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- pintomp3, on 10/31/2007, -5/+58if you are paying full price for a phone, it shouldn't be locked to any network and you shouldn't have to be under contract since they are subsidizing the cost. that being said, people bought it know this anyway.
- trghpy, on 10/11/2007, -2/+48Who knew it'd take the iPhone to wake up a congressmen about how much cell phone companies have been raping us.
- BufordT, on 10/11/2007, -6/+38It's called reading what's in the damn contract before you sign it. If anyone was truly concerned about possibly having to bail out later, then you should have asked questions. In what other business can you opt out of a contract and not have to pay the fee that was agreed upon and signed by both parties?
- Quix, on 10/11/2007, -4/+29Agreed, if there is no hardware subsidization, the carrier has no real justification for an early termination fee. I'm loving my iPhone and I have no problems with AT&T service (yet), but having paid *$599* for a phone there is no way I should have to pony up another $175 if I wanted/needed to opt out later.
I thought the lack of hardware subsidization would result in some kind of subsidization of the calling plans (X months free or at a discount), but this is not the case. I'm paying full-price for the hardware and full-price for the service plan. Early termination fees should not apply. - brutalentropy, on 10/31/2007, -4/+22That's not news. It's been known since shortly after the iPhone was announced that Apple had a 5 year agreement with AT&T.
- Jaymoon, on 10/11/2007, -4/+21Exactly... What are people complaining for?
You agree to the contract knowing you are locked into AT&T, and somehow after a couple weeks you are upset that somehow AT&T and/or Apple tricked you? - reed311, on 10/11/2007, -3/+15No, that is full price. They have already said it is not subsidized and everyone is paying full retail for it.
- MrJohnson, on 10/11/2007, -1/+11Telecommunication companies are utilities, we're just in denial about it.
- Ogre73, on 10/31/2007, -13/+22" The phones, which cost between $500 and $600—are usable only on AT&T Inc.'s wireless network and will remain that way until 2012." this is the real news in this story.
- Timberwolfl, on 10/11/2007, -5/+13And the cost to manufacture said POS is around $200-$300 iirc.
- Wivell, on 10/11/2007, -1/+9A lot of people seem awfully surprised that a cellular service carrier is trying to screw their customers.
I dunno, I guess I'm just not doing that kids face from Home Alone over here like everyone posting these stories. - spooniep, on 10/11/2007, -0/+7Give me a break. What I don't get is that even though U.S. mobile phone companies lock virtually every one of their phones to their networks and charge early termination fees, people are just now starting to bitch and moan about it now that the iPhone is out.
This isn't the iPhone's problem. It's a bigger issue with the way that the whole mobile phone business is a giant racket that's built around the "razor/razorblade" model. It's just that someone finally figured out that if the "razor" is nice enough that people might pay for it too. - Stradenko, on 10/11/2007, -4/+10I think you mean $220
http://digg.com/apple/iPhone_Costs_A_Mere_220_To_Make - JJCDAD, on 10/11/2007, -2/+7You all do know that you can use the iPhone on AT&T without a contract right?
http://arstechnica.com/reviews/hardware/iphone-review.ars - Langford, on 10/11/2007, -1/+6I'm having trouble deciding if I should feel sorry for anyone. The cost of the device is a ripoff and contracts are exclusive, so shame on Apple. The cost of termination is a ripoff and the contract is scandalously crooked, so shame on AT&T. AT&T is nearly a monopoly again and they are somehow allowed to get away with this kind of contract, so shame on the government. Consumers knew it was a rip from the start were warned and still agreed to it, so shame on the consumers. It would be really easy to just pick the group I like best, and support them as the victims, but I can't help but think that none of them really deserve much sympathy here. If there is anyone to feel sorry for, it's the people who would have liked to get the device, but are thankfully patient enough to wait for better circumstances before they get it.
- tdhurst, on 10/31/2007, -1/+6Don't like it, DON'T ***** BUY IT. Period.
- TedLW30101, on 10/11/2007, -1/+5Everyone complaining about these fees (included in the contracts that are being signed) don't seem to understand the free-market concept.
If you don't like the fees, don't sign. If everyone does that then the provider/manufacturer has a ton of unsold product which means they adjust their practices to get it to sell.
Guess what? You want an iPhone. It's a specific brand. There are other cell phones/PDAs out there. Buy those until iPhone/ATT adjust to what the market will support. The reason companies can charge these prices are simply because consumers will pay.
If people want to play 'keeping up with the Jones' by getting the latest status symbol then you have to pay. Don't whine when it turns out to be crap.
Lamborghinis are cars, so are Mercedes, Lexus, Acuras, Hondas, Hyundais and Fords. Get what you can afford and be happy with. - iName, on 10/11/2007, -3/+7No different than the price to break contract on any device. Shouldn't "lawmakers" get pissed about that?
- kenok, on 10/11/2007, -0/+4So which telco companies have 'consistent' good customer sevice?
- cactus476, on 10/11/2007, -1/+5What? Something good coming from the iPhone?
- jinjin, on 10/11/2007, -2/+6Well at least Congress is tackling the hard-hitting, important issues.
- AxeSwinger, on 10/11/2007, -0/+3We stopped being customers and because consumers in their eyes. We got turned into a commodity.
- anillop, on 10/11/2007, -0/+3Well that sucks, I like the phone but there is no chance in hell I would ever go back to AT&T again. Their network is horrible and so is their customer service.
- hammradio, on 10/11/2007, -2/+5Why are they all of a sudden concerned about the AT&T/iPhone Termination Fee... when every service has a high termination fee. Sprint's is $150. The Term fee is usually the same as the "rebate" you get for a new phone typically. So your next free phone you pay for when you leave. Thanks for waking up Congress.
- Timberwolfl, on 10/11/2007, -1/+4Yes, thank you, I was too lazy to do my own search :)
- 3adkied, on 10/11/2007, -1/+4Apartments and cars are significantly different. In the case of an apartment, it takes time to find a new tenant. Without proper notification, it could sit vacant for months while they still have to pay a mortgage. In the case of the car, if you break the lease, you probably haven't yet paid back the depreciation for using the car, and they may be forced to sell it for a loss.
Neither of these really applies to cell phone service. What does the ETF really represent? A SIM card doesn't cost that much. It can't cost that much to go on the computer and de-activate my account. Likewise, the loss of my account doesn't force them to go out and find someone to fill it - they can have as many or as few accounts as needed at any time. The simple fact that they can convince people to sign the contract by offering no other options doesn't justify a charge that doesn't represent any real cost for them. They want me to believe it is as costly to terminate my account as it is to serve me for two months? - jsayreallen, on 10/11/2007, -0/+3AT&T's Blackberry Connect is $30 a month and their PDA Connect is $45 a month (for treo's and windows mobile smartphones), so in essense $20 a month for the iPhone plan is a $10-$25 a month subsidy - or $240-$600 over the 2 year contract. Not bad in my book.
- TimmyGUNZ, on 10/11/2007, -0/+3Yeah, but the Blackberry unlimited data plan is only $20 on T-Mobile. AT&T is making a pretty profit off BB data plans.
- nightstrm, on 10/11/2007, -0/+3As stated above, why is the iPhone being signaled out in this instance?
If Apple let the phone go to any carrier, people would start complaining that features that require hardware on the carrier's network to function (i.e. visual voicemail) wasn't working. - huntrm, on 10/11/2007, -1/+4Here's a fact: Contracts are put in place by cellphone carriers to offset the subsidy of a phone (e.g., the phone costs $199, they sell it to you for $49). In addition, they obviously want your business for 2-years. But main point of a contract is to minimize risk on a phone subsidy. The odd thing is that the iPhone has no subsidy - typically one can buy an AT&T phone for the full price (with no contract), or buy it for less with a 1-year ($99) or 2-year contract (free).
Termination fee should apply in the event that the phone was subsidizied. In this case, though, people are paying for a phone with ZERO subsidy and also signing a 2-YEAR agreement (idiots). I guess if you gotta have it, then you gotta have it. Having been in the cell-phone business for 10-years, I'm astonished that people don't see this idiocy.
I for one would love to get an iPhone, but there's no way I'd do a 2-year contact since 1) The phone can't be insured - what do I do for a replacement? e.g., pay $49 for a new phone and extend my contract out for another 1-2 years?? 2) The phone isn't being subsidized, which if I sacrifice two years, I should get the phone below cost.
The real way to get this phone is 1) do it on prepaid per ArsTechnia article (bit more, but worth it) or 2) if you are an existing AT&T customer, get the phone, but somehow find a way to activate it on your current post-paid phone without adding 2-years to your contract (I think ArsTechnica explains this one also, but sounds bit more difficult). - nondescrypt, on 10/11/2007, -0/+3i agree that all industries should be regulated, i don't know anything about good service but i do know that the people are p a y i n g
seriously tho, people need to be protected from the runaway greed that is sooo celebrated around here. - zioxide, on 10/11/2007, -1/+4If you don't like the terms of the contract (early-termination fee being one of them), then don't sign it. It's that simple. AT&T can charge whatever they damn well please for early termination, etc. If you don't want to pay this, don't sign the contract.
- r3zonance, on 10/11/2007, -1/+3From what I gather "Adequacy of Consideration" is not a guaranteed get out.
- fritzbrown, on 10/11/2007, -1/+3Amen brother, consumers are screwing themselves by agreeing to pay for crappy services and agreements.
- prammy, on 10/11/2007, -0/+2I have had service from most of the major cell services and T-Mobile has been the best for me so far. Sprint was not too bad either.
- dethl, on 10/11/2007, -0/+2If the iPhone were subsidized by AT&T your argument would be valid.
Yes, DirecTV and Dishnet both charge ETFs - except that shiny new HD-DVR you got was probably damn cheap or free. They need to make their money back somehow and a contract will help them. If you want out of your service you pay a prorated early termination fee and you're free. People who bought the iPhone payed the FULL price - not a subsidized price. AT&T is making pure profit from this - there is no subsidy to overcome with iPhone customers - iPhone customers should be allowed to cancel their contract ETF free whenever they feel like it. - r3zonance, on 10/11/2007, -2/+4"Not only do they have no choice, but they also have to pay a termination fee."
Consumers do have a choice. And the choices are as follows:
1. AT&T and any handset they like.
2. AT&T and an iPhone.
3. Other carrier and any handset other than an iPhone.
That's 3 choices without even going down to specific brands of non-iPhone. - Novagenesis, on 10/11/2007, -1/+3It's technically illegal to abuse a monopoly by overcharging -too- much. How much is "too much" is up for debate.
Charging 1500 a unit for something that cost 200 to make, and expecting 1,000,000 sales, is probably excessive. - teadrinker, on 10/11/2007, -0/+2So why did Apple decide to force the consumers to connect to AT&T? Are they getting kickbacks?
- elmwood, on 10/11/2007, -0/+2.... EVERYONE with T-Mobile bitches about that fee. My contract is up in a month, and they still want to charge me with it to cancel? ***** them.
- iceperson, on 10/11/2007, -1/+3http://en.wikipedia.org/wiki/Consideration_under_American_law#Lack_of_Consideration
If there is no consideration on the part of the cellphone company the contract is unenforceable. In the iPhone example the customer is agreeing to pay for the service for 2 years without any "consideration" from AT&T because AT&T reserves the right to cancel your service at any time. Usually the cellphone company says that their subsidy is "consideration", but they can't say that is the case when they're talking about the iPhone because they aren't subisidizing the cost. - bemenaker, on 10/31/2007, -3/+5WTF Hello congress, wake up, this is nothing new, where the hell have you been?! This is standard operating procedure from these anti-competitive douchebags. Thanks for finally seeing this for the first time in your life.
- AbeVigoda, on 10/11/2007, -2/+4T-Mobile's early termination fee is $200 and has been for quite some time. No one's bitchin' about that.
- AxeSwinger, on 10/11/2007, -0/+2Depending on your state they have to prorate the termination fee. I know they have to in California
- kittynipples, on 10/11/2007, -7/+9So, you willingly sign a contract, and then complain because your have to pay a penalty to get out of it. Boo hoo.
- AxeSwinger, on 10/11/2007, -0/+2I don't think you understand the free-market concept. There is no competition in this market, it's controlled by three major players. The collude their pricing schemes, as evidence I point to the recent price increases of Text messaging the four largest providers (the smallest of the four leases a majority of it's capacity from the second largest) all increased their prices to .15 with in six months of each other. It's not because of costs because TM cost virtually nothing in infrastructure cost and use significantly less bandwidth than voice calls.
So before you start talking about free markets understand what exactly makes a free market.
I'll give you that the iPhone is mostly about conspicuous consumption (I don't own one) it's a great example of whats going wrong in the cell industry with the media hype the launch received it's garnered the attention of lawmakers. - geminitojanus, on 10/11/2007, -1/+3The point of the Contract Termination Fee is to pay for the fact you didn't live up to your end of the contract, not to pay for any subsidized equipment (that you may end up having to pay for anyways, depending on the company). If you actually read the phone contract before you signed it, you would realize this.
- r3zonance, on 10/11/2007, -2/+4But this is a fairly reasonable contract. You terminate early, you pay the costs you would have paid upto the end of the contract.
Basically you're agreeing to pay them x dollars at the very least. - OrangeTide, on 10/11/2007, -0/+2Sprints termination fee was $250 last time I dealt with them. And many of these companies (Spring included) have this automatic contract renewal system which seems totally illegal.
I would highly recommend you do not set up automatic payments using a checking account with these companies. I did that once and I it was almost impossible to get them to stop billing me for their made up fees. Credit card is the way to go with these guys. plus when your CC is ready to expire it's easier to try and cancel your service. They won't really talk to you about the charges until they have a problem automatically charging you without your permission and will actively contact you about it. - tdowling, on 10/11/2007, -0/+2So they're not so much subsidizing for the iPhone as overcharging for everything else.
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