Cell early Termination

**Boatfloating** · 07-31-2008, 04:31 PM

Rut Roh!!!! This should get good...

California judge rules early cell phone termination fees illegal

In one of the most significant legal rulings in the tech industry this year, a Superior Court judge in California has ruled that the practice of charging consumers a fee for ending their cell phone contract early is illegal and violates state law.

The preliminary, tentative judgment orders Sprint Nextel to pay customers $18.2 million in reimbursements and, more importantly, orders Sprint to stop trying to collect another $54.7 million from California customers (some 2 million customers total) who have canceled their contracts but refused or failed to pay the termination fee.

While an appeal is inevitable, the ruling could have massive fallout throughout the industry. Without the threat of levying early termination fees, the cellular carriers lose the power that's enabled them to lock customers into contracts for multiple years at a time. And while those contracts can be heinously long, they also let the carriers offer cell phone hardware at reduced (subsidized) prices. AT&T's two-year contract is the only reason the iPhone 3G costs $199. If subsidies vanish, what happens to hardware lock-in? Could an era of expensive, but unlocked, hardware be just around the corner? It's highly probable.

Of course, the carriers aren't going to take this lying down. Early termination fees are seen as critical to business, so carriers are expected to look for ways to reclassify the fees (such as by calling them "rates," part of the arcane set of laws that covers the telecommunications industry). The industry is also pushing for the federal government to step in and claim oversight over the early termination fee issue, which would invalidate any state ruling. The FCC is generally more tolerant of such fees, though Chairman Kevin Martin has proposed a plan whereby the fees are decreased the closer you are to the end of your contract.

The FCC may also buy the argument that, since carriers are nationally based (and consumers can use their phones anywhere in the country), that a single policy should apply across the nation, rather than creating a patchwork of legislation that could lead to confusion and chaos caused by having 50 different policies.

Is the early termination fee dead? Not yet, but it's looking a little haggard.

**kilrtoy** · 07-31-2008, 04:49 PM

Yeah yeah, The check is in the MAIL

Ultra26 # 1 · 07-31-2008, 04:57 PM

I would have figured a contract was legal and binding.

**WATERDOG** · 07-31-2008, 05:06 PM

Originally Posted by Ultra26 # 1

I would have figured a contract was legal and binding.

Now that there's funny.

**DannyH** · 07-31-2008, 05:25 PM

Say goodbye to inexpensive cell phones. You think 175 dollar ETF sucks? How would you feel about paying $200 for a cell phone that's free. Most carriers offer a subsidy of $150.00 out the door then offer additional subsidies of 50-150 in mail in rebates.

AT&T pays apple around 520 dollars for the 8gb iPhone. This is one wish consumers will ultimately wish they never wished for.

**HPBoats83** · 07-31-2008, 05:55 PM

I always thought these early termination contracts were bullshit. I really pissed me off that they (the cell phone companies) would give better pricing to new customers, rather then take care of their existing customers. My brother has a phone with Verizon (phone's a piece of crap) and they won't exchange it for him for a different phone. They want him to pay $600 for a new phone. It was cheaper to cancel the contract, go to a different carrier, and get a new phone with their discounted (new user) price. I've always thought it was a better business practice to take care of your current customers then tell them to f off and go to sprint.

**scooooter7** · 07-31-2008, 06:19 PM

I wonder if the Early cancellation fees for other things like satellite systems are affected.

**wsuwrhr** · 07-31-2008, 07:08 PM

Originally Posted by Ultra26 # 1

I would have figured a contract was legal and binding.

Originally Posted by WATERDOG

Now that there's funny.

Originally Posted by scooooter7

I wonder if the Early cancellation fees for other things like satellite systems are affected.

...or any other contract for that matter.

"Legal" has always placed great importance on precedence rather than common sense.

Since it seems "common sense" isn't really all that common, what should it be called instead?

Brian

**lalhc** · 07-31-2008, 07:25 PM

[QUOTE=DannyH;280439]Say goodbye to inexpensive cell phones. You think 175 dollar ETF sucks? How would you feel about paying $200 for a cell phone that's free. Most carriers offer a subsidy of $150.00 out the door then offer additional subsidies of 50-150 in mail in rebates. QUOTE]

That's exactly what will happen if this is enforced. Carriers subsidize hundreds of dollars on equipment in order to get people on board.

**Boatfloating** · 07-31-2008, 09:34 PM

What pissed me off about Verizon a couple years ago was I had a old phone I activated and they said I need a 1 year contract WTF...

No way will we see $500 phones something will give...

**lalhc** · 07-31-2008, 10:42 PM

Originally Posted by Boatfloating

What pissed me off about Verizon a couple years ago was I had a old phone I activated and they said I need a 1 year contract WTF...

No way will we see $500 phones something will give...

I agree w/you about activating existing phones. Carriers should only have the contracts for the subsidized phones, not the monthly service.

**DannyH** · 08-01-2008, 03:32 AM

Originally Posted by lalhc

I agree w/you about activating existing phones. Carriers should only have the contracts for the subsidized phones, not the monthly service.

Carriers don't require a commitment to activate a line of service with existing equipment. They "did" but they no longer do.

You may run into trouble activating an existing cell phone with no commitment but if you call into customer service for said carrier and provide them with the imei on the device they will activate the phone and not make you sign a service contract.

Here's the real deal. Wireless is a business that has been relying on investors now for a significant amount of time. The companies were giving away the farm and losing their asses as a result. Now they have created a need tightened down the hatches and are becoming profitable as a result.

The hatches are being tightened across the board. However, spending is up. The wireless companies created a need and today consumers demand more then ever. As a result costs go up. I've seen us rebuild our networks 3 times in a course of 10 years and roll out new towers, new services, and new things to make peoples lives easier.

When I got into this biz minutes cost a premium and text messaging was unheard of. Since then your office revolves around your cell phone. I can name personally not 10's but 1000's of people who wouldn't be in business today if it weren't for their blackberries, Treos's and iPhones.

What boggles my mind is why people are fighting the wireless industry so much. If it weren't for the pocket pc's, blackberries, and Pda's would we have progressed as much as we have in the last 10 years.

My opinion is obviously biased the wireless industry feeds me and my family. But what would you do if you woke up tomorrow and your cell phone didn't work anymore?

**jxr02** · 08-01-2008, 05:16 AM

Originally Posted by DannyH

Carriers don't require a commitment to activate a line of service with existing equipment. They "did" but they no longer do.

You may run into trouble activating an existing cell phone with no commitment but if you call into customer service for said carrier and provide them with the imei on the device they will activate the phone and not make you sign a service contract.

Here's the real deal. Wireless is a business that has been relying on investors now for a significant amount of time. The companies were giving away the farm and losing their asses as a result. Now they have created a need tightened down the hatches and are becoming profitable as a result.

The hatches are being tightened across the board. However, spending is up. The wireless companies created a need and today consumers demand more then ever. As a result costs go up. I've seen us rebuild our networks 3 times in a course of 10 years and roll out new towers, new services, and new things to make peoples lives easier.

When I got into this biz minutes cost a premium and text messaging was unheard of. Since then your office revolves around your cell phone. I can name personally not 10's but 1000's of people who wouldn't be in business today if it weren't for their blackberries, Treos's and iPhones.

What boggles my mind is why people are fighting the wireless industry so much. If it weren't for the pocket pc's, blackberries, and Pda's would we have progressed as much as we have in the last 10 years.

My opinion is obviously biased the wireless industry feeds me and my family. But what would you do if you woke up tomorrow and your cell phone didn't work anymore?

Because i send them $70.00 a month (more than my cable or water) and dont ask for anything in return but decent service, and being treated like a human being when I call customer support. Unfortunately, the industry consistently underdelivers both. I have had T-mobile, Verizon, and ATT. They all suck.

Ultra26 # 1 · 08-01-2008, 06:38 AM

Originally Posted by WATERDOG

Now that there's funny.

Why is this funny. Many cell contracts are the result of discounted equipment. Early termination should result in paying full price for the equipment. If not we can say good buy to free or discounted equipment.

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Cell early Termination

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