Congress bellyaches about contracts, termination fees
By Chris Ziegler 
posted Jul 13th 2007 10:40AM
posted Jul 13th 2007 10:40AM
We don't like paying a couple bills to slide out from under a bunk two-year contract any more than the next guy, but at least we're cognizant of the tradeoff: subsidized hardware. Congress this week appears to have taken a special session to discuss state regulation of the wireless industry and turned it into a rant session, with several reps chiming in that termination fees and exclusivity deals (you can probably guess the device in question here) suck. We don't disagree, folks -- really, we don't -- but we hope these lawmakers (mostly rich people, we might add) realize the tradeoff of enforcing any sort of anti-contract, anti-exclusivity legislation will be higher prices on handsets. Naturally, carriers were quick to chime in that they're plenty competitive with one another and there's absolutely no need for any sort of government meddling. Let's start with significantly expanded carrier-subsidized lineups and greater manufacturer-direct unlocked presence before we start worrying about getting rid of contracts, shall we?[Via AppleInsider, thanks Warren J.]
I wonder if this has anything to do with wanting to get an iPhone :)
i totally disagree on that(higher price)
i am not saying you are wrong , but i think this might actually create more competition between carreirs and benefit us in many ways, like more advanced handsets from Asia and EU, and better services,
There is nothing Congress (or even wireless carriers, really) can do to force handset makers to bring more advanced phones to the US. They don't do it because there simply isn't a big enough market for it here. There is still a significant portion of the population who just wants a phone to make and receive phone calls. Over here, we've been weaned on landlines and internet via computers, while people in Europe and Asia have been doing that through mobile lines for much longer. That history is what causes the difference in usage.
End exclusive agreements and let service providers compete on the services they provide.. not on locked hardware they sell you at a "discount" and then they jack up the prices of their service to cover the cost. And if you are happy with your cellphone and don't want to upgrade, you pay the cost of the subsidy anyhow.
Let phones be marketed and sold as phones, let services compete and be sold as services.
I could get in line behind this idea. One problem though, is the the fact that we have two competing technologies. That would make it somewhat more difficult to completely eliminate exclusive agreements.
My major complaint with the current wireless ecosystem is the subsidy in respect to contracts. I'm fine with paying less for a phone if signing a cotnract for service, it's a trade off, you lock in to get better rate on the phone. However, try walking into a wireless company store and activating service *without* service commitment. You can't. So If i buy a phone off ebay and walk into a TMO store, I am still locked into a 12mo or more contract with no benifit to me. Kind of sucks. I understand the business behind it, revenue commmitment to satisfy stockholders, etc. And activation fees? Where do they get off charging an activation fee, if they are going to charge you to terminate? If they *need* that $35-$40 why not build it in to the rate plans or reduce the subsidy? I dont get the nickel and dime stuff.
Im all for the direct handsets. it frustrating to see what you can buy form the moto stores in other countries and then see the few unlocked options on the u.s. moto store. why cant we buy the z6 and razr2 from moto u.s. with a us warranty for a decent price. and they wonder why they are losing money, an american co., that forgets americans.. thanks moto.
I actually testified at this hearing, and this is a total misrepresentation of the subject of the hearing and what was actually discussed. I wrote about it here:
http://skydeck.com/blog/thisisbroken/congressional-hearing-on-wireless-innovation-and-consumer-protection/
very good points made
If subsidies on handsets were eliminated, the monthly cost of the plans would remain around the same.
So you'd still be paying $40-50 a month, but now you're paying upwards of $250-300 to get a phone that you could get for free with a contract today.
I just hope we don't turn into Canada, with its THREE year agreements and crap phones.
..and paying a few times more than the American counterpart.
Par exemple:
I'll take a random phone.. Blackberry Curve.
On AT&T you can buy it for $199 after mail in rebate ($299 before) with a 2 year contract, while in Canada, the same phone would cost $349 with a 3 year contract.
The current Canadian trend is ETF.. some carriers charge up to $720 (Telus) for cancelling service.. that's a major ouch!
My problem is with places like sprint that make you sign the 2 year contract when you activate a new line regardless of whether or not you buying a phone from them. I tried to activate a phone with them that I already owned and was going to have to pay the $30 activation and they still wanted me to sign a two year agreement.
no contract means: the companies can't say "oh well, you're screwed, and you're stuck with us."-- If there weren't contracts, they would probably try FAR harder to keep customers, and therefore have better service and provide more than what's normally offered, to keep from losing their customers.
Coasterjob has it right. We need the choice of the option. Get contract lower price phone or bring your own phone and no cotract. Whatabout changing plans?? If I up my plan they renew the contract - what does that have to do with the phone I got 1-1/2 years ago??? It's like indentured slavery.
Higher prices? Where do you think those subsidies come from? I'll tell you: Higher monthly fees for services. So if we pay the real cost of the phone we should get lower monthly fees (a la cellular in the 1980s) and most of us will save money over the long haul.
I've had the same GSM Samsung flip phone for 7 years. I'm pretty sure I could save some money by splitting out the phone and the contract.
I for one think this whole thing with the company is just another way that rich people and snotty whiners can't get what they want. When the Razr came out for Cingular originally, you didn't hear everybody freaking out. Now, there are a million different models of handsets including like 10 models of the Razr that are out there. Plus other companies got phones similar to it. So, whoopty whoo..who gives a damn about a slim form factor phone there are a ton of the from. My point being that ppl complain about signing contracts..well hey..there are multiple options u can either get a prepaid phone service..and there are a bunch of them out there that do not require a credit check or a contract of any kind and even most of the time you can do the prepaid and convert it over to a contracted account. So, I really don't want to hear it. Activation fees are paid on almost every type of servie out there especially if its a new service. Folks, it's just how it is. I think we are so spoiled in our thinking. Cell phone service is a luxury service that we choose to have. There are no laws and no requirements that state that u must have one and yes it is a neccessity, it's not the death of you if you don't have a iPhone, Razr, Treo, Blackberry, or any device. People just need to realize that you choose the wireless service and that YOU sign the conract, if it was well I was tricked into it and they never told me anything, well I guess you are just s.o.l., however if you look at the options via prepaid or postpay and decide that you want that service then be prepared to take on THERE requirements. You can't go into it complaining about the service that they are offering when you chose them. I've had almost every carrier with the exception of Alltel (thanks Lord for that I must say) and I have to say they all have there great benefits.
1. T-mobile has great plans that are affordable and they got Sidekicks..yay..
2. Sprint they have some fairly good coverage and they have pretty good pricing as well for a CDMA technology carrier..
3. At&t has rollover and iPhone as well as a bunch of innovative devices plus they work well in other countries.
4. Verizon has won numerous awards for customer service and they have great coverage.
The point being stopped complaining ppl. You have choices, it's just not the ones you want, but guess what if you bought a car and 6 months later you said well I don't want it anymore cancel my financing rates, I'm sure they would turn around and give you your money and prorate the charges for the time you had it.
Oh and by the way, if I hear another person ask me why they are billed in advance with Verizon Wireless, I'm gonna run thru a wall. If you have never been billed a month in advance then I look forward to you living in the real world.
Sorry, but "that's the way it is" doesn't mean that's the way it should be. Unless they give me the option to buy my own hardware and not have a contract, or treat me well enough that being under contract doesn't bother me, congress (or anyone) needs to represent MY interests and force some changes.
By the way, does it bother anyone else that all agreements, changes and other important discussions had with a CSR (with ATT in my case) go as notes on your account, but the customer never receives a written copy to hold their interests? This wouldn't bother me so much if I hadn't been lied to on several occasions and screwed out of my time and money by dishonest CSRs.
maybe people dont sign up because they had the choice. maybe people sign up because they had NO CHOICE so they went with what they felt was the lesser of the evils.
if they all have 2 year contracts and they all have etfs, then where is the choice?
the only nationwide postpaid company i know of with no etf is Voce.
Agreed I really really really don't want to have no contract and no ETF. because at least that way we can get deals on the devices at the front. I'd rather have the unlocked and wider array of devices.