Cancelling Nexus One triggers TWO "early termination fees"?

[Dave Farber <dave () farber net>]

Begin forwarded message:

> From: Lauren Weinstein <lauren () vortex com>
> Date: January 12, 2010 12:48:20 PM EST
> To: nnsquad () nnsquad org
> Subject: [ NNSquad ] Cancelling Nexus One triggers TWO "early  
> termination	fees"?

> With all the controversies about cell carrier early termination fees
> (ETF), Verizon's recent doubling of their ETF in some cases, and
> general confusion regarding the topic, it appears that Google's Nexus
> One and T-Mobile *may* have further muddied the waters.
>
> I say *may* because my hope is that the issue being reported by
> observers below is a misinterpretation of a situation, not an accurate
> analysis.
>
> The problem *appears* to be this.  Contractual terms for buying a
> subsidized Nexus One through T-Mobile seem to indicate that if you
> want to cancel service and return the phone within a few months (after
> the brief trial period), you must pay Google the associated difference
> between what you paid T-Mobile for the subsidized phone and the cost
> of an unlocked (unsubsidized) phone.
>
> This makes basic sense so far.
>
> The problem is that this is seemingly not exclusive of T-Mobile's own
> significant ETF.
>
> Normally, when you buy a subsidized phone, the carrier ETF is designed
> to recover the additional cost of the phone (beyond what you paid the
> carrier directly for the phone at the start of the contract) when
> you cancel early.
>
> But it *appears* that in the Nexus One case, if you cancel early on,
> you end up having paid:
>
> 1) The subsidized cost of the phone (paid to T-Mobile)
> 2) The cost of the Nexus One minus the amount you paid to T-Mobile
>   for the phone (paid to Google)
> AND
> 3) The T-Mobile early termination fee
>
> In this sort of cancellation sequence, (2) would not normally exist.
> It appears that you end up paying handsomely more than the actual cost
> of the phone if you buy a subsidized phone through T-M and cancel
> within a few months.
>
> It could perhaps be argued that this "premium" extra payment can
> somehow be justified, but at first glance it's a particularly unusual
> arrangement.
>
> I hope that we see additional clarification about this soon.
>
> http://bit.ly/79kJci  (Android Phone Fans)
>
> --Lauren--
> NNSquad Moderator



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