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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."
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
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.
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.
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.
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?
It's actually cheaper to pay full retail and still go with t-mobile for the full 2 years. Getting the subsidized phone puts you on a different plan than getting a no-contract plan that t-mobile introduced in october.
http://lukehutch.wordpress.com/2010/01/05/the-cheap-way-to-pay-for-a-nexus-one-think-tco/
Basically, if for some reason you really didn't want to pay a full $530 up front, it'd be cheaper just to take out a $350 loan over 2 years plus you wouldn't be beholden to t-mobile's service / contract.
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.
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.
You don't. You do email and calendar at your desktop computer. You pick up the cheap $50-with-1-year-contract cellphone when it makes a noise indicating someone wants to talk to you.
You don't need immediate mobile email access to keep in touch with family. Read your mailbox once per day (or every few days) when you get to your desktop. If someone has an emergency, they can fucking call you. If it's not an emergency, a delayed turnaround is fine.
And if you are required to read email/calendars immediately for your job, then don't worry, because your employer is going to buy the phone.
Yep, it's pretty clear you don't know the diff between a cell phone, and a ridiculously powerful (expensive) handheld personal computer. The two are merging but they're sure as hell not quite the same thing yet. One costs $50 and the other costs $500. Quit saying that you want a cellphone (a $50 device) and then bitching that the $500 overkill device costs too much. Get the $50 one and make your fucking phone calls like you said you wanted to.