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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 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
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.
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?
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!