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Google Charges ETF For Nexus One On Top of Carrier's 165

dumbnose sends along the news that Google is double-dipping on the Nexus One early termination fee. Ars sorts out the double dose of fine print from Google and T-Mobile. What it boils down to is, if you give up on your Nexus One between 14 days and 120 days after the sale, it will cost you $550: $350 to Google (automatically charged to the credit card you used to buy the phone) and $200 to T-Mobile. After 120 days the Google fee goes away and after 550 days the T-Mobile ETF begins prorating. A poster on Dave Farber's email list provides another perspective on the "restructuring of the handset premium."
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Google Charges ETF For Nexus One On Top of Carrier's

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  • by Anonymous Coward on Tuesday January 12, 2010 @05:12PM (#30742768)


    quick, somebody justify and rationalize it

    whew, that was a close one!!

  • by Trepidity ( 597 ) <> on Tuesday January 12, 2010 @05:13PM (#30742786)

    The discount for buying it with a 2-year plan is $350, so clearly the termination fee has to be more than T-mobile's $200 to deter people from buying with the plan and then cancelling as a way of getting the bare phone at a discount. Now, $550 is a bit absurd, because it's higher than the cost of the bare phone, but these sorts of fees are often higher than would make sense.

    I guess having the fee charged in two separate instances, instead of T-mobile charging one larger fee and then reimbursing Google with part of the money, is a somewhat unusual structuring. But I'm not sure it fundamentally matters?

  • by ironicsky ( 569792 ) on Tuesday January 12, 2010 @05:14PM (#30742796) Journal
    I'll stick with my phone... $200 early termination fee.. That's $200 for the phone, $200 termination = $400, which is still cheaper then the retail $699.
  • Hmmm (Score:3, Insightful)

    by jwinster ( 1620555 ) on Tuesday January 12, 2010 @05:28PM (#30742956)
    Now to watch and see if the reaction by the FTC to Verizon's ETF on certain phones is the same as for Google/T-Mobile. I'm no fan of Verizon but I'm curious to see if the FTC is truly blinded by the shiny goodwill that Google has with its users.
  • And then? (Score:4, Insightful)

    by e2d2 ( 115622 ) on Tuesday January 12, 2010 @05:30PM (#30742988)

    Look, don't buy it then. It's that simple. This isn't access to a new heart they are selling, it's a cell phone and a premium one at that. Act like a grown up and read the contract then make a decision. Problem solved.

    Too many "outrage" stories these days relating to luxuries and free services. Solution: Don't buy them or don't use them.

  • Re:False alarm (Score:2, Insightful)

    by PPalmgren ( 1009823 ) on Tuesday January 12, 2010 @05:38PM (#30743082)

    Might wanna read TFS again, it clearly states that this incident can occur between 14 to 120 days, which is what your quote says. Essentially, you can only return the phone for the first 14 days, and you're charged an ETF by google to make up for the subsidy cost difference if terminated between 15 and 120 days. T-Mob also charges an ETF for breach of contract.

    IMO it is a double dip, since they would be making 180+350+200 on a phone cancelled in that window, which is more than the cost of the phone, which is bullshit. If you can find fine print in T-mobile's contract that states they do not charge an ETF if it overlaps with google's ETF, that will negate it, but I don't see anything in your post that suggests otherwise.

  • It's not the Google ETF that's the problem, it's the T-Mobile one. You're buying the phone from Google, not T-Mobile. If you trigger Google's early termination fee, T-Mobile shouldn't be out of pocket at all, and shouldn't be charging you anything.

  • by InakaBoyJoe ( 687694 ) on Tuesday January 12, 2010 @05:41PM (#30743122)

    If you buy the phone on a contract, you pay $80 a month. If you buy the phone without a contract, you still pay $80 a month.

    Why aren't people questioning this practice? Carriers justify ETFs on the basis of having to subsidize handsets, but they turn around and charge the SAME amount to customers who aren't taking advantage of the subsidy. Thus artificially suppressing the market for unlocked / open phones.

    The system in Japan makes more sense. When you buy a phone, you choose to pay the full cost up front, or pay in 12 or 24 installments (and of course if you want to cash out early, you have to pay the remainder of the balance, just like any installment plan). The communication charges are SEPARATE from the phone charges. So the end result is that the user who wants a "free phone" simply pays a bit more monthly than the user who paid for their phone up front.

    The money the carriers would save trying to explain, justify, and collect those arbitrary "early termination fees" probably justifies switching to this more sensible system. And it would encourage a free market for phones. Why aren't the regulators/attorneys/etc. stepping in where they should?

  • by Mekkah ( 1651935 ) on Tuesday January 12, 2010 @05:50PM (#30743246) Journal
    Well okay, so you're saying I should be blaming Google for not taking the hit, rather than Verizon, gotcha.

    I think if that is the case though, Google made a bad move with Verizon, they should've learned from AT&T's dealings with Apple. But I think that Verizon just might be hiding behind Google on this one.. It doesn't seem right at all.
  • by keepper ( 24317 ) on Tuesday January 12, 2010 @05:56PM (#30743332) Homepage

    Come. The. Freak. On. !!

    Why does google get to charge this? They get the kickback FROM the carrier, so have the carrier do the ETF.

    Why does the carrier AND google, get to charge fees? Not even the iPhone, a phone that carries a higher retail value without a plan, do such a high termination fee.

    It seems google can do no wrong on slashdot. It can have the cake, the party, eat the cake, and snuff the party goers, and all is well in slashdot-google-fanboy land.

    Come on guys.

  • by InakaBoyJoe ( 687694 ) on Tuesday January 12, 2010 @06:09PM (#30743522)

    Thanks, that's an interesting bit of info. That's a step in the right direction, but it still leaves the handset subsidy shrouded in a mysterious cloud of "plan discounts" and such. And, since all other North American carriers still collect the same amount regardless of subsidy, the user is still punished for bringing their own phone.

    Why can't we go to a simple system like this: say a phone costs $600. You either pay that up front or add $25 to your bill for 24 months and get it for "free". If you want to terminate the contract, you pay the remaining balance, period. "Early termination fees" and "prorating after x number of months" only serve to cloud the issue and confuse the consumer, while creating a customer service and bill collections headache for the carrier.

    Again, this is where good regulation could step in and set things straight. Outlawing ETFs would be the key.

  • by Anonymous Coward on Tuesday January 12, 2010 @06:30PM (#30743738)

    Okay so I need a cell phone to do my job, and keep in touch with my family. .. How do I check my email and keep my calendar with one of those?

    You don't. You do email and calendar at your desktop computer. You pick up the cheap $50-with-1-year-contract cellphone when it makes a noise indicating someone wants to talk to you.

    You don't need immediate mobile email access to keep in touch with family. Read your mailbox once per day (or every few days) when you get to your desktop. If someone has an emergency, they can fucking call you. If it's not an emergency, a delayed turnaround is fine.

    And if you are required to read email/calendars immediately for your job, then don't worry, because your employer is going to buy the phone.

    it's basically telling me to find a job and a lifestyle that doesn't require a cell phone.

    Yep, it's pretty clear you don't know the diff between a cell phone, and a ridiculously powerful (expensive) handheld personal computer. The two are merging but they're sure as hell not quite the same thing yet. One costs $50 and the other costs $500. Quit saying that you want a cellphone (a $50 device) and then bitching that the $500 overkill device costs too much. Get the $50 one and make your fucking phone calls like you said you wanted to.

"Oh my! An `inflammatory attitude' in alt.flame? Never heard of such a thing..." -- Allen Gwinn, allen@sulaco.Sigma.COM