FCC To Hold Hearings On Early Termination Fees 184
Isaac-Lew sends word of an article in the Washington Post reporting that on June 12 the FCC will hold a hearing regarding cellphone early termination fees. The Commission may look at early termination fees for TV and Internet service as well. The wireless carriers are taking a Bre'r Rabbit approach toward possible FCC regulation of early termination fees — the FCC's intervention would pre-empt a number of class-action lawsuits going forward against Verizon, Sprint, and others. These suits, stemming from state regulations, could cost the carriers billions. "...the carriers have renewed a lobbying effort in recent weeks to persuade the FCC on a legal definition that would stave off the state lawsuits on cancellation fees. On May 6, 2008, Verizon Wireless chief executive Lowell McAdam and the company's chief lobbyist, Tom Tauke, met with [FCC Chairman] Martin, urging him to adopt a federal policy, according to FCC records."
The FCC was unable to be reached for an opinion... (Score:5, Funny)
Market Forces At Work (Score:5, Interesting)
Re:Market Forces At Work (Score:5, Interesting)
*Of course the price of the phone is rolled up into the price of the service you get - that's why new phones need a 2 year service plan because after 2 years you will have paid off the cost of phone. It is also why when you renew your contract you get a new phone, since you have paid off the old one and are making payments on the new one.
If there were no cancelation fees then the company would have no way to make up its initial gift of a several hundred dollar phone to you if you decided to stop paying the monthly fee for it.
If the FCC strikes down cancelation fees then the price of phones will suddenly increase several hundred bucks. This isn't necessarily a good thing for the market since almost everyone I know tends to go for the free phone or the 50 dollar phone when getting a new plan - no one is willing to spend several hundred dollars. At least, not in a lump sum up front.
Re:Market Forces At Work (Score:5, Interesting)
A) The "free" phone would be require the contract and have it clearly stated (not buried in the contract) that this will include both an increased monthly cost and a early termination fee. The termination fee should be the amount you haven't paid off yet. Ie, keep it for year and a half and cancel, you only have to pay the remaining balance.
B) The option to buy a phone upfront in full, and have a monthly discount (compared to the "free" phone cost). As it is with most companies you can't do this. Even if you spend hundreds on a phone, you have to fight with them to get service without a multi year contract if you're able to get service at all. Even then you pay the same monthly cost as the person with the "free" phone.
I'd like to have the choice. Personally, I'd take B. What I have now is a "free" phone, but I read through the contract you have the choice to not renew it after the 2 year term. I took that option, though it took a lot of arguing with them over it. I still pay the same amount even though it's a three year old phone, but at least I can cancel it whenever I want.
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I paid $550 (including shipping, handling, and taxes) for an unlocked smart phone, for which the local carrier charges $700+taxes without a contract. $499+taxes with a 3-yr contract. I know for a fact that the cost to the manufacturer is around $200.
It has built-in GPS receiver but can't save map data on the flash card and display the location on that map. Why? because the carrier my case wants to upload maps from their server and char
Re:Market Forces At Work (Score:4, Interesting)
This is not subsidizing the price of anything. It is only used to lock me into their service and line their pockets. Since I was done with the contract I had with them, I decided I'd rather switch to a new carrier than be treated like that. They got MUCH more willing to work with me when I told them I was cancelling... to late for them, though.
Re:Market Forces At Work (Score:5, Insightful)
Apparently you did that wrong. What I've been told is that I should never talk to the service people at a cell phone company. Instead, always ask to be put straight through to their cancellation department. For whatever reason, they're MUCH more willing to negotiate than the regular service folk.
Personally, I haven't done that. I just can't be bothered. If your front line isn't authorised to make the customer happy, this customer will take his business elsewhere. I don't play games with my business, so if you want to screw me over, well, screw you.
Re:Market Forces At Work (Score:5, Interesting)
They'll change their minds if they end up paying for a few months worth of contracted service that they cant use. If they never run into that, well its a moot point and they'll probably continue happily with the contracts. If you know you're going to use the service for the length of the LTC and that you can deal with replacing the phone in the event of the unforseen, AND read your damned contract then there really is no problem with this. The problem there is no one is willing to wade through pages of fine print to check every possible caveat situation (which isn't exactly a fault but neither is it transparent and honest).
Another thing is that there are a lot of contracts with clauses that i'm fairly sure are illegal (in canada at least, i'm not sure how things would work in the US there) such as disclaiming liability for the actions of their customer service representatives in its entirety (at least it was in certain companies contracts when i was doing cell phone customer service back in 2004-2006). I honestly wonder how many of these "contractual obligations" would actually hold up in court given a good attourney with the balls to bring it to the big boys.
And to the complaint people have that such actions would increase the price of cellphones. YOU'RE ALREADY PAYING THAT PRICE FOR THE CELLPHONE. It's simply rolled into the costing of the service, and MUCH harder to check the true cost effectiveness of the two (device and service). If providers had to advertise contractless prices primarily and list contractual bonuses seperately, it would make things much more transparent. There is no reason they cannot keep the ETF's out of the contract if they do not provide the device, and if its quite clear in the contractual bonuses that there is a penalty fee if one DOES subsidise a device.
Also remember that if you activate your own phone on a contracted plan, the ETF is still the same regardless of whether they provided you with a phone or not (ie if you take a contracted 'special offer' and upgrade your plan with the phone you already have). Granted people can just get a new one with the new contract to not have the liability for no reason, but that seems rather wasteful if the previous device does everything the client wants already.
People always say that you should read your contracts, but to be quite honest the majority of contractual ETF cases i ran into were situations where the customer did not even know they had a contract. If they accept a plan over the phone, are told it comes with a contract, and the notes on the account state that the user was advised of the fee (whether they were or not) good luck trying to prove it. And good luck trying to subpoena the call recording without a harsh capital investment in either time or money.
Insurance? (Score:2)
Do they not have insurance in Canada? Mine is 2.99 a month and covers loss, theft, or virtually any type of damage. I've used it three times and it's painless and simple.
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The fact that such services were discontinued speaks volumes, whether they were too incompetant to properly price the insurance based on the risk probabilities or whether it was intentional to cash in on the ETFs or subscripti
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They weren't. Rogers at least wasn't.
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This was Chachingular.
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Wow, you're lucky. Mine costs $7.99 a month, and if you have to use it, you have to pay a $99 deductible, which is more expensive than the phone costs on ebay, plus they give you a refurb which is even cheaper. I don't have insurance anymore, after I found this out. Four months of not paying insurance and I can afford to buy a phone off o
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How is that the carriers fault? If you buy anything on a payment plan or on a credit card and then lose it, you still have to pay for it.
And to the complaint people have that such actions would increase the price of cellphones. YOU'RE ALREADY PAYING THAT PRICE FOR THE CELLPHONE.
Nobody disputes that. But few people want to pay $350 for their cel
Re:Market Forces At Work (Score:5, Informative)
Re:Market Forces At Work (Score:5, Informative)
I would like a cell phone market where you can go to the mall, go into a cell phone store and order what you want, then go into your preferred carriers store and get what you want. Off course the prices should reflect that, knowing AT&T, Verizon or Sprint, they're just going to maintain the prices for subscriptions and jack up the prices of the cell phones.
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I'm not sure what you're getting at. In Europe when you want a new phone you have to shell out several hundred dollars, there are no free phones or discounts. The phone companies here give them away for free*.
It really gets on my nuts when people do this - the UK is part of Europe, and I can currently walk into *any* high street mobile phone shop (Orange, O2, Link, Carphone Warehouse et al) in the UK and within 10 minutes walk out with a contract and a free or subsidised handset.
Check out the following Orange UK store handset page - note the text at the bottom which says 'The prices shown here are a guide based on an average plan costing £35 a month. The price of your phone or device may change a
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Re:Market Forces At Work (Score:4, Interesting)
I bet it's lots less in europe than it has been here. Or until just recently.
Here in the US they are essentially charging us monthly for the *free* phone, since no phone is really free.
The free phones are just a mechanism to keep you signed up for long contracts. The carriers keep a stranglehold on the equipment to keep you having to either pay an outlandish price for a phone with no contract or to sign up for a new contract to get it free or at a pretty small discount.
I would guess the free phones and other sales expenses, kickbacks, etc. are costing us at least 20% of our monthly bill, and after two years if you didn't get another free phone, they don't lower your bill. They keep the extra money.
The best thing to happen is to have the cellular carriers not sell you or give you your phone at all!
You could then buy it in a bubble package at Walmart.
Motorola, Samsung, LG, Nokia would have sales reps calling on Walmart, Target and other retailers selling them phones in huge volume to sell us without any bundling, and there would then be significant competition.
As it is now the cellphone manufacturers have only a few customers, the carriers.
How much do you really think it costs Motorola to make a free phone at a plant in Mexico? $4-$6 for the really cheap ones that are given out free. Maybe $25 for the really fancy ones.
As usual the problem can be solved by letting market forces work, getting cellphone manufacturers duking it out to sell you your phone through regular retailers, and having cellphone carriers duking it out to sell you your service. And you can then use whatever phone you want.
One GOOD thing that has happened in the last year, the IPHONE came out.
Until then cellphone manufacturers were making phones the *carriers* wanted.
Now, we are finally getting phones that *we* want.
But ATT was dragged kicking and screaming to the IPHONE.
Verizon wouldn't make the deal and give up the control. They lose!
Re:Market Forces At Work (Score:5, Insightful)
Motorola, Samsung, LG, Nokia would have sales reps calling on Walmart, Target and other retailers selling them phones in huge volume to sell us without any bundling, and there would then be significant competition.
What, you can't do that in the US? In Europe we can walk into any supermarket and walk out with a contract free phone 5 minutes later. They're not free but they're fairly cheap - competition keeps the prices down.
One GOOD thing that has happened in the last year, the IPHONE came out.
Previously, you signed up for a longish contract and you got the phone free.
With the iphone, sign up for a longish contract and you pay full price for the phone.
I fail to see why this is a good thing.
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Essentially you cannot, except for prepaid phones.
You can't buy any phone like that to use on Verizon or Sprint (CDMA).
You *can* buy a cheap ($20) Tmobile GSM Prepaid phone that you can then use on a Tmobile regular plan if you like by discarding the prepaid SIM that comes with it.
There are s
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Clearly not the same as a cellphone with competitive rates. Not if you use it much that is.
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R&D actually costs money.
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If people are stupid enough to want a new phone or lose their existing one every two years they have no one to blame but themselves.
Some carriers will give you the unlock code for your phone after a period of time has passed
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Also, the FCC could restrict the cancellation fees to when you DO get a new phone. Extending your contract, even on a "special rate" shouldn't extend a cancellation fee.
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Right; I'm not willing to spend several hundred dollars in a lump sum up front. That's because I'm paying hidden monthly fees for the phone already.
Except that's not really the way it happens (Score:5, Interesting)
That's all well and good in theory, but that isn't even remotely how things happen in practice. Cell phone companies actually use these plans to protect themselves from free market competitive forces and to secretly overcharge people for services and products they've already paid for. I can (and will) back that assertion up with examples in the next few paragraphs, but let me say first I hope those lawsuits suck tens of billions of dollars out of these cell phone companies, because they've easilly gotten billions in ill-gotten gain. On to the examples:
When my wife and I got married December 2006, I was three months away from a new phone and and ending a two year contract. We went to Verizon and asked to consolidate our two phones into one family plan. They did this, but then without telling us extended our contract by a full year. All we wanted was consolidated billing: we kept our same phones, our same numbers, etc. Nothing changed. But they extended our contract by a year, and suddenly I'm continuing to pay off my already paid off phone, I didn't get a new one, I'm told leaving will cost me a 200 dollar termination fee (for what, I might ask, since my phone is paid off), and getting a new phone will cause them to extend my contract by two years.
But it gets better than that. My wife and I found we weren't using all that many cell phone minutes, so we went back a few months later to lower the minutes on our plan. They secretly extended our contract again without telling us. Meaning once again I'm paying for a paid off old crappy phone, I still didn't have a new one, and I was going to get charged an early termination fee (for no justifiable reason) if I quit.
So that's how these things really work in practice. They do nothing but screw over the consumer in what really is an entirely illegal way. Obviously, if I had known in either case my contract was going to be extended, I would have said no way (I didn't find out about those secret extensions until months after the second incident). What it comes down to is this: I was unknowingly placed by Verizon into a contract I never agreed to, and then was charged an early termination fee quitting it! That is the definition of unethical, I'm not the only one they did this to, and the judge can't take away enough billions from them to satisfy us (or make up for what all these cell phone companies have done to American consumers).
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And it used to be illegal. Time was when contract law required a valid signature by both parties to be valid.
But welcome to the New! Improved! world of American corporate law, where you can find yourself liable for the terms of a contract that you've never seen and never signed. Big corporations can just cre
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Re; On the flip side; (Score:4, Insightful)
How many phones does the typical person have in a drawer, locked to some provider they had a falling out from?
This may be the end of locked phones. Pick up a phone that you like, not just what they push this week, and pick up a SIM card from your favorite carrier. This iPhone dilemma of nice phone, carrier sucks would end. Service would improve to reduce churn.
You are no longer forced to buy a new phone to change carriers. Why is this a bad thing? As a trend this way, one of the cell stores has a sidewalk sign board advertising unlocked phones for sale. This may be the beginning of a good thing.
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If the FCC strikes down cancelation fees then the price of phones will suddenly increase several hundred bucks. This isn't necessarily a good thing for the market since almost everyone I know tends to go for the free phone or the 50 dollar phone when getting a new plan - no one is willing to spend several hundred dollars. At least, not in a lump sum up front.
Explain how "Pay as you Go" phones are only $50 then. All it means is that people would have more basic phones (i.e. not everyone would have a camera phone.) That, and people would continue to use their phones for more than two years.* I, myself, have been using the same phone for the past 3 years, despite living in the US, and the vibrate function has been broken for nearly 2 of those 3 years.
*One could also argue that by continuing to use the same phone for more than 2 years, consumers would be throwi
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If they want to rent or lease cell phones then they should rent or lease cell phones. Don't tell me the phone is only $50 then try to recoup the cost by marking up service and then charging me $200 to cancel my service. Just say the phone costs $250. It's called honesty, the marketing guys won't un
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What bugs me most is they do it on a per-line basis. I have three lines so for me to switch companies it would cost me $600 in early term fees
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The 'free' phone, contract extension, termination fee model has worked because the market likes it. Now we have a few people that still want their free phones, but don't want to have to p
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I've never heard of a provider locking out ringtones or blocking picture transfers (which since half of those go via bluetooth would be rather difficult).
I did have one phone where they'd disabled the VOIP client.. took 10 minutes to reenable it.
Shitty coverage (Score:2)
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No one cellular carrier has a monopoly either I one though they could make more money by offering contract terms the demand side of the market would view more favorable they would leverage the advantage and do it. They don't so the peo
It's the network (Score:2)
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Maybe your economic education was different than mine, but when government regulation steps in this is not "Market Forces At Work". If the market was demanding this, people wouldn't be getting free phones with a contract renewal. Instead they would buy their phones elsewhere and not have to deal with termination fees.
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No, it's worked because that is basically the only option other than pay-as-you-go, which are even more expensive. It's kind of like the airlines. As soon as one adds a surcharge, takes away a service, etc., all the other ones follow suit. It's not free market if the "competitors" all have the exact same terms.
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So the price of phones will just increase, nice. (Score:3, Interesting)
Nonetheless, the subsidized cheap/free phones people want make sense. It's like a simple credit extension by the provider: people get free phones every few years, and the provider gets their money back and then some over the life of the contract.
The FCC has no right to butt into this portion of the market. I'd love to see a "Non-subsidized" contract price, but my company handles all my employees' cell phone accounts, so we already get a nice reduction in our monthly price because we never take their free/cheap cell phone deals. So that option IS there, you just have to negotiate with the right department and not a retail store.
Re:So the price of phones will just increase, nice (Score:5, Insightful)
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When a customer ends their contract VERY early, the fee may not even cover the true cost of the phone.
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Take this N95 deal - free N95, 12 month contract, £17.50/mo for first 5 months, £35/mo for the the other 7. Total cost of contract £332.50 (calculations from dialaphone - haven't verified them).
No matter when you terminate O2 get exactly the same amount of money out of you. The phone is probably worth about £250 of that and the rest
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If 10,000 customers sign up in a given area, and the cell provider doesn't have significant coverage in that area, there is a high burden of cost over the time that the customer is signed up: finding land, leasing land, providing towers, maintaining towers, etc. That $200 or so you'd pay is probably close to the realistic guid
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Except...what? (Score:2)
Which almost makes sense, except that they're charging you $200 not to provide service. It's a "termination" fee, not an "activation" fee (which they also charge you when you establish service.)
Temp agencies (Score:2)
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Unfortunately, that's not the case. Sprint claimed I had a 2 year contract after I bought a phone full price, and then switched to Cingular.
Of course, they're not willing to document why they think I have a 2 year contract, and I'm not willing to pay them the $150 fee until they do.
So t
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In fact, I now regularly get offers to reduce my bill 5-10% if I will lock in to a 1/2 year contract. Perfectly reasonable offer, IMHO, but the fact I had to jump through so many hoops to be in such a situation is egregious.
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I called up AT&T Cingular, went into their stores, went online.
I told them I had my own phone and I wanted service from them with no contract.
There was no way to get that from them. It was impossible. If I ported my number, got a new number, whatever.
There was a 2 year contract.
I asked "Why, not like you are giving me a subsidized phone?" They had no answer.
There was no way to establish service with ATT without a 2 yea
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Every major US carrier has a monthly plan. They're generally not well-advertised, and are primarily intended for those with poor credit, but they're available.
The problem is the sheeple who honestly think that a mid-market cellphone costs US$50. They're the ones who buy that US$250 phone for US$50 (along with a 2-year contract!), the next day drop it in water / drive a truck over it / simply lose it, and then get infuriated when their carrier declines to sell them another US$250 phone for $50 (and doesn't
Re:So the price of phones will just increase, nice (Score:3, Interesting)
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Just in case there are those who do not know, in canada at least the providers always have a uncontracted phone price. These prices tend not to be advertised much though, and many of the salesmen are comissioned based on contracts not the devices themselves.
Be sure to ask. Repeatedly. And with different agents.
Re:So the price of phones will just increase, nice (Score:3, Insightful)
If I replace my phone, I get into another penalty period. If I don't... I pay the same amount; but without the penalty period. And that's it.
I want to see a "no-phone" rate...
Yes, I would lik
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Even though I am in London right now (for the next week), my home base is Canada (Toronto). My carrier does NOT offer that service -- they would much rather I buy a phone from them. I don't have much choice for carriers; the "competition" doesn't even offer sim card support for their phones.
Completely disgusting.
I am looking for service at £50/mo with reasonable minutes, unlimited web access, email delivery and send. I don't want to be locked into a "contract" with a £200 penalty. Based on a
You said GBP. We have USD. (Score:3, Insightful)
Contracts (Score:2)
I don't think we should be able to call the FCC and cry about not liking contracts we signed, but maybe there should be rules about having initials next to every item on the contract (like the termination fee
read the effin contract (Score:5, Insightful)
i don't think this should apply to dropping service if the cell carrier isn't holding up their end of the bargain (crappy coverage, non-functioning hardware, refusal to address issues, etc) - then, by all means, the customer should have full right to leave without ANY penalty. but if the customer is leaving because they want the sweet phone on the other network, or just because they feel like it...maybe they should have thought of that before signing.
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don't like termination fees? don't sign a contract agreeing to pay them if you leave. duh. it's not like you have some inalienable god-given right to a cell phone. hence the contract.
Easier said than done when none of the competitors offer anything w/out a contract. In this day in age, going w/out a cellphone simply isn't a choice for most people. I tried to go as long as humanly possible without a cell phone (I absolutely HATE phones), but eventually had to cave in due to social, school, and work-related issues..not to mention with pay-phones disappearing nowadays, it can be a pain in the ass to make a phone call when you're in unfamiliar territory.
You should maybe do some research, ok? (Score:5, Insightful)
Hmm. Let's examine this.
http://www.wireless.att.com/cell-phone-service/go-phones/ [att.com]
AT&T Go phone. No contract.
http://www.t-mobile.com/shop/plans/default.aspx?plancategory=4 [t-mobile.com]
T-Mobile. No contract.
http://www.verizonwireless.com/b2c/store/controller?item=prepayItem&action=viewINpulsePlanDetail [verizonwireless.com]
Verizon. No contract.
http://www.boostmobile.com/ [boostmobile.com]
Boost Mobile (owned by Sprint-Nextel). No Contract.
Did I misunderstand you when you said "none of the competitors offer anything w/out a contract." because that ALL of the (major) competitors, and no contracts. There are literally dozens of options for cell service without a contract.
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I think you'd be surprised (Score:2)
Check that out. TBH, it's an extremely good deal at $55 a month for unlimited talk, text and wireless web. Definitely not gouging.
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To be sure, even the existing usurious cancellation fees should work out to only about 3-4 months of service (depending on your plan). It'd be a small price to pay for not giving them your money for the next year and a half anyway.
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No kidding, I feel exactly the same way. It is gotten to the point where the cell phone is completely necessary, just like roads, water, gas, and electricity. Under the old wired system, we used a net
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NYCL out there to correct me?
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you merely accept one of a few choices of contract and all that it entails.
That's negotiation. You select your carrier and the terms they offer. Businesses do not operate on individually-crafted contracts. It would take too much time and cost far too much money. The problem with people with a little knowledge of the law is that you're incredibly dangerous. Words don't mean what you take them for granted to mean.
Standard form contracts are how mass transactions occur, even between businesses. You even get situations where two businesses enter into contracts and exchange form
Re:read the effin contract (Score:5, Insightful)
Gas station chains that only sell gas to if we agree to enter into a contract to only buy gasoline from their stations, and you agree to buy a minimum of 50 gallons a month! Don't like termination fees? Don't sign a contract agreeing to pay them if you leave. It's not like you have some inalienable god-given right to drive a car. Hence the contract.
I have my own cell phone. I currently use a pay-as-you go system, precisely because I don't want to be force into multi-year contracts, and I typically only have my cell phone for emergency purposes. But let me tell you, I pay significantly more per-minute than those with a contract (about $0.25 a minute, plus fees).
In an ideal world, a competitor would come along to service my needs. In the real world, there are very few companies with the money to buy the spectrum necessary for cell phone use, and those that have have all gotten together and decided that all of them will use this lock-in method. That leaves me with no choice but to pay exorbitant rates for their service without a contract.
And as I said in a post above, I've had providers attempt to lock me into a one-year contract for the mere privilege of changing my phone number after I moved, so don't give me garbage about this contract being used to subsidize the price of phones.
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Last year I moved from southern California to the SF area to take a new job. I'd been a T-Mobile customer for four years at that point. Their coverage in SoCal was top-notch and I'd never experienced a drop call in four years. Their customer s
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Yea, well, the cellular companies and their contracts, all done on the phone, little except perhaps your original one done in writing. Like the parent said, they renewed his contract "without his knowledge". They do that all the time.
Then later they try to stick you with termination charges even though your contract might h
They'll just change the system (Score:4, Insightful)
- The "free" phone that is given to you in exchange for signing a 3-year contract, instead becomes a "lease"
- You must give a "deposit" in exchange for the lease. The deposit is equal to the cost of the phone that they would sell it for, should you choose to buy it without a contract
- They'll conveniently offer you an instant loan to cover the cost of the lease. So you don't have to shell out those $300 bucks, you just "owe" them to the company.
- Each time you pay your plan, part of the money is used to cover that deposit loan. If you finish your 3-year contract, the owed amount becomes 0, and you get to keep the phone.
- If you leave early, they charge you the remainder of the loan.
They'll just wrap it all in the same kind of contract you sign without reading anyways, and for most customers it won't be any different in how or how much they pay, compared to the current system. But from the legal perspective, it suddenly becomes a whole new ball game.
Re:They'll just change the system (Score:4, Insightful)
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so what exactly are they deciding on? (Score:2)
I could see this hearing poised to set a very good, or a very bad, precedence.
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I don't think they will make any decision that fees should be abolished thanks to the arguement about handsets being subsidized by the contract, but they may just put a s
ETFs aren't the problem, plans include the cost (Score:2)
Assume I bought a $300 phone that would have been $50 with a 2 year contract.
Well, great! No commitment. Just one (big) problem: I don't get any sort of pricing commitment. The whole reason the ridiculous discounts work is because the discounts provided are just put in the cost of plans! If I don't get any sort of discount, why bother?
A further disincentive against buying your own cell phone? The different standards and activation. Sure, AT
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Common sense (Score:2)
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The cell phone manufacturers forbid companies to sell their new hardware for less than a certain amount. A phone might cost them $50 to make, but you know that they're going to sell it to you for $400. Or actually, $50 + two-year contract..which means the cell company can pay it off in like two months. You don't believe that phone actually costs $400, do you?
Its collusion, plain and simple. I could have a contest to win a $100,000 car..and if Uncle Scam's Car
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Covers The Cost Of The Equipment Discount (Score:4, Interesting)
Where do you list your $10/month cheaper plan that doesn't have this tied in?
My phone's about to come out of its two year contract. It's still perfectly functional and will likely see me through several more years just fine. I'm guessing a lot of others are in the same boat. As it stands, with no discount for already having a phone making a lie of the cost reclamation argument, most people are likely to get a new one that they consider "free," tossing their old one. Were they able to save that $10/month, how many more would be tempted to save money and, even unintentionally, end up saving a lot of damage to the environment?
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The wireless carriers' highest duty is to increasing profits for their shareholders, so thinking about the Earth is not allowed. Saving the planet is not important enough compared to adding an extra 5 to the dividend.
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No, it doesn't. Contracts to do things that are illegal are null and void, as are contract provisions against public policy. There are various rights that you cannot contract away. There are restrictions on what you can contract to do and how the contract must be made. (For example, under the Statute of Frauds, certain types of contract must be in writing even though in general oral contracts are valid.)
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