

AT&T increasing early termination fee to $325 - ukdm
http://www.geek.com/articles/mobile/att-increasing-early-termination-fee-to-325-20100521/

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jsz0
Maybe AT&T noticed that Verizon got away with a dramatic ETF increase earlier
this year and figured why not? Who's gonna stop us? As the article mentions
it's still $25 cheaper than Verizon's ETF. Previously it was $175 cheaper. I
can't think of any good reason AT&T would want to undercut Verizon on ETF. I
suspect this has more to do with the economy than the day-to-day dynamics of
the SmartPhone market. Both AT&T and Verizon are probably seeing a lot of
customers not fulfilling their 2 year contracts.

The FCC (or congress if needed) really need to examine this situation. I
understand the need for the ETF in the context of a 2 year contract a customer
signs but I'm deeply opposed to the lack of transparency on the real value of
hardware subsidies and the way the cellular industry punishes people with lack
of choice if you don't want to sign a contract. Why does an unsubsidized
customer typically pay the same (or more) as a subsidized customer? That's
just not fair.

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Retric
Also IMO, the ETF should be reduced based on the time remaining in the
contract. If you have been a customer for 18 months on a 2 year contract they
should have recovered 75% of their phone subsidy. Yet they still charge more
than that.

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silentOpen
This is not true under the current ATT ETF rules. I got a 3GS in January and
the rules I agreed to said the ETF dropped by $5/mo.

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Retric
They now reduce it by 10$ per month, but still if you compare the discount to
the total they still keep 95$ if you break it a month early. (325 - 10 * 23 =
95$)

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callmeed
BTW, you can avoid the ETF by simply "moving" to a region that only offers
"partner coverage" or none at all ... you may have to give proof but that's
fairly easy to do.

I don't normally condone hacking out of a contract like this, but AT&T is
probably my least favorite big company on the planet. When we moved our
company to Oregon, I actually had my account suspended because of "excessive
use of partner coverage" ... despite the fact my wife and our staff all had
iPhones but were never suspended.

AT&T offered to let me out of my contract (despite me pleading). So, I
unlocked my iPhone and put it on T-Mobile.

I'll never give them another dime.

~~~
100k
What kind of proof do they need that you moved?

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callmeed
I believe you fax them a lease/rental agreement or a utility bill that shows
an out-of-coverage address.

I think I'll make a web app that generates a fake one for people that want to
get out of their AT&T contract.

~~~
smokey_the_bear
I moved somewhere where I get 0 bars on either of my AT&T phones anywhere
within a half mile of my house. I called them, but they claimed that their map
showed that I had coverage, so I couldn't get out of the contract. They also
said they would be adding another tower soon. A year later I got an email that
they'd added a tower, but the service quality did not improve.

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noelchurchill
Maybe they're offering Apple even more cash up front for extending the
exclusivity agreement, and they're ensuring they're going to earn that money
back by raising the ETF.

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bradleyland
Or maybe someone at ATT realized that their ETF was almost half as much as
Verizon's and adjusted it accordingly.

Also, I think it would be fair to speculate that as your "average consumer"
starts buying more smartphones, carriers will see more early terminations.
Businesses are typically better able to pay their bills and are more apt to
fulfill a multi-year agreement.

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Gimpson
Any chance that this increased ETF might be a sign they'll offer larger
subsidies when the new iPhones are released? With several very nice looking
Android alternatives out I wonder if AT&T wants the new iPhones to be priced
much more aggressively.

~~~
wmf
The low end iPhone is $99; if they increase the subsidy by $150 they'd be
paying you $50. OTOH if the cost of the iPhone 4 increases and they want to
offer it for "zero down" then the new ETF makes sense.

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jqueryin
Sounds to me like Google IO got them a little scared and they don't want
customers dropping their plan for another carrier that has a better selection
of Android phones.

~~~
tptacek
You seriously think AT&T can change their ETFs inside of a couple days? I
don't think it's possible a company as big as AT&T could finish planning the
meetings that it would take to plan contractual changes in that time period.

Beware the tech-colored glasses. Most people don't care what Google does.

~~~
smackfu
Yeah! AT&T will screw over their customers all by themselves.

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tjarratt
I'm just going to hope that this means Apple is releasing an iphone with
Verizon, or Sprint. This is a really nasty way to fight customers going to
Android phones.

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cwilson
Normally when cell carriers make a big change like this (see text message rate
hikes in the past for an example) you are actually able to leave your contract
free of charge, which is ironic in this specific case.

Anyone know if this applies? If so, bye-bye AT&T when Verizon announces iPhone
support (which is probably one of the reasons they are doing this in the first
place)!

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Gimpson
This change only applies to new contracts signed after the change goes into
effect.

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donw
Anybody know if this applies to existing contracts? If so, I'll probably
terminate mine tomorrow...

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andreyf
From the article: "If you are on existing AT&T contract this won't affect you
until renewal time. If you’re considering an iPhone this must be a
consideration before signing up with AT&T now."

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jrockway
That's one way to solve their network capacity problems.

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tjarratt
I don't follow, how is increasing the cost to terminate your service going to
solve the problem of there already being too many people on your network? At
best this will keep the problem from getting worse, but not solve it in the
least.

At least until contracts start expiring...

~~~
jrockway
If this was Slashdot, I would post an ASCII art picture of a joke flying over
a person's head. Since it's not, I won't.

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lurkinggrue
I guess they are getting ready for a non At&T iPhone.

