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FCC chief lays out plan for cell phone fees

Discussion in 'Wireless News' started by RJB, Jun 12, 2008.

  1. RJB

    RJB Gold Senior Member
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    The Associated Press: FCC chief lays out plan for cell phone fees
     
  2. walkguru

    walkguru Wireless Guru
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    I say do away with them atogether.
     
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  3. RJB

    RJB Gold Senior Member
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    I am afriad if this happened we would see phone prices go sky high.
     
  4. walkguru

    walkguru Wireless Guru
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    im sure your right. but the contract on cell phones is really dumb. i would rather pay more and be able to change providers with no penalty.....................i think.:confused:
     
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  5. M in LA

    M in LA Mobile 28 Years Plus
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    I've wondered the same thing, but then again, the carriers know they won't sell phones at the levels they do now because most people won't pay for an expensive phone.

    As much as I hate ETF's, I accept them as a "necessary" evil, even as unnecessary as they are.
     
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  6. COtech

    COtech Bronze Senior Member
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    If ETFs were prorated, and declined to zero at the end of the service contract, I would consider that fair. If wireless service were offered at a "bring your own phone" price, lower than by contract with equipment subsidy, that also would be fair.

    COtech
     
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  7. spleck

    spleck Tool
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    I agree. I'm fine with subsidies and ETFs, IF they aren't forced on me.
     
  8. bobolito

    bobolito Diamond Senior Member
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    What I don't understand is if cell phone carriers recover subsidy costs from our monthly service fees, then why do they still charge the same amount if we did not buy a subsidized phone from them, or after the contract is over? Wouldn't you think that the monthly service charges should be less after contracts are over, or if you didn't acquire subsidized equipment?
     
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  9. army1

    army1 Banned
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    not if they wanted to stay in bussiness
     
  10. jrip

    jrip Senior Member
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    Why would that happen? If the $175 ETF is meant to cover the difference between what you pay for the device and what it cost's the carrier,as the carriers keep saying. Then how does the $175 ETF cover the difference between the MSRP of $499 and the $99 price you paid for the device? It doesn't and never will. No matter what "type"of math you use. The $175-$200 ETF is there only to make it too expensive for you to cancel your contract and switch to a different carrier.... plain and simple.
     
  11. army1

    army1 Banned
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    i agree, they markup the phone price 100-150% when new,
    then give them away when they are outdated and they have
    a warehouse full that they can't sell, then stick you on a
    2yr. contract for taking them off there hands.
     
  12. army1

    army1 Banned
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    almost makes me glad i'm retired and draw social security, they can't
    touch my check no matter when i cancel
     
  13. walkguru

    walkguru Wireless Guru
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    good point army1
     
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  14. RJB

    RJB Gold Senior Member
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    Carriers mark alot off the price of a new phone to attract people to come to them in fact sometimes they loose money on the phones. Well they figure after a year or two you will pay them back to make up the difference and then some with your monthly service fee. Well if you want to leave early the $175-200 will help pay for the losses they wont make on you since you wont be there to give them future revenue. Now if there is no ETF then they would have to raise the price somewhere to compensate either being the plans or phones. Also I know for the most part the ETF does not cover the MSRP pricing adjustment but if the carriers tried to make you spend more than what they do there would be many more lawsuits than there already is.
     
  15. spleck

    spleck Tool
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    I believe it is Sprint that actually includes a line item in their quarterly financial report listing the millions spent on equipment subsidies.
     
  16. army1

    army1 Banned
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    thanks, but i have to add this for the post to take
     
  17. army1

    army1 Banned
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    disagree, there isn't a company out there who could stay in bussiness losing money.

    open your phone, i'll bet you $10.00 it doesn't say made in the U.S.A.
    point bing all these phones are made for penny's on the dollor including
    shipping by outsoursing, now if i could have any product made for $40.00
    and sell it for $500.00 i could afford to lose the ETF, the only reason for
    your example of raising fee' s would be to keep the already over paid CEO'S
    making the big bucks.
     
  18. tmobileman

    tmobileman Iphone Hater
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    The average cost to obtain a new customer for tmobile is about 300 - 400 dollars, so even if a subsidy on the phone is not given the ETF is still a necessary evil at least initially to recoup some or all of those costs should the customer cancel early within the first year. Your normal customer takes the free phone to start, and so the cost is higher for those customers with tmobile specificly the average cost per cust is about 3.50 per month with the average individual plan being 39.99 which makes the profit per month about 36 dollars, the first 10-11 months the company is breaking even if you don't have any extra charges so I see the ETF as necessary from the business standpoint, but I agree that after the first year the fee should decline, and I feel that if you don't take a new subsidy on a phone later than the ETF should be gone by the end of the first two years. If you take advantage of a rate plan promo then I do believe you should have to sign up again but only for 12 months with the etf starting lower than the standard 200 if you have already completed a two year contract maybe 100 to start decreasing by 10 dollars a month at the ten month mark of that new contract you could cancel fee free.

    That would be my proposal, but again from the business side I see the ETF as definately necessary for the business to succeed. That is my 2 Cents.
     
  19. RJB

    RJB Gold Senior Member
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    Well we both are entitled to what we think is really the right thing here, agree or not. I do respect your thoughts though some good points.
     
  20. RJB

    RJB Gold Senior Member
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    Well looks like you know what is going on. Thanks for the break down I am thinking on the same lines you are.
     
  21. walkguru

    walkguru Wireless Guru
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    in my life the only comphany charging a etf is the cell phone comphanys.
     
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  22. KyleAndMelissa22

    KyleAndMelissa22 Woot Woot, Splat !!!
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    I think the only thing not fair with ETFs is that they are per line.
    $200 isn't too bad, but $800 for a family of 4 is ridiculous!

    At least I don't have to worry about ETFs because I have great service,
    and the contract doesn't hurt one bit, I forget its there most of the time.
    I'll start a new 2-yr contact with Alltel when my current one ends in September.
     
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  23. hank424

    hank424 Junior Member
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    AT&T: termination fees ultimately a great deal for consumers
     
  24. army1

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    ETF and great deal seems like an opposite to me.
     
  25. RJB

    RJB Gold Senior Member
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    Could you explain more what you mean by this?
     
  26. tmobileman

    tmobileman Iphone Hater
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    I think he is trying to imply that paying an etf to get out of ATT was worth it, but I am speculating, this may sound weird but as a tmobile employee I think ATT does a lot of great things so I would have to disagree with this poster. The ETF is never a good deal no matter who you're with.
     
  27. spleck

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  28. walkguru

    walkguru Wireless Guru
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    yeah me too. I think they suck big time.
     
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  29. Simon5282

    Simon5282 Senior Member
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    I agree

    I somewhat agree. Cost of the phones would go up, but they would go up to their fair value. A basic phone on the world market only cost thirty to fifty dollars. Phones in developing countries can cost as little as thirty US dollars. These are durable phones that have voice and texting. If you don't believe me look at the Nokia 1100 and the Motorola F3. You can buy the F3 online unlocked an unbranded off Motorola's own website for forty five bucks.

    A basic phone (defined as a free phone) in the US includes a camera, high speed data, music ring tones, games, color screen, and you can even get a free phone with an MP3 Player with a mega pixel camera!!! These are features that many people do not care to use.

    Let the people who want a basic phone pay for a basic phone, and those who want a premium phone have a premium phone. It would save the carriers, and ultimately us customers money; and people would realize the true value of their phones as something worth value and not free, and treat them like the two hundred dollar (or thirty dollar for those who want a basic phone) piece of electronic gadget it is.


    Both you and I know the answer to this cleverly stated rhetorical question that I absolutely enjoyed reading. They are more concerned about keeping us hostage instead of providing us with a fair service at a fair price to keep our business.

    I hear that argument over and over again. I still don't buy it. They can eliminate those costs by no longer subsidizing phones and selling service directly.

    I think that if the government stays out of regulating the industry, ten years down the road the carriers will eventually be forced by the free market out of the handset business and sell service. How you ask? First of all, the standard will be LTE. LTE = SIM cards. Second, the cost of phones will drop so low that Wal-Mart and Target will sell phones so cheap and the customers will demand to sign up service contract free. Some will get the cheap phones. Others will walk into high end electronic stores and demand premium phones that the carriers may not have, and may want to take with them when they switch from one company to another. With customers buying their phones from stores at full price the carriers will have no choice to give in.

    Look what happened when Alltel started to brag that they would allow anytime plan changes without contract extensions?

    You will buy your phone from an electronic store and choose your phone company directly. This is how it works in much of Asia. With LTE just five years down the road it is very feasible to have a model like this a short decade from now. What was the market like in 1998 vs. 2008? How about 2018?
     
  30. RadioRaiders

    RadioRaiders RF Black-Belt
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    I think the price of a contract is the same with and without the subsidy is to entice people to sign up for a 2-year clip to get a free phone.

    Generally speaking, I think the $175 fixed price for an ETF is silly. Pro-rated makes much more sense. I'm suprised it's taken this long to get the idea to come around to where the FCC is talking about it ...and it's still not there yet :rolleyes: I know some carriers are doing it allready, but that's in response to the class-action lawsuits, not because it's federally mandated.
     
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