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Google Charges ETF For Nexus One On Top of Carrier's
dumbnose sends along the news that Google is double-dipping on the Nexus One early termination fee. Ars sorts out the double dose of fine print from Google and T-Mobile. What it boils down to is, if you give up on your Nexus One between 14 days and 120 days after the sale, it will cost you $550: $350 to Google (automatically charged to the credit card you used to buy the phone) and $200 to T-Mobile. After 120 days the Google fee goes away and after 550 days the T-Mobile ETF begins prorating. A poster on Dave Farber's email list provides another perspective on the "restructuring of the handset premium."
More like WTF.
There are no karma whores, only moderation johns
...evil
quick, somebody justify and rationalize it
whew, that was a close one!!
The discount for buying it with a 2-year plan is $350, so clearly the termination fee has to be more than T-mobile's $200 to deter people from buying with the plan and then cancelling as a way of getting the bare phone at a discount. Now, $550 is a bit absurd, because it's higher than the cost of the bare phone, but these sorts of fees are often higher than would make sense.
I guess having the fee charged in two separate instances, instead of T-mobile charging one larger fee and then reimbursing Google with part of the money, is a somewhat unusual structuring. But I'm not sure it fundamentally matters?
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
I'll stick with my phone... $200 early termination fee.. That's $200 for the phone, $200 termination = $400, which is still cheaper then the retail $699.
FGITA (F*ck Google in the Ass), that's what they're trying to do to you!
Can someone who is a lawyer say if it's legal or not? If this becomes a trend, what's to keep other Android phone manufacturers and even other manufacturers from doing the same? What's to keep it to spreading from other industries, specifically one that has a service associated with it?
It's customary to explicitly define the acronym before its first use in the main body.
As Ars poster captriker notes: the Google fee is only levied if you do not return the device to them in the subscribed time.
Google's terms of sale for the Nexus device state:
You agree to pay Google an equipment subsidy recovery fee (the "Equipment Recovery Fee") equal to the difference between the full price of the Nexus handheld device without service plan and the price you paid for the Nexus handheld device if you cancel your wireless plan prior to 120 days of continuous wireless service. For example, if the full price of the Nexus handheld device without service plan was $529 USD and the price you paid for the Nexus handheld device was $179 USD with a service plan, the Equipment Recovery Fee you pay will be $350 USD in the event you cancel within the first 120 days of carrier service. The Equipment Recovery Fee is equal to the line item in your confirmation email setting forth the discount on the full priced Nexus handheld device related to your carrier service plan activiation. You authorize Google to charge the Equipment Recovery Fee directly to your credit card, or other payment method used to purchase the Nexus handheld device, upon cancellation of your wireless plan. You will not be charged the Equipment Recovery Fee if you return your Nexus handheld device to Google within the 14 day Return Policy period as set forth below.
Now to watch and see if the reaction by the FTC to Verizon's ETF on certain phones is the same as for Google/T-Mobile. I'm no fan of Verizon but I'm curious to see if the FTC is truly blinded by the shiny goodwill that Google has with its users.
Q.E.D.
You bought the phone, and inside 4 months you canceled your plan. The phone is subsidized. This seems reasonable. I mean, consider the ETF could be Verizonized (i.e. strung out for the entire term of your plan, if you cancel a month early there's a huge ETF).
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120 days is a long time ... I will probally buy a new one then ;-)
Look, don't buy it then. It's that simple. This isn't access to a new heart they are selling, it's a cell phone and a premium one at that. Act like a grown up and read the contract then make a decision. Problem solved.
Too many "outrage" stories these days relating to luxuries and free services. Solution: Don't buy them or don't use them.
Google states that if you cancel the contract within the first four months, you have to pay them the for the rest of the phone. ($350 + $180 = $530)
The T-Mobile fine print says:
THE EARLY TERMINATION FEE IS: $200 IF YOU TERMINATE WITH MORE THAN 180 DAYS REMAINING ON YOUR TERM; $100 IF YOU TERMINATE WITH 91 TO 180 DAYS REMAINING ON YOUR TERM; $50 IF YOU TERMINATE WITH 31 TO 91 DAYS REMAINING ON YOUR TERM; AND THE LESSER OF $50 OR YOUR MONTHLY RECURRING CHARGES (including any applicable taxes and fees) IF YOU TERMINATE IN THE LAST 30 DAYS OF YOUR TERM. The Early Termination Fee is part of our rates and is not a penalty.
How is Google double dipping by demanding no money if you cancel after 120 days?
It's not evil, it's just business.
So there I was, scribbling down some notes off the PC screen by hand, when I reached for the keyboard and Ctrl-S'd.
It's not the Google ETF that's the problem, it's the T-Mobile one. You're buying the phone from Google, not T-Mobile. If you trigger Google's early termination fee, T-Mobile shouldn't be out of pocket at all, and shouldn't be charging you anything.
Now that a US carrier finally allows it, just don't buy subsidized phones. You won't be charged any ETF and you're overall costs will be a few hundred dollars lower. Problem solved.
We hope your rules and wisdom choke you / Now we are one in everlasting peace
If you buy the phone on a contract, you pay $80 a month. If you buy the phone without a contract, you still pay $80 a month.
Why aren't people questioning this practice? Carriers justify ETFs on the basis of having to subsidize handsets, but they turn around and charge the SAME amount to customers who aren't taking advantage of the subsidy. Thus artificially suppressing the market for unlocked / open phones.
The system in Japan makes more sense. When you buy a phone, you choose to pay the full cost up front, or pay in 12 or 24 installments (and of course if you want to cash out early, you have to pay the remainder of the balance, just like any installment plan). The communication charges are SEPARATE from the phone charges. So the end result is that the user who wants a "free phone" simply pays a bit more monthly than the user who paid for their phone up front.
The money the carriers would save trying to explain, justify, and collect those arbitrary "early termination fees" probably justifies switching to this more sensible system. And it would encourage a free market for phones. Why aren't the regulators/attorneys/etc. stepping in where they should?
Hey, here's a NOVEL idea for those protesting ETFs. Pay FULL retail, and then shop for a service plan for the device.
Oh, only T-Mobile supports it? You don't get a service agreement discount for having your own phone? Darn.
In other words ... PICK your poison.
Don't like either option, then get another phone from another vendor/telco. Don't like those vendors and service plans? Sucks for you doesn't it?
Or you can just suck it up and not terminate your service ... you know ... early. I know, shocking concept.
I should draw this up as a flowchart.
Or you can get one of those "disposable" VISA cards and stick it to the man. Anarchy Rules!!
Honestly, I don't know what the big deal is, other than people whining about wanting their cake and eating it too.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
I wonder what's going to happen in the next decade or so, say around 2019 when Google will probably have launched the sixth or so version of the Nexus? These "smart" phones will have grown *so* damn smart that they'll have developed a survival instinct; if you cancel your contract, they'll have to send a representative of the telcos out to deal with them.
I suspect that by then it won't be called termination.
It will be called retirement.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
Come. The. Freak. On. !!
Why does google get to charge this? They get the kickback FROM the carrier, so have the carrier do the ETF.
Why does the carrier AND google, get to charge fees? Not even the iPhone, a phone that carries a higher retail value without a plan, do such a high termination fee.
It seems google can do no wrong on slashdot. It can have the cake, the party, eat the cake, and snuff the party goers, and all is well in slashdot-google-fanboy land.
Come on guys.
See my problem with "don't buy it" in the cell phone market is that there aren't enough alternatives. Okay so I need a cell phone to do my job, and keep in touch with my family. Exactly what do I do? Buy one of those crappy PAYGO cell phones that break in 6 months, and has no features? How do I check my email and keep my calendar with one of those? We need OSes in the market like WebOS, the iPhone and Android, but in order to take advantage of them, yes the cell phone companies aren't competing to get my dollar, they are colluding to drive prices up while not improving their service at the same rate.
Every cell phone company is trying to pull bullshit because they all learned that a) the best way to make money is to try to either force people into a contract or try to trick them and b) the American government as it stands now simply is unwilling and incapable of properly regulating and policing them. We can't even get proper banking or health reform ion this country, cell phone reform on pricing is significantly further down the list. Telling me not to buy it when there are no choices for me is not a choice, it's basically telling me to find a job and a lifestyle that doesn't require a cell phone.
"All great wisdom is contained in .signature files"
When I bought my HTC Fuze for AT&T off Amazon, it only cost $100, but there was a $250 charge from Amazon if I canceled the contract within 6 months (not actually the ETF), and a $275 or whatever charge from AT&T if I canceled the contract within 2 years (the ETF). Google is giving you a bigger discount on the phone, otherwise it'd cost $350 more by default. So what? This isn't anything new, non-carrier resellers have been doing this for a long time, everyone is just complaining because it's Google doing the 'reselling'. (And they are, since it's HTC's hardware)
I dont quite understand this, are you paying some sort of recurring fee to google and if not then how are they subsidizing the phone to you?
it all seems a bit complicated to me, I'll stick with buying my phones outright and not being at the mercy of the telcos in my country (who sound a whole lot better than the dicks you have over there)
From what I heard from Vodafone even the contract phones are entirely supplied direct from Google.
So unless I'm missing some figures badly here when cancelled Google just wants the phone cost covered, which is understandable, and even offer refunds if the device is returned within a MUCH broader time line than any carrier I've ever seen in the UK.
This just highlights the trumped up baseless charges from the carriers for doing no work and providing nothing that makes them even less defensible when the right people are questioning them.
Then the article should read, "T-Mobile Charges ETF For Nexus One on top of Google's" but instead, it reads the other way around because Google is news and a cell carrier shafting their customer is not.
T-Mobile has decided to charge a fee for early termination of contract. I agree it's shady, but Google clearly is not making this decision for T-Mobile.
And that concludes the end of all my interest in this phone.
Seriously? More ETF? What were they smoking? That goes completely against what the reason was, that anybody hoped for this phone in the first place.
Any sufficiently advanced intelligence is indistinguishable from stupidity.
Google is reimbursed by T-Mobile. If they're reimbursed by you, then T-Mobile doesn't owe them anything, so why is T-mobile charging you an early termination fee?
A bit of background. A few years ago I got a Smartphone, a T-Mobile Smartphone, but not from T-Mobile. I wanted to get service from T-Mobile because that was the only way at the time you could get software updates. So I go to the T-Mobile store, and ask for a month-to-month contract, for THIS phone. I had it with me, they knew I was going to use my own phone.
No problem.
Then they asked for a $200 deposit.
For what?
In case I terminated the contract before two years are up.
But it's month to month.
Yes, but you see, I had to pay for the phone.
But I already had a phone.
But the contract came with one.
I didn't want it.
That's OK, I didn't have to take it, but I had to pay for it anyway.
Needless to say, I walked out without a cellphone contract.
So... T-Mobile is perfectly prepared to charge you an ETF for a phone you never bought from them, that doesn't come out of their pocket. I strongly suspect that 120 days is when Google gets the $350 from T-Mobile, and any ETF T-Mobile is charging before that point is just them up to their old tricks. I'm sure that any other US carrier would do the same thing, I'm not ragging on T-Mobile here, I'm ragging on the whole cellphone industry.
I don't understand why Americans make such a fuss over this. Just get your phone and a cheaper service plan separate and you will ALWAYS be better of than with a subsidized deal in the long run.
If everyone does this then they will drop these ridiculous schemes and we might see some competition based on price/quality.
No it's actually Google's ETF that does not make sense. TMobile stands to gain if you stay with them for the duration of the contract, which is why they are subsidizing the handset and are entitled to levy an ETF if you break out earlier. Google's role ends the moment you purchase the product (except for warranty and support issues, which apparently they are keen to pass along to HTC). I don't see how they are entitled to another ETF.
If con is the opposite of pro, is Congress the opposite of progress?
I have a basic T-mobile plan for $40/month, with 1-yr contract and no phone (I have my own phone). If I cancel early, they will charge me an ETF of (I think) $200, prorated after 6 months.
WHY?! You are right, this is the true outrage, and the FTC should investigate this practice. For nearly any other product, if I am not satisfied with it and return it, I get all my money back; the exception is electronics, where they charge a small restocking fee. But if I am not satisfied with my mobile connectivity product, I am still forced to pay it in full. For what reason? What is the overhead cost they must recuperate, for terminating my service? How is their cost structure any different than for my land line, which I can cancel at any time without an ETF? Wireless carriers' behavior borders on monopolistic.
I thought you said "I went with the T-Mobile Even More Pus plan".
You're not paying for a phone, you're paying for a status symbol.
My phone cost 59.99 6 years ago. Sure, it was subsidized, but I never paid more for it. I could have brought my own phone in, had them hook it up to their service and still had the service contract and I would have been charged 59.99 less.
My point is that you all seem to be bitching about paying for something that is SUPPOSED to be expensive. Otherwise, it wouldn't have that certain "bling" status as everyone would have one.
It is a PHONE for fucks sake. /sigh
Google's role ends the moment you purchase the product (except for warranty and support issues, which apparently they are keen to pass along to HTC).
If you paid Google full price for it, yes. If you paid the subsidized price, Google's role only ends when T-Mobile pays them the rest. When does that happen? That's between Google and T-Mobile, but how much you want to bet it's after 120 days?
See, all of that is yet another excellent reason to buy phones without contract. With the Nexus One, you actually can. Thank you, Google!
Those contract/phone bundles do not actually save you any money. Just say "no"...
I've seen offers before where the manufacturer offers a $200 rebate on the phone after the 2nd or 3rd month of service. They require you to send copies of your first X months of statements to show you've maintained your plan. Everybody complains because the cost is"so high" up front, and the burden is on the customer to remember to send it in, follow the terms, etc. If you mail it a day late, or forget your notarized original receipt, or the wind was blowing the wrong direction, the customer doesn't get the rebate and is screwed over.
Google goes the opposite route, gives the rebate up-front where the customer doesn't have to do anything to get it, and charge the customer later if they don't follow the terms by keeping their contract. Customer doesn't have to wait on the rebate or do anything special other than pay their bill that they'd have to do otherwise. No worry about forgetting to sign a 3rd dotted line or mail getting lost or delayed on the way to the processing center only to find out 3 months later it is denied.
In both cases the carrier still charges their ETF if the contract is canceled early. I'm no Google fanboy, while I think they are *less* evil than many of the other big companies out there, they are still a business and are in the market to make money. They have unheardof access to a ton of our private data and great influence over everybody's life, whether they realize it or not. That being said, I fail to see the reason Google is being pointed out as the bad guy on this. Amazon does the same thing, you get a bigger discount on the phone, yet according to their terms if you're *late* on a payment they will charge you for the difference.
I think the only evil party here is T-Mobile. Supposedly the ETF is so the carrier doesn't get shafted by giving the customer $300 off the price of a handset only to have the customer cancel 2 months down the road and go to another carrier. Since Google is providing the subsidy here (and charging the difference in the event of failure) T-Mobile has nothing to lose except a customer. T-Mobile should be treating this as a no-contract phone providing the same discounts as their other Bring Your Own Phone plans.
It bothers me to see Google (or any company for that matter) being accused of being anti-customer when they're actually doing something to help the customer. It bothers me moreso to see them blamed when they aren't the ones causing the problem in the first place.
I can understand them not wanting to accept returns of customized devices... But if someone other than you (say, Fedex, or the notorious Brightstar, which handled fulfillment for the Android Dev Phones and royally screwed up the XO laptop shipments) screws up and gets returned to Google, they charge you a $45 fee. Presumably this fee covers the cost of restoring the phone to its original condition -- but if they can do that, why not just charge that fee for returned devices, instead of outright rejecting them?
Well, they are monopolistic. If you want cell service, you go to a cell carrier. They all act the same.
Collusion? Not likely, just jumping on the bandwagon.
ETFs for service are all about keeping you signed up, and not jumping ship to the next cheaper carrier. Some of this is actually about keeping you buying their service for the full term, and of course getting back the subisidised phone cost if you bail early.
But in this case, TMO is getting an ETF for the service only, and that is usually because they want you to stay for the whole term, to avoid having to replace you and pay the price of 'churn'.
It truly sucks. But there isn't really a double-dip here, it's just an extraordinarily large ETF, thanks to having two parties involved. One fot Google, one for TMO.
Two more reasons to avoid the Nexus One.
They tell me European carriers are cheaper and more forgiving. Some of this must be due to regulation. How much of the US pricing is due to the FCC's auctioning off bandwidth?
TMO probably booked $16B in 2009. They committed to $4.1B in FCC auction #66 in 2006. That's some hefty operating expenses, seeing as TMO admitted to about $21B total revenue in 2008, so it looks like they paid a LOT for bandwidth. They should, so some of your monthly service fee is going to pay the FCC (and us) for spectrum.
Did Europe auction spectrum? Comparable pricing, from what I can find... Not much of an excuse there.
deleting the extra space after periods so i can stay relevant, yeah.
This is no longer the case. In october when T-Mobile introduce no contract pricing, there is no longer any ETF or contract associated with the "Plus" plans which are also cheaper.
All that hype, and a nice but not ground-breaking phone that is being sold with even worse terms than are the norm. I thought it was going to blow away all other phones, including the Droid and IPhone? Marginally better, perhaps. Wasn't it supposed to be "Google branded" and unlocked, so you could do as you please with it? Sounds pretty tightly tied to Mobile, and operates more or less like all the other HTC Android phones. It isn't even especially attractive. I've been a pretty big fan of some of the things Google has done, but lately now it seems as if they are behaving just like every other company: screwing customers whenever a profit can be made, making empty promises, doing as much as possible to put competitors out of business, and just generally sucking. I still like my G1 and depend on Gmail, but Google is beginning to annoy me.
This is a hacked account, for which the owner can not be held responsible.
Faggy Douchebags have those stickers on their bicycles that have frames and rims made out of a special fibrous material created from hemp and the blood of Republicans.
Come back when you are a REAL Faggy Douchebag
Why is it so hard to only have politicians for a few years, then have them go away?
well, isn't that depressing :(
Design your marketing structure so that it's not susceptible to a denial of service attack. We wouldn't want some large unscrupulous organization motivating their employees and partners to buy & ebay phones, and so halt the happy google toy train, would we?
Help stamp out iliturcy.
Why You can't use the Nexus One not as a modem for ... .
the laptop or any desktop in an emergency case?The
rooting of android should allow a machine recovery
In the UK under The Distance Selling Regulations ( http://www.oft.gov.uk/advice_and_resources/resource_base/legal/distance-selling-regulations/ ) All mail order companies, including on-line sellers must give you a seven (working) day cooling off period during which you may return your purchase for a full refund. For a phone you would be expected to pay the tariffed cost of any calls etc that you made but during the time you had it but nothing for the phone, no penalty and the contract would be cancelled. All networks also offer SIM only contracts where you may use your own phone. T-Mobile UK for instance offer both monthly sim-only plans: http://www.t-mobile.co.uk/shop/mobile-phones/sim-card/pay-monthly/ and pay as you go 'free SIM' plans http://www.t-mobile.co.uk/shop/free-pay-as-you-go-sim-cards/
Ahh, I see you're blind to the obvious google bashing that goes on here when ever Google does anything.
What is happening here is when a customer buys a subsidised phone from google with a plan, they have to pay a fee if they terminate the plan within 4 months if the customer does not return the subsidised handset. One can surmise from this information that perhaps Google or T-mobile requires you to pay for the hardware, in entirety if you chose to terminate the subsidising contract.
I mean that just reeks of pure evil. How dare they ask for the full price of purchased hardware to be paid.
Over here, a phone plan is considered a legally binding contract and you are required to pay it regardless, Australian ETF's can be the remainder of your contract if the Telco so chooses. Mobile service contracts need to be treated as financial contracts (because they are, just like a loan) and if you sign up for $50 a month for 24 months, you have to pay $50 a month for 24 months if you do not wish to do so then you must pay whatever penalty the service provider requires (this may include returning the hardware). On the flip side, if the provider breaches their side of the contract they are in no position to ask for anything when the TIO declares the telco in breach of the contract, which is not that hard to do, with our crazy consumer protection laws.
Calling someone a "hater" only means you can not rationally rebut their argument.
I was going to make the exact point. If they can manage to bill seperate rates for calls, texts and internet then they should easily be able to seperate an entry for "handset"
If you don't risk failure you don't risk success.
And so, I use a pay-as-you-go phone ... that is just a phone. No software updates needed. ... well, incidentally a watch too... that needs to be recharged regularly.