Are you tempted by Walmart and Straight Talk's promotion of "unlimited" iPhone 5 service? Unfortunately, it's too good to be true, and the situation is even worse than reported: almost every iPhone 5 user could be violating Straight Talk's terms of service.

Most "unlimited" services aren't really unlimited; they have a soft cap along the way where your data speeds get throttled. Straight Talk starts out with a straight lie, as it doesn't mention caps or throttling anywhere on its website, promising only "unlimited everything." That compares poorly to T-Mobile and Virgin Mobile, both of which make it clear how much full-speed data is included in each "unlimited" plan.

As ZDNet's Matthew Miller, GigaOm's Kevin Tofel and many people on Internet discussion forums report, Straight Talk's iPhone plan appears to have a soft cap of around 2GB per month, after which you begin to get harassing automated phone calls and then either get your speeds dramatically slowed, or your service cut off.

Straight Talk also has unusually restrictive terms of service - worse than any other wireless carrier we checked - which turn almost any iPhone user into a violator. That means that Straight Talk can kick you off at any time for something as simple as downloading a game from iTunes over its network or using more than "average" amounts of data.

2GB is enough data for most people - I'm on a 2GB plan myself, and I'm perfectly happy with it. But Straight Talk's refusal to be straight up about its policies make it a company you might not want to work with.

Unacceptable Terms

A carrier's terms of service are a legal contract you accept when you sign up for cell-phone service. While few people read these contracts, they generally prohibit some uses of the network and give the carrier power to kick you off if you violate them. (There's no net neutrality in wireless.)

I looked over 11 terms of service, from the five biggest U.S. wireless carriers (AT&T, Verizon, Sprint, T-Mobile, and MetroPCS) and some virtual operators (Black Wireless, Boost Mobile, Ready SIM, Simple Mobile, Ultra Mobile, and Virgin Mobile) to compare them to Straight Talk's. In that group, Straight Talk's is unique, in that it specifies that you're only allowed to use Straight Talk's own portals to access the Net.

Here's Straight Talk's acceptable uses: "Straight Talk Unlimited Talk, Text and Mobile Web Access Plans may ONLY be used with a Straight Talk handset for the following purposes: (i) Person to Person Voice Calls (ii) Text and Picture Messaging (iii) Internet browsing through the Straight Talk Mobile Web Service and (iv) Authorized Content Downloads from the Straight Talk Mobile Web Store."

A little later, it muddies the waters a bit. "This means, by way of example only, that checking email, surfing the Internet, downloading legally acquired songs, and/or visiting corporate intranets is permitted, but downloading movies using P2P file sharing services and/or redirecting television signals for viewing on laptops is prohibited."

These two paragraphs contradict each other, but notice what isn't allowed - no app downloads from iTunes, no gaming, and no browsing through anything other than Straight Talk's portal. Any music or video streaming, even watching a YouTube video, is clearly verboten here too. According to Pew, 53 percent of smartphone owners stream music, so at least half of all smartphone owners are cut off there if they're daring to use the Straight Talk network to do it.

Also, Straight Talk reserves the right to cut you off if you have greater than average data use. Not if you're abusing the network, not if you're going over a limit. They can just boot you for being above average.

"Straight Talk may discontinue providing Service to you … for customers whose usage, in the sole judgment of Straight Talk: (1) appear likely to generate … abnormally long average call lengths or Mobile Web Access and data usage as compared to the usage of other Straight Talk customers."

While I couldn't find any press contacts for Straight Talk, the company has an online forum where it has responded to customer concerns about data caps with references to its terms of service and incomprehensible corporate babble concluding in "Straight Talk reserves the right to deny service, deactivate or cancel existing service, terminate data connections and/or reduce data throughput speeds, to anyone for any reason at any time."

How Straight Talk Compares

Only MetroPCS's terms of service come anywhere near Straight Talk's. All the other carriers are a lot more liberal. Here are the five major carriers.

AT&T: "AT&T's wireless data services are intended to be used for the following permitted activities: (i) web browsing; (ii) email; and (iii) intranet access if permitted by your rate plan (for example, access to corporate intranets, email, and individual productivity applications like customer relationship management, sales force, and field service automation); (d) uploading and downloading applications and content to and from the Internet or third-party application stores, and (e) using applications and content without excessively contributing to network congestion."

Sprint: "Sprint data services are provided solely for purposes of web surfing, sending and receiving email, photographs and other similar messaging activities, and the non-continuous streaming of videos, downloading of files or on line gaming."

T-Mobile: "Your Data Plan is intended for Web browsing, messaging, and similar activities on your Device and not on any other equipment" and "With T-Mobile you can watch movies all day, every day ... put your favorite music on repeat and listen day after day, all month long."

Verizon Wireless: "You can use our Data Plans and Features for accessing the Internet and for such things as: (i) Internet browsing; (ii) email; (iii) intranet access (including accessing corporate intranets, email and individual productivity applications made available by your company); (iv) uploading, downloading and streaming of audio, video and games; and (v) Voice over Internet Protocol (VoIP)"

MetroPCS's terms are a dense block of text, but they have one notable problem: you can use your phone for Web browsing, but "not for off-portal multimedia streaming services." For a while now, MetroPCS has made a distinction between streaming and other online activity. That's something to be aware of.

Better iPhone Deals Available

Straight Talk is charging $45 per month for its not-really-unlimited iPhone plan. That's a great deal, and hopefully you now know why it's such a great deal: Straight Talk wants to make sure you use that plan as little as possible.

Black Wireless, which uses AT&T's network, has a $50 per month, 2GB plan with unlimited talk and text, and the ability to "access the Internet, text, pictures, video, games, graphics, music, email, applications, sound, and other materials ('Data Content')." Given that Straight Talk appears to have a 2GB cap anyway, this looks like a good bet for bargain-hunting iPhone users who don't want to be constrained by Straight Talk's extremely restrictive terms.

T-Mobile has an even better deal for light talkers: a $30 plan with 100 voice minutes, unlimited text and 5GB of data at HSPA+ 4G speeds. To best take advantage of this with an iPhone, though, you have to be in one of T-Mobile's 1900Mhz HSPA+ cities, which don't cover the carrier's whole network but are spreading.

Straight Talk may still be a good choice for light and unadventurous data users, but I really don't like how it's making a point of keeping consumers in the dark.

Walmart did not respond to an email request for this article. Straight Talk appears to have no official press contacts at all.

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