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What You didn’t know About AT&T iPad 3G Data Breach!

The news of investigation by the Federal Bureau of Investigation on the recent data breach on the new iPad with 3G connection by AT&T has been released. The release of this information has taken the world by storm because of the implications of this news. The news was confirmed to the Wall Street Journal on Thursday by the FBI. However, according to FBI, the case is still in its primary state. This information that the case is in the primary stages of investigation gives the company enough time to think of an adequate response.

Hacking as a cause of the security breach

AT&T hold the exclusive right for the 3G connections in the iPad, like all other products by Apple that needs a connection for internet service. A group of black hat hackers, calling themselves “Goatse Security” obtained the list of email addresses of 3G subscribers of iPad on last Wednesday. They took over more than 114,000 email addresses and iPad ICC-IDs.  This they did when they hacked the website of AT&T.

How they hacked the system

After entering the serial number of the SIM card into the website, they were automatically able to generate a new email address for each user. The hackers used script language to pull out the email addresses based on the possible serial numbers; and that gave the whole list of the email IDs.

Whose information was hacked?

No other information except the email addresses were gained and AT&T already shut down the service. They mailed to each customer stating their apology for the incident. Some of these customers hold important position in the government and military as well as several officials of NASA, FAA and FCC. There are even some CEOs from large scale multinational organizations. This has brought a whole new meaning to the situation. If the company had lost some of the information of some common people at a random, then it would not have caused such a big furore, but since many of the people who lost their important personal details are high profile people, it is to be investigated to see if there is some sinister plan like a terrorist organization trying to get important information.

FBI handling the case

Any breach of security is a serious crime and when the national security is involved because of the high profile nature of the crime, there needed to be prompt action that was seen to be a deterrent to further attacks. Due to the severity of the crime, the FBI took over the case. According to Katherine Schweit, the spokesperson of FBI, the agency was always aware of these possible intrusions that could occur through the computer and had opened an investigation as soon as there was some inkling of doubt about the actual intrusion. She did not give any details on the possible suspects.

However, it is clear that Goatse Security is the first suspect and FBI will take a closer look on their recent activities as well as keep an eye on the present actions so that they are under their watchful eyes.

AT&T’s announces Early Termination Fee

In what is termed as an “open letter to our valued customers”, AT&T announced that consumers willing to terminate their connection before the set date in the contract will be liable to pay a hefty sum of $325 as an early termination fees (ETF). Adding further onto its point, AT&T has decided to divide the ETFs it charges on the cheaper or subsidized phones. For consumers dealing with basic, quick messaging phones, the ETF would be $150, even as $4 gets reduced for every month of the contract. For those consumers requiring Smartphone, netbooks or other high-end devices, the cost of ETF would be $325, with a reduction of $10 every month.

AT&T defends its exorbitant ETFs by providing a simple argument: they are offering the consumers with wireless handsets for subsidized rates which are much lower than the market price! The subsidized handsets come with a two-year service contract with AT&T. However, the ETFs being charged are supposedly to help AT&T recover what they invest in providing handsets at subsidized rates. Nevertheless, what has caught the eye of the Federal Communications Commission (FCC) is that while the ETFs are high, it is still quite expensive to forgo the contract, even towards its end. If a consumer bound by 24 month contract forgoes it in the 23rd month, a basic phone user still owes the company $58. For those using Smartphone and other more sophisticated devices, the price goes as high as $95.

Industry examiners are now coming to the conclusion that AT&T has followed the same ETF pattern as brought up by another big player, Verizon. Verizon too recently increased the ETF against a Smartphone up to $350, ensuring that the consumer ends up owing a lot to the company at the time of canceling the contract. However, the examiners are now raising questions addressed to companies like AT&T and Verizon. According to them, if the entire point of charging ETFs is to cover up for the huge discounts offered by the companies on the handsets, shouldn’t it be prorated properly? After all, if the ETF is prorated equally for 24 months, the cost towards the end of the contract should be zero.

Another question coming into the light is that if the entire point of ETF is to recover the discounts offered on handsets, ETFs should not be applicable to consumers who opt to pay the full amount for their handsets. On this the company is clear and ascertains the fact that for consumers not entering into any agreement or term contract, ETFs stand nil and void. However, this remains the only difference. Subsidized handsets or not, all consumers are asked to pay the same fees for the services they avail. There is absolutely no difference in tariff plans for those opting for “no commitment” or “month-to-month plan” and those who opt for a “24 month commitment plan.”

While FCC examines the issue, no measures have yet been taken by the industry or concerned committees to curb this policy.

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