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Google Charges ETF For Nexus One On Top of Carrier's

kdawson posted more than 4 years ago | from the hand-in-the-cookie-jar dept.

Cellphones 165

dumbnose sends along the news that Google is double-dipping on the Nexus One early termination fee. Ars sorts out the double dose of fine print from Google and T-Mobile. What it boils down to is, if you give up on your Nexus One between 14 days and 120 days after the sale, it will cost you $550: $350 to Google (automatically charged to the credit card you used to buy the phone) and $200 to T-Mobile. After 120 days the Google fee goes away and after 550 days the T-Mobile ETF begins prorating. A poster on Dave Farber's email list provides another perspective on the "restructuring of the handset premium."

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165 comments

ETF? (3, Interesting)

The Clockwork Troll (655321) | more than 4 years ago | (#30742748)

More like WTF.

You say WTF, I say (2, Funny)

Anonymous Coward | more than 4 years ago | (#30742844)

FGITA (F*ck Google in the Ass), that's what they're trying to do to you!

Re:You say WTF, I say (0)

Anonymous Coward | more than 4 years ago | (#30743188)

Pork chop sammiches!

Re:You say WTF, I say (0)

Anonymous Coward | more than 4 years ago | (#30743194)

Yea, and we can't even call them evil because it's not politically correct to call homosexuality evil! Next up, a Big Corporation Fucking Consumers In The Ass Pride Parade.

Re:You say WTF, I say (0)

Anonymous Coward | more than 4 years ago | (#30744080)

Yes, FGITA, but what does the scouter say about his power level?

Do no evil? (-1)

Anonymous Coward | more than 4 years ago | (#30742762)

Indeed.

oh no, that sounds... (3, Insightful)

Anonymous Coward | more than 4 years ago | (#30742768)

...evil

quick, somebody justify and rationalize it

whew, that was a close one!!

Re:oh no, that sounds... (0)

iamhassi (659463) | more than 4 years ago | (#30744224)

"...evil

quick, somebody justify and rationalize it"


for those of you just joining us, Google's corporate motto is "Don't be evil" [wikipedia.org]

Re:oh no, that sounds... (1)

WCguru42 (1268530) | more than 4 years ago | (#30744482)

"...evil
quick, somebody justify and rationalize it"

for those of you just joining us, Google's corporate motto is "Don't be evil" [wikipedia.org]

You're doing it wrong.

that sort of makes sense (4, Insightful)

Trepidity (597) | more than 4 years ago | (#30742786)

The discount for buying it with a 2-year plan is $350, so clearly the termination fee has to be more than T-mobile's $200 to deter people from buying with the plan and then cancelling as a way of getting the bare phone at a discount. Now, $550 is a bit absurd, because it's higher than the cost of the bare phone, but these sorts of fees are often higher than would make sense.

I guess having the fee charged in two separate instances, instead of T-mobile charging one larger fee and then reimbursing Google with part of the money, is a somewhat unusual structuring. But I'm not sure it fundamentally matters?

Re:that sort of makes sense (1)

Mekkah (1651935) | more than 4 years ago | (#30742808)

It might make sense, but is AT&T doing this?

No, so, if AT&T can do it, then Verizon can eat it too.

Re:that sort of makes sense (2, Interesting)

More_Cowbell (957742) | more than 4 years ago | (#30742864)

As far as I can tell, the difference here is that this phone is not being sold by the carrier, but by Google. Not trying to be an apologist for Google, but I *guess* it makes sense...

Re:that sort of makes sense (0)

MBCook (132727) | more than 4 years ago | (#30743126)

Nope. That's what the $45 restocking/refurbishing fee is. I can understand that. This is just... strange.

Out of pocket + Google ETF + T-Mobile ETF > Unsubsidized cost

That doesn't add up.

Re:that sort of makes sense (1)

More_Cowbell (957742) | more than 4 years ago | (#30743324)

Uh, I think that depends on the nature of the contract between Google and T-Mobile. If the phone costs Google X to manufacture and they are selling it for less than X as part of a contract where T-Mobile pays them some portion of the difference, it makes some sense that Google would want to recoup that money if you cancel the contract with T-Mobile. There is no restocking fee here, you are keeping the phone, just not the contract.
T-Mobile ETF is almost a red herring here, phone companies charge that either way. And you paying T-Mobile ETF probably does not reimburse Google (my guess).

Re:that sort of makes sense (1)

ravenshrike (808508) | more than 4 years ago | (#30743458)

Exactly. The plan shows that after 120 days Google has recouped it's discount from T-Mobile. It has nothing to do with the T-Mobile ETF and I doubt Google sees a cent of that.

Re:that sort of makes sense (2, Insightful)

Mekkah (1651935) | more than 4 years ago | (#30743246)

Well okay, so you're saying I should be blaming Google for not taking the hit, rather than Verizon, gotcha.

I think if that is the case though, Google made a bad move with Verizon, they should've learned from AT&T's dealings with Apple. But I think that Verizon just might be hiding behind Google on this one.. It doesn't seem right at all.

Re:that sort of makes sense (1)

rocket97 (565016) | more than 4 years ago | (#30743486)

Where did Verizon come into this? It is a Google/T-Mobile thing.

Re:that sort of makes sense (3, Informative)

kannibal_klown (531544) | more than 4 years ago | (#30742830)

See, that's why I went with the T-Mobile Even More Plus plan.

No 2-year contract, and no early termination fee.

Then again that meant I had to pay full price for my Nexus One... around $550.

I'm still deciding whether I'm going to keep it or stick with AT&T, and I still have 1.5 weeks to decide and return it.

Granted I'll still be about about $90-$100 if I return it. 51.99 from my T-Mobile plan (via company discount) and 40-50 for the restocking fee.

Re:that sort of makes sense (1)

yincrash (854885) | more than 4 years ago | (#30743162)

If you went with AT&T, wouldn't the plan come out to $80/mo and you wouldn't have 3G?

Re:that sort of makes sense (1)

kannibal_klown (531544) | more than 4 years ago | (#30743606)

I guess I should've been clearer in my post.

I'm switching from AT&T to T-Mobile, assuming I enjoy my Nexus One + T-Mobile enough. Just in case I'm keeping my AT&T account this month.

However the T-Mobile coverage by me is looking a little spottier than I'd like.

So, if I decide to cancel the T-Mobile I don't have to pay an ETF with the "More" account. So I'll just lose the first month of T-Mobile ($51 USD) and the restocking fee on the Nexus One (about $45-50) since I payed for the unsubsidized model.

I wouldn't want to use the Nexus One on AT&T as, like you said, it would be slow as heck with Edge and Id be paying a fair amount.

The first time I scanned your post (1)

ClosedSource (238333) | more than 4 years ago | (#30743784)

I thought you said "I went with the T-Mobile Even More Pus plan".

Re:that sort of makes sense (0, Troll)

jeffmeden (135043) | more than 4 years ago | (#30743718)

No, sorry, it doesn't make sense at all. The point of an ETF is to deter people from signing a contract then bailing, just like you pointed out. However, when you buy the phone, it still costs you $179 with a new contract via Tmobile (last I checked) so if the phone is $550 it would be fair that they would somehow have a $371 etf somewhere in there to cover the gap on the handset cost.

Aside from that, who is eating the handset cost here, and who is making up in subscription fees... Google or tmobile? If it's google, then tmobile better not charge one red cent for the privilege of signing a contract for a paid for phone. If it's Google, then why does t mobile get to charge an ETF at all?

Finally, unless Google is getting a kickback from t mobile for every month the phone is in contract, why would they care if you bought the phone then left t mobile? You aren't going to put the phone on a shelf and never use it after you leave your contract; you will likely subscribe and keep on using it just the way Google wants. They keep winning. Why should they try to penalize you for leaving t mobile?

The only answers that make sense are thus:

A) Google is super greedy, plus tmobile is super greedy.
B) Google is kind of greedy, plus t mobile was too lazy to adjust the contract to exclude the ETF considering google fronts the phone.

I'll stick with my Rogers Wireless iPhone (3, Insightful)

ironicsky (569792) | more than 4 years ago | (#30742796)

I'll stick with my phone... $200 early termination fee.. That's $200 for the phone, $200 termination = $400, which is still cheaper then the retail $699.

LOL! iPhone Owner... (-1, Troll)

Anonymous Coward | more than 4 years ago | (#30742856)

Douchebag with a shitty, outdated phone.

Enjoy your fart apps hipster.

Re:LOL! iPhone Owner... (-1, Troll)

Anonymous Coward | more than 4 years ago | (#30743228)

Slashdot is even more fun to troll than Mac boards: Full of angsty, self-righteous nerds who think they all have Asperger's but actually are just socially inept, and no content that isn't presented faster, and more professionally, elsewhere. So nothing's lost by shitting in the comments.

You Suck At Flaming Retard (-1, Troll)

Anonymous Coward | more than 4 years ago | (#30743312)

And you still have a piece of shit iPhone.

Go away. No one wants hipster doucebags like you around.

Re:You Suck At Flaming Retard (-1, Offtopic)

Anonymous Coward | more than 4 years ago | (#30743346)

What are you, some kind of fag? 'Cause the only thing less tolerable than douchebags like me is fags like you.

Re:You Suck At Flaming Retard (-1, Flamebait)

Anonymous Coward | more than 4 years ago | (#30743646)

I'm a faggy douchebag. And I have the Obama sticker on my moped to prove it, you insensitive clod!

Re:I'll stick with my Rogers Wireless iPhone (0)

Anonymous Coward | more than 4 years ago | (#30742944)

Err... from Rogers: "The ECF is the greater of (ii) $100 or (iii) $20 per month remaining in the service agreement, to a maximum of $400 (plus applicable taxes), and applies on each line in the plan that is terminated."

Also... Rogers revised their phone upgrade terms... now it's like a min of 2 yrs before you qualify for phone upgrade discounts.

Re:I'll stick with my Rogers Wireless iPhone (0)

Anonymous Coward | more than 4 years ago | (#30743454)

I got around the 2 year thing last fall...
Its amazing what happens when you call support, be polite, explain that you'll happily take your GSM phone to Telus if they don't give you an early upgrade and be persistant, but polite.

Its when you start yelling that they start ignoring you.

Re:I'll stick with my Rogers Wireless iPhone (0)

Anonymous Coward | more than 4 years ago | (#30743800)

You sure about that?

They changed it to maximum of $400 some time ago.

Also, there's an early cancellation fee on the data plan you're likely also missing.

Re:I'll stick with my Rogers Wireless iPhone (0)

Anonymous Coward | more than 4 years ago | (#30743838)

Don't forget the DETF (Data ETF) that Rogers also charges separately from the ETF...

Re:I'll stick with my Rogers Wireless iPhone (0)

Anonymous Coward | more than 4 years ago | (#30744226)

I'm sorry, but whoever sold you that phone lied to you.

Roger's Early Cancellation Fee policy is as follows:
"An Early Cancellation Fee (ECF) applies if, for any reason, your service is terminated prior to the end of the service agreement. The ECF is the greater of (ii) $100 or (iii) $20 per month remaining in the service agreement, to a maximum of $400 (plus applicable taxes), and applies on each line in the plan that is terminated. A Data Early Cancellation Fee (DECF) also applies if, for any reason, your service is terminated prior to the end of your plan’s commitment term (Data Term). The DECF is the greater of (i) $25 or (ii) $5 per month remaining in the Data Term, to a maximum of $100 (plus applicable taxes), and applies in addition to the ECF for termination of your service agreement. If you subscribe to a plan combining both voice and data services, both the ECF and the DECF apply."

So, $200 is the early termination fee if you are within 5 months of the end of your THREE YEAR contract (Not two years, like US iPhone plans). If you cancel in the first 31 months of your contract you will pay more than $200; up to a maximum of $500 for any cancellation in the first 16 months of your contract.

Legal? (0)

Anonymous Coward | more than 4 years ago | (#30742902)

Can someone who is a lawyer say if it's legal or not? If this becomes a trend, what's to keep other Android phone manufacturers and even other manufacturers from doing the same? What's to keep it to spreading from other industries, specifically one that has a service associated with it?

Re:Legal? (1)

maxume (22995) | more than 4 years ago | (#30743070)

They are charging the fee as the retailer of the phone, not as the manufacturer.

Early termination fee (ETF) (5, Informative)

Chris Pimlott (16212) | more than 4 years ago | (#30742904)

It's customary to explicitly define the acronym before its first use in the main body.

Re:Early termination fee (ETF) (3, Funny)

kbob88 (951258) | more than 4 years ago | (#30742972)

It's customary to explicitly define the acronym before its first use in the main body.

Come on, here on Slashdot, everyone knows that ETF stands for "Exchange Traded Fund". Google is giving out Nexus Ones to all investors in some fund, and charging them for it. Or is it "Electron-transferring flavoproteins"? Maybe "Emergency Task Force"?

Re:Early termination fee (ETF) (1)

Hurricane78 (562437) | more than 4 years ago | (#30743628)

No. Actually it is EPIC TOTAL FAIL! ^^

(Filter error: Don't use so many caps. It's like YELLING.)

Re:Early termination fee (ETF) (-1, Flamebait)

Anonymous Coward | more than 4 years ago | (#30743576)

STFU, DIAF.
 

False alarm (4, Informative)

jdgeorge (18767) | more than 4 years ago | (#30742924)

As Ars poster captriker notes: the Google fee is only levied if you do not return the device to them in the subscribed time.

Google's terms of sale for the Nexus device [google.com] state:

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.

Re:False alarm (1)

More_Cowbell (957742) | more than 4 years ago | (#30742994)

As Ars poster captriker notes: the Google fee is only levied if you do not return the device to them in the subscribed time.

Uh, yeah, you mean like it says in the summary at the top of the page?

iPhone Media Fanboys Are In Panic Mode (-1, Flamebait)

Anonymous Coward | more than 4 years ago | (#30743050)

After getting a free ride in the media for so long the iPhone fanboys are in desperation mode with the massive success of Android and Google having the best cellphone on the market with the incredible Nexus One.

They are pretty much throwing every bit of FUD they can come up with and just hoping some percentage of it sticks.

Remember folks, the "OMG!! iPhone!!!" is what their owners base their own personal self worth on. Android isn't just a threat to Apple's third place in the cellphone market, it's a dire threat to hipster iPhone douchebag owners themselves.

 

Re:False alarm (2, Insightful)

PPalmgren (1009823) | more than 4 years ago | (#30743082)

Might wanna read TFS again, it clearly states that this incident can occur between 14 to 120 days, which is what your quote says. Essentially, you can only return the phone for the first 14 days, and you're charged an ETF by google to make up for the subsidy cost difference if terminated between 15 and 120 days. T-Mob also charges an ETF for breach of contract.

IMO it is a double dip, since they would be making 180+350+200 on a phone cancelled in that window, which is more than the cost of the phone, which is bullshit. If you can find fine print in T-mobile's contract that states they do not charge an ETF if it overlaps with google's ETF, that will negate it, but I don't see anything in your post that suggests otherwise.

Re:False alarm (1)

0xdeadbeef (28836) | more than 4 years ago | (#30743532)

180 + 350 = 530, which just so happens to be the price of the phone! Amazing!

T-Mobile fucking you for backing out a contract is their prerogative, and pretty typical of all carriers. Don't like? Don't sign a contract!

Re:False alarm (1)

DiademBedfordshire (1662223) | more than 4 years ago | (#30743152)

So if you break the contract after 120 days your cost of ownership would be $179 inital price + $200 etf for a total of $379 or a $150 discount. Not a bad deal.

Re:False alarm (0)

Anonymous Coward | more than 4 years ago | (#30743398)

Except you pay an extra $20/month on contract vs unlocked. Over 120 days, that's $80 extra, so total discount it only $70.

Re:False alarm (1)

fermion (181285) | more than 4 years ago | (#30743650)

In any case, I think the intent of the story, which is to say that Google is double dipping is true. Anything over a $300 termination fee is excessive, especially since they are openly selling the unlocked version. There is simply no incentive for a person to buy the subsidized phone with the intention of breaking the contract. It in fact seems like a bait and switch scheme since it is so out of line with what consumers are used to, and these variances are evidently not prominently displayed on the purchase screen. It shows that there is something fundamentally flawed with their model if consumers are going to liable for 2X purchase price if the contract is broken.

It is a worse deal than an iPhone. No early termination fee if phone returned with 30 days, much better than a mere 2 weeks. The nexus one must have questionable quality if there only a two week trial period. Early termination fee is $175 versus $200, and is decremented $5 per month.

I always though the early termination fee was to recover subsidized cost of the phone. I never thought you had to return the phone. For instance, if someone lost a phone then the phone would not be able to be returned. I have seen statements of people canceling after 30 days and keeping the phone. If google is charging for the phone after 30 days, then they are, arguably, doing evil.

Hmmm (3, Insightful)

jwinster (1620555) | more than 4 years ago | (#30742956)

Now to watch and see if the reaction by the FTC to Verizon's ETF on certain phones is the same as for Google/T-Mobile. I'm no fan of Verizon but I'm curious to see if the FTC is truly blinded by the shiny goodwill that Google has with its users.

Re:Hmmm (0)

Anonymous Coward | more than 4 years ago | (#30743870)

Now to watch and see if the reaction by the FTC to Verizon's ETF on certain phones is the same as for Google/T-Mobile. I'm no fan of Verizon but I'm curious to see if the FTC is truly blinded by the shiny goodwill that Google has with its users.

Verizon raised the ETF after the fact. Google is being straightforward (so far...)

This seems reasonable (1)

bluefoxlucid (723572) | more than 4 years ago | (#30742974)

You bought the phone, and inside 4 months you canceled your plan. The phone is subsidized. This seems reasonable. I mean, consider the ETF could be Verizonized (i.e. strung out for the entire term of your plan, if you cancel a month early there's a huge ETF).

120 days is enough (1)

solu007 (1719556) | more than 4 years ago | (#30742980)

120 days is a long time ... I will probally buy a new one then ;-)

And then? (4, Insightful)

e2d2 (115622) | more than 4 years ago | (#30742988)

Look, don't buy it then. It's that simple. This isn't access to a new heart they are selling, it's a cell phone and a premium one at that. Act like a grown up and read the contract then make a decision. Problem solved.

Too many "outrage" stories these days relating to luxuries and free services. Solution: Don't buy them or don't use them.

Re:And then? (1)

steelfood (895457) | more than 4 years ago | (#30743388)

This is something of a special case. Google's not supposed to be evil. Setting this kind of prescedent when none such exists in the industry is pretty damn evil. Watch every other phone manufacturer change their terms to the same thing.

That having been said, I'm not getting a Nexus One, through the carrier or not. I was looking at it seriously, but now not so much.

And buy what as an alternative? (1, Interesting)

hellfire (86129) | more than 4 years ago | (#30743402)

See my problem with "don't buy it" in the cell phone market is that there aren't enough alternatives. Okay so I need a cell phone to do my job, and keep in touch with my family. Exactly what do I do? Buy one of those crappy PAYGO cell phones that break in 6 months, and has no features? How do I check my email and keep my calendar with one of those? We need OSes in the market like WebOS, the iPhone and Android, but in order to take advantage of them, yes the cell phone companies aren't competing to get my dollar, they are colluding to drive prices up while not improving their service at the same rate.

Every cell phone company is trying to pull bullshit because they all learned that a) the best way to make money is to try to either force people into a contract or try to trick them and b) the American government as it stands now simply is unwilling and incapable of properly regulating and policing them. We can't even get proper banking or health reform ion this country, cell phone reform on pricing is significantly further down the list. Telling me not to buy it when there are no choices for me is not a choice, it's basically telling me to find a job and a lifestyle that doesn't require a cell phone.

Re:And buy what as an alternative? (1)

maxume (22995) | more than 4 years ago | (#30743636)

They don't have a lot of gee whiz hotness, but there are all sorts of unlocked phones on Amazon that have calendars and reasonable ability to check email, for $200-300.

Re:And buy what as an alternative? (5, Insightful)

Anonymous Coward | more than 4 years ago | (#30743738)

Okay so I need a cell phone to do my job, and keep in touch with my family. .. How do I check my email and keep my calendar with one of those?

You don't. You do email and calendar at your desktop computer. You pick up the cheap $50-with-1-year-contract cellphone when it makes a noise indicating someone wants to talk to you.

You don't need immediate mobile email access to keep in touch with family. Read your mailbox once per day (or every few days) when you get to your desktop. If someone has an emergency, they can fucking call you. If it's not an emergency, a delayed turnaround is fine.

And if you are required to read email/calendars immediately for your job, then don't worry, because your employer is going to buy the phone.

it's basically telling me to find a job and a lifestyle that doesn't require a cell phone.

Yep, it's pretty clear you don't know the diff between a cell phone, and a ridiculously powerful (expensive) handheld personal computer. The two are merging but they're sure as hell not quite the same thing yet. One costs $50 and the other costs $500. Quit saying that you want a cellphone (a $50 device) and then bitching that the $500 overkill device costs too much. Get the $50 one and make your fucking phone calls like you said you wanted to.

Re:And buy what as an alternative? (1)

Antisyzygy (1495469) | more than 4 years ago | (#30744286)

You could get a netbook to check email, ect. They have cell service internet plans or you could go in any coffee shop, and many restaurants in this world to get wireless access. Then you could get yourself a cheaper, regular phone. I use a Samsung SCH-U650. Its compact, light, has long battery life, and it looks nice.

Re:And buy what as an alternative? (0)

Anonymous Coward | more than 4 years ago | (#30744320)

You need a cell phone, and don't want a cheap one. An ETF, however, is a deal breaker. Here, I've got a phone for you: the Google Nexus One. They offer it in two flavors: one subsidized by a 2-year contract with an ETF, and one unlocked with no contract.

Re:And buy what as an alternative? (0)

Anonymous Coward | more than 4 years ago | (#30744354)

See my problem with "don't buy it" in the cell phone market is that there aren't enough alternatives. Okay so I need a cell phone to do my job, and keep in touch with my family. Exactly what do I do? Buy one of those crappy PAYGO cell phones that break in 6 months, and has no features? How do I check my email and keep my calendar with one of those?

There is a huge OTHER market. With gsm, you can buy unlocked cell phones from anywhere, pop in your SIM card, and away you go.

I've bought 6-month old blackberries for less than $100 on ebay (retail $600). Not to mention craigslist, newegg, and other retailers.

Re:And then? (1)

geekmux (1040042) | more than 4 years ago | (#30743444)

Look, don't buy it then. It's that simple. This isn't access to a new heart they are selling, it's a cell phone and a premium one at that. Act like a grown up and read the contract then make a decision. Problem solved.

Too many "outrage" stories these days relating to luxuries and free services. Solution: Don't buy them or don't use them.

I couldn't agree more. I really don't understand all the "outrage" over this, when the EXACT same practice has been going on in the form of "restocking fees" for years now with other forms of electronics. I don't really see a difference, regardless of the amount vendor X is charging compared to vendor Y.

Either you learn to live with your buyers remorse, or pay up. It's called personal responsibility. I know, that's a fairly new term going around these days...

Way to Dumb, guys! (1, Informative)

copponex (13876) | more than 4 years ago | (#30742990)

Google states that if you cancel the contract within the first four months, you have to pay them the for the rest of the phone. ($350 + $180 = $530)

The T-Mobile fine print says:

THE EARLY TERMINATION FEE IS: $200 IF YOU TERMINATE WITH MORE THAN 180 DAYS REMAINING ON YOUR TERM; $100 IF YOU TERMINATE WITH 91 TO 180 DAYS REMAINING ON YOUR TERM; $50 IF YOU TERMINATE WITH 31 TO 91 DAYS REMAINING ON YOUR TERM; AND THE LESSER OF $50 OR YOUR MONTHLY RECURRING CHARGES (including any applicable taxes and fees) IF YOU TERMINATE IN THE LAST 30 DAYS OF YOUR TERM. The Early Termination Fee is part of our rates and is not a penalty.

How is Google double dipping by demanding no money if you cancel after 120 days?

Re:Way to Dumb, guys! (1)

PPalmgren (1009823) | more than 4 years ago | (#30743136)

Its not about google double dipping, its about Google and T-Mobile collectively recouping more than the cost of the phone (180 + 350 + 200 = 730). The point of the ETF is to recoup subsidies, not to rape the customer for leaving you because you suck.

Misleading Title (1)

copponex (13876) | more than 4 years ago | (#30743594)

Then the article should read, "T-Mobile Charges ETF For Nexus One on top of Google's" but instead, it reads the other way around because Google is news and a cell carrier shafting their customer is not.

T-Mobile has decided to charge a fee for early termination of contract. I agree it's shady, but Google clearly is not making this decision for T-Mobile.

It's not evil... (4, Funny)

Dartz-IRL (1640117) | more than 4 years ago | (#30742992)

It's not evil, it's just business.

Re:It's not evil... (0)

Anonymous Coward | more than 4 years ago | (#30743316)

Parent better be modded Funny.

Re:It's not evil... (1)

MBC1977 (978793) | more than 4 years ago | (#30744380)

Why? Parent is perfectly correct.

It's the T-Mobile ETF that doesn't make sense... (5, Insightful)

argent (18001) | more than 4 years ago | (#30743084)

It's not the Google ETF that's the problem, it's the T-Mobile one. You're buying the phone from Google, not T-Mobile. If you trigger Google's early termination fee, T-Mobile shouldn't be out of pocket at all, and shouldn't be charging you anything.

Re:It's the T-Mobile ETF that doesn't make sense.. (0)

Anonymous Coward | more than 4 years ago | (#30743508)

I dont quite understand this, are you paying some sort of recurring fee to google and if not then how are they subsidizing the phone to you?
 
it all seems a bit complicated to me, I'll stick with buying my phones outright and not being at the mercy of the telcos in my country (who sound a whole lot better than the dicks you have over there)

Re:It's the T-Mobile ETF that doesn't make sense.. (4, Informative)

argent (18001) | more than 4 years ago | (#30743612)

Google is reimbursed by T-Mobile. If they're reimbursed by you, then T-Mobile doesn't owe them anything, so why is T-mobile charging you an early termination fee?

A bit of background. A few years ago I got a Smartphone, a T-Mobile Smartphone, but not from T-Mobile. I wanted to get service from T-Mobile because that was the only way at the time you could get software updates. So I go to the T-Mobile store, and ask for a month-to-month contract, for THIS phone. I had it with me, they knew I was going to use my own phone.

No problem.

Then they asked for a $200 deposit.

For what?

In case I terminated the contract before two years are up.

But it's month to month.

Yes, but you see, I had to pay for the phone.

But I already had a phone.

But the contract came with one.

I didn't want it.

That's OK, I didn't have to take it, but I had to pay for it anyway.

Needless to say, I walked out without a cellphone contract.

So... T-Mobile is perfectly prepared to charge you an ETF for a phone you never bought from them, that doesn't come out of their pocket. I strongly suspect that 120 days is when Google gets the $350 from T-Mobile, and any ETF T-Mobile is charging before that point is just them up to their old tricks. I'm sure that any other US carrier would do the same thing, I'm not ragging on T-Mobile here, I'm ragging on the whole cellphone industry.

Re:It's the T-Mobile ETF that doesn't make sense.. (1)

Algan (20532) | more than 4 years ago | (#30743662)

No it's actually Google's ETF that does not make sense. TMobile stands to gain if you stay with them for the duration of the contract, which is why they are subsidizing the handset and are entitled to levy an ETF if you break out earlier. Google's role ends the moment you purchase the product (except for warranty and support issues, which apparently they are keen to pass along to HTC). I don't see how they are entitled to another ETF.

Re:It's the T-Mobile ETF that doesn't make sense.. (1)

argent (18001) | more than 4 years ago | (#30743804)

Google's role ends the moment you purchase the product (except for warranty and support issues, which apparently they are keen to pass along to HTC).

If you paid Google full price for it, yes. If you paid the subsidized price, Google's role only ends when T-Mobile pays them the rest. When does that happen? That's between Google and T-Mobile, but how much you want to bet it's after 120 days?

Re:It's the T-Mobile ETF that doesn't make sense.. (0)

Anonymous Coward | more than 4 years ago | (#30743694)

I have a basic T-mobile plan for $40/month, with 1-yr contract and no phone (I have my own phone). If I cancel early, they will charge me an ETF of (I think) $200, prorated after 6 months.

WHY?! You are right, this is the true outrage, and the FTC should investigate this practice. For nearly any other product, if I am not satisfied with it and return it, I get all my money back; the exception is electronics, where they charge a small restocking fee. But if I am not satisfied with my mobile connectivity product, I am still forced to pay it in full. For what reason? What is the overhead cost they must recuperate, for terminating my service? How is their cost structure any different than for my land line, which I can cancel at any time without an ETF? Wireless carriers' behavior borders on monopolistic.

Don't buy subsidized phones (1)

amRadioHed (463061) | more than 4 years ago | (#30743120)

Now that a US carrier finally allows it, just don't buy subsidized phones. You won't be charged any ETF and you're overall costs will be a few hundred dollars lower. Problem solved.

Re:Don't buy subsidized phones (1)

e2d2 (115622) | more than 4 years ago | (#30743480)

Thank you! And people wonder why I buy my phones outright. It's because I have the money up front. It just makes more sense. I don't want to buy a phone on the installment plan and sign myself into a contract that is slanted towards the carrier. People think I'm foolish because I'm paying more up front. But up front or in the behind, it's your choice.

Also no one can say squat when I hack the life out of it. It's MINE ALL MINE MUHAHAHA

Re:Don't buy subsidized phones (1)

amRadioHed (463061) | more than 4 years ago | (#30743836)

Well buying your own phone has only really made financial sense since T-Mobile introduced it's Even More Plus plan late last year. Before then anyone buying a plan in the US was pretty much forced to pay for a subsidized phone whether or not they used it.

It's fantastic that T-Mobile is finally give us an option though, and hopefully other carriers will follow suite.

Separate handset and communications charges (5, Insightful)

InakaBoyJoe (687694) | more than 4 years ago | (#30743122)

If you buy the phone on a contract, you pay $80 a month. If you buy the phone without a contract, you still pay $80 a month.

Why aren't people questioning this practice? Carriers justify ETFs on the basis of having to subsidize handsets, but they turn around and charge the SAME amount to customers who aren't taking advantage of the subsidy. Thus artificially suppressing the market for unlocked / open phones.

The system in Japan makes more sense. When you buy a phone, you choose to pay the full cost up front, or pay in 12 or 24 installments (and of course if you want to cash out early, you have to pay the remainder of the balance, just like any installment plan). The communication charges are SEPARATE from the phone charges. So the end result is that the user who wants a "free phone" simply pays a bit more monthly than the user who paid for their phone up front.

The money the carriers would save trying to explain, justify, and collect those arbitrary "early termination fees" probably justifies switching to this more sensible system. And it would encourage a free market for phones. Why aren't the regulators/attorneys/etc. stepping in where they should?

Re:Separate handset and communications charges (5, Informative)

RManning (544016) | more than 4 years ago | (#30743260)

If you buy the phone on a contract, you pay $80 a month. If you buy the phone without a contract, you still pay $80 a month.

I have an unlocked Nexus One. T-mobile has two separate types of plans: one with a subsidized phone and one if you provide the phone yourself. For me, I pay about $20 less per month then if I had gone the subsidized route.

I believe T-mobile is the only major carrier in the US that does it this way.

Re:Separate handset and communications charges (2, Insightful)

InakaBoyJoe (687694) | more than 4 years ago | (#30743522)

Thanks, that's an interesting bit of info. That's a step in the right direction, but it still leaves the handset subsidy shrouded in a mysterious cloud of "plan discounts" and such. And, since all other North American carriers still collect the same amount regardless of subsidy, the user is still punished for bringing their own phone.

Why can't we go to a simple system like this: say a phone costs $600. You either pay that up front or add $25 to your bill for 24 months and get it for "free". If you want to terminate the contract, you pay the remaining balance, period. "Early termination fees" and "prorating after x number of months" only serve to cloud the issue and confuse the consumer, while creating a customer service and bill collections headache for the carrier.

Again, this is where good regulation could step in and set things straight. Outlawing ETFs would be the key.

Re:Separate handset and communications charges (1)

assemblyronin (1719578) | more than 4 years ago | (#30743714)

Why can't we go to a simple system

Answer: Profit.

While I agree 100% with your assessment that it would benefit the consumer to have simple well defined payment options. It doesn't benefit the carriers bottom line.

This type of behavior happens in many other markets - not just the cellphone arena. Think car buying, or the recent Mortgage glut. People were so focused on the 'out-the-door' cost, they weren't thinking total cost of ownership.

Also, to back up the surrounding posters - you can get the Unsubsidized phone + 'Even More Plus' T-Mobile service for cheaper than the subsidized version.

Re:Separate handset and communications charges (1)

colinnwn (677715) | more than 4 years ago | (#30744388)

The T-mobile "Even More Plus" plans are pretty much exactly like this. As long as you have suitable credit, they will finance any phone you buy from them over 20 months (I'm pretty sure interest free), or you can pay the full amount. Though they still offer the old style plans that never decrease in price; they are called "Even More" plans.

Re:Separate handset and communications charges (1)

0xdeadbeef (28836) | more than 4 years ago | (#30743842)

If you buy the phone on a contract, you pay $80 a month. If you buy the phone without a contract, you still pay $80 a month.

Paying $50/month and my N1 works just fine.

Re:Separate handset and communications charges (1)

bgarcia (33222) | more than 4 years ago | (#30743492)

If you buy the phone on a contract, you pay $80 a month. If you buy the phone without a contract, you still pay $80 a month.

That's no longer true. T-mobile introduced no-contract plans last year that cost less, but don't include a subsidized phone. This is what I'm using. (2-line family plan with 500 shared minutes and unlimited data & texting, for $110)

Re:Separate handset and communications charges (2, Informative)

GweeDo (127172) | more than 4 years ago | (#30743660)

Because with T-Mobiles Even More Plus plan that isn't the case. If you have a contract-free phone it is cheaper.

Re:Separate handset and communications charges (0)

Anonymous Coward | more than 4 years ago | (#30743758)

I think you're a clueless idiot that knows shit about the Nexus One and T-Mobile. Apparently the moderators that modded your dumbass up are also equally as stupid.

Re:Separate handset and communications charges (1)

harlows_monkeys (106428) | more than 4 years ago | (#30744260)

Carriers justify ETFs on the basis of having to subsidize handsets, but they turn around and charge the SAME amount to customers who aren't taking advantage of the subsidy

$179 is not the same as $529.

ETFs? (0)

Archangel Michael (180766) | more than 4 years ago | (#30743146)

Hey, here's a NOVEL idea for those protesting ETFs. Pay FULL retail, and then shop for a service plan for the device.

Oh, only T-Mobile supports it? You don't get a service agreement discount for having your own phone? Darn.

In other words ... PICK your poison.

Don't like either option, then get another phone from another vendor/telco. Don't like those vendors and service plans? Sucks for you doesn't it?

Or you can just suck it up and not terminate your service ... you know ... early. I know, shocking concept.

I should draw this up as a flowchart.

Or you can get one of those "disposable" VISA cards and stick it to the man. Anarchy Rules!!

Honestly, I don't know what the big deal is, other than people whining about wanting their cake and eating it too.

Re:ETFs? (4, Informative)

yincrash (854885) | more than 4 years ago | (#30743232)

It's actually cheaper to pay full retail and still go with t-mobile for the full 2 years. Getting the subsidized phone puts you on a different plan than getting a no-contract plan that t-mobile introduced in october.

http://lukehutch.wordpress.com/2010/01/05/the-cheap-way-to-pay-for-a-nexus-one-think-tco/ [wordpress.com]
Basically, if for some reason you really didn't want to pay a full $530 up front, it'd be cheaper just to take out a $350 loan over 2 years plus you wouldn't be beholden to t-mobile's service / contract.

Re:ETFs? (1)

bnenning (58349) | more than 4 years ago | (#30743524)

Great link, I knew about the Even More Plus $60/month plan but didn't know you could remove SMS and save $10. It really is a no-brainer to get the unlocked N1, unless you want to try the cancel-after-121-days-and-pay-$200-ETF arbitrage described above, and I wouldn't be surprised if there's some clause in the contract that makes that not work.

If the Nexus One does nothing other than make unlocked phones with contract-free service more mainstream, Google will have done a very good thing.

Google: The Director's Cut (1)

Dogtanian (588974) | more than 4 years ago | (#30743212)

I wonder what's going to happen in the next decade or so, say around 2019 when Google will probably have launched the sixth or so version of the Nexus? These "smart" phones will have grown *so* damn smart that they'll have developed a survival instinct; if you cancel your contract, they'll have to send a representative of the telcos out to deal with them.

I suspect that by then it won't be called termination.

It will be called retirement.

WOW, slashdot IS full of GOOG fanboys... (5, Insightful)

keepper (24317) | more than 4 years ago | (#30743332)

Come. The. Freak. On. !!

Why does google get to charge this? They get the kickback FROM the carrier, so have the carrier do the ETF.

Why does the carrier AND google, get to charge fees? Not even the iPhone, a phone that carries a higher retail value without a plan, do such a high termination fee.

It seems google can do no wrong on slashdot. It can have the cake, the party, eat the cake, and snuff the party goers, and all is well in slashdot-google-fanboy land.

Come on guys.

Re:WOW, slashdot IS full of GOOG fanboys... (0)

Anonymous Coward | more than 4 years ago | (#30743872)

The simple answer tot that is....GOOGLE will probably not get the 'KICKBACK' from TMO if you cancel your contract early. Which I think is the case with most manufacturer/carrier deals. GOOGLE unlike REAL manufacturers, has to pay someone to produce the phones for them and may have to eat more costs when on early terminations. I dont know who said it, but you do not have to return the phone when you cancel a service contract, which is part of the reason for the TMO ETF. Maybe if GOOGLE gave the option of returning the phone and waving the ETF would sit better with everyone.

The problem is GOOGLE will be setting a precedent that will probably spur copy cats in the market place. Which just sucks!!!! I mean I kinda understand their logic, but I still dont like it. Companies as big as GOOGLE or APPLE or ATT, should eat those costs.

This shouldn't be a suprise (1)

AndrewNeo (979708) | more than 4 years ago | (#30743452)

When I bought my HTC Fuze for AT&T off Amazon, it only cost $100, but there was a $250 charge from Amazon if I canceled the contract within 6 months (not actually the ETF), and a $275 or whatever charge from AT&T if I canceled the contract within 2 years (the ETF). Google is giving you a bigger discount on the phone, otherwise it'd cost $350 more by default. So what? This isn't anything new, non-carrier resellers have been doing this for a long time, everyone is just complaining because it's Google doing the 'reselling'. (And they are, since it's HTC's hardware)

Isn't this a good thing? (0)

Anonymous Coward | more than 4 years ago | (#30743592)

From what I heard from Vodafone even the contract phones are entirely supplied direct from Google.

So unless I'm missing some figures badly here when cancelled Google just wants the phone cost covered, which is understandable, and even offer refunds if the device is returned within a MUCH broader time line than any carrier I've ever seen in the UK.

This just highlights the trumped up baseless charges from the carriers for doing no work and providing nothing that makes them even less defensible when the right people are questioning them.

Nexus One DOA (1)

Hurricane78 (562437) | more than 4 years ago | (#30743598)

And that concludes the end of all my interest in this phone.

Seriously? More ETF? What were they smoking? That goes completely against what the reason was, that anybody hoped for this phone in the first place.

Just buy the damn thing already... (0)

Anonymous Coward | more than 4 years ago | (#30743626)

I don't understand why Americans make such a fuss over this. Just get your phone and a cheaper service plan separate and you will ALWAYS be better of than with a subsidized deal in the long run.

If everyone does this then they will drop these ridiculous schemes and we might see some competition based on price/quality.

Your not paying for a phone... (1)

Anachragnome (1008495) | more than 4 years ago | (#30743786)

You're not paying for a phone, you're paying for a status symbol.

My phone cost 59.99 6 years ago. Sure, it was subsidized, but I never paid more for it. I could have brought my own phone in, had them hook it up to their service and still had the service contract and I would have been charged 59.99 less.

My point is that you all seem to be bitching about paying for something that is SUPPOSED to be expensive. Otherwise, it wouldn't have that certain "bling" status as everyone would have one.

It is a PHONE for fucks sake. /sigh

Re:Your not paying for a phone... (1)

Antisyzygy (1495469) | more than 4 years ago | (#30744344)

I agree in part, however it is ridiculous that they are this expensive. Whats stupid about it is people are willing to pay it otherwise they wouldnt be in business. So F@%% you consumers!

Buy without contract, then! (0)

Anonymous Coward | more than 4 years ago | (#30743878)

See, all of that is yet another excellent reason to buy phones without contract. With the Nexus One, you actually can. Thank you, Google!

Those contract/phone bundles do not actually save you any money. Just say "no"...

A reverse rebate (0)

Anonymous Coward | more than 4 years ago | (#30744124)

I've seen offers before where the manufacturer offers a $200 rebate on the phone after the 2nd or 3rd month of service. They require you to send copies of your first X months of statements to show you've maintained your plan. Everybody complains because the cost is"so high" up front, and the burden is on the customer to remember to send it in, follow the terms, etc. If you mail it a day late, or forget your notarized original receipt, or the wind was blowing the wrong direction, the customer doesn't get the rebate and is screwed over.

Google goes the opposite route, gives the rebate up-front where the customer doesn't have to do anything to get it, and charge the customer later if they don't follow the terms by keeping their contract. Customer doesn't have to wait on the rebate or do anything special other than pay their bill that they'd have to do otherwise. No worry about forgetting to sign a 3rd dotted line or mail getting lost or delayed on the way to the processing center only to find out 3 months later it is denied.

In both cases the carrier still charges their ETF if the contract is canceled early. I'm no Google fanboy, while I think they are *less* evil than many of the other big companies out there, they are still a business and are in the market to make money. They have unheardof access to a ton of our private data and great influence over everybody's life, whether they realize it or not. That being said, I fail to see the reason Google is being pointed out as the bad guy on this. Amazon does the same thing, you get a bigger discount on the phone, yet according to their terms if you're *late* on a payment they will charge you for the difference.

I think the only evil party here is T-Mobile. Supposedly the ETF is so the carrier doesn't get shafted by giving the customer $300 off the price of a handset only to have the customer cancel 2 months down the road and go to another carrier. Since Google is providing the subsidy here (and charging the difference in the event of failure) T-Mobile has nothing to lose except a customer. T-Mobile should be treating this as a no-contract phone providing the same discounts as their other Bring Your Own Phone plans.

It bothers me to see Google (or any company for that matter) being accused of being anti-customer when they're actually doing something to help the customer. It bothers me moreso to see them blamed when they aren't the ones causing the problem in the first place.

Engraving (1)

supersat (639745) | more than 4 years ago | (#30744472)

There's some equally-questionable terms in the sales agreement:

You may not cancel these Terms and return a Device that has been engraved with a personal message of any sort regardless of where you reside. Devices that were not successfully delivered to you will be returned to Google and Google will issue a refund to the credit card or other payment method originally charged for the order. The amount of the refund will be the original purchase amount, minus shipping charges and any refurbishing fees associated with engraving. Specifically, returned delivery of Devices that have been engraved with a personal message will result in a $45 USD engraving fee.

I can understand them not wanting to accept returns of customized devices... But if someone other than you (say, Fedex, or the notorious Brightstar, which handled fulfillment for the Android Dev Phones and royally screwed up the XO laptop shipments) screws up and gets returned to Google, they charge you a $45 fee. Presumably this fee covers the cost of restoring the phone to its original condition -- but if they can do that, why not just charge that fee for returned devices, instead of outright rejecting them?

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