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New Bill Takes Aim At Higher Verizon ETFs
Senator Amy Klobuchar tries again...
by Karl Bode Monday 23-Nov-2009 tags: business · wireless
A few weeks ago, you might recall that Verizon decided they were going to raise their early termination fees for smartphone users from $175 to $300. You might also recall how this annoyed Minnesota Democratic Senator Amy Klobuchar, who wrote to both the FCC and Verizon to complain that the ETF hike was "anti-consumer and anti-competitive." Klobuchar is now apparently trying to put her legislation where her angst is. According to an exclusive report from The Hill, the Senator is unveiling a new bill taking aim at ETFs. Details are vague, but the bill would attempt to limit the size and scope of such fees. Klobuchar's previous efforts on this front weren't passed into law, but they did get carriers to voluntarily pro-rate (reduce the ETF each month you're under contract).

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Camelot One
Premium,MVM
join:2001-11-21
Austin, TX
kudos:1

Whats next?

I am as anti-telco as the next guy, but I'm not sure the government needs to get involved in private party contract law. As long as both sides (the company and the consumer) are aware of the etf before the contract is signed, there shouldn't be a problem.

I would however like to see some sort of regulation in place requiring your signature before the company can just automatically renew/extend the original contract though.
Euphrates

join:2007-04-30
Bellingham, WA

1 edit

Re: Whats next?

said by Camelot One:

I am as anti-telco as the next guy, but I'm not sure the government needs to get involved in private party contract law. As long as both sides (the company and the consumer) are aware of the etf before the contract is signed, there shouldn't be a problem.

I would however like to see some sort of regulation in place requiring your signature before the company can just automatically renew/extend the original contract though.
I look at it like parents and children. If children can do the right thing and play fair, parents generally won't get involved with their lives unless its major things. The problem is, children can't do this.

The same can be said for large corporations when dealing with their customers. If they would stop trying to find ways to screw over their customers for as much money as possible (ETF's, long-term contracts, etc, etc) then the parents (government) wouldn't have to keep stepping in to try to stop them.

I'm actually one for less government intervention, but the fact is, without it, things would go back to the wild wild west days with snake oil salesman selling, well, snake oil.

One recommendation would be businesses who are recognized as being competitive and extremely pro-consumer would get tax breaks, certain preferential treatment, priority for government work, blah, blah, blah.

In most cases, government is more than happy to screw over the consumer if it helps big business and lines their pockets but eventually, the big guys screw over the little guys so much that government has to step in and say "no more".

ThrowDemsOut
If you can't convince 'em, confuse 'em
Premium
join:2002-03-03
Mullica Hill, NJ
kudos:4
And Senator Klobuchar has more important things on her plate - like a few weeks of Healthcare debate, and the increase of the national debt ceiling, and about 8 spending bills that need to be passed before year end if the gov't is expected to keep open. And right now it looks like the Senate won't get even these critical things done without working thru Christmas.

Somehow I doubt her stupid bill will go anywhere and will never even get out of committee.
--
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don1p2

join:2004-06-11
Boston, MA

Re: Whats next?

said by ThrowDemsOut:

And Senator Klobuchar has more important things on her plate - like a few weeks of Healthcare debate, and the increase of the national debt ceiling, and about 8 spending bills that need to be passed before year end if the gov't is expected to keep open. And right now it looks like the Senate won't get even these critical things done without working thru Christmas.

Somehow I doubt her stupid bill will go anywhere and will never even get out of committee.
Exacty. Somehow I don't suspect that the Founding Fathers, had in mind that they were creating a consumer "protection" agency when the House and the Senate and the division of powers between the branches of the Federal gov't were created.

This sort of Democratic Party pandering is exaxctly what they are looking for....an American people have become too dumbed-down to enter into a contract of their own free-will without big gov't intervention.

Be afraid.
ZachAttack

join:2009-05-30
Yorba Linda, CA

Re: Whats next?

I'm not afraid, I'd rather have subservient business to a powerful friendly government, then subservient government to an all powerful corporate controlled world. Government wants control and power, and most of what I do is of no concern or care of the government even if they were massively powerful. Do they care that I write short stories and take too many photos of my friends, or do they care that Sundays are wake up late day, and sometimes we like to spend the entire Sunday wasting time in Ikea, and at Bath & Body Works, frankly no. They'd prefer us to be quiet little consumers, and I'm fine with that. If they did what's right for consumers and the citizens of the country rather than corporations for once I think we'd all be a little bit happier, and able to just be happy little citizens.
chimera

join:2009-06-09
Washington, DC
Reviews:
·Comcast
Given the size of the markets involved, the fact that most areas are basically duopolies in which collusion exists and consumers don't have much of a choice anymore (good luck getting a job that pays well without being available 24/7) and because all of these companies are renting out public property (part of a spectrum) I would say that the government has a right to step in.

battleop

join:2005-09-28
00000

Re: Whats next?

"the fact that most areas are basically duopolies"

Name a market with just two Cell providers.

BF69
Premium
join:2004-07-28
Camden, TN

Re: Whats next?

said by battleop:

"the fact that most areas are basically duopolies"

Name a market with just two Cell providers.
MINE

battleop

join:2005-09-28
00000

Re: Whats next?

You must not look very hard.

AT&T, US Cellular, Tmobile, and Verizon all show coverage for Camden, TN. I didn't waste any more time looking for others.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Whats next?

He doesn't get that.

battleop

join:2005-09-28
00000

Re: Whats next?

He wants the best of both worlds. He wants to live in the middle of no where and have everything that goes with living in a city like LA.
thevorpal

join:2007-11-16
Alexandria, VA

Re: Whats next?

said by battleop:

He wants the best of both worlds. He wants to live in the middle of no where and have everything that goes with living in a city like LA.
Do you think it fair that a company may use their monopoly status to affect prices in one market because they face competition in an unrelated market?

Camelot One
Premium,MVM
join:2001-11-21
Austin, TX
kudos:1

Re: Whats next?

said by thevorpal:

Do you think it fair that a company may use their monopoly status to affect prices in one market because they face competition in an unrelated market?
In what market does ANY cell carrier have a monopoly?

battleop

join:2005-09-28
00000
Name one market where AT&T, Verizon, Sprint, or any other cell phone company is a Monopoly or any market where any two are a duopoly. (Not including places where the cows outnumber people by more than 100:1)
jjeffeory

join:2002-12-04
USA
There's "shown coverage" and then there's real world. The two are not the same.
jarthur31

join:2006-04-14
Carlsbad, NM
Here in the Roswell area, there is only Alltel and Plateau.
openbox9

join:2004-01-26
Alexandria, VA
kudos:1
The only thing such legislation will accomplish if passed is increased costs to purchase phones and initiate service. How's that for anti-consumer and anti-competitive?

Boricua65
Premium
join:2002-01-26
Sacto Sh*tty

Re: Whats next?

That argument has been said sooo many times in sooo many ways, it's become a mantra for every business in America (almost like the sky is falling). How many times has that been said whenever the minimum wage gets raised. What are the credit card companies now before the Credit Bill of Rights becomes enacted (I believe it was changed from Feb 1 2010 to Dec 1 2009).
--
Illegal aliens have always been a problem in the United States. Ask any Indian. Robert Orben
openbox9

join:2004-01-26
Alexandria, VA
kudos:1

Re: Whats next?

What do the minimum wage rates and the new credit card legislation have to do with ETFs for mobile phones? What do you think would happen if companies aren't allowed to charge appropriate ETFs for their products? My guess is that you'll pay more upfront for the devices. BTW, I do believe that the ETFs should be prorated by the number of months on the contract, i.e. prorate a $350 ETF by $14.58 for each month completed of a 24 month contract.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: Whats next?

Because it is the same BS they try to claim to "protect" us consumers. EVERYTHING they don't want to do they claim will cost us more or won't work because "WE" won't except it and yet every single time the industry still strives because us consumers weren't hurt.

If phone prices go up then let them. Then the phone companies will have to find a way to make a good product for less. If they can't innovate in that respect then they don't need to sell phones.
openbox9

join:2004-01-26
Alexandria, VA
kudos:1

Re: Whats next?

You're missing the point. The phone companies won't be impacted by this type of legislation. The consumers, ironically the ones this legislation is supposed to protect, will end up paying the cost. ETFs affect a relatively small population of mobile device customers. Why potentially impact everyone with higher costs for the "benefit" of a minority that actually wants to terminate their contracts?
iansltx

join:2007-02-19
Golden, CO
kudos:2
Agreed. Seriously, you can get all of Verizon's plans without a contract. You just have to pay more for the phones. Verizon isn't disallowing functionality, they're just charging more if you terminate the contract before it runs out.

cableties
Premium
join:2005-01-27
Reviews:
·Verizon FiOS

Re: Whats next?

I thought the reason for the high ETF was for the churn of folks that get the phones cheap, cancel, then turnaround for a profit on ebay. Yes?

Because the phone is subsidized (Say the phone is $400) over the plan's 24 month period ($600-$2000 depending on the plan/feature), that is alot of money projected. So Verizon is basically saying, "look, we make 150-500% profit on this item. If we allow a consumer to take the phone and bail before we break even, we lose.
For this reason, make the ETF higher.
However, isn't this a small percent of phone contracts? And ironic that every carrier copies the other's moves? Just like data plans (Gee, every freakin carrier made data plans mandatory if the phone had a keyboard).

Once the Fed steps in, its bad for US. Yet, when we need them, they still do a crappy job (remind me about how credit card rates tripled in August...)
--
Splat
iansltx

join:2007-02-19
Golden, CO
kudos:2

Re: Whats next?

Not every keyboarded phone is required to have a data plan. Just msot smartphones.

Also, Sprint has said upfront that it will not raise its smartphone ETFs.

BF69
Premium
join:2004-07-28
Camden, TN
said by Camelot One:

I am as anti-telco as the next guy, but I'm not sure the government needs to get involved in private party contract law. As long as both sides (the company and the consumer) are aware of the etf before the contract is signed, there shouldn't be a problem.

I would however like to see some sort of regulation in place requiring your signature before the company can just automatically renew/extend the original contract though.
yeah this is a problem since the consumer has no choice. Your point of view is like saying if a girl is about to be raped and the guys asks "can I rape you?" and she says yes knowing she doesn't have any other choice then that's ok because she said he could.

Z80A
Premium
join:2009-11-23

Re: Whats next?

How is anyone compelled to choose a particular carrier or phone? These new subscribers aren't conscripts.

IOW, they absolutely have the choice to say, "$300 ETF? Are you insane? F-You, I'm taking my business elsewhere."

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

Re: Whats next?

said by Z80A:

they absolutely have the choice to say, "$300 ETF? Are you insane? F-You, I'm taking my business elsewhere."
you mean the elsewhere that also has the outrageous ETFs. theres nowhere to go[other than prepaid which has just as much bullshit(expiring unused minutes)] because everyone has the same "make money off unhappy subs" policies!
--
When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee

Z80A
Premium
join:2009-11-23

1 edit

Re: Whats next?

Uh, not all of them have $300 ETF and you are free to buy a phone outright, paying full price and not having an ETF.
jjeffeory

join:2002-12-04
USA
Not when all of them are in collusion and have the same or similar ETFs. That's the problem. And we don't get to negotiate a contract. It's all or nothing. Nothing is not an option if you want to participate in society and not be "one of those" fringe people.

Z80A
Premium
join:2009-11-23

Re: Whats next?

And certainly you have proof of this collusion?

vzw emp

@qwest.net
The problem is that when one company gets away with charging a certain amount the rest of them follow suit. Why would they want to miss out of on this windfall? Verizon is doing it now, how long do you think it will be before AT&T, Sprint and T-Moblie jump on the band wagon? Sure, you can say no and not sign up with a certain company, but in this market it won't be long before all four major carriers have adopted the same policy.

I hate that people refer to cellular agreements as "contracts". Contract implies negotiation, that there is some give and take and that the final agreement is beneficial to both parties. That is far from the truth. A cell phone "contract" is more of a mandate. The company sets the terms and conditions and you must agree to them in order to get their service. When is the last time you can remember anyone going into their local cellular carriers store and negotiating the terms of a "contract"? It's their way or the highway.

If a ETF truly is being used to recoup the cost of discounted equipment provided by the cellular provider then I would like to propose a pro-consumer solution (that will never see the light of day): For each phone a provider subsidizes they must also disclose what they paid for the phone. Take that amount, subtract any amount paid by the consumer, and then add 20% and that will be the amount of the ETF for that particlar phone. So if Verizon pays $200 bucks for phone and sells it for $50 bucks, they would be allowed to set the ETF at $180 maximum. This way they could make a realistic profit if a customer leaves early, the ETF is related to the carriers actual cost and the customer isn't paying $175 to leave if the phone only cost the carrier $30 to begin with.

Z80A
Premium
join:2009-11-23
Reviews:
·Cox HSI

Re: Whats next?

No, how about this pro-consumer solution: You get to read the terms of the contract and CHOOSE whether you agree with them or not. Or alternatively choose to buy a phone outright and pay month to month. There are plenty of people who pick used phones up off eBay and get them activated without a contract.

Think the ETF is a rip, don't sign up. Think buying the phone is a rip, don't buy that phone and get a cheaper one. This isn't rocket science.

And even in the case of Verizon, they have a 30 money back guarantee. You can try the phone and the network for a full month to see if it sucks or not. Don't like the phone and/or the service, cancel within 30 days and walk away.

TheFlagg

@cox.net
Your analogy is good, but only to unmake your point.

Asking "can I rape you?" is a contradiction in terms, because rape implies lack of consent, and your 'guy' is evidently requesting it. Therefore, the question- unabridged, reads "Do I have your consent to have sex with you without your consent?" Which, is quite obviously, absurd.

When a contract is put forward for you to sign, the other party is saying this: "just so you know, by agreeing to use our product, you are also agreeing to all of our fees and restrictions and caveats et al. If you consent to this, sign here..." Guess what, you have two choices. You can sign, or not sign. You can go with another plan, another company, or you can screw the whole cell phone thing entirely.

This is not rape. In fact, it is the ANTITHESIS of rape because a contract is by definition a request for consent. And furthermore, to allude that something as benign, consensual, and trivial as signing a cell phone contract is akin to rape is to trivialize anyone who has ACTUALLY been raped.

One of the nice things about having a government is that they can always be the impartial 3rd party who ensures that contacts are upheld. Moreover, that's their JOB.

As long as the government isn't actively colluding with the telecom companies to screw us over, just allow them to do their REAL job and not request that they also chaperon our personal decision-making.
patcat88

join:2002-04-05
Jamaica, NY
kudos:1
said by Camelot One:

I am as anti-telco as the next guy, but I'm not sure the government needs to get involved in private party contract law. As long as both sides (the company and the consumer) are aware of the etf before the contract is signed, there shouldn't be a problem.
What private party? Does any legal person have a born civil right to spectrum or right-of-way? When your selling something you rent from the government, the government can attach any terms it wants to the deal.
axus

join:2001-06-18
Washington, DC
I can't think of any way an ETF would ever benefit a regular person.

See 6 replies to this post
Mr Matt

join:2008-01-29
Eustis, FL
kudos:1
Reviews:
·CenturyLink
·Comcast
·Embarq Now Centu..
·Millenicom
We have police to protect us from ordinary criminal thugs. We have regulations to protect us from corporate thugs. Anyone that feels that we do not need the government or government regulation to protect us against thugs should be given a free months vacation in Somalia. They can learn what it is like to live where there is no government interfering with their citizens right to do whatever they want.

P.S. Don't forget your Jolly Roger so you will fit right in!

PhoenixDown
-- Wants FIOS
Premium
join:2003-06-08
Fresh Meadows, NY
kudos:1
While I generally agree with your sentiments, its not like we (users) get to actually negotiate a contract here.
--
~ Insert a Funny Sig Here ~
openbox9

join:2004-01-26
Alexandria, VA
kudos:1

Re: Whats next?

But you have a choice whether to sign the contract or not. Don't like the terms? Don't sign the contract
NeoandGeo

join:2003-05-10
Harrison, TN

Re: Whats next?

But they are all out to set us up for failure, so I along with others will continue to complain, and laugh at any bad fortune that falls on any cell phone company.
openbox9

join:2004-01-26
Alexandria, VA
kudos:1

Re: Whats next?

Set you up for failure? How about providing you a valuable service while maximizing their ROI? If the service isn't valuable enough, or you don't feel like contributing to their ROI, then don't purchase their products. It's not a conspiracy to bring doom to NeoandGeo See Profile.

Camelot One
Premium,MVM
join:2001-11-21
Austin, TX
kudos:1
said by PhoenixDown:

While I generally agree with your sentiments, its not like we (users) get to actually negotiate a contract here.
said by openbox9:

But you have a choice whether to sign the contract or not. Don't like the terms? Don't sign the contract
openbox9 pretty much made my point. I agree, the ETF sucks. But people are informed of it in advance, the fee is set, and they agree to it - in exchange for getting a discount on the phone. Its no different than those apartment complexes that offer the first month free rent, but if you break the lease, you have to pay for that month. Its basis contract 101. And I see it as even LESS of a problem now that there are so many non-contract cell plans.

Now auto-renewals, and pretty much anytime a person isn't physically signing the contract, that is a different story.
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1

Re: Whats next?

Having a cell phone line is imperative for many people`s jobs. These companies rent spectrum from the government. Considering consumers have no legitimate choices as there is a severe lack of competition in the wireless industry, it makes sense for the government to regulate these contracts.
jjeffeory

join:2002-12-04
USA
The two parties are not equal partners in the contract. It is a one sided contract. Those are sometimes unenforcible.

Camelot One
Premium,MVM
join:2001-11-21
Austin, TX
kudos:1

Re: Whats next?

But most contacts outline some sort of penalty against the party breaking the contract. The etf is exactly that.
Should we also ban landlords from charging a lease break fee? What about if you want to turn your leased car in early?

Without some sort of penalty for breaking them, contracts are useless.
--
Intel Q6600 @3400Mhz/GA-EP35-DS3P/4x 2048Mb G.Skill/WD Raptor 300Gb/3x WD20EADS 2TB/2x PNY GTX 260/Silverstone 850W/Custom water cooler
PaulTTU

join:2009-02-12
Cookeville, TN

Re: Whats next?

said by Camelot One:

Without some sort of penalty for breaking them, contracts are useless.
The landlord's contract also provides rights to the renter, ex the renter has the right to occupy premises, the landlord can't randomly break the lease, can't break the lease without notice, and the landlord must pay for repairs, etc. A lot of these things are in law too.

These cell contracts don't have any service guarantees or terms that benefit the consumer. They usually include language like the carrier can terminate the contract at any time, arbitration clauses, a list of things that isn't our fault, etc. Sprint's service contract is 7500 words. I bet there's not a single one that benefits the consumer.
Mr Matt

join:2008-01-29
Eustis, FL
kudos:1
Reviews:
·CenturyLink
·Comcast
·Embarq Now Centu..
·Millenicom
Here is how government regulation helped me. In 1970 I signed a lease for an apartment, in an area and at a time where finding housing was difficult. Much like the wireless companies with limited competition the landlord was able to insert two clauses in the lease that were outrageous but had to accept or sleep in my car. The first, the tenant would be responsible for the cost to repair all appliances in the apartment for the duration of the lease. The second was that each tenant was responsible to pay for a portion of any increase in property tax for the building that occurred during that year. In other words if the property tax increase for that year was $50,000.00 and there were 100 Apartments the portion each tenant would be responsible to pay the landlord for was $500.00.

Here is how government regulation helped me. As part of an effort to curb the rapid inflation that was occurring in 1971, the Nixon administration passed several laws and policies that were designed to stabilize prices including freezing wage and price increases. As part of the price stabilization effort, a federal law was passed that prohibited landlords from passing on property tax increases to tenants.

In mid 1972 I was offered a better job in South Florida and moved. My lease was about to expire so the landlord agreed to accept my security deposit as liquidated damages. A couple of months later I received an invoice for about $450.00 from the landlord for the tax increase that occurred the prior year. I sent a letter to the landlord advising him that he could not enforce the clause related to tax increases because of the new regulation. He responded by threatening to turn the matter over to a collection agency. As part of the price stabilization program the government created forms and set up an agency to process complaints against violators of the new regulations. I filled out the form and send in copies of my correspondence with the landlord. I received a letter from the price stabilization agency to ignore the landlord's demands.

The best part about the whole process was that I heard from a tenant in that building, that the landlord was required to refund all fees passed on to tenants from the date that the law went into effect. All of the tenants received a fat refund check from the landlord. It is to bad that our current government does not pass laws protecting consumers from greedy corporations.
thevorpal

join:2007-11-16
Alexandria, VA
said by Camelot One:

But most contacts outline some sort of penalty against the party breaking the contract. The etf is exactly that.
Should we also ban landlords from charging a lease break fee? What about if you want to turn your leased car in early?

Without some sort of penalty for breaking them, contracts are useless.
Except that the contracts are not equal since the penalty is one sided.

If the company decides not to honor it's contract, they simply do not, and you have no recourse except to go to THEM and ask for your money back.

If we fail on our end of the bargain, we are faced with eviction notices, severe penalties to our credit reports, legal threats.

If the company fails? They just lose a customer (If it is actually something the customer can go without, often, like housing, it is not). The customer just has to take it.

Van
Premium
join:2009-07-08
New Orleans, LA
Reviews:
·Verizon FiOS
Agree on both points but your last sentence is pretty much why I don't necessarily think the world would end if SOME sort of regulation or over-view came out from the Government

I mean, over the years my services have improved no doubt and the prices have risen but in addition....the amount of ridiculous stories I have heard/read about with companies duping consumers or forcing consumers into deals (forcing as in they have very few if any other options and NEED the service).....

I just think that completely trusting these companies is not a smart move.

Bob123

@rr.com
There is regulation. In order to extend a contract there needs to be a signed contract or a digital recording of approval on the IVR which is done when activating a new phone.

The reason for the higher ETF on expensive data devices is to protect the company. If they are giving a $350 discount at the point of sale in exchange for a two year service contract the higher ETF protects Verizon's investment. It was only a year or two since brand new smartphones were sold for over $300 with a 2 year contract. Now they are at most $200.
Cloneman

join:2002-08-29
45436

Canadian etfs

Canadian ETFs on Voice & Data packages vary between

500$ and 720$

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

Re: Canadian etfs

said by Cloneman:

Canadian ETFs on Voice & Data packages vary between

500$ and 720$
something has to pay for socialized medici. . . . ehrrmmm i mean universal healthcare.
--
When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1

Re: Canadian etfs

Oh that`s really funny dvd. It`s too bad Canada spends a significantly smaller proportion of their GDP on healthcare, otherwise your `tacit` insult would actually make sense.
bn1221

join:2009-04-29
Cortland, NY

I dont hate ETFs

Well, if you get a subsidized smart phone and you cancel early you should pay an ETF. I'm not sure that 300 is fair. I'm not sure 175 is fair.

Sprint wants 200 to cancel a standard 50 dollar nextel piece of crap phone. I can understand Verizon doing that since some of the Smartphones and BB and PDAs cost 300-500 and they subsidize that over two years. I think the lady senator is out of line. The gov't can't seem to do anything right that is tries anyway so I'm leery of that.
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1

Re: I dont hate ETFs

said by bn1221:

gov't can't seem to do anything right that is tries anyway so I'm leery of that.
It`s funny that you say that while using the government-created internet. By the way, how`s the government controlled police force doing? Do you enjoy eating your FDA approved food, consuming your government regulated utilities, etc.?
cghh

join:2001-01-15
Milpitas, CA

1 edit

Why ETF was raised

The ETF on smart phones was raised to keep people from making a profit by flipping phones on eBay/CraigsList, which they could do since the price they could get was more than the subsidized price they paid plus the old ETF.

BF69
Premium
join:2004-07-28
Camden, TN

Re: Why ETF was raised

said by cghh:

The ETF on smart phones was raised to keep people from making a profit by flipping phones on eBay/CraigsList, which they could do since the price they could get was more than the subsidized price they paid plus the old ETF.
So punish the innocnet because of a few guilty parties. Yet everyone bashes the RIAA and MPAA when they essentially to the same thing.
jjeffeory

join:2002-12-04
USA

Re: Why ETF was raised

Agreed.
cghh

join:2001-01-15
Milpitas, CA

1 edit
said by BF69:

said by cghh:

The ETF on smart phones was raised to keep people from making a profit by flipping phones on eBay/CraigsList, which they could do since the price they could get was more than the subsidized price they paid plus the old ETF.
So punish the innocnet because of a few guilty parties. Yet everyone bashes the RIAA and MPAA when they essentially to the same thing.
How are the innocent punished? If you don't break the contract, the amount of the ETF is irrelevant since you never pay it. But I agree that it would be fairer if the ETF were simply the amount of the subsidy prorated over the term of the contract, as others have suggested.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Useless

Klobuchar shouldn't be wasting OUR time whining about optional fees that anyone with even half a brain can avoid.

Instead, why not introduce a low that restricts unfees? Perhaps mandate that the advertised price of service match what is on the bill.
--
Blagojevich / Madoff 2012!

See 8 replies to this post
iansltx

join:2007-02-19
Golden, CO
kudos:2
Reviews:
·Comcast
·Verizon Online DSL

Got a solution for you

ETF = (Cost of unsubsidized phone - cost of subsidized phone) / (months remaining in contract / months total in contract). Pretty straightforward and definitely reflective of carrier subsidy costs.

Now people will argue that this isn't fair either because Verizon/Sprint/AT&T/T-Mobile (T-Mobile is not as bad about this now) jack up the prices of their unsubsidized phones. That's another battle to fight. But you can always grab a (slightly subsidized usually) prepaid phone or grab a handset off of eBay if you don't like your carrier's policies.

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

Re: Got a solution for you

said by iansltx:

ETF = (Cost of unsubsidized phone - cost of subsidized phone) / (months remaining in contract / months total in contract). Pretty straightforward and definitely reflective of carrier subsidy costs.
Only you're out of gas on that when you bring your own unsubsidized handset there should be no ETF.
ETF = money we as the phone company make on unhappy subscribers.
--
When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee
iansltx

join:2007-02-19
Golden, CO
kudos:2
Reviews:
·Comcast
·Verizon Online DSL

Re: Got a solution for you

No. There should be no ETF on bring-your-own-phone...and for T-Mobile, Verizon and AT&T that's an option. My AT&T aircard was purchased off of eBay...no contract for my data plan and no ETF Wouldn't have signed up for the service if it hadn't been that way.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH
Reviews:
·WOW Internet and..
·Time Warner Cable
The thing is, who lets you bring a your phone to a new carrier? TM only if you unlock it and and then buy the SIM card (if they decide to allow it) ATT--mehhhh. Sprint won't do it. VZW sure in the hell won't do it.

TM and ATT will re-activate their old phones but still require contracts unless its under the no contract option now of TM or GoPhone for ATT.
--
www.two-pugs.com www.2pugs.etsy.com

RARPSL

join:1999-12-08
Suffern, NY
said by iansltx:

ETF = (Cost of unsubsidized phone - cost of subsidized phone) / (months remaining in contract / months total in contract). Pretty straightforward and definitely reflective of carrier subsidy costs.
The problem is that the reduction in EFT is not computed this way. The reduction amount is much less than the subsidy/length of contract. IOW: The remaining EFT after 1 year (of a 2 year contract) SHOULD be half of the original amount not much more than the fraction (as it is).
iansltx

join:2007-02-19
Golden, CO
kudos:2

Re: Got a solution for you

Agreed. My suggestion was of how it *should* be, not how it is.

shane349
Premium
join:2005-03-21
Delta, OH

lol

i wonder if she would be more angry if she knew they are actually $350

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

However their math is flawed

"but they did get carriers to voluntarily pro-rate (reduce the ETF each month you're under contract)"
they don't totally prorate though.
e.g. on the VZW ETF they only give $10/mo on the prorate on the $350 ETF when it should be $14.58/mo!
--
When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee

thender
Screen tycoon
Premium
join:2009-01-01
Brooklyn, NY
kudos:1
Reviews:
·Optimum Online

Does ETF fee hike effect contract signers prior to change?

I signed when the fee was $175.

If I cancelled my contract now, would it be $300? I signed a contract that said the fee was $175.

If Verizon is allowed to use some bullshit loophole like ETF and any actual terms of the contract are subject to change & renegotiation at any time without your consent, then it is total bullshit, and I hope Amy rapes them. If they can change the contract, I firmly believe I have the right to exit.
--
Macbook repair in NYC

verizongte

@charter.com

I think T-Mobile has the fairest approach

T-Mobile now offers a discount on the monthly rates for those who bring their own phones or buy them outright in-store.

This just goes to prove that carriers (including mightly Verizon) already includes the price of the phone subsidy into their monthly rates. Both the MSRP of the hardware and the ETF's are extremely overly inflated.

I'm sure there are some who scammed Verizon, but not to the point of causing irreparable harm. Verizon could simply do away with the BOGO or reduce the ETF after 6 months back to regular rates but they don't.

Verizon, like all the carriers, is always trying to find ways to get more and more revenue. They already know they're among the most expensive and don't want to look bad by raising the MRC so instead they'll just scoop up some more revenue by sticking fat ETF's to those who churn.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·Verizon FiOS

margins on phones and etfs

Verizon's trying to have it both ways.. have pricy phones AND high etfs.. either raise the etf & lower the price of the phone more or keep the etfs where they are and keep pro-rating etfs. Smart phones such as the droid are NOT costing $600.. one reason why is because the don't have 32 or 64gb of built in memory.. they have a card slot, so where is the extra cost of the build coming in? It's a scam to have so-called hot phone that consumers may want and then be lumped in with higher etfs. Motorola really needs to get it's ass kicked with that kind of pricetag.. I don't like apple either, but the consumer is getting less than they think and more than they bargained for. If you want a smart device, get a netbook and a basic prepaid phone and save yourself some money.
glinc

join:2009-04-07
New York, NY
Reviews:
·Verizon FiOS

he

Its funny how these senators don't take in mind when customers activate and then cancel after a month to sell the phones online to make profit. There are tons of people doing this and makes the company lose $$$. Now with this ETF is a way to counter this. People have choices, so if they don't like it can always switch to other provider.
krazyboi
Premium
join:2008-06-27
Mckinney, TX
kudos:1

higher ETFs....

I can understand some ETF's but $300-?? seriously?? quit spending money on all those dang tv ads and put that money somewhere else....

VZW EMP

@comcast.net

Re: higher ETFs....

Its funny how people either complain about the cost of the price plans, data charges, phone cost, etf etc...you know what go to another carrier....where its less! There is a reason why Cricket, Boost & Trac phone havent change the industry...what good is a phone when you can't consisently make a call? So what if "x" device is the most technologically advanced device ever made if its not reliable?

I see so many customers that pay more for our service because they have been around the block and witnessed what unreliable service is really like and want the reliability of our network. You are not going to buy Mercedes, Lexus or any Luxury car and 5 months down the road say that I don't want it because the insurance, up keep, monthly payment is too high and get your money back or the loan canceled.

Regardless of what people say you do have choice...we just don't make the choice that is right for us based on cost because we want all the "bells & whistles" without paying for it.

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