It’s been a long time coming, this post. So much RAGE. I HATE ADAM INTERNET, and I will attempt to explain why. I have also posted this on the Whirlpool Forums.
Since I wrote the post on Whirlpool Forums, I’ve also written a letter to the TIO (Telecommunications Industry Ombudsman).
funkninja writes…
They’re contradicting themselves too.. On one hand reserving the right to increase price for a certain set of reasons..
Then using completely different reasons for the price increase in their announcement.
And am I the only one that sees a real flaw on their story?
I agree with funkninja, and here I will attempt to deliver a more in-depth explanation as to why I have hated Adam Internet for quite some time.
Firstly, let me talk about the current price hike:
Adam Internet released an announcement here: http://www.adam.com.au/pricing_announcement.php
As funkninja has already summarised, they are increasing the (contracted monthly) costs. The ‘real flaw’ that funkninja talks about isn’t explained the best it could. The announcement states:
What we didn’t expect was the very high demand for this service as actual demand has exceeded forecast by over 500%. Whilst this provides significant economy of scale, the network infrastructure that was planned to meet demand for two years, as per industry practice, has actually lasted in some cases six months.
…
The need to increase pricing has been caused by many factors but in summary, here are the main offenders:
-> High demand for our services requiring constant upgrading of our core network beyond normal industry practice.
-> The lack of regulatory intervention and a reluctance to allow innovative, cost effective broadband solutions by fair and equitable access to Telstra facilities, infrastructure and wholesale pricing.
To the best of what I can understand of this, they aimed for X customers, and they got that. At this point in time, people were being provided with (cheap) internet and Adam was profitable, and everyone is happy. Adam Internet saw the opportunity to serve an extra 4X customers (i.e. to a total of 5X customers, a 500% increase) and took it. This however means not only purchasing 4 times the existing amount of hardware, but (assuming worst case scenario) ditching the already existing hardware to avoid bottlenecks. So now they have paid in a relatively short period of time, 6/5th’s the amount of hardware than they need to have if they knew of this potential client base in November 2004. The costs of providing the first X customers has not changed at all.
The way I see this, is the burden of the implementation cost of the next 4X customers (after the first X) is being forced onto the original X customers contracts. My point is that they could easily allow for the original X customers to expire their contracts at the original price, before subjecting them to the increased price.
When I signed up for Adam Internet, I was forced to sign the ADSL Specific Terms and Conditions (not the General Terms and conditions).
The general terms and conditions are provided here:
http://www.adam.com.au/terms.php
The ADSL specific terms and conditions are provided here:
http://www.adam.com.au/adsl_ter…d_conditions.php
I read the ADSL specific terms and conditions thoroughly at the time which they wanted me to sign to enter the binding contract (and again now) and the only concern I noticed was point number 11:
You acknowledge that Adam Internet’s broadband service is provided without warranty that it is continuous or fault-free. Adam Internet is not liable for any loss or disappointment you may suffer as a result of any faults or interruptions in Adam Internet’s broadband service. Regardless of these faults or interruptions, you are responsible to maintain your monthly commitments.
Basically, this means that Adam Internet are claiming to not have to provide any internet at all, for the entire length of your contract as long as there is some way of saying that the equipment with Adam Internet is ‘faulty’. There is nothing to say that a space bar key being stuck on a main frame server is not too small to be considered as a fault. I figured this contract is therefore bogus, as there is no way in court that Adam Internet could argue for 24 months of downtime, which from my interpretation, Adam Internet are protecting themselves from this possibility. It is also of my understanding that a contract like this is considered ‘bogus’ in the legal profession (just from what I’ve learnt in studying law as part of my Bachelor of Engineering degree, correct me if I’m wrong, but please provided references if I am wrong).
Point 1 of the ADSL Specific Terms and Conditions states:
The Conditions of Service contained in this document are in additional to, and in conjunction with, the general Adam Internet Terms and Conditions located at www.adam.com.au/terms. Should there be inconsistency between the Conditions of Service mentioned herein and the general Terms and Conditions then the Conditions of Service shall be the authoritative document for the purpose of clarifying the inconsistency.
Although a link to this document was provided in the document that we were forced to sign when applying for a contract with Adam Internet, the General Terms and conditions at the time was completely different to the contract they are now displaying on the website. I distinctly remember this General Terms and Conditions contract being out of date when I read it whilst signing up last year, because it stated in the old General Terms and Conditions that it costs money to apply for email aliases, which I confirmed to be wrong with an Adam Internet worker (name with-held until I get his permission), who then arranged for the contract to be updated. This was roughly around the time of the new website launch. Unfortunately, I do not have a copy of these old conditions. To summarise: an Adam Internet worker told me that the General Terms and Conditions contract was out of date and arranged for it to be updated. The company then failed to notify customers about this updated contract.
Still, some many consider the argument in the above paragraph is weak since I don’t have proof of this original contract. However, it certainly opens the floodgates of questionability.
Either way, in the (now updated) General Terms and Conditions point 3 states:
Adam Internet Pty Ltd reserves the right to change charging, terms and conditions without notice, in order to cover any price increases such as Telstra and other service providers. You agree to indemnify and hold Adam Internet Pty Ltd, its parents, subsidiaries, affiliates, officers and employees, harmless from any claim, demand, or
damage, including reasonable solicitors fees, asserted by any third party due to or arising out of your use of or conduct on the Service.
I spoke to Scott Hicks on the phone tonight who pointed the above out to me. What I believe is contradictory is that he used this point as justification for the notification discussed above. However the notification discussed above doesn’t involve any price increases from Telstra and other service providers. The cost of the service would not actually change if Adam Internet didn’t decide to expand. It’s the cost of the EXTRA service that is relatively higher. If Adam Internet does not take on new customers, they would still be making the same profit on the old price plans. If they weren’t, they would never have ventured into ADSL2+ in the first place.
The real catch is point 9.1.5:
9. Rights of Adam Internet
9.1. Under the Terms and Conditions Adam Internet may:
9.1.1. delete any transitory data stored on Adam Internet servers for a duration exceeding 90 days;
9.1.2. Reject any email (including attachments), which exceeds 5mb (including encapsulation) and is sent to You via any of Adam Internet mail servers.
9.1.3. where it is deemed necessary in order to comply with Adam Internet’s legal obligations, Adam Internet may monitor data accessed or transmitted by You while using the Service;
9.1.4. take any steps deemed necessary to comply with Adam Internet’s legal obligations under the relevant State or Federal legislation, industry code of
practice or under direction from a relevant regulatory authority or court order;
9.1.5. increase the amount You are charged for Your Internet Service by providing You with 21 days notice;
9.1.6. vary the conditions of the Service by providing 21 days notice via newsletter.adam.com.au;
9.1.7. remove a Service by providing You with 21 days
notice.
Basically, Adam Internet reserve the right ro randomly charge us anything they could possibly desire. That’s right, they could decide to charge us $1,000 / month if they felt like it (according to the contract). Obviously this would not stand a chance in the court of law, but where is the fine line?
I propose the contract is bogus from the start, and it always has been. The fact that they are acting on this pathetic unjust contract, that doesn’t even state that they are obligated to offer 1 SECOND of internet access througout an entire contract, suggests to me that the TIO should respond well to this.
Scott Hicks on the phone tonight pointed out to me that Adam Internet has not increased prices in the last 20 years. The reason they have stayed afloat as an ISP is precisely for this reason! If an ISP does, they may go down!
The announcement ( www.adam.com.au/pricing_announcement.php ) states three options (as I see it):
1) Help to pay for the cost of Adam Internet expanding its customers so that they can in turn make ridiculous amounts more money out of us. (I for one refuse to be bullied around like this, as I have hopefully portrayed by now).
2) Go from a 20megabit/1megabit connection to a 0.25megabit/0.05megabit connection, i.e. reduce your download speed by 80 times, and therefore not get bullied into paying more money, but get ripped off all the same.
3) Pay for a $90 disconnect fee, which is the equivalent of only getting ripped off for 18 months (which for me, considering I’m more than 6 months into my 24 month contract, it’s cheaper to get ripped off with option 1) than to get ripped off with the ‘bail out’ option of option 3).
The way I see it, is they are missing options 4) and 5):
Option 4) could be: Customer can reserve the right to finish the contract on the existing price plan and THEN go up a level of price plan.
Option 5) could be: $0 disconnection fees, to change ISP’s.
Sure, Scott Hicks, you made your point that there’s ALWAYS been a $90 disconnection fee, and I’m sure if you offered a $0 disconnect fee it would open the ‘flood gates’ to other customers wanting to claim it. However as you also duly pointed out, Adam Internet has never done this before in 20 years. So why not allow a once in a 20 year exception to void this $90 disconnect fee?
I believe I’ve made my case about the recent price increase. Now, I shall make my case about why I hated Adam Internet well before this present date.
I originally tried to sign up for Adam Internet over the internet back in April/May 2005. Part way through the registration process, I was informed about being able to Rapid-Transfer over to Adam Internet ADSL2+ from Netspace, thereby avoid paying some sort of fee. The staff member of Adam Internet indicated that if I were to take advantage of this, I would have to re-do the application for the 256/56 ‘Home’ contract. We tried to do this, although it was not possible to do this without
specifying a different username. A seemingly lovely Adam Internet staff member then gave us the option of wiping out that account (some weeks later, after MANY phone calls and emails, MANY times which they said they would call us back and NEVER did, etc).
What they did not tell us is this would drop us to the bottom of the ADSL2+ waiting list for my (Norwood) exchange, which in fact dropped us out of the next migration bunch altogether. Although the details are becoming hazy to me these days (and I’ll try to update this post when I further recall them) it was the beginning of August (around 3/4 months later) that we complained about not yet being connected. They claimed we should have called several months ago, because we’ve since missed the next migration period. We have however, several emails from the company which prove they never got back to us on various matters as to the delays, and hence it is still completely Adam Internet’s fault that we had not been connected with them yet. On precisely the 5th August (by now I was keeping better records since I knew I was
being screwed around, and I felt the need to be able to keep employees ccountable) we had offically ‘re-applied’, and got connected the the 256/56 on the 12th of August, at the price of ADSL2+. We were told by Adam Internet that yes, we would still be transferred over to ADSL2+ within a couple weeks (otherwise we would never
have continued this far!!). On the 5th December 2005 we complained profusely, to the Operations Manager Carl Noutz. Carl told both my father and myself in confidence (which I’m happy to break, since I feel they’ve broken us) when we went in to see him in person to sort the mess out, that they did in fact have enough customers on queue to warrant another migration over to ADSL2+, although they wanted to keep waiting until 2006 such that the migration would be even more profitable. I was practically in tears whilst talking to Carl Noutz whilst simultaneously holding myself back from a physical outrage, as he said he understands my situation, and it certainly is undesirable. He continued to say that there would be no possible way that Adam Internet would provide compensation for accidentally stuffing up our account, since it would open the flood-gates to other customers wanting compensation as well. So exactly how many other customers are being screwed over then!?!?
In February 2006 a friend of myn applied for Adam Internet ADSL2+. Three days later he got connected. Outraged, I rang Adam Internet to discover what was going on. It was something to do with the fact that I was already on Adam Internet’s Home plan (the 256/56 plan, as recommended by Adam Internet, to avoid a 2-week
downtime back in April/May 2005). Regardless, Carl Noutz offered me a special ‘LOW FEE’ of $30 to change to ADSL2+ (conversation over the phone). This did however
mean a week down time, but at least I got onto ADSL2+. Later, the $30 ‘LOW FEE’ appeared as a $35 fee on the credit card bill.
SUMMARY (with roughly 30 phone calls, and 15 emails throughout this summary)
1) April/May 2005 applied for Adam Internet.
2) Discover there would be a potential two week downtime, and followed the advice of Adam Internet staff to avoid this. They stuffed up, and we got nowhere.
3) Mid August 2005 get transferred to 256/56
4) February 2006 get transferred to ADSL2+ for a $35 fee, and an entire week downtime. (That was the best compensation they could offer!)
5) Two weeks after finally getting onto Adam Internet ADSL2+, the price plan increases by 10%.
SUMMARY OF THE SUMMARY
If it wasn’t for the mis-information of Adam Internet staff, we would have paid a single $90 fee in May 2005 and been on ADSL2+ ever since then, instead we still had the downtime and paid $35 instead of $90, a small sacrifice for being stuck on 256/56 for 6 months at the ADSL2+ price, as well as having to wait for 3 months to get connected at all. Two weeks after finally getting onto Adam Internet ADSL2+, the price plan increases by 10%.