Policy

T-Mobile is making another long-term price guarantee, but wireless users will rightfully be skeptical since T-Mobile refused to honor a previously offered lifetime price lock and continues to fight a lawsuit filed by customers who were harmed by that broken promise. Moreover, the new plans that come with a price guarantee will have extra fees that can be raised at any time.

T-Mobile today announced new plans with more hotspot data and a five-year price guarantee, saying that “T-Mobile and Metro customers can rest assured that the price of their talk, text and data stays the same for five whole years, from the time they sign up.” The promise applies to the T-Mobile “Experience More” and “Experience Beyond” plans that will be offered starting tomorrow. The plans cost $85 or $100 for a single line after the autopay discount, which requires a debit card or bank account.

The price-lock promise also applies to four new Metro by T-Mobile plans that launch on Thursday. T-Mobile’s announcement came three weeks after Verizon announced a three-year price lock.

If the promise sounds familiar, it’s because T-Mobile made lifetime price guarantees in 2015 and 2017.

“Now, T-Mobile One customers keep their price until THEY decide to change it. T-Mobile will never change the price you pay for your T-Mobile One plan,” T-Mobile said in January 2017. When a similar promise was made in 2015, then-CEO John Legere said that “the Un-contract is our promise to individuals, families and businesses of all sizes, that—while your price may go down—it won’t go up.”

Taxes and fees not included

T-Mobile raised prices on the supposedly price-locked plans about a year ago, triggering a flood of complaints to the Federal Communications Commission and a class action lawsuit. There were also complaints to the Federal Trade Commission, which enforces laws against false advertising. But so far, T-Mobile hasn’t faced any punishment.

Besides the five-year price guarantee, there’s at least one more notable pricing detail. T-Mobile’s previous plans had “taxes and fees included,” meaning the advertised price was inclusive of taxes and fees. With the new Experience plans, taxes and fees will be in addition to the advertised price.

This will make the plans cost more initially than customers might expect, and it gives T-Mobile wiggle room to raise prices during the five years of the price guarantee since it could increase any fees that are tacked onto the new plans. The fine print in today’s press release describes taxes and fees as “exclusions” to the price guarantee.

“Fees” can refer to virtually anything that a carrier chooses to add to a bill and isn’t limited to the carrier’s actual costs from taxes or government mandates. For example, T-Mobile has a “Regulatory Programs and Telco Recovery Fee,” which it acknowledges “is not a government tax or imposed by the government; rather, the fee is collected and retained by T-Mobile to help recover certain costs we have already incurred and continue to incur.”

This can include the cost of complying with legal obligations, “charges imposed on us by other carriers for delivery of calls,” and the cost of leasing network facilities that are needed to provide service, T-Mobile says. In other words, T-Mobile charges a separate fee to cover the normal expenses incurred by any provider of telecommunications services.

The promise is thus that the base price of a service plan won’t change, but T-Mobile gives itself wide discretion to add or increase fees on customers’ monthly bills. “Guarantee means that we won’t change the price of talk, text, and 5G smartphone data on our network for at least 5 years while you are on an Experience plan,” T-Mobile said today. T-Mobile’s terms and conditions haven’t been updated, but the terms address price promises in general, saying that price locks do not include “add-on features, taxes, surcharges, fees, or charges for extra Features or Devices.”

T-Mobile Consumer Group President Jon Freier, who has been with T-Mobile for about two decades, seemed to recognize in an interview with Fierce that customers are likely to be wary of new promises. “One of the things that we’ve heard from customers is that the more definition that we can put in terms of timing around the guarantee, the more believable and useful that guarantee is,” he said. “So we chose to roll out with five years.” Freier asserted that “we are absolutely signing up for the guarantee for the next five years.”

Freier even mentioned the 2015 guarantee in a video announcement today, saying that T-Mobile is now “evolving this promise and expanding it across our portfolio.”

T-Mobile fights price lock lawsuit

There is a better chance that T-Mobile will keep the latest promise, since it is limited in scope and lasts only five years, while the lifetime price lock was supposed to last for as long as customers chose to keep their plans. The lifetime price lock did last for more than five years, after all. But T-Mobile has shown that when it breaks a promise, it is willing to accept the public backlash and fight users in court.

A class action lawsuit over the nullified lifetime price lock is still pending in US District Court for the District of New Jersey. T-Mobile is trying to force plaintiffs into arbitration, and the sides are proceeding with discovery on the matter of whether the named plaintiffs “executed valid opt-outs of Defendant’s arbitration agreement.”

A joint status update in March said that T-Mobile refused to produce all the documents that plaintiffs requested, arguing that the “burden of collecting these documents far outweighs their potential relevance to the allowed scope of discovery.”

T-Mobile tried to give itself a way out when it introduced the 2017 lifetime price lock. Although a press release issued then made the promise sound absolute, a separate FAQ essentially nullified the promise by saying that T-Mobile was only promising to pay a customer’s final bill “if we were to raise prices and you choose to leave.” Customers who tried to hold T-Mobile to the lifetime price promise were not mollified by that carveout, given that it was published on an entirely separate page and not part of the price-lock announcement.

While customers may find it difficult to fully trust T-Mobile’s new guarantee, they can at least take a look at the carveouts to get a sense of how solid the new pledge is. We already noted the taxes and fees caveat, which seems to be the biggest thing to watch out for. This category on its own makes it easy for T-Mobile to raise your bill without technically breaking its promise not to raise the price of “talk, text and data.”

Guarantee “worthless based on T-Mobile’s previous actions”

The new plans are not yet live on T-Mobile’s website, so it’s possible a more detailed breakdown of caveats could be revealed tomorrow when the plans are available. The website for T-Mobile’s separate Metro brand has a slightly more detailed description than the one in the press release. While details could differ between the main T-Mobile brand and Metro, the Metro page says:

5-year guarantee means we won’t change the price of talk, text, and 5G smartphone data on our network for at least 5 years while you are on an eligible plan. Guarantee also applies to price for data on wearable/tablet/mobile Internet lines added to your plan. Your guarantee starts when you activate or switch to an eligible plan and doesn’t restart if you add a line or change plans after that. Per-use charges, plan add-ons, third-party services, and network management practices aren’t included.

As you might expect, wireless users commenting on the T-Mobile subreddit were not impressed by the price promise. “Price guarantee is worthless based on T-Mobile’s previous actions. They might as well save the ink/electrons,” one user wrote.

Many users remarked on the removal of “taxes and fees included,” and the specific end date for the price lock that applies only to the base price. “This is them saying we are sorry we screwed consumers,” one person wrote. “Now we will be more transparent about when in the future we will increase your rates.”