3 ms·

Why should the law protect loss leader strategies? My local supermarket does not get some special legal protection for its loss leader strategy with milk and e

Why should the law protect loss leader strategies? My local supermarket does not get some special legal protection for its loss leader strategy with milk and eggs. What makes cell phone companies worthy of this special protection of their business, which puts independent cell phone stores at a substantial disadvantage?

mrgoldenbrown 14y ago
The contract issue is mostly orthogonal to unlocking the phone - most contracts that give you a reduced price have a clause allowing you to cancel early, with a penalty cost that loosely approximates the subsidy that went towards your phone. The problem is that even if you wanted to pay this penalty, the DMCA makes it illegal to unlock your phone.
- betterunix 14y ago
  Except that you might want to unlock your phone even without canceling your contract. Maybe you want service from two cell providers simultaneously for some reason. Why should the DMCA stop you from doing that?
  - daxelrod 14y ago
    Some reason like traveling overseas.
  - mrgoldenbrown 14y ago
    We are in agreement. Orthogonal means the two issues (unlocking being legal under DMCA vs unlocking being prohibited by contract in exchange for a free phone) should be treated separately.
lysium 14y ago
Aren't airlines providing cheap tickets at a discount rate but with extra restrictions (no baggage, etc.)? Or discounted tickets that cannot be turned back, even when you are sick? I mean, if you don't like that, by an unsubsidized phone. I don't see the special treatment of the cell phone companies.
- betterunix 14y ago
  The difference is that the airline is selling you the right to sit on their airplane; the right to store your baggage on their airplane is another matter. In the case of the cell phone, your service contract is what gives you the right to use their network, and they are selling you a phone to use on that network. The special treatment is the DMCA, which forbids you from unlocking your phone regardless of the contract. This gives the cell companies an advantage by protecting a loss leader strategy: it is less risky for them to sell you a phone at a large discount which is locked, because it is illegal for you to unlock it whether or not you are under contract. It would be as if an airline sold you a discount ticket, and the law forbade you from having another company carry your luggage.
- jamieb 14y ago
  The difference is that if I choose to fly on a different airline I dont go to jail. However, even if I continue to pay my monthly bill, as required by the contract, but I unlock my phone so I can use it in Europe, I am guilty of a felony.
duskwuff 14y ago
A loss-leader strategy would be if the cell company was actually selling the phones at these discounted prices; they are not. They're only offered as a bundle with a contract.

mrgoldenbrown 14y ago

The contract issue is mostly orthogonal to unlocking the phone - most contracts that give you a reduced price have a clause allowing you to cancel early, with a penalty cost that loosely approximates the subsidy that went towards your phone. The problem is that even if you wanted to pay this penalty, the DMCA makes it illegal to unlock your phone.

betterunix 14y ago
Except that you might want to unlock your phone even without canceling your contract. Maybe you want service from two cell providers simultaneously for some reason. Why should the DMCA stop you from doing that?
- daxelrod 14y ago
  Some reason like traveling overseas.
- mrgoldenbrown 14y ago
  We are in agreement. Orthogonal means the two issues (unlocking being legal under DMCA vs unlocking being prohibited by contract in exchange for a free phone) should be treated separately.

lysium 14y ago

Aren't airlines providing cheap tickets at a discount rate but with extra restrictions (no baggage, etc.)? Or discounted tickets that cannot be turned back, even when you are sick? I mean, if you don't like that, by an unsubsidized phone. I don't see the special treatment of the cell phone companies.

betterunix 14y ago
The difference is that the airline is selling you the right to sit on their airplane; the right to store your baggage on their airplane is another matter. In the case of the cell phone, your service contract is what gives you the right to use their network, and they are selling you a phone to use on that network. The special treatment is the DMCA, which forbids you from unlocking your phone regardless of the contract. This gives the cell companies an advantage by protecting a loss leader strategy: it is less risky for them to sell you a phone at a large discount which is locked, because it is illegal for you to unlock it whether or not you are under contract. It would be as if an airline sold you a discount ticket, and the law forbade you from having another company carry your luggage.
jamieb 14y ago
The difference is that if I choose to fly on a different airline I dont go to jail. However, even if I continue to pay my monthly bill, as required by the contract, but I unlock my phone so I can use it in Europe, I am guilty of a felony.

duskwuff 14y ago

A loss-leader strategy would be if the cell company was actually selling the phones at these discounted prices; they are not. They're only offered as a bundle with a contract.