Pacific Bell: a system update or a rate hike?

On January 12, 1999, Pacific Bell sent a letter to some of its customers informing them of a change in its digital PCS (cell phone) rates. The letter started as follows:

Dear ... ...

"We would first like to thank you for your continued business. It is greatly appreciated. Our goal is to continue providing you with the best digital PCS service.

Unfortunately, our newly updated billing system will no longer support your current rate plan with 200 included Call Home minutes.

As of February 19, 1999, we will automatically convert your rate plan to the Loyal Starter plan. The number of free minutes that you have (200) remains the same. But these minutes can now be used to call anyone (not just your home phone) from anywhere within our California and Nevada network during weekends only. Now that's a change for the better. Please refer to the chart below for more details."

The letter went on to explain the new rates. The customer's previous plan (the Starter Plan) had allowed use of 200 free minutes per month for calling home any day of the week. With the elimination of the Starter Plan, customers were being switched to the Loyal Starter Plan, under which the 200 minutes would apply only on the weekends, but could be used anywhere within the Pacific Bell network in California and Nevada.

Questions:

1. The second paragraph in the letter mentions a "newly updated billing system." Without doing any research, use the WCA framework to summarize how you believe that system operates.

2. When people tell customers about newly updated systems they usually imply that the customer is receiving a benefit. Explain why you do or do not believe all customers will benefit from the change.

3. Explain whether you believe this situation is most honestly presented in terms of a "newly updated billing system."

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