06-14-2008, 06:00 PM
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Contributing Editor Emeritus
Join Date: Aug 2006
Posts: 8,228
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AT&T: "Early Termination Fees A Great Deal For Consumers"
"Those early termination fees (ETFs) that consumers pay for switching cell phones in mid-contract are a great deal, an attorney for AT&T told the Federal Communications Commission yesterday. "ETF-backed term contracts give customers the ability to lower their monthly charges and upfront handset costs in exchange for their promise to pay monthly charges for the life of the contract or alternatively to pay the ETF in lieu of the remaining charges," Seamus C. Duffy explained to the FCC. Not only that, but "the overwhelming popularity of these rate plans has fueled the tremendous increase in wireless penetration, usage, and technical innovation documented by the [FCC's] annual reports on wireless competition." Right. It is such a great deal for consumers, I am waiting for the online petition so my utility companies, cable bill and NNTP service fee implement an ETF. And I am sure those of you paying monthly fees for acces to subscription sites, music sites and many more are also excited about ETFs everywhere, because according to the AT&T attorney, it is a good thing for us. No, not just a good thing, but a "Great Deal!" In fact, I think Jason may be working on an ETF program for Thoughts Media subscribers, because he surely wouldn't want to cheat you out of a great deal.
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06-14-2008, 07:25 PM
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Contributing Editor Emeritus
Join Date: Aug 2006
Posts: 2,291
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I don't think the problem is the ETF so much as the way it is handled. They need to be more upfront with the customer and give you options.
1. Pay full price for the phone, get a monthly contract with no ETF.
or
2. Pay a discounted price for the phone, have a contract with an ETF that goes down each month by (discount/#months on contract)
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06-14-2008, 10:18 PM
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Intellectual
Join Date: Aug 2006
Posts: 160
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Quote:
Originally Posted by Chris Gohlke
I don't think the problem is the ETF so much as the way it is handled. They need to be more upfront with the customer and give you options.
1. Pay full price for the phone, get a monthly contract with no ETF.
or
2. Pay a discounted price for the phone, have a contract with an ETF that goes down each month by (discount/#months on contract)
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Right on the nail IMO. The contract itself is not unfair. You are getting a $150 discount on a phone in return for a commitment of two years. The problem is that there is no option to get service with out a contract.
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06-15-2008, 12:44 AM
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Editor Emeritus
Join Date: Aug 2006
Posts: 2,432
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Quote:
Originally Posted by JKingGrim
Right on the nail IMO. The contract itself is not unfair. You are getting a $150 discount on a phone in return for a commitment of two years. The problem is that there is no option to get service with out a contract.
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With AT&T they have their 'contract-like' goPhone plans that include rollover, nights and weekend minutes and even unlimited mobile-to-mobile and the option to add on features like unlimited SMS and MediaNet data access. I think T-Mobile has something similar. The only downside is you pay a little more but at least you don't have to deal with the contracts. 
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06-15-2008, 03:49 AM
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Intellectual
Join Date: Aug 2006
Posts: 160
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Quote:
Originally Posted by Rocco Augusto
With AT&T they have their 'contract-like' goPhone plans that include rollover, nights and weekend minutes and even unlimited mobile-to-mobile and the option to add on features like unlimited SMS and MediaNet data access. I think T-Mobile has something similar. The only downside is you pay a little more but at least you don't have to deal with the contracts. |
A month ago I finally made the switch to GSM. I walked into the att store with my unlocked tilt in pocket. The plan you are referring to is called pick your plan. It is like a rate plan, but no contract and you pay before the billing period instead of after. The plans give you a lot less minutes for the same price. I asked a rep if I can get a regular rate plan with no contract and he said no. I promptly went across the street to t-mobile and signed up. With Tmo you can get flexpay. You pay the exact same rate as a post paid plan, just at the beginning of the cycle as opposed to after. Same features and everything. Wakeup AT&T.
Here is my dilemma. I am working in Michigan for the summer, but I go to school in Blacksburg VA. At my apartment in VA, coverage by most carriers is spotty. At my apartment here in MI T-mo coverage really stinks and it is very annoying. AT&T has 850mhz coverage here, however. Their coverage map show very good signal. I would love to sign up with AT&T for better coverage (maybe even despite the fact that I would pay $40 more per month for the same basic features). But what if when I get back to Blacksburg I get no signal with AT&T and good coverage with T-mo? I am past the 30 cancellation period. Contracts suck. I should not be forced to commit for two years just to get a service. [/rant]
Last edited by JKingGrim; 06-15-2008 at 03:51 AM..
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06-15-2008, 04:50 AM
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Pupil
Join Date: Nov 2007
Posts: 12
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Anyone can get a plan with AT&T without a contract. Every phone (except the iPhone) has a "no commitment" price. With this, you buy the phone outright. You don't get the extra discounts because you're not signing a contract, but you can definitely get service without a contract. However, because of the discounts, two-year contracts can be a good thing (which I'm assuming is where the AT&T lawyer was intending to go with his line of reasoning regarding the ETF).
@JKingGrim: The rep you talked to was absolutely wrong about you needing to sign a contract if you have your own equipment. As far as the signal goes, if you can get a signal with T-Mo then you can get at least the same signal with AT&T, if not better due to their use of multiple bands.
Quote:
1. Pay full price for the phone, get a monthly contract with no ETF.
or
2. Pay a discounted price for the phone, have a contract with an ETF that goes down each month by (discount/#months on contract)
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That's actually exactly how it works. AT&T even has prorated ETFs now.
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06-15-2008, 12:20 PM
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Thinker
Join Date: Feb 2005
Posts: 471
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If I understand correctly, ETF isn't a terribly bad deal. You've signed up for a commitment and AT&T charge you if you want out of that commitment. If you want to break your commitment in the UK, you have to pay the remainder of the contract - a sum that is usually far in excess of $150.
That said, most carriers in the UK now offer SIM only deals. You don't get a new phone but in return you can cancel at any time and the SIM only plans are very attractive.
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06-15-2008, 03:52 PM
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Intellectual
Join Date: Aug 2006
Posts: 160
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Quote:
Originally Posted by deanhatescoffee
Anyone can get a plan with AT&T without a contract. Every phone (except the iPhone) has a "no commitment" price. With this, you buy the phone outright. You don't get the extra discounts because you're not signing a contract, but you can definitely get service without a contract. However, because of the discounts, two-year contracts can be a good thing (which I'm assuming is where the AT&T lawyer was intending to go with his line of reasoning regarding the ETF).
@JKingGrim: The rep you talked to was absolutely wrong about you needing to sign a contract if you have your own equipment. As far as the signal goes, if you can get a signal with T-Mo then you can get at least the same signal with AT&T, if not better due to their use of multiple bands.
That's actually exactly how it works. AT&T even has prorated ETFs now.
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I would certainly love to believe you but according to AT&T this is not so. Whether or not you want a subsidized phone, you must sign a two year contract. The rep told me they dont even do 1 year contracts anymore. The only way to get service without a contract is "pick your plan" or "pay as go" prepaid plans, which as I explained above are even bigger rip-offs than the regular rate plans. The unsubsidized cost for the phones are for those who purchase without service or those who are upgrading their handsets, and they are not yet eligible for a discount by re-upping the contract. If I can get a regular post paid plan with no commitment please do tell how.
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06-15-2008, 04:16 PM
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Philosopher
Join Date: Oct 2006
Posts: 554
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Quote:
Originally Posted by JKingGrim
I would certainly love to believe you but according to AT&T this is not so. Whether or not you want a subsidized phone, you must sign a two year contract. The rep told me they dont even do 1 year contracts anymore. The only way to get service without a contract is "pick your plan" or "pay as go" prepaid plans, which as I explained above are even bigger rip-offs than the regular rate plans. The unsubsidized cost for the phones are for those who purchase without service or those who are upgrading their handsets, and they are not yet eligible for a discount by re-upping the contract. If I can get a regular post paid plan with no commitment please do tell how.
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All true! After reading post by deanhatescoffee I call AT&T and got the same answer as you
__________________
You create your opportunities by asking for them
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06-15-2008, 05:28 PM
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Contributing Editor Emeritus
Join Date: Aug 2006
Posts: 2,291
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Again, I think it is a disclosure issue.
In exchange for a 2 year contract, you are getting two benefits.
1) Subsidized hardware
2) Discount to monthly fee
So to be truly transparent, you'd need the following options
1) Pay full price for hardware and have a no contract monthly rate of x
2) Pay full price for hardware and have a contract rate of (x - rate discount for contract)
3) Get subsidized hardware and a contract rate of (x - rate discount for contract + add on to recoup the cost of the subsidized phone)
The early termination fee should be some combination of the present value of the contract discount that you should not have gotten since you did not fulfill the 2 year contract and the costs of the subsidized phone that have not been recouped.
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