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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."
No, sorry, it doesn't make sense at all. The point of an ETF is to deter people from signing a contract then bailing, just like you pointed out. However, when you buy the phone, it still costs you $179 with a new contract via Tmobile (last I checked) so if the phone is $550 it would be fair that they would somehow have a $371 etf somewhere in there to cover the gap on the handset cost.
Aside from that, who is eating the handset cost here, and who is making up in subscription fees... Google or tmobile? If it's google, then tmobile better not charge one red cent for the privilege of signing a contract for a paid for phone. If it's Google, then why does t mobile get to charge an ETF at all?
Finally, unless Google is getting a kickback from t mobile for every month the phone is in contract, why would they care if you bought the phone then left t mobile? You aren't going to put the phone on a shelf and never use it after you leave your contract; you will likely subscribe and keep on using it just the way Google wants. They keep winning. Why should they try to penalize you for leaving t mobile?
The only answers that make sense are thus:
A) Google is super greedy, plus tmobile is super greedy.
B) Google is kind of greedy, plus t mobile was too lazy to adjust the contract to exclude the ETF considering google fronts the phone.