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Verizon Defends Doubling of Early Termination Fee 319

Posted by Soulskill
from the we-decided-we-liked-money dept.
I Don't Believe in Imaginary Property writes "Verizon is defending its decision to double its Early Termination Fee from $175 to $350 after being called to account by the FCC. They claim it's because the higher fees allow them to offer more expensive phones with a lower up-front cost (PDF), and they also say that because they pro-rate the fee depending on how much of your contract is left, they still lose money. Apparently doing something about the Verizon customer service horror stories isn't as good a way to retain customers as telling them that they have to pay several hundred dollars to leave."
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Verizon Defends Doubling of Early Termination Fee

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  • Maybe consumers would have a better chance at fairness if Verizon had to justify itself to the FTC.

    • Fairness? (Score:5, Interesting)

      by grapeape (137008) <mpope7@kc . r r . c om> on Saturday December 19, 2009 @12:40PM (#30499044) Homepage

      Fairness would be selling the phones at standard unlocked prices and letting people buy their contracts ala carte. Of course that would also mean much higher phone prices, how many people would buy the iphone or Droid at $600? In the long run consumers would be better off for it, but many seem to want the latest and greatest but don't want to pay more than a couple hundred bucks to get it.

      In Verizon's defense, they are likely looking to stop some of the scamming that goes on with newer phones. I know of a couple local discount cellular stores near me that was having employees buy iphones, keep them 30 days so that the return policy is no longer in effect and then pay the early termination fee, for a 32gb 3gs they nearly double their money. Perhaps a better option would be a tiered ETF?

      • Re:Fairness? (Score:5, Insightful)

        by orlanz (882574) on Saturday December 19, 2009 @01:47PM (#30499564)

        I think a better deal would be to split the discount you get for the phone and the charges for the actual service. Its that simple. On your bill, you get your Phone mortgage and your plan charges.

        Then we can discuss further separating the link between the phone and the plan. The phone aspect should be treated like a straight out loan. You pick one of: the monthly payment, interest rate, or duration of loan and the provider picks the other two. Of course you should have a "buy out" option on each statement that tells you how much you need to pay to completely OWN the phone.

        THEN we can realistically compare and discuss the discounts that providers give for service contracts. Right now, the system is too hidden and vague. It severely prefers customers who jump providers every 2 years and creates a lot of waste (useless phones). It punishes current and future loyal customers. Customer acquisition is a LOT more expensive than keeping current customers, and the system prefers the former with the later bearing the additional expense burden.

        • Re: (Score:3, Interesting)

          by aaarrrgggh (9205)

          Furthermore, customers can actually benefit from using their phone beyond the mortgage period! The current system is designed to scam consumers, as you pay the same price for service if you bring your phone or get one subsidized by the carrier.

          An early termination clause is reasonable for some non-subsidy costs, but since they already charge you an activation fee, it is pretty hard for me to believe there is residual customer acquisition costs. (Customer retention costs should not be paid by a departing c

      • Re:Fairness? (Score:4, Insightful)

        by haruharaharu (443975) on Saturday December 19, 2009 @02:02PM (#30499654) Homepage

        Of course that would also mean much higher phone prices, how many people would buy the iphone or Droid at $600?

        Lots - nothing stops verizon from financing the thing separately and adding the payments to your account. Pay off the phone? Your bill goes down.

      • Re:Fairness? (Score:5, Insightful)

        by Znork (31774) on Saturday December 19, 2009 @03:00PM (#30499970)

        how many people would buy the iphone or Droid at $600?

        As many as buy cars, TV's, or any other consumer item on credit? It wouldn't be much different for cable networks to offer TV's with their subscriptions, or, to have a car analogy, gas companies that give you a car and require you to pay for an amount of gas each month.

        But either way it's pretty much a scam; financing baked into the price which makes it easier to trick consumers into non-competitive rates for both the consumable and the financing.

      • Re: (Score:3, Insightful)

        by poetmatt (793785)

        cost of the droid (build cost) for verizon to obtain them is probably not above $100-150 absolute maximum, and likely under $100. The magic 600$ is a number pulled out their asses to imply value and to rationalize the ETF as they are trying to do. It's a bunch of doublespeak and hopefully people will learn eventually.

  • Meh. (Score:4, Insightful)

    by RightSaidFred99 (874576) on Saturday December 19, 2009 @12:16PM (#30498872)

    Verizon sucks anyway. Their plans are laughable. Try pricing out a smartphone plan with them. Oh, and don't forget the (lol) extra $24 for the data plan. For an average family plan with smartphones they come out to like $40+ more than Verizon for just two lines, and it goes up as you get more lines.

    Verizon can rot in hell. Can you hear me now? Yes? Well, what I said was "fuck you, Verizon".

    • Oops, "they come out to like $40+ more than Sprint", that is.
    • by Ogive17 (691899)
      I only pay $65/month through Verizon for my blackberry storm. I consider that a good deal since my co-worker has an iPhone 3G and pays $80/month for the same plan and the phones have very similar features.
  • If they didn't get you on the back end, they could just charge you more up front to buy the phone, then amortize the up front cost through lower monthly bills, until in the end you pay the same amount. That way, they could even offer "no termination fee!" But I'm sure somebody would still get pissed at call it deceptive business practices. It's a free market, and they can charge anything they like. This is a total non-story.

    Please, Slashdot, can we have a way to filter out stories by submitter? I don't

    • by nurb432 (527695)

      I agree that they have the right to run off business due to exorbitant fees/prices, but, if they change any terms DURING your current contract you should have the right to terminate with no fee or other repercussions. And yes, the that section of their TOS allowing them to do that should be struck down as deceptive.

      Furthermore, if you don't like the posts from an individual, try this : DONT READ THEM.. geesh. You are whining as much as you claim others are..

    • by timeOday (582209)

      If they didn't get you on the back end, they could just charge you more up front to buy the phone, then amortize the up front cost through lower monthly bills, until in the end you pay the same amount. That way, they could even offer "no termination fee!" But I'm sure somebody would still get pissed at call it deceptive business practices.

      You just made that up. Why do you think it? Obscure down-the-road fees are deceptive; up-front charges are not. They're two different things. That's the whole point.

      • by gbjbaanb (229885)

        but I thought this was for ending the contract early, so they're not exactly obscure charges - most people enter into a phone contract for a fixed amount of time and expect to have to honour that for that time. If they want to leave early, they should expect to either not be allowed at all (ie have to continue to pay the contracted-into bills), or pay a fee to agree to break the contract.

        As long as there are no fees to pay once the contract term is up, this is still a somewhat non-story.

    • by ultranova (717540)

      Please, Slashdot, can we have a way to filter out stories by submitter? I don't think I've ever seen a story from "I Don't Believe in Imaginary Property" that doesn't irritate me with its smug sanctimony and total irrelevance. Personally, I don't believe in imaginary news.

      If they did, I'm sure somebody would still get pissed at call it deceptive news reporting. It's a free market, and Slashdot can filter its stories anyway they like. Your whining is a total non-story.

      And personally, I've never seen a post

    • ...that a totally “free” market, is the exact same thing as the law of the jungle?

      Which is the opposite of democracy on the “democracyness” scale. (Beware, that I don’t say that that scale can’t have negative numbers too. :)

      If you tell that to a fundamentalist “free market” republican, does his head explode? ^^

      “We must have a democracy.
      But we must also have a completely free market.
      But we must have a democracy.
      But... aaaaahhhh *BANG*”

    • by nexuspal (720736) on Saturday December 19, 2009 @02:54PM (#30499940)
      It's an oligopoly (with a high risk of collusion)...
      • by Anonymous Coward on Saturday December 19, 2009 @03:09PM (#30500010)

        It's an oligopoly (with a high risk of collusion)...

        You think? A couple years back, text message cost 10 cents on AT&T, Sprint, T-Mobile, and Verizon Wireless. Then surprise-- they all go up to 15! Then 20!

        500 text messages take up less bandwidth [consumerreports.org] than a minute of conversation.

        I'd say there's a high risk of collusion too.

      • Re: (Score:3, Insightful)

        Oligopolies are perfectly capable of being formed in a free market economy. A free market refers to the lack of governmental intervention except in cases of force or fraud. An oligopoly is a market segment (whether in a free market, a socialist economy, or even anarchy) that is dominated by a small group of entities. The two concepts are not incompatible, or even comparable. Saying "it's not a free market, it's an oligopoly" is a non-sequitur. It's kind of like saying "it's not a car, it's blue".

  • by eldavojohn (898314) * <eldavojohn.gmail@com> on Saturday December 19, 2009 @12:22PM (#30498908) Journal
    AT&T CEO: So, basically when the new iPhone 3GS++ comes out, people will be leaving other carriers in droves.
    Verizon CEO: No matter, every customer signed a contract with more words than the US Constitution which means they either didn't or are unable read it. In that contract, we reserve the right to increase our crippling early termination fee. So we'll juice that up to lock in size and by the time most customers can leave, we'll have an answer to your latest model.
    Verizon Shareholder: I approve.
    Verizon Customer: Why does my ass hurt?
    • by pitchpipe (708843)
      Man, I would love to get the Droid, but I had Verizon. I'd rather shoot myself in the head than go back to that nightmare of a company. Don't get me wrong, I have AT&T and I really hate how they've spied on us, but this is a case of choosing Satan himself or one of his lowly henchmen who - when he fucks you in the ass - will at least use some lube.
    • Uuum, one question: Here in Germany, no company can change a contract in “mid air”, without asking you for permission. They can send you a letter where they tell you about the changes. But you can then terminate the contract without having to pay anything, if they don’t want to keep your original contract. They can’t do anything about it. I’ve done it some times.

      Is’t that the case in the USA too? If Verizon would send me a “change in contract”, with the new te

      • Re: (Score:3, Interesting)

        by ottothecow (600101)
        I believe this is true with verizon's contract as well...

        I often see threads on slickdeals.net saying something like "Get out of your $wirelessprovider$ account free!". People there look out for changes in the small print (or in the case of termination fees...big print) which opens you up to something like 30 days to break your contract without penalty.

        Of course, they like to do this on slickdeals because they can go jump into a new contract for another free/subsidised phone that is however much newe

  • Don't pay the fee (Score:4, Insightful)

    by Kohath (38547) on Saturday December 19, 2009 @12:22PM (#30498914)

    If you don't want to pay the fee, you should avoid it by not signing an agreement with Verizon. If you don't like Verizon's customer service, you should avoid it by not signing an agreement with Verizon. Or sign an agreement and live up to your obligations and avoid the fee that way.

    Don't hire the government to force the people at Verizon to do things against their will -- unless the people at Verizon have truly defrauded you, personally, out of a significant amount of money. Because forcing people to do things against their will is (almost always) morally wrong.

    • by jkgamer (179833) on Saturday December 19, 2009 @12:57PM (#30499160)

      I agree with you 100 percent, well almost. Forcing Verizon to do anything that isn't in their corporations best interest is morally wrong. Because we all know that large corporation are only looking out for what is best for the consumer! If you get a "free" phone from Verizon for your aging mother so that she can stay in contact with you more easily, well then you SHOULD have to pay the early termination fee of $350.00 for that $29.99 piece of electronics when she passes away on the 21st month of your contract. And while we are at it, let us remove those other pesky regulations that the goverment has placed upon these large corporations. Let us remove the one where they are required to pay a minimum wage to their employees. We all know that this is just costing us jobs. Hell, my cousin Bruce could be making as much as 50 cents an hour AND have a job if it wasn't for that pesky goverment interference. Shame on you Mr. President (Because we all know that he REALLY makes all the laws, the Congress and Senate are just for show.) Let's remove the regulation that says Verizon must provide access to their lines from other competitors as well. I don't want no stinking Sprint customer to be able to call me. (You and your aging mother are using the SAME provider, aren't you?)

      My point is that a truly and totally free market is a farce. There has to be a balancing act performed to keep the market truly competitive and profitable. Unfortunately, one groups idea of fair and balanced differs from another groups idea of fair and balanced. That is why we need regulation. Maybe this particular case isn't one that requires regulation. Maybe this particular case works as it currently is implemented. Obviously not everyone believes that, especially the person who DIDN'T get a DROID and then for whatever reason had to cancel their contract two months early.

      Oh and one more thing. Maybe forcing PEOPLE to do something is morally wrong, but corporations are NOT people. People generally have to live with their actions, a corporation can merely disolve itself and start up as a completely different corporation. It is a lot more difficult for a person to simply disolve their identity and reappear under a completely new one free of all legal and moral obligations of their past actions. If the US goverment is going to provide corporations with that type of benefit then they do have a MORAL responsibility to make sure they don't abuse it.

      • Re:Don't pay the fee (Score:5, Informative)

        by causality (777677) on Saturday December 19, 2009 @01:28PM (#30499412)

        My point is that a truly and totally free market is a farce. There has to be a balancing act performed to keep the market truly competitive and profitable. Unfortunately, one groups idea of fair and balanced differs from another groups idea of fair and balanced. That is why we need regulation. Maybe this particular case isn't one that requires regulation. Maybe this particular case works as it currently is implemented. Obviously not everyone believes that, especially the person who DIDN'T get a DROID and then for whatever reason had to cancel their contract two months early.

        The only way you would ever have a free market is if the average person always fully understood both the product/service that is being sold AND any contract that goes along with it. Even that wouldn't be enough. You would then need for all people, as individuals, to be willing to boycott a company (even in the absence of a competitor) and bring it to its financial knees and to be willing to do this over even minor abuses. They must do this individually and not as the result of some organization's decision, and nearly all of them must do so. Then if a corporation even remotely looks like maybe it is screwing someone over, it gets faced with its own bankruptcy and made an example of. This will put other corporations on notice, proving to them that anything resembling bad-faith or malfeasance absolutely will not be tolerated and will be punished at all costs.

        This model would not result in more bankrupt companies. It would result in companies complying with the wishes of the people in order to make a profit, just like everything they do now is for profit. The only thing that would change are the particular behaviors that lead to profitability. This would radically change the way citizens relate to corporations. It would fundamentally alter the balance of power. Right now that balance of power favors the corporations -- they are the major players in the market, and most customers cannot truly negotiate with them but must instead accept contracts of adhesion. They have the money and the lawyers and the political clout, meaning they can alter laws in their favor RIAA-style.

        Until and unless people come to see it this way, we will indeed need government regulation. Government is about the only thing big enough and powerful enough to deal with corporations that are often larger than many nations. Even then we have the problem of well-funded lobbyists that were not sent to Washington by average citizens, but by monied interests. That's why I think this is ultimately only a partial better-than-nothing solution, as it merely relocates the problem from the marketplace to the realm of public policy.

        • Until and unless people come to see it this way, we will indeed need government regulation.

          Who will regulate the government and prevent its corruption? You state,

          The only way you would ever have a free market is if the average person always fully understood both the product/service that is being sold AND any contract that goes along with it.

          How is that not similar to the politicians people vote for? You're just treating the government as a benevolent, righteous deity because "IT'S SUPPOSED TO" carry out j

          • by SanityInAnarchy (655584) <ninja@slaphack.com> on Saturday December 19, 2009 @02:05PM (#30499672) Journal

            But the world doesn't run on wishes. You can't escape the necessity for people to be responsible and informed, first and foremost, and when they are that makes the need for regulation unnecessary.

            That just about made me do a double-take.

            The world doesn't run on wishes. You can't escape the reality that people won't be responsible and informed. Informed is important here, too, and is part of the job of regulation -- for example, we have laws about food safety, so I can walk into any restaurant with some confidence that the food there is safe to eat. You could have a totally free market, in which independent organizations certify particular restaurants as "safe", but then the customers would have to constantly be checking those certifications.

            • by causality (777677)

              But the world doesn't run on wishes. You can't escape the necessity for people to be responsible and informed, first and foremost, and when they are that makes the need for regulation unnecessary.

              That just about made me do a double-take.

              The world doesn't run on wishes. You can't escape the reality that people won't be responsible and informed. Informed is important here, too, and is part of the job of regulation -- for example, we have laws about food safety, so I can walk into any restaurant with some confidence that the food there is safe to eat. You could have a totally free market, in which independent organizations certify particular restaurants as "safe", but then the customers would have to constantly be checking those certifications.

              That's one area where the argument for regulation is unusually strong. If you get screwed over when you buy a car, you can always decide not to do business with that company again. If you go to a restaurant, eat the food, and die of food poisoning, it's going to be pretty hard to vote with your feet and take your business to a competitor when you're dead.

              I'm not a fan of regulation, but this is one of its more benign forms. There's not a lot of political power to be had by verifying food safety. It's

            • Re: (Score:3, Insightful)

              by bzipitidoo (647217)

              Informed? I have a few words for you: Confusopoly [wiktionary.org]. Shrink wrap contract [wikipedia.org]. "Doubt is our product."

              That's right, these businesses are actively trying to prevent us from informing ourselves, sowing confusion. When called to account, they often try to weasel out with disclaimers about no real harm having been done, that they didn't intend to keep people in the dark, that it was all an innocent mistake. Inexcusable, and very evil. Be careful about implying it's all the customer's fault with that "won't"

          • by causality (777677)

            Until and unless people come to see it this way, we will indeed need government regulation.

            Who will regulate the government and prevent its corruption? You state,

            The only way you would ever have a free market is if the average person always fully understood both the product/service that is being sold AND any contract that goes along with it.

            How is that not similar to the politicians people vote for? You're just treating the government as a benevolent, righteous deity because "IT'S SUPPOSED TO" carry out justice. But the world doesn't run on wishes. You can't escape the necessity for people to be responsible and informed, first and foremost, and when they are that makes the need for regulation unnecessary.

            I don't know how you managed to do it, but you somehow interpreted my words in the exact opposite way in which they were intended. I straight up said that what you need are people who are responsible and informed -- you quoted the very line in which I said it ("The only way you would ever have a free market...").

            To me, government regulation is a sorry substitute for a fully informed, savvy public who makes good rational decisions in the marketplace. I said as much, when I stated that government regulat

        • People rationalize. "Not enough people will do it, so it won't have any effect, so it's pointless for me boycott ACME Paper Co." The only thing in our culture that needs to change is for most of us to decide to patronize or boycott a company for the sake of claiming integrity, and not because we think our one dollar will make a difference.

          This is why some individuals sort their garbage or buy a hybrid car, or refuse to buy dvd's. They (we) want feel like we have some integrity.

          Verizon has a phone I reall

          • by causality (777677)

            People rationalize. "Not enough people will do it, so it won't have any effect, so it's pointless for me boycott ACME Paper Co." The only thing in our culture that needs to change is for most of us to decide to patronize or boycott a company for the sake of claiming integrity, and not because we think our one dollar will make a difference.

            I've heard the essential difference explained this way. You can act because you wish to engineer a particular outcome, in which case all of your thoughts and actions are

      • There has to be a balancing act performed to keep the market truly competitive and profitable.

        Shouldn't that be you?

        Everywhere I go people claim we need some great authority to keep a smaller "authority" in check. We need a city government to rule over people, because people might do bad things. We need county governments to rule over the cities, in case the city does something wrong. We need a state government to watch over the county governments. We need a federal government to make sure the states do

      • You could have said that in a shorter form:

        1. A totally free market has no rules at all.
        2. When there are no rules at all, that is called “the law of the jungle”.
        3. On a scale of how democratic something is, a perfect democracy is at 1.0, and the law of the jungle is at 0.0. (And 1984 is somewhere down the negative values. Hence that quote, that fascism should be called corporatism.)
        4. Therefore, the free market and proper democracy are natural opposites.

    • by DebianDog (472284)
      Oh please . Can I sign up, get service, and not sign and agreement? NO. Now exactly would I know how good their customer service, the network, or coverage is without signing up with them? Then once I find out how crappy the service for -my- needs I am stuck? Then they can charge -ANY- amount of $$$ to release me from crappy service? Sorry buddy there should be some level of oversight. Luckily Verizon is awesome -here- and I have been a customer for 8 years!
      • by karnal (22275)

        That's my main trouble with service from the cell companies.

        Let's say I wanted to buy a phone - like my current Fuze/touch pro. So I buy it in full, up front for say 600$ (not sure what they were initially, but this is a good starting point.) There is no way I can go month to month with them without getting one of their packages ($30 data, xx for xx minutes of voice etc.) And - this package is at the exact same price point that the people whose phones are subsidized are paying.

        If I bring the phone to the

      • Oh please . Can I sign up, get service, and not sign and agreement? NO. Now exactly would I know how good their customer service, the network, or coverage is without signing up with them?

        You're right, there is absolutely no way to research this information.

        While I'm no fan of the telcos and know that their math is skewed, it's not like you can't do a little googling before making a two-year commitment to something. Or ask some friends / coworkers; more than likely at least a couple of them are going to have verizon.

      • Oh please . Can I sign up, get service, and not sign and agreement? NO. Now exactly would I know how good their customer service, the network, or coverage is without signing up with them? Then once I find out how crappy the service for -my- needs I am stuck? Then they can charge -ANY- amount of $$$ to release me from crappy service?

        If only there was some sort of short term period [verizonwireless.com] wherein you could return the phone for a small "restock" fee (ie: the non return of the activation charge and pay only for your actual usage and have the contract null and void. SIGH!

    • by Jawn98685 (687784) on Saturday December 19, 2009 @01:13PM (#30499278)

      Don't hire the government to force the people at Verizon to do things against their will -- unless the people at Verizon have truly defrauded you, personally, out of a significant amount of money. Because forcing people to do things against their will is (almost always) morally wrong.

      Obviously, you missed the part about "the agreement" being intentionally and maliciously complex, to the point that it is indecipherable to the average customer. Said customer, having been assured by the friendly sales rep, "It just says [insert standard salesman bullshit rap here]", signs anyway, in the mistaken belief that he's dealing with a fair and honorable business.
      There are laws against trying to cheat customers. Hiding your draconian terms in an indecipherable "agreement" is anything but fair and honest. It should be illegal.

      • by Shakrai (717556)

        Said customer, having been assured by the friendly sales rep, "It just says [insert standard salesman bullshit rap here]", signs anyway, in the mistaken belief that he's dealing with a fair and honorable business.

        If you believe what the salesman tells you then you are already a lost cause. His job isn't to look out for your best interest. His job is to sell.

        Hiding your draconian terms in an indecipherable "agreement" is anything but fair and honest. It should be illegal.

        The reason that businesses in the United States have such agreements is because of the ease with which you can sue people in this country. Because of this lawyers have an outsized amount of influence and insist on covering every possible base in any account agreement. It has less to do with "Let's screw our customers!" and more to do with "Let's try not to g

        • If you believe what the salesman tells you then you are already a lost cause. His job isn't to look out for your best interest. His job is to sell.

          Shortsighted at best. His job may well be to sell to you, personally, and he may get a commission from you. But ripping you off with a bullshit story is detrimental to the company as a whole, at least in theory.

        • Re: (Score:3, Insightful)

          by tomhudson (43916)
          Two points:
          1. In many jurisdictions, what the salesperson said is legally binding on the company, even if the actual contract says otherwise;
          2. Back in the day, Borland had a simple license. You don't have to have a license be overly complex if both sides are dealing in good faith.
      • I let salesmen really feel the pain, by sloowly reading the whole contract and terms... twice... asking for any and all the tiniest unclarities, until I perfectly and fully understand it. And if he loses his patience, I call the police and tell them some criminal want so pull a con job on me, and now started to threaten me.
        Then when I’m done, sometimes I simply say: Sorry, that thing is criminal, offensive and not acceptable. And drop it on the floor like it’s a piece of cloth used for cleaning

    • Re: (Score:3, Insightful)

      by vvaduva (859950)

      I couldn't say it better; the contract people sign with Verizon is voluntary...nobody is holding a gun to your head, so go to a competitor. The market will sort things out in the end.

      • Re: (Score:2, Insightful)

        by lorenlal (164133)

        so go to a competitor. The market will sort things out in the end.

        What's interesting here is that those competitors have similar contracts, setups, fees, etc. At what point does regulation step in and say, "You aren't playing by the rules?"

        Suppose the major vendors decide that when one of them raises prices, rather than compete with an advantage, they raise their own prices to match? At what point does it become collusion and price gouging?

        I ask because it appears to me like the market is nearly impossible for new players to jump into.

      • the problem in the US market anyway is that *all* of the providers are pirates. you can go to a competitor, but you get screwed there as well, albeit in a different manner probably. i guarantee that at&t is just waiting to see what the FTC does with verizon's ETF. if it stands, they'll bump their own shortly.

        the fact of the matter is that lower ETF's aren't something that providers can effectively use for marketing against their competitor. consequently all the providers will have similar ETFs in the lo

    • by db32 (862117) on Saturday December 19, 2009 @01:18PM (#30499326) Journal

      Forcing kids to do homework or eat vegetables or stopping drunk drivers, rapists, murders, thieves, genocidal dictators, slave owners/traders, and so on is all morally wrong? To say "almost always" is a little overboard, not that I disagree with the notion you are trying to get across. I just think the situations in which it is not morally wrong to stop someone happen a lot more often than you imply.

      In this case...the trouble is that the government is giving verizon special permission in order for them to operate their service (frequency usage, tower locations, etc). Additionally, the whole notion of contracts that one side can unilaterally change at any given time is pretty stupid too.

      That said, fraud is one of those things that should be stopped. There are plenty of conmen that tell "the truth" but do it with so much smoke and mirror tapdancing that people still sign up. What you are attempting to do is blame the victim by letting verizon totally of the hook. So...they say it is to help subsidize the phone. Why is it that I would get subjected to the termination fee if I brought my own phone? This also adds to the issue that they claim they recoup the cost of the phone through their rates and the ETF makes up for the people who leave early. Well...why don't I get a lower rate for bringing my own phone? Or why don't I get my rate reduced after I have paid back the subsidized portion of the phone? I am guessing you haven't seen the leaked meetings where they talk about how many billions they make using various fraudulent billing tactics. They force people to burn minutes as they sit through the ever growing "welcome to your verizon voice mail and blah blah blah and blah and blah blah blah pres blah blah blah" messages.

      I agree that we shouldn't hire the government to force Verizon to do things against their will. However, calling them out for deceptive and fraudulent bullshit is not the same. (Their argument for why they hide the ETF is that it is 'not important' and they got busted on that when it was decided that big ETFs qualify as materially important pieces of a contract). I think the best solution would actually to slap "users of any service provided using these frequencies cannot be subject to early termination fees or have their service terminated for excessive roaming" in the fine print of the agreements they have with the FCC to even operate. I bet they would scream bloody murder at such a one sided contract change...and then we can tell them "Well you shouldn't have signed anything with the FCC, you could have started your service in the Sahara where there is no FCC."

  • by wizardforce (1005805) on Saturday December 19, 2009 @12:24PM (#30498926) Journal

    Verizon's guilty of a lot more than merely doubling their early termination fees. They've also tried to pin about 300$ in botgus charges to a friend of mine's account when she tried to leave them. I hope the FTC nails them to the nearest cross.

  • by Herger (48454) on Saturday December 19, 2009 @12:25PM (#30498930) Homepage

    The FCC and FTC definitely need to step in the the wireless market. Policies like this promote stagnation and high prices.

    Why should the customer be bound to a wireless contract when this doesn't apply to landlines? I've said before that wireless contracts are keeping prices artifically high, allowing providers to charge quite similar rates for similar plans, because it is so difficult to switch. If customers were not tied to contracts, the ensuing price war might bring wireless rates down closer to prices that I have seen outside the USA.

    Speaking of other countries - Why is the USA one of few countries where I can't just pop the SIM or UICC card out of my handset and put it into a new one? Why did it take intervention by the Chinese government to force device manufacturers to standardize chargers to minimize electronic waste?

    • by peragrin (659227)

      well to start with we don't have just GSM networking. Verizon uses CDMA, and sprint uses a different type of CDMA. So gsm only work with AT&T and tmobile. So you can SIM swap however swapping to other carriers is useless as tmobile has shitty coverage in the USA.

      Good news as it stands now both Verizon and AT&T are going to support LTE for their 4G cell phone tech so in about 10 years sim swapping will be semi practical. sprint is going the wi-max route.

      Chargers are a different problem and your to

  • by BadAnalogyGuy (945258) <BadAnalogyGuy@gmail.com> on Saturday December 19, 2009 @12:25PM (#30498932)

    The total lack of customer service, the terrible coverage, and the relatively subpar implementation of cellular service in the US compared to other countries is not just a problem with Verizon. It is a problem industry-wide, and it is only getting worse.

    With the economy in the toilet, these companies are losing customers like the Bucs lose football games. This means they don't have the financial wherewithal to build out the necessary networks. And due to this, customer service continues to decline.

    Maybe it is time to nationalize the whole wireless carrier system and slowly parcel out contracts to private companies for the day-to-day operations. If we can punish these carriers by taking away their networks, we will see real change in customer service and subsequently real competition and improvements across the board.

    As long as private companies run these networks, we're stuck with the worst possible system for cellular phone users. It may be a cultural thing because Asian and European companies don't seem to screw over their customers so badly, but it's our culture and we should (as a nation) take it back.

  • they also say that because they pro-rate the fee depending on how much of your contract is left, they still lose money.

    ...So, they claim to be losing money on all the subscribers who don't cancel their contracts early?

    That can't possibly be right, maybe I should go RTFA to see if it really says the same thing...

    • This is "loss" the same way that the RIAA "loses" money when you download your music. In other words, they define the word differently than everyone else, but do not mention their different definition in an effort to confuse you.
  • by mark-t (151149) <markt@@@lynx...bc...ca> on Saturday December 19, 2009 @12:33PM (#30498984) Journal

    "they also say that because they pro-rate the fee depending on how much of your contract is left, they still lose money"

    Wow... that's the biggest load of BS I think I might have seen all week.

    They don't lose money off of the pro-rated fee... at absolute worst they lose money because they lost a customer, and even that's unlikely unless the company is teetering on the edge of bankruptcy. Heck, if a customer terminates early and the company collects that fee, they can actually earn interest on the whole termination fee sooner instead of collecting it over a period of several years.

    I'm not sure in what sort of reality they think saying something like this would be likely to make anybody feel even slightly sorry for them.

    • by Solandri (704621)
      I don't even understand why there should be early termination fees. If they want to subsidize the cost of the phone, just give the person a loan and add its repayment costs to the monthly charge. They already pull your credit report when you sign up for service anyway. If the customer leaves early, the remaining balance of the loan becomes due. Simple and keeps the numbers straight and legit.

      The only reason the cellular companies play this subsidized phone and early termination fee charade is to take
    • Re: (Score:3, Informative)

      by farble1670 (803356)

      additionally, the idea that they pay $600 for a droid phone is BS. they are the single distribution channel for the droid in the US. that means that motorola is bending over to have them push their phone. they are getting droids at a massive discount over what a normal consumer would pay for the unlocked phone.

  • by ceoyoyo (59147)

    Wow. My early cancellation fee is $500. And contracts are three years, not two.

  • . . . need to be regulated like the installment loan contracts they actually are, and subject to the Truth In Lending Act.
    • Mod parent up. Don't fix the symptoms, fix the problem. Make them clearly state the fact that you are entering a finance deal on the phone as well as entering a contract. It's not a free phone, it's not a phone that you are renting, it's a phone that you are buying with a loan from the phone company. You should be able to see what the interest rate is (much higher than most banks will offer for an unsecured personal loan) and have it billed as a separate line item to the cost of connection (if there is

  • Since this is the crux of it...

    Verizon Wireless said Friday that it doubled the fees for customers to break service contracts for smart phones because those devices cost much more.

    and other companies have not raised their ETF incredibly (including AT&T, who just so happens to have rights to the most smartphones, including iPhone), it basically comes down to maximizing profit with the added benefit of increasing retention rate. In other words, they want more money.

    However, it's not completely bleak, since they do decrease the ETF like other carriers do:

    Verizon, like several other carriers, lowers the price of the early termination fee over the length of the contract. A Verizon customer who canceled a two-year contract after 23 months would still be charged $120, though.

    It must suck if Verizon Wireless is one's only option. If it isn't, it makes zero sense to switch (

    • by tepples (727027)

      it makes zero sense to switch (except for network coverage, but AT&T is practically right there with them).

      For one thing, there's a map for that. For another, Verizon has been known to lock out features that the handset manufacturer has advertised.

  • Lower Cost Phones? (Score:3, Insightful)

    by eatblueshell (1702842) on Saturday December 19, 2009 @01:01PM (#30499198)
    Absolute horse-crap. Phones are one of the most arbitrarily priced pieces of hardware on the market. Take for example the 'free phone' it is 'retailed' at 200 plus dollars. It has not touch screen, no wifi, no app store, no legit mobile browser. When in reality, you could buy, for that same 200 bucks, a iTouch, which gives you applications, wi-fi internet, Texting, and a significantly larger screen (touch screen even). Hell, with Wi-Fi, as long as you have access to a router, you can run Skype and Call anyone, FOR FREE! Hell for 200 bucks you can get a netbook! Cell-Phones are a huge, dare I say, price-fix bonanza. Friggen Rip-offs.
    • You say a low-end phone has MSRP $200, compared to a smartphone minus its GSM/UMTS radio. But how much does this radio cost?
  • "...they also say that because they pro-rate the fee depending on how much of your contract is left, they still lose money.

    Er, somehow I seriously doubt that the .01% of customers that terminate a contract early somehow equates to them "losing" money. Their extortionist texting rates alone could probably keep the entire division afloat. What a crock of shit.

    Any company that is sitting back reaping the benefits of tens of millions of people calling in "every week to cast your vote for the next one-hit-wonder Idol" can STFU about "losing" money. They're enjoying profit streams no one even imagined 10 years ago.

  • I picked up his-and-her iPhones yesterday. (Was scheduled for today, but we're getting all the snow they promised, 14" and coming down at 1"/hour). Verizon coverage is very good, but ATT cannot be any worse than Verizon on customer service and in particular on corporate policies. I got a call a couple of days ago from some Verizon sales rep trying to get me to replace/upgrade my phone. I said "I don't want any of your new phones."

    A friend has a Droid and is pretty happy.

    Even if you're not an Apple fan

    • Re: (Score:3, Insightful)

      Even if you're not an Apple fan, you have to give them credit for recasting the cellphone world and removing the chokehold the carriers had on costs, phones, customer service, etc, etc.

      Sorry, what? No I don't.

      What, exactly, has Apple done to help that situation?

  • My pay as I go Virgin Mobile phone works just great. See if I wanna visit a web page, I wait til I'm at a computer. Call me old skool.

  • by Darth_brooks (180756) <clipper377@NoSpAm.gmail.com> on Saturday December 19, 2009 @03:26PM (#30500084) Homepage

    USMC applies here too: U Signed the Muthafuckin' Contract.

    Don't like it? Don't buy a Verizon phone. Or better still, don't buy a phone with a contract.

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