[IP] more on Locked In a Cell: How Cell Phone Early Termination Fees Hurt Consumers
Begin forwarded message:
From: "Kobrin, Steve" <kobrins@xxxxxxxxxxxxxxxxx>
Date: October 10, 2005 5:10:48 PM EDT
To: dave@xxxxxxxxxx
Subject: RE: [IP] more on Locked In a Cell: How Cell Phone Early
Termination Fees Hurt Consumers
There is another dimension to this problem. I signed a two year
contract with Verizon last October and took advantage of a discount on
the phone. Last month I wanted to trade-up, to purchase Verizon's new
international phone. Even though I was willing to extend my contract
for another two years, Verizon would not do it. My only choice was to
purchase the phone at list, which in this case is over $500. While I do
not think I am being taken advantage of, it seems to me that it would be
in Verizon's interest to let me trade up and extend my contract. I have
to assume that, given the price of international calls, the service
would be more profitable than my current domestic contract.
Steve
-----Original Message-----
From: David Farber [mailto:dave@xxxxxxxxxx]
Sent: Monday, October 10, 2005 5:01 PM
To: Ip Ip
Subject: [IP] more on Locked In a Cell: How Cell Phone Early Termination
Fees Hurt Consumers
Begin forwarded message:
From: Gerry Faulhaber <gerry-faulhaber@xxxxxxxxx>
Date: October 10, 2005 2:12:10 PM EDT
To: dave@xxxxxxxxxx
Subject: Re: [IP] more on Locked In a Cell: How Cell Phone Early
Termination Fees Hurt Consumers
Dave [for IP]--
Could we hear from an IPer who is either with Verizon Wireless/
Cingular/Sprint or who has direct experience with real world data?
Are there differences across carriers? (Normally, if there's an
anticompetitive practice going on, I would expect this to become a
dimension of competition)
Gerry
----- Original Message ----- From: "David Farber" <dave@xxxxxxxxxx>
To: "Ip Ip" <ip@xxxxxxxxxxxxxx>
Sent: Monday, October 10, 2005 10:47 AM
Subject: [IP] more on Locked In a Cell: How Cell Phone Early
Termination Fees Hurt Consumers
[My experience with Cell Companies is not what Gerry describes. I
always supply the phone since I am not happy with the cell phones
sold in the USA. Yet I am tied up with 1 or 2 year contracts with
$175 cancellation agreements. Why?? djf]
Begin forwarded message:
From: Gerry Faulhaber <gerry-faulhaber@xxxxxxxxx>
Date: October 9, 2005 1:13:21 PM EDT
To: dave@xxxxxxxxxx
Subject: Re: [IP] Locked In a Cell: How Cell Phone Early
Termination Fees Hurt Consumers
Dave [for IP]--
Re: cell phone contracts. I think the way this works is that you
can get a cellphone at a below-market price from your service
provider in return for a one- or two-year contract, OR you can buy
your phone elsewhere and get the service without a contract (or
maybe a contract of shorter duration). So this is a trade-off,
you get a price break on your instrument in return for a longer
contract. But you don't have to take this; you can still avoid
the lengthy contract by buying your own phone at a market price.
Why is this a problem? If you don't like the long contract, then
don't take the price break on the phone. Seems to me a perfectly
legit deal.
The practice of automatic contract renewal I think is sleazy, but
it is very widespread. Even Consumer Reports automatically re-ups
my subscription on my credit card every year, and CR is a very
legit outfit.
Now let's be honest here. If you sign a contract to get the
cheaper phone, then as soon as you actually have the phone you want
to get out of the contract, and this seems to be what this is all
about. "Gimme the cheap phone, then I'll whine about how I'm
being exploited by a long-term contract". Pretty cheesy.
Professor Gerald R. Faulhaber
Business and Public Policy Dept.
Wharton School, University of Pennsylvania
Philadelphia, PA 19104
----- Original Message ----- From: "David Farber" <dave@xxxxxxxxxx>
To: "Ip Ip" <ip@xxxxxxxxxxxxxx>
Sent: Saturday, October 08, 2005 10:05 PM
Subject: [IP] Locked In a Cell: How Cell Phone Early Termination
Fees Hurt Consumers
Begin forwarded message:
From: Monty Solomon <monty@xxxxxxxxxx>
Date: October 5, 2005 3:00:50 AM EDT
To: undisclosed-recipient:;
Subject: Locked In a Cell: How Cell Phone Early Termination Fees
Hurt Consumers
Locked In a Cell: How Cell Phone Early Termination Fees Hurt
Consumers
August 2005
Executive Summary
http://masspirg.org/MA.asp?id2=18535
Press Release
http://masspirg.org/MA.asp?id2=18541
Full Report
http://masspirg.org/reports/lockedinacell05.pdf
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