Angry iPhone owners blast AT&T over upgrade pricing

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Computerworld - iPhone users angry over AT&T's pricing policy for the new iPhone 3G S have taken their campaign to Twitter, where more than 4,400 have added their names to an instant petition.

They're mad as hell about AT&T's plan to charge them an additional $200 to upgrade to the iPhone 3G S if they haven't fulfilled most or all of their two-year contract with the carrier. "AT&T should give existing customers the same rate for the new iPhone 3G S that they do for new customers," the Twitter petition reads. "New customers or not, another 2-year contract is being made."

Apple's and AT&T's subsidized prices for the iPhone 3G S, which will launch on Friday, June 19, are $199 for the 16GB model and $299 for the 32GB device. Those prices, however, apply only to new customers to AT&T, or to existing customers who are judged eligible for the lower-priced upgrade.

Meanwhile, people who already own an iPhone or have an existing AT&T contract, and are judged by AT&T as ineligible for another subsidized phone must fork over $399 for the 16GB, $599 for the 32GB.

AT&T doesn't reveal the criteria it uses to peg existing customers as eligible or ineligible, but Computerworld staffers who own iPhones have been told that they must run through as few as 12 months, and as many as 20 months, of their 24-month contracts before they'll qualify for the $199 and $299 prices.

That's made AT&T customers mad enough to sign the Twitter petition at a rate of about 250 an hour as of mid-day Wednesday. The petition was first posted yesterday.

They're also venting in other online venues. "This is all a slap to our face!" ranted a user identified as "irishlad1977" on a well-trafficked AT&T support forum thread labeled "No Subsidized Price For Loyal iPhone Users."

"Cry foul, all disappointed iPhone users!" added "tsfroggy" on the same thread.

"Why are we being punished for buying Apple products?" asked "Darksithscorpius" in a post to an Apple support forum. "I love the product, but the way that they let AT&T dictate how their customers are treated is terrible. Charging us the extra $200 for being loyal customers is flat out wrong!"

The company's policy, however, is standard for the wireless industry in the U.S., which ties subsidized phone prices to the completion of long-term contract commitments. That fact was quickly pointed out by others unsympathetic to the complainers.

"You do have a cheaper option once you live up to your side of the bargain," said "DWC1" on the AT&T forum. "If you want to upgrade early then you will have to pay full price with no subsidy discount. You can't blame anyone but yourself for your predicament."

AT&T did not respond to a request for comment about its pricing practices, or what it thought of the Twitter petition and the online postings by iPhone owners.

A similar Twitter-based petition for customers of O2, the U.K.'s exclusive carrier for the iPhone, had nearly 4,100 signatures by mid-day Wednesday.

The hubbub over pricing isn't the only negative press that AT&T's received since Apple unveiled the iPhone 3G S on Monday. The company has also come under fire for its slow moves to support MMS and its lack of a tethering plan to let customers connect laptops to the Internet via the iPhone. Other mobile carriers will offer both MSS and tethering when the iPhone 3G S debuts next week.