DA... duly noted. that's why in my post I called the balance due on the phone the same as an ETF fee, consumers if switching may not because the unpaid balance on the phone is due on terminating the contract.

But I don't consider that really the same as Verizon's ETF.

For one, the phone balance decreases at a pretty fast clip, maybe about $25 a month. That's better than Verizon taking a paltry $10 off each month.

Second, having the monthly amount applied to pay off a phone I own is a lot better than simply having$10 deducted off a Verizon-imposed fine or penalty.

Third, if one leaves T-Mo he or she still owns a phone, that can possibly be used with a new carrier or sold on eBay to recoup the cost of the phone.

Fourth, I like the options/flexibility one has under T-Mo's plan. One can buy a phone anywhere and bring it to T-Mobile, or one can get a lesser phone with T-Mobile while waiting for a newer model to come out.

For example, I just bought a T-Mobile Touch Pro2 for $329 on a one year contract. But a new HTC phone is coming to T-Mo (hopefully) that I want for my other line, the HD2. I like knowing I can get the HD2 for retail and pay for it over 22 months and not be relying on a contract extension simply to get the contract price.

But the biggest benefit is that one is not tied to a phone contract. If nothing else I just like the sound of that. If something better comes along from another carrier I like knowing that I won't be breaching a contract, I will simply be giving notice to T-Mo that I am terminating our relationship. At the end of the day it does not matter

Sidenote: Why do they have flat-rate early termination fees for such high amounts, like Verizon's $350? Seems the fairer way to assess the fee is to use the discount one received and deduct an amount each month against that. For example, if you got a $200 discount on the phone, $200 is the "ETF" from which to deduct $10 each month.

I can speculate why they do this. An impending ETF motivates customers to stay put. A user gets so worked up over avoiding payment of an ETF or feels otherwise bound that he does not think to pencil things out and realize that it would be a better deal to pay an ETF, switch carriers and perhaps with a new carrier pay $1500 less over a two year period.

For example, I know a girl who does not pay attention to how any of this works. She simply says "I have X number of months left on my contract, maybe then I can get a new phone." That's the kind of customer Verizon likes, one who is afraid of paying an ETF fee.

T-Mobile rewards its loyal customers, much along the lines you mention, where it has special pricing for long-term customers.

Back in March or so they came out with the "Loyalty Plan" that gave me, for example, unlimited talk on two lines for $89 a month.

As I recall the requirements included having been with T-Mo for two years or more, paid bills on time, etc.

That is the way to keep customers, to reward them (or "award" as you say) rather than handcuff them with fees and other draconian gimmicks.

And I think T-Mo's new "More Plus" plan will become very attractive to people. Instead of getting the phone at a discount with contract, eliminate the contract, allow one to pay for the phone over two years and lower the rate plans for those people since there is no contract forcing them to involuntarily stay a customer.

It will be interesting to see if the T-Mo concept becomes the new standard.

Doing it that way eliminates carrier concern about getting stiffed by a disloyal customer who got a discounted phone.

More significant, a "no contract, no ETF, and lower priced plans" sounds a lot better than "contract, penalties and expensive plans."

This might be a double post, so pardon. I am still trying out my password entry. I am doing something incorrect because entering my e-mail and engadget password does not result in my post showing. Maybe it was because the server rejects any post with a link or URL?
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Anyway, as I said before, if you want to read all about ETF controversies, the litigation and settlements, check out the Google hits on such. In Google simply enter "ETF litigation" and see what comes up.

There was an expert retained by a law firm who represented Verizon. Here is what the number crunching damage [financial loss] expert when trumpeting on his Site that he had Verizon as a client. It reveals Verizon's argument on why it needs to have ETFs:

"Verizon Early Termination Fee (ETF) Litigation. Retained by Verizon Wireless to analyze losses to Verizon from a class of consumers who terminated their cell phone contracts early; i.e., prior to the contracts' maturity.

On one hand, the class of consumers claimed that they were damaged by the inclusion of early termination fees in their contracts. On the other hand, Verizon Wireless argued that the [company] suffered significant losses due to the early terminations.

Working with a CRA team ... I developed a detailed model which demonstrated that early terminations caused significant losses to Verizon Wireless during the class period from 1999 through 2006. [I was deposed in March 2008.] Case settled during trial on July 8, 2008, just before my scheduled testimony in Oakland, California."

Although I write for a magazine and enjoy this site immensely I am compelled to chime in:

I agree with Chris. I hate the morons who post "first." If this was my site I'd ban those people. Only thing I would do different is not tell anyone about the ban, I'd just silently slice his wrists and throw him into a ditch.

On this ETF, well at least there's the proration now. I think that was the result of class action litigation, where the ETF was in violation of number portability laws. (People could not move to another carrier because of the huge fees attached to moving.)

Kind of arrogant for Verizon to increase the fee rather than decrease or eliminate it. Carriers should not seek to imprison people into staying with them.

On another front, T-Mobile is doing the opposite. You can buy an undiscounted phone, pay for it over 22 months, and not be bound by a contract.

And the rates are lower on the T-Mo no-contract plan (I think they call it "More Plus" or something like that) because T-Mo needs to give you an incentive to stay with the company since there is no contract and no ETF.

If you get a $500 phone on a T-Mo installment plan that will work as a sort of ETF because if you leave T-Mo the unpaid portion of the phone purchase price is due. But that's still better than tying us to a two year contract to get a discounted phone and being threatened with the ETF.

It probably all balances out in the end, but I like T-Mo's new plan, where there is no contract.

Doing a spot of marketing myself over the years, I agree 100%

The general rule is that after the ad viewers should know what the product is, what it does and why it is useful or cool. This ad does achieve these things.

You also should not require a viewer to pay much attention to figure out what is going on. As cute as the ad is, one has to think, and think again, just what it is they just saw. For example, the icons signifying apps, looking sadly (conveyed via music) that they might not get to go with the owner (like a dog wanting to go for a car ride) is lost because few people know what ALL those icons represent.

I doubt the average consumer will understand the point, that with a "Windows Phone" you can now take all your apps with you, If people get that point, they are nevertheless left with the impression that there is a Windows Phone that does these things.

There are less confusing ways to convey the concept.

And most definitely, at the end people are rewinding and pausing to get a glimpse of the new "Windows Phone" to see what it is, so they can call AT&T to inquire about it. The ad makes it look like AT&T is the only carrier who has the new pictured Windows Phone.

(I suspect a good indicator of confusion would be for MS market people to call AT&T and ask if they have been getting calls about the "Windows Phone they saw in the TV commercial."

I have a few videos on YouTube talking about WinMo 6.5, 7 and "Windows Phone." MS needs to make clear that this is an OS, not an actual phone. I don't think the public will ever understand that the concept. And if you have to explain a product name, that indicates the name has failed to tell the public, in the name, what it is.

People own computers by brand name. People don't say "I have a Windows Computer." They say "I have a Dell with Windows XP."

Having the word "phone" in the MS mobile OS name will create confusion. I don't think it will ever catch on; for example, saying "I have a Touch Pro2 phone running Windows Phone."

If MS wants to get away from the old names for its mobile OS products (understandable) they need to delete the word "phone" from the name and choose something else, such as "Windows Smartphone 9" or "Windows Wireless 9" (the "9" being the year).

Newspeak.... spot on, about smartphones. While other handsets have suffered about an 8% DECLINE in sales, smartphone sales have increased.

I liken it to netbooks. Right now netbooks are the must have electronic and sales are through the wall. Speculation is that this year netbooks will be the hot Christmas electronic gift.

I think smartphones are there too. More and more people look at my smartphone and tell me they want to get one too. Maybe smartphones will be the netbook of the wireless industry.

If so, I suspect T-Mo knows it. Look at their phone lineup, they have every niche covered with all the hot technologies, software and operating systems. Whatever sells like the "netbook" took off, to me at least, T-Mo has is covered: Android, Windows Mobile, RIM, Linux, keyboard, touchscreen only, high MP camera, etc.

Assuming my statement accurate (that carriers are tanking, the same as other industries) it appears that T-Mo is expertly executing its "Plan B" which I assume Project Dark is, a response to the economic implosion.

As I posted over at BGR, I am currently paying $140 for two lines, unlimited talk and data. That would be the same as the rumored $50 per line Unlimited Everything.

I got the Loyalty Unlimited Talk plan back in March 2009. Query: Was that T-Mo testing the waters on the unlimited everything plan, for example, to see if that would retain customers?

In any event, if T-Mo comes out with a $50 per line unlimited data and talk, that would only be $20 less than what I am paying now. So that does not seem a hard-to-believe leap, taking an additional $20 off my plan pricing.

Now if they were going from what I was paying in 2005 for two lines, unlimited data, and 2000 minutes on the family plan ($240 a month) down to $100 for the two (on Oct 25) that would seem an impossible dream. But plan prices with T-Mo decrease over the years, not increase. So $50 for unlimited data and talk does not seem a pipe dream to me.

Doesn't the thrust of this article assume that T-Mo just a month ago said "I know, why don't we slash prices and offer everyone unlimited everything."

Me? I have to assume T-Mo is aware of everything you mention (perils and benefits), learned from AT&T's errors, and that they have planned this Project. I don't assume that T-Mo execs and engineers sit around like potted plants and just throw stuff against the wall to see what sticks.

In fact, I get the opposite feeling about the Company. They plan carefully and precisely every move they make, somewhat like a master chess player.

Sure, there's plenty of people out there who criticize anything and everything T-Mo does, while calling the employees dumb as rocks, but I have yet to see evidence that T-Mo acts like the keystone cops.

For sure, if I was T-Mo I would not be telling any of you out there what my plans are, how I will go about implementing them. T-Mo seems quite careful in this regard, for example, not trusting store employees with any information. (It's a crackup when purported employees post information on the blogs acting like they know what is going on. Well, the quickest way to get fired and sued by T-Mo is to leak information on public boards.

It's also a crackup reading how everyone knows more than T-Mo. They know what handsets the company should be selling, what price they should be listed at, what discounts to give and what plans and services to offer. This begs the question, of course, why aren't these people on T-Mo's payroll if they know so much, especially on how to make T-Mo #1? What, did they use their MBA to go work at Burger King?

Oh well, it's amusing to see that many people already know what T-Mo has planned and has declared T-Mo's plans a failure, even before the projects debut. Wish I had that skill.

I like to think that T-Mo will continue its careful planning, knows their business inside and out and that there will be an Unlimited Everything plan come October 25. And I wish T-Mo every success. I hope their customer count increases by 10 million because of Project Dark.

Well I got the T-Mobile Touch Pro2 on opening day for a special price of $329 on a ONE YEAR contract. So these prices don't matter to me.

Even if I paid $150 more for the phone (on a two year deal) I'd have to ask myself it it worth $150 to be able to use the TP2 for two months (appx) before anyone else has it. I say yes.

Of course that's a subjective opinion. Others for whom handset selling price is all that matters, then waiting two months to save another $150, well, that's being a wise shopper in their minds.

But like anything, you can go without and hold out for months or years to eventually get something for far less than what it first listed. Look at the iPhone first adopters. They took a bath compared to those who waited a few months to get that phone.

The worst thing that lemming, robotic consumers do, however, is get caught up on handset pricing and failing to take into account what the phone is really costing them over the life of a two year contract.

So they get the phone for $200 and feel great until the first few months of billings come in, where they are paying $50 more a month for service and plans. But maybe people don't think about it. After all, they were suckered in with a low handset price, so why would they all of a sudden wake up three months later and calculate the true cost of the phone.

What I call "pricing scams" must work, why else would T-Mo, for example, sell the TP2 for $400 on a one year contract and for a paltry $50 savings sell the phone for $350 on a two year deal. I challenge anyone to come up with an argument to support the concept that it makes good financial sense to accept a $50 additional discount on a phone in return for obligating one's self to pay at least $1000 to T-Mo for that additional one year plan obligation.

It makes no sense but must work because otherwise carriers would not play these kind of pricing games. $199 indeed.

There should be a truth in pricing law enacted. Each carrier has to disclose the minimum cost a handset and plan will cost someone. That would promote some competition. Imagine Sprint having to say "Buy the Touch Pro2, only $2600." ($200 for the phone, $100 mo for talk and data). T-Mo can compete back "But the Touch Pro2, only $2150." ($350 for the phone, $75 mo for phone and data).

Oops.... I meant "Windows Media Video," needed to clarify, don't want you thinking there's a movie format called "windos" (some kind of Windows DOS combo) LOL.