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FCC Probes Google and T-Mobile For Double-Whammy Fees 127

Posted by samzenpus
from the maximizing-the-dip-to-chip-ratio dept.
Julie188 writes "On Monday, the FCC asked Google, AT&T, Sprint, T-Mobile, and Verizon to explain how they tell their customers about early wireless contract termination fees. Notice that Google is the only handset retailer in the bunch. That's because if someone buys a Nexus One phone from Google with a two-year T-Mobile contract, and the user wants out of that contract, the user is expected to pay two early termination fees. One fee would be charged by Google and a second charged by T-Mobile."
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FCC Probes Google and T-Mobile For Double-Whammy Fees

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  • If they really want to know how these conditions are presented, it's better that they send in a few investigators undercover and get it all on tape. That way they can cost the jobs of a few lowest-rung minimum wage idiots who are working their ass off for a couple percent commission.

    At least they will catch someone. Maybe the FCC isn't familiar with the "exculpatory no". They will become very familiar with it asking the policy makers at these companies, though. So that's nice.

    • by mcgrew (92797) *

      If they really want to know how these conditions are presented, it's better that they send in a few investigators undercover and get it all on tape.

      In the US, the secret police almost never go after the rich and powerful. They're there to keep the dope smoking rabble in their place.

      IMO there should be no "undercover agents"; cops should be in uniform. Saying they need "plainclothesmen" or "undercover agents" is an admission of their own incompetence.

  • by jjoelc (1589361) on Thursday January 28, 2010 @04:31AM (#30931088)

    Actually, I think the law requires that the carriers include these early termination fees in print no larger than 3 scan lines to remain on screen for no more than 3 frames during any commercial to be aired between the hours of 3:27a-3:28a... As an alternative, it may be included in the microprint of the signature line of any contract signed by the customer.

    For communications companies, they are awfully good at not telling you anything they don't want you to pay attention to.

    • Re: (Score:3, Interesting)

      by CaptBubba (696284)

      For communications companies, they are awfully good at not telling you anything they don't want you to pay attention to.

      Of course they are, they stick marketing professionals on the team that makes these to make sure you don't read it. From the fees being in super small print in some vaguely titled paragraph of the contract to the notices of changes to your account being on the back of the second to last page of your monthly bill it is all been carefully designed so that the vast majority of people never ever read it.

      It is the same reason that when your credit card changes terms you get a separate letter which looks like ju

    • You miss the point of the small print. The small print is REQUIRED by law. Rather than having a * and saying "Restrictions apply, see store, website or whatever for details" they are require to shove all the terms right there on the screen. And it is often too much info to fit in, so they shrink it to fit.

      IMHO, if you don't know what you're signing, then don't sign it.

  • T-Mobile? (Score:5, Insightful)

    by EzInKy (115248) on Thursday January 28, 2010 @04:47AM (#30931170)

    When I went to my nearest T-Mobile store to sign up for service for my N900 they seemed to have no qualms over activating my device despite the fact that it allowed me the freedom to install whatever software I felt like it on it.

    Now, from the very frequent stories I see posted here related to the iPhone and Android, I have been gathering that the same does not hold true for those devices.

    In fact it appears in many cases that owners of those devices are subject not only to the whims of carriers, but the device manufacturers themselves.

    So really, what is the problem here? You buy it, you do want you want with it. You lease it, you do want they want with it. Seems to me that somebody wants to muddy the waters between ownership and rental.

    • Wait until nearly everything moves to the cloud and unless you hack your device all apps will have to be approved before you can use it.

    • Re:T-Mobile? (Score:5, Insightful)

      by itsdapead (734413) on Thursday January 28, 2010 @06:53AM (#30931740)

      So really, what is the problem here? You buy it, you do want you want with it. You lease it, you do want they want with it.

      Trouble is, the way phones are typically sold - free or heavily subsidised as part of a service contract - is closer to leasing than buying. Since this is the dominant business model, it has a splash back on the way manufacturers design their product, even if you buy it "naked" (I have a nasty suspicion that it also means that "naked" phones are sold at artificially inflated prices to make the subsidies more attractive...)

      It also depends on how you perceive phones: if you buy a general-purpose computer, you expect it to be a universal tool that you can freely program or install software on and still enjoy the manufacturer's support. If, however, you buy a washing mashine and try and convert it to use dry-cleaning solvent you accept that, if it blows up, that's your fault. When phones were just phones, they clearly fitted into the latter category. Smartphones are in a bit of a limbo: people want to run arbitrary software on them but they also expect them to perform reliably as a phone.

      • by EzInKy (115248)


        Trouble is, the way phones are typically sold - free or heavily subsidised as part of a service contract - is closer to leasing than buying. Since this is the dominant business model, it has a splash back on the way manufacturers design their product, even if you buy it "naked" (I have a nasty suspicion that it also means that "naked" phones are sold at artificially inflated prices to make the subsidies more attractive...)

        Couldn't agree more, but still even if the cost is inflated one would think that freed

      • It's not really leasing since you aren't paying down the depreciation and returning the phone when you're done. It's more like financing the phone through the provider. Here's a car analogy: if you finance a car purchase, the bank owns the car until the last penny is paid for. If you default, then the repo men come for the car, despite you potentially paying off a large percentage of the loan. A cell contract is a little different because the cost of the phone and the cost of the service are combined t
        • by tompaulco (629533)
          You forgot about the part where the car dealer then takes the car to auction, sells it wholesale, which is probably far less than what you still owe on it, and then proceeds to take you to court for the remainder of that balance. Then magically, that same dealer sells the same car at the same price he sold it to you, to some other poor shmuck at the same inflated interest rate and the cycle continues.
          I guess the analogy to the phone market doesn't quite hold, other than the merchant ripping off the consume
        • by sjames (1099)

          You don't have to ask the bank's permission before you can put new wheels on the car.

        • by itsdapead (734413)

          It's not really leasing since you aren't paying down the depreciation and returning the phone when you're done.

          (a) I said "closer leasing than buying" not "exactly like leasing".

          (b) How much is a typical smartphone worth at the end of a typical 18 month contract? Or, more precisely, how much would it be worth if the carriers demanded that every phone was returned and the market was flooded (rather than the minority which currently get sent to money-for-old-phones services)?

      • If a smartphone is designed correctly .... i.e. securely, then the part that is a phone (connects to the network, makes and receives calls) should be protected from the rest of the device, which runs the OS, applications, etc.. which simply asks to make a phone call, shows the networks status, get notified of incoming calls, texts, etc ....

        If this was the case then the Smart part of the phone could be open, but the iPhone and the Android phones do not appear to have this separation properly done? So they

        • by Rich0 (548339)

          Actually, android does have this separation. The radio interface is a separate firmware blob, and this is not open source. Some people have tinkered with it slightly (mainly to fix compatibility issues with changes to the rest of the OS), but for the most part it is a black box.

          When you think about it phones have a practical need to isolate these kinds of functions anyway. The phone has to continually interact with the cell network to detect incoming calls/etc, but that doesn't require all the hardware u

          • by itsdapead (734413)

            Actually, android does have this separation. The radio interface is a separate firmware blob,

            Which might stop people hacking the radio and causing the downfall of civilization, but doesn't mean that the phone will still work (or the media player will play without skipping) if the CPU and RAM are saturated by too many multitasking fart apps.

            • by Rich0 (548339)

              Yup - I can certainly vouch that this is the case. My biggest pet peeve is that I don't have any control over whether services run short of using a task manager to manually kill them.

              Note to devs: you don't really HAVE to have a service for every little thing you write. Let me choose whether I need my weather updated every 30 seconds or whatever...

              • by GooberToo (74388)

                The problem is the Android framework requires the use of services for any nontrivial background task. The issue with this is, many developers are not managing their service's life cycle properly.

            • I can't speak for Linux, but it does with Symbian. The radio stack runs as a separate personality on the nanokernel, at a higher priority than the user stack. If the radio stack needs CPU to make its realtime guarantees, it gets it, even if it means your fart apps get a bit more latency and a bit less throughput. I assume with Linux they use a realtime kernel, run the radio stack with a realtime priority and everything else at a lower priority.
    • by AC-x (735297)

      Now, from the very frequent stories I see posted here related to the iPhone and Android, I have been gathering that the same does not hold true for those devices.

      In fact it appears in many cases that owners of those devices are subject not only to the whims of carriers, but the device manufacturers themselves.

      I've had no trouble with my T-Mobile G2 (aka HTC Hero). Initially T-Mobile blocked the app store until I went into my account settings online to confirm I was over 18 (weird parental controls) but after that I've had no problem installing 3rd party software, using free tethering etc.

    • by mcgrew (92797) *

      Seems to me that somebody wants to muddy the waters between ownership and rental.

      A lot of somebodys, and they're almost all corporations. The record companies, for example, call their wares "intellectual property" as if they own the works. In the US at least, constitutionally they don't. Mankind owns this "property", they merely have a "limited time" monopoly on it, just as someone who rents a house has a limited time monopoly on its use.

      Movie studios, OS and games and other applications companies do the sa

    • When I went to my nearest T-Mobile store to sign up for service for my N900 they seemed to have no qualms over activating my device despite the fact that it allowed me the freedom to install whatever software I felt like it on it.

      Now, from the very frequent stories I see posted here related to the iPhone and Android, I have been gathering that the same does not hold true for those devices.

      Even with AT&T, I had no real problems using unlocked devices on their network. Heck, they once even gave me an unlock code for my Blackberry since AT&T has agreement with RIM to do that if asked. They closest they came to a problem was when I was reporting a network outtage in my town, they prefer I report it with a known + locked phone so they could be sure it wasn't just my unlocked phone crashing lame, but I still had a 2+ year old AT&T phone lying around). I was the first to report, but

      • by whoever57 (658626)

        The only problem I have with the iPhone is you're forced to get the "unlimited" data plan for $30 per month, and supposedly they pole their IMEI numbers from time to time to auto-bill people using an iPhone on an account without said plan.

        They do write letters to people who use iPhones without the iPhone plan (I know someone who has received such letters). However, I suspect that here are a number of legal barriers against auto-billing for them, including, probably, agreements related to GSM.

    • I have a Motorola Droid with Verizon and I've been able to install any application I wanted to. What are you referring to when you say that you can't install software on an Android phone?

    • by CompMD (522020)

      I run my own Android build based on AOSP on my G1 on T-Mobile. They don't care, why should they?

  • -Google and T-Mobile now have to sell an expensive, otherwise new, phone as a refurbished phone.
    -T-Mobile can't justify shafting its employee's commission because you broke the contract.
    -Call it a $200 fee for the phone or a $200 fee for breaking the contract, it's still $200 for walking away one way or another.
    -You signed the damn thing without finding what remedies the other parties had against you? Oh wait, this is how we got into the whole mortgage fiasco!

    • You signed the damn thing without finding what remedies the other parties had against you? Oh wait, this is how we got into the whole mortgage fiasco!

      Bingo! The one area where I really support regulation is full, clear disclosure. Require that, and then enforce the contracts. If people are too lazy or unconcerned to read the contract, that is NOT the fault of the other party, nor should the government come in to rescue them from their foolishness or laziness.

      The key is requiring that the terms be laid out plainly and clearly. A table showing total cost of the contract (less any add-ons that you might make such as buying things with your phone, etc)

    • by mcgrew (92797) *

      Oh wait, this is how we got into the whole mortgage fiasco!

      We got into the mortgage fiasco because we allowed the mortgage companies to take out insurance on their losses, in effect letting them eat their cake while still having it. The mortgage companies were in a position where the only way they could lose was for the insurance companies to go bankrupt.

      AIG should have been allowed to fail.

      • by sjames (1099)

        Not only were they allowed to insure their losses, they were allowed to take HUGE risks and then fraudulently represent them as minimal risks when they resold them.

      • by Belial6 (794905)
        That isn't the whole story though...

        1) The lenders were allowed to do as you say, as well as play all sorts of other shell games. NINJA (No Income, No Job Applications) being a big one. My wife worked at a lender. There is no question that the lenders knew that they were frequently committing fraud. We had many a conversation where she would call me up and tell me that she was refusing to do work, and that she may get fired over it, because she was told to commit crimes. Luckily, she did not have to
        • by mcgrew (92797) *

          You should have been modded up.

          I actually blame government. The primary cause was that the things you mention should not have been allowed to happen, and it's part of government's role to not allow things like that to happen.

  • If you buy a subsidized phone from a 3rd party retailer ( not the carrier ) they only get their money if you stick around for a while on your contract.

    Amazon has a similar policy, dinging you $250 on a Blackberry from AT&T:
    http://www.amazon.com/gp/feature.html/ref=cell_dp_activationLink?ie=UTF8&docId=508597 [amazon.com]

    What's interesting, is Amazon's policy doesn't say anything about dodging the fee if you return the phone.

  • The more I see of this, the more I think we need some sort of "bill of rights" for cell phone customers. I'm not against people choosing to take the subsidy, assuming they know what they're doing when they sign the contract. What I don't like is being FORCED in to a subsidy arrangement. When I signed up for T-Mobile about 5 years ago, I had a perfectly good Sony Ericsson phone, yet TMO would not just sell me a SIM card and bill me month to month. Instead, I had to take their free phone (which I shoved in a
  • I recently went to cancel DirecTV service - which I've had for more than a decade, only to find out they tacked on a $400 early termination fee. This had nothing to do with an agreement that I signed or ever verbally agreed to. It's just a tactic that they used to try to prevent me from leaving. The problem is that they can add on these fees and demand payment and in absence of payment, they'll affect your credit. My only solution is to go to small claims, which will cost me $75 + time and energy. Most

  • Meh.Phone companies have always done their best to squeeze every drop of blood from the turnips that are their customers. Plans and bundles and contracts, all smoke and mirrors designed to disguise the fact that they simply want to charge you for breathing but cannot, hence the paperwork. The thing that I would like to see eliminated is this inane "minutes" limit. We are SO past that with today's technology, yet they keep on sticking it to us and we sheep keep on getting sheared.
  • As a previous sales rep for an authorized reseller for a big cell company (in the US and not for T-Mobile), I have to tell everyone that whenever an authorized reseller sells a phone to a customer, that customer has 2 contracts. One with the cell company and another with the company selling the phone. The cell company's contract is like usual, with the deal about their etf (early termination fee) and the company that sold you the phone has a contract usually stating something along the lines of: if you canc

    • by mattc06 (978394)

      Oh, forgot to mention, Google would be an authorized reseller if you are going through them to upgrade to the Nexus One or if you are getting a new plan with them. For those of us who bought the phone at the full cost, we have no etf with google (but depending on your cell plan, you may have one with your cell service provider).

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