By: Revanche

ETF reimbursement?

August 5, 2008

This article on a recent Superior Court ruling in California caught my eye because I had to pay an early termination fee to cancel my beloved T-Mobile service and start using my iPhone. Originally, the fee was supposed to be taken care of, but the promise was broken, so my pocketbook took a whopping $200 hit. Gr.

Anyway, I got excited thinking that perhaps there was hope yet for getting that $200 back ….

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.

If I recall correctly, I think Europe’s way of doing things is far better: They purchase whatever phone they want, and then sign up for service with whatever phone carrier they want. I don’t know what that does to the price of equipment and service compared to ours, but I know that I could have continued on my merry, slow-tech way and saved a whole lot of money!

3 Responses to “ETF reimbursement?”

  1. The cellphone plans are crap in North America

    I’ve heard so many great things about Europe’s plans – why the hell aren’t we like them?

  2. Sense says:

    ditto for NZ–cell phone plans are AWFUL, much worse than America’s, in my opinion. Let’s all threaten to switch over to the European cell phone plan and see what happens. 🙂

  3. Revanche says:

    FB: Does it work the same in Canada, then?

    Sense: We’ve gotta figure out a way to convert the rest of the world to the Euro system … unless there’s a catch in there somewhere that we don’t know about.

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