more on I AGREE djf 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 11, 2005 9:28:27 AM EDT
To: dave () farber net
Subject: Re: [IP] I AGREE djf more on Locked In a Cell: How Cell  
Phone Early Termination Fees Hurt Consumers


OK, this has been a learning experience;-).  Thanks to the the many  
informed IPers who responded.  Here's what I've found out (and  
another question):

1- The only carrier that offers a month-to-month service for "bring  
your own phone" is Sprint, as several IPers have mentioned.  None of  
the others do. But in case you didn't notice, Sprint is probably the  
weakest of the cellphone companies (even with their merger), so it  
would appear that offering a month-to-month with "bring your own  
phone" is simply not very important to customers.  Maybe to IPers,  
but most of those who reported this dastardly practice do not seem to  
have switched to Sprint.  In other words, while you and I may want  
the option of month-to-month, it is not important enough to most  
customers to be a competitive advantage.  Too bad.

2- It's pretty obvious a multi-year contract is in the interest of  
the phone company.  For example, magazines make much more $$ from  
yearly subscriptions than newstand sales.  And if customers don't  
think it's important enough to choose a carrier based on month-to- 
month, it will not happen.

3- Some IPers mentioned foreign phones brought to the US and operated  
on month-to-month, but noted they were much more expensive.  Of  
course, that was my original point: month-to-month will be more  
expensive.

4- I was surprised almost no one discussed pre-paid cell service,  
which of course involves no commitment at all, beyond the initial  
minutes purchased. This has been a successful business model; e.g.,  
Virgin Mobile only does pre-paid.  This is a very different model, in  
that there is no credit risk for the firms to bear.

I would think that IPers who object so strongly to multi-year  
contracts would opt for pre-paid...or move to Sprint.  I'd be  
interested to learn from our correspondents why they do not avail  
themselves of these options.

Prof. Gerry Faulhaber

----- Original Message ----- From: "David Farber" <dave () farber net>
To: "Ip Ip" <ip () v2 listbox com>
Sent: Tuesday, October 11, 2005 7:45 AM
Subject: [IP] I AGREE djf more on Locked In a Cell: How Cell Phone  
Early Termination Fees Hurt Consumers



> Begin forwarded message:
>
> From: Tom Goltz <tgoltz () QuietSoftware com>
> Date: October 10, 2005 11:42:29 PM EDT
> To: Gerry Faulhaber <gerry-faulhaber () mchsi com>
> Cc: dave () farber net
> Subject: Re: [IP] more on Locked In a Cell: How Cell Phone Early  
> Termination Fees Hurt Consumers
>
>
> At 10:47 AM 10/10/2005, you wrote:
>
>
> > 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.
>
> My experience has been the exact opposite of what you describe.  I   
> have approached several different carriers with existing phones  
> that  were compatible with their networks.  Verizon flatly refused  
> to give  me service without my signing *exactly* the same 1-year  
> contract that  I'd have to sign to obtain a discounted phone.   
> Ditto for Cingular  and T-Mobile.  Only Sprint is willing to  
> provide service on a month- to-month basis to new customers who  
> either already have a phone or  pay full price for the phone.
>
> If the cell phone companies are doing such a wonderful job for  
> their customers, why are over 50% of the complaints received by the  
> Better Business Bureau cellular related?  If you stop ten random  
> people on  the street and ask them how they like their cellular  
> service, why  will five of them tell you that they'd switch  
> carriers if they  weren't locked into a contract?
>
> Personally, I believe that all of us would be better off as  
> consumers  if it was illegal for telecommunications companies to  
> require long- term contracts for services.
>
>
>
>
> -------------------------------------
> You are subscribed as gerry-faulhaber () mchsi com
> To manage your subscription, go to
>  http://v2.listbox.com/member/?listname=ip
>
> Archives at: http://www.interesting-people.org/archives/interesting- 
> people/



-------------------------------------
You are subscribed as lists-ip () insecure org
To manage your subscription, go to
 http://v2.listbox.com/member/?listname=ip

Archives at: http://www.interesting-people.org/archives/interesting-people/