Verizon: ETFs Help the Poor Afford Smartphones
Verizon has responded to an FCC probe into its early termination fees. The carrier told the communications body that the ETF allows customers with "limited means" to buy phones they otherwise would not be able to afford.
Earlier this month, news emerged that the FCC was inquiring about Verizon's early termination fees. Just a few weeks prior to the probe, Verizon raised its ETF for "advanced devices" to $350 with a $10 for every month you remain on contract. This new price meant that even if you wanted out of your of your two-year contract in the second-to-last month, you'd still have to pay Verizon a $120 ETF.
The FCC wanted to know why a customer leaving a few weeks before the end of their contract would owe such a large sum and also asked Verizon to be more specific in its description of "advanced devices." Further, the FCC wanted details on how customers were notified of the change in ETF.
Ars Technica cites the wireless carrier as justifying the pricing structure with claims that it enables Verizon to offer devices at a substantial discount, lowering the barrier to consumers obtaining mobile broadband services.
"This pricing structure enables Verizon Wireless to offer wireless devices at a substantial discount from their full retail price. By reducing up-front costs to consumers, this pricing lowers the barriers to consumers to obtaining mobile broadband devices. It thus enables many more consumers, including those of more limited means, access to a range of exciting, state of-the art broadband services and capabilities."
Verizon says that aside from covering the cost of the device, the ETF also covers the extra costs associated with advertising and marketing advanced devices. "It takes more time (and hence increases the cost to Verizon Wireless) for sales and customer care representatives to handle customer inquiries regarding the complex advanced features and functionalities of Advanced Devices," the company explained.
Read the full story here.
- Nanotech Helps Create Paper-based Batteries
- A4G Accidently Advertised Sony PSP-4000?
- App Developer Claims to Make $1M Per Month
- Maine Considering Cell Phone Cancer Warning
- China Restricting People From Registering Domains
- Woman Arrested for Not Returning Overdue DVDs
- LED Traffic Lights Don't Melt Snow, Cause Danger
- Asus Working on Android-Powered EeeBot
- Study: No Decline in Illegal Downloading
- LG Reveals World's Thinnest LCD TV, Again
- Sony Considering Premium PSN Subscriptions
- UFO Spotted Above the Kremlin in Moscow
- Project Natal Lag Will Restrict Development
- Man Jailed for Killing Wife with TV Remote
- Net Campaign Helps RATM Become Xmas No.1
- AT&T Says You Need Its 3mbit Service for Facebook
- Deal Between Google and Yelp Called Off
- Top 15 Facebook Status Updates Trends of 2009
- Apple's Cable Plans Gets Disney, CBS Support
I can understand the "cost of the device" but it still makes little sense in general that if your 2 weeks away you still pay 120..
" Advanced Devices "
Verizon is claiming ETFs provide a necessary income and only penalize those who break the contract they agreed to anyway. Its like parking meters. The 25-cents you put into those things doesn't even cover the cost to maintain them. The profit comes from parking tickets. Cities acknowledge this, it's why in some cities, you can get a ticket for putting change in someone else's meter (cause the city desperately wants that ticket fee).
I can see Verizon excusing the ETF to cover the cost of the phone (seriously though, $120 one month before?), but where they get off claiming ETFs cover higher customer service costs and advertising is beyond me. Shouldn't the phone PLAN cover things like customer service, not the phone?
2 letters : BS
So they also want us to directly play for the child like fight in commercial that they make.
And how come that a ETF that even after i finish my 2 year contract, i need to pay more money, for ending my contract, will help me acquire a new technological device...
If i don't have money to rank for the device, i surely wont have money to pay those hefty monthly fee
The money comes from the 0.00001 cents it costs for them to send a txt message but you actually pay $15 a month or more for that virtually free txt they are sending. And if they are talking about marketing, I think they actually mean the AT&T smashing commercials. In the end, it's all a money grab.
The money comes from the 0.00001 cents it costs for them to send a txt message but you actually pay $15 a month or more for that virtually free txt they are sending. And if they are talking about marketing, I think they actually mean the AT&T smashing commercials. In the end, it's all a money grab.
The money comes from the 0.00001 cents it costs for them to send a txt message but you actually pay $15 a month or more for that virtually free txt they are sending. And if they are talking about marketing, I think they actually mean the AT&T smashing commercials. In the end, it's all a money grab. AT&T is no better.
These companies should be allowed to charge an early termination fee, only on a prorated daily amount.
For example, Verizon should only be able to charge me $0.48 a day for each remaining day on my contract with their $350/2 Year agreement ETF.
This seems like a reasonable approach to the situation. People can't screw them over at the register and the phones depreciate as anticipated.
Verizon is in the wrong on this and they know it. I TOTALLY get the idea of ETFs and I think they are absolutely necessary... but when your ETF just becomes a punitive tool to keep your customers on board, then you've crossed a line. Whatever cost Verizon subsidizes on their phones I totally believe they should have ETFs that match... and then reduce it proportionately as the contract works its course. To pop someone for $100+ on the last month of a 24 month contract? That is what got them in this mess and the socialist (sorry, I meant "liberal") congress that we have now is going to hammer them on this. Someone at Verizon should have known better... the $350 isn't the problem... it's the way they prorate it.
Whats the big deal? If you can make it 23 months through a contract why would you not be able to hold on for 1 more month? Seems like a rarely encountered scenario anyways.
So, because its finnaly prorated, everyone is pissed? Why was no one complaining when it was $150 if you canceled on Day 1 or Day 729?
The ETF is atleast $120 so that you stay in your agreed upon contract. If you have a smartphone on Verizon (or any) service, you probably pay $70+ dollars a month, anyway. So, before they charged you almost 2 months of service to dump them, now they are trying to ensure you pay that much up until the very end. Most people will stay under contract rather than take the penalty at that point.
Does nobody see what's going on. First round of ifone 3g contracts are up soon. Most people want nothing more than to ditch AT&T (even if it means giving up the ifone, as there's not a cdma version out yet). They bail to verizon, and shablam! 2 years of being nickel-and-dimed to death.
Conspiracy? I perfer to see it as forward thinking.
Verizon: "the ETF allows customers with 'limited means' to buy phones they otherwise would not be able to afford".
And when they can't even afford to keep paying for the phone and want out, we charge their ass off!
maybe these limited means people shouldn't have smart phones, just like all those poor people shouldn't have had McMansions. do they even do a credit check when you sign up for one of these contracts? I assume they do?? This is why I hate contracts.
ETF's serve 2 purposes and 2 purposes only:
1.) They keep the price of phones inflated.
2.) They reduce churn of customers.
I'm poor and their ETF doesn't help me afford a "smart phone" so where do they get off with trying to say that it does?