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Apple Cracks Down On iPhone Unlockers 565

Posted by CmdrTaco
from the but-i-want-to-break-things dept.
An anonymous reader writes "It looks like Apple and its wireless operator partners have finally figured out a way of cracking down on iPhone unlockers by making it a requirement to sign up for a contract before you can get your hands one. "It's obvious why this has happened though. This method means you're tied into a contract, or you're paying O2 and Apple a massive wad of cash for the privilege of owning a 3G iPhone. We're disappointed about this decision, but it does make business sense." Both ATT in the US and O2 in the UK are implementing the new activation system on July 11th, when the iPhone 3G goes on sale."
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Apple Cracks Down On iPhone Unlockers

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  • Correction (Score:5, Insightful)

    by Mateo_LeFou (859634) on Tuesday June 10, 2008 @08:02AM (#23724003) Homepage
    "a massive wad of cash for the privilege of owning a 3G iPhone" If you're not allowed to do what you want with the device, you do not own it.
    • Re:Correction (Score:5, Insightful)

      by OverlordQ (264228) on Tuesday June 10, 2008 @08:03AM (#23724033) Journal
      If you're not allowed to do what you want with the device, you do not own it.

      You can do what you want with it after you buy it. You just need a contract to buy it, slightly different.
      • Re:Correction (Score:5, Insightful)

        by sirambrose (919153) on Tuesday June 10, 2008 @08:09AM (#23724137)
        You can also cancel your contract and keep the phone by paying a $175 termination fee. Since the new models are $200 cheaper than the old models, the new phone is still cheaper than the old one that cost $400.
        • Re:Correction (Score:5, Interesting)

          by God'sDuck (837829) on Tuesday June 10, 2008 @08:31AM (#23724515)
          Or you get the contract and immediately resell it on one of the contract trade sites: http://www.google.com/search?q=trade+cell+phone+contract [google.com]
          • by onceuponatime (821046) on Tuesday June 10, 2008 @08:51AM (#23724863)
            If O2's network was good enough I wouldn't have so much of a problem with this. However, O2's network is simply not worth being tied into. I put an O2 sim into my HSDPA phone (TyTN II) and I swear it wasn't even getting 64kb/s, so it's not going to benefit much from the 3G version. If this were on Vodafone in the UK, I would extend the contract as that was several times faster than O2's when I tested it (It felt about 5x faster at least).
        • Re:Correction (Score:5, Interesting)

          by eiapoce (1049910) on Tuesday June 10, 2008 @10:19AM (#23726627)

          You can also cancel your contract and keep the phone by paying a $175 termination fee. Since the new models are $200 cheaper than the old models, the new phone is still cheaper than the old one that cost $400.
          Are they unlocking the terminal after the cancellation? Otherwise it's not like you really own it afterwards...
        • Re:Correction (Score:4, Informative)

          by Wireless Joe (604314) on Tuesday June 10, 2008 @12:20PM (#23729697) Homepage
          This may be posted further down, but the one thing this guards against is the people who buy multiple iPhones to resell. AT&T won't let you sign a new contract for a number of months (year?) after you cancel one. So you'll only get to buy, cancel and resell one phone per SSN.
      • Re: (Score:3, Interesting)

        ...except things like using it as a tethered 3g modem with a laptop, which the firmware/AT&T prevent. Otherwise, I'd buy one. "Oh, laptop internet access?! Yeah, here, you're going to need a $50 aircard and a $59/month additional plan for that, capped at very low download Kb/month." (5Gb?) = double dipping.
    • Re: (Score:3, Interesting)

      by x_MeRLiN_x (935994)
      And if you knowingly accept the subsidy from AT&T/O2, you can't ethically use another provider.
      • Re:Correction (Score:5, Interesting)

        by elrous0 (869638) * on Tuesday June 10, 2008 @08:26AM (#23724433)
        If Apple cared about ethical behavior towards us, they would also offer an unsubsidized version for consumers at a higher price. Since they refuse to do that, why do we owe them anything?
        • Re:Correction (Score:5, Informative)

          by salmosri (1051404) on Tuesday June 10, 2008 @08:45AM (#23724753) Homepage
          They do, in the UK you can purchase the new iphone on the pay as you go deal, which means no contract you pay the full price for the phone and you can do as you wish with it. Here [techcrunch.com] is some info from the O2 deal.
        • Re: (Score:3, Insightful)

          by forand (530402)
          Apple is not the one refusing to do that. AT&T(or whatever your local monopoly carrier for iPhones is) is the one refusing to let them. When Apple went shopping around for carries willing to deal with their demands for Video voice mail and the like AT&T was the only one which said yes with stipulations. Those restrictions are that Apple cannot sell iPhones for use on non AT&T networks. If Apple sold iPhones as you suggest they would be in violation of that agreement since it would be obvious th
        • by thefinite (563510) on Tuesday June 10, 2008 @09:00AM (#23725049)
          And exactly what ethical duty to us would they be upholding by offering an unsubsidized, contract-free iPhone?

          I'm curious to hear your answer because, while the grandparent was right about the ethical duty of fulfilling a contract you agree to, I don't think Apple owes an ethical duty to us that would require them to offer an unlocked phone.
          • by mumblestheclown (569987) on Tuesday June 10, 2008 @09:39AM (#23725837)
            New to slashdot, are you? Things that you can learn from slashdot include:
            • you have a right to pirate something if it is not for sale in your area.
            • you have a right to pirate something if you want it in a format in which it is not possible to purchase
            • companies have an ethical duty to make GPL drivers,
            • if you have some grievance against a company where the question is about whether you get some good/value/service from the company by being in violation of some law, contract, agreement, statute, or convention, you are nevertheless justified in doing so since while you are small, the companies are big.
            • and on and on.
            welcome to the home of situational ethics!
    • Re:Correction (Score:5, Insightful)

      by blackholepcs (773728) on Tuesday June 10, 2008 @08:05AM (#23724065) Journal
      That's the problem with companies today. They "lease" you the equipment, with hidden terms and rules, and bullshit marketing that omits important facts that relate directly to your decision to purchase (lease) their product. Cell phone companies are one of the worst for this.
      • Re:Correction (Score:5, Insightful)

        by ConfusedVorlon (657247) on Tuesday June 10, 2008 @08:24AM (#23724393) Homepage
        That's the problem with consumers today. They'd rather "lease" a discounted phone and pay more in the longer term with higher locked in rates.

        Cell phone buyers are the worst for this, they more or less destroy the market for buying phones seperately.
      • by Angostura (703910) on Tuesday June 10, 2008 @08:28AM (#23724463)
        That's the problem with cell-phone companies today. They subsidize the cost of the equipment, in the expectation that they might get some call revenue in exchange. Then they get all annoyed when you don't give them any call revenue. Weird that.
      • Laughing my ass off (Score:4, Informative)

        by goombah99 (560566) on Tuesday June 10, 2008 @09:25AM (#23725533)

        That's the problem with companies today. They "lease" you the equipment, with hidden terms and rules, and bullshit marketing that omits important facts that relate directly to your decision to purchase (lease) their product. Cell phone companies are one of the worst for this.
        Whooo boy. you must be still wet behind the ears. You see sonny a long long time ago, there were these things we now call land lines and POTS. And back then no one owned their own telephone. Indeed almost all telephones looked alike because there was only one place to get them. Lease them from the telephone company to put onto their network.

        It was not until deregulation (carter era?? I cant quite recall when it happened now) that you could buy any old phone and attach it. It may also surprise you to learn there was only one phone company too.

        At the time it made a lot of sense. The networks made a lot of assumptions about what was connected to them. They trusted the hardware. they trusted signals coming in from other nexuses. trust trust trust.

        but just like trusting client side authentication leads to grief, the rise of phone phreaks injecting their own signals into a trusted network led to free phone calls.

        I can still see why the cell phone company has reasons that they don't just want to permit any possible activity on their network. They are all about quality of service for as many possible people not an all-you-can buffet where a few people can pig out.

        But I digress. Leasing telephone equipment has been the norm since alexander graham bell. this little experiement where you "purchase" a phone then lease the line has been pretty short lived so far. So get over it.

      • Re: (Score:3, Interesting)

        by Thelasko (1196535)

        That's the problem with companies today.

        Not just today, it's been done this way for over 100 years. [wikipedia.org] Ever notice that you can't buy old fashioned safety razors anymore? By giving away razors with more blades they encouraged men to switch to blades that are more expensive, and forced the inexpensive blade manufacturer's out of the market. It's the business model that made Gillette [wikipedia.org] the company [wikipedia.org] it is today.

        On a side note, does anybody know where I can get a package of 10 hot dog buns?

    • Re: (Score:3, Insightful)

      by Admiral Ag (829695)
      Blame other cell phone buyers. People have decided that they would generally rather not pay upfront for the hardware and then find a carrier.

      This means that carriers will subsidize phones and then look to lock them down to recoup their investment. They wouldn't have to do this if people had decided they liked buying phones the old fashioned way.

      Just thank God that computers aren't sold this way or DRM would be even worse.
  • ER, non-story (Score:2, Insightful)

    by anomaly256 (1243020)
    Um, this has always been the case, since the first round of the first models started being resold without contracts Apple instigated this. Old news, non-story, and hasn't actually stopped anyone from doing this.
    • Re:ER, non-story (Score:5, Informative)

      by Thelasko (1196535) on Tuesday June 10, 2008 @08:08AM (#23724109) Journal

      Um, this has always been the case, since the first round of the first models started being resold without contracts Apple instigated this. Old news, non-story, and hasn't actually stopped anyone from doing this.
      I think this is news to people in Great Briton. For those of us in the US, this is not news at all.
      • by x_MeRLiN_x (935994) on Tuesday June 10, 2008 @08:14AM (#23724227) Homepage
        Great Britain was the island you were looking for. 'Great Britain' and 'United Kingdom' are also not interchangeable.
        • Re: (Score:3, Informative)

          by LizardKing (5245)

          'Great Britain' and 'United Kingdom' are also not interchangeable.

          Yup. Just to clarify things, Northern Ireland is not part of Great Britain, but is part of the United Kingdom.

          • Re: (Score:3, Informative)

            by SpinyNorman (33776)
            Or to totally spell it out for the geo-politically impaired :

            United Kingdom - passport issuing union of four countries (and their minor island possessions)
            England
            Scotland
            Wales
            Northern Ireland

            Great Britain - an island comprising three countries
            England
            Scotland
            Wales

            Ireland - an island comprising two countries
            Northern Ireland
            Ireland (aka Republic of Ireland)

            Note that someone bor
  • A nontechnical solution to an ultimately nontechnical problem.

    One has to wonder, is ATT really such a necessary evil or can innovations like visual voicemail be rapidly available other ways than lock-in?
    • Re: (Score:3, Insightful)

      by Firehed (942385)
      They probably were a necessary evil to make the VV happen in the first place; I'm sure it's non-trivial to implement, but I doubt it's rocket science either. At this point, it's almost certainly just contractual obligations - remember, Apple+AT&T are in bed for, reportedly, five years from the initial iPhone launch. That means iPhone+AT&T only (within the US) until June 2012.

      Of course by that point it won't matter, as all of the cell companies will have bought each other up, and then will proceed
  • Seems reasonable (Score:3, Interesting)

    by ReiDragon (1018072) on Tuesday June 10, 2008 @08:07AM (#23724087)
    This seems like a normal practice to me to be honest. Almost every smartphone that people will buy will come with a contract at the time of purchase to get the price lowered to a point that is reasonable. It happened with my old 8525 to get the $600 phone down to $285, and now it's happening with the iPhone to get the $400 phone down to $200. It just seems to be the industry standard, and before people start to complain about not being able to use it with t-mobile or another GSM carrier, I just want to say that you don't NEED to get an iPhone. You can get whatever smartphone comes with your service. If you want to travel with a smartphone, then you can get a different one too to put different SIM cards in and only pay for those times you use it.
    • by Serious Callers Only (1022605) on Tuesday June 10, 2008 @08:20AM (#23724343)

      It happened with my old 8525 to get the $600 phone down to $285, and now it's happening with the iPhone to get the $400 phone down to $200.
      Only reasonable if you don't realise that $325 price drop was taken out of your fees for the next x years of contract.

      We'd be much better off if mobile phones were sold as items like computers or telephones, without contract, and the phone companies concentrated on providing a good service, instead of 'adding value' by gimping phone software, charging insane amounts for data, or tying users into long term contracts.

      $500 is a reasonable price for the technological marvel which is a modern cellphone, if you can't afford that, perhaps you can't afford a highly priced monthly contract either.

      As it is in the UK the iPhone may be available without a contract from O2 via the Pay as you Go packages, but they're being remarkably coy about that, they probably want to sucker people into signing 18 month contracts for 30-75GBP a month first before unveiling PAYG.

      I see why Apple has done this (as you say it's standard practice) but that doesn't make it any more palatable.

      PS Can't translate a £ symbol !! WTF Slashdot, this is 2008.
      • by elrous0 (869638) * on Tuesday June 10, 2008 @08:31AM (#23724509)
        Getting cell phone companies in the U.S. to abandon the "locked-in" model at this point would require a new law or high-level legal ruling. And, since the telecoms basically own Congress and the Presidency, it ain't gonna happen.
      • Re:Seems reasonable (Score:5, Informative)

        by MBCook (132727) <foobarsoft@foobarsoft.com> on Tuesday June 10, 2008 @08:38AM (#23724637) Homepage

        If I'm going to be locked into a contract either way, I'd much rather have my phone subsidized (new plan) than not (old plan).

        I was all set to buy one of the new iPhones until more data started leaking out. You know that nice iPhone plan they had? 450 minutes, unlimited data, 200 SMS for $60 a month?

        Gone

        In what can only be described as "easier", you now have to use the standard AT&T model. Their lowest plan is 450 minutes which is $45. You have to add $5 to get 200 SMS messages (note: this seems to include MMS and other things too, which is different). Then there is the iPhone data plan that you are required to buy: $30 a month.

        So instead of a simple little $60 plan, they now expect me to pay... $80.

        So let's see... $20 difference per month X 24 months = $480. Take out the cut they were paying to Apple (wasn't it like $5?) and that's another $120.

        So AT&T's revenue goes up $600 per two year 3G contract.

        I'm not so sure I want to pay $80 a month for an iPhone. I was hesitant with $60 but this makes me question things much more.

        Congratulations again AT&T. You took the must buy product of the year for me and managed to screw it up.

        • Re: (Score:3, Interesting)

          by megaditto (982598)
          Perhaps you are not their target customer in the first place?
      • You need a contract (Score:5, Interesting)

        by DrYak (748999) on Tuesday June 10, 2008 @08:53AM (#23724901) Homepage

        We'd be much better off if mobile phones were sold as items like computers or telephones, without contract, and the phone companies concentrated on providing a good service, instead of 'adding value' by gimping phone software, charging insane amounts for data, or tying users into long term contracts.
        None the less, you still need a contract with some GSM or 3D operator to be able to use your phone. Otherwise, you'd be buy an iPod Touch instead.

        So while you're at it, as you'll be buying a phone and a contract anyway why not the phone company giving you some rebate as they're going to make wads of cash from the monthly fee any way ?

        The only current problem with the iPhone is that they have exclusive contract with some service providers.

        Whereas, in several European countries (including here in Switzerland, but also mandated by law in France as reported recently on /.), you just buy whatever phone you want from the shop. Either you pay the phone full price. Or, if you sign a new contract or extend a previous one, that contract's provider gives a N$ rebate, to be used with whatever phone you choose to buy simultaneously in the same shop. The amount of rebate depends on the contract you picked up.

        The two aren't even bound together (the phone was just taken from the shelf) and nothing forces you to use this contract and this phone together (you could cheaply get and extra handset by extending your own current contract and give the phone as a present to you S.O.)

        Some service providers have their own shop which may sell some special package with a "special edition phone" (= read : the provider logo on the phone's shell, 1 additional customized screen background and ringtone, and some preinstalled crap that you won't use at all).

        But in most shops and malls, you just pick up the phone you want, and eventually the contract you want from the provider of your choice.

        The idea of subsidizing phone with provider contract isn't stupid. It's the complete lack of choice for those contract that is debilitating.
  • by splutty (43475) on Tuesday June 10, 2008 @08:07AM (#23724093)
    Apple is going to have a serious problem applying this in a lot of European countries. They have laws that actually forbid this sort of tying 2 vendors into 1 product.

    I know for a fact that France and the Netherlands have laws for that, and if I remember correctly, Germany has as well.

    So either they're not going to be able to sell iPhones there, or they have to be sold seperately, which then opens them up for unlocking anyway.
    • by larry bagina (561269) on Tuesday June 10, 2008 @08:17AM (#23724275) Journal
      Vodafone sued T-Mobile/Apple (in Germany) over that and lost [During the lawsuit, they sold an unlocked iPhone for 999 Euros]. Orange (France) sells an unlocked iPhone for 749 Euros vs 399 locked. So nothign will change (except maybe a lower price for the locked version).
    • Re: (Score:3, Interesting)

      by Splab (574204)
      Denmark has laws against how long you can tie a person into a contract.

      And the minimum total spend on the contract has to be clearly listed in the commercials.
    • Re: (Score:3, Informative)

      by BenoitRen (998927)

      But they were still able to sell the iPhone in France, so I don't think those laws are that strict.

      In Belgium, however, there are better laws on this, and the iPhone still isn't officially being sold here. There are shops that sell imported unlocked ones, though, for a hefty price.

  • What happens in places where it must be unlocked?
    • Re: (Score:3, Insightful)

      by TheP4st (1164315)
      They will be sold unlocked, probably at a higher price than the $199 which is going to be price in most countries. And certainly many of those phones will find their way to countries where you can only buy iPhones that are tied up to a operator. Still, none of this will prevent Apple from cashing in a very thick wad of cash from the sheeple that buy one in countries where they are tied up to operator X.
  • So much for that (Score:2, Insightful)

    by Anonymous Coward
    I was seriously considering getting one of the new 3G iPhones, but now I will definitely not.

    The more they tighten their grip, the more customers will slip through their fingers...
    • by jamrock (863246)

      The more they tighten their grip, the more customers will slip through their fingers...

      I think that John Gruber nailed it [daringfireball.net]. By halving the price and rolling out in 70 countries simultaneously, Apple is going for market share in a huge way. If you thought the hype leading up to the US launch last June was over the top, I think you'd better go hide in a cave in the weeks leading up to July 11th. The global excitement and anticipation will feed on itself and drown out any other consideration, as far as the ge

  • by BoldAC (735721) * on Tuesday June 10, 2008 @08:12AM (#23724199)
    The contract lock-in insures that the new iPhone is more expensive than the last.

    If you do the iPhone math [tech-recipes.com], the new phone will cost you more than the older phone despite the "half the price" ad campaign.

    If AT&T really drops free sms, it'll cost even more.

    I don't mind paying more. However, for somebody like me not in a G3 area, why should I have to pay the G3 transfer higher prices?
  • by oahazmatt (868057) on Tuesday June 10, 2008 @08:18AM (#23724293) Journal
    As far as I recall, Apple was actually shopping around for a few different providers. Apparently when they were in talks with Verizon there were too many demands on Verizon's end. (Surprised?) AT&T was the largest carrier available willing to let the phone be what Apple wanted it to be. Just something to think about.
  • by 0xdeadbeef (28836) on Tuesday June 10, 2008 @08:31AM (#23724513) Homepage Journal
    While carriers might still be able to lock Android phones, there will undoubtedly be unlocked phones available, since there is no monopoly on the platform.

    Apple + AT&T = single point of failure

    Think about how absurd it would be if, in the old days, you had to buy your computer from the phone company because it had a modem?
  • by Zymergy (803632) * on Tuesday June 10, 2008 @08:33AM (#23724551)
    Time will likely solve this issue as Chinese reverse-engineering development teams (and "ghost shifts" at probably the same factories making current 'official' 3G iPhones get to cranking out 'overages' lol)

    Then again, if the killer app is not the device but the method by which it is unlocked.... surely this will not increase handset theft or there is always the 100% 'honest' 3G iPhone vendor unlocking the phones in house for some under the table cash?

    Just what is so technically savvy about the new unlocking method or is this simply some lawyer-authored bulletproof contract that one must sign in fresh blood?
    I for one compliment the cloners in order to avoid those ridiculous lock-in contracts. This is the world of competition, and the nature of global competitors.

    How useful would it be for Asus' eeE PC to only work under contract and only from an Asus Wi-Fi router? It is a matter of time before someone creates a truly unlocked Wi-Fi handset that VoIPs whenever possible with Vonage et al, and other times uses the SIM for whatever carrier you choose to use that day. I can use my laptop with a variety of pay ISPs even at the same time. A few more evolutions of these devices and stiff competition will likely leave consumers getting a better product not crippled deliberately. This is why I despise the iTunes lock-in on iPods (and will not own one as a result). I remember when MP3 Players were as easy to access as USB memory sticks and they played nearly anything despite its source... Given Apple does make some sharp looking items, but they are not consumer-friendly due to their hardware lock-ins. I'd love to use Tiger or Spotted-Leopard or whatever it is called these days on my Intel PC hardware, I'd love to just use windows explorer to copy MP3 files onto my Nano. I'd love to swap SIM chips in my iPhone and use whatever carrier I am using at the time... But NO.. They are lawyer-empowered consumer-restraining capitalists above all else. So I pay for and own NONE of the Apple devices mentioned above.
  • by boris_the_hacker (125310) on Tuesday June 10, 2008 @08:53AM (#23724905) Homepage
    Different price plans mean different initial outlay.

    How else would you sort out the purchase of the iPhone?

    As they have different initial outlay, they aren't going to let you pick up an iPhone for £59 then choose a cheaper tariff. The only way to offer the different initial costs is to make sure that the tariff you have matches.

    It really isn't some conspiracy. It isn't to crack down on phone unlockers. There is nothing to stop you unlocking after purchase.

    They are just covering the subsidy through the tariff.
  • gimmie a break. (Score:3, Insightful)

    by milkmage (795746) on Tuesday June 10, 2008 @10:17AM (#23726591)
    why do some of you include the cost of the plan in the TCO for the iphone? the new pricing model is the same for all phones (go to ATT and check - the data plan is for PDA/Smartpone, there isn't a line item for the iphone) - so regardless of the hardware you buy your plan is the SAME (minus PAYG which has been dropped for the iphone) ATT PRESS RELEASE: http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=25791 [att.com] The new agreement between Apple and AT&T eliminates the revenue-sharing model under which AT&T shared a portion of monthly service revenue with Apple. Under the revised agreement, which is consistent with traditional equipment manufacturer-carrier arrangements, there is no revenue sharing and both iPhone 3G models will be offered at attractive prices to broaden the market potential and accelerate subscriber volumes. The phones will be offered with a two-year contract and attractive data plans that are similar to those offered for other smartphones and PDAs. AT&T anticipates that these offers will drive increased sales volumes and revenues among high-quality, data-centric customers. Currently, less than 20 percent of AT&T's postpaid subscribers have integrated devices capable of voice, Web and data applications. Based on the company's experience, average monthly revenues per iPhone subscriber are nearly double the average of the company's overall subscriber base. With a two-year contract, the price of an 8GB iPhone 3G will be $199; the 16GB model will be priced at $299. Unlimited iPhone 3G data plans for consumers will be available for $30 a month, in addition to voice plans starting at $39.99 a month. Unlimited 3G data plans for business users will be available for $45 a month, in addition to a voice plan.
  • by MrPerfekt (414248) on Tuesday June 10, 2008 @10:49AM (#23727395) Homepage Journal
    I think the bigger story here is that Apple will not be selling them online. As far as I know, the first Apple product not to be sold online since they started the Apple Store.

    From the Apple Store Online:

    Where to buy:
    iPhone will be available in 8GB (black) and 16GB (black or white) models1 at Apple Retail Stores and AT&T Stores.

    The absence of "right here on this page" is sad. If you want one, you're going to have to sit with the mob on July 11th. Boo.
  • by Nom du Keyboard (633989) on Tuesday June 10, 2008 @10:53AM (#23727499)
    Isn't this illegal tying?

    If anything this is going to do wonders for Apple iPhone sales in a downward direction. Make it even harder for them to reach the magic 10 million sales in a year -- make that 18 months now.

  • by paco verde (561678) on Tuesday June 10, 2008 @02:06PM (#23732243) Homepage

    The iPhone alternative (for freedom lovers) [cnet.com]

    "This article [cnet.com] explains how to get an even better mobile Internet experience, without having to do business with either AT&T or Apple--with no contracts and no $60 per month bill just to surf the Net."

    (Surveillance State blog [cnet.com])

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