08-05-08 08:26 PM
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  1. flchick75's Avatar
    Read this.......... California judge rules early cell phone termination fees illegal : Christopher Null : Yahoo! Tech


    not sure if anyone brought this up yet or not but I thought it was interesting.

    Here's part of the article:

    In one of the most significant legal rulings in the tech industry this year, a Superior Court judge in California has ruled that the practice of charging consumers a fee for ending their cell phone contract early is illegal and violates state law.

    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.
    Last edited by flchick75; 07-31-08 at 05:51 PM.
    07-31-08 05:47 PM
  2. grandpa's Avatar
    I think it will be more likely that phone makers would have to drastically drop their prices so people can afford them. A lot people have the free phone because they have can't afford the pricey Apples and BBs. It is much the same concept as a certain Dodge dealer in OKC, Ok that has there gas pick-ups on sale for 50% off and their larger diesel pick-ups for 40% off. They can't get rid of them at regular price with 4 dollar gas. I think the phones would be the same. Too many people would start opting for cheap phones til the smart phone prices hit rock bottom. I have like 3 razors a couple v-400s and an old treo lying around just in case. lol
    07-31-08 06:13 PM
  3. jenaywins's Avatar
    Are you serious? Good Lord.

    So here is my question: Are ETF fees illegal altogether, or does this ruling state that ETF fees are illegal in certain situations, IE when the carrier doesn't uphold their end of the terms and conditions of the contract?
    07-31-08 06:23 PM
  4. oakie's Avatar
    illegal according to california law based on that county judge's interpretation of the law. media outlets seem to forget to add those very important stipulations.

    and if it is found to be tried and upheld federally, you can expect the cost of handsets to increase dramatically as subsidies will be eliminated.
    07-31-08 06:44 PM
  5. jenaywins's Avatar
    That is plain stupid. I'm sorry, but it really is. So because there are people out there who cannot adhere to a comittment THEY signed up for, everyone must pay higher prices for our phones? Brilliant.
    07-31-08 06:46 PM
  6. oakie's Avatar
    Are you serious? Good Lord.

    So here is my question: Are ETF fees illegal altogether, or does this ruling state that ETF fees are illegal in certain situations, IE when the carrier doesn't uphold their end of the terms and conditions of the contract?
    according to california code, subsidised contracts must be defined by dollar value and deemed fulfilled upon completion, regardless of contract fulfillment date.

    therefore, the ETF charge is illegal if a customer pays back the subsidy no matter the length of time contracted... if you get a $150 discount on a phone, the contract must clearly state the cost breakdown of your contract over time to show when that $150 has been paid back.

    depending on your monthly rate and amount of subsidy, you could have fulfilled those terms much earlier than 24 months. in addition, your subsidy rate may be less than the $175 ETF they attempt to collect.

    this is where the contractual agreements as they are have violated california code.
    07-31-08 06:50 PM
  7. jenaywins's Avatar
    So basically, the only change is..... As it stands, contracts are defined by a certain period of time, not dollar value. However, the new law would state that you must fulfill a certain agreed upon dollar amount, which would vary contract-to-contract, depending on rates.... Am I reading this correctly? If so, that does make sense... However, I still see nothing wrong with the way contracts are setup as of present.
    07-31-08 06:53 PM
  8. hal1's Avatar
    That is plain stupid. I'm sorry, but it really is. So because there are people out there who cannot adhere to a comittment THEY signed up for, everyone must pay higher prices for our phones? Brilliant.
    Agreed. We get lo-cost or no-cost phones in exchange for our commitment. Everything has a cost.

    Free internet websites such as Google, yahoo, cnn, you name it, can be offered without a subscription due to advertisers. Same with FREE TV, Radio, you name it.

    The "cost" of our low-cost phone is our contract commitment.
    07-31-08 06:54 PM
  9. dave_sz's Avatar
    Agree. You sign a contract that says if you get out of it early you must pay.

    Posted from my CrackBerry at wapforums.crackberry.com
    07-31-08 07:14 PM
  10. patrick.waugh's Avatar
    I guarantee you this will be overturned.

    California (I know I used to live there) does lots of stupid liberal stuff, but that doesn't make it right (just left).

    That judge is off his rocker. You sign a contract, and the ONLY thing you can't contract to do is something illegal. In other words, if I sign a contract to rob a bank for you, or pay you $1,000,000 you can't sue me (successfully) when I "break" the contract and don't rob the bank.

    Only a liberal (read socialist/marxist) could possibly have any issue with and ETF fee that you have to agree to, to be subject to pay. You can go in any carrier right now today and not have an ETF, and get any phone you want.

    That judge has been smoking to much ganja if you ask me. =)
    07-31-08 07:32 PM
  11. kladner's Avatar
    This is unbelievable. No one takes responsibility for their actions anymore. (Like signing a contract) I guess they made them sign it too!!! Also bet they didn't mind taking that free phone.

    Posted from my CrackBerry at wapforums.crackberry.com
    07-31-08 08:05 PM
  12. frasej's Avatar
    You sign a contract, and the ONLY thing you can't contract to do is something illegal...
    That is exactly what the judge is saying, that the contract violates California's state law. Which would make it illegal, in California. Now, which law that might be, I don't know or really care. The carriers will get their money one way or another.
    07-31-08 08:20 PM
  13. jidx's Avatar
    Good find!
    07-31-08 08:22 PM
  14. Super Loopy's Avatar
    Only a liberal (read socialist/marxist) could possibly have any issue with and ETF fee that you have to agree to, to be subject to pay.
    Yeah, cause our wonderful right wing Texas Governor has really helped us for the past 8 years.

    You may want to watch the names you're throwing out there. Next thing you know you'll be talking about Czechoslovakia.
    07-31-08 08:25 PM
  15. kladner's Avatar
    Yeah, cause our wonderful right wing Texas Governor has really helped us for the past 8 years.

    You may want to watch the names you're throwing out there. Next thing you know you'll be talking about Czechoslovakia.
    Nothing to worry about, Obama will save us!

    Posted from my CrackBerry at wapforums.crackberry.com
    07-31-08 08:37 PM
  16. ShortStop51001's Avatar
    I just read my new ATT contract and it says the ETF will be lowered each month...hey i actually downloaded the contract and cropped that portion out....here it is



    IMO ETF's are why our phone's are so cheap. I pay full retail for much of my phone in he past because i want a phone before my contract allows me to do so. If you do not want to be committed to a carrier, why not sign up for a year instead of two years...but no people dont want to do that because the phone price is more. Well ya can't have your cake and eat it too.
    07-31-08 08:47 PM
  17. bexx's Avatar
    i do not want to pay more for hardware because people whine about early termination fees. if they want no-committment, they do make those!

    i'm absolutely positive it hurts the majority more to pay the riduculous monthly fees and give the providers carte blanche to make us pay up for the hardware too. i freaked out when i read that article!
    07-31-08 08:52 PM
  18. calidiva79's Avatar
    Okay I know cali does some dumb things but give us a break we can't help who lives here lol

    As far as the ETF goes, we (T-Mobile) have already modified our policy to where it breaks it down from $200 down to $50 based on how many days are remaining in your contact. So no, ETF has not gone away they are just more reasonable now.

    Posted from my CrackBerry at wapforums.crackberry.com
    07-31-08 09:14 PM
  19. Hi-Definition's Avatar
    Whoa, Whoa patrick.waugh (rush is that you?)...what has your opinion and indiscreet stance on liberals/conservatives have anything to do with the ETF case??

    Case-law in this situation is non-existent; since there have been no rulings in the past in any other state or jurisdiction to base a ruling on. Therefore; this case is HUGE...it will set a precedence. Yes, phone prices are low because ETFs are what offsets the out-of-pocket price that service providers actually pay when they sell a device...hoping to make it up by customers honoring their contract and paying their monthly dues for however long the contract length is.

    However, yes; ETFs are illegal in the sense that they are 'vague'. But once the terms and conditions of the ETF are laid-out clear (what exactly is 'clear'; the courts will judge) as to why they exist; and why the sum of the ETF is the way it is...they become legal. The ETF is no more than a security deposit of sorts on contracts.

    I do believe that ETF fees should exist; however the charge for the ETF should be uniform for service providers across the country; and the verbage outlining them should be uniform also.
    07-31-08 10:29 PM
  20. reeneebob's Avatar
    You may want to watch the generalizations, patrick - I am strongly liberal (gasp Canadian) but I think the ruling is stupid. Its the same as people up here whining about the incoming text fee if they have no text plan. They want to say its breach of contract, but it clearly states the texting is a feature and feature pricing can change at any time. Now there are class action lawsuits over it. Stupid. We sign the contract knowing these things and its not the carriers fault people are too lazy to read the contract.

    And I am the most liberal person you'll ever meet - pro choice, pro euthanasia, pro legal medical marijuana and strongly pro gay marriage, but even I think this is stupid.


    I guarantee you this will be overturned.

    California (I know I used to live there) does lots of stupid liberal stuff, but that doesn't make it right (just left).

    That judge is off his rocker. You sign a contract, and the ONLY thing you can't contract to do is something illegal. In other words, if I sign a contract to rob a bank for you, or pay you $1,000,000 you can't sue me (successfully) when I "break" the contract and don't rob the bank.

    Only a liberal (read socialist/marxist) could possibly have any issue with and ETF fee that you have to agree to, to be subject to pay. You can go in any carrier right now today and not have an ETF, and get any phone you want.

    That judge has been smoking to much ganja if you ask me. =)
    Posted from my CrackBerry at wapforums.crackberry.com
    08-01-08 08:56 AM
  21. talltubatom's Avatar
    Ok from what i understand most people will not see a difference here. The point is the ETF can't be double charged. It needs to be made clear what the monthly charges for the subsidized cost of the phone are.

    This seems like it might be a good example to illustrate the point.

    So lets say I get $240 off my phone on a 2 year contract. That breaks down to $10/ Mo. Now if the contract that i sign says that there will be a $240 ETF (due to the subsidized phone) I am only obligated to pay that money if it has not already been paid off with my monthly commitments. So if I want to cancel after 12 months My ETF should be adjusted to $120 because I have already paid them back for the first half of the discounted price.

    I don't think that eliminating the ETF would be a bad thing at all though. We would see a more accurate price for the services we receive reflected in our monthly bills.
    08-01-08 10:10 AM
  22. Duvi's Avatar
    Hopefully this is overruled. I find it very stupid that California always has a different set of rules from the rest of the U.S.

    Working for at&t and always having a training and rules excluding California is getting annoying.

    I don't mind paying an ETF. In some cases, the discount I get off the phone + paying an ETF is cheaper than paying outright for the device. Also I've never had an issue getting early upgrades. This is plain stupid IMO.
    08-01-08 10:41 AM
  23. RedWings's Avatar
    Cali folks are such cry babies

    Posted from my CrackBerry at wapforums.crackberry.com
    08-01-08 10:45 AM
  24. Duvi's Avatar
    Cali folks are such cry babies

    Posted from my CrackBerry at wapforums.crackberry.com

    In terms of their legislative body, I will agree to that.
    08-01-08 11:11 AM
  25. grandpa's Avatar
    Nothing to worry about, Obama will save us!
    I'm sorry, but God help us all. (When Democrats tell you they want change, tell them you don't have any)

    Really you sign a contract you should adhere to it. AT&T's cancellation policy for contracts after 04/08 is $5 per month left of contract which is better then prior $175 flat rate.

    On the other hand, there is no way they can sell enough $500-$600+ handsets to warrant making them. The subsidy is just a marketing ploy to make it look like a good deal. They still make money on the phone or they wouldn't sell it. They make money on the contract as well and thats why they give away $2 cheap phones and not BBs and iPhones. It probably doesn't cost them more than 10-20 to make them anyway.(Just a SWAG) How many people do you really know that can walk in and buy a 5 or 6 hundred dollar phone. I personally know very few. They would have to opt to not have a cellphone or find a free or cheap ones from a friend or something to that effect. They can get you with the contract whether or not you buy the subsidized phone(unless it is deemed illegal). When I bought the original iPhone I was put back under a 2 yr. contract and the only way to get that phone was to buy outright.

    I don't think anyone should worry about phone prices, not anytime soon. They will only go up with inflation and the more non necessity items go up the less they will be sold and so they will be forced to make better deals or go out of business.

    Just my opin.
    08-01-08 11:20 AM
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