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."

Comments

Federal Trade Commission

[TubeSteak]

Maybe consumers would have a better chance at fairness if Verizon had to justify itself to the FTC.

Re:Federal Trade Commission

[Zugok]

I too wondered why it was called to account to the FCC and not the FTC. Seems it missed every over reply so far as well.

Meh.

[RightSaidFred99]

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".

Re:Meh.

[RightSaidFred99]

Oops, "they come out to like $40+ more than Sprint", that is.

Re:Meh.

[BrokenHalo]

I'm not even a potential Verizon customer, since they have no presence here in Australia, but pricing out any plan is largely an exercise in futility, given that just about all telcos are notorious for moving the goalposts as soon as you've signed on the dotted line. All you can do is run your costings on what they're offering at any given moment, in the hope that there isn't some buried clause in your contract that allows them to multiply the costs by x^n under whatever circumstances they hadn't seen fit to mention before. Or in the hope that the clause that says they can "vary the terms of your contract without bothering to tell you" won't come back to bite you on the bum.

Re:Meh.

[Ogive17]

I only pay $65/month through Verizon for my blackberry storm. I consider that a good deal since my co-worker has an iPhone 3G and pays $80/month for the same plan and the phones have very similar features.

Re:Meh.

[Anonymous Coward]

I'm not aware of any agreement in the wireless industry that can be changed without notifying the consumer. Typically if they change your contract in their favor you can cancel and avoid paying the ETF.

Not necessarily. For example, AT&T and others drastically raised the cost of texting a few years back, but said that since it wasn't a material change, one couldn't terminate without paying the ETF. By all accounts, it was a material change (and IAAL) but it's a bitch to fight. They're all slimeballs, and the only way they bend is when they lose public-interest based class action lawsuits.

Re:Meh.

[trum4n]

you should be paying 35. but this is america, land of the greedy.

Re:Meh.

[Ogive17]

We should also be paying $6/gallon for gas... pricing is relative.

Re:Meh.

[PopeRatzo]

You did read it before signing it, right?

And did you also read the 11 "addendums" to your contract that you agreed to when you logged in to your account to pay your bill?

If the phone companies weren't trying to gyp you, they'd tell you exactly what your bill's going to come to every month instead of saying you're buying a "59 dollar unlimited plan" that for some reason comes to $110 every month.

The extent and quality of phone service in the United States grew exponentially when the phone company was basically a government-regulated utility. Then we were sold a bill of goods when we were told that only by creating "competition" could there be any technological advancements, so we end up with a small handful of mobile companies overcharging people for phone service while working to suppress the technological advances that "less free" countries in the rest of the world enjoy.

Re:Meh.

[demonlapin]

How old are you? Old enough to remember how much long distance calls cost before we introduced competition?

I remember twenty years ago that an in-state call to a town 200 miles away cost thirty cents a minute. Calling my parents on a phone card from a ski trip out West was about $1.50 a minute. And those were AFTER competition had started.

There are problems with the American mobile phone market - in particular, the different communication technologies and the different 3G GSM bands fragment the market so that effective competition is greatly reduced. But our market has some significant advantages, too: every plan sold today is nationwide without roaming charges. When you find me a European operator that will cover me from Moscow to Gibraltar for the same price Americans pay, then we'll talk about apples-to-apples.

Re:Meh.

[Macrat]

I remember twenty years ago that an in-state call to a town 200 miles away cost thirty cents a minute.

And yet "long distance" charges still exist today on land lines for calls that are "normal" calls on a cell phone or voip service.

Re:Meh.

[evilviper]

I remember twenty years ago that an in-state call to a town 200 miles away cost thirty cents a minute.

And? How much did a 56kbps modem cost? Oh right, it hadn't even been conceived of yet.

Regulation has next to nothing to do with falling long-distance costs. Technology is improving all the time, and it's vastly less expensive to operate a data line today than it was 30 years ago.

Even if we'd maintained the bell system as a regulated monopoly, the falling operating costs would have similarly resulted in falling phone bills.

Re:Meh.

[demonlapin]

Even if we'd maintained the bell system as a regulated monopoly, the falling operating costs would have similarly resulted in falling phone bills.

Then why were the competitors' prices so much cheaper than Ma Bell's? Do you really think that Sprint and MCI had no effect whatsoever?

Re:Meh.

[dissy]

And did you also read the 11 "addendums" to your contract that you agreed to when you logged in to your account to pay your bill?

Uhh yes?

Are you trying to say you DON'T read things before making them legally binding to you?? And that is your argument?!?

No wonder you are so bitter, after letting the world take advantage of you so brutally...

They can charge whatever they want

[Guido del Confuso]

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.

Re:They can charge whatever they want

[nurb432]

I agree that they have the right to run off business due to exorbitant fees/prices, but, if they change any terms DURING your current contract you should have the right to terminate with no fee or other repercussions. And yes, the that section of their TOS allowing them to do that should be struck down as deceptive.

Furthermore, if you don't like the posts from an individual, try this : DONT READ THEM.. geesh. You are whining as much as you claim others are..

Re:They can charge whatever they want

[timeOday]

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.

You just made that up. Why do you think it? Obscure down-the-road fees are deceptive; up-front charges are not. They're two different things. That's the whole point.

Re:They can charge whatever they want

[gbjbaanb]

but I thought this was for ending the contract early, so they're not exactly obscure charges - most people enter into a phone contract for a fixed amount of time and expect to have to honour that for that time. If they want to leave early, they should expect to either not be allowed at all (ie have to continue to pay the contracted-into bills), or pay a fee to agree to break the contract.

As long as there are no fees to pay once the contract term is up, this is still a somewhat non-story.

Re:They can charge whatever they want

[ultranova]

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 they did, I'm sure somebody would still get pissed at call it deceptive news reporting. It's a free market, and Slashdot can filter its stories anyway they like. Your whining is a total non-story.

And personally, I've never seen a post saying "it's a free market" that didn't come down to defending some corporation from - usually well deserved - criticism. But then again, economical freedoms are more important than freedom of speech to right-wingers...

Re:They can charge whatever they want

[timeOday]

After going back and reading the article, I see it's only for new contracts, and only for smartphones, so I wouldn't claim it is or should be illegal. But it's good for people to whinge about it online, that's how we become informed consumers.

What does bother me, though, is the lack of ala-carte alternatives. I wouldn't mind silly people entering into long contracts, taking out (what amounts to) high-interest loans for shiny gadgets, if I could just pick out my own smartphone, pay upfront, then buy minutes (or rather, megabytes) on my carrier of choice. But that choice does not exist. It's not like there's some vast, efficient marketplace out there ready to supply the service you want - except most everywhere in Europe.

Re:They can charge whatever they want

[noidentity]

It's ironic that someone who doesn't believe in IP (presumably because it conflicts with physical property) doesn't believe in physical property either. You signed a contract with the cell phone company. Deal with it. If you don't like such contracts, don't sign them! Nobody forced you.

Crippling Early Termination Fee

[eldavojohn]

AT&T CEO: So, basically when the new iPhone 3GS++ comes out, people will be leaving other carriers in droves.
Verizon CEO: No matter, every customer signed a contract with more words than the US Constitution which means they either didn't or are unable read it. In that contract, we reserve the right to increase our crippling early termination fee. So we'll juice that up to lock in size and by the time most customers can leave, we'll have an answer to your latest model.
Verizon Shareholder: I approve.
Verizon Customer: Why does my ass hurt?

Re:Crippling Early Termination Fee

[pitchpipe]

Man, I would love to get the Droid, but I had Verizon. I'd rather shoot myself in the head than go back to that nightmare of a company. Don't get me wrong, I have AT&T and I really hate how they've spied on us, but this is a case of choosing Satan himself or one of his lowly henchmen who - when he fucks you in the ass - will at least use some lube.

Re:Crippling Early Termination Fee

[Hurricane78]

Uuum, one question: Here in Germany, no company can change a contract in “mid air”, without asking you for permission. They can send you a letter where they tell you about the changes. But you can then terminate the contract without having to pay anything, if they don’t want to keep your original contract. They can’t do anything about it. I’ve done it some times.

Is’t that the case in the USA too? If Verizon would send me a “change in contract”, with the new terms, that they could rape me, and that I would have to pay for it too, I could terminate on the spot... right? Oh god I hope I’m right...

Re:Crippling Early Termination Fee

[ottothecow]

I believe this is true with verizon's contract as well...

I often see threads on slickdeals.net saying something like "Get out of your $wirelessprovider$ account free!". People there look out for changes in the small print (or in the case of termination fees...big print) which opens you up to something like 30 days to break your contract without penalty.

Of course, they like to do this on slickdeals because they can go jump into a new contract for another free/subsidised phone that is however much newer than their old one. If you weren't interested ins signing a new contract or getting a new phone (remember that in the US, your verizon phone will not work with the other major providers that use GSM), this might not be a great option because I don't know if they will let you call them up and break your contract without canceling service...i.e. you can't just break your contract into a month to month deal--you need to leave for another provider.

Re:Crippling Early Termination Fee

[demonlapin]

They can't do it in the US, either, although /. readers frequently miss that. Verizon has raised the ETF for new subsidized smartphone purchases. I got my Droid on launch day, before the hike, and if I wanted to terminate service it would be $175. My fee has not changed.

Re:Crippling Early Termination Fee

[Tuoqui]

Except by jacking up their ETF they are effectively changing their contract which allows you to use a clause that if they change billing you can get out of the contract for free... That is unless they changed their contracts significantly since this video was posted.

http://www.youtube.com/watch?v=nYUAnnCFscw

Don't pay the fee

[Kohath]

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.

Re:Don't pay the fee

[jkgamer]

I agree with you 100 percent, well almost. Forcing Verizon to do anything that isn't in their corporations best interest is morally wrong. Because we all know that large corporation are only looking out for what is best for the consumer! If you get a "free" phone from Verizon for your aging mother so that she can stay in contact with you more easily, well then you SHOULD have to pay the early termination fee of $350.00 for that $29.99 piece of electronics when she passes away on the 21st month of your contract. And while we are at it, let us remove those other pesky regulations that the goverment has placed upon these large corporations. Let us remove the one where they are required to pay a minimum wage to their employees. We all know that this is just costing us jobs. Hell, my cousin Bruce could be making as much as 50 cents an hour AND have a job if it wasn't for that pesky goverment interference. Shame on you Mr. President (Because we all know that he REALLY makes all the laws, the Congress and Senate are just for show.) Let's remove the regulation that says Verizon must provide access to their lines from other competitors as well. I don't want no stinking Sprint customer to be able to call me. (You and your aging mother are using the SAME provider, aren't you?)

My point is that a truly and totally free market is a farce. There has to be a balancing act performed to keep the market truly competitive and profitable. Unfortunately, one groups idea of fair and balanced differs from another groups idea of fair and balanced. That is why we need regulation. Maybe this particular case isn't one that requires regulation. Maybe this particular case works as it currently is implemented. Obviously not everyone believes that, especially the person who DIDN'T get a DROID and then for whatever reason had to cancel their contract two months early.

Oh and one more thing. Maybe forcing PEOPLE to do something is morally wrong, but corporations are NOT people. People generally have to live with their actions, a corporation can merely disolve itself and start up as a completely different corporation. It is a lot more difficult for a person to simply disolve their identity and reappear under a completely new one free of all legal and moral obligations of their past actions. If the US goverment is going to provide corporations with that type of benefit then they do have a MORAL responsibility to make sure they don't abuse it.

Re:Don't pay the fee

[DebianDog]

Oh please . Can I sign up, get service, and not sign and agreement? NO. Now exactly would I know how good their customer service, the network, or coverage is without signing up with them? Then once I find out how crappy the service for -my- needs I am stuck? Then they can charge -ANY- amount of $$$ to release me from crappy service? Sorry buddy there should be some level of oversight. Luckily Verizon is awesome -here- and I have been a customer for 8 years!

Re:Don't pay the fee

[Jawn98685]

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.

Obviously, you missed the part about "the agreement" being intentionally and maliciously complex, to the point that it is indecipherable to the average customer. Said customer, having been assured by the friendly sales rep, "It just says [insert standard salesman bullshit rap here]", signs anyway, in the mistaken belief that he's dealing with a fair and honorable business.
There are laws against trying to cheat customers. Hiding your draconian terms in an indecipherable "agreement" is anything but fair and honest. It should be illegal.

Re:Don't pay the fee

[vvaduva]

I couldn't say it better; the contract people sign with Verizon is voluntary...nobody is holding a gun to your head, so go to a competitor. The market will sort things out in the end.

Re:Don't pay the fee

[db32]

Forcing kids to do homework or eat vegetables or stopping drunk drivers, rapists, murders, thieves, genocidal dictators, slave owners/traders, and so on is all morally wrong? To say "almost always" is a little overboard, not that I disagree with the notion you are trying to get across. I just think the situations in which it is not morally wrong to stop someone happen a lot more often than you imply.

In this case...the trouble is that the government is giving verizon special permission in order for them to operate their service (frequency usage, tower locations, etc). Additionally, the whole notion of contracts that one side can unilaterally change at any given time is pretty stupid too.

That said, fraud is one of those things that should be stopped. There are plenty of conmen that tell "the truth" but do it with so much smoke and mirror tapdancing that people still sign up. What you are attempting to do is blame the victim by letting verizon totally of the hook. So...they say it is to help subsidize the phone. Why is it that I would get subjected to the termination fee if I brought my own phone? This also adds to the issue that they claim they recoup the cost of the phone through their rates and the ETF makes up for the people who leave early. Well...why don't I get a lower rate for bringing my own phone? Or why don't I get my rate reduced after I have paid back the subsidized portion of the phone? I am guessing you haven't seen the leaked meetings where they talk about how many billions they make using various fraudulent billing tactics. They force people to burn minutes as they sit through the ever growing "welcome to your verizon voice mail and blah blah blah and blah and blah blah blah pres blah blah blah" messages.

I agree that we shouldn't hire the government to force Verizon to do things against their will. However, calling them out for deceptive and fraudulent bullshit is not the same. (Their argument for why they hide the ETF is that it is 'not important' and they got busted on that when it was decided that big ETFs qualify as materially important pieces of a contract). I think the best solution would actually to slap "users of any service provided using these frequencies cannot be subject to early termination fees or have their service terminated for excessive roaming" in the fine print of the agreements they have with the FCC to even operate. I bet they would scream bloody murder at such a one sided contract change...and then we can tell them "Well you shouldn't have signed anything with the FCC, you could have started your service in the Sahara where there is no FCC."

Re:Don't pay the fee

[karnal]

That's my main trouble with service from the cell companies.

Let's say I wanted to buy a phone - like my current Fuze/touch pro. So I buy it in full, up front for say 600$ (not sure what they were initially, but this is a good starting point.) There is no way I can go month to month with them without getting one of their packages ($30 data, xx for xx minutes of voice etc.) And - this package is at the exact same price point that the people whose phones are subsidized are paying.

If I bring the phone to the table - or my contract (2 years) runs out, I should get some sort of discount on the service since I'm not paying them back for the phone.

I would be first in line to a decent-coverage network if I could find a carrier like this. But - the catch - it has to cover all of North America; or at least similar to what the bigger 3 have.....

Re:Don't pay the fee

[BrianRoach]

Oh please . Can I sign up, get service, and not sign and agreement? NO. Now exactly would I know how good their customer service, the network, or coverage is without signing up with them?

You're right, there is absolutely no way to research this information.

While I'm no fan of the telcos and know that their math is skewed, it's not like you can't do a little googling before making a two-year commitment to something. Or ask some friends / coworkers; more than likely at least a couple of them are going to have verizon.

Re:Don't pay the fee

[causality]

My point is that a truly and totally free market is a farce. There has to be a balancing act performed to keep the market truly competitive and profitable. Unfortunately, one groups idea of fair and balanced differs from another groups idea of fair and balanced. That is why we need regulation. Maybe this particular case isn't one that requires regulation. Maybe this particular case works as it currently is implemented. Obviously not everyone believes that, especially the person who DIDN'T get a DROID and then for whatever reason had to cancel their contract two months early.

The only way you would ever have a free market is if the average person always fully understood both the product/service that is being sold AND any contract that goes along with it. Even that wouldn't be enough. You would then need for all people, as individuals, to be willing to boycott a company (even in the absence of a competitor) and bring it to its financial knees and to be willing to do this over even minor abuses. They must do this individually and not as the result of some organization's decision, and nearly all of them must do so. Then if a corporation even remotely looks like maybe it is screwing someone over, it gets faced with its own bankruptcy and made an example of. This will put other corporations on notice, proving to them that anything resembling bad-faith or malfeasance absolutely will not be tolerated and will be punished at all costs.

This model would not result in more bankrupt companies. It would result in companies complying with the wishes of the people in order to make a profit, just like everything they do now is for profit. The only thing that would change are the particular behaviors that lead to profitability. This would radically change the way citizens relate to corporations. It would fundamentally alter the balance of power. Right now that balance of power favors the corporations -- they are the major players in the market, and most customers cannot truly negotiate with them but must instead accept contracts of adhesion. They have the money and the lawyers and the political clout, meaning they can alter laws in their favor RIAA-style.

Until and unless people come to see it this way, we will indeed need government regulation. Government is about the only thing big enough and powerful enough to deal with corporations that are often larger than many nations. Even then we have the problem of well-funded lobbyists that were not sent to Washington by average citizens, but by monied interests. That's why I think this is ultimately only a partial better-than-nothing solution, as it merely relocates the problem from the marketplace to the realm of public policy.

Re:Don't pay the fee

[Shakrai]

Said customer, having been assured by the friendly sales rep, "It just says [insert standard salesman bullshit rap here]", signs anyway, in the mistaken belief that he's dealing with a fair and honorable business.

If you believe what the salesman tells you then you are already a lost cause. His job isn't to look out for your best interest. His job is to sell.

Hiding your draconian terms in an indecipherable "agreement" is anything but fair and honest. It should be illegal.

The reason that businesses in the United States have such agreements is because of the ease with which you can sue people in this country. Because of this lawyers have an outsized amount of influence and insist on covering every possible base in any account agreement. It has less to do with "Let's screw our customers!" and more to do with "Let's try not to get sued".

Re:Don't pay the fee

[lorenlal]

so go to a competitor. The market will sort things out in the end.

What's interesting here is that those competitors have similar contracts, setups, fees, etc. At what point does regulation step in and say, "You aren't playing by the rules?"

Suppose the major vendors decide that when one of them raises prices, rather than compete with an advantage, they raise their own prices to match? At what point does it become collusion and price gouging?

I ask because it appears to me like the market is nearly impossible for new players to jump into.

Re:Don't pay the fee

[MindlessAutomata]

There has to be a balancing act performed to keep the market truly competitive and profitable.

Shouldn't that be you?

Everywhere I go people claim we need some great authority to keep a smaller "authority" in check. We need a city government to rule over people, because people might do bad things. We need county governments to rule over the cities, in case the city does something wrong. We need a state government to watch over the county governments. We need a federal government to make sure the states don't pass terrible laws. So on and so forth; some people go even further and claim we need a world government, but that doesn't even solve the problem, and I'd say the further up the chain you go the more removed from the actual effects of your policies and the more apt and able a leader is to engage in corrupt activities.

Every business exists because either 1) shady and clearly immoral business practices (outright theft), 2) government largesse, or 3) because people are paying for the goods and services. I'm a believer in certain types of collective action, and if you want better pay and working conditions then collective bargaining is an option. Likewise, consumers are free to express their disapproval by refusing to engage in business relations with a corporation that conducts business in a way unsuitable for them.

You say,

Unfortunately, one groups idea of fair and balanced differs from another groups idea of fair and balanced. That is why we need regulation.

Like above, that applies to governments, too. Who is going to watch over, or regulate, when they have differing ideas of fair or balanced? A world government? Who will watch over that? God? Many people worship a deity simply because it gives them comfort that something right in the world will ensure justice always happens, something that will make good happen to them and for them, without them having to lift a finger to fight it themselves. God is, however, just a creation of the human mind, and after people have increasingly begun to realize this they turned to government to try to right every little wrong and scratch every little itch they have. But the edicts of governments are not moral ones, and no one "should" follow a government's laws as if doing so will put them on the right side, morally speaking.

People generally have to live with their actions, a corporation can merely disolve itself and start up as a completely different corporation. It is a lot more difficult for a person to simply disolve their identity and reappear under a completely new one free of all legal and moral obligations of their past actions. If the US goverment is going to provide corporations with that type of benefit then they do have a MORAL responsibility to make sure they don't abuse it.

That would be more the result of the emergent nature of a corporation, and the actual laws and regulations put in that specifically dissolve people of individual responsibility in a corporate setting.

That is why we need regulation. Maybe this particular case isn't one that requires regulation. Maybe this particular case works as it currently is implemented. Obviously not everyone believes that, especially the person who DIDN'T get a DROID and then for whatever reason had to cancel their contract two months early.

Guess what? Verizon is not the greatest company around, but they don't exist, or shouldn't exist, to serve you. Many, many companies have termination fees, as insurance because a fickle or unreliable customer can easily cost them money. My ISP demanded a deposit, which functionally works a similar way, when I first got my cable access particularly because I was a new customer. Life is tough and shit happens, but you have to take responsibility sometimes. If you foresee the termination fee becoming an issue you should either set aside the money for it o

Re:Don't pay the fee

[MindlessAutomata]

Until and unless people come to see it this way, we will indeed need government regulation.

Who will regulate the government and prevent its corruption? You state,

The only way you would ever have a free market is if the average person always fully understood both the product/service that is being sold AND any contract that goes along with it.

How is that not similar to the politicians people vote for? You're just treating the government as a benevolent, righteous deity because "IT'S SUPPOSED TO" carry out justice. But the world doesn't run on wishes. You can't escape the necessity for people to be responsible and informed, first and foremost, and when they are that makes the need for regulation unnecessary.

Re:Don't pay the fee

[sglewis100]

Oh please . Can I sign up, get service, and not sign and agreement? NO. Now exactly would I know how good their customer service, the network, or coverage is without signing up with them? Then once I find out how crappy the service for -my- needs I am stuck? Then they can charge -ANY- amount of $$$ to release me from crappy service?

If only there was some sort of short term period wherein you could return the phone for a small "restock" fee (ie: the non return of the activation charge and pay only for your actual usage and have the contract null and void. SIGH!

Re:Don't pay the fee

[SanityInAnarchy]

But the world doesn't run on wishes. You can't escape the necessity for people to be responsible and informed, first and foremost, and when they are that makes the need for regulation unnecessary.

That just about made me do a double-take.

The world doesn't run on wishes. You can't escape the reality that people won't be responsible and informed. Informed is important here, too, and is part of the job of regulation -- for example, we have laws about food safety, so I can walk into any restaurant with some confidence that the food there is safe to eat. You could have a totally free market, in which independent organizations certify particular restaurants as "safe", but then the customers would have to constantly be checking those certifications.

Re:Don't pay the fee

[SanityInAnarchy]

If you believe what the salesman tells you then you are already a lost cause. His job isn't to look out for your best interest. His job is to sell.

Shortsighted at best. His job may well be to sell to you, personally, and he may get a commission from you. But ripping you off with a bullshit story is detrimental to the company as a whole, at least in theory.

Re:Don't pay the fee

[visualight]

People rationalize. "Not enough people will do it, so it won't have any effect, so it's pointless for me boycott ACME Paper Co." The only thing in our culture that needs to change is for most of us to decide to patronize or boycott a company for the sake of claiming integrity, and not because we think our one dollar will make a difference.

This is why some individuals sort their garbage or buy a hybrid car, or refuse to buy dvd's. They (we) want feel like we have some integrity.

Verizon has a phone I really want, and has the best cell coverage in my area, but it's unlikely I will ever be their customer. If Verizon were the only cell provider in my area I would learn to live without a cell phone. I have no illusions that my lack of patronage will influence Verizon at all but I'm not going to live selfishly and hope that the other 200 million adults in this country don't.

Re:Don't pay the fee

[SanityInAnarchy]

The frustrating fact is that if you actually avoid every market that's either regulated or in massive collusion, you'll find yourself giving up many modern conveniences. Not just cell phones, but the telephone in general -- just why do you think land lines are reasonable now?

Re:Don't pay the fee

[causality]

Until and unless people come to see it this way, we will indeed need government regulation.

Who will regulate the government and prevent its corruption? You state,

The only way you would ever have a free market is if the average person always fully understood both the product/service that is being sold AND any contract that goes along with it.

How is that not similar to the politicians people vote for? You're just treating the government as a benevolent, righteous deity because "IT'S SUPPOSED TO" carry out justice. But the world doesn't run on wishes. You can't escape the necessity for people to be responsible and informed, first and foremost, and when they are that makes the need for regulation unnecessary.

I don't know how you managed to do it, but you somehow interpreted my words in the exact opposite way in which they were intended. I straight up said that what you need are people who are responsible and informed -- you quoted the very line in which I said it ("The only way you would ever have a free market...").

To me, government regulation is a sorry substitute for a fully informed, savvy public who makes good rational decisions in the marketplace. I said as much, when I stated that government regulation merely relocates the problem. That is, it relocates it as opposed to solving it.

I even went so far as to talk about how individuals need to stand up to these corporations when they misbehave, and they need to do it without being prompted ("not as the result of some organization's decision", because lobbyists have proven that an organization can be compromised). Government intervention would not be individual action; it would be collective (or organizational) action. Does my call for individual action really sound to you like I regard the government as "a benevolent, righteous deity"? When I say that laws can be bought RIAA-style, does that sound to you like I am a great admirer of government? Does it sound like I believe our government has any integrity?

Sorry man but you couldn't be farther off the mark. Had you not quoted my text, I would have asked if you were even responding to me or someone else.

Re:Don't pay the fee

[causality]

But the world doesn't run on wishes. You can't escape the necessity for people to be responsible and informed, first and foremost, and when they are that makes the need for regulation unnecessary.

That just about made me do a double-take.

The world doesn't run on wishes. You can't escape the reality that people won't be responsible and informed. Informed is important here, too, and is part of the job of regulation -- for example, we have laws about food safety, so I can walk into any restaurant with some confidence that the food there is safe to eat. You could have a totally free market, in which independent organizations certify particular restaurants as "safe", but then the customers would have to constantly be checking those certifications.

That's one area where the argument for regulation is unusually strong. If you get screwed over when you buy a car, you can always decide not to do business with that company again. If you go to a restaurant, eat the food, and die of food poisoning, it's going to be pretty hard to vote with your feet and take your business to a competitor when you're dead.

I'm not a fan of regulation, but this is one of its more benign forms. There's not a lot of political power to be had by verifying food safety. It's not an area that is so open to abuse, nothing like when the government wants to take over a bank or an automobile manufacturer.

I admit that regulation is not 100% evil or 100% useless in all cases, so cue the people who think that makes me a socialist/communist/leftist. Perhaps they do that because they've never met a real one and seen their wholehearted allegience to authority regardless of whether it has any amount of legitimacy or necessity.

Re:Don't pay the fee

[Hurricane78]

You could have said that in a shorter form:

1. A totally free market has no rules at all.
2. When there are no rules at all, that is called “the law of the jungle”.
3. On a scale of how democratic something is, a perfect democracy is at 1.0, and the law of the jungle is at 0.0. (And 1984 is somewhere down the negative values. Hence that quote, that fascism should be called corporatism.)
4. Therefore, the free market and proper democracy are natural opposites.

Re:Don't pay the fee

[causality]

People rationalize. "Not enough people will do it, so it won't have any effect, so it's pointless for me boycott ACME Paper Co." The only thing in our culture that needs to change is for most of us to decide to patronize or boycott a company for the sake of claiming integrity, and not because we think our one dollar will make a difference.

I've heard the essential difference explained this way. You can act because you wish to engineer a particular outcome, in which case all of your thoughts and actions are subordinate to expediency. You can also act according to your standards of integrity, honor, and honesty, in which case your concern is that your conscience is clear, you are not contributing to the problem, and you are not concerned about whether a particular goal is achieved, for the only goal is to have no conflict with yourself.

The people who worry about whether enough people will participate in a legitimate boycott are trying to engineer an outcome. Those who don't subscribe to this kind of self-inhibition do what they know to be right and accept that others must have the free choice to do likewise or not. They might try to persuade others, but they could not support any attempt to coerce others (legally or otherwise) to make particular market decisions without making hypocrites of themselves.

The funny thing is that the outcome is much more likely when the individuals involved aren't worried about what others are doing. It totally eliminates the concern of "my boycott alone won't have any noticable effect." If more people felt that way, boycotts would be both more likely and more effective.

To put it crudely, if the majority of customers (they are not consumers) sent a clear and unambiguous message of "don't fuck with us, because at all costs we will not tolerate it", much regulation would become redundant and unnecessary.

Re:Don't pay the fee

[jkgamer]

I can't believe you interpreted sarcasm as literal.

Re:Don't pay the fee

[farble1670]

the problem in the US market anyway is that *all* of the providers are pirates. you can go to a competitor, but you get screwed there as well, albeit in a different manner probably. i guarantee that at&t is just waiting to see what the FTC does with verizon's ETF. if it stands, they'll bump their own shortly.

the fact of the matter is that lower ETF's aren't something that providers can effectively use for marketing against their competitor. consequently all the providers will have similar ETFs in the long run. you can't sell someone a phone / plan by talking about how easy it is to *leave* the plan early. it's a confusing message. why would the user want to leave? because the service is poor? it implies there is a reason the user would want to leave in the first place. not a good message.

Re:Don't pay the fee

[Hurricane78]

I let salesmen really feel the pain, by sloowly reading the whole contract and terms... twice... asking for any and all the tiniest unclarities, until I perfectly and fully understand it. And if he loses his patience, I call the police and tell them some criminal want so pull a con job on me, and now started to threaten me.
Then when I’m done, sometimes I simply say: Sorry, that thing is criminal, offensive and not acceptable. And drop it on the floor like it’s a piece of cloth used for cleaning train station toilets.

Let them feel it.

Re:Don't pay the fee

[Lord Kano]

Basically, you have to be willing to walk. I was willing to leave the Verizon store if I didn't get the phone I wanted, a plan that I wanted and a 1 year contract. I got the phone for free, a discount on my calling plan and a one year contract. The phone turned out to be a piece of shit, I didn't know at the time that Verizon crippled the RAZR. I finished my year and left. I went to another carrier and left Verizon behind. I'll never go back to them.

LK

Re:Don't pay the fee

[tixxit]

I think you are missing the point. Verizon and the consumer entered an agreement. That agreement may not be fair, but you signed it knowing the conditions. You get very little sympathy from me. I bought my phone outright and signed a non-fixed term contract with no cancellation fee. I did this because I read the agreement and thought it was ridiculous. If you cannot afford a smart phone (or the cancellation fee) without getting into a completely 1-sided deal with a carrier then YOU SHOULD NOT BE BUYING A SMARTPHONE. Get a cheap phone with a short term contract.

Re:Don't pay the fee

[Sirusjr]

Everyone should know that you have to pay an early termination fee if you get a 2 year contract with your free phone. That is how things work and if you don't want to pay it, put up with the phone you have for another 2 years (or less hopefully unless you JUST UPGRADED). More than likely if you are able to get by with your phone for any length of time you can also get by just as well for another year and a half before splitting to another provider that will shaft you just as much with the same sorts of fees.

Re:Don't pay the fee

[causality]

Everywhere I go people claim we need some great authority to keep a smaller "authority" in check. We need a city government to rule over people, because people might do bad things. We need county governments to rule over the cities, in case the city does something wrong. We need a state government to watch over the county governments. We need a federal government to make sure the states don't pass terrible laws. So on and so forth; some people go even further and claim we need a world government, but that doesn't even solve the problem, and I'd say the further up the chain you go the more removed from the actual effects of your policies and the more apt and able a leader is to engage in corrupt activities.

The intention of our federal system was that most government a citizen experiences would come from the state and local levels. At those levels the average politically active citizen is much better represented and better able to influence the legislature. The intention was that the federal government would be quite weak compared to the one we now know, and would only concern itself with matters that truly require a national response, such as warfare or interstate trade.

Rather than going further up an endless chain, this system allows you to vote with your feet. Don't like the policies of the state you're in? Move to another state and stop supporting the errant state with your tax dollars. States that piss off too many people end up reducing their taxbase, and unlike the federal government, the states cannot just print money whenever convenient. It's like a competitive market for government.

That goes out the window the moment the federal government becomes the gigantic beast that is involved in the daily lives of citizens like the system we know today. It goes out the window when the federal government can take our money via taxation, and then selectively give that money away to states on the condition that they behave the way the feds want them to. I could go on but you get the point. That never-ending chain of ever-higher authorities to purportedly keep lower authorities in line only seems inevitable because we, collectively, have failed to appreciate and correctly use the system that we have inherited.

Re:Don't pay the fee

[KarmaOverDogma]

The only way you would ever have a free market is if the average person always fully understood both the product/service that is being sold AND any contract that goes along with it. Even that wouldn't be enough. You would then need for all people, as individuals, to be willing to boycott a company (even in the absence of a competitor) and bring it to its financial knees and to be willing to do this over even minor abuses. They must do this individually and not as the result of some organization's decision, and nearly all of them must do so. Then if a corporation even remotely looks like maybe it is screwing someone over, it gets faced with its own bankruptcy and made an example of. This will put other corporations on notice, proving to them that anything resembling bad-faith or malfeasance absolutely will not be tolerated and will be punished at all costs.

Under your idea of doing things, no corporations would exist, because they would not be able to get the working capital from prospective shareholders to accomplish anything meaningful; they'd be too worried about losing their investments to the next lawsuit-de-jour, whether justified or not.

I'm not saying corporations don't do bad things - there's a mountain of evidence to show they do. When they do, they should be held accountable. But there is such a things as going to far, over reacting or creating an environment so stifling that no innovation can take place.

Let's take a deep breath and see how this plays out, shall we?

Re:Don't pay the fee

[cowboy76Spain]

Depends of which is the game. If it is a service/good that you regularly buy, yes (it will be stupid for your gardener to rip you so much that you don't call him anymore). But if it is a one time buy (like buying a house, or something like that) it is in the seller best interest to ignore any ethics and just get the deal (the sales rep just wants a new contract, and knows that even if you are impressed of his works, most likely than not he'll never hear or get more bussiness from you again).

Re:Don't pay the fee

[bzipitidoo]

Informed? I have a few words for you: Confusopoly. Shrink wrap contract. "Doubt is our product."

That's right, these businesses are actively trying to prevent us from informing ourselves, sowing confusion. When called to account, they often try to weasel out with disclaimers about no real harm having been done, that they didn't intend to keep people in the dark, that it was all an innocent mistake. Inexcusable, and very evil. Be careful about implying it's all the customer's fault with that "won't" assertion you made.

Re:Don't pay the fee

[Mark Shewmaker]

You could have a totally free market, in which independent organizations certify particular restaurants as "safe", but then the customers would have to constantly be checking those certifications.

In the US state where I live, that's what we have with government regulations, and I suspect that's what we would privately develop without them.

It's not at all a big deal, and it's actually pretty cool.

Health inspectors come at random times to each restaurant, and the restaurants are required to PUBLICLY POST THEIR REPORTS in the restaurant itself.

The result is that people read these reports, really! Folks shy away from going to restaurants with lower scores, and the fact that a place has a high score is something that will invariably come up in conversations. It's not some goofy thing that only a few people do, it's something that people notice and then talk about if the score is particularly high or low.

(Just a few days ago I went back to a place for the first time in a year since they got a bad score--82, a score which of course included written notes on all the problems found. Now their score is 100, which is really unusual, and I won't be hesitant to go back for cleanliness reasons. These scores make a real difference in people's behavior.)

I know that in some US states that these reports aren't published the same way, so people can't make decisions on whether to eat somewhere based on the problems found in the previous inspection.

Given that the existence of government testing will in practical terms preclude the development of private testing in most areas, if you don't have real-world transparency in the testing process that the state government provides/enforces, then people will just become used to the fact that the information isn't there, and possibly just assume that it's too much information for individuals to keep up with or even pay attention to anyway.

But if you're used to seeing these results, it's a natural thing to look for the posted health report. It's as natural a thing as to look for as credit card logos, or noting whether this is a place where you pay your bill at a cashier up front versus paying at the table. You really just do it and don't think much of it.

Well, unless you're writing a reply to a slashdot comment. :-)

For a different industry, look at the history of Underwriter's Laboratories. Before their existence, there were neither private nor governmental regulations on the safety of electrical devices. Since unsafe devices were being sold and causing homes and businesses to burn, insurance companies that bore the brunt of the financial side of the resulting losses got together to make their own private testing agency, and arranged their policies to encourage the use of only UL-tested and certified electrical devices.

The market was allowed to work in that case, in that it was allowed to develop private certification agencies that people and companies do pay attention to. While technically it's possible to buy and sell non-UL tested devices even today, for the most part you'll not find them in stores as stores won't sell them as a mass-market item at all, and if you did buy such a product you'd have insurance problems if/when they caused a fire, and you'd probably have liability problems if you actually used them in a business. You'd pretty much have to go out of your way to purchase something like this today, meaning that you'd be doing so only if you had a real reason to, (maybe you're stripping the device for parts, or comparing something between multiple devices of the same type, working on things in your own electronics lab and the like.)

In any event, government fortunately happened not to try to develop it's own system of electronic safety certification that would preempt the development of private certification, so we have a working private system that can pay attention to the actual real safety issues, and get less bogge

Re:Don't pay the fee

[PopeRatzo]

but corporations are NOT people

The US Supreme Court begs to differ.

In fact, the current Chief Justice of the US Supreme Court was paid two million dollars a year to argue specifically that "corporations ARE people" before George W. Bush, knowing an "originalist" when he sees one, made him Chief Justice.

Before 1886, when the Supreme Court in Santa Clara County v. Southern Pacific decided that corporations are people, only those who have been "born or naturalized in the United States" were covered by the Bill of Rights. It's not accidental that that decision ushered in the era of "robber barons" in the US. Those rights of "personhood" were subsequently limited until the Reagan Administration resurrected this legal fiction in order to reward the corporate powers that had bought Ronald Reagan the election.

It is not accidental that the steady decline of the American middle class and workers' real income started at the same time. Also at this time came the innovation of the "credit economy" which allowed people to believe their standard of living was improving when in fact they were becoming measurably less free and less prosperous, deeper and deeper in debt. Also, this legal fiction insured that every President since Ronald Reagan would be nothing more than a proxy for big corporations, a tradition that continues to this day.

Re:Don't pay the fee

[demonlapin]

His deeper point is that if you don't trust corporations, whose only motive is money, why do you trust politicians, whose clearly stated goal is telling other people what to do?

Re:Don't pay the fee

[MindlessAutomata]

Rather than going further up an endless chain, this system allows you to vote with your feet.

And businesses act much the same way--people voting with their patronage.

Re:Don't pay the fee

[visualight]

Very well put, I'm saving the text.

Re:Don't pay the fee

[demonlapin]

Nice elision. Nobody sane enough to come in out of the rain actually believes that a "free market" has no rules at all. And democracy is no guarantee that the law of the jungle is not enforced - the tyranny of the majority is real.

Re:Don't pay the fee

[MindlessAutomata]

Or, how about, if you're ever concerned about the cleanliness of food, you shouldn't eat there?

but then the customers would have to constantly be checking those certifications.

And they damn well should. People shouldn't expect or assume anything. One of the main problems today is that people believe consumers are a passive force. You should always be reading reviews on a product, so on, so forth.

Honestly, though, I'm not sure people, even you, truly care about this. I'm sure you've eaten food your friends have cooked, possibly in questionable conditions in their kitchens, without your own concern. I am not downplaying the necessity for clean food, but your argument really is just hand-waving and saying, "meh, that's too much work" when even that's not true.

Re:Don't pay the fee

[demonlapin]

You show 'em! Did you drop it on the floor, or did you throw it on the ground ?

Re:Don't pay the fee

[MindlessAutomata]

And moreso, if people can't be bothered to look up and consider important things like food safety on their own, is trusting them with electing politicians anymore solving the problem (and not creating new ones)?

Re:Don't pay the fee

[vakuona]

I sort of get your point, but it's not a free market problem. It's more the absence of the free market that is a problem.

Verizon, and other mobile phone companies have been granted monopolies to use certain parts of the spectrum to provide communications services. Maybe this is for practical reasons. On the other hand, they will tend to argue that government not allowing them to behave in certain ways is undemocratic and not in keeping with free market principles. We need to call BS on that. Verizon can either act in a responsible way, or Americans should exercise their rights over the spectrum Verizon uses by withdrawing their authorisation for Verizon to use it exclusively.

Re:Don't pay the fee

[noidentity]

Obviously, you missed the part about "the agreement" being intentionally and maliciously complex, to the point that it is indecipherable to the average customer.

So don't sign anything that's maliciously complex to the point of being indecipherable.

There are laws against trying to cheat customers. Hiding your draconian terms in an indecipherable "agreement" is anything but fair and honest. It should be illegal.

Even though you can easily avoid this supposed fraud?

Re:Don't pay the fee

[noidentity]

Forcing Verizon to do anything that isn't in their corporations best interest is morally wrong. Because we all know that large corporation are only looking out for what is best for the consumer!

Why do you think a company should be looking out for you? You are simply in it to get the most for yourself; you aren't looking out for the company. But the two balance out, the most basic form being buyers and sellers. A buyer wants to pay zero if possible, and a seller wants to charge an infinite amount, if possible. They find a common ground that's based on how much they value money and the product.

As for corporations, property law is what gives both parties equal footing. You have money, and the company has things you want. The company offers them at some price and with some contract, and you can choose whether it's worth your money. Some companies have complex contracts whose terms can change within constraints covered in the contract. You have to consider whether the terms are worth it to you, and perhaps whether you can even understand the terms. If you don't feel confident, you don't have to sign the contract; you can just walk away.

If you get a "free" phone from Verizon for your aging mother so that she can stay in contact with you more easily, well then you SHOULD have to pay the early termination fee of $350.00 for that $29.99 piece of electronics when she passes away on the 21st month of your contract.

If you signed a contract that has those terms, hell yeah you should have to pay. Why did you sign a contract you didn't intend to keep? Why should you get special treatment because your mother died? That's not preventing you from being responsible.

And while we are at it, let us remove those other pesky regulations that the goverment has placed upon these large corporations. Let us remove the one where they are required to pay a minimum wage to their employees. We all know that this is just costing us jobs.

Indeed it does cost jobs! An employee is a seller of labor, and the company is the buyer. Minimum wage laws say that an employee cannot offer his product (labor) for less than some amount. If his product is worth less than minimum wage, he cannot (legally) sell it!

Let's remove the regulation that says Verizon must provide access to their lines from other competitors as well. I don't want no stinking Sprint customer to be able to call me.

I think it's the market that dictates this. Why would someone use a cell phone provider that didn't allow you to call people using other providers? Or are you saying that people would anyway, and then ask the government to force Verizon to connect to others, when the people could have simply taken their business to other providers in the first place and left the government out of it? Why do you feel entitled to dictate what a company does with its own property?

Re:Don't pay the fee

[Macrat]

I guess you haven't seen the articles on land line charges being increased.

Re:Don't pay the fee

[Tuoqui]

The sad but true fact is that companies have been diversifying their ownerships. As a result if you try to boycott a company or even an entire industry it doesnt matter to them. If you boycott the music industry, companies like Time Warner still have their cable business, movie businesses, etc... Sony has their video games department, computers, a bunch of movie studios, etc...

Re:Don't pay the fee

[causality]

The only way you would ever have a free market is if the average person always fully understood both the product/service that is being sold AND any contract that goes along with it. Even that wouldn't be enough. You would then need for all people, as individuals, to be willing to boycott a company (even in the absence of a competitor) and bring it to its financial knees and to be willing to do this over even minor abuses. They must do this individually and not as the result of some organization's decision, and nearly all of them must do so. Then if a corporation even remotely looks like maybe it is screwing someone over, it gets faced with its own bankruptcy and made an example of. This will put other corporations on notice, proving to them that anything resembling bad-faith or malfeasance absolutely will not be tolerated and will be punished at all costs.

Under your idea of doing things, no corporations would exist, because they would not be able to get the working capital from prospective shareholders to accomplish anything meaningful; they'd be too worried about losing their investments to the next lawsuit-de-jour, whether justified or not.

I'm not saying corporations don't do bad things - there's a mountain of evidence to show they do. When they do, they should be held accountable. But there is such a things as going to far, over reacting or creating an environment so stifling that no innovation can take place.

Let's take a deep breath and see how this plays out, shall we?

It was no accident that I never once mentioned the word "lawsuit." That was not what I had in mind. What I had in mind was for people to do without i.e. a cellphone rather than accept a cellphone deal with which they are unsatisfied. My idea was that any industry which has customer satisfaction rates as low as this one would either shape up or go out of business and be replaced by someone else.

Give companies a choice of either bankruptcy or actually treating their customers with respect (which includes full disclosure and not finding clever ways to screw them over or nickle-and-dime them) and the companies will choose the latter every time. But the threat of bankruptcy from a widespread boycott cannot be an empty threat; it must be one that people are willing to back up at any cost if it should become necessary. To put it bluntly, all this requires is a spine and the realization that cellphones are very convenient and useful but are not essential to life. You talk about holding corporations accountable and I agree that we should do this. Since the only thing corporations care about is money, not giving money to them is how you go about it.

Re:Don't pay the fee

[Nightspirit]

I agree. I don''t know about Verizon but the AT&T stores clearly list the full price of phones without contract and with a contract. If you don't want to pay a termination fee then don't "finance" the $600 phone for $99, pay full price. Even my grandma knows this. I still have a 3 year old smartphone and while it doesn't have all the bells and whistles of the new smartphones, I'm not locked into a data plan and I can terminate my service anytime I want. The problem is entitlement, people want the latest and greatest for the cheapest and they don't care what they get into as long as they get it.

Re:Don't pay the fee

[tomhudson]

Two points:

1. In many jurisdictions, what the salesperson said is legally binding on the company, even if the actual contract says otherwise;
2. Back in the day, Borland had a simple license. You don't have to have a license be overly complex if both sides are dealing in good faith.

Re:Don't pay the fee

[glennpratt]

That's one area where the argument for regulation is unusually strong. If you get screwed over when you buy a car, you can always decide not to do business with that company again.

Unless their faulty equipment contributes to your death in a car accident. Put simply, many things in this world can and should be regulated because their existence depends on public spaces, spectrum, safety or trust.

Re:Don't pay the fee

[kramerd]

If you sign the contract to get your mom the latest, newest, 2 year lock in phone, you are an idiot. She isnt going to be surfing the internet while drives around everywhere. She isnt going be texting you (she will call you, thats why you got her a phone). She isnt going to be using apps to play games or check the stock market or the weather. You should have just bought her a prepaid minutes phone, and had her phone text you when she runs low. You could have gotten her unlimited monthly home phone service for maybe $30, even if she lives in Mexico. Hell, you could get her a monthly no contract phone for $50 purchase and then $25 a month.

The president doesnt make any laws, or health care reform would have been pushed through, despite no one wanting it. Chances are, no one on earth ever has to cancel a contract two months early, because they signed a contract. They understood what two years means, so if they want to break it, they also understand what early termination means. If they don't, you get 30 days after signing the contract to figure it out. You also can ask any questions you want, and spend as much time reading the contract as you want on Verizon's website, at any time, including before signing the contract. This isnt a moral issue, its a legal one, and nearly 100% of the time, the consumer is wrong. The only time the consumer is right is when they read the contract.

On another point, corporations are made of people. We shouldnt be forcing them to shut down by government decree (for one thing, it doesnt stop spammers). People shouldnt be able to disolve their identity and reappear without legal or moral obligations, unless of course you want murderers, drug dealers, rapists, and home owners to walk away from their obligations to banks and/or society. I don't know anyone who does. Corporations, on the other hand, don't have moral obligations, just legal ones. If your company makes widgets, and the price of widgets unexpectedly drops in half, and your company cant afford to pay for its inventory, you might go out of business. There can't be responsibility for that debt following the end of business, or individuals will have such debts for having worked for the company. Ill bet even you can come up with 30 or 40 reasons that arent moral issues for why this wouldnt work.

Re:Don't pay the fee

[gurps_npc]

You can split to a per month, no termination, no contract, rather easily.

Re:Don't pay the fee

[SanityInAnarchy]

Or, how about, if you're ever concerned about the cleanliness of food, you shouldn't eat there?

Say I'm from out of town. Hell yes I'm concerned, now where do I eat? I know nothing of the locals, and nothing of the local restaurants. My best bet is to go on my own intuition of what looks clean, and on the assumption that these places are regularly inspected.

Honestly, though, I'm not sure people, even you, truly care about this. I'm sure you've eaten food your friends have cooked, possibly in questionable conditions in their kitchens, without your own concern.

Given that they are my friends, I trust them to not deliberately put themselves or me in jeopardy. Given that they are cooking for me, chances are they are at least somewhat conscious of the quality of their food, in more ways than just cleanliness.

Contrast that to a restaurant -- if they make really cheap food that sometimes makes people sick, but no one makes the connection, they stay in business. For that matter, maybe the food is all contaminated, but the locals have developed an immunity -- so it stays in business, but people from out of town get sick.

This is why we have specialization. It's not "meh, it's too much work", it's the fact that even if I was motivated, it's impossible for me to become an expert in everything, even to the point where I'd know which of the competing certifications on the wall I should pay attention to. The argument is often made on Slashdot that the average customer shouldn't have to care what web browser they use -- if true, why should I have to pay attention to which brand of car I drive, just to make sure it won't explode?

I mean, following this rabbit hole:

People shouldn't expect or assume anything... You should always be reading reviews on a product, so on, so forth.

Now, how would I know which reviews are legitimate? In the case of buyer reviews, how do I know which ones aren't astroturfing by the company?

Re:Don't pay the fee

[SanityInAnarchy]

if people can't be bothered to look up and consider important things like food safety on their own, is trusting them with electing politicians anymore solving the problem (and not creating new ones)?

The suggestion is that people should consider electing politicians to be their job, and an important one at that. Ensuring food safety, electrical appliance safety, safe cars, safe chemicals, safe software, safe building materials, and so on, should not be the consumer's job, at least, not directly.

You can't be an expert in everything.

Re:Don't pay the fee

[Blakey Rat]

Obviously, you missed the part about "the agreement" being intentionally and maliciously complex, to the point that it is indecipherable to the average customer.

Ok, so don't sign it for THAT reason.

It's not difficult. Don't sign a contract you don't understand. Don't sign a contract if you don't want to live up with the obligations spelled-out in it.

If Verizon loses customers because their contracts are too complex, then they'll either go out of business or they'll fix the problem. That's how the free market is *supposed* to work.

However, what usually ends up happening is that retards sign the contract, then get mad that they didn't read it, then petition the government to step-in to save them from themselves. Hello, nanny state!

Re:Don't pay the fee

[Myopic]

We use legislation to make markets more free.

In this case, the naturally occurring cell phone market is unfree because the power delta between provider and consumer is so gigantic that providers can collude and use tricks to get consumers to buy their products. We can use legislation to make that unfree market more free, by having laws to increase consumers' understanding of contracts, and so on.

There is no such thing as a free market (just as there is no such thing as a perfect circle), and insofar as we prefer freer markets to unfreer ones, we can use legislation to increase freeness.

That's not all they do

[wizardforce]

Verizon's guilty of a lot more than merely doubling their early termination fees. They've also tried to pin about 300$ in botgus charges to a friend of mine's account when she tried to leave them. I hope the FTC nails them to the nearest cross.

Re:That's not all they do

[wizardforce]

Their own records showed that she owed nothing. It took two weeks to get the basturds to acknowledge it.

Re:That's not all they do

[wizardforce]

That doesn't even make sense. How did Verizon present that?

Basically they called her repeatedly trying to get her to pay 300 dollars for charges that she did not owe: eventually they cleared her account of those charges after about two weeks of fighting with them.
It looks like they were trying to bully her into keeping her account open under the assumption that she was a complete moron.

I think either you're lying, your friend is lying, or you're an idiot (or all of the above).

I don't care what you think about the matter. You won't even attach your name to what you say. If I really was a liar or an idiot etc. I probably wouldn't attach my name to this now would I? The fact of the matter is that someone at Verizon fraked up big time and tried to screw my friend. They are rat basturds in a multitude of ways that go beyond what has been said on Slashdot.

So what if you have a basic phone?

[Anonymous Coward]

Is the fee prorated more aggressively because the phone doesn't cost as much or are you subsidizing the super phone users?

Re:So what if you have a basic phone?

[maxume]

You are just more profitable, no way are they (regularly) making individual agreements that they lose money on.

Where is government now that we need them?

[Herger]

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?

Re:Where is government now that we need them?

[maxume]

Motorola has been using USB for a long time. I think they are the only significant cell phone manufacturer based in the U.S.

Sure, they still play gimmicks with special cables and chargers, but the most recent one I messed with worked with a standard USB cable (it was even a Verizon branded phone).

Re:Where is government now that we need them?

[peragrin]

well to start with we don't have just GSM networking. Verizon uses CDMA, and sprint uses a different type of CDMA. So gsm only work with AT&T and tmobile. So you can SIM swap however swapping to other carriers is useless as tmobile has shitty coverage in the USA.

Good news as it stands now both Verizon and AT&T are going to support LTE for their 4G cell phone tech so in about 10 years sim swapping will be semi practical. sprint is going the wi-max route.

Chargers are a different problem and your too stupid to notice. Chargers are laid out by the manufacture of which the majority sub contract out to china anyways. Sim swapping has nothing to do with charger plugs.

Re:Where is government now that we need them?

[the eric conspiracy]

The phone companies in the US are a lot more varied in their policies because they are not under Socialistic (Fascist) regulatory regimes.

If you were to use T-Mobile as your carrier in the US you would find the ability to do everything you described in your post.

Verizon not so much, but then again their business model allows you to get an expensive smart phone without shelling out the full cost up front in exchange for a contract commitment.

Your choice.

Re:Where is government now that we need them?

[Anonymous Coward]

Unlike other markets of the world where people got used to modern cellular practices, the US was the first nation with a cellular network. So a lot of Americans viewed cell service as ungainly expensive for a long time, and were happy with anything. So for a long time, cellphone providers could get away with selling low end units with little functionality and charging a premium. This is why Motorola raked in the cash with their RAZR line for so long. American consumers for the most part only demanded phones that could call out, SMS, have a couple downloadable games for sale, and some stuff for download at a store. So, cellphone companies provided just that. Want new wallpaper? $1.99. Want the ringtone from whomever's latest album? $4.99.

Fundamentally, these expectations didn't change until 2007 and the iPhone when Apple set the bar of what people should expect in a phone.

Even though these days, basic RAZR-like phones are relegated to the "free with two year subscription", or the rack of prepaid devices, US consumers are still used to throwing away a device at the end of the contract, then buying their new toy from another provider. So, if someone has an iPhone and wants a Droid, they either wait until they are OOC with AT&T or pay the ETF and jump providers.

The second reason is that the US has only two GSM providers. The other two providers are CDMA, and this generation of technology does not allow for exchange of phones between carriers in an easy fashion. For example, with T-Mobile, I can buy a phone, unlock it, drop in my SIM card and be online. With Sprint or Verizon, the device has to be put on their CDMA network on their end so changing phones is more difficult.

Because of Americans being used (until recently) to low functioning cellular networks, and the incompatibility between providers (even the two GSM providers have different bands), consumers here tend not to bother with moving phones across networks, and instead will just switch providers when they switch phones.

Re:Where is government now that we need them?

[bstender]

The phone companies in the US are a lot more rapacious in their policies because they are not under consumer-oriented regulatory regimes.

"Socialistic (Fascist)" .. wtf doofus-ism is that? The phone companies in the US are like every other corporation in the US, like pigs in shit, dealing with a consumer base comprised of a high percentage of morons who are more worried about boogey-men than their own rational self-interest. these consumers stand by and watch their "representatives" get paid off by their adversaries to sell them down the river and then they thank them for it cuz this is the greatest nation on earth by Gawd so shut-up and leave it if you don't love it. do i have that about right?

It's a problem with the whole industry

[BadAnalogyGuy]

The total lack of customer service, the terrible coverage, and the relatively subpar implementation of cellular service in the US compared to other countries is not just a problem with Verizon. It is a problem industry-wide, and it is only getting worse.

With the economy in the toilet, these companies are losing customers like the Bucs lose football games. This means they don't have the financial wherewithal to build out the necessary networks. And due to this, customer service continues to decline.

Maybe it is time to nationalize the whole wireless carrier system and slowly parcel out contracts to private companies for the day-to-day operations. If we can punish these carriers by taking away their networks, we will see real change in customer service and subsequently real competition and improvements across the board.

As long as private companies run these networks, we're stuck with the worst possible system for cellular phone users. It may be a cultural thing because Asian and European companies don't seem to screw over their customers so badly, but it's our culture and we should (as a nation) take it back.

Re:It's a problem with the whole industry

[maxume]

If 200 million people started voting with their dollars instead of just complaining, nationalization might start to look like the shitty option.

Re:It's a problem with the whole industry

[phantomfive]

How much are you willing to pay for it? The truth is, customer service in every industry in America is kind of lousy, because we'd rather do it ourselves and get a better deal. When most people are shopping for a cell phone plan, they aren't thinking, "how easy will it be for me to terminate this?" The primary thought in their mind is, "how much will this cost?" As a cell phone company, if you can shave even a dollar off your monthly plan, that will give you a competitive advantage over the rest.

Also, Americans really are addicted to getting a good deal, which is why you can get free cell phones* all over the place. In fact, my memory is that the cell phone never really became popular until the prices dropped down to around $30 for a phone. People just weren't willing to pay the true high cost.

*with a qualifying plan.

Umm...

[Timothy Brownawell]

they also say that because they pro-rate the fee depending on how much of your contract is left, they still lose money.

...So, they claim to be losing money on all the subscribers who don't cancel their contracts early?

That can't possibly be right, maybe I should go RTFA to see if it really says the same thing...

Re:Umm...

[shog9]

No, see... it makes sense: they lose money on folks who don't leave, so they've added the extra termination fees and reduced customer service as a ploy to drive customers away and drive up profits!

But my guess is that this is just the first step; at some point, you'll pay them up-front to avoid signing a contract in the first place...

Re:Umm...

[betterunixthanunix]

This is "loss" the same way that the RIAA "loses" money when you download your music. In other words, they define the word differently than everyone else, but do not mention their different definition in an effort to confuse you.

Re:Umm...

[dotfile]

Ummm... indeed. You can do that now. Buy the phone at retail, go month to month on the service with no contract.

Re:Umm...

[KarmaMB84]

They lose money on the phone, not the contract.

Re:Customer care

[eldavojohn]

Verizon will go any lengths to protect their customers, even if it means killing them.

"This is an automated message notifying you that on the ... two five of ... November of ... 2009 your husband did conspire to change carriers with willful and malicious intent. Regarding this matter, he has been terminated in order to assure you continuous service. We apologize if you experienced any problems with your service during this technical adjustment. You will receive an invoice shortly for the professional handling of your husband and his disposal. Please remit payment by the end of ... December of ... 2009 to avoid further late charges and fees. To return to the main menu please press star, to talk to a Verizon funeral representative please stay on the line ... "

And you can write whatever you want...

[shog9]

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.

Re:And you can write whatever you want...

[Anonymous Coward]

IIt's a free market, and they can charge anything they like.

Your right It is not a free market if only one carrier has service in your area. It is a fucking monopoly

Re:And you can write whatever you want...

[jimicus]

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.

Of course they are. Mobile phones are essentially a commodity. An expensive one, but nevertheless a commodity.

Obfuscating your product in the name of offering choice when there fundamentally isn't much to choose between competing products is a common tactic when you're selling commodity items.

Re:And you can write whatever you want...

[PopeRatzo]

It's not a free market

There is no such thing as a "free market". There has never been such a thing in human history, and never will be, until we can be assured that everyone acts in good faith and everyone has the same complete and reliable information.

The "free market" is as impossible as "free energy" and the "free lunch".

Re:And you can write whatever you want...

[Rich0]

Mobile phones are essentially a commodity.

Agreed - phones are a commodity.

Phone PROVIDERS, on the other hand are NOT. In the US there are really only four with any significant coverage, and only two with fairly wide coverage. That is not really a "free market."

And only T-mobile at this point has plans that don't involve phone subsidies, which makes the commodity status of phones an issue as well. What good does it do me to buy my own phone when the carrier is going to just charge me as if they had given me a subsidized one?

They should be required to separate the phone subsidy in the plan so that you can choose to get the plan with or without the subsidy.

If you cancel service early you could opt to pay the termination fee, or pay ONLY for the subsidy portion of the plan for the remainder of your contract (not the FULL plan). If you don't have this clause then the providers will play games with the subsidy value so that people still pay more.

Oh boo, friggen, hoo...

[mark-t]

"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.

Re:Oh boo, friggen, hoo...

[O('_')O_Bush]

The Anonymous posters above is correct.

It doesn't have to do with loss of a customer, but rather the loss of a customer before they've held the contract long enough that they pay back the phone that they got at a steep discount with the contract.

The discounts are so steep because smart phones are so expensive, that's why they require smart phone plans and other BS to increase service costs to cover those phones, and also why they have a higher cancellation fee to cover the difference that the service plan wouldn't have if the customer cancelled early.

Re:Oh boo, friggen, hoo...

[Solandri]

I don't even understand why there should be early termination fees. If they want to subsidize the cost of the phone, just give the person a loan and add its repayment costs to the monthly charge. They already pull your credit report when you sign up for service anyway. If the customer leaves early, the remaining balance of the loan becomes due. Simple and keeps the numbers straight and legit.

The only reason the cellular companies play this subsidized phone and early termination fee charade is to take advantage of people like me. I've had the same phone for almost 4 years now. I've long since paid back any subsidy which lowered my initial purchase price. Yet I'm still paying the same monthly service fee (and hence subsidy repayment fee) as someone who got a brand spanking new smartphone last week.

Re:Oh boo, friggen, hoo...

[farble1670]

additionally, the idea that they pay $600 for a droid phone is BS. they are the single distribution channel for the droid in the US. that means that motorola is bending over to have them push their phone. they are getting droids at a massive discount over what a normal consumer would pay for the unlocked phone.

Re:Oh boo, friggen, hoo...

[mark-t]

I've never seen any company charge less for a termination fee than what it would have cost to have borrowed the difference to buy the phone and had payments on that loan factored into the monthly bill such that the period of the loan is the duration of the contract. People who "buy out" their contract so that they only owe $175 after paying $200 for a $600 phone have been utilizing that phone for over half of the time of the original contract, and the phone company has been collecting money the whole time... it's not like they aren't making money hand over fist and can't afford to put a portion of that on the balance owed. $400 off of a phone over 3 years means that at 10% interest, only about $13 a month goes towards paying off the balance owed on the phone... which is substantially less than what the phone company will charge you each month for a plan for that phone, and is easily soaked into the regular costs while the company makes a profit.

The only way that they "lose" money when somebody cancels a contract is that they don't have somebody continually paying them every month... which doesn't really cut into their bottom, except in the indirect sense that any unsatisfied customers can be considered a serious liability.

Re:Oh boo, friggen, hoo...

[bstender]

This is a lousy business model. not sure what you can sell that used phone for, but it ain't full retail. maybe this scam is worth it to some kid with no expenses, but i doubt Verizon would allow them to make a habit of it.

Second, Verizon does not pay 600 for that phone. if they pay more than $200 per unit i'd be surprised. Verizon does not lose money on any retail transaction whatsoever. This double fee is just extortion-as-usual, they are paving the way for a new standard. expect the others to quietly double up within the next few months. People will just grumble and pay it anyway.

$350?

[ceoyoyo]

Wow. My early cancellation fee is $500. And contracts are three years, not two.

Re:$350?

[tepples]

What kind of coverage does your carrier have in Indiana?

Re:Careful, they're going to covertly sign you up

[buttersnout]

IANAL but to me the contract seems unconscionable. Once signed up, Verzion is able to decide any amount of money the consumer owes them whether as a monthly fee or termination. I don't understand why such a contract would be legal.

Fairness?

[grapeape]

Fairness would be selling the phones at standard unlocked prices and letting people buy their contracts ala carte. Of course that would also mean much higher phone prices, how many people would buy the iphone or Droid at $600? In the long run consumers would be better off for it, but many seem to want the latest and greatest but don't want to pay more than a couple hundred bucks to get it.

In Verizon's defense, they are likely looking to stop some of the scamming that goes on with newer phones. I know of a couple local discount cellular stores near me that was having employees buy iphones, keep them 30 days so that the return policy is no longer in effect and then pay the early termination fee, for a 32gb 3gs they nearly double their money. Perhaps a better option would be a tiered ETF?

Re:Fairness?

[scott666]

So it seems like a good deal when you get $500 off.

Re:Fairness?

[icebraining]

I'm betting that cheap phone doesn't have UMTS or CDMA support. But yes, smartphones should cost way less.

Re:Fairness?

[tepples]

I mean, the iPod touch is $199

With no camera and no GSM/UMTS radio.

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.

Re:Fairness?

[Rytr23]

Fairness would be selling the phones at standard unlocked prices and letting people buy their contracts ala carte. Of course that would also mean much higher phone prices, how many people would buy the iphone or Droid at $600? In the long run consumers would be better off for it, but many seem to want the latest and greatest but don't want to pay more than a couple hundred bucks to get it.

Sure, and in "fairness" if you buy a phone at full price, your bill would be less the cost of the ETF each month..right? Oh, sorry, you do not get a discount for paying the "retail" price of any device. So, i guess if the monthly charge is the same either way I'll take the discount.

Re:Fairness?

[ozmanjusri]

In Australia, resellers have to tell you the actual cost of the phone. If you look at the prices at Harvey Norman (a big electronics/furniture chain) you can see that those "subsidised" phones can end up costing a lot.

Nokia E51 Mobile Phone - Silver, $529
$0 Upfront on a $30 Telstra Plan *1.
Minimum payment $720 over 24 months.

BlackBerry® Bold 9000 Smartphone, $999
$0 Upfront on a $100 Telstra Plan *1.
Minimum payment $2400 over 24 months. The BlackBerry® Bold 9000 Smartphone features email compatibility, 2MP camera and video camera.

Re:Fairness?

[adwarf]

Except with T-mobile...

Re:Fairness?

[orlanz]

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.

Re:Fairness?

[haruharaharu]

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.

Re:Fairness?

[TheRaven64]

My current phone cost about £50 (unlocked) around a year ago and has UMTS. It's classed as a 'feature phone' not a 'smart phone' but it runs Symbian has a 200MHz ARM CPU and 32MB of RAM and will run user-provided programs. I've not actually run any on this one, I just got it because it has a SIP client and WiFi so I can make cheap calls when I'm near an access point (I've saved more than the cost of the phone by doing that since I got it. If I'd made all of the calls I made via SIP using the mobile network then it would have cost more than the phone). I occasionally use it as a bluetooth modem when I am mobile, but not very often.

Re:Fairness?

[Znork]

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.

Re:Fairness?

[WCguru42]

Of course that would also mean much higher phone prices, how many people would buy the iphone or Droid at $600?

Why does an unsubsidized phone have to be $600? Why not $250? I mean, the iPod touch is $199, and you can get a cheap throw away phone for $20, add in a bit for some software development and a you get an unencumbered smart phone for a reasonable price.

Because you're not setting the price of the iPhone, Apple is. Now, if it wasn't selling well enough at $600 and Apple decided to sell it at $300 then it would cost $300, but not simply because you think it should only cost $300. Also, adding in the additional hardware to make an iPod touch into a phone while keeping nearly the same form factor probably costs a lot more than that cheap $20 phone.

Re:Fairness?

[PopeRatzo]

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.

Re:Fairness?

[PopeRatzo]

Why didn't you mention the brand name and model of your 50-pound "feature phone" with the Symbian and the 200MHz ARM and 32MB of RAM?

Re:Fairness?

[PopeRatzo]

TracFone and Virgin Mobile phones are subsidized

I don't think that "subsidized" is the appropriate word when a company sells you a fifty-cent razor for five dollars in the hope that you'll buy eight dollar blades.

Do you really believe that the manufacturing costs of a Virgin Mobile phone is more than about ten bucks?

Re:Fairness?

[gak001]

And all phones should be unlocked to allow portability and competition. ...while we're making demands.

Re:Fairness?

[PopeRatzo]

Also, adding in the additional hardware to make an iPod touch into a phone

You mean a fifty-cent microphone?

It already has WiFi. The only thing keeping you from using your iPod Touch as a really useful VOIP phone is Apple's stranglehold on the software.

It's OK. The day when somebody starts selling a $150 Touch clone that lets you run Skype isn't far off. You can already buy cheap Touch clones in any big South Asian city. Here in the city where there's WiFi everywhere, I make calls all day long from my netbook without taking my phone out of my pocket.

Re:Fairness?

[Bodero]

Fairness would be selling the phones at standard unlocked prices and letting people buy their contracts ala carte.

You mean like Verizon Wireless already offers, by selecting the "Month-to-Month" contract type option? Notice the phones are at full price. Notice you have no ETF. Why are people complaining? They have choices.

Re:Fairness?

[sjames]

But it wouldn't mean higher phone prices at all. You pay for it either way, either up front where you know what it actually costs or all along as a hidden part of your monthly bill.

Perhaps if sticker shock made enough people decide it's just not $600 worth of cool, it will start costing less. If you really must have the cool $600 phone, you could always get that on a payment plan separate from your service. That way the costs are made clear to you. As a nice side benefit, it eliminates the opportunity for scamming.

Re:Fairness?

[sjames]

The radio and camera together shouldn't cost more than $100 retail (and that's being generous). So the whole package can be profitably offered at $299.

Re:Fairness?

[DJRumpy]

I would agree with most of your points, except that I would clarify that 'free market' without regulation (i.e. Competetion) is the cause of the U.S. lackluster performance in telecommunications. Free Market does have obvious benefits, but you can't let the wolves guard the hen-house, except in our case, we have two really big wolves, and a lot of chickens.

I really wish they would separate content from providers.

Re:Fairness?

[EvanTaylor]

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.

Re:Fairness?

[BlueBoxSW.com]

I agree. But it's less like a loan and more like financing.

I think if they're going to finance the cost of the phone over some time, that's fine, but show the math and the interest rate, and give people the option to buy it outright or get their own financing.

Re:Fairness?

[shentino]

It's not a free market at all because of everyone being in bed with each other.

It's like a gridiron field full of beefy quarterbacks.

Without the authority of a strong team of referees, the game would quickly be won as a wrestling match instead of as a football game.

It's the same reason we as a society have a police force.

Re:Fairness?

[TheRaven64]

Nokia N80. A couple of generations old now. I didn't mention the brand because they're hard to find now, but you can find similar phones new.

Re:Fairness?

[aaarrrgggh]

Furthermore, customers can actually benefit from using their phone beyond the mortgage period! The current system is designed to scam consumers, as you pay the same price for service if you bring your phone or get one subsidized by the carrier.

An early termination clause is reasonable for some non-subsidy costs, but since they already charge you an activation fee, it is pretty hard for me to believe there is residual customer acquisition costs. (Customer retention costs should not be paid by a departing customer...!)

Re:Fairness?

[Rich0]

Agreed. There should also not be any early-termination fee for any aspect of the service other than the phone cost, and you shouldn't have that at all if you bring your own phone. Also, you should be able to pay out the remainder of your phone rental term without having phone service. So, if my phone fee is $10/month and my plan is $100 per month and I want to switch two months early at most it should cost me $20 (paid over the next two months).

And all phones should be unlocked - at most the company that you're renting them from should have a lein against the phone. I'm fine with them demanding the return of the phone if you fail to make payments for it, but if I cancel my deal with AT&T I should be able to use my existing phone with T-mobile or whatever as long as I pay for phone-only cost for the remainder of my AT&T plan.

Once this happens you could mostly deregulate phones, as they are a commodity. The plans are the part that are a natural monopoly.

Re:Fairness?

[iamhassi]

"Perhaps a better option would be a tiered ETF?"

Agreed. I know there were many threads on the macrumors forums discussing buying an iPhone for $49 to $99 (depending on the deal that day), then cancelling and paying $175 ETF, getting an iPhone for $224 or $274, sometimes lower than the cost of a iPod Touch.

Re:Fairness?

[rfunches]

Why are people complaining? Take a basic individual plan and a basic (Moto W755) phone on Verizon:

• 2-year contract
  • Monthly plan: $39.99/mo
  • Phone: $0
  • Cancel after 1 year: $654.88 ($479.88 + $175 termination)
  • 2-year cost: $959.76
• Month-to-month contract
  • Monthly plan: $39.99/mo
  • Phone: $249.99
  • 1-year cost: $729.87
  • 2-year base cost: $1209.75

It's still cheaper after one year to pay the full $175 ETF on-contract than go month-to-month because they inflate the "real" cost of the phone. The month-to-month plan is nothing more than a veiled warm-and-fuzzy to the people who want to "stick it to the phone company."

Re:Fairness?

[poetmatt]

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.

Re:Fairness?

[Zxern]

Its a great scam. Manufactures can set prices to stupidly high levels because the service providers will mass purchase them at those levels to keep the retail cost high and convince consumers to buy into "subsidized" phones.

Service providers make out by getting people locked into long term contracts, manufacturers make out by charging higher than what the market would actually bear out.

And consumers lose on both ends higher prices and locked in service contracts.

If they weren't allowed to bundle like this "retail" prices would drop in a heartbeat.

Re:Fairness?

[shutdown -p now]

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.

Re:Fairness?

[shutdown -p now]

That sounds like a very good idea - better informed customers make more rational choices, etc. It could also be considered as part of "truth in advertising".

Re:Fairness?

[WCguru42]

You mean a fifty-cent microphone?

It already has WiFi.

Yes, that would be a functional phone within wifi range but would not be a cell phone (in the traditional sense of the term), which is what the ggp was trying to say.

Re:Fairness?

[Eivind Eklund]

I mean, the iPod touch is $199

With no camera and no GSM/UMTS radio.

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.

Yeah, $20 is too low - but you can get them around $30, retail.

Samsung classic at 19.89 British pounds

19.89 British pounds = 32.058702 U.S. dollars

Nokia 1208 at 22.50 British pounds (look through to the "Used & New", cheapest new).

22.50 British pounds = 36.2655 U.S. dollars

Eivind.

Re:Fairness?

[Runaway1956]

Agreed. A telephone should be sold for what it is worth, separately from any service fees. It's alright to break the price of the phone up into 12, or even 24 monthly installments - but the bill should be itemized. Monthly charge of 25 bucks for payment of the phone itself, plus 25 bucks or whatever for service. Payment for the phone would be due if the service is terminated for any reason, then you're in the clear. The phone should be transferrable to ANY OTHER service carrier.

Verizon, nor anyone else, ever had a justification for early termination fees. Any legitimate fee would be small - ten to 25 bucks for processing paperwork.

Screw them all.

Re:Fairness?

[kenshin33]

agreed to the point where: in US no way in hell to get an unlocked cell, even if you pay it up front full price. Neither in here (canada). In a truly free/fair market you would have at least the choice.
So indirectly the consumer are forced to buy subsidized phones (why the hell would I pay full retail price for a locked phone ????).
IPhone is the worst. cant buy it full price (let alone unlcoked), you want it ? it comes with 3 years contract with DATA access (no way you take it just to use it as a phone/mp3 player and connect to wifi home or any hotspot out there). Rogers had it first (fido later) exclusively for almost (may be more) 2 years now, the other 2 big joined now (BELL and TELUS), guess what ? same shit diffrente package.

Re:Fairness?

[kenshin33]

what would you say about the early payment fee on a mortage ? :) (Not that I'm ok with that)
I think their justification of these fee among other things is damage. You promised to stay with them for X years but you broke that promise so you cough up the bucks.

Re:Fairness?

[Runaway1956]

Early payment fees for mortgage isn't *really* comparable. A mortgage is a long term agreement, often times 30 years or more. It represents a sizable portion of an individual and/or a joint earnings potential. In short, it can be seen as a lifetime investment. I *can* justify a small fee for altering a lifetime investment deal. (note, I don't actually justify the fee, I'm just drawing a distinction here)

A telephone shouldn't be seen as such. A couple hundred dollars worth of equipment is a relatively minor investment, unless you're dirt poor. Even a 1000 dollar investment should be seen as a short term loan and/or investment.

However that might be seen by the business world, I insist that the equipment cost and the service contract should be entirely distinct and separate, and that your monthly bill should itemize what portion of your bill is being applied to each. As others have pointed out, once my $100 or $800 telephone is paid off, my bills don't go down. Assuming that I keep my contract for ten years, then I have presumably paid for the same telephone about 5 times over. There is something seriously wrong with this picture.

It should probably also be noted that the same plan from the provider costs the same, whether you opt for that $100 phone, or the $800 phone. Again, there is something wrong with this picture. Am I really paying for an $800 dollar phone, no matter which physical phone I choose to use?

Transparency is something that the providers simply do not understand. Any time I sign a contract, I like to know precisely what I'm getting, what I'm paying, and WHY.

Again - assuming that I keep my contract for 10 years, have I subsidized a telephone for 4 other users? That is simply wrong, if so. If the telco wishes to subsidize those phones, that is fine - but they should do it with their own money!! Certainly not with MINE!

Re:Fairness?

[kenshin33]

and I totally agree with you there.
I was just pointing out that may be these fee are simply not for the phone but some kind of damage/penalty liability for breaking the contract. same as with a cable company (plain old analog, nothing rented) .. contract for 12 months, cancel before 20/month up to 200$ (If I remember correctly) as it goes for Internet some ISP will lend you the modem (no monthly fees) which you;ll give back when you wont need it anymore. cancel before end of contract => return modem + pay fees.
and since they print it (I'm note sure here) in their TOS, it's legal way to squeeze few hundreds out of the clients (as a parting gift of a sort)

Re:Fairness?

[The End Of Days]

I guess we need a Department of Telling People What They're Allowed to Sell at What Price. With a centrally planned and approved economy there's no limit to how awesome everything will be.

Re:Fairness?

[earlymon]

Of course that would also mean much higher phone prices, how many people would buy the iphone or Droid at $600?

600 hundred smackers gets me a Dell Inspiron notebook or a Mac mini why does a cell phone magically have to cost so much?

An iPod touch - beaucoup computing power, touchscreen, WiFi and Bluetooth is $200.

Tell me why adding a 3G radio to that costs an additional $400?

I keep hearing how stupid we all are not to just lay down and spend 500 to $700 on a phone. Again - on a PHONE.

NO - it's not in my best interests to keep feeding from the trough and buying a phone for cheap with lock in.

NO - it's not in my best interests to encourage an industry without monopolies to sell me hardware at more than twice its value, had it been any other consumer electronics good - just because I can call Aunt Grammy on it.

I don't want to spend more than a couple hundred bucks because when it comes to a phone - I really can make do with less than an iPod Touch - and that's my logical price-equivalent for the tech involved.

Re:Fairness?

[plague3106]

Of course that would also mean much higher phone prices

No, it wouldn't. Prices would necessarly come down, or people wouldn't buy the phone. There's plenty of wiggle room to do so as well... an iPhone doesn't cost as much to make as its "retail" price. Also, if I could buy ONE phone that worked on ANY network, that would further drive prices down, not only for phones, but for plans as well (and may well hasten the stupid defacto contract based system we have now).

Re:Fairness?

[badkarmadayaccount]

To harass drug users?

Re:Fairness?

[shentino]

Personally I'd rather have government cops harassing drug users than have an anarchy get taken over by force by the mafia or whatnot.

Re:Fairness?

[badkarmadayaccount]

I'm stumped. Anarchy almost sounds better. Don't forget that the police are just a legal mafia.

Re:Fairness?

[shentino]

The difference is that you can take a bad cop to court.

Without a government, you have no court.

Re:Fairness?

[badkarmadayaccount]

Touche.

Alternative services

[Butterforge]

Go Prepaid! Cheaper rates and no contract! Boost Mobile - $50/month for unlimited data usage. Metro PCS - $45/month for unlimited data usage.

Except if you want to get a new phone, there is no discount. The Samsung Finesse, for example, costs $300. Out of pocket.

These "free phone" deals . . .

[base3]

. . . need to be regulated like the installment loan contracts they actually are, and subject to the Truth In Lending Act.

Re:These "free phone" deals . . .

[TheRaven64]

Mod parent up. Don't fix the symptoms, fix the problem. Make them clearly state the fact that you are entering a finance deal on the phone as well as entering a contract. It's not a free phone, it's not a phone that you are renting, it's a phone that you are buying with a loan from the phone company. You should be able to see what the interest rate is (much higher than most banks will offer for an unsecured personal loan) and have it billed as a separate line item to the cost of connection (if there is one) and the cost of calls.

How much is the fee

[Murdoch5]

I just had my contract cancelled because my phone broke and I needed a new one. I had 33 months left and they charged me 400 and only picked up 190 of it. When I told them thats retarted they said "We don't care just pay". I'm confussed on what the fee should be.

I want to call them back and agru this because first of all I shouldn't be charged for a broken phone because the phone should of broke in 3 months. Second I shouldn't be charged a massive cancell fee becasue they sell phones which break easily.

Does anyone have a story or tale about being charged a low rate for there contract. Something around 33 months would be good because I'm really pissed about how they've been screwing me. Out of the last 5 or so months I've had to call and get my bill corrected 4 times and on a second note I had to make a new call to just get my phone replaced. This company is horrible and when my contract is up I'm never going back.

Just say it.

[MrCrassic]

Since this is the crux of it...

Verizon Wireless said Friday that it doubled the fees for customers to break service contracts for smart phones because those devices cost much more.

and other companies have not raised their ETF incredibly (including AT&T, who just so happens to have rights to the most smartphones, including iPhone), it basically comes down to maximizing profit with the added benefit of increasing retention rate. In other words, they want more money.

However, it's not completely bleak, since they do decrease the ETF like other carriers do:

Verizon, like several other carriers, lowers the price of the early termination fee over the length of the contract. A Verizon customer who canceled a two-year contract after 23 months would still be charged $120, though.

It must suck if Verizon Wireless is one's only option. If it isn't, it makes zero sense to switch (except for network coverage, but AT&T is practically right there with them).

Re:Just say it.

[tepples]

it makes zero sense to switch (except for network coverage, but AT&T is practically right there with them).

For one thing, there's a map for that. For another, Verizon has been known to lock out features that the handset manufacturer has advertised.

Verizon customer service is the worst

[Trip6]

I have NEVER had a good experience dealing with Verizon phone or store personnel. I only feel better when I compare horror stories with AT&T customers, who have similar complaints.

I am also amazed at the piss-poor quality of connection we collectively tolerate as cell phone consumers. Remember when you could talk over a land line and actually hear somebody? And now my wife and daughter want iPhones so it's about to get even worse.

Pre-Pay is only way to go

[bwave]

I don't understand your non-poweruser who would sign a wireless contract. Prepay is by far more cost effective, $1 a day to talk unlmited to any Verizon customer (and who isn't, even if they are evil), otherwise 10c per minute outbound, add $10 and you get unlimited text, otherwise 10c a text. Best of all, no taxes or bogus FCC fees, etc. Now if you live in NYC this might not work, as you probably have people on all the networks, so you'd be paying 10c per minute to talk outbound during the day (unlimited nights and free inbound) But here in Delaware/Maryland area, AT&T's network quality is horrible, and Sprint/Nextel is nearly non-existant.

Re:Pre-Pay is only way to go

[TheRaven64]

These days, I mainly have a SIM for incoming calls. I've paid under £10 in the last year for my phone. Most outgoing calls go via WiFi/SIP - I only use the mobile network when I'm outside - and I've only spent about £10 on those, but got a lot more talk time for the money.

Lower Cost Phones?

[eatblueshell]

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.

Re:Lower Cost Phones?

[webdog314]

Also remember that last year's cell phones are about as popular used gum, and just as hard to sell to the American cell market. It's for this reason that Verizon has it's "New Every Two" deal where they give you a big break on a new phone ever two years. They want you to be in the habit of thinking of phones as having a one or two-year shelf life, when most of us would be perfectly happy holding on to the phone we have for as long as five. But you BETTER buy a new phone every two years or they're going to be stuck with a whole bunch of useless hardware that they can't sell. They charge you a ton to leave not to subsidize the phones they SELL, but rather to subsidize they phones they DON'T SELL. If you buy a phone use it for a while and cancel, they might break even on the deal (probably more than that) but they lose big time if they end up with branded hardware they can't sell at all.

Re:Lower Cost Phones?

[TheRaven64]

Hush. Don't let people know mobile phones last more than two years, or they'll stop selling them so cheaply second hand as soon as the latest shiny must-have phone appears on the market. If you're happy to be a couple of years behind the state of the art, you can pick up unlocked phones very cheaply, use pre-pay rather than a contract, and pay very little for the privilege.

Re:Lower Cost Phones?

[tixxit]

Hrmm... I got my phone for $70 CAD brand new from my carrier 1.5 years ago and have had no problems with it (it is my primary phone). When I was looking, all the carriers had basic phones (speaker phone, basic bluetooth, shitty camera, etc.) available for under $100 CAD.

Re:Careful, they're going to covertly sign you up

[Anonymous Coward]

And how are people informed that the contract has changed?

IS it kept in a locked cabinet in the basement of a building with no light bulb with a sign on the door that says keep out vicious dogs?
So the possibility of you finding that is has changed before the grace period is over is about nil.

Re:Careful, they're going to covertly sign you up

[Anonymous Coward]

Actually the dogs are quite nice, so it's still the consumer's fault.

How much does the radio chip cost?

[tepples]

You say a low-end phone has MSRP $200, compared to a smartphone minus its GSM/UMTS radio. But how much does this radio cost?

Re:How much does the radio chip cost?

[eatblueshell]

I can tell you it's not nearly 200 bucks!

Re:Here is a solution to cell phone madness

[iwaybandit]

We had a nationalized phone company, AT&T. All telephones were black and had a dial. After the breakup all kinds of innovative services became available, and prices went down.

Ok, technically it was a monopoly, but they had government's blessing to maintain that status. The only difference is that the CEO was not a member of the Presidential cabinet.

Er, "losing" money? Bullshit.

[geekmux]

"...they also say that because they pro-rate the fee depending on how much of your contract is left, they still lose money.

Er, somehow I seriously doubt that the .01% of customers that terminate a contract early somehow equates to them "losing" money. Their extortionist texting rates alone could probably keep the entire division afloat. What a crock of shit.

Any company that is sitting back reaping the benefits of tens of millions of people calling in "every week to cast your vote for the next one-hit-wonder Idol" can STFU about "losing" money. They're enjoying profit streams no one even imagined 10 years ago.

Re:Here is a solution to cell phone madness

[causality]

It's called nationalization, and it's a shame that Americans shy away from such a pro-consumer action because it stinks of "socialism".

No, nationalization is when the government assumes control of something. The GP was not talking about that. He was talking about private citizens purchasing shares of an existing corporation on the open market in order to own a controlling interest. That controlling interest can then be used to determine how that corporation runs. His idea is to use that to set up a truly customer-friendly cell-phone company. In a way it's a good idea. The barriers to entry in this market are rather high; better to legally take over an existing company with an existing customer base than to try to start from scratch.

Either you were itching for an excuse to discuss socialism or you really misunderstood the GP.

bye-bye, Verizon!

[david.emery]

I picked up his-and-her iPhones yesterday. (Was scheduled for today, but we're getting all the snow they promised, 14" and coming down at 1"/hour). Verizon coverage is very good, but ATT cannot be any worse than Verizon on customer service and in particular on corporate policies. I got a call a couple of days ago from some Verizon sales rep trying to get me to replace/upgrade my phone. I said "I don't want any of your new phones."

A friend has a Droid and is pretty happy.

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.

Re:bye-bye, Verizon!

[eatblueshell]

I see what you did there.

Re:bye-bye, Verizon!

[SanityInAnarchy]

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?

Re:bye-bye, Verizon!

[SanityInAnarchy]

Except for, ironically, Windows Mobile.

Re:bye-bye, Verizon!

[Ender_Wiggin]

Apple removed the carriers' veto power over cell phone features. Verizon has disabled or crippled countless features on their phones. Apple made sure they had creative control over the device; no forced branding, no blocking of features, allowing the use of WiFi and some VoIP

Re:bye-bye, Verizon!

[SanityInAnarchy]

Apple removed the carriers' veto power over cell phone features.

Didn't Apple blame AT&T for the fact that the Google Voice app has still not been accepted?

But suppose you're right. What did that buy us, really? All it means is that Apple now has veto power over those same features.

Verizon has disabled or crippled countless features on their phones.

Including, I suspect, the Droid. It doesn't look like much has changed in Verizon-land.

Apple made sure they had creative control over the device;

Indeed they have -- they and no one else, except maybe the carrier anyway. Certainly not the consumer or the developer.

allowing the use of WiFi and some VoIP

Yes, note "some" -- see Google Voice above. And does tethering work yet -- finally? Windows Mobile has had that forever. How much do you want to bet AT&T is vetoing the tethering, behind closed doors?

All Apple did was take everything that's wrong with the existing mobile world, make it worse (at least I could install my own apps on Windows Mobile), and dressed it up in a shiny, glossy package.

Seriously, I'm a Linux guy. It's awkward for me to advocate the Microsoft choice -- it feels much like it does agreeing with Fox News on everything, but when it's Fox News vs the Westboro Baptist Church, I have to go with Fox.

So, I'd much rather it be a truly unlocked Android or Maemo, but Windows Mobile has had pretty much everything the iPhone does, and it's had it since before it was even called Windows Mobile.

Competition

[p51d007]

The phones wouldn't be expensive, so to speak. If all phones in the USA were unlocked, and any retailer would sell them, you know good and well stores like Walmart, Target et al, would pressure the manufacturers for the lowest price and the "retail" price would come down to a few dollars, above the cost to manufacture the phone. It's called capitalism & good business. Those that didn't drop the price, would lose market share.

Re:Competition

[tinkerghost]

Take a look at Wallyworld now. If you check the Verizon rack on the pre-paid phones and then look at the phones for contracts, you'll see that getting a basic phone locks you into a $350 ETF for a $45 phone. And yes, you can buy the $45 phone and then put it on a monthly account without an ETF.

In other News

[/dev/trash]

My pay as I go Virgin Mobile phone works just great. See if I wanna visit a web page, I wait til I'm at a computer. Call me old skool.

So, sue me.

[Low Ranked Craig]

Basically, that's how I look at it. Yes, they might ding your credit, but in my experience when purchasing a large ticket item like a car or a house, anything like a cell phone bill or a Dr's bill can generally be discounted as long as you mortgage, auto and credit card payments are current. I've had the finance guys at car dealers and banks tell me that they don't even look at utility bills or dr bills. tax liens, on the other hand...

Re:Their service, their terms

[cynyr]

"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.

Termination fees should be depreciated

[davidwr]

If Verizon gives you a free phone for 24 month's service, they should credit you for 1/24th of the early termination fee every month should you terminate early. Have a $240 termination fee and cancel after 23 months? Cough up a 10-spot.

Re:Their service, their terms

[TheRaven64]

They have been granted a license to use the public airwaves to operate their business on the assumption that it is beneficial to the public for them to do so. If this is not the case, then the FCC, on behalf of the public, can revoke their license.

Deadcheap phone exist

[DrYak]

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.

Re:Let em charge what they want!

[Anonymous Coward]

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?

Re:Their service, their terms

[John Nowak]

The federal government gives money to (and takes money from) practically everyone. If that's your standard for judging if someone should be subject to force by the state, we'd all be slaves. The fact that the government gives out money to everyone makes it necessary to take that money whenever it is offered to you lest you lose out to a competitor that took it. If you don't want to be in this sort of moral quandary, have the state stop redistributing your wealth to everyone else.

Did you notice...

[Hurricane78]

...that a totally “free” market, is the exact same thing as the law of the jungle?

Which is the opposite of democracy on the “democracyness” scale. (Beware, that I don’t say that that scale can’t have negative numbers too. :)

If you tell that to a fundamentalist “free market” republican, does his head explode? ^^

“We must have a democracy.
But we must also have a completely free market.
But we must have a democracy.
But... aaaaahhhh *BANG*”

Re:Did you notice...

[Guido del Confuso]

I think you may not be clear on what "free market economy" actually means. A free market economy requires a certain level of structure. The unauthorized taking of property by means such as fraud, theft, or extortion must be illegal and punishable by the government. Contracts must be enforceable by some means, either through the courts or through private governing bodies. And such laws must be applied equally and fairly to all citizens of a society. Without this fundamental framework, you don't have a free marked economy--you have anarchy.

Democracy has nothing to do with a free market economy. People are free to vote for or not vote for laws that detract from the freedom of the market, just as kings or dictators can enact or not enact the same laws. Democracy is merely the process of a society deciding how it runs itself, not how it's actually run. A free market economy is just as compatible with democracy as a socialist command economy is.

Re:Did you notice...

[PopeRatzo]

A free market economy requires a certain level of structure.

"Structure" which is imposed by the people with the most money and power.

Now just how do you feel the modifier "free" is appropriate for such a system?

Democracy has nothing to do with a free market economy.

Thank you for your honesty. Now take the next step and admit that "freedom" has nothing to do with the feudal system known as a "free market economy".

Re:Did you notice...

[Guido del Confuso]

Freedom is slavery, eh?

And apparently in your case, ignorance is strength.

Re:Did you notice...

[honkycat]

Now just how do you feel the modifier "free" is appropriate for such a system?

Just fine, thanks. I'm capable of grasping different meanings for the same word under different circumstances.

Free market does not mean total freedom. It does not mean political freedom. It does not mean software freedom. It means something specific, not just what it sounds sorta like it probably means.

Not a 'Free Market'

[nexuspal]

It's an oligopoly (with a high risk of collusion)...

Re:Not a 'Free Market'

[Anonymous Coward]

It's an oligopoly (with a high risk of collusion)...

You think? A couple years back, text message cost 10 cents on AT&T, Sprint, T-Mobile, and Verizon Wireless. Then surprise-- they all go up to 15! Then 20!

500 text messages take up less bandwidth than a minute of conversation.

I'd say there's a high risk of collusion too.

Re:Not a 'Free Market'

[Guido del Confuso]

Oligopolies are perfectly capable of being formed in a free market economy. A free market refers to the lack of governmental intervention except in cases of force or fraud. An oligopoly is a market segment (whether in a free market, a socialist economy, or even anarchy) that is dominated by a small group of entities. The two concepts are not incompatible, or even comparable. Saying "it's not a free market, it's an oligopoly" is a non-sequitur. It's kind of like saying "it's not a car, it's blue".

Re:Not a 'Free Market'

[PopeRatzo]

So what exactly is the benefit of this mythological "free market" economic system of which you speak?

Re:Not a 'Free Market'

[Rich0]

It is only a free market if anybody is free to enter the market. That is certainly not the case with a phone company. How much capital do you think it would take to actually create a credible cell-phone provider?

Re:Not a 'Free Market'

[10101001 10101001]

Oligopolies are perfectly capable of being formed in a free market economy. A free market refers to the lack of governmental intervention except in cases of force or fraud.

Generally true. However, in the Adam Smith free market, monopolies and oligopolies should be fought, removed, etc. Meanwhile, in the Laissez-Faire free market, monopolies and oligopolies are good, wholesome constructions of inherent rights.

Many people who champion a free market don't realize that monopolies and oligopolies could be constructed in a free market because many Laissez-Faire supporting individuals are quick to downplay their inevitable existence with speak of competition and the invisible hand. The end result is people like the GP who are misinformed about what a real free market (as opposed to an idealized free market) entails.

Any Jarhead can tell you....

[Darth_brooks]

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.

Re:Any Jarhead can tell you....

[antdude]

What American phones have no contracts?

Re:Any Jarhead can tell you....

[dupeisdead]

What American phones have no contracts?

a lot, you just need to look at the OTHER phones, not the coolest shiniest toys. But if you want a highend phone for under $200, yes you need a contract. If you want a basic phone and no contract that's doable.

Re:Let em charge what they want!

[mlyle]

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!

Re:Let em charge what they want!

[KarmaMB84]

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.

There is another way

[whistlingtony]

I have a nasty habit of washing my phones. Or losing them when camping....

I can't afford to get a fancy phone three times a year. I can't afford to be in a contract. So I just buy my phones.

I get them off ebay. They cost $10, including shipping. They have no bells and whistles, but who cares? I don't contribute to shitty Ta mining practices in Africa. I don't sign a contract for the length of my service. It's cheaper for me.

I'm free. I can leave whenever I want to. Hear that Sprint? Yup... whenever I want to.

Other people could be free too. We're all whining about how Evil Verizon is, but people PUT UP WITH THIS SH!T. It's outrageous, considering that NOT putting up with it is cheaper, easier, better for the environment, etc...

Now, even though I think most poeple are morons who "need" the latest Shiny... The phone ocmpanies are still evil bastards. Go FCC! Extend network neutrality to phones!

Re:There is another way

[east coast]

We're all whining about how Evil Verizon is, but people PUT UP WITH THIS SH!T. It's outrageous, considering that NOT putting up with it is cheaper, easier, better for the environment, etc...

Speak for yourself. I'm not whining at all.

Early termination fees don't bother me in the least. It makes business sense and I feel it's justifiable for the cost of subsidizing a phone. Verizon has provided a kick ass service to me for over a decade. So I'm putting you to task to explain how it's cheaper, easier and better for the environment.

Seems like they should charge by phone

[SuperKendall]

I actually agree with Verizon that they shouldn't have to eat the cost of an expensive subsidized phone (like the Droid). It seems fair to me that if you get a very expensive phone you are going to pay that back either through service usage or termination fees.

What seems wrong is that every person has to pay that termination fee, including people buying cheaper phones. It makes no sense for those people to have to pay more when they don't even want a smartphone.

People don't like being forced to pay $15+ / rent

[Joe The Dragon]

People don't like being forced to pay $15+ /m each rent for the cable box and the cable co have worked hard to make cable card a joke and to make it not work 100%. Some said here that comcast Garden State "Effective January 1, 2010, Digital Classic Channels and Digital Additional Outlet Service will no longer be available for subscription to subscribers with a Cable Card"

so use more then 1 tv with cable card and or Digital Classic (where NFL network, MLB network and lots of others is will need a comcast cable starting about $5-$6+ (sd) up to $20+ for a HD DVR per tv.

http://www.dslreports.com/forum/r23478294-Bad-News-for-Cable-Card-Users-in-South-Jersey

Double Double Fees

[Midnight Warrior]

These termination fees don't apply just to the whole contract. If you add a family member in for the $9.99/mo, they get their own phone number (duh), which is effectively another contract. If that family member leaves before the end of the contract, they own the remaining balance on the termination fee. The primary holder on the account can also be hit for the remaining balance of the termination fee if they cancel early too.

So, if you subscribe your wife and/or girlfriend on to the plan 18 months into a 24 month plan, they charge you $9.99 a month. I don't remember if they charge a fee to set up the phone, but the cynical side of me says that they probably do. If your significant other dumps you in the 23rd month of the contract, they can prorate the termination fee any way they want. They may take their $175 prorated to remove (23-18=) 5 months and you owe the rest. Then, when that is done making you mad and you decide to leave a month early, they'll hit your side of the contract with the prorated termination fee too.

Oh. Did I forget to mention this: when your significant other left you in month 23 and you canceled her phone, you automatically signed yourself up for a different plan. So, if you go to leave at the end of month 24, they find a way to prorate the termination fee because you are leaving the new plan early.

This is insane, you say? Then go to a pay-as-you-go plan where the profits are really juicy. Go ahead. I dare you.

I'm just glad none of these fuzzballs got bailout money. Or at least I'm hoping they didn't.

Re:Double Double Fees

[FSWKU]

Yes, there is a setup fee for the additional line. It's less than the primary, but it's still pretty ridiculous.

Anyway, what you do when the wife/girlfriend decides to leave you is this:

1. Remove them as an account manager. This will prevent them from making ANY changes to the account (including cancellation). Change the online password, as well as the one that they have you choose when calling customer service. If you never had them as an AM, you're one step ahead of the game.
2. Call customer service. Report the phone as lost/stolen and have them do a "suspend WITH billing". What does this accomplish? Well, first of all it puts that particular phone on the negative list, meaning it cannot be used again until you (now the sole authorized person on the account if you followed step 1) allow it to be. Even if she gets her own account, that particular ESN/MEID is blacklisted and CANNOT be used. The other thing this does is keeps your contract end date the same. If she leaves you in month 23 out of 24, you can pay the $10 for the last month, then cancel with no peanalty whatsoever. Much better than paying a $120 ETF with one month to go. If she has any additonal features on the account (text/data/international calling/whatever), you can go ahead and remove those with no penalty, and only owe the prorated amount for the time used in the current month.
3. While you're on the line with the rep, you can also choose to block her number from your phone.
4. If the split is more amicable, you can actually split her line off to it's own account under her name, and it would become her financial responsibility. Just tell the customer service rep you would like to do an "Assumption of Liability", and they can give you all the details. This lets her take over her line, keep her number, no ETF, and no activation fee.

The single most important thing to remember when adding a spouse/partner/whatever to your account is that if you add them as an Account Manager, this gives them FULL control over the account to do whatever they want. This includes change your plan, add lines, drop lines, renew contracts, order phones, add/change/remove features, etc. The ONLY things they can't do are add/change AM's, change the customer service password, or perform the above mentioned Assumption of Liability. Something to think about before you add him/her on as anything other than an additional line.

When a free market isn't free

[rsborg]

Oligopolies are perfectly capable of being formed in a free market economy. A free market refers to the lack of governmental intervention except in cases of force or fraud.

As correct as you are, you forget what this means in reality: All the "goodness" (read: efficiency) of the ideal free-market goes out the window as soon as it becomes an Oligopoly or Monopoly... so in effect, this "free market variant" is so different in terms of apply basic pricing theory that it's not a free market at all.

There's A Map for That!

[Trackster]

Want to find a way to avoid getting fuxed by the Verizon Wireless early termination fee to escape it's crappy service? *world map excluding United States pops up* There's a map for that!

Why stop at doubling?

[drwav]

Just make the early termination fee $1 billion and change the contract length from 2 years to 100 years. Then shut down all the towers and fire all employees so that the CEO and a few other high ups are the only ones collecting money. It isn't like they will need to worry about anyone ever leaving ever so who cares if they don't actually provide service since they have a "service not guaranteed" clause in the contract anyway.

I think the government should step in...

[okmijnuhb]

...and require carriers to offer service plans without a contract. That would force them to shape up service to retain customers.

A strange game.

[PPH]

The only winning move is not to play.

Reminds me of my warranty dance

[pem]

Sometimes I go to (insert big office/computer store retailer here) to buy a new machine, when I'm too busy/lazy to put one together.

When I have the big, heavy, cardboard box up near the cash register and they start asking me if I want their warranty, I set it down as quickly as possible without any damage, back up like I just found out it's infected with ebola, and say in a very loud, incredulous, voice "It's going to BREAK!!?! I don't want it if it's going to BREAK!!!"

Of course, they assure me that it's perfectly fine, so I ask why they even sell warranties, and then they go into some weaselly song and dance. But the upshot is, I don't get the usual hard-sell on the warranty, because I've convinced them I'm ready to bolt without the hardware.

Re:Let em charge what they want!

[aukset]

Even collusion is unnecessary. The concept of Mutually Assured Destruction isn't limited to the threat of nuclear annihilation. If you think about it for a little while, you'll see it is actually in the providers' interests to NOT compete on price. Price wars drive profits down, everyone knows it, so no one risks sparking one.

Verizon would then be a bank

[KalvinB]

While it sounds like a fantastic idea, the ability to give out loans is limited to banks. Verizon would have to start up a new business or outsource that end of the business to someone else, thereby increasing the price further. Because phones are technology which is obsolete as soon as it gets in your hands, good luck getting companies to finance a $600 phone for three years when it'll be worth less than a hundred within a year or two. In practice it's worth zero within six months because there will be no buyers for your old phone when the new shiney comes out.

People do horrible things to their houses when they get repossessed. How do banks plan on getting the phone back from people who don't pay their bill? What are the odds it'll still be working and in resellable condition?

Banks only want to finance things which retain their value longer than the loan.

An additional problem is that anything less than $1500 in most states is small claims. So the bank would have to send out a lawyer to deal with you in small claims court which costs more than the phone is worth. The plane ticket to make the court date would cost more than the phone.

It's a good idea in theory but there's just no way it's going to happen. It's simply not worth the hassle.

Re:Verizon would then be a bank

[kenshin33]

what about cars ????? a car losses value over time ... yet you can finance ?

Re:Verizon would then be a bank

[haruharaharu]

People do horrible things to their houses when they get repossessed. How do banks plan on getting the phone back from people who don't pay their bill? What are the odds it'll still be working and in resellable condition?

You don't, just collect the balance due. The difference here is that getting someone to cough up $500 via garnishment is actually practical, while $150,000 is not.

Banks only want to finance things which retain their value longer than the loan.

No, they can finance the thing at a higher rate or over 2 years - $600/24 = $25, so charging $30/mo for 2 years or $36/mo for 1.5 years is doable.

It's a good idea in theory but there's just no way it's going to happen. It's simply not worth the hassle.

Worked great in finland.

Re:etf

[bstender]

are ripping Verizon off, leaving Verizon to pay HTC and Motorola for the phones that we sold to them at 1/3 of the cost.

Verizon...losing money...

bwahahahahahaHAH!

clueless a tad?

cut the cord...

[twoHats]

...or some other anachronism that means dump the crooks. I did a couple of years ago, and am about 2500 bucks richer - minus the 200 i have spent on wireless since then, and have only missed the endless time on the phone to customer service.

Re:People don't like being forced to pay $15+ / re

[kenshin33]

yet they do it... ISPs offer you the option to buy your modem or rent it (agreed the price is ridiculous but still) cable/sat distributors let you either buy or rent the STB (especially hi end ones HD PVRs)

canadian ones let you buy them not us ones.

[Joe The Dragon]

canadian ones let you buy them not us ones.