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Hardware

Is Netpliance Slamming Customers? 183

Posted by timothy from the even-finer-print dept.
visionik writes: "Today I received a charge on my credit card for Netpliance i-opener service, even though I called them prior to ordering and verified that monthly service charges would not be put on that card. According to Netpliance, they will be charging monthly service on the cards of everyone who ordered an i-opener since March 1st, even though their Web site and support people indicated otherwise. I'm contesting the charges immediately, but thought this should be brought to the attention of everyone else who ordered an i-opener directly from Netpliance." visionik kept a small diary of his dealings with Netpliance. In part, it reads thus: (more)

1. 3/11 I saw the article on Slashdot, and thought it would be a nifty project to run linux on, followed quickly by a thought that I didn't have time to mod it anyway, followed by another thought: hey, even better - i'll order one for my brother's birthday (which is monday the 27th)

2. 3/11 I called netpliance to verify that I could order the unit on my card, without service, and that my brother could subsequently sign up for services on his card. they said sure, no problem. i asked if it would arrive before the 27th, and they said -again- sure, no problem.

3. 3/11 I went ahead and ordered one a bit later in the day via the web form. The site said my total was $99 plus shipping ... nothing about service; and that the shipping would be 7-10 days.

But when visionik called Netpliance to inquire why the amount his credit card was charged was higher than he expected it to be, he learned that he was also being charged for service, including a prorated charge for service in March. He writes: "So I say I want to cancel the order. This guy laughs and says 'Fine, but you'll have to wait at least 30 days before we will [credit] your credit card.' That was enough. I told him I was contesting the charge and filing a complaint with my card company, to which this ballsy guy laughed again and said 'good luck'!"

I called Netpliance to ask them about this, and was surprised to reach a courteous human after only a few layers of voice-prompts. The sales representative I reached seemed taken aback by my questions, and surprised that the idea that anyone who'd been assured otherwise would be charged for the service. He quickly transferred me to one of his bosses, named Jerome. I asked Jerome whether people were being automatically charged for Netpliance's ISP service after being informed that they would not be via phone or the company's Web site.

He responded that signing up for the service was now required of all customers who purchase an i-opener from Netpliance. "According to the Web site, the service now automatically goes into effect two days after the order is recieved."

But what about those in visionik's situation? Asked whether all customers, like visionik, now being charged for the service had been aware of this change at the time of order, Jerome acknowledged that there may have been a gap between the change to automatic start of service and that policy being reflected on the Netpliance page. "I think it wasn't announced on the site [earlier in the month]. I hadn't looked at the Web site, so I'm not sure what it said. ... I'm not sure exactly when that change went into effect. There may have been a lag."

Might the i-opener again be sold without the service agreement-requirement? Jerome's diplomatic answer: "I'm not sure about that."

Jerome then transferred me to John, a customer-service supervisor, who confirmed that everyone who buys an i-opener direct from Netpliance is now being charged for the ISP service as well, and that there are "a couple" of people who are being charged although they did not sign up for the service or specifically asked not to be, but he did not indicate the actual number.

John described buying the i-opener device/service combination from Netpliance as a matter of convenience, and said "You can buy them at Circuit City and save shipping, or you can buy them from Netpliance and pay $40." For ones bought at Circuit City, currently the only i-opener's retail outlet, he said that to initiate service, "you do have to call. Our main focus is to sell it to our mainstream customers, a certain type of person we're aiming at."

Perhaps they should consider aiming at home-networkers looking for inexpensive flat-panel terminals as well.
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Is Netpliance Slamming Customers? More

Is Netpliance Slamming Customers?

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  • Ticket Price and Mobile phones (Score:1)

    by Anonymous Coward
    In Australia, the $99 sticker would be illegal and have to have a qualifier saying minimum package cost $121 or whatever. We have free mobile phones, but the saleperson still has to tell you the minimum package cost is $474 over 20 months - for example. - and you see it several times over The qualifier has to be given decent airing.

  • Re:dont pity the whiner (Score:1)

    by Anonymous Coward
    ...which would be well and good if the company hadn't specifically stated that they wouldn't charge those cards. The reason so many companies act in a crooked manner is because people are so willing to let them get away with small things like taking '$20 whole damn dollars' without consent.

  • Down with the man (Score:1)

    by Anonymous Coward
    Hell yeah, fight the man. The establishment cannot take advantage of us anymore. Can you tell I am listening to Rage Against The Machine?

  • Simple solution... (Score:1)

    by Anonymous Coward
    Port scan em. Then they will terminate your service for TOS violation. If that ain't enough post a couple of copies of DeCSS of cphack :)

    Seriously the real options are to buy the thing with cash money or cancel your credit card ,or perhaps use a debit card which then means you can simply take all the money out of the account, tell your bank you no longer authorize changes from them and then see what happens. You could still get billed directly by snail mail, but then
    you could just ignore the bill. I am willing to bet they will cancel your service after three or four unpaid bills.

  • not really (Score:1)

    by Anonymous Coward
    he never agreed to buy the ISP service. he only agreed to pay for the i-opener device. if paying for the ISP service was a condition of buying an i-opener BEFORE actually buying the i-opener then netpliance would be in the right but really printing on the box is hardly a contract.

    netpliance is behaving ill in this matter. they are the ones who ARE RESPONSIBLE. it was their poor foresight that led this to happen. they ought not to try and get people to pay for what they havent agreed to pay. that sounds like fraud to me. i think they're just going to have to eat this one.

  • NetPliance Billing (Score:1)

    by Anonymous Coward
    I noticed the same thing just the other day when my credit card bill came in.

    I've had my iOpener since December and never saw a bill from them. Suddenly, I get a bill on my March credit card probably pro-rated from January instead of December(not sure from when) and February.

    I was at least pleased to see that it was only $21 and not $26 - which is the service I signed up for. Unfortunatly, after I had already purchased it and the sales person said I could get access for my home PC as well, I called and found out that they wern't done with that service deal yet. Great.... I wouldn't have purchased it right then if I couldn't get access for both my PC and my iOpener from the same place.

    I've tore into my iOpener and hacked with it. Made a modification or two just to suit my personal preferences (audio/etc.) However, I've always decided to keep it on NetPliances' network. However, if they start doing some interesting deeds to their customers, I just may have to cancel and use my own ISP and Lineo (embeded Linux from Caldera) instead.
  • WebTv ... BTW why has no one hacked one of those yet?

    First you'd have to find somebody crazy enough to want to. After all, even after you hacked it it would still be a WebTV.

  • Was that actually produced after the particular date, rather than shipped, though?
  • I suspect there would be slightly less chance of hell freezing over than of getting decent consumer protection laws past the people-who-are-afraid-of-black-government-helicopt er lobby.
  • Well, I take it from the press release [netpliance.com] from Netpliance themself:

    "In response to recent reports of the unauthorized reconfiguration of its i-opener Internet appliance, Netpliance, Inc.
    (NPLI) announced that it has implemented hardware changes to prevent reconfigurations of i-opener Internet appliances produced after March 20, 2000"

    As to what exactly they've done, no one knows until they get one and open it up to see what's different. Many have had theories, but until someone gets one, who knows. The most severe to me would be completely yanking the IDE port and connecting points on the motherboard so no one could try and solder on a new connector.

    I know of someone that ordered one a couple days after the March 11 post here on Slashdot, and hasn't yet received it. They said it'd take 7-10 days, but my guess is they've put a hold on shipments while they re-tooled their manufacturing process to do these "hardware changes." Perhaps they're even getting ready to ship these new ones now that they're charging people's credit card and adding the internet service. But really, it's all speculation. Feel free to disbelieve...

  • Suck it up and cancel the service.

    So if I buy a hammer to crack walnuts, I should naturally expect to be enrolled in the nail of the month club and have it charged to my card? Even if they explicitly said that would not happen? Even if they knew that my purchase was conditional on NOT being enrolled?

    I think not.

  • If you're purchasing a Spacely Hammer Deal, which lists plainly on the card in front of you includes one (1) hammer and one (1) subscription to the Nail of the Month club (with a recurring cost of $5,000/month) for one low hardware cost of $5, then yes, you should expect that. That's what you bought.
    That's NOT what he bought. He (and several other posters) bought the machine WITHOUT INTERNET SERVICE, and that was what they were told they would get. It doesn't matter if they changed the policy after he bought it; the terms of sale at the time of sale were clear.
    HIS problem is that Netpliance did not (allegedly) honor the special arrangements the salesperson set up for him (to delay billing of the ISP service). In all likelyhood, this occurred because of this: At the time, ISP service did not begin until after the unit was first connected and used with a telephone line. Upon its initial dial-out, it subscribed the user to the ISP service. The salesperson knew this, and told him it would not be a problem and he would not be billed for ISP service. A policy change at Netpliance moved the "start" date for ISP users to the 2nd day after the order was shipped. This "start date" was not part of any contract. The fact that they told him one thing and did another is simply POOR BUSINESS, and is in no way illegal or even (in the big picture, seeing how this guy is trying to rip them off just like the rest of us using these i-openers for cheap Linux installations) what I would consider unethical.
    Charging for goods and services not authorized by the consumer and/or retroactive change of contract (even if it's a verbal contract) are illegal in all the jurisdictions I know of. (IANAL, blah blah). He specifically purchased it as a gift, so that while he would pay the hardware fee, his brother would pay the monthly fee.
    He has grounds to write them a letter, ask for a refund, sure, but this is hardly something to get Slashdot kiddies worked up over. They're certainly not "slamming" or "cramming" or whatever the term is. They've stated up front that they bill for ISP service, and in this ONE specific case, they ended up going through with it despite (alleged) special arrangements. I say "alleged" because I imagine the conversation was more for "confirmation" that their current ISP policy is not to bill immediately, not, as the submitter claims, an explicit assurance by the salesperson that he would not be billed for ISP service *at all*.
    Irrelevent. At the time of sale, the contract (vocal or implied) was for the i-opener plus shipping fee, period. Changing the policy at a later date and retroactively applying it to earlier sales is illegal. Whether it is worth the legal fees and/or hassles for ~$20, is another matter entirely.
  • I read in one of the IPO reviews that Netpliance only had $26000 in revenue from subscriptions in
    the year in 1999. If your company had gone IPO, needed to show revenue growth and were in this
    kind of predicament, I bet you would start pondering unethical business practices also.
  • Some moderator of questionable judgement marked the informative and ontopic parent of this post down to -1. In case anyone cares here it is...
    I think someone has hacked into one of those. It was on geeknews.org a while ago. Go to /. to listen to nerdier than thow people argue about linux -- go some place else to hear the latest news.

    --

  • I mean, the people who screwed us with DIVX and 15% restocking fees wouldn't partner with companies like this, would they?

    A little personal story:

    My wife wanted a new graphics card for her computer, and lo-and-behold, C.C. had a decent one advertised at a reasonable price. We bought it, brought it home, and installed it. The card caused hardware lockups after running the machine for about 30 minutes - every time.

    To isolate the problem, I tried the card in three other machines, with identical effect for each one. A different card in my wife's machine worked fine. Diagnosis: bad graphics card.

    No big deal, right? Wrong. When we showed up at C.C. later that evening, we were told that the card's selling price was so cheap because it was discontinued, and that no, it wasn't advertised or disclosed as such. "OK", sez I, "I guess we'd just like to return it and try again at a later date with a different card."

    "That's fine", replied the clerk. "Let me just credit ($COST * .85) back to your card."

    Erm, what?

    "Yes, sir. There's a 15% restocking fee on all refunds."

    Me: "But this is a defective card, which I bought this morning, and you don't have anything to exchange it with!"

    Clerk, visibly irate: "Sorry, sir, but that's our policy."

    Me: "Get your $#!$()%$#@ manager."

    To make a long story short, I was given two alternatives: accepting an 85% refund for a broken good, or applying a 100% refund to a (much!) more expensive graphics card.

    Screw Circuit City. I will no longer buy anything from them, or from any company who uses C.C. as an exclusive retailer. As far as I'm concerned, anyone willing to enter into exclusive contracts with those scum can't be too legitimate themselves.

    I apologize for the rant, but every time I see that company's name, I'm reminded of getting the shaft from them and how many other people must've been bitten. If they ever clean up their act, then I may deal with them again. Until then, I'll do everything I can to stear my friends and family away from them and their strategic partners.

  • gee... why does that ISP sound familiar? hmmm.... I wonder.... could it be? at home? uh yupp. from the sounds of things you nailed it, missed a few of the recent additions to the customer service part... especially popular lately is the "blame the user" stage at level 2... a group of trained monkies I can only assume from talking to them on the phone....
  • So if you buy something, you should not only look at what you're buying but also at what the seller thinks you should use it for?

    Face it, Netpliance is so scared to loose money on people not buying the service that they decided to even charge the people who ordered when they didn't yet have the notice on the website. In the hope that not too many people would complain.

    That's fraud, or at least it is if they don't apologise and give a refund right away.

    EJB
  • I agree. The last thing people who are pissed about how the company went back on their word should do is do something illegal. Do it illegal and you'll lose it - they'll get your money.

    Its better to legally contest it, and my other option I'd suggest is taking it to small claims court. They don't want to waste their time dealing with 10,000 small claim court actions so they'd probably give up if you did.

    Or - this just occured to me - get a CLASS ACTION lawsuit going against them - for those who were told one thing and another things happening.

    Do it legal and do it right.
  • IIRC, WebTV uses an embedded MIPS R46xx series processor at around 100 MHz.
    Not an x86, but hardly shit.
    (My Indy has an older, non-embedded version of the R4600-100...I'd say it beats a P100 by a little bit,
    but being an SGI arch box prolly makes a large difference.)
    I think the biggest problem with hacking WebTV is memory and storage - You'd prolly need a PROM burner to do anyting interesting.

    --Kevin

    =-=-=-=-=-=
    "Just take another hit 'cause you don't give a f*ck-
    You're a junkie and you're proud!"
  • I don't think even your post goes far enough.

    Quite frankly, I'm surprised at the amount of "geeks" slamming Netpliance in this and the previous /. story. Come on people, they've implemented a wonderful idea, out-of-the-box Internet for your non-geek Mother/Father/Brother/Sister. As far as I'm concerned they should be congratulated and not picked on for not letting "geeks" buy cheap Linux/*BSD terminals.

    My suggestion to all the people on /. getting worked up about this: Go and work on how you can do what Netpliance is doing for the cheap-Linux-terminal market.

    My suggestion to Netpliance: As of 1 April, get customers to sign contracts for service, like cellphones. Until then, be nice and foot any possible losses/withdrawals from service.

  • And then there's the myth of someone buying an expensive keyboard, getting home with it, and finding nothing but planks of wood in the box.

    Maybe it was a TechStyle [techstyle-com.com] keyboard [techstyle-com.com]? :-)


    ---
  • Who's trying to rip off the company? They're selling the hardware for the stated price. Not renting, not leasing, but SELLING. Outright. Once you take delivery, you have the right to do absolutely whatever your little heart desires. If the company were serious about maintaining customer base for their service, they should have made it a lease agreement, not an outright sale.

    They're simply learning a hard lesson -- never underestimate the Geeks.
  • I guess YMMV applies to negative as well as positive experiences, eh?

    No doubt. If you go over to Clark Howard's website [clarkhoward.com], you will find that there are numerous complaints against Best Buy, but very few against Circuit City when it comes to customer service issues. About the only things I get from Best Buy are CDs or specific models of equipment after doing extensive research (which is about the only way I buy stuff anyway).


    "Logic . . . merely enables one to be wrong with authority"
  • The should not be charging for serveices you were never alerted to purchasing.
  • no you can't seem to read english. He call and asked if buying the unit for his dad would charge his OWN CARD for service he would NEVER recieve. They answered that he would NOT be charged. Then they charged him. I'm concidering buying one of the things for grandparents and I sure as hell don't want service charges on my CC they aren't paying for the box I'm. When they get box I've payed for they will pay for the service. That's what the guy asked for, was told sure that cool, then charged anyway. My impression is that he ordered over the phone so it doesn't matter what the website said.

  • freewwweb.com [freewwweb.com] works with any computer that supports the standard dial-up protocols. I use it in Linux everyday. I also use worldshare regularly as my backup when Freewwweb is busy. Neither of your statements is true.

  • From the Netpliance web site in the article Netpliance Comments on Unauthorized Reconfiguration of the i-opener Internet Appliance [netpliance.com]:

    "The Company believes the reported unauthorized reconfiguration of the i-opener Internet appliance has not had a material impact on its operating results or general product availability."

    So really all these people saying we are going to hurt/sink/kill/etc Netpliance are not correct, and this is from the company themselves.

    • My apologies for not being very specific in my reply to the original story. But IMHO, I really don't think the fuss is about a month's service fees. I really believe that the device was bought with intent to modify. "This" referred to my belief that the device was bought with an intent to modify.
    Well, here is a quote from the article above that disproves that:
    • 1. 3/11 I saw the article on Slashdot, and thought it would be a nifty project to run linux on, followed quickly by a thought that
    • I didn't have time to mod it anyway, followed by another thought: hey, even better - i'll order one for my brother's birthday (which is monday the 27th)
    So while he might have initally wanted to mod it, he decided that it would be a better gift for his brother because "I didn't have time to mod it anyway". So once again, he has full right to be angry with Netpliance. He was told specifically that the charges could be placed on his brother's card (he asked them specifically about it) and was subsequently charged for one month's service. $22 may not seem like much, but it's the principle that we are discussing here, not the loss of $22 due to something that 'comes with the unit'. And to think, when I first saw this thing mentioned on ZDTV before it came out, I thought "That'd be perfect for Mom - she doesn't need a full PC just to surf the net." Well, Netpliance has just lost me as a potential customer due to their lies and fraudulent activity. I'll just take an old box that I have here at the house and give it to her.
    • Is twenty something really worth the fuss?
    Like I said before, maybe the $22 is not worth the fuss, but the principle of the issue definitely is. If Netpliance gets away with this incident, then they can do this to every single customer who plans to give it away as a gift.
    • And why did Netpliance start charging service fees?
    Exactly. They shouldn't have, since he specifically asked them about his situation and they said "No problem."
    • Think before you get angry with Netpliance.
    I have, and I'm still angry.
    _______
    Scott Jones
    Newscast Director / ABC19 WKPT
    Commodore 64 Democoder
    • Trying to rip off the company isn't right.
    Who said he's trying to rip them off? He specifically asked if there would be any additional charges to his CC other than the $99+tax that he paid for the iOpener. He was told no. Then the ISP charges appeared on his CC bill. You're damn right he should be mad, hell I would be mad if I got charged for something that I was told I wouldn't.
    • I think it is not right to take advantage of a flaw in the design (the fact that the device could be modified) and try to rip the company off.
    Okay, here's proof that you did not read one word of this article. This guy thought about modifying it, but decided not to, then thought 'Hey, this would make a great gift for my brother!'. Therefore, since the device is not going to be his, why should he be charged for the service?
    • I know that you guys did not sign anything on paper but everyone knew that the reason the product was selling so cheap was because the company expected to make up the difference through the access fee. Think before you get angry with Netappliance.
    That's not the issue here, as you would know if you actually read the damn article. The issue is basic fraud, charging someone when you specifically say you won't. Nothing to do with any modifications whatsoever. Get your facts straight before you post, please.
    _______
    Scott Jones
    Newscast Director / ABC19 WKPT
    Commodore 64 Democoder
  • Here's a possible solution: report the card lost, and have your bank issue a new card with (presumably) a new number. They offending service will certainly not automatically get the new number, and they wont be able to charge squat to the cancelled one.

    The only downside is that you might have to live without your card for a few days until they get you a new one - if it is also your ATM card, you might want to take out enough cash from a machine with it to tide you over _before_ you have them turn it off...

    An idea that has recently occured to me that somsone might make some $$ from: offer pre-paid CC's with a specific balance, that would be throw-away after they were used up. This would be handy for ordering stuff off the net or TV or anywhere else that will only accept CC's, but that you aren't comfortable with them being able to charge whatever they want to your card.
    The only problem might be with companies that will only ship to 'the cardholder' - somehow this would have to be resolved with a one-time use card...
  • Although I'm positive someone has come up with this idea before, it has struck me as somewhat novel. How about credit card companies implement some sort of authorization system for cardholders that wish to have it. Debit cards have this now to some extent, seeing how you have to enter a pin number to validate the purchase, but I see one step further that before a transaction is processed, you will have to verify the actual amount as well.

    This wouldn't have to be mandatory and customers that wished to opt out of it should have every right to do so. But it would be remarkably easy with e-commerce. Any time a purchase is made, the user would be taken to a website owned by the credit-card company and the customer would enter in an authorization code if the dollar amount matches. After that point, the merchant would be able to charge ONLY that amount and no more, and no subsequent charges would be permitted unless previously authorized by the customer.

    This would also make a moot point of someone stealing your credit card number. It would be useless to them. Its slightly less convienent, but much more secure.

    I still find it rather odd that you can buy one in the store without the service, but you are forced to get the service bundled when you order it online. I might have to drop by Circut City tonight and check them out now. :)

    -Restil
  • You missed the point. The arrangement at the time of his purchasing the device was that payment for the service was separate. This being the case, legally speaking, they have no place charging his credit card. Not that it's worth making a legal sized fuss over... Admittedly his best corse of action now is probably to just tell them to cancel the subscription as you suggested, but no he didn't sign up for the service at the time, they only just made the agreement manditory, and I think he's fully justified in being pissed off.
  • That's like bundling a web browser with an operating system.

    I was thinking more along the lines of... like giving away cell phones for next to nothing, but stipulating in the contract that you must purchase service for a year. What's so wrong with that? Nothing. It is a perfectly legal and common business model.

    However, pulling the bait and switch is a different story. If the charges for service were not stipulated in the original contract, then there is a problem. Of course, thousands of other Slashdotters have already driven this point home.

    -----

  • My apologies for not being very specific in my reply to the original story. But IMHO, I really don't think the fuss is about a month's service fees. I really believe that the device was bought with intent to modify. "This" referred to my belief that the device was bought with an intent to modify. Is twenty something really worth the fuss? And why did Netpliance start charging service fees? Think before you get angry with Netpliance.
  • Trying to rip off the company isn't right. They developed a good product and they are trying to sell the product and the service at a decent price. I think it is not right to take advantage of a flaw in the design (the fact that the device could be modified) and try to rip the company off. I know that you guys did not sign anything on paper but everyone knew that the reason the product was selling so cheap was because the company expected to make up the difference through the access fee. Think before you get angry with Netappliance.
  • Uhm, I did.

    Mine was shipped 24th of March. Got it today,- installing an alternative OS on the added harddrive rite now.

    It's the same. Not even no-tamper stickers.

    Breace.
  • Aside from the little fact that no Circuit City has any in stock, it sounded like the perfect plan. CC is just the store front, you go in, are amazed at the demo machine, they have one shipped in from Taiwan (or wherever) to the store, you pick it up. Now, seeing as Netpliance has not shipped any units out for a long time, even for those who ordered long before the 20th, I'd wager that what you got at CC is the non-hackable one.
  • Before you start giving out information like this learn a few things before you get people in jail.

    When you call in a credit card lost several things happen:
    1: The card is closed and all transaction authority is stopped.
    2: A new card is opened and LINKED to the old card
    3: You are given tyhe chance to contest any sitting charges from the time the card was reported. This for is an affidavit.
    4: Any contested charges are investigated and action is taken on a per item level.

    A few points to consider:
    In regards to action 2, any legit charges that have not finalized on card x (the lost/stolen one) WILL hit card y (the new one).

    On point 3, if you lie on the affidavit you WILL be charged with credit card fraud. Your credit rating will go right down the shitter and you will probably go to court and jail.

    I work for the IS department of a Credit Union. Part of my job requires me to work very closely with the credit/collectios department.

    Please, if you are going to be giving people information that could have legal ramifications would you please KINLDY FIND OUT WHAT THE FUCK YOU ARE TALKING ABOUT!!!!!!!!?
  • or perhaps use a debit card which then means you can simply take all the money out of the account, tell your bank you no longer authorize changes from them and then see what happens.

    I work for a credit union and that trick does not work. I deal weekly with people contesting charges from AOL on debit cards that have been closed (usually due to loss or theft) and nothing stops them.

    Of course, if it is discovered that you removed your funds for the sole purpose of not paying for services rendered you can be charged with credit card fraud. And don't forget that your bank will probably charge you a nice fat Non-Sufficient-Funds charge (average is between $20.00 and $30.00 US).

  • They hope people will buy the service too. But requiring it? Why... That's... That's...

    Since they are nowhere near a monopoly, they have every right to require it, If THEY STATE THAT THEY DO UP FRONT. If they said they didn't, they should honor that and take the loss.

    What they are doing now, however, is consumer fraud at best. It should be treated legally the same way as if a store sold you something on credit, and then decided to 'sell' you a few more things the next day using the cc# that you gave them for the first transaction.

  • product was selling so cheap was because the company expected to make up the difference through the access fee. Think before you get angry with Netappliance.

    I would have no problem with that if they had stated that that was the deal up front. Many companies practically give away cell phones with service, only they are explicit about requiring signup for service, and the length of service required. They also explicitly indicate what it will codt to buy the phone without service (if allowed), and what you will be charged if you want to cancel early.

    If they had had any sense whatsoever, they would have spelled all of that out, it's not a new concept. They certainly have no right to say that you are free to buy it without service and then complain if someone does just that.

  • I once had experience with cancelling internet service by closing the credit card account. Back in 1995 when local service providers were few, I made the unfortunate mistake of trying out Compuserve. Never mind they only had a 2400bps connection for my 14000 baud modem. They were also long distance. Well, cancelling from them at the time may have been complicated and required paperwork. I couldn't just call them and ask a person to cancel my $20 a month account.

    Just so happened I lost my credit card that month. My credit card company gave me a new card and number free of charge. Compuserve called me daily for the next month asking for monthly payments after they found they could not charge me. They had a hard time taking no for an answer. But I was not going to pay and the card number was no longer valid. What could they do? Sue me? I would have enjoyed that opportunity to see them in court, but they finally gave up.

    Does this affect my credit rating? No. Considering my credit and interest rates, I can honestly say this has not.
  • But they could make similar systems intended for home networkers that cost more, rather than ignore that market. Add a small harddrive and either an ethernet card or an external USB port for an ethernet adaptor. That's what many people are doing with them, and from the i-opener plus parts cost, probably spending $200-250.


    If they sold one with that functionality -- a low-powered, cute, network-friendly thing -- for anything under $350, they would probably fly out the door.

    They have made a modest amount of noise about "working with the open source people" and about "seeing a new market identifyed". They may well be planning a somewhat beefyer machine with a much larger price tag. I'm not sure they would "fly off the shelves" if they were the same machine plus a small (I think 2G is the smallest in production) portable drive, and an ethernet (it would cost less to have an ethernet then the existing modem, but only by a few bucks), and no QNX or even SanDisk flash part.

    But I'm not sure you could make such a device, and profit from it at $250.

    You have, maybe $20 of CPU, $50 of memory, the cheapest desktop SS7 motherboard is about $30, a small in-production hard disk is about $100. I'm not sure about the flat-panel, a better quality one at the exact same size is $99, so $50 might be reasonable. That's about $250 right there, and we havn't payed anyone to put it together! Or for the keybord, the plastic "case", the little metal stand, or any money for the design and other NREs. Oh, and profit, both for netpliance, and for the distrbution channel.

    Even if Netpliance does, it takes months to bring a machine to market. Even if it is just a fairly minor respin of an existing product. Even if you skimp on "focus group" "market testing".

    Remember this thing is essensally a cheap portable. None of those are on the market at signifagantly less then $1,000. Let alone $500. Let alone $300. Even with this portable being made of more trailing edge parts then any i have seen in a while, it still costs a fair amount of money!

    P.S. the existing one has a USB port, I assume for "future expansion". So you could put a USB ethernet in it (assuming you were running a patched Linux, or a FreeBSD 4.0 or newer, or the right revs of NetBSD, or...)

    P.P.S. I think Netpliance it justifyed in changing their "no contract policy", but not retroactivaly. In fact I'm almost sure doing it retroactavly breaks some laws. I think they are also justifyed (legally and moraly) in making the new units harder to hack, but I think it is a mistake. Either the percentage of units ordered to be hacked is too low to bother with, or they are about to get a wave of returns, possabably broken returns.

  • The bottom line is that this guy bought an Internet appliance with the intention of using it in ways the manufacturer didn't intend. It's not their fault they assumed he was a normal customer. If you're going to purchase things and use them in ways the manufacturer didn't intend, you have to expect that there are going to be things attached along with that purchase that you don't necessarily need.

    Let's say I was buying a car. For some reason the dealer for this brand of car sells them really cheap, say $4000 rather then $15,000. But they charge $200 per scheduled service rather then $19.99 like Jiffy Lube. You ask the sales person if you have to take it to them, or if you can take it elsewhere.

    If they say "you have to take it to us, it's in the contract", then your argument is right. Suck it up. You agreed to it, you deal with it.

    If they say "oh, well you can take it wherver you want, but they way it is built we are really the only ones that can service it, so it'll be a bad idea...but there is no contract", then your argument is crap. They told you you'll end up coming back to them, but they said there is no agreement in the contract. You can do what you like. (and this is what Netpliance told some people, including me)

    In the middle ground if they said "you have to get the oild changed here, but if you choose not to drive it, then you don't need the oil changed (and there is no contract)", well I figure your still wrong. After all they said it ain't in the contract. (this sounds more like what netpliance told the guy in this article)

    Now in the real world, it doesn't matter as much what they said, if there is a contract that says the other thing.

    Netpliance is fully within their rights to make a contract that says "you have to pay us $21 a month for service for X months or pay us Y dollars to terminate the deal". They are totally within their rights to do this to all new customers. They can't do it to people who have allready bought. I expect this includes people who have payed, but not yet recieved the product.

    Or do you really think Ford should be able to force you to get oil changes at a Ford dealer on a car you bought months before they decided this was the "new policy"?

    Great deal, or not, nobody can retroactavly change contracts. Except a court of law, and normally they don't unless the terms of the contract are really really absurdly unfair. By absurdly unfair, I mean things like "after you work for us, you can't work for anyone else" (and even those are upheld from time to time -- if they are really "for a huge amount of money you can't do a really similar thing for some amount of time", like millions and years, or thousands and a few months).

  • Your missing the point of the original problem. They changed the conditions of sale AFTER he bought it. I've got one of these from Circuit City and have been watching the whole fiasco as it unfolds. Net Appliance presented a Loss-Leader product to the market that had "holes" that are easily taken advantage of to make it something it wasn't intended for (but does a nice job of being
    a low-end PC) They got taken to the cleaners and are aggressively trying to get our of their situation. With that being said - changing the rules of engagement 2 weeks after the sale doesn't fly. That's bait and switch/slamming (call it what you want.) and it sucks royally. He'll contest it and win.
  • Because it's considered part of the same package. When you buy a car, you usually can't choose to remove certain components. If there were only one car company (having done away with its competition somehow), and it bundled a kick-ass stereo system, then it is harming 3rd party stereo dealers. In turn, this hurts consumers.

    Only when this is done to unfairly drive competitors out of business is this a problem. That hurts consumers. Not good. In this case, though, I don't think the i-Opener is stopping anyone from coming up with a similar device at the same pricepoint. They're certainly not hurting the ISP industry.

    That said, I think these guys are bozos. You don't retroactively charge people for something they didn't pay for in the beginning.


    - Jeff A. Campbell
    - VelociNews (http://www.velocinews.com [velocinews.com])
  • Microsoft is also a monopoly, whereas these guys are neither preventing anyone from running an ISP or making cheap IA devices. Basically, they're not harming competitors by this practice, as there really hasn't been anyone else who has truly bothered with this market.

    That's the theory at least.

    - Jeff A. Campbell
    - VelociNews (http://www.velocinews.com [velocinews.com])
  • When the story first hit I sent them a couple of questions (one of which also contained a somewhat impolitely worded critique of something on their web site FAQ)about whether it had to be used with their ISP service and whether their ISP service would work with other machines. John Bortscheller responded to both more politely than I deserved and fairly quickly.
  • Hi, credit rating? You've just described a sure-fire way to trash your credit. Try it, I dare 'ya.
  • did y'all actually take it apart? or were you guestimating from the outside? I heard today at work that some enterprising EEs got together and bought one just to disect it... their estimate at current wholesale costs was about US$300, and I don't think that included the flatpanel. netpliance is definently selling these at a loss and expecting the ISP and other services money to make up for it... I'll bet their IPO prospectus pretty much says that in the risks section.
  • Well, that's probably the issue then.

    In the Netherlands we also have decent consumer protection laws. Shrink wrap licenses aren't valid and contracts are only valid between two parties, not between you and a box you bought from a computer store. Sellers need to be very clear if your purchase also includes other things like a subscription.

    It would be interesting if I bought one of those over the net from the Netherlands. I'd like to see if Dutch judges are as eager to extend their jurisdiction as their USA-an counterparts. :-)

    EJB
  • The fact is, Netpliance sells the computers at a loss and has to use the ISP service to turn a profit.

    You mean the fact that they have proved to be genuinely stupid. After they had an advertisement like that on slashdot they can sell any number of copies of this otherwise pretty flimsy hardware just because it is geeky for its actual price (299 instead of 99). And I would definitely buy it as well. 299 is a good price for a flat screen terminal.

  • but what it DOESN'T say is whether I can cancel the service after the first 30 days. If so, than who the hell cares if it's an extra $22.00. Also, I'd like to see them go after people for moding them. You are buying the hardware, not leasing it. It's yours. Throw it off a bridge, install linux....its your choice!

    -mark
  • The difference is, The Sonys of the world are smart enough to do things right.

    All Netpliance did, to try to prevent modifications, was to reverse the pins on the onboard IDE interface. They didn't even bother to remove it entirely!

    If you can find an IDE interface on a Playstation or Playstation 2, and can use a hard drive on it, I'd be surprised.

    The XBox, on the other hand, might end up being useful!
  • He'll contest it and win.

    Hopefully he'll sue them for punitive damages and win...

  • Hey, how interesting! I just left an employer that did cablemodem service as well! I don't think you'll have a hard time figuring out who.

    For those of you who think that's bad, look at this; my now former employer has rolled out DOCSIS in most of their locations (whereas @Home is way behind) and has converted probably 70% of the customer base to DOCSIS. There isn't buy versus lease - it's lease or go without. You don't like that, tough luck.

    And if you wanted it, you had to have at least basic cable. Period. There was no 'Oh, just give me a cablemodem, I don't want cable.' On top of that, you would get nailed pretty damn hard for the install - mine, at employee discount, was $120. Figure that the cablemodems cost around $180 or so, at my best guess. And remove the employee discount - after the first month, the money is made back on the cablemodem, and now you're another cable subscriber, like it or not. But that's only covering the cost of the cablemodem and the install.

    To purport that Netpliance could possibly hope to turn a profit off the ISP business is preposterous, to say the LEAST. ISPs lose more money every year than any other business I've seen. You know those $9.95/month unlimited ISPs? Ever wonder why it's slow and you get busy signals? Because they can't turn profit on that. That's why ISPs offer webhosting and such.

    Figure that ISP XYZ in Sometown has 48 modems, and 200 subscribers, giving them roughly a 4:1 user to modem ratio - fairly good. However, ISP XYZ has had to invest ~$3000 in a router, ~$12000-45000 for a terminal server with those 48 modems, and probably costs of $1300/mo on a T1 to someone like UUnet, and another $13/mo per channel on each PRI (24 channels each). $9.95/mo doesn't cover even that $13/mo cost. Yeah, sure, they have four times the subscribers as lines, but take into account the initial investment as well.

    Netpliance is presumably nationwide, meaning either they have 'extended' DIDs assigned to PRIs, meaning more than one number in more than one area code goes to one PRI, or they have equipment in every city. Figure a maximum of say, 250-300 dialup users on a T1 before you choke it to death. Assume they have a T1 in every city, and probably out of band management equipment as well. In other words, a complete POP in each city they service.

    In the big cities, say New York, they've probably got two to four POPs to handle the anticipated customer base, as well as to cover all calling areas that they can. So, let's crunch the numbers.

    Figure around 240 lines per city at a cost of $11/month per line. A terminal server around, say, $65,000 to handle the PRIs. Probably a Cisco 2610 - about $3000 there. Likely an external CSU/DSU for some silly reason - there's another $300-2500. Out of band management equipment like a 33.6k modem - ~$50 - a Cisco 2509 - ~$2100 - and an analogue line seperate from the PRIs - ~$40/mo. NOW attempt to figure in their servers, decentralized OR centralized, it's going to be somewhere in the hundreds of thousands of dollars, probably. Marketing, sales, etcetera.

    In other words, they're just plain losing money. By the minute. It'll probably be seven or more years before they pull themselves out of debt, if not longer! Most ISPs, even something like this, only last two to three years before giving up due to the constant harassing of bill collectors. Then they either get bought, or just shut down. My guess would be that Netpliance is going the 'new business' route of trying to get bought out.

    Think about it. What do THEY care if they have horrible PR, if they're looking to get bought out? Once they get bought out, they're no longer Netpliance - they're whoever is the highest bidder. The CEO/President/whatever walks off with a buttload of cash, more than his intial investment due to an existing customer base and such. A lot of customers probabl get screwed. The usual fallout from a 'merger.'

    If you ask me, Netpliance is nothing more than another pathetic company trying to make themselves just attractive and popular enough to attract bidders, perhaps before IPO, and then get the hell out of dodge.

    Yeah, you're damn right what they're doing is totally unethical. I don't doubt it was intentional slamming - which is against federal law in the US, it might be noted - in order to 'generate revenue' in a 'timely manner.' Hoping for at least some return on investment before trying to sell, would be my guess. Yeah, they'll say it's legal, and I wouldn't expect any customer service from them whatsoever, with those kinds of losses already taken, but that's the way things work these days.

    Gods, I hope they IPO so I can laugh my ass off at the people who are crazy enough to buy shares. Buying shares of AOL is one thing - AOL has profit and good revenues. This company has more money presumably 'invested' in equipment than Microsoft spends on a TV ad.

    Some people just never learn...

    =RISCy Business
  • They arent thinking about their target market very much if they start the clock ticking as soon as you get the unit. I bought 3, planning on giving 2 away to my Mom and Sister when I go visit them this summer. My unit, I have other plans for that one...
    Anyway... It's going to be a real bitch if all of a sudden I have 5 months x 2 units worth of charges on my card before these things ever get powered up... I'll sit on them for a few months, still in sealed boxes, if charges show up, I'll dispute them. I have the sealed boxes for proof, I have not used the services yet, why should I pay for them. If they wont budge, then they go back for return and a reversal of charges. I signed no contracts when I bought my units. This should be interesting to see how this all plays out in the coming month or two...
  • "I think it wasn't announced on the site [earlier in the month]. I hadn't looked at the Web site, so I'm not sure what it said. ... I'm not sure exactly when that change went into effect. There may have been a lag."

    When someone denies something obtusely three times in a row. It's a good bet they're lying. Not that the guy could tell the truth without setting off a few lawsuits, but, well, that quote above is a lie.

    I still haven't seen a price on these withOUT the service, surely they could figure it out or something. Exactly how long MUST you stay on board before they break even?
    --
  • Hmm.. lets see.. isn't the business model for consoles: Give the console away, they have to buy your software? So who's adding a harddrive to the sony playstation and porting linux to it? Boring.. yep.. How about putting a harddrive on Microsoft's X-Box and shoving linux onto that? What do playstations go for these days?
  • Andrew: Thanx for clarifying it. For the first few days after the story broke on /. - there was no requirement for service, and speaking for myself, I was personally assured, (after explicitly asking) that charges to the would not begin until the unit phoned home and set itself up with subscriber info. My order was placed before any change in billing policy. I was therefore charged without authorization.

    While I agree that the thing's still a screaming bargain at $99 + $40 shipping + $22firstmonthservice, I do not agree that they had the right to make that charge.

    If I'd ordered a few days later, they'd be entitled to charge me for the first month. If I'd ordered after March 20th, they're entitled to send me something I "can't hack", and it's good that they're being upfront about the modifications they're making to the unit. But at the time I ordered it, I was assured there would be no service charges.

    Maybe NPLI lied to me. Maybe NPLI simply screwed up. I dunno. But if you ordered before the change in policy, you should probably check your statements or call your bank ASAP to find out what's going on.

    Whether or not NPLI is losing money (and they almost certainly are) on people who bought these things to hack is irrelevant. If they're charging people for stuff not ordered, something's wrong and needs to be fixed.

  • > I think Netpliance has been perfectly justified in moving into an automatic billing scheme.

    Absolutely. They should've done this from Day Zero, even before it was discovered the units were moddable.

    > It's one thing to take advantage of a loss-leading price like this, and I myself feel a little guilty for participating,

    Also absolutely. I sympathize with 'em for the loss.

    > but people like this, those that are really TRYING to give Netpliance the shaft here really annoy me.

    But since when is objecting to unauthorized charges giving NPLI the shaft? Hell, I'd still buy one at $300ish if they offered it for outright purchase without the ISP encumbrance. But I didn't have that option.

    So as one who signed up before they changed their policy to automatically bill the credit card, and as one who was assured that there would be no billing until the unit was hooked up to a phone line, I'm quite steamed.

    Tell me - would I be unjustified to contest the charges if NPLI charged $22 per month for a year, even after a request to cancel service? How about if they retroactively implemented a $250 "early disconnect" policy? After all, your point of view seems to be that they're allowed to retroactively charge us something to make up for their losses on the loss-leader units sold to geeks, so how much do you think they've got the right to charge?

    This isn't about the money, it's about the principle. As soon as you allow a firm to retroactively change their billing policy to bill you once for $22 "because they made a mistake selling it for $99 and lost some money on the deal", you've implicitly allowed them to bill you for $220 to cover their losses. Or $2200. Or any other amount they feel like.

    Am I gonna go out and sue NPLI for being bastards about this, or call for a class-action suit? No. The only beneficiary would be the lawyers. Am I gonna stop recommending i-openers to friends and relations for their intended purchase? Yeah, for a while, at least until I cool off. Am I gonna call them and insist that they remove these charges and live up to the terms of the original agreement they made at the time I purchased my unit? You betcha.

    It's tit-for-tat. Give me a cool unit for $99, get recommendations to your real customers. Charge my credit card without authorization, lose those recommendations and have your charges contested.

    Will my contesting of the charges "win" or "lose"? I dunno, but I'm willing to trust my bank's judgement either way, particularly since there'll be hundreds of fellow geeks contesting the same charges. (I wonder if Mastercard's abuse department is ready for the /. effect?)

    But tit-for-tat isn't about bearing grudges. Offer me a unit for roughly your breakeven cost, unencumbered by your ISP (umm, and gimme back the money you charged without authorization my credit card that was gonna buy pizza for an all-night hack session to get Linux on the SanDisk :), get recommendations to geek friends for the Developer's Model as well as non-geek friends for the regular model. I'll probably even buy another one - at the developer's price - and send my modded one to some geek friends outside the States.

    'Course, I'll buy it for cash at Circuit City now, instead of via credit card directly from them. Fool me once, shame on you, fool me twice, shame on me :-)

  • Tackhead cools off a bit [slashdot.org] and posts something a little more intelligent.

    Moderators, please drop my original post #133 back to "2". If you're gonna upmod me, please do it for something a little more worthy of the points. My apologies for having had you waste the modpoints.

  • > What really gets to me personally, is there changing policy on people who have allready made a purchase.

    Agreed.

    I ordered a unit on or about the same day as the Slashdot complainant did, and checked my records based on this article.

    I, too, ordered by voice and was assured that there would be no billing until the unit called home.

    I too, now have charges on my credit card which I did not authorize.

    NPLI, I've gone to bat for you on the bulletin boards on the grounds that the only "switch" you've pulled on your customers without notifying them has been to upgrade the CPU from 180 MHz to 200 MHz.

    You've just crossed that line. I will no longer recommend your service to my computerphobic relatives. I will contest these charges.

  • What Netpliance is doing is credit card fraud. They have charged for services that where not ordered -- his receipt said $99 + s/h. Second, they are charging for services prior to providing them -- they haven't shipped the i-Opener yet, but they are already charging for ISP service. (They quote 7-10 days for shipping time, so they should know better than to start billing ISP services two days after taking the order.)

    Call your credit card company. And then call your local BBB if the credit card company isn't going to do it (or do it anyway.) Your receipt clearly shows what you are to be charged.

    Moral of the story: Be careful to whom you give your credit card information.
  • I personally would love a device that I can hook to my home network. I've been working on getting some new 'puters and setting things up, and it's been a pain in the ass, especially dealing with used computer stores that won't take things back after 24 hrs after you buy it if at all. One 486 I got wouldn't work with any ethernet card I put in the ISA slot, and a P90 I got had controller failures and memory failures when you power it on. If I could buy a new box that is guaranteed to work, maybe have linux preinstalled even, i'd be a happy camper.

    As it stands now, I've bought a box (on clearance bc it was a return) that hooks computers to tvs for $125. Wireless keyboard for $99. P90 (1 of the 3 boxes that actually worked) for $80. (it came with an ethernet card) - has a 600 mb hard drive, got it hooked up to the tv in the living room and the stereo, and it being networked to my computer w/ a 30 gig hd, I can play all my mp3's, browse the internet, etc, and lay on the couch. I want something like that off the shelf rather than having to piece parts together.
  • You probably bought the box with American Express, Visa, or Mastercard, and all of them have straightforward procedures for disputing credit card charges. If you ordered the box when the service was not mandatory, and didn't order the service, and they charged you anyway, RTFP (Read The Fine Print) on your credit card bill and follow the process. Be sure to indicate that the service was NOT mandatory at the time you ordered the box, though the company may have changed processes since then. Retail companies do NOT like having credit card companies bounce large numbers of charges on them - it costs them money, which is the opposite of what they're trying to accomplish by selling things - and credit card companies can be relatively grouchy to retailers who get lots of complaints against them.


    N.B. Do wait for your hardware to arrive before complaining about the billing :-)

  • I've heard plenty of stories about Circuit City being the 10th level of hell. For example, I heard somewhere (was it here?) about a shopper looking for a stereo. He was plugging different components into each other to find a combination he liked, when a clerk comes up to him and says 'Please don't play with the merchandise' in a very condescending tone. Angry, the customer leaves the store and goes to Best Buy where he purchases a $1000+ stereo. He then returns to C.C., asks to see the clerk's manager, shows them both the receipt, and leaves.

    And then there's the myth of someone buying an expensive keyboard, getting home with it, and finding nothing but planks of wood in the box. And I bet he was still charged the restocking fee. :P

  • Isn't this bundling? Is this one of the very things for which M$ is defending itself? Isn't this the same sort of practice that got folks free machines when M$ and others were forced to cancel obligatory online services? How is NetPliance getting away with the same practice that others have not?
  • Perhaps they should consider aiming at home-networkers looking for inexpensive flat-panel terminals as well.

    But I thought that the reason that they are selling the service immediately is that people were modding them so they didn't have to buy the service. The reason they can't sell $99 flatpanel systems is that they would go down the tubes. These things must not cost only $99 to produce because, if they did, they wouldn't care if people were installing Linux on them because Netpliance would still be gaining a profit. If everyone is buying these i-openers and installing Linux on them, Netpliance is not getting any profit

    That's why they can't target home-networkers who are looking for a cheap flatpanel system.

    Welcome to Slashdot. Please do not feed the trolls.
  • Paying for services by credit or debit card can be very dangerous. By doing so you give the service provider permission to make varying monthly (or whatever) charges to your account. According to international banking regulations you CANNOT get your bank or card company to cancel the payments without great difficulty - there is an assumption of permission when the service provider requests payment. The problem is almost insurmountable when the service provider is in an other country. The rules are not likely to change any time soon. Beware!
  • Let us also remember that Netpliance likely doesn't make a dime on their hardware. Do we really think that if LCDs were this cheap that someone else wouldn't have thought of this sooner? I imagine netpliance is making its money on the service (similar to the `buy a 3 year subcription to MSN and save $400 dollars on your new puter' deals). This is a valid business model and they shouldn't be criticized for it on its face.

    My objection is not with the business model. If that is in fact their business model and they expect people to live up to it, they must express
    that in a contract with appropriate cancellation penalties and not express it in a closed box that happens to be not so closed once someone peeks inside. My cell phone contract lasts for a year and has a hefty cancellation fee. I know what my
    end of the bargain is because it's down in writing.

    I declare my right to hack any piece of hardware and software that I buy.

    Anomalous: inconsistent with or deviating from what is usual, normal, or expected
  • Is it actually a fact that Netpliance sells the machines at a loss? Some co-workers and I tried to estimate the cost of manufacture of one of these things (I have one sitting on my desk at work) and the number we came up with was about $85 or less. Now obviously this wouldn't be a great margin, but it's not a loss either. It would be nice to see some actual per-component cost numbers as well as manufacturing costs.
  • (Has anyone confirmed that you can, in fact, get them there without the service being activated?)

    A buddy of mine bought his at CC right around the time the first article came out and it just got delivered a little over a week ago.&nbsp No muss, no fuss, no activation fee. &nbsp If I'm not mistaken, i-openers bought from CC would need to be "manually" activated, ie., you call or dial in to sign up.

  • We knew we would be charged for one month of service. All we had to do was to cancel as soon as we received the box and there would be no more charges thereafter. It's still a good deal.
  • Looks like netpliance is learning to two step like the big dogs....

    This is twice now that they have said one thing and done another, in as many weeks...

    Really though, both sides of this issue need to look at the facts.

    First: We all know their business model. No, they aren't making money on the hardware, they could, but that isn't what they want. In my opinion, their business model is a little sneaky, but that is neither here nor there. But, it isn't their business model that was being complained about. It was the fact that Netpliance billed the guy for a service he did not agree to. It sounded to me like his brother would be getting service himself, on his own credit card, so in no way was this guy working against their business model. Further, if you don't want the service, don't buy the box. Simple as that.

    Second: Although they aren't making money on the hardware, don't think for a second that they are losing hundreds of dollars. The type of display (size and resolution) is the same type of display they have been putting on laptops for at least 3 years. The rest of the hardware is not top quality stuff either. By my estimation (and I am not an expert, but this is the way I see it) the box isn't costing them more than $250 - $300, and that may be a little high. As has been stated, many of the hackers here would be willing to pay at least that much for one of these.

    Third: Netpliance and their supporters need to realize that their business model is a little shaky. With DSL and cable becoming more prevalent, these types of systems will lose their novelty quickly when the endusers find that without modification, they are stuck at 56 k/s. Hell, for $30 - $40 a month these people could browse at more than twice the speed. I don't imagine that even those not technologically inclined will use the service for more than one year. That is only about $250, so they won't be making that much money on the service.

    Bottom line (sorry so long in coming), sure, netpliance has the right to make money. But they are looking at the internet service like it is a cash cow, and it isn't. They could make more just selling the hardware for a little above cost. Perhaps it is time for a little modification to their business model.

  • Yes, that's true, Netappliance is selling them at a loss (as far as I know), with the intention of making it up in ISP charges. And so it is perfectly reasonable for them to realize that people can take advantage of this, and change their plan and product to be less easily exploitable.

    -however-

    That still isn't an excuse for false or misleading advertisement. And before we get TOO sympathetic to netappliance, they DID make a mistake, by not realizing what would happen. Companies that make mistakes often take losses. That's the way capitolism works. I don't think anyone can really get too upset that they realized their mistakes and took steps to correct it. The point that makes most people angry is how they chose to fix their mistake: By changing their policy without telling people, so that people did not know what they were buying at the time. So what they did is not only immoral, but (hopefully, since IANAL) illegal as well. And for that, yes, they did something wrong. And so I have no problem with getting angry at them for that.
  • He purchased an Internet appliance that comes with its own connectivity arrangement. He knew when he bought it that he was buying an ISP subscription. He's just bitter because the ISP subscription used to begin the moment the device was connected and dialed up. He was counting on the fact that since he was going to scrap the OS first, that he wouldn't even have to begin the ISP service and wouldn't have to pay the charges.

    Actually, from what the article says, he bought it as a gift for his brother and asked the i-opener salesperson if he could buy it on his card, then have his brother sign up for the service on his own.

    "I called netpliance to verify that I could order the unit on my card, without service, and that my brother could subsequently sign up for services on his card. they said sure, no problem."

    The problem here is that, if i-opener was going to charge his card for the service, they should have told him. In fact, by law, they HAD to tell him. But they told him that they were not going to. Then they did. He is completely within his rights, and the law, to contest those charges. It's the same thing as if he bought it as a store, saw the receipt for $100 and then discovered on his monthly statement that they charged him more. It is not allowed.
  • he only agreed to pay for the i-opener device.

    This is the same problem as the whole Windows Refund Day thing. People are convinced that they are buying a collection of different products, with the expectation that they can break it down any way they want and always have the option of returning/cancelling a portion while keeping the balance.

    The "product" here is the I-opener appliance, which, according to product literature, descriptions and the card sitting in front of the thing, includes a $22/month ISP account.

    He did NOT buy the device alone. He bought the whole package, which included ISP service, not a standalone device.

    He called up Netpliance and asked them if he could post-pone activating his account (waiting to give it to his dad, hack it up, whatever). They said that at the present time, accounts are activated when the unit is first connected to a phone line and used. They changed that policy without warning (without needing a warning), and now the guy's mad because they did what they said they were going to do and charged him service.

    If the salesperson came out and explicitely told him that they would make a special effort not to begin service on the account, then Netpliance has clearly gone back on that word, and he has grounds to contest the charges, but this is NOT a matter of Netpliance being an evil company and "slamming" customers without their knowledge.
  • From what I've heard, they haven't made any real changes to the box, either. In essence, all the noise they made about modifying the system to prevent hacks was window dressing to mollify the stockholders.

    If this is what you've heard, then you need to select a more authoritative source.

    NOBODY has received a unit produced after their "line of no modification." Everything that's been said up until this point about what changes have been made to keep us from hacking these things has been WILD SPECULATION.

    Check out the mailing list set aside for this discussion at http://snoopy.net/mailman/listinfo/iopen er [snoopy.net].
  • He purchased an Internet appliance that comes with its own connectivity arrangement. He knew when he bought it that he was buying an ISP subscription. He's just bitter because the ISP subscription used to begin the moment the device was connected and dialed up. He was counting on the fact that since he was going to scrap the OS first, that he wouldn't even have to begin the ISP service and wouldn't have to pay the charges.

    It's silly to make such a fuss over this now. Just cancel the subscription for God's sake. Stop whining because the company carried through with the product's information and started him up on an ISP service that he wasn't going to use. How are they supposed to know that he wasn't buying this for use as they'd intended?
  • So if you buy something, you should not only look at what you're buying but also at what the seller thinks you should use it for?

    No, you should look at the product description and be aware of what you're getting when you order it (from the sales brochure):

    What you get with the i-opener:
    • A simple, fun-to-use Internet appliance for only $99
    • i-opener's Internet service, browser and email ready out of the box
    • One email account set-up for you
    • A monthly fee of $21.95/month* ...
    To my knowledge, this information has never changed, and I was aware of all of this when I stopped into Circuit City to pick up my two i-openers THREE WEEKS ago (long before they made this policy announcement). I was PERFECTLY aware that I was purchasing a device that had an attached ISP service, and so was this guy. He was simply counting on the fact that reports indicating Netpliance wouldn't start billing until you actually connected the device were indeed accurate. So they changed their policy. I fail to see why this needs to be such a huge blown-up legal matter.
  • The problem here is that, if i-opener was going to charge his card for the service, they should have told him.

    The problem is that they (allegedly) failed to honor the special agreement that he had been allowed by the sales person. The product purchase includes ISP service. If he explicitely asked that the service not be started, and the sales person agreed to honor that, then I agree he has a right to complain, but IMO this is more of a poor business practice than any illegal "slamming".

    I mean think about it, how many people are affected by this? How many people explicitely asked that service not be started when they ordered their i-opener (which, allow me to repeat, according to all the sales information I've seen, INCLUDES ISP SERVICE by its very nature), were granted that, and did not have these arrangements honored?

    I'm betting it's just a handful of people, and while I do agree that one is too many, I hardly think this should be the topic of a front-page Slashdot article.
  • The notice has been up on their web page for at least a week (two?) that orders would be automatically billed for service. It sounds like this guy placed the order before such a notice was in place, but he is *not* necessarily a victim here of an evil company.

    You are purchasing an Internet appliance, with the expectation that you will plug it in and be connected to a monthly Internet service (with its own fees). THIS IS WHAT YOU BOUGHT. The date the actual monthly ISP service starts shouldn't really matter.

    The bottom line is that this guy bought an Internet appliance with the intention of using it in ways the manufacturer didn't intend. It's not their fault they assumed he was a normal customer. If you're going to purchase things and use them in ways the manufacturer didn't intend, you have to expect that there are going to be things attached along with that purchase that you don't necessarily need. Suck it up and cancel the service.

    I think Netpliance has been perfectly justified in moving into an automatic billing scheme. It's one thing to take advantage of a loss-leading price like this, and I myself feel a little guilty for participating, but people like this, those that are really TRYING to give Netpliance the shaft here really annoy me.
  • First off:
    • being a monopoly isnt illegal.
    • MS business practices, taken alone, are not illegal
    Being a monopoly and being a bastard is illegal. Or, more correctly, using you power as a monopoly is illegal.

    Netpliance is by no means a monopoly, and what there doing is no worse (which is to say, not at all bad) that cell phone carriers selling phones at a loss.

  • Re:I have a question... (Score:3)

    by Graymalkin ( 13732 ) on Monday March 27, 2000 @02:21PM (#1167133)
    This isn't bundling. Netpliance manufactuers the hardware and provides the internet service all as part of the same product. They are not letting someone else sell their product while they provide the OS or something with it. The i-Opener and online service are all part of the deal, your cable company doesn't sell you cable boxes without them providing cable to your house.

  • Re:netpliance business model (Score:3)

    by seebs ( 15766 ) on Monday March 27, 2000 @01:56PM (#1167134) Homepage
    "10% profit margin" might well have the boxes selling for $200 or $300, or more...

    But yeah, I'd probably pay close to $400 for a box like this, with no real regrets.

    I disapprove of their near bait-and-switch tactics, but not much more than I disapprove of all the people trying to find ways to shaft them. We know what their business model is, we know they're losing money on hardware sales, and we want them to like us, so the best thing we can do is screw them as hard as possible. Uh-huh.

  • Linux Terminal Server Project - diskless iopener (Score:3)

    by kjj ( 32549 ) on Monday March 27, 2000 @01:52PM (#1167135)
    Here is another I-Opener hack. You can now boot linux from the flash memory instead of disk. The problem is you still need a disk and cable to make the initial transfer. Check it out here [ltsp.org].
  • We knew we would be charged for one month of service. All we had to do was to cancel as soon as we received the box and there would be no more charges thereafter. It's still a good deal.
    It's clearly stated in the article, and was also my experience, that originally (i.e. the first two or three days after the original story hit slashdot) you didn't have to pay the first month's service. Now, it's true that this is only $22, not really a big deal -- but it's still fraudulent on their part. *MY* order form said $140, *NOT* $162, and so did this fellow's. It was only AFTER he (and I) had already purchased the IO that the first month of service was required.

    As he stated in the article, "3/11 I called netpliance to verify that I could order the unit on my card, without service, and that my brother could subsequently sign up for services on his card. they said sure, no problem."

  • Hey this was an idea that every geek jumped on ... $100 for a computer ... under $100 more to throw a harddrive in ... around $30 for Lan and Mouse ... and for around say $200 you had a working computer with monitor that was actually really small.

    Whoa ... wait this isn't possible ... how in the world could netpliance do this? Ahhh yes the Internet service ... take a $5 a month internet service and charge $20 for it ... within a year the I-Openers would reap in millions of dollars ... until some geek decided he wanted to play inside his. If they were going to have such a cow why didn't they just lease the boxes? ...

    As for canceling the Service or getting a free service like NetZero [netzero.com], FreeI [freeinet.com], TheSimpsons [thesimpsons.com], Lycos [lycos.com], Altavista [altavista.com], or BlueLight [bluelight.com] you are forced into this horrid agreement. Not to mention what if you own a cable modem and want to just network the box into the home lan. Can't do that.

    I actually can see the article in maximum PC's "Watchdog" right now ... Netpliance will soon be the enemy that once stood in the place of WebTv ... BTW why has no one hacked one of those yet?

  • Actually, you don't even need the disk at all (Score:3)

    by Fas Attarac ( 163334 ) on Monday March 27, 2000 @02:14PM (#1167138)
    All you need to do is dial the unit up using its native QNX (either to the Netpliance-provided ISP or, if you've wriggled your way into the internals, by using pppd itself with your own ISP), FTP a compressed boot/root filesystem image, and write that image to the raw SanDisk device.

    Poof. Instant Linux installation. It's been done with BSD [netbsd.org] and there are already Linux "distros" (images) available to do the same. Check out their web site [i-opener-linux.net] and the FAQ [fastolfe.net].

  • Wait a second here.. (Score:4)

    by BigZaphod ( 12942 ) on Monday March 27, 2000 @02:21PM (#1167139) Homepage
    Isn't it the Linux crowd that generally all screams "Make money on the service!"?

    Here we have a small company trying to do just that and now they get abused on here because of it. That hardware is dirt cheap and they can't be making anything on it (most likely they are losing money). This is exactly what most of you wanted to see--get free hardware, pay for the services. This is how RedHat makes...er..tries to make money, right? Give the OS away and charge for the service and tech support.

    Netpliance doesn't seem any different to me.

    All that being said, however, I agree that promising one thing at the time of sale and then charging extra later is WAY out of line. It was their fault and they should pay for that obvious mistake. But starting now no one here should have a complaint against Netpliance's business model of selling the service and "giving" away the actual product.

  • what the... (Score:4)

    by rwade ( 131726 ) on Monday March 27, 2000 @01:34PM (#1167140)
    Whoa! wait a second...a company...trying to make money...by shafting customers...what the hell?

  • Re:Give us a break! (Score:4)

    by Fas Attarac ( 163334 ) on Monday March 27, 2000 @05:14PM (#1167141)
    So you work there, or have some of their stock. Big Deal.

    No, I don't.

    I'm actually one of the more spoken people on the i-openers mailing list, and the guy that put together the FAQ for hacking the thing up. I have two of these devices in my home, used as X terminals and one will eventually be an MP3 player in my living room.

    http://fastolfe.net/misc/i-opener-faq.html

    I am the 'Fastolfe' in 'Fastolfe.Net'.

    I think I'm probably one of the most qualified people in this article to comment on what's going on here, since I've been dealing with Netpliance and the i-opener "hacking" community since the beginning.

    I have little problem with people wanting to take advantage of the low price to use these things in other ways, PROVIDED they do not attempt to give Netpliance THE SHAFT in the process. If you actually read the mailing list, you'll find that most of us are quite sensitive to Netpliance's predicament, and we ARE quite aware that we are really taking advantage of them here, and I'm quite sick of Linux Slashdot kiddies who think they can force Netpliance (or any other "evil" corporation of the week) to take it up the ass for them. Things like this make me sick.

  • It's a question of power (Score:5)

    by copito ( 1846 ) on Monday March 27, 2000 @02:10PM (#1167142)
    Netpliance has all of the power in designing the contract, product, and terms of service. The consumer only has a choice of buying the product or not (they also have varying degrees of consumer protection rights depending on their state). The consumer should not have to question whether or not the company they are buying the product from is making a profit. They should only have to question whether the product and associated terms of service and future fees are worth it. Netpliance has the lawyers, accountants, and marketeers, let them set a good price for their service. Otherwise, where does it stop. Should a consumer not buy products from a money losing e-business? Should an ISP customer not use expensive POPs (such as UUNet) because the cost to the ISP exceeds $19.95 a month for normal users. Of course not. Thats the beauty of market capitalism, a great deal of information and business calculation that the consumer does not have to care anything about is embodied in the price.

    I have no problem with Netpliance realizing that they made a mistake and changing their offer, but I also have no problem with customers taking advantage of a good deal. Given the imbalance of power, I also think that Netpliance should at least honor the deal that was advertised at the time of purchase.
    --

  • Aha, the fog begins to clear... (Score:5)

    by Dirt Road ( 7096 ) on Monday March 27, 2000 @01:37PM (#1167143)
    For ones bought at Circuit City, currently the only i-opener's retail outlet, he said that to initiate service, "you do have to call...."

    I was wondering how they would be able to nail someone who walked into Circuit City, paid cash for an I-Opener, and commenced to hack.

    They can't.
    Yessssssss!

    From what I've heard, they haven't made any real changes to the box, either. In essence, all the noise they made about modifying the system to prevent hacks was window dressing to mollify the stockholders.

  • HEY! (Score:5)

    by Signal 11 ( 7608 ) on Monday March 27, 2000 @02:48PM (#1167144)
    Read the fine print. They have not modified the boxes. You can still buy them at Circuit City for $99.

    What's the big deal? Some guy got the shaft. This is news? Yes, netpliance dropped the ball, but we have the court system to deal with this. This just shows that this poor sap doesn't know how the financial system works. did you know that all I need to withdraw from your checking account is the first two sets of numbers on the bottom left of your check? No signature. Not even an amount. Just the number, and I can electronically suck you dry.

    Credit cards have similar non-safeguards. If you think you've been ripped off, you need to contact your credit card person RIGHT NOW (within 24 hours, usually) and your liability is limited. You, and them, can then jointly go after the illegal debit. This kind of crap is dealt with predictably and swiftly: if you're right, the legal system will drop kick them down the stairs and then turn around and cut you a check (*cough*).

    Here's some other agencies that'll be interested in hearing from you:

    • Consumer Affairs (ralph nader!)
    • Better Business Bureau
    • Your local State Attorney General
    • Most states have a 'consumer fraud' department. They'd like to hear from you too.
    • Your local small claims court would like a $20 deposit to initiate action against them. Let them FLY down to defend themselves. You bought it from your state, they need to show up there.

    In short, slashdot is not the forum to discuss Shafting 101 - yeah, it happens. But it's caveat emptor out there, I'm sorry to say. Call this an inexpensive lesson - it could have been worse. You could have signed a mortgage....

  • netpliance business model (Score:5)

    by Hollins ( 83264 ) on Monday March 27, 2000 @01:31PM (#1167145) Homepage
    Certainly Netpliance should be taken to task if it pulled a bait and switch as indicated in the article.

    However, a lot of anger seems to have been building toward them around /. for trying to force customers to use its ISP when buying its computer. The fact is, Netpliance sells the computers at a loss and has to use the ISP service to turn a profit. I would love to see them sell these nifty machines at a higher price (I figure a 10% profit margin is reasonable) and without any internet service tacked on, but until their production ramps up, I don't expect to see it, if ever.

  • Re:netpliance business model (Score:5)

    by Nastard ( 124180 ) on Monday March 27, 2000 @01:53PM (#1167146)
    This isn't really anything new. Until recently I worked for a major ISP that provides cable modems @ your home. We had two types of markets - "buy" markets and "lease" markets. In a buy market (not many), you pay for the modem and we provide cheaper service. In a lease market, we provide the modem and the service for an extra 5 bucks a month. The modems are about $250 a pop for the company, so this is obviously a loss (especially considering the free install/1st month promos). So to make up for that loss, we didn't maintain our network and screwed our customers.

    We did explain that we would be charging to the card, but getting any kind of credit back was a pain for everyone. The billing dept. was so f-ed up that a simple chargeback could take 60 - 90 days. The process was so confusing that half of the employees didn't truely understand.

    I can recall one occasion where a customer would contact me personally every month or so to let me know that credits *I* personally walked over to billing, hadn't shown up on her card yet. At the time of my leaving, the issue still had not been resolved.

    The service was even worse. 90% of issues would be sent to "level 2" (expect to be on hold for at least an hour). The other 10% would end in a truck sent to the house, which usually resulted in a "line tech" that rarely if ever showed up. To compound the issue, we had no contact whatsoever with these techs. If your service goes out, good luck getting it fixed, and good luck getting credit for it. The best part was, we were not allowed to apply credits until AFTER the service was restored.

    This sounds like a diatribe, but it is relevant. Screwing customers of a service for as much as you legally can, while providing as little help as you can, while using their own credit cards to put them into a proverbial headlock, is nothing new.

    My advice: always ask for statement billing whenever you can.

  • Re:Wait a second here.. (Score:5)

    by The Reverend ( 131365 ) on Monday March 27, 2000 @02:50PM (#1167147) Homepage
    There is one, and only one, issue here:

    He was told they would not charge his card for the service and then he was charged. Comments about anything else are obfuscation.

  • Where netpliance is coming from (Score:5)

    by fridgepimp ( 136338 ) on Monday March 27, 2000 @01:38PM (#1167148) Homepage
    Lets get a couple of things straight before we go off wailing on netpliance on all fronts.

    First of all, I will say that charging someone for something they didn't order or authorize is patently wrong and in most countries/states considered a form of fraud. I agree that this is how it should be.

    Let us also remember that Netpliance likely doesn't make a dime on their hardware. Do we really think that if LCDs were this cheap that someone else wouldn't have thought of this sooner? I imagine netpliance is making its money on the service (similar to the `buy a 3 year subcription to MSN and save $400 dollars on your new puter' deals). This is a valid business model and they shouldn't be criticized for it on its face.

    Lets be careful which aspects of business we criticize. And I should like to point out, even $199.00 or $249.00 wouldn't be such a bad deal for this baby w/o service so just because there isn't a company dedicated to losing money so you can have neat stuff isnt a Bad Thing(tm).

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