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Oh boy – queue up the backlash. Your parents always told you to read the fine print and the Nexus One Terms Of Sale reveal a troubling detail that we can’t quite figure out. If you buy a subsidized Nexus One through your carrier and cancel your account you not only have to pay an Early Termination Fee (ETF) to your carrier but ALSO have to pay GOOGLE an ETF that automatically charges your credit card the remainder of full price of the phone.
This comes directly from Google:
You agree to pay Google an equipment subsidy recovery fee (the “Equipment Recovery Fee”) equal to the difference between the full price of the Nexus handheld device without service plan and the price you paid for the Nexus handheld device if you cancel your wireless plan prior to 120 days of continuous wireless service. For example, if the full price of the Nexus handheld device without service plan was $529 USD and the price you paid for the Nexus handheld device was $179 USD with a service plan, the Equipment Recovery Fee you pay will be $350 USD in the event you cancel within the first 120 days of carrier service. The Equipment Recovery Fee is equal to the line item in your confirmation email setting forth the discount on the full priced Nexus handheld device related to your carrier service plan activiation. You authorize Google to charge the Equipment Recovery Fee directly to your credit card, or other payment method used to purchase the Nexus handheld device, upon cancellation of your wireless plan. You will not be charged the Equipment Recovery Fee if you return your Nexus handheld device to Google within the 14 day Return Policy period as set forth below.
You agree that the Equipment Recovery Fee is not a penalty but is for liquidated damages Google will incur as a result of such cancellation. These damages may include, but are not limited to, loss of compensation and administrative costs associated with such cancellation or changing of wireless service provider(s), market changes, and changes in ownership. Please note that the Equipment Recovery Fee is imposed by Google and not your chosen carrier and is in addition to any early termination fees that may be charged by your chosen carrier in connection with termination of your wireless plan prior to fulfillment of your chosen carrier’s service agreement term.
I completely understand the ETF with the carrier – the reason you get a discounted phone in the first place is because the carrier recovers the discounted price of the phone over the course of the contract. But why does Google need to charge your credit card for the full price of the phone IN ADDITION to this ETF?
Andy Rubin claimed the goal of Google’s new mobile phone sales distribution was to make things EASIER but this isn’t easy by any means. This is MORE confusing. Consumers have NEVER been used to paying an ETF for the carrier in addition to an ETF by the manufacturer or retailer. But that’s exactly what Google is instituting with these Terms Of Sale.
Maybe I’m totally missing something here. Maybe the agreement that Google has with HTC and T-Mobile make this a necessary measure. But as far as I’m concerned paying two separate ETF fees to carrier and manufacturer is an unprecedented practice that deserves an explanation.
What gives, Google?
WTF
WTF. Good thing I got it unsubsidized.
You buy a $530 phone for $180 and agree to a 2 year contract. If you cancel the contract and keep the phone, it seems reasonable that you owe someone for the balance of the phone – $350. I’m not clear why it’d be more than that, unless the carrier feels they’re owed something also for their troubles.
Yikes. If this takes off, I wonder how many other companies will do the same thing. This is pretty lame. This seems a tad on the evil side.
Not only does it deserve an explanation, but it’s enough to never buy the phone.
Wow… this has been on other blogs for weeks. Thanks for the fine reporting Rob
Consider this:
Buy subsidized phone at $180. Cancel contract outside of 30 day return window. Need to pay ETF of $175 to T-Mobile, then another ETF of $350 to Google. Total price ends up being $705, compared to $529.99 for the phone unlocked.
They PROFIT from this ($175)!! Shady stuff man, shady stuff.
The important question to ask here is:
Are you paying TWO (2 , 2x) ETF fees. If the only one you’re responsible for is to Google and T-Mobile does not charge you a ETF, then its reasonable.
If T-Mobile AND Google both ask you bend over… then thats wrong! Unless you’re into that kind of thing… in which case… Um, call me.
well, if google is going to subsidize then you should not have to pay a the ETF w/ the carrier and vice-versa. I dont see how it can become a problem unless its an isolated problem or ppl trying to score phones to sell over ebay.
Clearly it is Google who is subsidizing the phone, not the carrier. So the carrier will not have grounds to impost an ETF in addition to the one google does. Seems straight up to me.
that int fine print its common knowlege. any rep with tmobile could have told ya that. its in the knowlege base. and also in the agreement with google. i skimmed through the agreement and saw it. and i didnt even buy the phone.
1) google has already stated you can return the phone to avoid the fee.
2) T mobile agrees to cover your cost of the phone on the agreement that you sign a contract with them. Should you break the contract with T mobile, they would request that money back from Google. It isn’t logical to think that Google would return this money, and let you keep the phone. This would put them at a loss. And to the guy that said they were making money off this, your math is wrong. You are counting t mobile and Google as the same company. Google makes no money off your t mobile fees, so you can’t count that as a profit for them.
ooooooold news
Ok so here is the theory of everything:
– carrier ETF is pure profit
– google needs it’s own ETF because carrier probably doesn’t pay up
– and since the parts costs only about $180, it can be assumed that the normal price with contract is the breakeven point
– so the carriers lie when they say the ETF is to pay for the phone because you already paid for the phone
– everything after the initial phone sale is just profit
– This also explains why if your 2 year contract is up the plan price doesn’t go down even though theoretically the phone should be paid off already.
All third party sellers do this. Best buy, Amazon and others. Although google isnt really a third party. It only applies in the first 4 months of ownership so who cares. It’s just to keep ppl from buying the phone, canceling their contract, then selling it on ebay for a profit.
Hay we are only talking 4 months here guys.
It seams to be a device to keep people from simply buying a phone on contract then breaking that contract in a few days and getting a Google phone for just $355 (the $180 plus $175 T-Mobile fee for breaking the contract)
if there was no ETF from Google they would never get there money out of the phones.
This is as silly as the people who are complaining about Google advertising on there own search page.
I don’t think it’s so bad. You can buy phone for $179 and sign up for a TMO contract. Then, after 120 days, you cancel the contract. By google’s terms, you then pay NOTHING to google because it’s after 120 days. You only pay the $200 early termination fee to TMO. Isn’t this a better deal than other smart phones currently?
wow!! another reason why im glad i was to broke to buy this wack ass phone. google effed up. too much negative vibes from this phone and company(google).
@ALok
Yes parts cost about $180 but that doesnt take into account any of the costs associated with design, development, marketing or shipping. I understand where you were going, but you have forgotten about some significant expenses there.
Take it from someone that spent close to a decade slinging cell phones, this is how it has ALWAYS worked with third party cellular retailers. Doesn’t matter if it is Best Buy, Wal-Mart, Google, RadioShack or any of the other thousands of third party and premier dealers. If you are selling the handset and service and you are not the actual carrier the payment structure works like this:
– Third party company buys their handsets at wholesale price, which is pretty close to what the customer pays when they buy a device out of contract.
– Third party company sells the phone to a customer at a discount on new contract or approved upgrade.
– 6 months after the third party company sells the phone to the customer, as long as the customer is in good withstanding with the provider, the third party company gets paid for the activation – usually $400-$600 per contract and up to 4-6x for each feature added on the plan (e.g. 4x-$39.99 Internet, 4x$3.99 Roadside Assistance, etc)
If you cancel or default on your plan within the first 180 days of owning the device then the carrier will not pay the company out their commission for selling you the phone. This is a HUGE loss for them since they get paid a lot to own your soul. To limit their loses the third party company makes you sign a contract that states you will keep your service for at least 180 days out of your 2 years contract so they actually get paid, if not they charge you the amount to make up for what they lost on the phone – give or take a few bucks.
People have been complaining about this for years but in reality no amount of complaining will make it go away since the third party company is taking a hit for 6 months before they get paid out for your contract.
Ok here a scenery, some qualifies to get the nexus one for 179. Then they decide to canel their contract early. Here’s the catch, they have the credit card they used to purchase the phone cancelled, and there’s no way for Google to collect what then. Once thats done the person would just start a new contract wit flex pay and vet what ever plan they want, now. Google is screwed. How does Google handle that(hope I didnt give anybody any ideas, or did i)?
wtf does this matter? That’s why you don’t cancel your account..everybody knows about ETF’s and should be prepared for them. Besides it’s VERY VERY easy to get out of an ETF with T-Mobile and AT&T [only two that I’ve done…more than once]. Another reason to get the Unsubsidized version.
This sounds quite reasonable and is implemented here in Australia with almost every phone contract you go on.
If you buy a $500 phone for $200 on a contract, you cannot just cancel your contract and pay back the $200 (plus a $50 of whatever ETF) and expect to have gotten yourself a working device for just $250.
Oh, by the way dude, that ad on the top of your site, the one for a free Droid Eris? Yeah, there’s an additional $300 ETF fee added on to that one as well.
Hey Rob:
Where’ve you been the past 4 years? Wirefly and Amazon do the same thing. Thousands of authorized dealers do this as well.
Google is in essence another Wirefly. The carrier (T-Mobile) pays Google a handsome commission check for bringing them new lines on contract. T-Mobile only pays them the spiff if the subscriber stays with them for at least 120 days consecutively.
You are right. Normally if a phone like this was sold through T-Mobile directly, T-Mobile would have to eat the entire huge subsidy on their own if a customer defected. But since Google is playing the reseller game, and because they are obviously making money off the hardware itself, they are penalizing customers for leaving the T-Mobile contract early.
I don’t like the fee either and that is why I’d only but the phone unsubsidized.
Can we be done with pointing out all of the bad things about the Nexus? It’s getting old…
makes perfect sense! As a tmo employee in the retail division we see so much fraud! People usually third party dealers trying to score phones for cheap by signing two years and making a whole bunch of little tricks to make tmo think they returned the device then cancel the account and sell the phone for much more when they never gave back anything! This way Google will hit em where it hurts and keep fraud down yay! Now if only this happened on all of our handsets.
This is old news… did you all really just find this out?
I read the fine print when I bought my Droid from Amazon and it said that in the event I didn’t fulfill the terms of my telco service contract for at least six months and this included downgrading service (that would be a violation), then I would owe Amazon the difference between the price I paid and the unsubsidized price.
I got it. It made sense. To begin with I was actually paying even less for it than at most places ($150, no rebate required). That price is probably less than what the phone cost to build.
After the interest the FCC took in Verizon’s “enhanced” ETF, this should also get their attention. Perhaps they’ll grow a skeleton yet?
This is different than Verizon’s ETF thats under investigation. Verizon gets their devices at discount rates. Google is the sole retailer in this case. T-Mobile being the carrier is recouping potential profits for those 24 months that the person was contracted for.
Google is recouping the discount they provided on the terms the customer keeps an agreement with the carrier. These fees may or may not go to restocking these returned phones, repackaging, refurbishing, and reselling the phones. If you didn’t plan on selling the device for profit once you canceled your account then you shouldn’t worry about these fees. If you can’t afford the plan then why keep the phone?
Once again, would you please use your brains already? Firstly, this isn’t even “news”, I first read about this on a different website a few days ago. And, secondly: OF COURSE they are doing this! It simply means that if you terminate your contract early, the price of your phone ends up being identical to the price of a contract-free phone, $529.
Otherwise, people would be getting the phone on contract and then terminating their contract, and thus paying less than $529 for their phones, which would obviously be unfair to those who buy their phone the “honest” way.
As I have often said about Phandroid: THINK before you write.
All the more reason to just buy this phone unlocked.
It is about time the US grew up from carrier controlled and subsidized phones and joined the unlocked phone world party.
In Spain, at least Carphone Warehouse (owned by Best Buy) has also an extra ETF during the first six months of your contract.
Maybe it’s just for me, but it’s reasonable because they have to pay back to the carrier some of the money they had received previously.
I guess Google is receiving some amount from T-mobile when you buy the phone subsidized and have to pay back them if you cancel the contract before 120 days of carrier service.
Queue congress the FCC and Obama-lama-dingdong getting involved. There shouldn’t be any such thing as a subsidized phone in the fist place and we’d all be paying 150-250 for unlocked phones(smartphones anyway), wouldn’t have to deal with contracts and all of this dropped call crap with iphone and ATT would be a moot point because if the service sucked you’d be able to leave.
We always talked about how AT&T and Verizon are EVIL in charging us ETF, this is EVIL too, oh man google is starting to disappoint me….
Like a few people already posted here: This type of arrangement is nothing new.
And as always: Read the fine-print (it wasn’t actually that fine, but it requires a bit of reading) before you buy.
It’s like with the engravings on the N1: People getting the engravings not reading the notice that popped up (no ‘buyer’s remorse’ return on the phone).
I am going to guess here, but maybe Google just worded it this way to cover any possibilities down the road (with other carrier launches). I don’t believe T-mobile is subsidizing the Nexus One, but maybe Google is. Therefore, my guess is that there is only one ETF… but we won’t know until the time comes. Best Buy, WireFly, and others already do this (have the carrier ETF and their own on top).
I understand an ETF large enough to prevent fraud. But (1) Going with Google’s simplicity concept this should be handled through ONE party and (2) $350 to Google + $200 to T-Mobile would make the cost of doing this about $730 – is that a necessary number?
I’d also like to point out that everyone’s argument that “Everyone is doing this” doesn’t make it fair. And Google has a history of challenging the status quo to IMPROVE industries. Isn’t that the purpose of Android? They could have easily taken a different and more fair approach on this ETF.
“this is old news”
Uh, no, its not. The “old news” was T-Mobiles ETF.
The “new news” is Google’s ETF, in ADDITION to what T-Mobile and other carriers add. TWO ETFS. Show me one link from before today that covers this little detail.
(And no, Apple, RIM, Motorola do NOT charge a separate ETF if you cancel your account with AT&T, Verizon, or, T-Mobile)
If people would stop trying to scam the system and get the phone for 180 plus ETF of 175 for a total of $355, then Google wouldn’t have to do this. Hell all you have to do is wait 120 days and then cancel. But Google is sticking it to those people by the fact your N1 will be devalued by then, because they will have something even better on the market in 4 months and that will be the new toy to have. If you want the phone for something other than T-Mobile and/or a different plan on Tmo, buy it unlocked or go get a different phone.
when my g-1 account has matured in september, there will be gazillions of used nexus-1s on ebay.
i can wait.
the nexus-1 is a sweet piece of hardware but, it aint worth 530 bucks more over what i have now.
Actually, once again, the people at fault here is THE CARRIER.
Here’s the deal, T-Mobile won’t pay GOOGLE the subsidized portion ($350) until the contract has reached 120 days. so if you cancel within 120 days, then HTC and GOOGLE are out of luck, they need to get their money back right?
But then, I ask this question. If T-Mobile hasn’t payed Google the $350 dollars before day 120, why do we have to pay T-Mobile?
Carriers suck.
VB
If you don’t like the fees just dont buy the phone and thats it! or buy it unlocked, which is what google wants you to do in the first place.
@victor bello
you have to pay tmobile because you signed a contract that says you were going to keep their service for two years! and the fee is supposed to keep you from leaving.
it is all profit but thats the point of subsidizing a phone. whos going to want to subsidize a phone and not make any profit?
Not only is the device unstable and poorly made they want to suck all this $ from you? NO THANKS! The android OS needs a couple of years to be prefected anyways so I’ll pass on it.
@Rocco Two thumbs up for the explaination.
I agree this is such BS. I was gonna get a Nexas but that changed my mind. I am sticking with my iPhone.
Se7en
yes it is old news because 3rd party resellers have been doing this for a long long time. Go read Amazon.com and letstalk.com fine print and you will see that if you do the same thing they will charge you a ETF ontop of the carrier ETF also. Usually 6months and Google is only 4 months.
Why are you comparing Apple,RIM, Motorola etc to this? None of those guys are selling their phone from there web site like a 3rd party reseller.
I can’t believe all the freakin blogs are going with this story wow..
What you need to do is blame all the a$$holes on ebay selling phones. Because this is why they do it to prevent fraud.
Here is Amazons terms from their page.
Amazon.com terms
“When you purchase your device with service from Amazon.com, we automatically pass along an instant discount from the carrier to you. This discount has been provided to you based on your agreement to (a) activate a new, or extend an existing, line of service for this device with the carrier, and (b) maintain this service in good standing for a minimum of 181 consecutive days. If you do not activate or extend a line of service in connection with this device, or if your service is canceled/disconnected before 181 consecutive days, Amazon.com will charge you $250 per device, plus applicable taxes. “
NEXT!!
http://www.apple.com/iphone/buy/
Apple is selling their phone…from “there” website.
Again, if this is old news, show me a link to a story about Google’s ETF before Phandroids.
@Matt. Quit trying to justify paying close to a grand for a sub-par phone. Thanks
I think Google is really focusing on the No-Contract phones. T-Mobile is really being a good partner here with their even more plus plans.
Think about it this way:
529 + 24 months of $59.99 500 minutes+data+texts even more plus plan that does not include a subsidized phone = $1968.76
179 + 24 months of $79.99 500 minutes+data+texts even more plan that INCLUDES a subsidized phone = $2098.76
So the bottom line is that the subsidized phone is a rip-off. It’s pure marketing. People think they are getting a free phone when anybody who knows anything about business and economics knows that there’s no such thing. Google knows it too. I imagine they started this google.com/phone thing only intending to sell unlocked full price phones. But some business person stepped in and said “woah! we have to offer the discounted phones with contracts because Americans are too stupid to realize the benefits of price up front phones and are used to being tricked into thinking what a great deal a free phone is.” So they had to tack on the plans, and didn’t negotiate with the carriers for the carriers to forward the ETF onto them, so they had no choice but to do this.
Jim- I’m not justifying anything. Do I think its right? Hell no but I buy my phones outright so I don’t care.
I’m just saying this isn’t anything different then what other 3rd party resellers do like Amazon etc.
Yup, no problem there IMO. All they are doing is recouping the cost of the phone. In addition to that Tmobile will ding you for cancelling your contract. Thats all. Just find a carrier with no contracts (Canadas Wind Mobile) and no subsidization.
I think this is great news. Consumers will be outraged and the government will have the motivation to step in to regulate ETFs across all industries by requiring any business that charges an ETF to use a pro-rated ETF over the life of the contract and requiring the business to prove that the amount of the ETF is actually a HARD DOLLAR loss incurred by the business.
hint, stop buying subsidized phones and you don’t need to worry about these things. the whole process of lock-in has never benefited customers anyway imho. buy the phone upfront, switch operator every time one has a better offer than the other and drive prices down. the money you put on a phone should be nothing compared to the savings that could be made on choosing better operators.
Okay people most of you are a bit slow when it comes to the whole contract thing…. when you sign a contract with tmobile the company expects you to stay in for that contract for the full 2 years agreed to, if you choose to leave that contract tmobile expects compensation for the loss of the rmainer of the contract you signed thus the etf. When taking the subsidised phone you are also essentially signing a contract with google as well as they provide the subsidy not tmobile so google must recoup their costs and I just don’t see google selling those phones at a loss so you can cheat the system and profit. Do people really not understand the word contract?
Good lord, I just love how quickly the “evil” moniker has been stamped onto this entire situation. It’s nothing new, it just happens that Google haters have brought the practice into the light and conveniently left out that their beloved phone manufactures probably have similar ETFs (if they sell direct unlocked phones).
Welcome to how the rest of the world experiences wireless. You pay big up front for the phone, then choose your provider without the draconian contracts. As has been pointed out repeatedly above, Google is doing this to recoup their costs in the event that scammers try to get the cheap subsidized entry price and then drop the 2 year contract, which still puts them way ahead of the total cost of buying the phone outright. This is to accommodate a subsidy situation, which only exists because we have been trained to bleat like sheep and sign in blood for 2 years to whatever provider got the cool new phone deal of the season, whether the service is good or not. I’m sure if Google had their way, they would just sell the phone directly to the consumer and never have to worry about this process.
If people want to whine about ETFs, target the ones who deserve the wrath: wireless providers who keep jacking up the ETF to force us to stay with them for 2 years and drop tons of money into their coffers, even if their service doesn’t deserve the income it’s receiving. I can guarantee it wouldn’t be an issue if T-Mobile wasn’t charging an ETF ON TOP OF Google’s. And the phone just goes back to Google, now used so it technically can’t be sold as new, so it’s Google that is out the money… Why is T-Mobile getting a $200 bite out of our butts for just being the middleman in the transaction? Maybe it’s just pure greed? Oh, but by all means, GOOGLE is the evil one. Pathetic.
Se7en said: “Show me one link from before today that covers this little detail”
Here you go: http://gizmodo.com/5436673/leaked-nexus-one-documents-530-unlocked-180-with-t+mobile?skyline=true&s=x
I was pretty disappointed with the release of the Nexus One phone. It was over hyped and really doesn’t really have anything that makes it better than Iphone or Droid.
Nexus One is a complete bag of FAIL. Yeah, it’s pretty — but I don’t know if I’ve ever seen a more ridiculous set of hoops to jump through just to get a damned cell phone. Not worth it; something just as good will be released in the normal channels later.
This all makes sense to me based on previous practices in the cell phone industry. ETF’s have always been with carrier. What google is doing makes sense, if you cancel contract and keep the phone then google is saying, “wait, hold on a sec, thats BS, you have to pay 530, so pay the differences!!” But google has given us the option to return the phone with no problem. People need to read stuff before they buy or do alittle research on the interwebz!! Its not rocket science.
“If you buy a subsidized Nexus One through your carrier and cancel your account you not only have to pay an Early Termination Fee (ETF) to your carrier but ALSO have to pay GOOGLE”
The answer is in the question. You are not buying a “subsidized Nexus One through your carrier”, you are buying it from Google.
WTF. They already rape you with the new $350 ETF that all carriers seam to be switching too (which idk why the heck it isn’t just paying the remainder of the phone, 560-300=/=Stationary $350 price), but the fact that google does this really chains you to a wall. I think we need to get rid of these crappy 2 year contracts and start doing 12 and 18 month contracts. Well maybe I should feel lucky considering the canadish (lol) have like a 20 year contract for a phone or bust.
The real problem here isn’t the ETF from GOOGLE, it is the ETF from T-Mobile during that 120 day period. That is it. It should *not* be both due T-Mobile is not subsidizing it during the 1st 120 days.
Amazon.com does the exact same thing. Here’s the language when buying a Palm Pre for $79 with new service:
“When you purchase your device with service from Amazon.com, we automatically pass along an instant discount from the carrier to you. This discount has been provided to you based on your agreement to (a) activate a new, or extend an existing, line of service for this device with the carrier, and (b) maintain this service in good standing for a minimum of 181 consecutive days. If you do not activate or extend a line of service in connection with this device, or if your service is canceled/disconnected before 181 consecutive days, Amazon.com will charge you $250 per device, plus applicable taxes.
This policy does not apply to prepaid phones, phones sold without service and Sprint devices. ”
http://www.amazon.com/gp/feature.html/ref=cell_dp_activationLink?ie=UTF8&docId=508597
Google is subsidizing the phone, not Tmo. Seems fair to me.
skillian,
where do they say you pay both Google and T-Mobile ETFs?
I don’t see what the deal is here-Phandroid was the first to report on this detail, why is that so difficult for people to accept?
WOW! Maybe Google thought their brand image was enough to overcome this. This is like a fumble with 2 minutes left and Apple got the ball back. If this doesn’t change and the phone is not perfect Google’s hype will be very short lived…
Does anyone read any longer? If you return the phone to Google within 14 days of purchase you’re not responsible for the price difference. The equipment recovery fee only applies to those people who cancel their service between days 15 and 120.
Wirefly and Amazon both have similar policies, in fact Google’s is less restrictive in that they allow the return of the phone. With the other 2 you’re SOL.
It’s being reported around the web that Google doesn’t get a dime from T-Mobile until the 120 day time period has been exhausted, the real bad guy here is T-Mobile as their not out the cost of the subsidy until the 120 days has expired.
Bend over, morons. You thought that Google was some kind of saint. Do no evil, my ass. Anybody that uses their hardware or services is just f’ing dumb.
TattierPub said “Wirefly and Amazon both have similar policies, in fact Google’s is less restrictive in that they allow the return of the phone.”
Not true. I have purchased from Wirefly before. Wirefly has a 30-day no-questions-asked money back guarantee and no restocking fees. They even include a prepaid return shipping label in the box.
Google has a 14-day policy and a $45 restocking fee. I’ve been so spooked by all the complaints that I decided to return my Nexus One. I couldn’t do it online. Had to call HTC and answer 15 minutes worth of questions over the phone, including stating 3 separate times that I agree to pay a $45 restocking fee, then they promised to send a shipping label via email but 24 hours later I still don’t have it.
Google store = Not ready for prime time. I can’t believe Verizon is about to let its brand be attached to this terrible customer experience.
@Erick…what a good point…hopefully the eyes of many others will wake up to this
@ Se7en
You said: “The “old news” was T-Mobiles ETF. The “new news” is Google’s ETF”
Make up your mind.
@Android fan (Google not so much): No one said “identical” policy. The word was SIMILAR. The return period may vary and there may or may not be a restocking fee. The point is that that you will pay an equipment recovery fee/ETF/whatever you want to call it on top of the carrier’s ETF. It’s nothing new.
The truth is, until the Government opens up the cell phone market like they did with your home phones, things like this are going to happen. There is no reason why you shouldn’t be able to buy a cell phone anywhere and then choose whichever cell phone carrier you want to use it with. Not sure how many people remember when you were only allowed to buy a home phone for your phone company only. This is the same thing their pulling with cell phones. Needs to stop
70% of the people above me are retards.
What the hell did you think; getting a 530$ phone for 360$ ?
Ofcourse its more expensive than buying the phone without a contract, there is not paperwork inbetween !
Example in Holland.
HTC HD2 for 30$ a month, 2 years. Phone itself 150$ = 850$
If I cancel the contract within 14 days; I have to return the phone and receive the 150$back.
If I cancel the phone after 2 months, I have to pay for the remaining 22 months & administrative fees. Count in the Phone itself for 150$.
I’m still shocked as to how everyone is going ‘wtf’ all over the place about something really, really dumb. What company would do that anyway? If that was possible I would abuse phonecompany’s all over the place just to get the newest phones with a 150-200$ discount.
And and about the flaming of the N1; this is probably 95% software related and thats what new things tend to have; baby-illnesses we call them. I dont remember the iPhone getting flamed all over the place because of the lack of an App Market or the lack of a qwerty keyboard.
It’s like all the schooldropouts are putting up websites to write dumb things on.
What really chuffs me is that there is no family plan available. Per T-mobile this is a condition that google insisted on. So, even though we are overdue for an upgrade on one of our lines (5 years since the last new phone for that line) we don’t qualify for the discounted phone. It took 30 minutes of asking the same question over and over again to get the answer that yes, we could buy the phone at full-price and get data support for an additional monthly.
I even offered to cancel the current contract that is a month from being up, sever the lines and buy two phones on 2 individual plans. The 20 something days until I can walk from the contract are too important to t-mob, and they let me know I’d have to pay the etf. Sorry, when those 20 days are up I am not giving them another cent.
At first, I too was like “WTF” (even though I’ve seen this when I bought a phone from wirefly). But, then I realized that if they *only* charged you the difference in price for the hardware, that would mean that there is no penalty for breaking the contract.
In other words, if you bought a $500 phone for $200 with a 2 year contract, and you then then cancelled the contract after 3 months and paid the $300, it would be the same as buying the phone without a contract. You paid $500 and now have a $500 phone that you can sell on E-bay…but what about the broken contract? The carrier ETF is the *penalty* for being an evil contract breaker…not to recover the cost of the phone.