I have been an AT&T cellphone customer since the Cingular days. More than ten years of cell use, and a full time data user since the day iPhone 1.0 dropped at the local AT&T store. I was third in line to get my handset. Over the last few years I have gone from upgrading to each new phone, to every other phone. The feature upgrades simply don’t justify the cost of buying a new phone every 12 months. So, I am finally upgrading from an iPhone 4S to an iPhone 5S, which should arrive in the next week. (I would have had it sooner, but I got a gold handset)

Two days ago I received my monthly bill from AT&T and noticed there was an extra $36.00 charge on the bill. A “One time upgrade fee”. So being the diligent customer I called them to talk about what it was, why I was charged it, and what they could do about it. You see I don’t want to drop AT&T, since I am grandfathered in with unlimited data as an original iPhone 1 buyer. The conversation below is a synopsis of what happened with AT&T customer service, and some info I got from a former AT&T rep that I have known for years. I am not going to use anyones names, and I want to point out the AT&T customer service reps were polite, went by the book, and did what they have been told to do. None the less, if AT&T continues to charge upgrade fees, I’ll be switching in 18 to 24 months.

The Conversation.

Hi, this is AT&T rep one, how can I help you?

Hi Rep one, I got my phone bill today and I noticed a new charge for $36.00. It says it’s upgrade fee, what is it and what can we do about it? I’ve a customer for more than ten years and you all have never charged me for upgrading handsets before.

Rep One: AT&T now has a policy where we charge a handset upgrade fee. In addition on next months bill you’ll probably see a $6.00 activation fee for your new phone as well.

Me: Hmmmm, is there anything we can do about this? I hate to say it, but if you are going to charge me to upgrade my phone, I’m probably going to dump you.

Rep One: Well there is nothing I can do. I don’t have authorization to waive any fees.

Me: Is there someone I can talk to that can?

Rep One: Let me put you on hold and talk to my manager. He might be able to do something.

I said OK and was on hold for about 5 minutes.

Rep One: My manager said there is nothing we can do. We can’t waive any fees.

Me: Can I talk to your manager?

Rep One: Why? He is going to tell you what I just told you he said.

Me: Rep One I know your hands are tied and you are just doing your job, but I really want to speak to someone a level above you that might be able to help me out here. So I’d like to speak with your boss, and see if he can help me or point me to someone who can.

Rep One: I’m going to put you on hold and transfer you to him.

Another five minutes of holding listening to bad music and ads. Actually I’m not sure about the ads, I kind of tuned it all out after a while.

Rep Two: Hi this is ______ How can I help you?

Me: Hi Rep Two, I’m sure rep one explained the situation to you. I have been a long time customer, and I don’t want to pay $36.00 to upgrade my phone. Especially when no one can tell me why I am being charged and what the money is for. I also don’t want to pay $6.00 just for turning the new phone on when I get it. So What can AT&T do to waive these fees since they seem to be financial padding rather than actual fees for something like line maintenance or a tax.

Rep Two: There is nothing I can do in this office. My hands are tied. AT&T has been charging this for over a year now. If you didn’t pay it in the past, it is possible that the rep at the store where you bought your last phone waived the fees. By the way all carriers are charging these fees now, so you should probably get used to it. (Yes he actually said that)

Me: Are you telling me an Apple store employee, where I bought my last phone has the authority to waive AT&T fees?

Rep Two: Um, maybe.

Me: Rep Two I know you are doing your job and following AT&T policy, but you are going to lose me over $42.00. You are going to let a customer slip away. A customer that will be locked into a 24 month contract at about $100.00 a month. If you do the math AT&T is going to make a hell of a lot of mooney off of me in the next 24 months. Is it worth letting me go for 42 bucks? Are you sure there is no one I can talk to that can help me out? There is no one that will waive these fees for me?

Rep Two: Let me put you on hold. I am going to transfer you to a different office that might be able to waive some of the fees for upgrading, but I can’t promise anything.

Me: That’s OK. Transfer me and I’ll give it a shot.

Five more minutes on hold and I am transferred to an office in Austin Texas.

Rep Three: Hi my name is ________ How can I help you?

Me: (I explain the situation to Rep Three)

Rep Three: No Problem Wade, I understand completely, and I can take care of that. Please bear with me while I pull up your account and make the adjustments. Hold for just a second.

Two minutes later.

Rep Three: Mr. Johnston, I have credited your account $42.00 and waived all of the upgrade fees for your new phone. Just to let you know, it is now AT&T policy to charge for upgrading certain handsets. The iPhone is on that list so if you upgrade next year you’ll probably see this again.

Me: Why just certain handsets?

Rep Three: I’m sorry Sir, I really don’t have an answer for that I just know what the current AT&T policy is.

Me: That’s OK Rep Three I know you are just doing your job. Thanks for your help, and thanks for getting this sorted out.

The conversation ends in typical fashion and I’m satisfied.

Now here’s the rub. Later in the week I am talking to friend of mine that was with AT&T for more than twenty years. The guy started out as a call center rep back in the day and managed to rise to a mid-senior level department manager. This is what he told me. He said that the upgrade fee is bogus. Thats right its a bullshit charge that AT&T has tacked on to your bill when you get a new phone, because according to him, “80 percent of the people just pay it and never question it. No one ever asks AT&T to waive the fees.” The upgrade really doesn’t cover much of anything. He said if I had pressed it and taken it to a level higher, I probably would have got someone on the phone that would have told me what the fee covered, but the reality is it’s probably a bogus policy AT&T has in place to make up for other fees they have been forced to drop over the last few years. It’s financial padding to cover loss to competition, emerging carriers, state and federal taxes, and other items AT&T has no control over. They are passing their loss on to the customer hoping no one will call them on it.

So here it is folks. Check your bill. If there is an item you don’t get, or you don’t like, it’s worth 30 minutes of your time on the phone to get the issue resolved.