3 ms·

What happens when the buyer says "no, I'm not paying" and sells the phone? Instant money. Meanwhile the telecom company has to sell the debt at a massive disco

by jjmarr 2y ago

What happens when the buyer says "no, I'm not paying" and sells the phone? Instant money. Meanwhile the telecom company has to sell the debt at a massive discount to a collections agency or spend a ton of money collecting on it. That's assuming it can be collected on at all from someone that might just be running a scam. With a locked phone, the phone just stops working and loses most of its value. A rule forcing carriers to unlock phones after the term is up is fine. Forcing them to do it before is illogical. How many people are going to pay for two plans on one phone because they didn't like the first plan? I doubt it's more than those who will immediately abuse this rule and stop paying for the phone. I don't see the benefit to society here.

seabass-labrax 2y ago
Being able to use a second carrier without cancelling a contract with the first is useful for international travel; the 'roaming' rate is often much higher than the normal rate of other countries' local telcos. Plus, mixing-and-matching plans can be advantageous to the user in certain situations even within one country. For example, data-only plans are typically cheaper than data+calls, but one might still want a very modest calls plan for infrequent use - sometimes, better value can be attained by combining two separate contracts. Of course, whether or not telcos ought to allow such use of their contract handsets is another question entirely!
- neodymiumphish 2y ago
  If there’s a big enough market for this use case, I suspect at least one carrier would do so. I’d imagine this would include some sort of payment in escrow, temporary unlock feature, or an optional add-on. Otherwise, folks in this position should just buy the phone outright and unlocked so they don’t have any issues like you’re describing.
__MatrixMan__ 2y ago
The carriers getting screwed is the point here. The sooner their anticompetitive behavior backfires on them the sooner they'll stop doing it.
FireBeyond 2y ago
Simple. Since the major carriers these days offer "interest free installments" on phones, with subsidies or billing credits to make the TCO cheaper... then when this happens, the carrier: 1) loses no interest payments, 2) may lose installment payments, but this is a credit risk anyway - onus is on them to assess risk to a point of acceptability to them, and 3) get to not pay out the subsidies or billing credit. All this amounts to is an additional layer of securing a loan. And pre-emptively so. "You cannot unlock this device because others may abuse this." Assess identity and credit risk better. I have little sympathy for the carriers, after having to fight Verizon over the claim that I, living in Seattle, and being an AT&T customer for a decade with 4-6 lines and devices, somehow decided to go to El Paso and buy a phone at a Walmart on Verizon, run it up making international calls and let it go to collections. After supplying their (onerous, tbh) info around identity, police report, current utility billing and such, VZW said "We are still satisfied that the debt is valid and belongs to you, after reviewing your documentation with documentation that was supplied when the account was opened". When I said "well, given that you have verified my identity, and given that you state that the documentation you have from the account says that it was I who opened the account, I'd like to see that documentation". Verizon: "We cannot provide that data to you as it may violate customer privacy". Schrodingers account holder. It's me when they want to collect money, it's not me when they're concerned about sharing "someone's" info or billing records...
lancesells 2y ago
> What happens when the buyer says "no, I'm not paying" and sells the phone? This is just like any thing you get a loan for. It goes to collections and your credit gets hurt. Why would normal consumers have restrictions because of bad actors? AT&T operating income for 2023 was $23.5B and T-Mobile was $8.3B. Carriers are doing just fine.
- crazygringo 2y ago
  The point is loans are generally secured with collateral. The bank can repossess your car or your house. It's worth it to go through the expensive repossession process because those items are high-value. A carrier just eats the loss on a phone they provide but don't get paid for. The kinds of people who skip paying their cell phone bill generally have bad credit to begin with and couldn't care less if it goes to collections. The recovery rate for collections is pennies on the dollar. And you know who will suffer if more people are able to basically keep phones for free? Not the carriers. They'll just jack up prices for everyone to offset the additional losses. You think they're just going to eat the cost themselves?
  - aceofspades19 2y ago
    Why would a carrier give someone a phone if they have bad credit? It's not like they are mandated by law to provide everyone the latest iPhone regardless of credit score. I worked in customer support for Rogers(A Canadian phone carrier) for a very short period before it was mandated to have unlocked phones and people still stopped paying their bill even if the phone was locked. The vast majority of people want to pay their bills on time especially for something as critical as phone service. The people who don't, are going to not pay their bill no matter what sort of rules in place because they either simply don't have the money or they don't care.
    - crazygringo 2y ago
      > Why would a carrier give someone a phone if they have bad credit? Because phone locking means they're much more likely to pay it off, and so an unprofitable customer segment becomes a profitable one. Everybody wins -- the carrier doesn't lose money, and more people get phones. > The people who don't, are going to not pay their bill no matter what sort of rules in place That's simply not true. If it were, then carriers would never have bothered with the administrative overhead of locking phones in the first place. People do respond differently to economic incentives like whether their phone will turn into a brick or not -- that's Econ 101.

by jjmarr 2y ago

seabass-labrax 2y ago

Being able to use a second carrier without cancelling a contract with the first is useful for international travel; the 'roaming' rate is often much higher than the normal rate of other countries' local telcos. Plus, mixing-and-matching plans can be advantageous to the user in certain situations even within one country. For example, data-only plans are typically cheaper than data+calls, but one might still want a very modest calls plan for infrequent use - sometimes, better value can be attained by combining two separate contracts. Of course, whether or not telcos ought to allow such use of their contract handsets is another question entirely!

neodymiumphish 2y ago
If there’s a big enough market for this use case, I suspect at least one carrier would do so. I’d imagine this would include some sort of payment in escrow, temporary unlock feature, or an optional add-on. Otherwise, folks in this position should just buy the phone outright and unlocked so they don’t have any issues like you’re describing.

__MatrixMan__ 2y ago

The carriers getting screwed is the point here. The sooner their anticompetitive behavior backfires on them the sooner they'll stop doing it.

FireBeyond 2y ago

Simple. Since the major carriers these days offer "interest free installments" on phones, with subsidies or billing credits to make the TCO cheaper... then when this happens, the carrier: 1) loses no interest payments, 2) may lose installment payments, but this is a credit risk anyway - onus is on them to assess risk to a point of acceptability to them, and 3) get to not pay out the subsidies or billing credit. All this amounts to is an additional layer of securing a loan. And pre-emptively so. "You cannot unlock this device because others may abuse this." Assess identity and credit risk better. I have little sympathy for the carriers, after having to fight Verizon over the claim that I, living in Seattle, and being an AT&T customer for a decade with 4-6 lines and devices, somehow decided to go to El Paso and buy a phone at a Walmart on Verizon, run it up making international calls and let it go to collections. After supplying their (onerous, tbh) info around identity, police report, current utility billing and such, VZW said "We are still satisfied that the debt is valid and belongs to you, after reviewing your documentation with documentation that was supplied when the account was opened". When I said "well, given that you have verified my identity, and given that you state that the documentation you have from the account says that it was I who opened the account, I'd like to see that documentation". Verizon: "We cannot provide that data to you as it may violate customer privacy". Schrodingers account holder. It's me when they want to collect money, it's not me when they're concerned about sharing "someone's" info or billing records...

lancesells 2y ago

> What happens when the buyer says "no, I'm not paying" and sells the phone? This is just like any thing you get a loan for. It goes to collections and your credit gets hurt. Why would normal consumers have restrictions because of bad actors? AT&T operating income for 2023 was $23.5B and T-Mobile was $8.3B. Carriers are doing just fine.

crazygringo 2y ago
The point is loans are generally secured with collateral. The bank can repossess your car or your house. It's worth it to go through the expensive repossession process because those items are high-value. A carrier just eats the loss on a phone they provide but don't get paid for. The kinds of people who skip paying their cell phone bill generally have bad credit to begin with and couldn't care less if it goes to collections. The recovery rate for collections is pennies on the dollar. And you know who will suffer if more people are able to basically keep phones for free? Not the carriers. They'll just jack up prices for everyone to offset the additional losses. You think they're just going to eat the cost themselves?
- aceofspades19 2y ago
  Why would a carrier give someone a phone if they have bad credit? It's not like they are mandated by law to provide everyone the latest iPhone regardless of credit score. I worked in customer support for Rogers(A Canadian phone carrier) for a very short period before it was mandated to have unlocked phones and people still stopped paying their bill even if the phone was locked. The vast majority of people want to pay their bills on time especially for something as critical as phone service. The people who don't, are going to not pay their bill no matter what sort of rules in place because they either simply don't have the money or they don't care.
  - crazygringo 2y ago
    > Why would a carrier give someone a phone if they have bad credit? Because phone locking means they're much more likely to pay it off, and so an unprofitable customer segment becomes a profitable one. Everybody wins -- the carrier doesn't lose money, and more people get phones. > The people who don't, are going to not pay their bill no matter what sort of rules in place That's simply not true. If it were, then carriers would never have bothered with the administrative overhead of locking phones in the first place. People do respond differently to economic incentives like whether their phone will turn into a brick or not -- that's Econ 101.