4 ms·

FCC Commissioner slams Verizon on $350 ETFs

24 points by abraham 17y ago

tkahn6 17y ago
Are these ETFs flat rates? Meaning, is the ETF the same for cancellation at a year in a half and two months in? If it is, that does seem ridiculous, but if it isn't it should be taken into consideration that a droid at retail without a two-year contract costs ~$600. If someone buys a droid at $200 with a two-year contract and then cancel's their contract, Verizon would (with the old ETF) effectively lose ($600 - ($200 +$175+profits on whatever data/minutes you paid for)). The reason you can buy the phone at $200 is because you've said that you'll make up the difference (and allow them to turn a profit) in data/minutes fees over the next two years. Whether or not they should be making a profit on the ETF is up for debate, but at least they should be allowed to break even.
- keltex 17y ago
  ETFs usually go down by $10 per month. So after 1 year, $350-$120=$230.
joshfinnie 17y ago
I am not sure if the FCC Commissioner slamed them on the $350 ETFs, but the fact that with the current rules if someone wants to cancel their plan with a month left there is still $120 left on the ETF. Showing that only $230 is going to recouperate the cost of the phone which are what ETFs were for in the first place. Also, Verizon did nothing to explain the more pressing issue of charging people the random $1.99. I think that fact is the last straw that broke the commissioners back.
ars 17y ago
I think the ETF should be the actual cost of the phone (i.e. different for each model). And then it goes down exactly prorated to the contact length. Isn't that how it works in europe? I remember reading that they were not allowed to hide the cost of the phone?
nkohari 17y ago
ETFs would be much less of a problem if buying unlocked phones wasn't like hunting unicorns.
elai 17y ago
Well at least it's not canada, with $400 ETFs, and a separate data ETF if you happened to get a data plan with your phone of $400. And mandatory 3 year contracts for most deals. The ETFs are charged by $20*(# of contract months) or $400, whichever is lowest, so you have to wait at least 1.3 years before your ETF fee will go down.

24 points by abraham 17y ago

Are these ETFs flat rates? Meaning, is the ETF the same for cancellation at a year in a half and two months in? If it is, that does seem ridiculous, but if it isn't it should be taken into consideration that a droid at retail without a two-year contract costs ~$600. If someone buys a droid at $200 with a two-year contract and then cancel's their contract, Verizon would (with the old ETF) effectively lose ($600 - ($200 +$175+profits on whatever data/minutes you paid for)). The reason you can buy the phone at $200 is because you've said that you'll make up the difference (and allow them to turn a profit) in data/minutes fees over the next two years. Whether or not they should be making a profit on the ETF is up for debate, but at least they should be allowed to break even.

keltex 17y ago
ETFs usually go down by $10 per month. So after 1 year, $350-$120=$230.

joshfinnie 17y ago

I am not sure if the FCC Commissioner slamed them on the $350 ETFs, but the fact that with the current rules if someone wants to cancel their plan with a month left there is still $120 left on the ETF. Showing that only $230 is going to recouperate the cost of the phone which are what ETFs were for in the first place. Also, Verizon did nothing to explain the more pressing issue of charging people the random $1.99. I think that fact is the last straw that broke the commissioners back.

ars 17y ago

I think the ETF should be the actual cost of the phone (i.e. different for each model). And then it goes down exactly prorated to the contact length. Isn't that how it works in europe? I remember reading that they were not allowed to hide the cost of the phone?

nkohari 17y ago

ETFs would be much less of a problem if buying unlocked phones wasn't like hunting unicorns.

elai 17y ago

Well at least it's not canada, with $400 ETFs, and a separate data ETF if you happened to get a data plan with your phone of $400. And mandatory 3 year contracts for most deals. The ETFs are charged by $20*(# of contract months) or $400, whichever is lowest, so you have to wait at least 1.3 years before your ETF fee will go down.