| Todd Allcock 2007-10-20, 3:33 pm |
| At 20 Oct 2007 14:55:44 +0000 Billy Ryman wrote:
> More needless government intervention. These people sign a contract
> for a specific period of time and then default, and then complain.
I'm on the fence with this one. While I'm usually anti-"needless
regulation," the carriers have brought this on themselves. Contracts were
once a simple quid pro quo- a committment in return for a hardware
discount, which was perfectly fair. But as handsets have dropped in
manufacturing cost and subsidies have lowered, standard contract lengths
have doubled from one year to two, and often get extended for non-subsidy
reasons, like changing rate plans or simply (like with Sprint) because
you change ESNs from one phone to another you already own.
> The bottom line
> here is that all they want is a free phone, plain and simple.
Not necessarily- AT&T and T-Mo required committments even if you tried to
establish new service with your own equipment! (T-Mo changed this policy
only a few weeks ago- you can now establish month-to-month service if you
bring your own handset or buy an unsubsidised one from them.)
> Why don't they just buy a phone in the first place and then they
> won't have to worry about a contract,
For an existing customer out of their initial contract that's true, but
most require a committment for new service even if you don't take a
subsidy.
> but......
>
> .....everybody wants something for free these days, but I guess these
> days a lot of people have an "entitlement" mentality.
True, but that's also apparently true of the carriers as well. If I go
to Verizon or AT&T with an eBay-sourced handset they still want a two-year
committment "for free!"
> They forget that someone had
> to pay for these phones in the first place.
True. I think a contract in exchange for subsidy is perfectly fair, but
carriers find any old reason for extending contracts today. I've been
with T-Mo for about 7 years, and was out of a contract. This spring I
added a line to my plan for my wife, and T-Mo put us both under contract,
despite the fact that I only added one line and received one new handset.
Now I'll be out $400 (two EFTs) if we decide to cancel. God help me if
I was adding a fourth line to three that were out of contract- that would
make the EFT $800 for the same single "subsidized" handset! That's,
frankly, insane!
> As in any business, a loss somewhere means a price increase
> somewhere else if they want to stay in business.
True, but again, it's 2007, not 1997. That "free" handset given away
today in return for a two-year contract has a wholesale cost of under $100,
vs. the $150-200 handset you received free for a one-year a decade ago.
A two-year committment for $100 bucks of subsidy? While I can certainly
be bought, I'm not for sale THAT cheaply!
Needless regulation is bad, but regulation is required when free market
forces aren't working. Given the inherent scarcity of wireless spectrum
limiting the number of competitors, it's not a true "free market." New
competitors can't jump into the wireless market to fill a perceived void,
like in most industries. (Except as MVNOs beholden to the same four
players calling all the shots!)
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