5 ms·

I don't think it's likely, but I deeply hope that Google (or somebody else) can kill the US addiction to subsidized handsets. The market will be so much more e

by simon_ 16y ago

I don't think it's likely, but I deeply hope that Google (or somebody else) can kill the US addiction to subsidized handsets. The market will be so much more efficient and flexible when we pay for phones as phones and pay for service as service.

gte910h 16y ago
I'd honestly prefer it was just legislated that we do it like Europe (where you see the amount you're paying for the phone itself, and there aren't really ETFs)
- roel_v 16y ago
  What's an EFT?
  - gregstoll 16y ago
    An ETF is an Early Termination Fee, which you have to pay if you leave your contract early. It protects the carriers since they're subsidizing your phone.
    - pyre 16y ago
      You say that it 'protects' them, but it was only recently (last year or two) that they decided to pro-rate those fees. So a month before my 2-year contract is up, my ETF would be the same as if I cancelled within the first month. This is bogus if the reasoning is so that the carriers can 'recoup the cost of the phone that they were subsidizing.' Even with the pro-rated ETFs now, IIRC they won't be insignificant at the 'month before the end of a 2-year contract' point even though the carrier has obviously made back most (if not all) of their sunk costs by then... ETFs are there because the mobile carriers like to bank your monthly fees as a constant revenue stream, and when people cancel early it screws up their numbers and projections, much in the same way that banks penalize you for closing out a CD early. Talk about how it's to 'protect the carriers from people that cancel early without covering the full cost of the phone' is just people buying in to the BS story that the US mobile industry's PR depts have been telling us for years.
      - gte910h 16y ago
        > decided to pro-rate those fees. They didn't decide. Non-prorated fees were found to be unenforceable. I'd call that forced.
        pyre 16y ago
        That's even worse. I didn't know the root cause of the change, just that it had happened.
        deleted 16y ago
        [deleted]
mattmaroon 16y ago
It would be great but it won't happen. Humans are genetically predisposed to wanting things that are free (even if, in reality, they only seem free). Number portability means carriers can't offer phones at steep discounts without the contract. People figure "I'm going to have a cell phone for the next 2 years anyway, I might as well just pick one carrier and get it for free."
- joshhart 16y ago
  Not sure about that entirely. Remember when computers were given away free with 3 years of AOL sign up in the late 90's? That fad only lasted a while.
  - brg 16y ago
    At that time the subscription fees did not cover the cost of the hardware. Subscription fees were also falling due to decreasing barriers of entry into dialup and internet providers. Alternatives such as advertising did not cover the cost of the net-pcs either. For cellular phones, the $200-300 hardware cost is easily recouped over two years on a $70.00 monthly plan.
    - mattmaroon 16y ago
      Not only that, AOL didn't last long after that.
- laut 16y ago
  It is already reality to a certain degree outside of the US. The difference can likely be explained by how some combination of the economics, regulation, politics, culture, geography is different in the US.
  - mechanical_fish 16y ago
    As has been pointed out elsewhere on the thread, the fact that there are multiple cellular radio standards in the USA (GSM and CDMA), combined with the fact that network coverage in the USA is so spotty (my colleagues in the Bay Area can't stop complaining about the poor AT&T coverage, whereas my AT&T coverage north of Boston is fine) means that you effectively don't have much choice of carrier. Once you choose a home and a phone you're very nearly stuck with one carrier. So unless you see yourself switching your service on and off over time, or you enjoy switching hardware more often than once every 24 months, there's no real disadvantage to signing the evil contract.
donw 16y ago
Apple could, but chose not to. I'm one of not just a few people who would have happily ponied up $600 for an unlocked iPhone direct from Apple, mostly because I could then use it with both my Softbank and AT&T accounts. As is, I have to do the unlock dance, and have a phone that crashes semi-randomly. I'm very unlikely to buy another iPhone again, at least not unless they sell them as unlocked handsets, and I'm also unlikely to use it with AT&T. Shitting on your customers is such a stupid strategy.
dzlobin 16y ago
I actually don't see why this is so bad. There are only a handful of carriers and and I switch every 5 or 6 years at this rate. Right now I can enjoy a new phone, as I just did with a new blackberry, for free if I extend my contract, which I would do anyway. How would actually dropping $300 on my phone and then 'choosing' a new carrier help me at all? Especially when they peddle the same shit service and same shit customer support
- moultano 16y ago
  Plans get cheaper if there isn't a phone to subsidize (at least with T-mobile.) You end up spending less money over the course of the contract if you buy the phone directly.
  - dzlobin 16y ago
    According to the website, the contract-less 1000 min plan costs exactly the same as my 2-yr contract with at&t's 1000 min plan. Except I got a 500 dollar phone for free. Maybe if the discounts were much steeper and widespread, but as of now, I still don't see a reason.
    - rbranson 16y ago
      Are you looking at the Even More Plus? It's not contract-less (there's a document to sign and a credit check) as much as it doesn't require you to sign a long-term contract. It's month to month. While AT&T is saying $59.99/mo for 900 minutes, T-Mobile's 1000 is $39.99/mo, the real savings comes in the data and texting plans. 1000 minutes + Unlimited Text + Unlimited data is $69.99/mo with T-Mobile, versus the gouging AT&T gives you at $109.99/mo.
    - btmorex 16y ago
      I guess I'm missing something. t-mobile 1000 minute plan is $40 per month. at&t 900 minute plan is $60 per month. $20 * 24 = $480, roughly what your phone is worth except you're stuck with the carrier for 2 years.
detst 16y ago
I think compatibility would kill this practice. Maybe LTE can bring this? If we could buy a phone from Europe, off Craigslist, a phone from ATT but switch to Verizon, etc., and not worry about carrier, we would start to question the contracts and pricing structure. There would be a huge demand for discounts (with the real threat of being able to take our phone elsewhere if they didn't comply) on non-subsidized phones.

by simon_ 16y ago

gte910h 16y ago

I'd honestly prefer it was just legislated that we do it like Europe (where you see the amount you're paying for the phone itself, and there aren't really ETFs)

roel_v 16y ago
What's an EFT?
- gregstoll 16y ago
  An ETF is an Early Termination Fee, which you have to pay if you leave your contract early. It protects the carriers since they're subsidizing your phone.
  - pyre 16y ago
    You say that it 'protects' them, but it was only recently (last year or two) that they decided to pro-rate those fees. So a month before my 2-year contract is up, my ETF would be the same as if I cancelled within the first month. This is bogus if the reasoning is so that the carriers can 'recoup the cost of the phone that they were subsidizing.' Even with the pro-rated ETFs now, IIRC they won't be insignificant at the 'month before the end of a 2-year contract' point even though the carrier has obviously made back most (if not all) of their sunk costs by then... ETFs are there because the mobile carriers like to bank your monthly fees as a constant revenue stream, and when people cancel early it screws up their numbers and projections, much in the same way that banks penalize you for closing out a CD early. Talk about how it's to 'protect the carriers from people that cancel early without covering the full cost of the phone' is just people buying in to the BS story that the US mobile industry's PR depts have been telling us for years.
    - gte910h 16y ago
      > decided to pro-rate those fees. They didn't decide. Non-prorated fees were found to be unenforceable. I'd call that forced.
      - pyre 16y ago
        That's even worse. I didn't know the root cause of the change, just that it had happened.
        deleted 16y ago
        [deleted]

mattmaroon 16y ago

It would be great but it won't happen. Humans are genetically predisposed to wanting things that are free (even if, in reality, they only seem free). Number portability means carriers can't offer phones at steep discounts without the contract. People figure "I'm going to have a cell phone for the next 2 years anyway, I might as well just pick one carrier and get it for free."

joshhart 16y ago
Not sure about that entirely. Remember when computers were given away free with 3 years of AOL sign up in the late 90's? That fad only lasted a while.
- brg 16y ago
  At that time the subscription fees did not cover the cost of the hardware. Subscription fees were also falling due to decreasing barriers of entry into dialup and internet providers. Alternatives such as advertising did not cover the cost of the net-pcs either. For cellular phones, the $200-300 hardware cost is easily recouped over two years on a $70.00 monthly plan.
  - mattmaroon 16y ago
    Not only that, AOL didn't last long after that.
laut 16y ago
It is already reality to a certain degree outside of the US. The difference can likely be explained by how some combination of the economics, regulation, politics, culture, geography is different in the US.
- mechanical_fish 16y ago
  As has been pointed out elsewhere on the thread, the fact that there are multiple cellular radio standards in the USA (GSM and CDMA), combined with the fact that network coverage in the USA is so spotty (my colleagues in the Bay Area can't stop complaining about the poor AT&T coverage, whereas my AT&T coverage north of Boston is fine) means that you effectively don't have much choice of carrier. Once you choose a home and a phone you're very nearly stuck with one carrier. So unless you see yourself switching your service on and off over time, or you enjoy switching hardware more often than once every 24 months, there's no real disadvantage to signing the evil contract.

donw 16y ago

Apple could, but chose not to. I'm one of not just a few people who would have happily ponied up $600 for an unlocked iPhone direct from Apple, mostly because I could then use it with both my Softbank and AT&T accounts. As is, I have to do the unlock dance, and have a phone that crashes semi-randomly. I'm very unlikely to buy another iPhone again, at least not unless they sell them as unlocked handsets, and I'm also unlikely to use it with AT&T. Shitting on your customers is such a stupid strategy.

dzlobin 16y ago

I actually don't see why this is so bad. There are only a handful of carriers and and I switch every 5 or 6 years at this rate. Right now I can enjoy a new phone, as I just did with a new blackberry, for free if I extend my contract, which I would do anyway. How would actually dropping $300 on my phone and then 'choosing' a new carrier help me at all? Especially when they peddle the same shit service and same shit customer support

moultano 16y ago
Plans get cheaper if there isn't a phone to subsidize (at least with T-mobile.) You end up spending less money over the course of the contract if you buy the phone directly.
- dzlobin 16y ago
  According to the website, the contract-less 1000 min plan costs exactly the same as my 2-yr contract with at&t's 1000 min plan. Except I got a 500 dollar phone for free. Maybe if the discounts were much steeper and widespread, but as of now, I still don't see a reason.
  - rbranson 16y ago
    Are you looking at the Even More Plus? It's not contract-less (there's a document to sign and a credit check) as much as it doesn't require you to sign a long-term contract. It's month to month. While AT&T is saying $59.99/mo for 900 minutes, T-Mobile's 1000 is $39.99/mo, the real savings comes in the data and texting plans. 1000 minutes + Unlimited Text + Unlimited data is $69.99/mo with T-Mobile, versus the gouging AT&T gives you at $109.99/mo.
  - btmorex 16y ago
    I guess I'm missing something. t-mobile 1000 minute plan is $40 per month. at&t 900 minute plan is $60 per month. $20 * 24 = $480, roughly what your phone is worth except you're stuck with the carrier for 2 years.

detst 16y ago

I think compatibility would kill this practice. Maybe LTE can bring this? If we could buy a phone from Europe, off Craigslist, a phone from ATT but switch to Verizon, etc., and not worry about carrier, we would start to question the contracts and pricing structure. There would be a huge demand for discounts (with the real threat of being able to take our phone elsewhere if they didn't comply) on non-subsidized phones.