Verizon Implementing $30 Upgrade Fee Starting April 22

[kupe]

You can see that my post was a response to another. I am just sick of the moaners and groaners because they solve nothing. This is a free country with a free economy. A buyer or seller makes an offer. The other party accepts or declines. No one is hostage.

Really? Is that how you do it? You've never heard of haggling? If not, I have some stuff to sell you.

[Sam73065]

Probably not a good idea for you to use a cell phone.

That makes no sense, disagreeing with how the carriers treat their customers has nothing to do with using a cell phone.

You can see that my post was a response to another. I am just sick of the moaners and groaners because they solve nothing. This is a free country with a free economy. A buyer or seller makes an offer. The other party accepts or declines. No one is hostage. No different from how you price your own services. ATT started this 10 years ago. Expect things to get worse until someone comes up with new models. FYI, I don't plan on paying it. If I upgrade soon, I'll let you know what happens.

So you're suggesting we don't complain? Just lay back and enjoy it?

"The buyers and the sellers were no different fellas than what I profess to be."

Why is it that those who most vociferously defend the ideal of a free-market economy also seem most pained by "moaners and groaners" who focus on the morality of the way that economy functions?

You are correct in theory that "No one is hostage." But that presupposes genuine competitive parity -- false assumption.

When regulation is the question, one hears, 'Why should vzw be penalized for its success?' But when consumer rights are at issue, the scarcely regulated corporate juggernaut invokes the ideal of competition, the reality of which it has steamrolled long before.

Vzw is just too big for those free-market britches. Competition is an old model, like the Fair Trade Act, not a new one.


Perspective instantiates reality.
[From DX by HoFo app.]

I would like to see more of a free market in the phones and force the carriers to stop subsidizing the phones. As it is now, nobody really knows the true price of handsets.

[jseah]

I would like to see more of a free market in the phones and force the carriers to stop subsidizing the phones. As it is now, nobody really knows the true price of handsets.

But there is a large segment of the "population" of cell phone users who wants the cheapest phone (free) possible. And if that means subsidized and they have to sign a contract, so be it. They're not going to want to pay upwards of $500 or $600 for a handset. Without the subsidy, I can pretty much guarantee that Apple would not be selling over 6 million iPhones per quarter if everyone had to purchase at full retail.

And you can argue that prepaid phones don't sell for $500 or $600, but even with prepaid phones, there is a subsidy built into the pricing as well. The carrier makes back the subsidy from the per minute usage.

[aneftp]

I believe in the free market but I think we are at a important time in America with the way carriers operate.

The biggest growth carrier has been metropcs the past several years. The public is stsrting to shift towards more prepaid models. But at the same time the public still wants cool android phones iPhone etc with hacking it to work on boost mobile, metropcs, straight talk, etc.

The post paid carriers like AT&T Verizon and Sprint need to figure out the best solution. I prefer the tmobile system of not mandating data as long as you buy your own phone outright along with giving post paid customers a little break on monthly plans.

Unfortunately tmobile is a distant fourth and consumers never took to the tmobile system.

Maybe Americans are too set in their ways not to pay the full $500-600 for the phones in exchange for lower monthly plans?

So Verizon and other two carriers resort to these added fees.

[jseah]

Maybe Americans are too set in their ways not to pay the full $500-600 for the phones in exchange for lower monthly plans?

It's like with car loans. 20-30 years ago, the interest rates on car loans were pretty high. Then a lot of car manufacturers started offering 0% or 0.9% loans as a means to get cars sold. Even though these loans required impeccable credit, the consumer has now become conditioned to it and expect these types of loans.

[Vatothe0]

There are plenty of unsubsidized devices for sale on the free market that have never been offered by a carrier. People don't generally know about them or buy them because they are so expensive.

opennetwork.verizonwireless.com/devicesshowcase.aspx

[kupe]

It's like with car loans. 20-30 years ago, the interest rates on car loans were pretty high. Then a lot of car manufacturers started offering 0% or 0.9% loans as a means to get cars sold. Even though these loans required impeccable credit, the consumer has now become conditioned to it and expect these types of loans.

Except this isn't what's happening with the major cell phone players. A subsidized phone is effectively sold to consumers on credit. You pay a down payment (like $199) and a part of each monthly bill goes to "paying off" your loan. If you break your contract, you pay off the loan balance (ETF) as a condition of breaking your contract. But unlike traditional loans, like the car loans you described, which are governed by transparency laws, wireless providers have no accountability. For example:

1. If a contract's ETF is an indicator of the amount of remaining loan (subsidy) payoff, then why doesn't the ETF go to zero in the last month of a contract?
2. If a customer pays full price for a phone or brings in a phone they purchased elsewhere, then why does that customer pay the same monthly rates as a subsidized phone customer?

In the case of wireless providers, their opaque business practices prevent customers from understanding precisely how their fees are applied against the subsidy, but because these aren't "loans" (in the banking sense), they can charge you whatever effective interest rate they want to without fear of violating usury laws. For example:

Let's say a phone's subsidy amount is $350. The monthly payment for 2 years (24 payments) at 10% interest is $16.15/month. At a high consumer interest rate of 20%, the monthly payment is $17.81/month and at a criminally high 30%, the subsidy payment is $19.57/month. A monthly subsidy payment of $25, which shouldn't be hard to imagine on a typical Verizon bill, would represent a 59% loan rate.

The wireless companies have a sweet deal going and so long as they keep up those lobbyist payoffs coming, they'll be able to keep on using their outrageous financing schemes.

[Vatothe0]

The ETF does go to zero when you finish the last month of your contract. That's how being out of contract works.

Sent from my DROIDX using Tapatalk

[johnhere]

Is it still $10 each month of service?

[aneftp]

If Verizon allowed all "Verizon certified devices" on their prepaid service without any hacks or tricks we would all be happy.

But no. Verizon and AT&T make it hard to use devices on their prepaid services.

[veriztd]

If Verizon allowed all "Verizon certified devices" on their prepaid service without any hacks or tricks we would all be happy.

But no. Verizon and AT&T make it hard to use devices on their prepaid services.

And when it comes to the prospect of lowering their profits, they can justify limiting access. They are not as responsible to the average consumer as they are to the share holders. Sad but true.

[aneftp]

And when it comes to the prospect of lowering their profits, they can justify limiting access. They are not as responsible to the average consumer as they are to the share holders. Sad but true.

I am a Verizon shareholder (own 1000 shares currently....VZ pays great 5 plus percent dividen) and would support those moves. What's really killing Verizon's profit is really the subsidies given to the non primary lines.

It would make more sense for Verizon to increase their prepaid by letting all Verizon devices in their prepaid.

Also would make more sense to essentially give away the iPhone for free on contract for the primary lines (in a family plan) but decrease the subsidies for non primary lines in a family plan.

And still charge $199 on contract for single line contracted plans.

That's the best way to maximize profits and increase the user base prepaid and postpaid. You make money both ways.

[johnhere]

They are way too strict on prepaid users almost to the point of it being a true pain.

[Vatothe0]

Also would make more sense to essentially give away the iPhone for free on contract for the primary lines (in a family plan) but decrease the subsidies for non primary lines in a family plan.

And still charge $199 on contract for single line contracted plans.

That's the best way to maximize profits and increase the user base prepaid and postpaid. You make money both ways.

There are no primary lines anymore and Apple sets the price of the iPhone, you plan will never happen.

[kupe]

The ETF does go to zero when you finish the last month of your contract. That's how being out of contract works.

True enough. The question should have been: If ETF is an indication of remaining subsidy payoff, the Why is the ETF still $130 the next to last month of a 2 year contract? It's like there's a big balloon payment for the customer (or a big bonus for Verizon).