AT&T is coming out with its first prepaid smartphone.

The LG Thrive, available April 17, will untether users from a long-term service contract. The Android phone will feature a 3.2-inch touch screen, a 3.2-megapixel camera -- and data packages with no locked-in contract (although if you want one, it's available). 

Customers can choose between being charged by the minute (10 cents a minute) and an unlimited daily talk and text plan ($2 a day). But if you want to browse the Web (and really, what's the point of a smartphone if you can't?), it will cost extra: $5 for 10 MB, $15 for 100 MB or $25 for 500 MB. If you're a frequent user of Internet on the go, the bill might get hefty.

The phone itself will cost $179.99. With a standard two-year contract, the price drops to $49.99.

For anyone considering a prepaid smartphone, consider the pros and cons:

The pros: For a budget-conscious person, or someone who isn't glued to his or her phone, the prepaid plan could save money. And if you're not happy with a mobile carrier, you can easily switch.

The cons: The phones themselves usually cost substantially more than if they were purchased with a long-term contract. The choice of phones might also be slim. And unless you're careful or go for an unlimited prepaid option, you could very easily run through your minutes or data plan quickly and end up spending more per month than you would have on a standard contract.

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Photo: Front of the LG Thrive, AT&T's first prepaid smartphone option. Credit: AT&T

The Federal Communications Commission on Thursday approved a measure mandating that companies such as AT&T and Verizon let smaller telecommunications carriers use their networks for mobile Internet service, a practice that is now voluntary.

The FCC vote was, however, divided along party lines, with three Democrats voting for the measure and two Republicans voting against it, according to a Bloomberg report.

Major mobile carriers are already required to forge agreements with smaller rivals for voice data, and the addition of Web traffic is essentially an extension of that rule, the report said.

Both AT&T and Verizon, the two largest cellular operators in the U.S., opposed the measure, Bloomberg said.

"Consumers expect mobile data services that will allow them to remain connected wherever they go; a data roaming rule will help ensure that consumers' services are not interrupted and that coverage is available on a competitive basis," the FCC said in a statement on the new rule.

"The widespread availability of data roaming arrangements will allow consumers with mobile data plans to remain connected when they travel outside their own provider's network coverage areas by using another provider's network. This promotes connectivity and nationwide access to mobile data services such as email and wireless broadband Internet access."

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Sprint Nextel is looking to beat AT&T, T-Mobile and Verizon to market with a service coming this year that will enable people to buy goods with their smartphones.

Kevin McGinnis, Sprint's vice president of product platforms, told Bloomberg that the telecom company was working with payment networks and smartphone manufacturers on the near-field communication features.

Customers would use the feature by tapping their phones on or waving their phones in front of scanners in retail stores, McGinnis told Bloomberg.

Sprint, the third-largest mobile carrier in the U.S., is hoping to make its service available before the near-field communications joint venture among AT&T, T-Mobile and Verizon, known as Isis, hits the market. Isis was announced last November and is expected to launch in 2012, Bloomberg said.

"We intend to make this an open solution where consumers can use their phone in a variety of physical locations," Sprint's McGinnis told Bloomberg. "Because we're allowing other brands and other institutions to participate, they can also tell their consumers that this is available on Sprint."

Isis plans to take a percentage of each purchase made through the service, but Sprint isn't looking to do the same, he told Bloomberg.

Rather, Sprint may take a share of purchases made with digital coupons available through its service, or it may take revenue from targeted advertisements that interact with a consumer's phone, McGinnis said. Purchases made through Sprint would show up on credit card statements, not phone bills, Bloomberg said.

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Photo: A Sprint BlackBerry phone at a Sprint store in Woodmere Village, Ohio. Credit: Tony Dejak / Associated Press

Sprint Nextel Corp. formally announced its opposition to AT&T Inc.'s proposed $39-billion purchase of T-Mobile USA Inc., urging regulators to block the huge telecommunications deal.

If the deal goes through, Sprint, the nation's fourth-largest wireless carrier, would find itself a distant third, behind Verizon Wireless and a much larger AT&T.

Sprint had been a rumored suitor for T-Mobile. With the AT&T deal, however, analysts speculate that Sprint would be ripe for takeover or be forced to acquire smaller wireless providers to try to remain competitive.

But AT&T's purchase must be approved by federal regulators for it to go through. And Sprint said Monday that should not happen.

"Sprint urges the United States government to block this anti-competitive acquisition," said Vonya McCann, the company's senior vice president for government affairs. "This transaction will harm consumers and harm competition at a time when this country can least afford it."

Regulators are expected to give the deal tough scrutiny. And key lawmakers have promised hearings; some of them, along with consumer advocates, have raised concerns that the deal could raise prices for wireless subscribers and reduce competition.

Sprint argued that it can compete "in a truly dynamic marketplace" but that AT&T's purchase would reverse years of actions by the federal government and the courts to make the U.S. telecommunications market more competitive.

Raising the specter of a return to AT&T's one-time dominance of the traditional land-line phone business, McCann said, "Sprint will fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly."

[Updated at 1:03 p.m.: AT&T responded that if it buys T-Mobile, the wireless market will remain competitive and the company will improve its quality of service and its customers' ability to get next-generation service, "spurring innovation and economic growth."

"The U.S. wireless market is intensely competitive, with five or more competitors in 18 of the top 20 markets," AT&T said.]

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 Photo: A Kyocera Corp. Echo smart phone that uses Sprint's service. Credit: Bloomberg

Shortly on the heels of announcing its $39-billion acquisition of T-Mobile USA Inc., AT&T lobbed out another surprise --plans to launch a smart phone with a 3-D screen and a camera for 3-D videos and snapshots.

The LG Thrill 4G will be available within the next few months and will feature a "glasses-free" 3-D display with 4G capability, AT&T said in a statement released Monday.

The Thrill, which will run on Google's Android platform, will be able to play 3-D games and display video clips in 3-D, AT&T said. 3-D content will be available through a special marketplace called "LG 3D Space." AT&T did not say how much the smart phone would cost.

Other electronic gadgets with 3-D capability have already hit the market, such as the Nintendo 3DS, which launches Sunday for $249.99 and also has a 3-D screen with no need for glasses.

T-Mobile USA has already previously announced plans to launch a tablet computer that can shoot 3-D video.

Other features of the LG Thrill 4G include:

• dual core, 1 GHz processor
• 5-megapixel, dual camera that shoots high definition videos and images in 3-D
• preloaded with 16 GB of memory

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Photo: LG Thrill 4G. Credit: AT&T

AT&T said Monday that it planned to convert T-Mobile's 3G towers to 4G service and move T-Mobile 3G subscribers to AT&T 3G phones.

The moves would all take place after AT&T's purchase deal of T-Mobile USA is closed -- that is, if it's approved by federal regulators, according to the Associated Press.

On Sunday, AT&T announced it had agreed to buy T-Mobile USA from it's German parent company, Deutsche Telekom, for $39 billion.

If AT&T is allowed to buy T-Mobile, the Dallas-based telecommunications giant would grow from its current 95.5 million subscribers to about 130 million. Verizon Wireless currently has about 94 million customers.

As T-Mobile's 3G towers are reconfigured for 4G service, T-Mobile 3G users would have to switch to AT&T 3G phones that run on AT&T's 3G frequencies emitted by AT&T's 3G towers, the AP said.

For T-Mobile subscribers in the U.S., the effect won't be too noticeable, Ralph de la Vega, AT&T's head of wireless and consumer services, told the AP.

"There's nothing for them to worry about," De la Vega said of T-Mobile customers. "It will be done over time, in a way that's good for customers and good for AT&T."

The process of switching all T-Mobile 3G users to AT&T 3G would take several years, De la Vega told the AP.

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Photo: AT&T CEO Randall Stephenson announces his company's proposal to buy T-Mobile USA from Deutsche Telekom on Sunday. Credit: Brendan McDermid / Reuters

AT&T Inc. announced Sunday it would buy T-Mobile USA in a cash and stock deal worth $39 billion, a move that would combine two of the largest U.S. wireless providers and build a telecommunications behemoth that would tower over Verizon Wireless, the other leading cellular network.

The merger would combine AT&T's 95.5 million wireless subscribers with another 33.7 million from T-Mobile, a division of the German communications conglomerate Deutsche Telekom.  With close to 130 million subscribers on a wireless system that would combine the vast national networks of both companies, the resulting union would far outstrip Verizon and its 94.1 million customers.

AT&T suggested that increased competition resulting from the deal could benefit consumers but did not explicitly say the plan would mean lower prices for its customers.

“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” AT&T Chief Executive Randall Stephenson said in a statement.

AT&T highlighted the efficiency savings it would garner from a merger, given that both companies use similar cellular technology -- as opposed to a different model used by Verizon -- and both are planning to take similar steps toward the next generation of faster 4G networks.

Part of AT&T's gambit has to do with the steep rise in the use of data services by consumers with sophisticated smart phones.  With many more users adopting video-ready, Internet-connected phones such as Apple's iPhone and the many Google-powered Android devices, demand for wireless bandwidth among consumers is quickly increasing, and the industry has been struggling to stay ahead of that demand.

AT&T said data traffic on its wireless network had grown 8,000% over the last four years.

"Because AT&T has led the U.S. in smart phones, tablets and e-readers -- and as a result, mobile broadband -- it requires additional spectrum before new spectrum will become available."

Critics quickly warned about the perils of conglomeration, saying federal regulators should scrutinize the deal carefully lest it actually lead to less market flexibility.

"Don’t believe the hype: There is nothing about having less competition that will benefit wireless consumers," said S. Derek Turner, research director at media industry watchdog Free Press, in a statement.

“A market this concentrated -- where the top four companies already control 90% of the business, and two of them want to merge -- means nothing but higher prices and fewer choices, as the newly engorged AT&T and Verizon exert even more control over the wireless Internet."

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Photo: Deutsche Telekom Chairman and CEO Rene Obermann, left, and AT&T Chairman and CEO Randall Stephenson pose for photos in New York on March 21, 2011. AT&T Inc. said Sunday it will buy T-Mobile USA from Deutsche Telekom AG in a cash-and-stock deal valued at $39 billion that would make it the largest cellphone company in the U.S. Credit: Mark Dye/Newscast/AP Photo

Google has been hinting for months that it will roll out a mobile payment service so that shoppers can ring up their purchases with their smart phones.

Now people familiar with the project are whispering to Bloomberg News that Google will begin testing the service at stores in San Francisco and New York in the next four months by installing thousands of cash register systems from VeriFone Systems.

The technology -- called near field communication, which transmits signals over short distances -- would let shoppers ditch cash or plastic (or even loyalty and gift cards and coupons) and check out by tapping a smart phone against a register.

Caveat: Bloomberg hasn't always gotten it right when it comes to NFC. It reported earlier this year that Apple's iPad 2 and iPhone 5 would include NFC. There is no evidence of the technology in the iPad 2 and the latest reports indicate that there won't be any NFC in the iPhone 5, which will probably be released this summer.

Google, which has taken a leading role in the mobile phone industry with its Android operating system that it offers for free to handset manufacturers, has been pushing for NFC-equipped phones, although there aren't many such Google devices out there yet.

Google's Eric Schmidt showed off what was presumed to be Samsung's Nexus S phone in November at the Web 2.0 Summit before the phone that allows NFC transactions was released. At the time he predicted that mobile phones would eventually replace credit cards.

"People don't understand how much more powerful these devices are going to be," Schmidt said. But he cautioned not to expect the technology to roll out quickly.

"I expect to be carrying my credit cards around for quite some time," he said.

Mobile payment is already a hotly contested market with a growing number of companies including EBay's PayPal and ISIS, an effort backed by AT&T and Verizon Wireless that will use Discover Financial Services to handle payments.

Google has demonstrated how the latest version of its Android operating system -- code named Gingerbread -- has mobile payment capability. And in Portland, Ore., Google has been experimenting with NFC window decals that, when tapped with a smart phone, give additional information about the business, including special offers and deals.

Not to mention that if Google were to get a significant foothold in mobile payment, its Checkout payment system would get a welcome boost.

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The blog Broadband Reports broke some bad news over the weekend for AT&T DSL customers. Starting May 2, AT&T plans to stop offering flat-rate pricing for unlimited Internet use. Instead, it will impose a monthly cap of 150 GB on its DSL subscribers and 250 GB on its U-Verse customers. (U-Verse is the pay-TV service that AT&T transmits over high-speed phone lines; the cap would apply only to those customers' Internet use, not their TV viewing.) Those who exceed the limit will be charged $10 for every additional 50 GB they consume.

The company says its average DSL customer uses a mere 18 GB a month, and just one out of each 50 customers has been exceeding the new limits -- presumably someone who downloads or streams a lot of video, games or software. To put it in some perspective, consider the case of an online video fan. At standard-definition data rates, that person would need to watch (or download) more than six hours of full-screen video a day to hit 150 GB. High definition video is much more of a bandwidth hog, but even then an AT&T customer could download one a day and still have plenty of room left under a 150 GB cap.

On the other hand, it's troubling when a broadband provider that faces little competition summarily raises prices, particularly when the move hurts rivals in a separate market. AT&T's pay-TV service competes with online video-on-demand offerings from Netflix, Amazon, Vudu, Apple and CinemaNow, to name just a few. If the bandwidth caps deter consumers from using those services, that's a very bad thing.

The move was condemned by Free Press, an advocacy group that's been among the most vigorous proponents of strong Net neutrality rules (and, as such, a frequent critic of AT&T). Echoing the Bells' arguments against those rules, S. Derek Turner of Free Press called AT&T's caps "a poor solution to an unproven problem, and it will have a chilling effect on economic growth and innovation online."

I wonder about that, too, and about the chances of AT&T increasing the caps steadily as bandwidth prices continue to drop and the demand for data grows. As Turner put it, "When ISPs force their customers to watch the meter, experimentation, innovation and business will suffer."

One thing that he failed to note, though, is that the caps are a better deal for most broadband users than all-you-can-eat pricing that forces them to subsidize the outsized data appetites of a small minority. That's the dirty little secret of the flat-rate pricing model that AOL made standard across the Net: It costs most users more than they would have to spend under the pay-as-you-go model.

All the same, consumers love the flat-rate model because they don't have to worry about the incremental cost of each session online, or about getting the same sort of nasty surprise in their broadband bill that they occasionally receive from their mobile phone company. So it may be that even modest users of AT&T DSL switch to cable modems after the caps go into effect -- assuming their cable provider isn't Comcast, which imposes a 250 GB cap.

For its part, AT&T pledges that none of its customers will be caught unaware by the new caps. It plans to alert them when they reach 65%, 90% and 100% of the limit, and not to impose the extra charges until they've exceeded the caps three times. And those who reach their limits have a way around the extra charge: They can read e-mail, watch videos and send tweets on their smartphones. Unless, of course, they've already hit their wireless data caps.

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AT&T said on Monday that wireless calls and text messages sent from the U.S. to Japan will be free for the rest of March, in light of the crisis that has resulted from Japan's earthquake and tsunami.

Calls and texts as far back as Friday, March 11, will also be included in the offer, AT&T said, noting that wireless prepaid customers won't be eligible for the deal.

International long-distance calls from Puerto Rico to Japan will also be included in the free calling offer, the company said.

Residential landline customers are also eligible for up to 60 minutes of direct-dial calling to Japan, effective from March 11 through March 31, AT&T said.

Landline users, after they've received their bills, will need to call AT&T to "receive adjusted calling for up to 60 minutes," the company said. "In other words, no charges for up to 60 minutes of call time from the United States to Japan between March 11 and March 31."

Customers will either see no charges reflected on their monthly statement for their calls to Japan, or they will see a credit applied to their bill for calls and texts to Japan made between March 11 and March 31, AT&T said.

Also, AT&T customers can text "redcross" to 90999 to make a $10 donation to the Red Cross' disaster relief efforts, free of any text-message fees.

The normal monthly subscription fee for the TV Japan channel available on AT&T's U-verse service has also been lifted until March 17.

[Updated 2:23 p.m.: Verizon is offering free wireless calls and texting from the U.S. to Japan through April 10 for it's non-pre-paid customers.

"All Verizon post-paid customers will receive free calling to Japan from March 11 through April 10," the company said in a statement. "Post-paid customers are those who receive a monthly bill from the company. In addition, Verizon Wireless post-paid customers in the U.S. will receive free text and multimedia messaging to Japan for the same time period."

Calls made from a Verizon home landline to Japan will be rated at $0.00 per minute, from March 11 through April 10, the company said.

Verizon is also waiving all pre-paid phone card charges for long-distance calls to Japan from the U.S. during the same period.

And, its FiOS TV customers who are not subscribed TV Japan will get free access to the channel through March 17, Verizon said.

Only long-distance usage charges are being waved for home landlines. All other fees including taxes, surcharges, monthly recurring charges, minimum spend levels, monthly minimum charges, and other fees are not being waved, the company said.

Verizon, too, is waiving text message fees for texts sent to one of 10 organizations raising money to assist in disaster relief programs going on in Japan. 

Customers can make a $10 donation by texting a specific word to different codes for each respective organization. The 10 groups are

• ADRA Relief: text SUPPORT to 85944
• American Red Cross Relief: text REDCROSS to 90999
• Convoy of Hope: text TSUNAMI or SUNAMI to 50555
• GlobalGiving: text JAPAN to 50555
• International Medical Corps: text MED to 80888
• Mercy Corps: text MERCY to 25383
• Salvation Army: text JAPAN to 80888
• Save the Children Federation, Inc.: text JAPAN or TSUNAMI to 20222
• World Relief Corp. of National Association of Evangelicals: text WAVE to 50555
• World Vision, Inc.: text 4JAPAN or 4TSUNAMI to 20222]

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