

California judge rules early cell phone termination fees illegal - brianlash
http://tech.yahoo.com/blogs/null/99655

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maxharris
I don't think the government should be in the business of invalidating
contracts that violate no one's rights. Those that don't like the terms don't
have to get cell phones - I don't have one for just that reason.

Just because I don't like someone else's terms does not give me the right to
bring the government in to give me a "better deal". The moral principle (not
the business situation) does not change even if there are hundreds of millions
of people that feel the same way.

Would you like it if one of your customers or acquirers agreed to do something
in writing and then came back a year later to sue you for better terms? The
fact that the cell phone companies are bigger and more established does not
invalidate this principle.

If you want quality and value straightforward dealings as highly as I do, be
principled and don't buy things you don't like. Try to to change the culture
by reason rather than through the coercive force of the government; do it this
way, and what you fight for will last far longer than some bullshit court
ruling.

~~~
ardit33
"Those that don't like the terms don't have to get cell phones" -- Well,
cellphones operate in public space. There is limited amount of spectrum
available, and the companies that decide to use it, must obey to certain
rules. If these companies don't like the terms, they don't have to use the
spectrum.

I'd like the goverment to get involved more into allowing fair access to
devices, and allowing third party aplications to be installed in devices,
without the need of the "blessing" of the carriers.

Imagine, if every piece of software you installed in your computer, have to be
"aproved" by your ISP. Well, that's how it is the current state in the mobile
world, and that's why there is a lack of real inovation there.

There is no limit to the amount of greed. In this case, there is clear tacit
collusion between carriers, as all of them seem to have early termination
fees.

When you have few players in a market (restricted by the limited amount of
spectrum), there is a great chance that free market rules wont apply anymore,
and just saying the goverment should not get involved, is a way to say let the
companies rape the customer as much as possible.

ETF do actually hamper inovation on the device space. All cellphones have to
be bought and aproved by the carrier (who resell them at discounted rates),
while hampering the adoption of inovative devices. Everytime you pick a
verizon phone, and look at the ugly UI the carrier forced the device makers to
use, you know the market is not working right.

THe problem, is that the customer is still getting raped. You end up paying
higher monthly fees for voice/data/sms messaging, to make up for that device
subsidy, yet the customer has less choices on the devices they use.

Look at Europe. They have much more rules in the wireless space to protect the
customer, yet usage and the industry is booming there. A lot of inovation
going on there (even the SMS was invented in Europe, not here).

~~~
maxharris
"If these companies don't like the terms, they don't have to use the
spectrum."

That's right - they don't. But the current owner of the spectrum - the FCC -
is an illegitimate one:

Read Declan McCullagh's June 7, 2004 column for news.com, "Why the FCC should
die" ([http://news.cnet.com/Why-the-FCC-should-
die/2010-1028_3-5226...](http://news.cnet.com/Why-the-FCC-should-
die/2010-1028_3-5226979.html?part=rss&tag=feed&subj=news))

If you really want more competition in the telecommunications industry, you'll
find the FCC standing in the way. They don't serve any technical purpose
anymore (except to keep technology down and to allow old radios to work), but
they sure as hell get in the way of new companies that might compete with
existing ones.

Keep in mind that without companies to build the radios and service the
networks and so on that make the spectrum valuable, who would be able to use
it, other than a few thousand engineers? What good would all the oil in Saudi
Arabia do you if _someone_ didn't know how to get it out of the ground, how to
refine it, and how to build cars to use it? Remember that when you declare
something like spectrum public, you inherently lose the ability to maintain
everyone's rights.

"There is no limit to the amount of greed."

Not true - at and above a certain price for any good or service, customers
won't buy. This is econ 101 stuff.

"limited spectrum" - you would do well to take a signals processing class.
Spectrum is only limited in the physical sense (the electromagnetic spectrum
is what it is), but beyond that, there are many ways to transfer more
information across the same spectrum through additional processing. Surely you
know about things like DSL and 802.11, neither of which were possible before
cheap processors became commonplace.

------
Xichekolas
The fact that the cellular industry still has ETF policies and hardware lock-
in is really sad. I mean, imagine if you had to buy your computer from your
internet provider, and then it only worked with that provider. Switching from
Comcast to Verizon would mean buying a new computer, and agreeing to some two
year contract.

The fact that the iphone would cost $399 instead of $199 is not a valid
argument in favor of the ETF lock-in. I'd rather actually own my hardware,
instead of what basically amounts to leasing the hardware with a modest down-
payment and a hefty penalty if you try and switch carriers or end service.

Just like with cars, some people may find it more advantageous to lease their
hardware. Good for them, let them lease and make an ETF part of the
agreement... but give us an option to 'buy the car' (or iphone).

~~~
jedberg
You already have that option with pretty much every phone except the iPhone.
Every carrier will let you buy the hardware at an "unsubsidized" rate, and
then get a contract with a higher monthly price, but no lock in. It's just
that no one does it, because it is so much more costly.

~~~
wmf
Er, if you buy an unsubsidized phone you should get a _lower-priced, non-
contract_ plan. But you probably don't, which I guess is the point.

~~~
BrandonM
I was very frustrated when I bought a Nokia N82 so that I could have an
unlocked GSM phone, only to find out that the only service that works in my
area is AT&T anyways. But hey, I already bought my phone, I should just be
able to get a non-contract plan, especially if I'm willing to pay the full
(phone-subsidizing) price each month, right?

Nope. You can't get a normal monthly plan without signing up to at least a
one-year contract. I even had to pay for the freaking sim card, not to speak
of the activation fee. So I paid something like $500-550 for my phone, sim
card, and activation fee, and I'm _still_ in a one-year contract, all for the
same monthly rate that I would be paying if I had gotten a plan that came with
a free phone.

Something is wrong here.

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mechanical_fish
This is based on CA state law, and (from the _Mercury-News_ link in the post):

 _Whether Sabraw's ruling will stand isn't clear. Experts say an appeal is
likely, and the Federal Communications Commission is considering imposing a
rule - backed by the wireless industry - which might decree that only federal
authorities can regulate early termination fees._

3e-3 cheers for the FCC. Sigh.

~~~
jrockway
Do FCC rules override state law? I've read a few cases involving FCC rules,
and the FCC nearly always loses.

If the federal government wants to restrict states' rights, they need to amend
the constitution, not pass "FCC rules".

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wmf
Eventually I think the carriers will be forced to replace the contract+ETF
with a standard loan, which isn't that different from a prorated ETF anyway.
It will still allow subsidized phones and plenty of revenue for carriers, but
it's a more familiar concept.

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akd
So does this mean it's time to buy a Sprint phone (or even iPhone, if the
ruling applies to all carriers) in California on a long-term contract and then
break it immediately? Before they change policies?

