FCC expands ETF inquiry, fires off letters to AT&T, Sprint, T-Mobile, and Google
By Chris Ziegler 
posted January 26th 2010 3:26PM
posted January 26th 2010 3:26PM
Verizon might be getting picked on for introducing its whopper $350 "advanced device" ETF, but the FCC has decided that it wants answers from everyone on concerns that "there is no standard framework for structuring and applying ETFs throughout the wireless industry." The commission has sent letters (via fancy certified mail, in case you're wondering) to all of the other biggies -- AT&T, Sprint, and T-Mobile -- along with Google, asking a series of questions probing how each carrier's ETFs are determined and applied. Google gets roped in for its nasty equipment recovery fee, but all of the recipients share a common dubious distinction: the frickin' FCC -- a bureaucracy filled to the brim with lawyers and... well, bureaucrats -- can't figure out terms that everyday customers are expected to understand. Of course, most customers don't have the distinction of being able to send a certified letter to their carrier probing fees and require a prompt and complete response, so we're happy to see the feds get to the bottom of this. Sure, ETFs may ultimately prove to be completely justified in their current form considering the expense that carriers put up to subsidize hot hardware, it's true -- but regardless, it's in everyone's best interest to make sure they're spelled out in ways even FCC commissioners (and Engadget editors) can appreciate.
Google, welcome to the big leagues.
@ashleythehottiest
It makes me sad to see Google's name grouped with the evil telecomms :(
@Ahartzog
The moment Google offered an object of desire (Nexus One) they themselves became evil.
@Ahartzog
It makes me sad they have a nasty equipment recovery fee.
@Ahartzog
I can even support Apple but definitely not Google.. they are scary.
Just because they are giving away stuffs for free doesn't make them customer loving company.
@ashleythehottiest Can anyone tell me why the RSS feed in Google Chrome doesent work for sites like this?
@ashleythehottiest
Can someone explain to me why the 8GB iPod touch's MSRP is $199, and the 8GB iPhone 3G has an out-of-contract MSRP of, what, like $449? $499?
There HAS to be price fixing/shenanigans going on. That 3G radio, and that FCC licensing fee cannot possibly be costing hundreds and hundreds of dollars.
THIS is what the FCC should be looking into!
@crawdad689 Since when is a product manufacturer required to account for the cost of production in what they choose to charge for a product? It's called business. I make a product and I sell it for what I choose to sell it for. If you're okay with the price, you buy it. If you're not, you don't.
@TheBrizz
So you're alright with Hynix, Infineon, Micron Technology, Samsung, and Elpida dram manufactures fixing prices in the DRAM market,
@TheBrizz
that would be fine if only one or some of the handset makers charged that much, but they all do. businesses coordinating their prices to make them higher and make big margins on each unit is sketchy. if an investigation found it was unintentional, nothing might happen. if it was found that there was intentional cooperation, that's illegal (type of monopoly) and there would be ramifications.
@ashleythehottiest
the irony of all of this is that google is trying to break the subsidy paradigm by pushing an unsubsidized phone paired with t-mobile's lower monthly charge plan, confusingly called "even more plus".
@crawdad689 Why are you complaining? Just buy an ipod touch.
OH SNAP!
Remember, if we didnt have the FCC and the FTC .. we would be paying A LOT more for things
@ipxnsv
How do you know that? Oh right, you can't. Well done.
@ipxnsv
Why is the FCC doing this instead of the FTC? Isn't this more about fair practices with customers than specific use of the airwaves?
@ipxnsv rriigghhtt... Keep drinking that populist kool-aid...
@limaxray What, you think that if there weren't an FCC and FTC that these corporations would just say 'Well gee, we better play nice and not rip off our customers to make as much money as we possibly can'? Wow. What are you smokin?
A government agency actually trying to do something for consumers...is it 2012?
@7egend : Keep dreaming.
@One Love Yes, let's remember how the FCC under the last republican administration was very pro-consumer....(I am being sardonic here)
(Wiretapping allowed by FCC)
(Against free AWS-3 - Look it up)
(net neutrality - since been reversing a bit)
lets make bets who responds first.And has the most bullsh*t explanation.
i say :SPRINT OR GOOGLE FIRST...AT&T most bullsh*t explanation..
@neeko18 - you do realize that the ETF from Google is completely different from the providers, right? The Google ETF covers them for the exact cost of the phone if someone opens a contract and gets the cheaper subsidized phone, then bails on the contract... So the consumer pays the same amount for the phone either way, and Google doesn't get hosed. Period.
The ETFs from the wireless providers, on the other hand, seem to be some combination of scare tactics and actual penalties and "expected income loss" fees that they somehow feel they are entitled to when a customer leaves. Of course, if their coverage is crap or their service sucks, too bad to the consumer, they still feel they are owed what they can't milk you out of if you leave early.
All these people that cry about contracts and ETF's are going to crying even louder when they have to pay $300 or $400 for a phone that used to cost $100.
@TheBrizz
They never actually cost $100. The subsidy offered in the contracts has been paid for by higher service charges and fees.
Who else will not be surprised if the FCC ends up doing nothing. The FCC and FTC we have today are large and somehow overburdened monstrosities that never evolved with the technologies they were meant to oversea. Welcome to bad government 101.
@M3
They were doing nothing before, but i consider this a definite step up from doing nothing.
@TheBrizz
The phone never "cost" $100. Price != Cost. But don't feel bad, Obama is confused about that as well.
@Abe What does any of this conversation have to do with Obama? Let it go.
$350, is that it? Come to Canada...
$20 per month up to a maxium of $400 for voice and $20 per month up to a maxium of 300 for data. Total @$$ raping of $700.
ETF should just be, pay off your device because that's all you keep anyways.
@Plazmic Flame
Don't forget the equipment, YOUR equipment that you fully paid off, would still be locked. Bell and Telus apparently wants another $75 to unlock, Rogers won't even talk to you about that.
@ToniCipriani Which is why it's always easier to go to a third party. I'm in the US but recently used a Canadian company to unlock a Blackberry. US$20 later I had a working unlock code.
@dpeters11 I know that, but compared to some other countries where phones are just sold unlocked, or carriers are mandated to unlock the phones after the lock served its purpose (i.e. enforce the length contract).
I shouldn't need to pay for unlocking in the first place, period.
Its about damn time!
they should send a letter to dish network because they also charge 350 for their ETFs.
All I want is a straightforward loan. Sign a contract and get a no or low interest loan of up to say $300 to be used towards the purchase of the device. Then the loan is paid off over 12 or 24 months. If the contract is broken, you owe the balance plus maybe a $25 fee. Plain. Simple. Honest. Transparent. How hard is that? It is already what these ETF's are supposedly about, so why not?
@PaulY Oh yeah, and obviously coupled with lower monthly service charges since the rates are currently bloated with $$$'s to recover the hardware subsidies.
@PaulY
i love you.
@PaulY
Tmobile USA is doing the exact same thing if you care to look at that as an opiton.
@PaulY -- That's basically what T-Mobile's installment payment plan is -- when you buy a phone for use with an Even More Plus plan, you can have a no-interest loan to pay the phone off on a monthly basis (if you have good credit, you can finance the entire cost of the phone -- the phone is full-price/unsubsidized). This applies to the phone and not the plan itself -- but because EM+ plans are month-to-month, you can cancel any time (no termin. fee).
(@sycamore714 -- sorry, x-post)
@PaulY
Step 1: Get a credit card. Step 2: Use said card to pay full retail price for phone. Step 3: Make minimum payments on your card while enjoying your phone on your service provider with no contract or ETF. Same thing as what you just recommended...
@Netro7 Step 4, convince AT&T, Sprint, and Verizon to lower their monthly rates because I bought my own damn phone. As it is, you're stupid not to get a subsidized phone because you're already paying for it monthly.
The point is to keep the same basic structure (free/cheap phones with some semblance of commitment) but to make it much more clear what you are paying for. Yes, basically what T-Mob is doing, but with a real wireless footprint and real 3G coverage.
@mpv
Right now I am on their 300 minute pre-Even More Plus plan for $75 a month. Although the month to month plans are cheaper by about $10, the unlimited Even More Plus plan with web and text is $80, so I see no value in paying more per month. I wish that they would just cut me a $120 check since I've been with them for almost a year. Their plans are under the guise of being cheaper, but people who only used 300-600 minutes are bumped up to the unlimited plan for more. I talked to several reps and was also quite pissed at the fact that they require you to sign a contract to get an employee discount through the company I work for. The rep, to get the sale, suggested I sign a contract for a free phone then just sell it, to cover any potential ETFs, lol. I am just sticking with them until something like the Droid hits ATT.
While I appreciate letters, letters are far from action. I'll believe the status quo will change in the ETF field when the FCC/FTC actually issue a ruling mandating a change.
It's just the constant, burning skeptic in me. Letters are nice, action is better.
@Anders
They could be using the letters as ammo. Like we read your explanation and its bullshit so this is what we are going to do.
I for one welcome our original overlords to keep our new overlords in check.
I understand the reasoning behind the ETF's. AT&T would lose big money if you could buy a new iPhone cheap and leave the company with it a month later. But why can't they institute a system where the longer you are under contract, the less your ETF would be, since they are making up the money all along while charging you out the a$$ for services like data and texting.
@Ssracer : there are already several ways to do this - half the used phones on Ebay were probably obtained through such means.
@psycros
Some of the major wireless carriers in the US do this currently. The ETF amounts are prorated every month that you stay within your contract.
And yet just today (actually a few minutes ago) I received a letter from AT&T notifying me of their settlement of a class action lawsuit regarding early termination fees. Given that this settlement covers "January 1, 1998 through November 4, 2009" you would think they had learned their lesson. But this FCC action implies they haven't...