Verizon, AT&T, T-Mobile, Sprint and Google answer FCC on ETF investigation
T-Mobile responded by saying that it would favor a $200 ETF and that its customers could avoid an ETF by signing up for its Even More Plus plan. Sprint said that it "continues to evaluate the market" as far as varying fees are concerned. Verizon, the carrier that started this mess in the first place with the two tiered ETF structure, basically stood up for itself and said that its customers have the choice to avoid an ETF by paying full retail price for a phone and paying for service on a prepaid basis. Big Red also noted that it had cut the number of devices that were labled "advanced" and subject to the higher ETF from 46 to 38. Google noted that it had just cut its $350 Equipment Recovery Fee to $150. The Mountain View based company was a bit peeved at being in the same company as the other four. They noted that the fee reduction was being planned before the inquiry started and that because they do not run a network, they offer no contracts and thus, there is nothing to terminate. Instead, the company charges an Equipment Recovery Fee which merely recoups the funds that have to be paid to T-Mobile when a customer cancels within 120 days. AT&T gave the FCC the reasons for charging the termination fee and reminded the FCC that the operator has offered contract free services for some time. So far, no one has been grounded and no one has had the keys to the car taken away but the battle is still in the early innings.
source: FCC via EngadgetMobile
1. scottmbolt (unregistered)
ETF's themselves don't bother me. Consumers know exactly what they are getting into when they sign a contract. I do believe that it should be lowered for all carriers, and if you do have serious problems with a carrier (i.e. provable bad/non existent service at home and at work) you should be allowed out of it. The one big thing I wish these companies would be more lenient on is their upgrading policies. If you want to upgrade early and sign a new contract, take a chill pill on the fees guy!
2. jundibasam (Posts: 119; Member since: 05 Aug 2009)
I more or less agree, but the problem with allowing every Joe Schmo to upgrade to a new phone every few months is that the carriers will always lose money. Equipment subsidies are real, and there is anecdotal evidence out there that shows some of these phones, especially the more advanced ones like Droid, iPhone, and Nexus One, cost carriers in upwards of $400, not including variable costs like sales, commission, and marketing. If the phone is selling at $200 or less, and a customer is only paying $100 a month for the service, then the carriers would be out of business quick. Most carriers do offer flexible upgrade options. I know Verizon allows customers who have a plan of $50 or more to get a new phone every year, and also let lines on the same account to "share" upgrade dates. A better option would be to do away with the subsidies all together or let the manufacturers offer the promotions and subsidies directly. The only problem with that is that if all the major carriers don't go onboard with it, then the carrier(s) that does(do) will be at a competitive disadvantage because most customers dont mind signing a contract if it will give them a new phone at little or no out of pocket expense.
3. scottmbolt (unregistered)
Your points are spot on. You are right, carriers shouldn't be giving every Joe schmoe a free upgrade. I am also happy to see that carriers are starting there "early upgrade" programs for loyal customers who are paying an arm and a leg for service, and are on time with their payments.
4. rwolf1984 (Posts: 518; Member since: 06 Jun 2009)
FCC and Senators obsession with interfering in the wireless industry ticks me off. They have been asking about ETFs for years...they are still not satisfied. The carriers need to protect themselves from fraud otherwise there would be this huge black market for cell phones. Actually it wouldnt be black it'd probably be red, yellow, blue and green (ebay, lol). Phones typically are $200-$600 depending on the type of device. Carriers do subsidize the cost of the phone to offer the phone for less up front. And some carriers offer non-contract options...this sounds fine to me. I wonder what the government has issues with? The network is a "living" entity if there are changes to the network that affect service then the carriers should work with the customers rather than slapping them with fees. I've heard that carriers do power off towers on a regular basis for whatever reason and its possible that some users could have less quality experience as a result. It's often a tough and ugly battle to prove this to the carrier because departments don't share data about the network with the customer service schmucks. It's also tough to prove when you're the person that always buys the "free phone" and is eligible for an upgrade. I've heard stories and witnessed personally where they've sent out "engineers" or "techs" to take measurements. Everything is always fine...? In conclusion...I want the FCC to leave the carriers alone unless they are going to help the carriers be more competitive...stop wasting their time and our time with ETF-BS (I think they just wanna piece of the ETF). Instead we, the consumers, should be asking you about all those FCC fees and what not every user pays each month. I'd love to learn how the FCC is spending that "wisely".