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Verizon's Higher ETFs Annoy Senator
'Anti-consumer and anti-competitive,' says Minnesota's Klobuchar

As we mentioned last week, starting November 15 Verizon will be doubling the early termination fee for smartphones from $175 to $350. The move is aimed largely at preventing people from turning around and making a profit on devices like the new Motorola Droid on eBay, but also to well, make money. Calling the move "anti-consumer and anti-competitive," Minnesota Democratic Senator Amy Klobuchar has written a letter to Verizon executives and the FCC complaining of the shift. From her letter to Verizon:

quote:
Although Verizon Wireless will pro-rate the ETF by $10 a month, under the company’s new plan, the penalty for leaving the contact halfway through a two-year contract would be $230 – still higher than the $175 ETF Verizon Wireless previously charged for these phones. I remain concerned that ETFs – especially at these high prices – unfairly penalize consumers, bear little to no relationship to the cost of the handset device, and are anti-consumer and anti-competitive.
It's an interesting time for Verizon's decision, given the FCC is currently poking around anti-competitive behavior in the wireless industry, exploring whether long-term exclusive handset deals or ETFs are used as anti-competitive weapons. Klobuchar previously introduced the Cell Phone Consumer Empowerment Act, which aimed to reduce and pro-rate ETFs.

Verizon, like Sprint, T-Mobile and AT&T, has been hounded by class action and State Attorneys General lawsuits over their ETFs. To derail new regulation like Klocuhar's potential law, carriers ultimately changed their stripes, pro-rating their ETFs, introducing 30 day money back guarantee refund windows for consumers, and stopping the rather obnoxious practice of quietly extending a user's long-term contract every time a user made even a small change to their plan. Verizon's since wiggled away from some of these improvements.
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woody7
Premium Member
join:2000-10-13
Torrance, CA

1 recommendation

woody7

Premium Member

hmmm.....

Just don't commit to a 2 year deal and leave early ,
no one is forcing you to sign the contract

Chiyo
Save Me Konata-Chan
Premium Member
join:2003-02-20
Salisbury, NC

Chiyo

Premium Member

Re: hmmm.....

I was forced at gun point
jjeffeory
jjeffeory
join:2002-12-04
Bloomington, IN

jjeffeory

Member

Re: hmmm.....

The contracts are so one sided that the word 'contract' is laughable. Otherwise, I 'd agree with you. It just seems like Verizon is stretching a bit on this one.
fiberguy2
My views are my own.
Premium Member
join:2005-05-20

fiberguy2 to woody7

Premium Member

to woody7
Normally I would agree with you 100% on this one.. however, some providers won't even let you sign up with your own phone with out a "contract".. and even then, these contracts are completely 1-sided agreements.. The providers have all of the control and can additionally terminate the contract ON you... however, you have no ability to terminate it on them for lack of performance.

Like I said, I'm usually the first one to tell people "don't buy it if you don't like or agree with it" or "don't sign the contract and pay full price" (which is THE smartest thing to do) but these days, it's WAY too over lopsided on the side of the providers which IS in fact wrong.

ual
@bellsouth.net

ual

Anon

Re: hmmm.....

said by fiberguy2:

Normally I would agree with you 100% on this one.. however, some providers won't even let you sign up with your own phone with out a "contract".. and even then, these contracts are completely 1-sided agreements.. The providers have all of the control and can additionally terminate the contract ON you... however, you have no ability to terminate it on them for lack of performance.

Like I said, I'm usually the first one to tell people "don't buy it if you don't like or agree with it" or "don't sign the contract and pay full price" (which is THE smartest thing to do) but these days, it's WAY too over lopsided on the side of the providers which IS in fact wrong.
There is a roundabout way you can terminate it for lack of performance. Simply call them whenever you experience the problem that is annoying you. Dropped call? Time to call customer service. Slow internet? Try calling support to ask if they're having a problem somewhere. Poor coverage? Try asking if they're having problems with the local towers.

You annoy them enough and they will invoke their right to drop you.
PhilAIV
join:2002-02-16
Carrollton, GA

PhilAIV to fiberguy2

Member

to fiberguy2
said by fiberguy2:

some providers won't even let you sign up with your own phone with out a "contract"..
The company this senator is referring to (Verzion Wireless) does in fact allow people to sign up without a contract, but most people don't want to pay full retail for a phone or don't have one laying around therefore they sign a contract.

RARPSL
join:1999-12-08
Suffern, NY

RARPSL

Member

Re: hmmm.....

said by PhilAIV:

said by fiberguy2:

some providers won't even let you sign up with your own phone with out a "contract"..
The company this senator is referring to (Verzion Wireless) does in fact allow people to sign up without a contract, but most people don't want to pay full retail for a phone
If the company will sell me the phone for "Full Price" or at a subsidized price with a contract, then the EFT should be no more than the difference between the two prices (since the EFT is supposed to cover the cost of the subsidy) AND the monthly reduction should be prorated based on the remaining contract term (ex: For a 2 year contract, 1/24th of the subsidy per month). Thus the subsidy should be fully paid up at the end of the contract based on the number of months and the monthly reduction. If Verizon wants to reduce the EFT $10 a month then the EFT should be $240. At $375, the monthly reduction should be $15.65/month. Also, what is the "Full Price" and 24 month "Contract Price" on the droid (ie: Is the difference $375) anyway?
moonpuppy (banned)
join:2000-08-21
Glen Burnie, MD

moonpuppy (banned) to PhilAIV

Member

to PhilAIV
said by PhilAIV:

said by fiberguy2:

some providers won't even let you sign up with your own phone with out a "contract"..
The company this senator is referring to (Verizon Wireless) does in fact allow people to sign up without a contract, but most people don't want to pay full retail for a phone or don't have one laying around therefore they sign a contract.
But they sometimes disallow you from bringing your own phone to their network even if it was already on Verizon. Some stores take a dim view of allowing you to buy a phone off eBay and get service with them.
PhilAIV
join:2002-02-16
Carrollton, GA

PhilAIV

Member

Re: hmmm.....

said by moonpuppy:

said by PhilAIV:

said by fiberguy2:

some providers won't even let you sign up with your own phone with out a "contract"..
The company this senator is referring to (Verizon Wireless) does in fact allow people to sign up without a contract, but most people don't want to pay full retail for a phone or don't have one laying around therefore they sign a contract.
But they sometimes disallow you from bringing your own phone to their network even if it was already on Verizon. Some stores take a dim view of allowing you to buy a phone off eBay and get service with them.
The only time they are allowed to deny a vzw phone from being activated is if it was blacklisted (reported stolen / lost) or no longer support (no agps for 911). If someone is running into this problem, escalating the situation will allow a manager to take care of it.

roc5955
Premium Member
join:2005-11-26
Rosendale, NY

roc5955 to woody7

Premium Member

to woody7
Ever try to negotiate your OWN contract with guys like these? It's simply impossible.

David
Premium Member
join:2002-05-30
Granite City, IL

1 recommendation

David

Premium Member

Re: hmmm.....

said by roc5955:

Ever try to negotiate your OWN contract with guys like these? It's simply impossible.
Yea I have... it's called "prepaid" get out when you want to or when service is crappy!
88615298 (banned)
join:2004-07-28
West Tenness

88615298 (banned) to woody7

Member

to woody7
said by woody7:

Just don't commit to a 2 year deal and leave early ,
no one is forcing you to sign the contract
So if you find out the service sucks you should just have to stick it out? I'm 100% sure if you went into a restaurant and found the food inedible you would NOT have to pay for it.

Also the Droid is only available with a 2 year contract. So yeah your are forced. There isn't any month to month or 1 year contract. Even with a 2 year contract it's $200. Screw that. Some of these phones without contract are $500. Come on it's a phone not a computer or a TV.

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

pnh102

Premium Member

Re: hmmm.....

said by 88615298:

So if you find out the service sucks you should just have to stick it out? I'm 100% sure if you went into a restaurant and found the food inedible you would NOT have to pay for it.
All cell phone companies give customers an opportunity to quit their service within a 2 week to 30 day period in case they are not happy with the service. If someone can't decide within this window that the service is right for them, then tough.
said by 88615298:

Come on it's a phone not a computer or a TV.
Yes, its a phone. This doesn't merit Congressional action. Perhaps people should think twice before entering into 2 year contracts if they can't afford to pay the ETF.
jjeffeory
jjeffeory
join:2002-12-04
Bloomington, IN

jjeffeory

Member

Re: hmmm.....

2 weeks isn't enough time to properly evaluate phones such as the phones in question. 30 days is barely enough time to properly test out a phone. The rest of your statement is just as insulting yet entertaining as usual.

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

pnh102

Premium Member

Re: hmmm.....

said by jjeffeory:

2 weeks isn't enough time to properly evaluate phones such as the phones in question. 30 days is barely enough time to properly test out a phone. The rest of your statement is just as insulting yet entertaining as usual.
Simply because you cannot do it does not mean it isn't true.
jjeffeory
jjeffeory
join:2002-12-04
Bloomington, IN

jjeffeory

Member

Re: hmmm.....

It's not about me specifically. I am thinking of the people who travel and go outside their home area from time to time. Some people actually travel. I think a 6 week window would be pretty fair. Simply because you, me, or anyone thinks something is true doesn't make it true either. Come on...

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

pnh102

Premium Member

Re: hmmm.....

said by jjeffeory:

It's not about me specifically. I am thinking of the people who travel and go outside their home area from time to time. Some people actually travel. I think a 6 week window would be pretty fair. Simply because you, me, or anyone thinks something is true doesn't make it true either. Come on...
So in other words, these people did not think through a major purchase. Perhaps they should not plan to switch carriers when a trip is being planned.
iansltx
join:2007-02-19
Austin, TX

iansltx to jjeffeory

Member

to jjeffeory
Verizon, Sprint, AT&T and T-Mobile offer prepaid plans. Test out service using those. Infinite return window, no contract.

NOCTech75
Premium Member
join:2009-06-29
Marietta, GA

1 recommendation

NOCTech75 to pnh102

Premium Member

to pnh102
pnh102 See Profile
Yes, its a phone. This doesn't merit Congressional action. Perhaps people should think twice before entering into 2 year contracts if they can't afford to pay the ETF.
Sure it does, the inept shit needs to prove she is "doing something for her constituents" to ensure she stays in power for her next term.
JazzJRabbit
join:2003-09-27
Wheaton, IL

JazzJRabbit

Member

Re: hmmm.....

Have you seen the price of those pre-paid plans? Last time I checked T-Mobile was the only one that charged 10 cents per minute with no monthly fees. Everyone else charged $1 per day if call is made. Plus you have to pay insane SMS charges and I bet you cannot add data plan to your pre-paid service either.

I've been using T-Mobile prepaid for years, still do, but outrageous SMS fees (0.05$ to receive and 0.20$ to send) and lack of data plans make it little more than an emergency cell phone while everybody else wants to use SMS/chat/send pictures/etc.
chimera4
join:2009-06-09
Washington, DC

chimera4 to pnh102

Member

to pnh102
Except it does since this effects interstate commerce which the federal government is empowered to regulated. Ditto for the internet.

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

pnh102

Premium Member

Re: hmmm.....

said by chimera4:

Except it does since this effects interstate commerce which the federal government is empowered to regulated. Ditto for the internet.
Heh. In the eyes of the federal government, everything falls under interstate commerce, and can thus be regulated at the federal level.
Expand your moderator at work
chimera4
join:2009-06-09
Washington, DC

chimera4 to pnh102

Member

to pnh102

Re: hmmm.....

Unfortunately they are becoming more and more correct about this too given the increasingly global nature of our economy and the size of major corporations.
thevorpal1
join:2007-11-16
Alexandria, VA

thevorpal1

Member

Re: hmmm.....

said by chimera4:

Unfortunately they are becoming more and more correct about this too given the increasingly global nature of our economy and the size of major corporations.
Oh it has nothing to do about the global nature of the economy.

A stacked court decision in the 1930s lead to this when the Federal Government decided that the Federal Government could classify something as Interstate Commerce simply by placing any regulation on the object.

IE: according to the ruling, it is interstate commerce if the Legistlature decides to regulate any product in almost any way.

The logic was used in the following manner as well:

The federal government bans something (anything) your use of that product, even if produced by yourself and consumed by yourself results in market pressure in the BLACK market which crosses state lines.

The commerce clause is the most abused aspect of our entire government.
88615298 (banned)
join:2004-07-28
West Tenness

88615298 (banned) to pnh102

Member

to pnh102
said by pnh102:

All cell phone companies give customers an opportunity to quit their service within a 2 week to 30 day period in case they are not happy with the service. If someone can't decide within this window that the service is right for them, then tough.
Verizon has been proven to NOT honor that promise. So what's you answer to that smart guy?
Yes, its a phone. This doesn't merit Congressional action. Perhaps people should think twice before entering into 2 year contracts if they can't afford to pay the ETF.
If the phone is only available via 2 year contract what other option do they have EINSTIEN? You are obviously of the mindset that business should be able to fuck people all they want because they are busniess. As a person that runs his own small busines I do NOT feel that is the proper way to conduct one's self. I guess ome of us have morals others like you lack them.

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

1 recommendation

pnh102

Premium Member

Re: hmmm.....

said by 88615298:

Verizon has been proven to NOT honor that promise. So what's you answer to that smart guy?
How is that relevant to your original point of not being able to buy a spanking new phone without a 2 year contract?
said by 88615298:

If the phone is only available via 2 year contract what other option do they have EINSTIEN?
If you find the terms of the contract disagreeable to the point that it detracts from your use of the device, then perhaps you should reconsider such a purchase.
said by 88615298:

You are obviously of the mindset that business should be able to fuck people all they want because they are busniess.
And again, you fail to provide proof that businesses are forcing people into these contracts. If you do not like the terms of the contract and agree anyway, you really have no place to complain.
said by 88615298:

As a person that runs his own small busines I do NOT feel that is the proper way to conduct one's self. I guess ome of us have morals others like you lack them.
Based on the tone of your posts, I can't say that running a lemonade stand at your parents' house qualifies as a small business.

And as a business owner, you of all people should appreciate contract law.
Big Dawg 23
join:2002-03-27
Northfield, MN

Big Dawg 23 to 88615298

Member

to 88615298
Click for full size
I can buy the phone on my current account with no two year contract. Look next to the $559.99 It says MONTH TO MONTH. So now what is your answer Smart Guy!
sonicmerlin
join:2009-05-24
Cleveland, OH

1 recommendation

sonicmerlin

Member

Re: hmmm.....

Except, unlike every other advanced industralized country, even if you bring your own cell phone you pay the same inflated monthly prices that people with subsidized contracts pay. So there`s a huge incentive to go with a 2 year contract, as you`ll save a great deal of money on the `subsidy`.

But you knew that already, didn`t you?

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

pnh102

Premium Member

Re: hmmm.....

said by sonicmerlin:

Except, unlike every other advanced industralized country, even if you bring your own cell phone you pay the same inflated monthly prices that people with subsidized contracts pay. So there`s a huge incentive to go with a 2 year contract, as you`ll save a great deal of money on the `subsidy`.

But you knew that already, didn`t you?
Well you can get the GSM-ish version of the Droid for only $800.

»welectronics.com/gsm/Mot ··· OID.HTML

BUT THERE'S NO CONTRACT! WOOT!

del ftw
@comcast.net

del ftw to sonicmerlin

Anon

to sonicmerlin
Not any more. Tmobile's prices are ~20 dollars a month less if you are not under contract.
iansltx
join:2007-02-19
Austin, TX

iansltx to 88615298

Member

to 88615298
That's incorrect. The Droid can be bought (for $570) without a contract.

Verizon should do what they want on this. There are three other major carriers, and Verizon, T-Mobile and maybe even AT&T will allow you to get a phone off-contract, then sign up for a wireless plan without a contract with the same features and pricing as a 2-year contracted plan.

•••••••

thender
Screen tycoon
Premium Member
join:2009-01-01
Brooklyn, NY

1 edit

thender to 88615298

Premium Member

to 88615298
said by 88615298:Come on it's a phone not a computer or a TV.


What makes this statement ridiculous is that a computer or a TV can cost anywhere from $50 to $15,000.

removed See Profile sells flashlights that cost more than some small new TVs.

Quality.

If you want a handheld device under half an inch thick that plays h.264 video on a 3" screen, can give you turn by turn directions, and get reception in a subway station, guess what - IT'LL COST MONEY!!!

Most people get these phones seeing how cheap they are with a contract even though they DO NOT NEED THEM, or use 90% of their features. Then they complain about the contract.

This is a case of stupid consumer more than big bad evil phone company.

FWIW, there are numerous things I hate verizon for, such as the new fee for online bill paying. I just thought this argument was ridiculous.

brian
Premium Member
join:2002-05-02
Mission Viejo, CA

brian to 88615298

Premium Member

to 88615298
said by 88615298:

Also the Droid is only available with a 2 year contract.
FALSE! I can purchase it on VZW's website for $560 with no contract. With a one year contract, the phone is $270. It's still too much, but at least you have the option unlike the iPhone.

••••

woody7
Premium Member
join:2000-10-13
Torrance, CA

1 edit

woody7 to 88615298

Premium Member

to 88615298
did you notice the winking smiley? I didn't mean to start a war, but in this instance, posters are right and some have the right idea,my point was that no one is forcing you to sign a contract, and I feel you need between 30-60 days to evaluate. Now having said that as some posters have said, people see the low price, and don't pay attention to the service, and I feel that with all the message boards and sites like DSL reports that people should do a little home work before they buy and get buyers remorse. Peace
skurfa4
join:2006-03-10
Yorktown, VA

skurfa4 to 88615298

Member

to 88615298
I could be wrong, but I think the non-contract (unsubsidized) price is pretty much set by the phone manufacturer, not the carrier. And, by the way, these phone we are talking about ARE computers, they make the PC you paid $1500 for ten years ago, look like an abacus.

jackie
@10/24.bsnl.in

jackie to woody7

Anon

to woody7
Lucky we still have Cellswapper.com

Matt3
All noise, no signal.
Premium Member
join:2003-07-20
Jamestown, NC

Matt3

Premium Member

Still Return

You still have a 30-day window with Verizon, you just have to pay the activation fee and the prorated amount of usage.
Mr Matt
join:2008-01-29
Eustis, FL

Mr Matt

Member

Bullies!

The ETF should be the purchase price of the handset minus the initial price paid reduced by 1/24th of the unpaid balance each month on a 24 Month Contract. Initial price of a handset should be FMV not some inflated price. The ETF should not exceed the purchase price of the handset minus the amount paid when the contract was initiated.

••••
33358088 (banned)
join:2008-09-23

33358088 (banned)

Member

and the unfairness is even more so

if you consider that in there contracts they have the right to change it at anytime and by sounds of things they are closing the holes you can get out. AKA raising a fee on you is nto a contract breaker most times in these types and thats totally unfair. In Canada if you change anyhting you have THE RIGHT to leave without any early termination fees and trust me these greedy types will try it so make sure you audio tape all conversations and get the reps name and number for every talk.
EVERY TALK.

DSLInstaller
@covad.net

DSLInstaller

Anon

CANCEL !!!

Do you really want to make a statement to wireless providers????? CANCEL your service for a total of a year. Just 10 years ago less than 1/2 us had a cell. It would be a great message and I'm sure then because of "customer concerns" and "customer needs" You will really see some competitve pricing. Look at Sprint in the future their numbers are so dismal that if a price war is to start they will be the ones to start it..... Remember this.... to the ATT, Verizon, T Mobile and Sprint reps who love to post on here.
k1ll3rdr4g0n
join:2005-03-19
Homer Glen, IL

k1ll3rdr4g0n

Member

The industry is compeitive

...to a point.
...and you are out of contract.
Oh well .

All I know is that I am out of AT&T's contract and am eyeing the Tilt 2, but if they aren't willing to do anything for me to keep me a customer, then there are PLENTY of competition out there that would.
Verizon has a permanent black mark for stupidly neutering their devices (so no Droid), T-Mobile hasn't had much luck with their service, been quite on all fronts from all other companies.

Crap.
At least I can use switching as leverage, which they don't have to know that I think the rest of the competition sucks .

In case that doesn't pan out too well, anyone know of any good MNVOs?
JimF
Premium Member
join:2003-06-15
Allentown, PA

JimF

Premium Member

Do what they do best

Senators should stick to doing what they do best, making empty speeches, and let communications companies do what they do best, running their business.
tuminatr9
join:2003-03-19
Saint Paul, MN

tuminatr9

Member

obviousley there is a reason

that Verizon is making the change they are a publicly traded company with stockholders to answer to they must be seeing red in the smart phone contract cancellations
TechWhiz
join:2004-10-30
Phoenix, AZ

TechWhiz

Member

Price Price Price

Present pricing for Motorola Droid without being tied down:

2-year 'contract' $200 + $375 ETF = $575
Month-to-month from Verizon = $559
Direct from Motorola = $600

It's all about the same deal. If you've gotta pay activation (~$40?) with the month-to-month, it's a better deal to just pay the ETF at any point during your contract.

malichi
@pg.com

malichi

Anon

mark up pricing

The mark up pricing on these devices are so utterly rediculous anyway. People sign those so call contracts because they dont have $400+ to spend on a $20-30 device. We should all migrate to prepay and see what they do then.