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Carrier is under heat over increased smart phone fees, surprise mobile internet fees

DailyTech recently reported that Verizon Wireless was raising its early-termination-fee on advanced devices (smartphones) from the previous fines of $175.  The move was largely in response to resales of the BlackBerry Storm 2 and Blackberry Tour purchased under the Buy-One-Get-One (BOGO) promotion.  Customers buying one of the phones got another for free -- and that phone was worth more than current $175 ETF.  Customers were getting the second BlackBerry, canceling its plan, selling the phone, and pocketing a $100 or more difference.

The ETF bump, though, was unfortunate for the average consumer who saw the price of cancellation at the one-year market jump from $175 or less to $230.  The decision led to an U.S. Federal Communications Commission inquiry into why Verizon was sticking it to its customers.

Verizon has at last responded and comments, "The higher (early termination fee) associated with Advanced Devices reflects the higher costs associated with offering those devices to consumers at attractive prices, the costs and risks of investing in the broadband network to support these devices, and other costs and risks."

Observers note that Verizon's ETFs are the highest in the industry, with typical fees from Sprint, AT&T, and T-Mobile starting at between $175 to $200 and being pro-rated over the course of the contract.  According to a recent Government Accountability Office report, ETFs were among the top four complaints submitted to the FCC between 2004 and 2008.

Carriers justify the fees pointing to the fact that they offer discounted phones to consumers when the consumer purchase a plan.  Aside from recouping those costs, Verizon says its hearty termination fee helps cover the company's advertising expenses -- perhaps helping fund its latest attack commercials against AT&T.

The FCC is also investigating another complaint against Verizon.  Customers have complained that they were charged a $1.99 fee for inadvertently accessing Verizon's Mobile Web service.  Verizon claims that the service, included on most of its phones, does not fine users for "simply launch[ing] the internet browser and land[ing] on the Verizon Wireless Mobile Web homepage."  It says customers that feel they have been unjustly charged can contact customer support and ask for a refund.



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Don't like the contract, don't sign
By Bateluer on 12/21/09, Rating: 0
RE: Don't like the contract, don't sign
By mdogs444 on 12/21/2009 11:45:46 AM , Rating: 1
That's right....and if you don't plan on using the phone for 2 years, then be prepared to pay full price for another one.

People complain all the time that they made stupid choices based on bad judgment, but its always someone else's or some businesses fault...nothing like personal responsibility.


RE: Don't like the contract, don't sign
By rs1 on 12/21/2009 1:14:13 PM , Rating: 3
I somewhat agree, but don't forget that Verizon settled a class action suit about those very same fees. Obviously they wouldn't have settled if they thought there was a good chance that they would win in court.

Personally I find the fact that they've kept essentially the same fee-structure in effect even after the lawsuit to be a bit confusing. It certainly does nothing to help the company's image.


By ebakke on 12/21/2009 1:44:45 PM , Rating: 2
quote:
Obviously they wouldn't have settled if they thought there was a good chance that they would win in court.
Not necessarily. The negative publicity can definitely impact future revenues. And a drawn out legal battle requires expensive lawyers, regardless of the outcome.


RE: Don't like the contract, don't sign
By SublimeSimplicity on 12/21/2009 1:45:55 PM , Rating: 1
Or maybe they settled because it was cheaper than winning a court battle (or marginally more expensive with far less negative PR).

When a company settles a class action lawsuit, it usually points more to the failures of our legal system, than the company that settled.


RE: Don't like the contract, don't sign
By Regs on 12/22/2009 8:32:48 AM , Rating: 2
I guess no one remembers the ford intermittent wipers lawsuit by Robert Kearns.


By JonnyDough on 12/22/2009 3:28:56 AM , Rating: 2
I think they did this because they're becoming something of a monopoly. They will STILL make money, even with bad press and out of court settlements. Does anyone realize what $350 times millions of customers is?


RE: Don't like the contract, don't sign
By Uncle on 12/21/2009 3:09:35 PM , Rating: 3
Why is it a one way street when it comes to signing a contract with these companies. They are so air tight you can't get out of it, no protection for the consumer. How about an out for the consumer, lets say crappy service dropped calls, static,and so on, if a company can't give what they advertise or promise, the consumer should have an out. Once you believe the bullshit by signing, they gotcha by the balls. They seem to invite you to sign up with all the flair and tell you your penalties for wanting out but their is nothing to penalize them for 2 or more years of bad service. But if in your mind they have you convinced that you can not live with out a portable phone like you did for the last 20 or 30 years then I guess you better sign on the bottom line and skip the fine print.


RE: Don't like the contract, don't sign
By mcnabney on 12/21/2009 3:34:07 PM , Rating: 3
You don't know what you are talking about. You can get out of a wireless contract for the following reasons w/o an ETF:

Military activation
Death
Service/coverge change at home or business location

Also, if you have legitimate needs to deactivate service you should contact customer care since all of the wireless companies will make deals under special circumstances.

The following is not a legitimate reason (and the the cause of most terminations):
A competitor has a deal on a neat-o phone that just came out.

Also, Time Warner Cable compels you to agree to a contract (that self renews, WTF?!?!) and has a $250 ETF. And this isn't to subsidize equipment they are giving you (I am paying rental fees for cable boxes too). It is to be anti-competitive.


By Lerianis on 12/21/2009 5:38:53 PM , Rating: 2
Time Warner Cable is asking to get smacked with that self-renewing contract as well. NO contract should be 'self-renewed'.... it should have to be renewed by the customer themselves, after being informed by someone that the contract is up for renewal.


By tastyratz on 12/22/2009 8:03:02 AM , Rating: 2
you are partially right.
I think in the interest of disclosure we should have a surgeons general warning type section like they recently put on credit card bills in the last few years. The very beginning of the contract should have a big bold font section with cancellation fees, term, cost, special conditions... etc. A big bold "gotcha" list.


By callmeroy on 12/22/2009 10:02:41 AM , Rating: 2
Laws are primarily to protect business first, consumers second.

That's not intended as a witty saying, smart a$$ comment, etc. its the truth...all you have to do is read over the laws of your state or even the constitution...anyone with a rational mind will see the greater bulk of laws are made for business protection first and foremost.


RE: Don't like the contract, don't sign
By jonmcc33 on 12/21/2009 11:46:48 AM , Rating: 1
I concur, but what about contracts that you don't sign? Such as those where phones are purchased and activated from the internet? My ex-wife did that and put the phone in my name. Now T-Mobile is coming after me for something like $700.

This is why I use a pay per minute phone. I don't like contracts like the 2 year garbage that most cell phone providers demand now.


RE: Don't like the contract, don't sign
By Bateluer on 12/21/2009 12:08:03 PM , Rating: 2
At some point in that process, you still 'sign' a contact. It may fail under the click wrap type agreement though, might be a way out there.


RE: Don't like the contract, don't sign
By jonmcc33 on 12/21/2009 1:31:15 PM , Rating: 1
No, I didn't sign any contract for this phone. It's through iWireless, Pay Per Use Plan. I add money to the phone, money is deducted as I use it. If I stop paying then phone stops working and nobody comes knocking on my door.


By mcnabney on 12/21/2009 3:37:06 PM , Rating: 5
The IVR (integrate voice response) is a perfectly legal form of agreeing to a contract. Your only challenge to that is that it was done fraudulently (ie - not by you).

You agreed to it. T-Mobile paid a ton of money to the device manufactures that they expect to recoupe during your service contract. Stop trying to weasel out of your commitments.


By Solandri on 12/21/2009 1:57:24 PM , Rating: 2
No, he said his wife got him the phone, but somehow they're coming after him for the money. Occasionally you'll run into a broken liability system like this, where the company hasn't thought of the possibility of people signing up in the name of others.

I ran into a similar thing where a person who was visiting asked to send a package via courier from my house. I didn't sign anything, never contacted the shipping company. But unknown to me the person put my name and address as the shipper, instead of himself as the shipper and my address as the origination address. The receiver was supposed to pay, but they didn't. So the shipping company went after me for the money. I probably would've won in court since I wasn't the party who made the contract, but it wouldn't have been worth the time and legal fees. Instead I had to waste 4-5 hours satisfying the courier's fictional version of events, and tracking down the guest and getting him to sign a transfer of liability waiver so the debt was correctly assigned to him.


By quiksilvr on 12/21/2009 12:12:08 PM , Rating: 2
Thank God for the Even More Plus plan. For 3G, T-Mobile still needs time to develop, but their service is generally good (I'm in Phoenix) and their prices are awesome.

I just wish someone like Verizon or AT&T would do something like that so the other companies will follow suit. T-Mobile isn't exactly the chip leader in the cellphone market.


RE: Don't like the contract, don't sign
By wempa on 12/21/2009 12:39:36 PM , Rating: 2
You don't need to sign a 2 year contract. The 2 year contract only gets you a big discount on your phone. You can sign a 1 year contract or go with no contract at all. Go to the Verizon website and check out the various discounts you get with each contract. I recently upgraded my phone, but only went with a 1 year contract. I still had to pay some money for the phone, but I wanted to be able to switch carriers after 1 year. People should stop signing these contracts if they aren't comfortable with the terms. If during your contract, you decide you want to switch carriers, just do it after your contract expires. This isn't exactly rocket science !


RE: Don't like the contract, don't sign
By jonmcc33 on 12/21/2009 1:26:43 PM , Rating: 2
Well, I don't want to drop a lot on a phone of all things. I wouldn't want the 1 year contract either.


By seamonkey79 on 12/21/2009 1:56:35 PM , Rating: 2
Then you don't get the shiny phone/toy to play with :-)


By ebakke on 12/21/2009 1:58:50 PM , Rating: 2
So you want someone to drop $500 into research/development/production on a phone, and then you'll just pick it up for, what, $20? And they'll do this because..... you're a nice guy?


By JediJeb on 12/22/2009 1:36:54 PM , Rating: 2
In the end you still drop the same amount of money on the phone, it is just spread out over the life of the contract instead of all at once. Even with a two year contract they don't actually give away a free phone, you still end up paying for it in the end.


By Targon on 12/22/2009 7:47:26 AM , Rating: 2
The problem comes from Verizon phones being locked into Verizon. With AT&T and other GSM carriers, you CAN move phones to other networks. With Verizon though, the phone becomes worthless without Verizon service.


By 0ldman on 12/23/2009 1:17:04 PM , Rating: 2
And here's the rub...

90% of the warm bodies in the stores and on the phone tell you that you cannot get service without a contract. Been there, done that, talked to their supervisor.


By AEvangel on 12/21/2009 3:14:21 PM , Rating: 2
quote:
I concur, but what about contracts that you don't sign? Such as those where phones are purchased and activated from the internet? My ex-wife did that and put the phone in my name. Now T-Mobile is coming after me for something like $700.


Then it's called fraud, you go to the police report it and they pursue her for ID theft.


RE: Don't like the contract, don't sign
By elgoliath on 12/21/2009 11:48:50 AM , Rating: 2
Not if they don't prorate it.


RE: Don't like the contract, don't sign
By mdogs444 on 12/21/09, Rating: 0
RE: Don't like the contract, don't sign
By MrSmurf on 12/21/2009 11:57:49 AM , Rating: 4
If you default on your car loan contract, you don't have to pay the full amount you financed. You're given credit for what you did pay. Why should it be different with a phone contract? The whole point of an early termination fee is so phone company gets its money back for the cost of the phone. Why shouldn't you be given a credit if you fullfilled the majority of your contract?

I agree if the user is fully aware of the $350 fee, than it is perfectly fair.


RE: Don't like the contract, don't sign
By Motoman on 12/21/2009 12:12:38 PM , Rating: 2
Your home loan contract has verbage that provides for that. Cell phone contracts don't.

If people got to decide, post hoc, what is or isn't fair treatment, then contracts would be meaningless and not even used.


RE: Don't like the contract, don't sign
By Solandri on 12/21/2009 1:47:25 PM , Rating: 5
You're slowly getting to why the FCC (FTC?) is investigating. In a normal market, there would be all types of different contracts. Some would be like we have now with ETF and prororated/not prorated. Others would be structured like car loans. Then competition would sort out which system customers liked more. But for some reason every company in the cell phone business outside the prepaid market uses this ETF system. A system which is rare in any other market, and doesn't seem to be in the customer's best interest.

The whole ETF system is some marketer's bastardization of a loan - it's set up to encourage people who buy phones frequently and don't leave the carrier, and punish those who don't fit this behavior model. If they want to subsidize the phone's purchase cost, just structure it as a loan and list it as a separate fee (they've already got a gazillion fees in their bill so it should be easy for them to do this). If you don't want to pay for your phone up-front, you get this loan and pay extra every month. When the loan is paid off, the extra charge disappears. If you leave before the loan is paid off, the remaining balance of the loan becomes due. Simple and makes sense, unlike this ETF system.

I'm miffed because I'm over a year past the end of my 2-year contract. But the only way to maximize the value I get out of their system is to buy a new phone and enter a new contract every 2 years, even if I don't want either. I'd prefer that my monthly fee be lowered to reflect the fact that I've already paid for whatever subsidy they gave me for my current phone, and to remain month-to-month so I can switch carriers if I want.


By Lerianis on 12/21/2009 5:41:12 PM , Rating: 2
Hit all the nails on the head in the last posting..... I salute you, because you have gotten exactly why the FCC and FTC (both of them are investigating) are doing what they are doing.


RE: Don't like the contract, don't sign
By Jalek on 12/21/2009 10:10:57 PM , Rating: 2
Bingo. I've been off contract for four years and even tried shopping around for another carrier. None of them offer any sort of reduced rate, so you might as well lock into a contract and get a newer phone. I think that's what they're after, but probably don't mind me subsidizing everybody else.

I'm even nicer than that though, I was given an iPhone so I'm also paying for "unlimited" data traffic I use only a few mb a month of.

I should go back to my old RAZR and go prepaid really, I don't even use half the monthly minutes I'm paying for.


By JediJeb on 12/22/2009 1:46:05 PM , Rating: 2
Only time I have every gotten a new contract was when an old phone died. Last one was over 4 years ago when I also got my RAZR. Honestly if it dies I will probably find another or different phone on eBay and just continue month to month. My RAZR makes calls and stores the phone numbers I need, haven't really seen a reason to get something that does more than that. If I didn't need it for work I would probably just get rid of my cellphone all together.


RE: Don't like the contract, don't sign
By mthoren68 on 12/21/2009 2:40:32 PM , Rating: 3
Big difference: Buying a car is not a subscription-type purchase. You buy the car, that's it, you're not financially involved after the purchase. And most often the loan is with a party other than the manufacturer/dealer. With a cell phone carrier, you are getting the device at a substantial discount (most often less than half of the unsubsidized price) in exchange for agreeing to a term of service. Look at the iPhone for example. My understanding is that AT&T takes a $200 hit on every iPhone it sells. Is it doing that to be generous? No. By itself, does that make good financial sense? No. It only makes sense if the carrier can recoup that loss and make a profit going forward.

People have gotten greedy. They want a phone that has a huge screen and 12MP camera and multitouch and their idea of the perfect browser and 24 hr. talk time less than 12mm thick and on and on, but they don't want it to cost more than $100 and they don't want to sign a contract and blah blah blah. Let's get real. If you want more, you gotta pay more. If you sign a contract, the other party has jsut as much right to demand that you hold up your end as you do to demand that they hold up theirs. Your falling in love with some new phone 1 yr. into your 2 yr. deal does not relieve you of your contractual obligation.


By foolsgambit11 on 12/22/2009 3:23:14 AM , Rating: 2
I agree with both of you. If you signed the contract, you're obliged to the terms you agreed to. For those currently in contracts, they're stuck.

But looking towards the future, are these contracts the way things should be done? Or, more accurately, are they the only way things should be done? The problem is that cellular networks have a de jure oligopoly provided by the government. As such, the government needs either to police that oligopoly for business practices hurtful to the consumer, or to change their wireless model and force the market open. Seeing as how it doesn't seem like a deregulation of wireless communication is in the cards, the first option is the one to go for.

And that's why the FTC/FCC are looking into these contracts. They don't have to be banned outright, I should think, but they may force wireless companies to prorate their ETFs (which would make them higher at the start of the contract, most likely) or offer more options for phone purchases. <sarcasm> Maybe GMAC should get involved in giving out phone loans? </sarcasm>


RE: Don't like the contract, don't sign
By Motoman on 12/21/2009 11:55:13 AM , Rating: 2
You're confusing an ethical "fair" with a legal "fair."

If the contract says your ETF is $9999999 and it doesn't prorate over the life of the contract, and you sign the contract, it is perfectly fair (from a legal standpoint) for the vendor to charge you $9999999 if you cancel your contract early.

You didn't have to sign the contract.


RE: Don't like the contract, don't sign
By MrSmurf on 12/21/09, Rating: -1
RE: Don't like the contract, don't sign
By Motoman on 12/21/2009 12:11:40 PM , Rating: 2
That wooshing sound was the point going right over your head.

The actual $ amount of the ETF is utterly irrelevant...whatever that amount is, whether or not it's prorated is "fair" in as much as it was laid out in the contract and you signed it.

You don't get to sign a contract with any ETF fee at all, which is not prorated, and then later complain that it's not fair that it isn't prorated.


RE: Don't like the contract, don't sign
By nvalhalla on 12/21/2009 1:14:19 PM , Rating: 4
Sorry Motoman, you're wrong. Penalty clauses above what allows for compensation for losses are unenforcable in most states. Just because you sign a contact, doesn't make it binding. That's why the FCC put the squeeze on the carriers to start prorating the fees, not doing so was an unfair penalty.


RE: Don't like the contract, don't sign
By Motoman on 12/21/2009 1:23:02 PM , Rating: 2
If you're still complaining about the $9999999, then knock it off - it was clearly just a made-up number.

A $350 ETF fee, if that's what it is, is legally fair if you sign that contract.

If the FCC comes in after the fact and changes the regulation of that industry, then they change the regulation of that industry...as it is right now, the contract is fair so long as you're abiding by the language in the contract that was signed.


RE: Don't like the contract, don't sign
By nvalhalla on 12/21/2009 1:30:05 PM , Rating: 2
No, I got the hyperbole. But if they decided tomorrow to change it to a more reasonable amount than your $9999999, say $500, it still wouldn't necessary be legal. Just because you signed the contact, doesn't make it enforceable. I can put that early termination entitles me to compete and immediate possession of all of your assets, it doesn't mean I can take your house when you cancel. They need to prove that $350 is a reasonable fee to cover their losses, something I'm sure the FCC will be asking for. From their statement, it sound like they want more to cover the cost of the phone, plus some advertising budget and extra stuff. That might not be legit.


RE: Don't like the contract, don't sign
By Motoman on 12/21/2009 1:35:59 PM , Rating: 2
...what you're implying would render virtually any contract null and void if you decided post hoc that it wasn't "fair."

So, while IANAL, I simply don't believe you.

Having said that, it seems probable at this point that the industry regulations will be changed such that ETF fees will have to be prorated, and maybe have other restrictions put on them. Frankly, I'd be fine with eliminating phone subsidies, and therefore ETFs, altogether. If that happens, then future contracts will have to reflect that. Current contracts, under current law, are fine.


RE: Don't like the contract, don't sign
By nvalhalla on 12/21/2009 1:46:03 PM , Rating: 2
No, it doesn't render any contact null, that's ridiculous, but it does render null any penalty charges in excess of actual or estimated losses. I'm not saying contacts can't be enforced if you decide later you don't like them, I'm saying they can't be enforced if they aren't legal to begin with. Check out the definition of "penalty clause".

I don't have a problem with ETFs as long as they are legal by 1. covering actual losses and 2. prorated over the life of the contact. It is what everyone else has to do, phone companies aren't special in this regard.


RE: Don't like the contract, don't sign
By Motoman on 12/21/2009 1:50:46 PM , Rating: 2
I get that the contract has to be legal at the time it was signed...my position is that a $350 ETF fee most certainly doesn't strike me as being illegal.

As noted, IANAL and I'm going to guess you're not either. So forgive me, but I'm not buying the concept that such ETF-laded contracts aren't legal.


RE: Don't like the contract, don't sign
By nvalhalla on 12/21/2009 2:00:48 PM , Rating: 2
ETFs aren't in-and-of-themselves illegal, no, but the question is whether the fee matches their costs. A $350, or $500, ETF isn't necessarily unenforceable, but they have to show why the fee exists. If the phone costs $350 more than what they ask from the customer, hey that's reasonable. I'm sure the FCC will accept that answer. Everyone else charges $150-$200 and the FCC doesn't have a problem with that, as long as it's prorated.

I responded to you because you were stating that if someone signs a contact, it doesn't matter what's in it, that's what they have to abide by. I wanted to let you know that you were incorrect, just because "you signed the contact" doesn't mean that it can be enforced.


RE: Don't like the contract, don't sign
By cmdrdredd on 12/21/2009 4:24:57 PM , Rating: 3
quote:
no, but the question is whether the fee matches their costs. A $350, or $500, ETF isn't necessarily unenforceable, but they have to show why the fee exists.


Network upkeep, account maintenance, customer service over the life of the contract and subscription, things like this are worth way more than $350 and come with each and every plan.


RE: Don't like the contract, don't sign
By fic2 on 12/21/2009 6:26:01 PM , Rating: 2
That is what your monthly service fee is for. AFAIK the cell phone companies have always argued that the ETF is for the price of the phone.

Kind of surprised that Verizon would lump advertising in there, too. But I haven't read any source articles.


By Solandri on 12/21/2009 2:04:53 PM , Rating: 2
http://en.wikipedia.org/wiki/Penal_damages

Here's what nvalhalla is getting at. Under contract law, penalties for failure to fulfill a contract have to be in-line with the losses suffered by the other party. Excessive charges are illegal, and will be invalidated by the courts. Which is what all this discussion of the ETF is about - is it an accurate measure of the losses suffered by Verizon if someone breaks their contract early?


By Targon on 12/22/2009 7:58:35 AM , Rating: 2
It should depend on the cost of the device, not just be a blanket number. Many phones out there would cost only $100 as a straight price to buy the phone, so at that point, a $350 early termination fee would NOT be justified. The fact that smart-phones cost more than normal phones implies that early termination fees should be based on the device(s) the customer has purchased through incentives.

Further, if a lower purchase price is based on rebates the customer did not take(buying a $40/month data plan when a $20 plan was enough), then that rebate should not count toward what the company has to get back via monthly service fees.

A cheap Motorolla or LG phone should NOT have the same early termination fees as a top of the line Blackberry.


RE: Don't like the contract, don't sign
By Lerianis on 12/21/2009 5:45:25 PM , Rating: 1
Maybe to YOU it is fair...... but I don't think I should be paying 350 dollars for a phone if I decide to end the contract 1 DAY before the contract would expire ON IT'S OWN!

Any contract like this should be PRO-RATED... it's about generic fairness..... something apparently that you do not understand..... conservacreep, I guess!

That's the thing about conservatives.... they don't UNDERSTAND basic fairness. Any other business would be REQUIRED to pro-rate something if you wished to buy it.... if I 'rent' something from Rent-A-Center for a few years and wish to buy it.... they PRO-RATE the price to take into account how much I have ALREADY spent on the thing in question.... which usually means I get the thing for a SONG! Why? Because I have ALREADY paid the FULL PRICE AND THEN SOME of the thing in question over the years I have already had it!


By Motoman on 12/21/2009 6:10:33 PM , Rating: 2
Wow dude. Try some decaf.

First of all, I am not by any stretch of the imagination a conservative. And not really a liberal...frankly, I think each issue should be weighed upon it's own merits, rather than say "I'm a conservative/liberal" anyway.

But further, all your "shoulds" are well and good. The issue being that they are ethical "shoulds" - not legal "shoulds." That's the only point I have tried to make.

There's nothing illegal about the contract with the ETF that doesn't prorate. At least, not until the regulations change. If that contract isn't fair - in your estimation as the consumer - don't sign it, and take your business elsewhere.

And stop shouting.


RE: Don't like the contract, don't sign
By mthoren68 on 12/21/2009 2:50:32 PM , Rating: 2
Wrong, nvalhalla. Easy example: A hot new car comes out, the MSRP is $50,000, but a dealer takes pre-orders for $70,000. The dealer is getting more than the MSRP by a wide margin, but if the basic terms of a contract are met (competent parties, consideration, etc.) then the contract is enforceable. This happened with the Dodge Viper. A contract being "unfavorable" in one party's mind after the fact does not make it unenforceable. That's called "buyer's remorse," and that is not ample cause to void a contract. As long as the basic conditions of a contract exist, and the content is legal, you are good to go.


By DominionSeraph on 12/21/2009 4:19:21 PM , Rating: 2
That's not a penalty clause.


RE: Don't like the contract, don't sign
By TheRequiem on 12/21/2009 12:05:58 PM , Rating: 2
Alright guys and gals... time to switch networks to Sprint and give Verizon a dose of their own medicine. Companies need to learn to quit taking such advantage of their customers, so we as customers, need to rebel and the only way we are going to get our message through is to drop service. My father's entire family are dropping their 5 lines tomorrow and switching to Sprint, we need lower prices in times like these, not higher.

So long Verizon, watch them drop like flies!


By ebakke on 12/21/2009 2:09:30 PM , Rating: 2
Is this a joke? You're going to Sprint? Ha! Best of luck, my friend. If you actually expect Verizon's subscriber numbers to drop, you're fooling yourself.


By seamonkey79 on 12/21/2009 3:14:48 PM , Rating: 2
Heh... My parents have Sprint, nothing but trouble, pay more for the same plan (note, not service, because my Verizon service is better), and have the same ETF, actually $30 more than my Verizon does.


By Hiawa23 on 12/21/2009 1:41:07 PM , Rating: 2
One reason why I went with metro PCS. I just wanted a phone, no contract $45/month..


RE: Don't like the contract, don't sign
By vanka on 12/21/2009 2:00:56 PM , Rating: 3
quote:
If the customer signs the contract with a $350 ETF, then its perfectly fair.


I have no problem with Verizon charging the $350 ETF; it makes sense that they would want to discourage the type of buy-cancel-sell tactic by making it unprofitable. The problem lies in the fact that while ETF went up, the amount that gets deducted for each month you keep your contract has not - it stays at $10. This means that if you choose to cancel 23 months into your contract the ETF is: $350 - $10 * 23 = $120.

Now anyone canceling with only one month on their contract is crazy, but what if you cancel after a year. Logically, if you're half way through your contract the ETF should be half as well: $350 / 2 = $175. But Verizon will charge you: $350 - $10 * 12 = $230; definitely not fair.


RE: Don't like the contract, don't sign
By wempa on 12/21/2009 4:11:44 PM , Rating: 2
quote:
This means that if you choose to cancel 23 months into your contract the ETF is: $350 - $10 * 23 = $120.


Any person with half a brain would wait the extra 1 month and avoid paying the $120 fee. What exactly would be SO critical that you absolutely have to have out of the contract immediately ?


By Lerianis on 12/21/2009 5:48:57 PM , Rating: 2
Hmm... let's see.... moving, death in family, going out of the country, loss of a job.... I can keep on listing things FOREVER!

Fact is that some people cannot wait that 'month' until the contract ends.... that is why they should be PRO-RATED... because Verizon has ALREADY been paid for the phone! (sing this in 4 part barbershop with me!)

That is the bottom line: they have ALREADY been paid for the manufacturing cost (which is usually only 1/10th of the price they would charge for the phone WITHOUT the plan).


RE: Don't like the contract, don't sign
By MrX8503 on 12/21/2009 2:29:18 PM , Rating: 2
quote:
If the customer signs the contract with a $350 ETF, then its perfectly fair.


If we continue to accept what these carriers feed us, then expect other carriers to do the same. Along with cable companies, credit, and banks, phone companies are one of the worst businesses out there who rape the customers in fees.

Perfectly fair? None of what Verizon/Sprint/Tmobile etc, is doing is fair.


RE: Don't like the contract, don't sign
By AEvangel on 12/21/2009 3:47:09 PM , Rating: 2
quote:
Perfectly fair? None of what Verizon/Sprint/Tmobile etc, is doing is fair.


You people kill me...like you HAVE to have a Cell and you HAVE to get one from these companies. If you don't like don't buy from them.

Then you start whining about well they have the coolest phones, well if you want to have what they got then you have to deal with their terms.


By Lerianis on 12/21/2009 5:53:16 PM , Rating: 1
And you people kill me by not realizing that these things would be ILLEGAL in any other industry. Car selling? Illegal to do a non-prorated thing.
Selling electronics? Same thing.

Need I keep going on?

And you are ALSO missing the salient fact that it is becoming a bottom line NECESSITY to have a cell phone.... so that you can call the police or 911 if something 'bad' happens to you because they are REMOVING all the pay phones from every single street corner.

Last time I went looking for one 5 years ago in my RURAL AREA.... I couldn't find one..... they had taken ALL the damned things out.... why? Because, they said..... EVERYONE HAS A CELL PHONE!

Not my family until 2 years ago.


By Iaiken on 12/21/2009 3:41:34 PM , Rating: 2
I agree in principle, but I wouldn't sign any contract where the value of the subsidized phone is less than $350.

This is just another example of draconian blanket pricing policy. I work with natural gas and electricity pricing systems every single day and we've manage to offer over 120,000 pricing models and growing for over 19 million customers. Fixed prices, Floating prices, ramp prices, amortization, suspension, blend and extend, carbon credit sharing and more!

Our prices vary because of numerous factors, including: delivery area, wholesale margin, differences in administration fees, load balancing etc. If it costs us more per capita to provide these services to an area, then they pay more than areas where we can provide them for less. Hedging your losses in Michigan with your gains in New York simply to spite your competition is just stupid.


RE: Don't like the contract, don't sign
By T2k on 12/22/2009 2:50:31 AM , Rating: 2
This is probably the BIGGEST IDIOCY in the whitewashed minds of the average retarded American consumerist...

...WTF is wrong with you, people? Have you lost your remaining little sense? It would be fair only if Verizon would have to deal with some sort of all-consumer representation - which the US lacks as the gov charged with such tasks - FCC - is a complete telco sellout for more than a decade now.


By xrodney on 12/23/2009 5:30:21 AM , Rating: 2
Real fair should be to pay just percentage of terminating fee based on remaining time so if you decide to terminate in middle of contracted time you should pay 50% of it.


Cell Phone Contracts
By chromal on 12/21/2009 1:18:38 PM , Rating: 2
This isn't 1985. A cell phone service should require no more of a contract than a land line, e.g.: none., for the majority of consumer plans. The fact that this rarefied contract-bound relationship is the modus operendi for wireless carriers is cynically designed to put consumers at a disadvantage and artificially constrain opportunities for free-market style competition between carriers.

The FCC absolutely should step in and mandate more consumer protection by disallowing many of these practices on non-business (e.g.: residential) cell phone service.




RE: Cell Phone Contracts
By 67STANG on 12/21/2009 1:28:29 PM , Rating: 2
Good. Then buy your mobile phone outright, the same as you would a landline phone, and you'll be all set.


RE: Cell Phone Contracts
By Motoman on 12/21/2009 1:52:40 PM , Rating: 2
Yes. I would be fine with cell phone networks eliminating phone subsidies, and the ETFs that go along with them, such that everyone would then be buying their phones outright.

Guess what? That "free" phone you got with your contract isn't "free" - it costs the carrier (let's say) $200 - so you can pay the $200 up front yourself, as opposed to spread out over the life of your contract.

It'd be a much more transparent and obvious process that way.


RE: Cell Phone Contracts
By cmdrdredd on 12/21/2009 4:29:21 PM , Rating: 2
quote:
Yes. I would be fine with cell phone networks eliminating phone subsidies, and the ETFs that go along with them, such that everyone would then be buying their phones outright. Guess what? That "free" phone you got with your contract isn't "free" - it costs the carrier (let's say) $200 - so you can pay the $200 up front yourself, as opposed to spread out over the life of your contract. It'd be a much more transparent and obvious process that way.


I guaran-damn-tee you you wouldn't be seeing 13 year olds walking around with iPhones then. Plus, my network speed would go up a ton because people wouldn't be paying $500 for these phones like I could if it became necessary to pay full price.


RE: Cell Phone Contracts
By Alexstarfire on 12/21/2009 5:52:43 PM , Rating: 2
They'd probably see how much garbage the iPhone really is too. Anyway, I'd much prefer to pay up front for the phone, since it'd allow people to have a far greater range of devices than just the ones the cell phone company provides, and have a lower monthly rate. Much like Metro PCS. Yes, I do know that you can buy unlocked phones that work with our wireless networks. I'm using a SE K850i phone on the AT&T network. If I don't even purchase a phone from AT&T why am I effectively paying off a subsidy that I never got? It's not that the way things are set up now are just outright bad, but without having other options available it seems to be the worst option by itself.


RE: Cell Phone Contracts
By T2k on 12/22/2009 2:56:37 AM , Rating: 1
quote:
because people wouldn't be paying $500 for these phones like I could if it became necessary to pay full price.


You guys are fuckin CLUELESS, that's for sure.

Europe and Aisa is WAAAY AHEAD OF THE US when it comes to cell phones and networks - WAY, WAAY ahead.
And guess what?
Even with much more reasonable ETFs still a lot of people BUY their phones there....

...amazing, huh? Far better service, far more advanced terter networks and less ripoff fees - no fucked-up, crooked PoS market like in this United Corporations of America.


RE: Cell Phone Contracts
By Motoman on 12/22/2009 10:10:22 AM , Rating: 2
quote:
I guaran-damn-tee you you wouldn't be seeing 13 year olds walking around with iPhones then.


Sounds like nirvana to me.


RE: Cell Phone Contracts
By Schrag4 on 12/21/2009 1:44:12 PM , Rating: 2
quote:
The FCC absolutely should step in and mandate more consumer protection by disallowing many of these practices on non-business (e.g.: residential) cell phone service.


I think the government should only step in if either side breaks the contract. The consumer should decide what's fair before they sign the contract. The cell phone companies, in my opinion, should merely be responsible for making it clear to the customer exactly what they're getting into if they sign.

Oh, and I assume by your statement that you're OK with "these practices" being used on businesses. Why would that be OK but it's wrong for "non-businesses"? Just curious.


RE: Cell Phone Contracts
By nvalhalla on 12/21/2009 1:49:22 PM , Rating: 2
I think the government does step in when consumers break the contact, it's called being sued by collections. The court finds you are in violation and you have to pay.


RE: Cell Phone Contracts
By mthoren68 on 12/21/2009 3:21:28 PM , Rating: 2
The government does not "step in." They adjudicate a dispute presented to them by another party, if it gets that far.


RE: Cell Phone Contracts
By chromal on 12/21/2009 1:50:57 PM , Rating: 2
Because contracts are normal for business telecom services and abnormal for consumer telecom services? Because businesses don't generally need to be protected and contracts are business as usual?

Cell phones have rapidly changed from a luxury or professional service to something your grandma is likely to carry.

I'm not really saying no contracts, just that they shouldn't be typical or the default agreement service providers push consumers toward. Even if they sell a new service with a phone that costs them $35, they'll push for their onerous multi-year noncompetitive contract, which ultimately limits consumer flexibility in choosing competitive carriers in a timely fashion.


RE: Cell Phone Contracts
By Iaiken on 12/21/2009 4:28:56 PM , Rating: 2
I love how when my sister called AT&T looking for information on iPhone data plans with her Canadian iPhone (an unlocked Rogers phone) basically told her "F$&# no! You need to buy a new plan with a new iPhone." Currently she's stuck in Arizona with an iPhone that is only enabled for Voice and WiFi.

What about those kinds of business practices?


RE: Cell Phone Contracts
By cmdrdredd on 12/21/2009 4:31:52 PM , Rating: 2
quote:
I love how when my sister called AT&T looking for information on iPhone data plans with her Canadian iPhone (an unlocked Rogers phone) basically told her "F$&# no! You need to buy a new plan with a new iPhone." Currently she's stuck in Arizona with an iPhone that is only enabled for Voice and WiFi. What about those kinds of business practices?


Your fault. Nowhere ever did it say that an iPhone from another country would be ok to take here and sign up with a plan for. Especially a jailbroken phone (unlocked as you put it).


RE: Cell Phone Contracts
By dagamer34 on 12/21/2009 4:53:46 PM , Rating: 2
Are you serious? You can't go ahead and use a product you already own because they won't let you? Cell phones were standardized FOR A REASON.


RE: Cell Phone Contracts
By rcc on 12/21/2009 6:08:32 PM , Rating: 2
No shoes, no shirt, no service. Yes, a company has a right to deny you service.

Obviously it is predjudical to their bottom line, but then can. It's your right to take you business somewhere else.

What's the big deal?


RE: Cell Phone Contracts
By chromal on 12/22/2009 10:51:10 AM , Rating: 2
Just like the FCC can revoke their licensed used of the spectrum. Take your business elsewhere? Let them eat cake, huh? The wireless carriers operate on the public radio spectrum at our sufferance; in many locations, there literally is nowhere else to "take your business" as only one company's tower is 'visible.' Your overly naive view of things coupled with your blind faith the large corporations' ethical behavior couples to make me hope you never are allowed to hold regulatory power over consumer use of the spectrum.


RE: Cell Phone Contracts
By rcc on 12/22/2009 12:31:47 PM , Rating: 2
Learn to read and comprehend.

However, from a contractual standpoint, does the government contract with the carriers define any of points you mention? If not, there is no basis for "sticking it to the company".

I have no "faith" in the ethics of large corporations. But they will follow the money. If enough people vote with their money, the corps will change. I suppose that's faith of a sort. We prefer to call it enlightened self-interest.

The thing that keeps the carriers doing what they are doing, is that people keep signing up and paying them. Get a land line, find another way. You want to change the system, you have to work at it a bit more.


RE: Cell Phone Contracts
By Iaiken on 12/22/2009 11:14:41 AM , Rating: 2
First of all, get your terminology straight.

Jailbreaking is the act of altering the Apple iPhone OS to allow the execution of unofficial applications.

Unlocking is the act of unlocking the SIM card id from a specific carrier.

So you're saying that because life took her outside the bounds of her previous carrier (Rogers), she's SOL?

Her options:

A) Get raped by Rogers/AT&T for roaming fees for the duration of the contract

B) Pay a $400 ETF (because giving the phone back is not an option) and use it as a paperweight.

Hrm...

Plan A is just stupid as it works out to more than the $400 cost of plan A over 3 years, so it's not really a choice. It's cheaper to just sign a new contract for a new iPhone than to go with plan B and get gouged on an international scale.

Plan B is not really a choice, but if you cancel your data plan with the current carrier. Again, not really a choice...

Which leaves the only logical choice as:

C) Unlock the phone and see about getting a talk/data plan from an existing iPhone carrier.

Nope! Apparently this is not a choice either despite being done with apples official unlocking tool:

http://theappleblog.com/2009/08/20/apples-official...

So I talked to her and if she is going to have to get a new phone, she's getting HTC HD2 and hold an iPhone stomp in downtown Phoenix. Basically, she is gonna set up a protesting spot and video tape her argument and let people stomp on her old useless iPhone and upload it to youtube and iPhone-hating group sites as a final F-U to Apple, AT&T and Rogers.


Why???
By tviceman on 12/21/2009 11:42:48 AM , Rating: 2
It's amusing how AT&T and Verizon are either adding new fee's, increasing early termination penalties, getting ridiculously high dropped calls with their iphones, or threatening to punish users who abuse "unlimited" data packages and are still gaining subscribers at the expense of Sprint. I've been on Sprint for 10 years now, the service is better than it's ever been, and with my current plan I don't see why I'll ever switch to a different carrier.

$130 for both myself and my wife, unlimited nationwide to any mobile phone on any network, unlimited data, and 1500 minutes to landline phones. At this point, it's really a no brainer for me.




RE: Why???
By StevoLincolnite on 12/21/09, Rating: -1
RE: Why???
By protosv on 12/21/2009 1:26:36 PM , Rating: 2
Same here, been with sprint for over 8 years now. Their customer service used to suck, but has vastly improved as of about 2 years ago and has remained consistent. Their prices are also pretty good for data plans etc....


RE: Why???
By Taft12 on 12/21/2009 2:23:56 PM , Rating: 2
A cellphone bill of $130 a month is hardly a no brainer for most people!!


RE: Why???
By tviceman on 12/22/2009 12:02:26 PM , Rating: 2
$130 for 2 people = $65 total after all taxes and fees per month for unlimited everything.

Find me a better plan than that.


Verizon ETF
By Milan96 on 12/21/2009 2:09:47 PM , Rating: 1
ETF is not fair.
Verizon have to think before start give a way free phone what can happen.( Use a math)
Get a customer this way is for company seems to me stealing customer just get a business.Is very wrong.
Make a mistake "pay for it" not customers.




RE: Verizon ETF
By wempa on 12/21/2009 4:16:01 PM , Rating: 2
Translation please ?


RE: Verizon ETF
By rcc on 12/21/2009 4:49:04 PM , Rating: 2
He's a kid that thinks companies are always evil, and should have to pay, no matter what.


Not unreasonable.
By karielash on 12/21/2009 11:49:29 AM , Rating: 2

I travel a lot and switched from ATT when my plan ran out earlier this year because the coverage was awful. I generally go for the one year plans and like the advanced phones, you get what you pay for and they have excellent coverage and a lot of features. The store staff were also explicit in pointing out the downsides of early cancellation was a hefty fee so when I signed on the dotted line I knew what I was getting. I should be able to get a $99 Droid upgrade next April so the fee isn't as bad as it seems.




RE: Not unreasonable.
By SoulBlighter on 12/21/2009 12:05:13 PM , Rating: 2
When it comes to retail price of all new smart phones, I hardly see any below $500 mark. Now as an example a customer is getting a phone worth $500 for $199, that means the company would like to have 300$ paid by any means in next two years. I don't see any wrong done by Verizon to increase the ETF to $350, they have all the right to protect their investment. I like the new system from T-mobile, you pay the full price of the phone, no contract what so ever and no ETF, and you are billed $10-30/month less than what you pay with a contact.


value of money
By Chernobyl68 on 12/21/2009 12:00:47 PM , Rating: 2
here's an idea:
Charge the consumers what the phone would really cost, and what the phone plan they choose would really cost. That way you don't have to charge fines for early disconnection/cancellation.
I don't think the average consumer realizes the cost of the phone when the price is often wrapped up in the service contract.




RE: value of money
By Bateluer on 12/21/2009 12:07:03 PM , Rating: 2
That'd be brilliant for signing up new subscribers. High end phones cost 500+ easily. They want to gain as many customers as they can, making people pay 600 dollars for the phone up front, plus the monthly fee, would turn away a lot of customers to a competitor who subsidized the phone.

Not everyone is a millionaire like everyone on Dailytech and AT.


All I want from a cell phone company
By Zstream on 12/21/2009 5:09:12 PM , Rating: 2
I want:

ActiveSync
Hardware Encryption
Google Maps
500 text messages a month

Why do I have to pay 45$ just for data/text and an additional 45$ for 700 minutes? This is stupid!




By Lerianis on 12/22/2009 5:51:27 AM , Rating: 2
Yes, it is stupid, and the FTC and FCC need to clamp down on this, because 'data' uses no more bandwidth than voice.


Contract?
By croc on 12/21/2009 7:54:11 PM , Rating: 2
A 'contract' in AUS legal terms, is an agreement between two parties. Don't like the contract offered? make your own riders, deletions or additions to the contract. If a company's position is this is the 'contract', take it or leave it, then it is not truly a contract - and I'd leave it alone. Buy your phone outright, pay for what you use.

Maybe all of these 'contracts' should go by what they properly are - Terms and Conditions of Use.




RE: Contract?
By Jalek on 12/21/2009 11:10:33 PM , Rating: 2
The fact that they can "offer" these contracts as a take it or leave it proposition shows that there is no actual competition between providers.


Fair trade contracts
By dotdotperiod on 12/21/2009 1:24:29 PM , Rating: 2
Ok fair enough for the ETF if that is what they need to cover their cost for early termination. But if a company is purposefully imposing an ETF for the sole reason of keeping customers then you stifle competition. Contracts need to fair as well, for instance a customer buys a phone say a droid for the $199 and agrees to the contract and is then cancelled for using too much of the unlimited service which by my reasoning is false advertising but back on the this issue. So customer has paid for this phone which by the way is locked to the carrier and cannot be transferred to another service, should the carrier holding the contract be responsible for re bursting the initial purchase price? This customer has paid for the phone/ paid the ETF/ paid for several months of service should they not own the phone and be able to go to any carrier he/she wishes? Second issue is when cell phone companies change their terms of service you have the right to end your contract without any ETF but if you have purchased a phone you can’t use it anywhere else. I have Verizon but do not have a contract at the moment but only sign one year agreements so what they are saying is if I want a new smart phone and a one year agreement and want out after 11 months of service I would owe them $240???? "Where do I sign" sarcasm




You people seem to forget...
By mthoren68 on 12/21/2009 4:05:25 PM , Rating: 2
...that you are perfectly free to buy a phone at the unsubsidized price and not subject yourself to the terms of any contract? What's that? You don't want to pay $600+ for the coolest phone that you gotta have even though you'll never use 3/4 of the features but you need it to feel good about yourself? Well then, if you only wanna pay $100-200 for the coolest phone that you gotta have even though you'll never use 3/4 of the features but you need it to feel good about yourself, then you get to sign a contract so that the carrier doesn't operate at a loss so that the monthly charges stay where they are.

Anyone ever heard of "cause and effect?" Things have a cost, and if revenue in one spot goes down, that has to be accounted for somehow, either in efficiencies, volume or an increase elsewhere.




This is life..
By ernestneo on 12/21/2009 9:16:33 PM , Rating: 2
Life is (un)fair




Don't like ETFs?
By RMSistight on 12/22/2009 8:56:00 AM , Rating: 2
Just buy your phone outright. That's what I do with all of my phones.....then again I should say PHONE because I've used the same one for seven years. haha.




By tedrodai on 12/22/2009 10:06:30 AM , Rating: 2
offer me plans at attractive prices, and let the phone manufacturers sell phones.




Dont set a flat
By daveloft on 12/22/2009 11:56:02 AM , Rating: 2
There shouldn't be a set flat rate for cancellation and it shouldn't include anything but the cost of the phone as your monthly fees should more than cover any other costs your provider has.

Take the total discount of the phone and divide it by the total months of the service agreement. Take that number and multiply by however many months is left in the contract. Make it law and be done with it already.




By rlctech on 12/24/2009 1:05:39 PM , Rating: 2
What about customers who did not get a smartphones. Do they charged #350 as well. This is just a BS. They should sale smartphones with less discount and those who can afford it will get it so they cannot resale the phones.
All they're trying to do is give u good discount so u can sign that dumb contract.




BS
By Link on 12/28/2009 5:07:23 AM , Rating: 2
So they are rasing ETF because of BOGO. Then, why not just apply the higer ETF to those who took advantage of the BOGO?




By T2k on 12/22/2009 2:21:11 PM , Rating: 1
...that they have BETTER SERVICE, FAR MORE ADVANCED NETWORKS and yet CHEAPER handsets, especially even at full price.

Just came across this BTW - iPhone from €19 with contract:
http://www.9to5mac.com/huge_iphone_price_cuts_3023...

Of course, ETFs are WAY LOWER and prorated over there.




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