AT&T says in November it will stop extending your contract when you change phone plans and early next year if you enter into a new contract, or sign up for AT&T services AT&T will prorate its Early Termination Fee (ETF), but what isn’t AT&T saying in this announcement and who exactly will see these benefits.

I know, I know, we all cringe when we get that notice or read that news article that our cell phone company has changed one of the terms of the contract the Company had us sign when we signed up. Well AT&T is making changes again but these two you might like:

According to AT&T’s press release:

“Beginning in November, customers who change to any one of the company's standard wireless calling plans during the course of their contract will no longer be required to extend their current contract or enter into a new one.”

We assume this means that if your current plan for example is “Nation 2000 w/ Rollover Minutes” and you wanted to switch to “Nation 1350 w/ Rollover Minutes” that you would be allowed to make that change without extending the length of your contract.

Now does this mean you could change from an Individual Plan to a Family Plan or a Data Plan that is not as clear. The best thing for you to do is ask, if you want to make a change to your plan ask whoever you talk to whether an in store agent or a customer service represent ask them how it will affect your plan and it never hurts to have them put it in writing or an email.

And what about upgrading equipment, most people are likely to change phones before they change plans, yet AT&T’s statement is mysteriously quiet about equipment upgrades.

The second change to your plan according to the press release:

“…those customers who choose to exit their contract early will no longer be required to pay a flat early termination fee. Instead, that fee will be progressively lowered during the term of the contract. Beginning early in 2008, this early-termination policy will apply to new and renewing wireless customers who sign one- or two-year service agreements. More details will be forthcoming at that time.”

What does this mean? Well for one your current AT&T contract will not be progressively lowered, commonly referred to as prorated.” No your current contract will have to run its course and if you enter into a new one in 2008 then the early-termination fee will prorate.

So if you were considering switching to AT&T you might want to consider waiting until 2008. But you may also want to wait until AT&T makes further announcement because:

1. They have not said if they will raise the ETF.

2. They have not said what proration rate will be.

And

3. They have not said if they will also decide to change your contract and go back to the flat rate ETF if you will be allowed to terminate your agreement without paying an ETF provided you give notice of termination to AT&T within 30 days after the first bill reflecting the change.

In the Press Release, Paul Roth, President of Sales and Marketing for the company's wireless unit stated: "AT&T leads the wireless industry in the flexibility, friendliness and fairness of its practices, and the new policies we have announced today are the most recent examples of that leadership. Customers have told us they do not like one-size-fits-all approaches. They are right, and that is why we have made these important changes."

I am going to have to disagree with Mr. Roth I do not believe these two new policies are examples of AT&T’s leadership in having flexible, friendly, and fair practices. Nor do I believe they made these changes because the customers wanted them.

Lets look at the evidence.

First, Verizon Wireless has been prorating their ETF now for quite awhile. Guess we will have to call you #2 on that one AT&T

Second, Alltel (ok so they are like number 5 in the industry but still) has allowed customers to change phones or plans without having to extend their contract for a long time. Sprint-Nextel was recently sued by the Minnesota Attorney General over the practice, and Verizon well they beat AT&T to the punch again and announced way back on October 1 that starting on October 7 Verizon would allow customers to change plans without extending their contract.

Third, AT&T is making changes only after the introduction of the Cell Phone Consumer Empowerment Act in the U.S. Senate (an act AT&T opposes by the way). Which would require among other things that the Wireless providers prorate ETFs and provides point-of-sale notice and gives the customer 30 days to cancel when they extend contracts. See

Fourth, T-Mobile is also facing a lawsuit over non-prorated ETFs and SIM-locked handsets.

Is AT&T leading the way or did it just seeing the writing on the wall? My guess is the latter since both times their announcements followed the actions of some of the other wireless providers.

So watch for new announcements and decide for yourself whether these new policies are consumer friendly enough to make you want to switch or sign up with AT&T or any of the other wireless providers.

AND DON’T FORGET TO READ YOUR CONTRACT.