[IP] more on Locked In a Cell: How Cell Phone Early Terminati on Fees Hurt Consumers
Begin forwarded message:
From: Robert Daffin <rsd3414@xxxxxxxxxxxxx>
Date: October 11, 2005 9:49:56 AM EDT
To: "'dave@xxxxxxxxxx'" <dave@xxxxxxxxxx>
Subject: RE: [IP] more on Locked In a Cell: How Cell Phone Early
Terminati on Fees Hurt Consumers
My wife and I use Nextel. I purhcased both phones (Motorola i90's) at a
steep discount in exchange for a one year contract nearly three years
ago.
I've been month-to-month with them ever since the contract expired, and
there have been no changes in my terms of service. I do occasionally
get
flyers that offer me some slight savings for signing a new service
contract.
Out of curiosity, I investigated the purchase of two new phones from
Nextel
several months ago, but was surprised to discover that the steep
discounts
offered are only available to new customers. Thus, even if I was
willing to
sign a two year contract to get new phones, I'd have to do it with
another
carrier to get the discount. I find it fascinating that Nextel is
willing
to offer such deals to attract new customers, but is uninterested in
offering the same to retain existing customers, even when every other
provider out there offers competitive new customer discounts to current
Nextel customers.
I don't know how the recent mergers will affect our situation in the
future,
but for now, we're content with our phones, our plan, and our
service. If
we ever decide that we need new phones, or if Sprint/Nextel decides
to try
to force us into a new contract, we'll likely have no choice but to
go to
another provider, in spite of our overall satisfaction with Nextel.
It is
no wonder that there is so much customer churn in the cellular market.
-R
-----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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