As a customer who has personally been affected by this shady practice, I like that the Government is stepping in and regulating what is clearly false advertising and deceptive business practices on the part of AT&T.
AT&T took very intentional steps here to degrade what customers were promised, with the intent to switch them over to higher-priced service plans. It also was done in a way to prevent customers escaping via escape clauses when contract terms changes.
As a customer, what are my options to avoid being screwed by a unsolicited unilateral material change to the service agreement I signed? I could buckle and pay more. I could stay with what I have and get something different than what I was sold. I could leave AT&T for one of the 3 competitors:
- Sprint, not possible at the time because network technology differences prevented bringing over your existing phone, plus poor coverage in areas I want to use the phone
- Verizon, not possible at the time because network technology differences prevented bringing over your existing phone
- TMobile, not possible since leaving the AT&T contract early leaves you with a locked phone unusable on TMobile's network, plus poor coverage in areas I want to use the phone
- Pay as you go and various 2nd-tier carriers that piggy back on the above. Exact same problems as already mentioned for switching to one of the other 3 major carriers.
When we subsidize industries and regulate them in such a way that no real competition exists, then absolutely it is the role of the Government to also regulate them to protect the customers against abuse of customer contract lock-ins and deceptive business practices.
Imagine if the power company offered you a fixed-rate 2 year contract and then halfway through it said "Switch to our new higher-price plan or we're cutting your line voltage after the first 3KWh of usage".