Slashdot Mirror
Verizon Defends Doubling of Early Termination Fee
I Don't Believe in Imaginary Property writes "Verizon is defending its decision to double its Early Termination Fee from $175 to $350 after being called to account by the FCC. They claim it's because the higher fees allow them to offer more expensive phones with a lower up-front cost (PDF), and they also say that because they pro-rate the fee depending on how much of your contract is left, they still lose money. Apparently doing something about the Verizon customer service horror stories isn't as good a way to retain customers as telling them that they have to pay several hundred dollars to leave."
Maybe consumers would have a better chance at fairness if Verizon had to justify itself to the FTC.
[Fuck Beta]
o0t!
Verizon sucks anyway. Their plans are laughable. Try pricing out a smartphone plan with them. Oh, and don't forget the (lol) extra $24 for the data plan. For an average family plan with smartphones they come out to like $40+ more than Verizon for just two lines, and it goes up as you get more lines.
Verizon can rot in hell. Can you hear me now? Yes? Well, what I said was "fuck you, Verizon".
If they didn't get you on the back end, they could just charge you more up front to buy the phone, then amortize the up front cost through lower monthly bills, until in the end you pay the same amount. That way, they could even offer "no termination fee!" But I'm sure somebody would still get pissed at call it deceptive business practices. It's a free market, and they can charge anything they like. This is a total non-story.
Please, Slashdot, can we have a way to filter out stories by submitter? I don't think I've ever seen a story from "I Don't Believe in Imaginary Property" that doesn't irritate me with its smug sanctimony and total irrelevance. Personally, I don't believe in imaginary news.
If you don't want to pay the fee, you should avoid it by not signing an agreement with Verizon. If you don't like Verizon's customer service, you should avoid it by not signing an agreement with Verizon. Or sign an agreement and live up to your obligations and avoid the fee that way.
Don't hire the government to force the people at Verizon to do things against their will -- unless the people at Verizon have truly defrauded you, personally, out of a significant amount of money. Because forcing people to do things against their will is (almost always) morally wrong.
The FCC and FTC definitely need to step in the the wireless market. Policies like this promote stagnation and high prices.
Why should the customer be bound to a wireless contract when this doesn't apply to landlines? I've said before that wireless contracts are keeping prices artifically high, allowing providers to charge quite similar rates for similar plans, because it is so difficult to switch. If customers were not tied to contracts, the ensuing price war might bring wireless rates down closer to prices that I have seen outside the USA.
Speaking of other countries - Why is the USA one of few countries where I can't just pop the SIM or UICC card out of my handset and put it into a new one? Why did it take intervention by the Chinese government to force device manufacturers to standardize chargers to minimize electronic waste?
IIt's a free market, and they can charge anything they like.
It's not a free market, and folks getting upset over the dissemination of phone and plan prices aren't making it any freer.
Another commenter already pointed out that other network providers offer better better deals... The hard part is getting this information to consumers in a form that's clear and easy to understand, when the providers themselves seem dedicated to obfuscation.
"they also say that because they pro-rate the fee depending on how much of your contract is left, they still lose money"
Wow... that's the biggest load of BS I think I might have seen all week.
They don't lose money off of the pro-rated fee... at absolute worst they lose money because they lost a customer, and even that's unlikely unless the company is teetering on the edge of bankruptcy. Heck, if a customer terminates early and the company collects that fee, they can actually earn interest on the whole termination fee sooner instead of collecting it over a period of several years.
I'm not sure in what sort of reality they think saying something like this would be likely to make anybody feel even slightly sorry for them.
File under 'M' for 'Manic ranting'
Absolute horse-crap. Phones are one of the most arbitrarily priced pieces of hardware on the market. Take for example the 'free phone' it is 'retailed' at 200 plus dollars. It has not touch screen, no wifi, no app store, no legit mobile browser. When in reality, you could buy, for that same 200 bucks, a iTouch, which gives you applications, wi-fi internet, Texting, and a significantly larger screen (touch screen even). Hell, with Wi-Fi, as long as you have access to a router, you can run Skype and Call anyone, FOR FREE! Hell for 200 bucks you can get a netbook! Cell-Phones are a huge, dare I say, price-fix bonanza. Friggen Rip-offs.
I think a better deal would be to split the discount you get for the phone and the charges for the actual service. Its that simple. On your bill, you get your Phone mortgage and your plan charges.
Then we can discuss further separating the link between the phone and the plan. The phone aspect should be treated like a straight out loan. You pick one of: the monthly payment, interest rate, or duration of loan and the provider picks the other two. Of course you should have a "buy out" option on each statement that tells you how much you need to pay to completely OWN the phone.
THEN we can realistically compare and discuss the discounts that providers give for service contracts. Right now, the system is too hidden and vague. It severely prefers customers who jump providers every 2 years and creates a lot of waste (useless phones). It punishes current and future loyal customers. Customer acquisition is a LOT more expensive than keeping current customers, and the system prefers the former with the later bearing the additional expense burden.
Of course that would also mean much higher phone prices, how many people would buy the iphone or Droid at $600?
Lots - nothing stops verizon from financing the thing separately and adding the payments to your account. Pay off the phone? Your bill goes down.
Reboot macht Frei.
"Their service, Their terms"
Good, now they can give back all the federal funding they have recived to roll out the networks. Those should be the terms of the federal money. Really just like the internet the service provider, and the owner of the actual infrastructure need to be separated.
All of the above was encrypted with a Quad ROT-13 method. Unauthorized decryption is in violation of the DMCA.
Even if you're not an Apple fan, you have to give them credit for recasting the cellphone world and removing the chokehold the carriers had on costs, phones, customer service, etc, etc.
Sorry, what? No I don't.
What, exactly, has Apple done to help that situation?
Don't thank God, thank a doctor!
I mean, the iPod touch is $199
With no camera and no GSM/UMTS radio.
Yes, an iPod touch doesn't have GSM/UMTS. But factor in the next piece of information
and you can get a cheap throw away phone for $20
TracFone and Virgin Mobile phones are subsidized and provider-locked in the hope that you'll buy more minutes.
I think the original post wasn't referring to the heavily subsidised smart-/feature- phones, but to the crappy phones that only provide basic voice & SMS. Basically they are only a GMS chipset connected to a speaker/microphone/keypad combination. You can find such in very low price-ranges.
Thus, according to this reasonning, adding GSM/UMTS radio to iPod touch to convert into iPhone, should cost something in the same range as the sum of the above products.
Creating a smartphone out of something which looks like a PDA should raise the cost from the initial ~200$ to ~300$ max.
Not a price jump from ~200$ to ~600$ as its currently the case.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Spoken like a true living-in-moms-basement capitalist.
When it comes to cellphones, it's not so much a free market as it is a fiat market. There aren't that many providers, their terms are all more-or-less similarly rapacious (some people might even say collusively rapacious). This is not some some Middle Eastern Bazaar where you can haggle for the deal you want - it's Their Way or the Highway.
Sure, you can opt out entirely, but is that really going to have them trembling about losing market share?
Let me put it this way. People dump Wal-Mart gift cards on me. Even with Free Money I won't set foot in Wal-Mart. So tell me, have I terrified them into switching back to USA-made products, yet?
It's an oligopoly (with a high risk of collusion)...
I've read Slashdot for the last 5 years, and now I start posting... Go figure
how many people would buy the iphone or Droid at $600?
As many as buy cars, TV's, or any other consumer item on credit? It wouldn't be much different for cable networks to offer TV's with their subscriptions, or, to have a car analogy, gas companies that give you a car and require you to pay for an amount of gas each month.
But either way it's pretty much a scam; financing baked into the price which makes it easier to trick consumers into non-competitive rates for both the consumable and the financing.
USMC applies here too: U Signed the Muthafuckin' Contract.
Don't like it? Don't buy a Verizon phone. Or better still, don't buy a phone with a contract.
There are some people that if they don't know, you can't tell 'em.
No, because the margin on a gift card that is never spent is way better than anything else they could ever sell you with it. Way to go! Down with the man!
They already got the money for the card. Essentially anything you'd buy with it was already paid for. Not using the card means you let someone give Wal-Mart free money.
No, it seems like a good deal when it's a good deal.
Because the phone companies are owned by big institutional investors that require big dividends and steadily increasing profits, they have to make it harder on consumers, who basically don't have anywhere else to go.
Phone companies need to be publicly regulated utilities, like they are in countries that have more advanced phone systems than the US.
The "Free Market" has kept us technologically behind much of the world when it comes to wireless phone service.
You are welcome on my lawn.
Uhh. There is no free-market in the US for just about anything. Cellphone companies license spectrum that no one else can use and become defacto monopolies.
I have traveled a bit and only one country that I have been to had a free-market of any kind. Ghana, West Africa.
Ghana has between 4 and 6 cell phone providers that compete with one and another.
Ghana would not give exclusive rights to any cellular company when they first approached the country before there was cellular technology in the country.
Instead Ghana started it's own government-run cell company because no major provider would agree to anything but a monopoly position.
Strangely enough... 6 competing companies are there now making money hand over fist, and the Ghanaian government just sold their old government phone/internet company to Vodacomm.
Privatization does work, in a real free market. We live in a completely socialized state that pretends it is a free-market driven economy.
Sleep is for the weak.
cost of the droid (build cost) for verizon to obtain them is probably not above $100-150 absolute maximum, and likely under $100. The magic 600$ is a number pulled out their asses to imply value and to rationalize the ETF as they are trying to do. It's a bunch of doublespeak and hopefully people will learn eventually.
The moral of your story seems to be: free market works, when the state occasionally intervenes (not necessarily with direct regulation - the case you described is a wonderful example of how else the market can be affected) to keep the competition going.