This content is rated TV-MA, and is for viewers 18 years or older. Are you of age?
Sorry, you are not old enough to view this content.

CNET Update: AT&T's Next plan doesn't add up

About Video Transcript

CNET Update: AT&T's Next plan doesn't add up

2:51 /

Customers pay more for a phone with AT&T's no-contract option, abandoned Yahoo IDs are up for grabs, and Foursquare finds a new way to push advertisements.

AT&T has a new upgrade plan that you might want to avoid. I'm Bridget Carey and this is your CNET Update. AT&T is giving customers the option to ditch their two-year contract and pay about $30 more every month for the opportunity to upgrade to a new phone once a year. This option is called Next, but it makes no financial sense. Your monthly service plan has not changed at all. So, let's say, you currently pay about $100 a month for service instead of just paying $200 upfront for that shiny new iPhone and being done with it. You now are paying double that, almost $400 over the course of a year for that same iPhone and that's just so you could trade it in for a new model in 12 months and that phone better be in good condition because if it's cracked, you gotta pay more to trade it in. The only person this benefits is someone who pays a large termination fee to break their contract every year just to get a new phone. If you do the math, the difference between paying a termination fee for your contract and the Next plan is about $55. If you don't get a new phone every year with Next, you're losing money. The Next plan basically takes the full price of the phone and splits it up over 20 months. So, if you keep your phone for the whole 20 months, you just shelled out the full $650 for a new phone when you could have gotten it for $200 just with sticking with a contract. So, why is AT&T even offering this? Well, I guess they thought they needed to do something to compete with T-Mobile which has a better version of this concept. At T-Mobile, they don't have contracts. You just put a down payment on a phone, like about $100, and you pay a monthly fee to pay off the rest of the phone over time, but your monthly service charges are lowered to balance it out. That's what AT&T is missing and T-Mobile just launched the Jump plan. So, for another $10 a month, you could upgrade a phone twice a year if you want something new or if the phone is damaged. So, it's like an insurance plan. We expect Verizon to also jump in and offer some option for people to upgrade early, but we'll have to wait and see if Verizon can make it worthwhile. It's time to claim a new Yahoo username. Yahoo has been doing some housecleaning and deactivated old abandoned IDs that have not been used in over a year. Now, Yahoo is opening up those names to other people on a first-come, first-served basis. Just go to wishlist.yahoo.com to request your username and Foursquare is beginning to roll out advertisements that show up after you check into a place. So, for example, when mom checks into the neighborhood park or pool, she might see a Toys"R"Us ad to encourage her to pick up some Frisbees and pool noodles. That's your tech news update. You can find more details at CNET.com/Update. From our studios in New York, I'm Bridget Carey.
  • This is the interactive sidebar!

    Click any icon for more information as they appear--don't worry, we'll pause the video and wait for you to come back.

  • Links Polls Galleries
  • Video Review

New releases

Bird-watching Apps
1:01 February 27, 2015
Now is a great time to get outside to observe your local bird populations. After all, spring is when birds are migrating and mating....
Play video
I, 3D camera robot
2:24 February 26, 2015
Qualcomm's robot is just one tool to test and develop exciting new camera features for smartphones and tablets. CNET's Jessica Dolcourt...
Play video
Apple's official Spring Forward event happens March 9
5:48 February 26, 2015
Look for the Apple Watch and more to be featured at Apple's latest event. Emoji's finally bring racial diversity and will the Apple...
Play video
Zyro, a drone you can play tennis with, Ep. 193
4:49 February 26, 2015
This week on Crave we explore the short history of Nintendo Toasters or Nintoasters, discover a mumified munk inside an ancient statue,...
Play video
Net neutrality battle gears up for Round 2
4:26 February 26, 2015
The Federal Communications Commission has voted in favor of enforcing Net neutrality rules to regulate Internet providers. But the...
Play video
Tomorrow Daily 136: Bionic reconstruction, a real armored Batsuit and more
26:40 February 26, 2015
On today's show, we talk about three Austrian men who volunteered to have their hands amputated for science, a Philadelphia student's...
Play video
Apple's event could be time for more than a Watch
3:00 February 26, 2015
The "Spring Forward" March 9 Apple event could hold some surprises in store, the FCC votes in favor of Net neutrality rules, and ToeJam...
Play video
What's new on Netflix and Amazon for March 2015
1:51 February 26, 2015
March was made for marathoning. Find out what's going online and offline right here.
Play video