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FCC To Hold Hearings On Early Termination Fees
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."
because they left early and everyone had to pay 200 dollars.
Early termination fee's are ridiculous, I can understand an earlier time when the costs of building the cellular network were to be thought of. Now it would seem they like their little cash cow, must help them subsidize the latest shitty phone. It's a shame it's taken this many years for it to finally get some government attention.
I'm sick of following my dreams. I'm just going to ask where they're goin' and hook up with 'em later.
I always buy my phones third party, generally out of the country. Even with a weak dollar, I prefer to buy my phones in Dubai or Asia - they're usually available in the States in a few months, but I like my cell phone toy. My iMate Ultimate has been awesome and hasn't crashed once, unlike almost every telcom-provided PDA phone.
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.
I have never accepted one of their free/reduced priced phones (I prefer to buy online as well, provider selection + disabling of functionality sucks) but you still get forced into a contract. I see no problem with allowing the early termination fees for people that take advantage of free/reduced price phones, you should not be forced into a contract when you bring your own phone though.
Just because you disagree doesn't make it offtopic or flamebait.
My only real issue with Cancellation fees are when you AREN'T getting a subsidized phone. I had my Treo for 2.5 years, I changed jobs and suddenly I needed significantly more minutes. I called them up, they had no problems getting me set up with a new more expensive plan, all was well. After 4 months of incorrect billing I called them and they found there was an error in the way my new plan was set up, it was fixed, all was well. Except when they made that change, they restarted my 2 year contract without telling me. So when my 2 years was up and I was moving, I wanted to combine my Cell/TV/ISP/Home phone to get a deal with another company. My current Wireless Provider wanted to charge me $200 per line, as my wife and I each have a cell on this account, to cancel. It should have been over for 2 months, but now they wanted to go by the new date and ruin my plans of consolidation which would have saved me over $100 monthly. Luckily for me I found out on the internet that the company had changed a charge on their bill and this meant they altered the plans and I was allowed to cite this change and cancel the contract w/o paying. I wont ever go back to that carrier. I don't have a major issue with the subsidized phones and the eventual charge if you bail out before your contract has paid up on the phone really, however after that I really cant see any reason other than a cash grab.
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.
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.
the united states is a nation of laws; badly written and randomly enforced -- frank zappa
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.
Ice Cream has no bones.
Why not? I think it's perfectly reasonable when you sign up with a carrier to have a 1 year contract. After that most contracts go month to month, and you only get in trouble if you take advantage of their 'free' phone offers. There are inherent costs associated with acquiring and setting up a new client on a phone network. Why shouldn't the carriers be able to at least ensure that they can make up those costs with an initial contract?
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I can't get a "no-phone" plan. I don't get a discount because I supply my own phone! But my "plan" is just out of the penalty fee phase. I can't change the plan without getting into ANOTHER penalty fee phase. (certain features can be added or removed, but there are limits -- and my carrier won't tell me what those are).
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 like to sue the provider.
Just another "Cubible(sic) Joe" 2 17 3061
If it becomes illegal to charge a penalty for early termination, I imagine they'll change the scheme to something like this:
- 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.
Hmm. Let's examine this.
http://www.wireless.att.com/cell-phone-service/go-phones/
AT&T Go phone. No contract.
http://www.t-mobile.com/shop/plans/default.aspx?plancategory=4
T-Mobile. No contract.
http://www.verizonwireless.com/b2c/store/controller?item=prepayItem&action=viewINpulsePlanDetail
Verizon. No contract.
http://www.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.
I use sprint, and I brought my own phone - with no contract. Just took alot of chatting with the representatives (and a lot of call backs to get a good rep).
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.
Where do you list your $10/month cheaper plan that doesn't have this tied in? Quoting from the Smithsonian's National Zoological Park: 250,000 tons of toxic material have been dumped in to landfills by 700 million "retired" cell phones in the U.S. alone. In addition, mining the coltan used to coat components in then, has devastated lowland gorilla and African elephant populations.
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?
As far as i remember, two of the major carriers (Bell and Rogers) had trialed lost cellphone insurance and had the services disappear. I am unaware of any third party cell phone insurances in canada, and a quick google search left me needing to do a longer one which i can't do at work.
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 subscription fees being paid without possible use.
Ice Cream has no bones.
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).
Beware of bugs in the above code; I have only proved it correct, not tried it.
At least, not in a lump sum up front.
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.
The truth shall set you free!
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 offer a 4-year contract!).
So the industry is stuck with a customer-base who only hate one thing more then 2-year contracts, and that is paying full price for phones!
I don't read ACs: If a post isn't worth so much as a nom de plume to its author then I wont bother either.