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Palm, U.S. reach a settlement in case

The handheld maker's devices are not as handy at connecting to the Web as the company made them out to be, according to a settlement with the Federal Trade Commission.

Palm's handheld devices aren't as handy at connecting to the Internet as it had led consumers to believe, according to a settlement announced Wednesday with the Federal Trade Commission.

Palm's claims that its PDAs come with built-in wireless access to the Internet and to e-mail are not the case for some models, according to the FTC. Several models require the owner to buy a separate wireless modem or a device to connect the PDA to a mobile phone.

"Palm does believe that we have appropriately disclosed service and additional requirements, but we are happy to make the disclosure in larger type and more explicit language," said Palm representative Marlene Somsak.

Under the settlement, Palm will now clearly disclose that consumers need to buy add-ons for some models in order to access the Internet and e-mail, the FTC said.

FTC spokesman Mitchell J. Katz said the models that require additional features for Web access are the Palm m100, Palm III and Palm V.

Microsoft and Hewlett-Packard settled similar charges last year, agreeing not to tout Internet access features without stating that such features require a modem.

The only Palm models that don't require additional devices are the Palm VII and the Palm i705, but those models were also misrepresented in Palm's advertising, the FTC said, because Palm didn't disclose that the models required people to sign up for Palm's proprietary "Palm.Net" Internet service and pay monthly service fees.

Palm's advertisements of its PDA's abilities to do some business functions were also a subject of the FTC's concerns. Several functions require customers to buy additional software.

As a result of the settlement, Palm is also barred from stating that its wireless Internet or e-mail service coverage is available everywhere or "almost everywhere" in the United States.

"Many of the mobile phones in the U.S. aren't compatible with Palm's PDAs," and Palm doesn't say that, Katz said. The models that are compatible may not offer service everywhere, he added.