Bill aims to limit wireless early termination fees; Do we need this?
Summary: Washington lawmakers, upset with the way the wireless industry is handling early termination fees, have introduced a bill to set a limit on those fees.
Don't get me wrong: I'm no fan of mobile phone early termination fees - but I understand why they're in place. In a nutshell, the wireless carriers are able to sell expensive smartphones at affordable prices because they are subsidized. If you bail out on the contract early, the carrier loses money - and, of course, they are not in business to lose money.
Today, Senator Amy Klobucher (D-Minn) introduced a bill that would set limits on these fees, according to a post on the Hillicon Valley blog. Kolbucher, along with Sens Russ Feingold (D-Wis.), Jim Webb (D-Va.) and Mark Begich (D-Alaska), called the fees "budget busters" and said they are unfair to consumers.
The controversy sparked after Verizon Wireless said it planned to double the early termination fee to $350 on some smartphones. Shortly after, the Minnesota Senator sent letters to Verizon executives and the FCC, calling the move "anti-consumer and anti-competitive." She said the move was proof that the wireless industry is incapable of policing itself and making its practices more competitive and consumer-friendly.
But Verizon Wireless disagrees and is quick to point out that consumers don't have to subject themselves to these fees. Instead, they can choose to not sign a contract and pay full retail price for the phone itself, which of course is usually significantly higher than the cost of the subsidized phone and the early termination fee combined. Customers can also choose to sign a one-year contract and pay a price somewhere between the two-year-contract price and the full retail price.
I never said they were good options. But there are options.
Here's the thing, though. I've been reading some posts on this subject as well as some reader feedback and I'm getting this sense that some consumers feel that they have some sort of God-given right to a low-cost, full-feature smartphone that offers unlimited Web access, texting, tethering, video and more on a powerful 3G network.
As much as I'd love something like that, I also know that a feature-rich smartphone is a luxury, one that I can either afford or not. If I want an iPhone, I'm going to have to pay - not only for the device but also the rates that AT&T sets. Same goes for Verizon and Droid, Sprint and the Pre and so on. This stuff does not come cheap.
With that said, I think the idea of early termination fees needs some tweaking and revisiting. I hate the idea of Verizon's fee hike for early terminations of smartphones, though I do appreciate the fees being reduced for every month of service - that's the way it should be.
While there needs to be a better way, I suspect that government's heavy hand is not the solution.
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Talkback
Actually, all I really want
Pay full-price for my handset of choice at time of signup. No contract.
But here's the kicker.
Lower @#$%ing monthly rates.
If I'm paying upfront for my phone vs the guy who is paying $200 for a $600 phone, my useage rates should work out to be $400 cheaper over 2 years (at a minimum, since they're not "loaning" me money with the subsidized hardware).
Lots of things you can't without some sort of bundling
whether you want it or not. That all-or-
nothing deal lowers the cost for the majority
of people who do want Windows at the expense of
the few percentage of people who don't. Of
course, those people can always build their own
computer, though this frequently isn't an
option in the case of laptops. But most
laptops and retail computers are subsidized by
crapware which you can free yourself from if
you reinstall any OS.
If you buy an optical drive, it almost
certainly comes with DVD playback software.
That means you're paying a few dollars for
software you don't need every time you buy an
optical drive.
There are endless example of products that
contain things some of us don't need, but
that's just how it goes. It's not practical to
have thousands of different configurations and
options.
How much does it cost to make an Iphone -- less than 100 bucks?
Early termination fees should be banned.
Market
Not completely true
That being said, the government has no place regulating companies fees of this nature. You can walk into most stores, buy a "per minute" phone and walk out the door. If I want to enter into an agreement with a company, no matter how "stupid" the government thinks I am, it is not the governments business. Unless, either party commits fraud, which is not the case here at all.
I appreciate your perspective,
Amen
I wouldn't buy an iPhone if they cost $10, because I'd have to go with AT&T as a provider - been there, done that, glad I'm out from under.
Why is it someone always says "That's how it is" ???
A truly free market has to be largely free of monetary influence over authority, and that is; sadly; just not the case. That's why people have adopted what sometimes appears to be an "entitlement" attitude. There ARE some things we ought to be entitled to: ... like being able to acquire technology without some billionaire standing over the tollgate and charging whatever the market will bear. That action, regardless of the market in which it takes place, will always be morally and ethically ocrrupt, so be very careful in thinking that everything that appears to be an entitlement mentality is merely a liberal democrat with a big mouth. Truth is, there really DOES need to be a limit on wealth, lest it fester the very corruption we see on a daily basis...
For those that recoil from this and start going down the path of questions like "What about freedom?", I'll just remind you of quetions like "What about responsibility?". After all, freedom without responsibility is chaos. That's what all the debt this country has ammassed amounts to, and we, the people, didn't have much we could do about it, save "call or write your representative". The reason so few actually do it is because there's no USEFUL feedback. Unless you give up your life and go become your own lobbyist, you get little or no response beyond a form letter. Is it any wonder people are sick and tired of the same old crew in Washington being so unresponsive? Think about it all... you might be surprised at the conclusions you reach.
An iPhone is not a phone alone.
I think an iPhone costs more than $100 [my mp3 player cost $80] but it's your fantasy to let's say that's all the hardware costs. [b]What's the cost of the software?[/b]
Ahem.
It doesn't have the coolness of the iPhone, but I don't have to deal with AT&T to use it, either.
Perfect example
It takes an army...
Garbage
have to buy one with Windows.
As for bundled software with a computer, if I
can't buy the computer without bundled
software I immediately uninstall that software
and install the software I want. I also plan
on the possibility that I won't be able to
fully uninstall that bundled crap. I may have
to format the hard drive and install only the
software I want.
If I buy anything that's bundled I'm doing
despite the bundling, not because of it.
T-Mobile is doing that.
If you get a subsidized phone, you have to sign a 2-year contract at a higher monthly cost. If you do the math, you find that it actually costs more over the 2 years to buy a subsidized phone.
Whether or not you want to go with T-Mobile is a completely different discussion.
TMobile rocks for me
3G GSM coverage in the nation.
While I like Tmobile its 3G coverage is not the best
Unlocked Phone
I checked Central Florida for 3G coverage and I do get it for my apartment and college, although I'm with Sprint.
Unlocked vs no contract.
As for unlocking, you have two choices. One, you can buy an unlocked phone from someone other than T-Mobile since all phones sold by T-Mobile are locked. I bought my current phone at the Nokia store in New York City. Alternatively you can buy a locked phone from T-Mobile and later get an unlock code from them. I believe that T-Mobile will give you the unlock code after 90 days, but only if you as for it.*
*My memory may be out of date or inaccurate, but they did at one point allow people to unlock their phones.
That only works if
And