Cingular to Impose $5 Surcharge on Customers
With Older Phones
07-31-2006 2:52 PM
By BRUCE MEYERSON, AP Business Writer

NEW YORK --  About 4.7 million Cingular Wireless
subscribers with older phones will have to pay
$5 extra each month as the company tries to prod
them to get new handsets so it can devote its
entire network to one type of signal.
The new surcharge, unique among the major U.S.
carriers, will be added to bills starting in
September, the company told The Associated Press
on Monday.
Cingular, jointly owned by prospective merger
partners AT&T Inc. and BellSouth Corp., reported
earlier this month that roughly 92 percent of
its 57.3 million customers use phones based on
the globally dominant technology known as GSM,
or Global System for Mobile.
The rest have handsets based on one of two older
technologies. One dates back two decades to the
first-generation of mobile phones, which used an
"analog," or non-digital, signal to transmit
calls. The second is a digital transmission
technique known as TDMA, which stands for Time
Division Multiple Access.
The new fee, which will generate $23.5 million a
month for Cingular, adds to a confusing array of
surcharges and government taxes that, regardless
of the wireless company, can boost the average
cellular bill by up to 50 percent from the
advertised rate.
Like other U.S. cellular carriers, Cingular is
required by the Federal Communications
Commission to keep providing analog service
until early 2008 so long as it still has
customers with those phones.
Although the company is not required to continue
providing TDMA service, it has no plans to turn
off that service until the analog phaseout
because both use the same portion of Cingular's
network.
Nonetheless, having to carry three different
kinds of wireless signals leaves less room for
Cingular to connect calls and provide data
services to its much larger audience of GSM
customers.
That network capacity is crucial because
Cingular is trying to shake a reputation for
poor service, boasting in national ad campaigns
that its customers suffer the fewest dropped
calls. Cingular's image was tarnished after its
acquisition in late 2004 of AT&T Wireless
Services, a merger that required the complex
integration of two disparate networks.
In early July, a federal lawsuit was filed
claiming Cingular promised to provide
uninterrupted service to AT&T Wireless
subscribers, but instead degraded their phone
reception in an effort to persuade them to sign
new contracts.
Cingular strongly refuted the claims in the
lawsuit, which seeks class-action status on
behalf of the more than 20 million customers
AT&T Wireless had at the time of the merger.
Many paid $18 "transfer" fees to switch to
Cingular plans and were required to buy new
phones or pay other fees, according to the
complaint, filed in U.S. District Court in
Seattle.
On Monday, Cingular issued a statement to AP
saying that with the number of analog and TDMA
users dwindling, "the per-customer cost of using
that network is increasing considerably. That's
why we made a decision to impose this charge."
The statement stressed that, "Customers can
avoid the charge by switching to our GSM network
and equipment. The combination of coverage,
service quality, devices, and advanced features
on GSM is superior to TDMA."
Verizon Wireless, jointly owned by Verizon
Communications Inc. and Vodafone Group PLC,
serves most of its 54.8 million subscribers with
a different digital wireless technology known as
"CDMA," but still has an undisclosed number of
analog customers. Those users are not charged an
extra fee.
Sprint Nextel Corp. has no analog subscribers on
either of its two networks, which were built
later than those at Verizon and Cingular and use
digital technologies. The Sprint network uses
CDMA, while Nextel employs a standard called
iDEN.

... Why in a country of free speech, are there phone bills?