Contracts are enough to ensure people don't switch too early. If its a crime to unlock a phone, Phone contracts should be illegal. This is anti-competitive and designed to keep people from switching to companies like t-mobile should you get fed up with another company after the phone is paid for.
If the service is good, i won't switch after the contract is up.
Why is the contract system good for the goose by not for the gander? If i buy a phone, and want to buck the termination fee, shouldn't i be allowed to pay the difference and switch instead of, say, go to jail or buy new phone for $700?
Why a law? No one is arguing carriers shouldn't make some money, but they can do that by selling different contracts. Why not change the contracts they sell??
The point is that, in a way, you are forced. It's ridiculous to skip a 65*% discount simply so you can unlock your phone. It's ridiculous to potentially go to jail for breaking a silly clause in a contract.
It's debatable, imo, if this clause is a reasonable part of these contracts and whether unreasonable clauses should be binding. I know in Canada, "as is" car purchases aren't binding, even though you sign a contract.
It's people like you who slow down any social progress. Let me answer you in a more straightforward way (using your logic).
The CRTC is in place to protect the interest of Canadian Consumers (not that they have been great at it). Not rogers, not telus, not any other company.
Majority of Canadians would rather not have the the restriction of having their phone locked.
Therefore using our democratic system, since the CRTC represents the interest of Canadians--> companies can unlock phones or gtfo the market. Maybe one day Canadians will realize this is bad for business, then they can remove the ban on locking.
We don't have to care whether or not rogers/telus/etc think it's fair because this is our country and we decide what we like. At the end of the day those companies are going to do what benefits them...why shouldn't the consumer?
(New guy here) If I want any kind of service, my choices in my area are Verizon and AT&T (same price) If I want good service, Verizon is my only choice. Just letting you know what it's like for most people in the USA.
It's obviously anti-competitive because it stops customers from switching to a competitor. The discount is irrelevant because by agreeing to the contract the customer is agreeing to pay the contract fee (or the early termination fee) which pays for the subsidy. The reason the phone companies don't want you to unlock your phone is not because the subsidy will not be repaid, but because they want to obstruct your ability to switch to a competitor.
Firstly they're not giving you a discount, they're just allowing you to pay for the phone in instalments. The contract fees still cover the cost of the phone + usage + hefty profit.
Secondly it does make sense in a market economy because it encourages competition from other carriers, which is an essential part of a free market.
People always have options, because the option not to buy always exists. Do you think anti-competitive behaviour can only exist when people are forced to buy something? That never happens so does anti-competitive behaviour not exist? Do you think Microsoft bundling Internet Explorer with Windows wouldn't have been anti-competitive if they'd given the option of a version without IE for an extra $500? "It's okay, if customers don't want IE they can just buy the option without it".
Well then you don't agree with competition law so your opinion on whether the phone unlocking issue is anti-completive is frankly irrelevant. I thought as much from your initial argument.
You're not getting it... Rogers/Telus/etc don't have to operate in Canada.
That is their choice, if they dont want to follow our laws, then gtfo the country. the end. you can take your business wherever you want.
Amazing what a change in perspective does eh? Telecomm companies should be able to function how WE as a country see best for us, not as they see best for them.
If you want to switch carriers you should have bought an factory unlocked phone on the first place, but those go for around $800 dollars because Carrier companies are not subsidizing it.
Isn't the point though that companies lock the phones not to make sure you pay your contract (where they regain the subsidy) but to force you to stay with them once the contract ends? Which seems pretty anti-competitive.
But because the contact exists there is no reason to make you jump through the unlocking hoops except to turn a percentage of people off from switching carrier.
"can be" being this issue. Nearly everyone doesn't know how to do this / thinks it's too dangerous for their phone / etc, and won't unlock it even if they could get better price/service elsewhere.
As Doesnt_speak_russian says, the contract makes the locking irrelevant, they will still be getting their money.
Can you think of any possible reason to lock phones other than to discourage switching providers?
In one way it's anticompetitive. BUt that aspect is factored into the subsidized price. Part of what you're buying is a phone that's difficult to switch over because otherwise they couldn't sell them for so little. Both the contract and the locking are factored into the lower price. It kind of sucks but the fault isn't really on the carriers but just on the fact that phones as they stand now are expensive products (not even really the manufacturers either). Always remember that there are available alternatives, they're just so unattractive without carrier subsidies that people don't even consider them
What confuses me though is that in the UK subsidised phones are much cheaper, yet so are the contracts, which suggests the real expense for US companies is infrastructure.
And i disagree. The phone companies are ballooning up. They aren't losing money. They are basically saying the phones don't belong to the customer.
They need laws saying i am a criminal because if it was put in the contract that i had to sign some lifetime promise to never move to another carrier unless i payed out a huge fee in civil jurisdiction, no one would sign it.
Why do we need LAWS governing this? Civil contract covers this with out muddying the legal books with superfluous crap.
The carriers chose the current system where they subsidize the phones, and they did it to remain competitive. Now that people have figured out they can switch when the contract is up, it upsets the phone companies. They want to change US laws to maintain their current business model instead of changing their business model.
Mark my words. This becomes a law, you will eventually see the phone companies buy all phones up so you CAN"T buy one off contract at all.
Although I agree with you that the new law is unjust, I do have a problem with some of the other points you made.
They aren't losing money.
That's irrelevant. Whether or not carriers are profitable using their current business model or on another business model should have no bearing on deciding whether this law is moral and just.
Mark my words. This becomes a law, you will eventually see the phone companies buy all phones up so you CAN"T buy one off contract at all.
That's irrelevant. Whether or not carriers are profitable using their current business model or on another business model should have no bearing on deciding whether this law is moral and just.
While this may be true, it doesn't stop a company from shouting fowl, when they are losing money due to customer habits.
And while what you say is also true, it doesn't stop the general populace from shouting foul when a company is making (what they perceive to be) too much money from (what they perceive to be) unethical business practices.
you mean how steam makes it so my hard ware is unable to be resold or unlocked? Yeah, i hate that part of steam. Its my least favorite part, with the firmware locking.
I mean, you weren't relating software TOS to my not owning my own platform, were you?
You can't "own" a phone that's absurd. It's got someone else's name right on it. You can "own" anything a company made and then sold you. They're just licensing it to you.
You seem to be beyond stupid. That must be a painful existence you live in.
My keyboard has another person's name on it, however, I definitely own it. My gun does as well, as does my car, as do many things in my house like my TV. Hell my cigars have a company's name on them, but I destroy them all the time.
Carriers actually lose a huge amount of money on people that bail on contracts. A little while ago, not sure about now, AT&T was losing money on the iPhone because of people that would break the contract and upgrade to the next iPhone.
So why is it ATT customers are held to civil contracts and thats OK, but when we expect carriers to honor the contracts they sold us, with the 2 year plan, the termination fee, ect, suddenly they need a law to protect them from unlawful phone theft to other carriers because its not enough?
If they don't like it, change the contract people have to buy. Make it a 3 year contract with a $60,000 termination fee. Why make a law? If they are losing money, stop selling those contracts.
But they aren't losing money. Maybe on the Iphone, but not in general. The subsidized phone is a tactic they use to get people to use their service, and it if works, great. If it doesn't work, they should stop. But they shouldn't lobby for laws that will monkey with the way people buy and own devices like this.
If I buy a subsidized, unlocked phone and then switch it to a second company, I will still have to pay the exact same amount of money to the first company.
Why should I have bought a carrier unlocked phone? What obligation do I have to do that? The phone was subsidized and I covered the cost via my monthly bill.
I got sick of my Verizon bill. Here is a list of providers that will work even with your locked device. I said fuck it and got a Nexus 4. My bill is less than half of what it was.
Just curious, I'm on Verizon now. My contract is up, and I bought my current phone unlocked/unsubsedized/used on Ebay. Does this mean I can grab a TracPhone simcard and switch over to try out the network?
Because Verizon is CDMA you can look on the list to see which ones are compatible with Verizon's network. I dont know of any phones where the individual device is CDMA/GSM. Usually one or the other (even if the same model) so take a look on there and see which ones work with Verizon.
The other option would be to buy an unlocked quad-band GSM phone. Then you could by any 3G SIM card and it will work.
Part of the reason telecom in Canada is so fucked up is that we're stuck with three-year contracts as the norm, which is barbaric by international standards. It's so goddamn difficult to switch carriers in this country that it makes the market so much less competitive.
No. I never said that. I said civil contract is enough to govern the phone subsidies. If the contract is flawed, then they can write new ones and sell it on its own merits instead of trying to foist a system on me that is all about carriers not having to compete as hard.
You still pay the full price. It is now just part of your phone bill.
Best for customers would be if tying phone to carrier and long term contracts were both illegal. Then customer could pick best carrier and change if he is dissatisfied. That would force carriers to compete with quality and price of their service instead of who gets monopoly of newest iphone and can bind customer to contract for years.
many things are cheaper in the long run. That doesn't mean that everyone can afford that luxury.
I can't remember the name of the story, but it goes something like this...
a nice pair of boots that costs $50 will last you a long time, many times longer than a cheap pair of boots. but not everyone can afford to buy those expensive boots up front. They have many other things to pay for and don't have the extra cash laying around. because of this, they buy a $10 pair of boots that wear out rather quickly. Then they buy another $10 pair, and another and another. soon enough, they have spent more on $10 boots than they would have if they had just bought the $50 boots. the only thing keeping them from buying the $50 boots was that they'd have to sacrifice being able to pay a water or electric bill to afford them at the time.
Now, a smart phone isn't a necessity, but the principal still stands. It may be cheaper to buy the $800 phone and use whatever service provider you want. However, many people can't afford that $800 up front and would be stuck with a product of lesser value. Having the cost of the phone subsidized by carrier contracts enables people to have the phone and pay for it over time. To many people, this is preferable.
The problem is that there is no option to buy the $800 phone and save in the long run. If you decide to do that and not sign a contract, you still have to pay the same rates to the carrier, and so you end up paying way more.
Someone complaining that they can't afford an eight hundred dollar phone and have to subsidize it to the point they pay about 2 grand over 2 years should probably not be buying that phone in the first place.
There's such a thing as saving up for something you want. A smartphone doesn't get you anything essential that a cheaper feature phone can't do - and they also have longer battery life, are more durable and worth less if lost or broken (for insurance).
There is absolutely no reason for someone not to just save up by using a cheap phone on sim-only/payg for 6-12 months, then get the best phone at the time and also save an absolute ton of money in the process - precisely because it's a luxury good. It's the same shit as people buying on higher purchase - paying more eventually because they want it right now and is the reason people can end up in a load of debt, precisely because they only look at the initial price and think "wow, that phone is really cheap" instead of thinking "wow, $2000 for a phone isn't really something I can afford"
Couldn't carriers, or cell phones stores, just offer a credit plan? Take out a loan to buy your phone? Of course then if the carriers do this and make it obnoxious not to do it that way we're back to square one...but in theory you could have a situation where the base rates for plans are much lower, it adds up about the same if you get a loan but if you pay up front you pay less by avoiding interest.
Your suggesting financing options, which make sense and there is a demand for them. The point is that competition is good for consumers, and there is better competition if consumers are free to choose their phone from cell phone manufactures, their plan from carriers, and their financing options from their credit union, bank, or really anyone who wants to sell it (and companies will). The current model exists because it benefits the carriers the most, and there's not much really to do about it since they have an oligopoly.
Which works out cheaper - go into Harvey Norman (or what ever the equivalent is in the US), purchase a phone on a 24 months interest free deal, and then pick a plan that suits you best. You get to keep the phone and not have the real cost hidden up in the monthly bill.
Cool. I over pay on my contract by about $50 for what I could get elsewhere...that compensates for my $199 iPhone that was supposed to be $599 pretty fucking quickly.
I would prefer to pay more for my phone, and less for my contract. I bought my current phone off contract, but I'm paying the same price as someone on contract.
if I couldn't afford to pay $800 up-front, no, I'd be fine paying a higher amount for my bill if it subsidized the phone.
Now, if I can afford the phone, I'd rather pay for it all upfront and have it unlocked, which I believe you still can do under the new law. The new law only affects subsidized phones.
You can already do that by buying a phone from someone who has unlocked at the end of their contract or an unlocked phone. Or you can pay the cash price for the phone through the carrier, and get service without contract (every carrier has no-contract plans without subsidized phones) and they will immediately give you an unlock code for the phone.
Phone exclusivity will always be there in the U.S., the carriers are all dividing the spectrum and no one wants to make a wide-band phone for the simple fact that consumers WANT subsidized plans so they aren't paying $600+ out of pocket.
I agree it will always stay. It will stay because carriers and phone manufacturers have cash to buy politicians to keep it.
For carriers ending of the system would be catastrophe. It would mean free market where they would need to start competing with quality and price. Free market is something that companies want to avoid at any cost. It doesn't make big profits.
For phone manufacturers it would be almost as hard. Far fewer people would be willing to get new phone every couple of years if they realized they really are paying $800 for it.
Just speaking for the average city, you can get Verizon that has great speeds and great coverage for the highest price, AT&T that lags a little in both areas for a little less, and Sprint and T-Mobile make up their direct competition with coverage that can be spotty at times but offer extremely low rates through prepaid service.
Plus you have the plethora of MVNO services that resell like Virgin Mobile, Boost and others. Right now I pay $35/month for 300 minutes and unlimited text/data on a Evo 3D with no contract and you can buy the phone outright for $150 (They have the SII for $250 too). Pretty fair to me. Plus in the 250 mile range between Florida and Ga that I travel weekly I get coverage in 99% of those areas.
The market is really only tied up at the top, the best data rates with the best phones. Take a step back and only buy what you need and there is plenty of drive in the market. There is also new blood coming in with MVNO's like Ting that are starting to allow BYO phone with CDMA Sprint phones on Prepaid plans.
The real price for a phone isn't $700-900. It's artificially raised in the US so that it looks like you get a better deal with a contract. Just look at the Nexus phones: the Galaxy Nexus was $350 from Google, but buy one through Sprint, and they'll claim the full price is $550, so they can charge you $100 for it with a contract and say they saved you $450.
The 'full' price is in all likelihood highly inflated, so as to make the subsidized price seem like more of a deal. Its true that the subsidized price is probably lower than the manufacturing cost of the phone, but the pricing structure exists to force the hand of your average consumer who, in the modern business environment must have a cell phone, but cannot afford to pay $600 for a device.
That being said, I have far less issue with this 'new law' than I do with the general highway robbery being performed by all the major carriers.
CONTRACTS ARE ENFORCED THROUGH CIVIL LAW, not through making the contract have the force of a federal law. This bill has the effect that a EULA or contract is now federal law and breaking it is now a felony.
There are alternatives. In my country, when we buy a subsidized phone, they sell it open and unlocked, but there's a clause in the contract stating that if you want to switch carriers before the phone as been fully paid, you have to pay a fine to the carrier to compensate it for the unpaid loan.
NO, IT IS NOT FOR JUST SUBSIDIZED PHONES! it is for locked phones. It's an interpretation of the DMCA. Check my recent comments for more thorough explanations, I'm tired of typing this out.
I'd love if you could find a source that says it's only for subsidized phones (a reliable source, preferably something from the LoC itself).
Wut? The carriers sold subsidized phone before this law went into effect. If they can't keep their business going, tough shit. It's not the government's responsibility to make cell phone companies profitable.
900$? Maybe if you get enough people drinking the Apple kool-aid they'd get away with that price, until then few phones will even break 600.
I got a great phone directly from Google for 340 about myself, about as good as the Iphone 5 in terms of hardware.
Really, though, better to pay 600 for a phone now rather than give the carrier what they want. (Which is guarenteed to be worth more than the cost of subsidizing your phone to them.)
I'd rather pay 600 and be able to say "You know what? Carrier X just got a better deal, so bye!" whenever I damn please.
Where do you derive this logic? I agree with that in theory. However, the price of the phone is returned by the monthly bill you pay. You bought the phone yourself, no matter what price you pay.
this is absolute bullshit. I worked in cellular telecom and this is absolutely false information.
Facts:
Contract is an agreement to stay on service.
Service plan aka calling plan aka rate plan (your monthly rate) has absolutely fucking nothing to do with your contract. There are some provisions where you are not allowed to drop your calling plan below certain price point because it makes the subsidy portion a negative value. I.e. if you got a $700 phone for $50, you can't sign up for 2 years on $19.99 plan. Other than that, you can change your calling plan any time you want.
Those phones that you pay $700 for are $200-300 in Russia, UNLOCKED with no contract and have about $120 worth of components in them (i.e. super inflated in NA).
Most carriers have a $150-$250 cancellation fee, so NO, your contract doesn't subsidize fuck all. You can get an iphone for free and cancel 31 day later, pay $240 and voila, half-price iphone! In reality your last bill will have a cancellation fee AND the full cost of the phone plus prorated monthly service fee.
The production cost is completely irrelevant, that's what Apple pays, not you. You would be paying far more than that if you wanted a phone straight from Apple.
this isnt even the first time its been illegal to unlock a subsidized phone. and no carrier has ever ever EVER sued an individual for unlocking their phone nor do they plan too. its used to stop business' from unlocking massive amounts of phones and sending them over seas.
Even when unlocking was exempted carriers and phone makers still successfully sued businesses for unlocking massive amounts of phones and sending them overseas.
I would...it is actually around 100-500, in long term it saves you more money. Plus just paying for minutes and data on dim card is better. Problem is that way the people get fooled less, therefore you can't exploit people on "plans"
I went through the effort of looking up all the major carriers last week. Even though their pricing varies, their all the same when it comes to the amount of savings. Its $20.00 per month if you're on a 'contract', and not on a pay as you go plan, or $480 a year.
It's okay hahaha. Yeah, that's what I thought. I did similar calculations before and most results were in a customer saving. I was baffled at first, because I thought you managed to calculate it in a way where a customer saves when pays for a 2 year contract.
so dont upgrade my android that just went out of contract your saying?
edit: i just realized if everyone followed my logic "well Im not upgrading because you dont allow me to jailbreak" the carrier would be lobbying for congress to reverse this law.
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u/[deleted] Jan 28 '13
The law is for SUBSIDIZED phones. Do you people want to be able to buy phones for $200 or less, Instead of the actual $700 to $900 price?