that misleads a significant minority of reasonable consumers is deceptive. See Heinz W. Kirchner, 63 F.T.C. 1282 (1963). ...

To be considered reasonable, the interpretation or reaction does not have to be the only one. n21 When a seller's representation conveys more than one meaning to reasonable consumers, one of which is false, the seller is liable for the misleading interpretation. n22 An interpretation will be presumed reasonable if it is the one the respondent intended to convey. ...

Commission cases reveal specific guidelines. Depending on the circumstances, accurate information in the text may not remedy a false headline because reasonable consumers may glance only at the headline. n33 Written disclosures or fine print may be insufficient to correct a misleading representation. n34 Other practices of the company may direct consumers' attention away from the qualifying disclosures. n35 Oral statements, label disclosures or point-of-sale material will not necessarily correct a deceptive representation or omission. n36 Thus, when the first contact between a seller and a buyer occurs through a deceptive practice, the law may be violated even if the truth is subsequently made known to the purchaser. n37 Pro forma statements or disclaimers may not cure otherwise deceptive messages or practices. n38 ...

Misleading "door openers" have also been found deceptive ....

Finally, as a matter of policy, when consumers can easily evaluate the product or service, it is inexpensive, and it is frequently purchased, the Commission will examine the practice closely before issuing a complaint based on deception. There is little incentive for sellers to misrepresent (either by an explicit false statement or a deliberate false implied statement) in these circumstances since they normally would seek to encourage repeat purchases. Where, as here, market incentives place strong constraints on the likelihood of deception, the Commission will examine a practice closely before proceeding.

In sum, the Commission will consider many factors in determining the reaction of the ordinary consumer to a claim or practice. As would any trier of fact, the Commission will evaluate the totality of the ad or the practice and ask questions such as: how clear is the representation? how conspicuous is any qualifying information? how important is the omitted information? do other sources for the omitted information exist? how familiar is the public with the product or service? ...

IV. THE REPRESENTATION, OMISSION OR PRACTICE MUST BE MATERIAL

The third element of deception is materiality. That is, a representation, omission or practice must be a material one for deception to occur. n44 A "material" misrepresentation or practice is one which is likely to affect a consumer's choice of or conduct regarding a product. n45 In other words, it is information that is important to consumers. If inaccurate or omitted information is material, injury is likely. ....

The Commission considers certain categories of information presumptively material. n47 First, the Commission presumes that express claims are material. n48 As the Supreme Court stated recently, "[i]n the absence of factors that would distort the decision to advertise, we may assume that the willingness of a business to promote its products reflects a belief that consumers are interested in the advertising." n49 Where the seller knew, or should have known, that an ordinary consumer would need omitted information to evaluate the product or service, or that the claim was false, materiality will be presumed because the manufacturer intended the information or omission to have an effect. n50 Similarly, when evidence exists that a seller intended to make an implied claim, the Commission will infer materiality. n51 ...

A finding of materiality is also a finding that injury is likely to exist because of the representation, omission, sales practice, or marketing technique. Injury to consumers can take many forms. n58 Injury exists if consumers would have chosen differently but for the deception. If different choices are likely, the claim is material, and injury is likely as well. Thus, injury and materiality are different names for the same concept. ...

V. CONCLUSION

The Commission will find an act or practice deceptive if there is a misrepresentation, omission, or other practice, that misleads the consumer acting reasonably in the circumstances, to the consumer's detriment. The Commission will not generally require extrinsic evidence concerning the representations understood by reasonable consumers or the materiality of a challenged claim, but in some instances extrinsic evidence will be necessary.

The Commission intends to enforce the FTC Act vigorously. We will investigate, and prosecute where appropriate, acts or practices that are deceptive. We hope this letter will help provide you and the public with a greater sense of certainty concerning how the Commission will exercise its jurisdiction over deception. Please do not hesitate to call if we can be of any further assistance.

By direction of the Commission, Commissioners Pertschuk and Bailey dissenting ... "


MY CONCLUSION

It is my opinion, that if AT&T WorldNet® Service (and other ISP's that have induced consumer subscription by offers of unlimited or untimed access) do in fact not honor this limitless offer they are guilty of fraud and deceptive trade practice thru the use of illegal "deceptive bait and switch techniques". A "new" price/service plan can be instituted for new subscriptions - but switching or discontinuation of a price/service plan that attracted millions of consumers, or outrageous price increases to that plan, to consumers who have not breached their contract through non-payment for the service - is illegal.

Hopefully, based on the tremendous outporing of NEGATIVE opinion that I've seen in AT&T WorldNet® Service's "designated newsgroups" in responce to this announcement - the "decision to proceed" with this action will be reversed prior to implementation. If not .... WHO KNOWS what may happen next??

If the proposed action is in fact - not "illegal" - and in all likelyhood it is "legal" - based on the detailed pricing plans T&C restriction....

"...5. AT&T reserves the right to modify or discontinue any Price Plan or promotion at any time. ..."

We at least know where AT&T® and AT&T WorldNet® Service stand "ethically" as a "service industry supplier" and can vote with our wallets.

---R.E. (Rick) Langdon

- April 4, 1998 . April 7, 1998


- Additional materials found since researching for the original piece -

From one of the Worldnet newsgroups -

Subject: The real reason AT&T wants to free up capacity and resources

Date: Fri, 3 Apr 1998 08:57:01 -0500

From: "Ronald Gerrans" <gerrans@WorkSmart-Enterprises.com>

From Today's Wall Street Journal On-line Edition http://interactive.wsj.com/edition/current/articles/SB890930614773448000.htm

( This address points to a "protected subscription service" - only a short clip has been extracted)

"... AT&T eCommerce Suite will be available May 1. Pricing Varies Earlier this month, AT&T launched WorldNet Business Dial Service, which comes in at the low end of the price spectrum. For $24.95 a month per employee, it includes unlimited Internet access, a 10-megabyte e-mail box, "business class" technical support 24 hours a day and seven days a week, corporate invoicing and access to a special WorldNet home page where AT&T posts business-oriented news and links. ..."