more on Locked In a Cell: How Cell Phone Early Termination Fees Hurt Consumers

[David Farber <dave () farber net>]

Begin forwarded message:

From: Gerry Faulhaber <gerry-faulhaber () mchsi com>
Date: October 10, 2005 2:12:10 PM EDT
To: dave () farber net
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 () farber net>
To: "Ip Ip" <ip () v2 listbox com>
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 () mchsi com>
> Date: October 9, 2005 1:13:21 PM EDT
> To: dave () farber net
> 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 () farber net>
> To: "Ip Ip" <ip () v2 listbox com>
> 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 () roscom com>
> > 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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