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shanelee24
January 13, 2010 2:47 PM
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At this rate your better off buying the unlocked phone without subsidy and selling it later......if you can. iPhone killer.....ha.

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6 replies
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roothorick
January 14, 2010 12:04 AM
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The Nexus One was never meant to be an iPhone-killer (see: Motorola Droid aka Milestone for what a REAL attempt at an iPhone-killer is). Honestly, look at the writing on the wall -- direct sales? limited advertising? community-oriented support? Google clearly isn't interested in making a mainstream smartphone. I'd say, what they're going for here, is a consumer-level developer platform. And in true Google style, that's a game-changing idea.

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JennQPublic
January 13, 2010 6:34 PM
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And an iPhone's only $100 with a contract...

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JEveryman
January 13, 2010 9:25 PM
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The 450 minute \"$99\" iPhone plan with unlimited text + unlimited data plan + voice dialing + GPS for the life of the 2 year contract is still 500 dollars more expensive over the course of the required 2 year contract.

Unlocked its the cheapest of the top tier smartphones available for retail purchase in the US. (I couldn't find a 3g unlocked, and I won't count window mobile in the US top tier smartphone category until the HD2 is available). In contract its only beaten by the Palm Pre.

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JEveryman
January 13, 2010 3:27 PM
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At any rate you are better off buying the unsubsidized version. Over the course of the contract you'd save approximately $119.

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YouDidWhatNow?
January 13, 2010 3:14 PM
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iPhones, like lemmings, need no killers...

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YouDidWhatNow?
January 13, 2010 8:53 PM
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I know that, and you know that...but *they* don't know that. Shhh!

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B
January 13, 2010 2:48 PM
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The fee is meant to cover the difference between the cost of an unlocked phone and the cost of a subsidized phone plus the early termination fee, thus preventing people from buying a phone from T-Mobie, breaking the contract and selling the phone on eBay.

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3 replies
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nerevar
January 13, 2010 2:56 PM
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all the nexus ones are sold unlocked and will work on any network that will allow it (aka not sprint or verizon)

you either buy a subsidized phone or an unsubsidized one.

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blogger X
January 13, 2010 2:51 PM
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Similar to Verizon...the FCC will have something to say about this.

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Cant_stop_the_rock
January 13, 2010 3:32 PM
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Why should they? The terms are completely reasonable. It's based on the cost of the phone, it's only for the first four months of the contract, and you don't pay it if you return the phone.

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mrscoach
January 13, 2010 3:45 PM
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I didn't see anything about whether you return the phone or not, except the part that you have the original 14 day window. The contract specifically states \"if you cancel your wireless plan\", nothing about \"if you don't return the phone\".

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pecan 3.14159265
January 13, 2010 2:55 PM
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It's on Wired, too. A Google spokesperson went on record as saying, \"If a consumer cancels service after 14 days, Google recoups this subsidy in the form of an equipment recovery fee. After 120 days, the equipment recovery fee will no longer apply. This is standard practice for third party resellers of T-Mobile and other operators, and you will find similar policies for other mobile service resellers. The T-Mobile early termination fee is separate and handled by T-Mobile.”

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2 replies
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Oranges w/ Cheese
January 13, 2010 3:12 PM
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Yeah, basically looks like its to prevent people from scalping them on Ebay.

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JonBoy470
January 13, 2010 7:05 PM
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The whole thing is annoying, but I agree the intent is to nip the re-sale market in the bud. The Nexus One is one of the few phones on the market where the identical phone is simultaneously sold as an unlocked, unsubsidized phone, and a locked, subsidized phone.

FCC regulation requires the carrier to give you the unlock code for your handset once you've fulfilled your contract. OTherwise, you could buy a Nexus One for $179, sign up for T-Mobile, immediately cancel, eat the $200 ETF and whatever piddly pro-rated amount needed to cover the bill for the two days the phone is active, one more call to get the unlock code, and, for ~$400 or so, you have an unlocked Nexus One identical to the one Google sells for $529.

Great for you if you want to have an unlocked Nexus One for yourself (to use on AT&T's EDGE network?), or to resell on eBay/Craigslist at a price that the market would quickly drive to just under the $529 Google charges. Not so great if you're T-Mobile, because you miss out on the two-year lock-in, and have increased subscriber churn as a result. Bad also for Google because this secondary market would cannibalize sales of the unlocked phone.

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Blueskylaw
January 13, 2010 2:56 PM
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\"You agree to pay Google an equipment subsidy recovery fee (the \"Equipment Recovery Fee\") equal to the difference between the full price of the Nexus handheld device without service plan and the price you paid for the Nexus handheld device\"

Are they using an amount that the phone normally retails for or an amount that they say the phone is worth?
You know the commercials: A $275 value for only $19.95

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bsh0544
January 13, 2010 2:56 PM
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Why are two companies both charging a fee whose purpose is to recover the money used to subsidize the phone? Seems like Google is probably footing the bill for the subsidy (hence the fee from Google) and T-Mobile is just doing business as usual with their own ETF. Bad news.

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4 replies
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YouDidWhatNow?
January 13, 2010 3:19 PM
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Don't like it? Don't buy a Nexus phone. Solved.

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Bohemian
January 13, 2010 3:09 PM
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So now what will they claim the ETF fee is for if Tmobile is not providing the phone?

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Oranges w/ Cheese
January 13, 2010 4:29 PM
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This fee is basically a preventative to keep you from putting the phone on ebay. The ETF is the fee for the tmobile contract.

Since tmobile isn't losing anything on the phone, it makes sense that google would be the one to collect an equipment fee. But its only for the first 4 months of the contract. A reasonable timeframe, IMO.

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JEveryman
January 13, 2010 9:37 PM
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This seems more like a T-Mobile issue than a Google one. Especially when you consider their in contract plan is twenty dollars more than the out of contract one.

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valkyrievf2x
January 13, 2010 2:56 PM
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Good lord! How much does it cost to buy the phone outright?

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2 replies
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JMP
January 13, 2010 3:14 PM
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This seems perfectly reasonable. The whole point of the discounted phone is that they make up the cost through the service contract. Why does everyone seem to think it's OK to sign a contract, then go home, call customer service to break the contract and then think it's unfair to have to pay for what they purchased.

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5 replies
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bsh0544
January 13, 2010 3:54 PM
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If Google is recovering the cost of the subsidy with their equipment recovery fee, what exactly is T-Mobile recovering with its ETF? Phone companies like to rationalize the ETFs by claiming they're recovering the cost of the subsidy, but in this case that cannot be true if Google is also recovering that same cost. Unless the subsidized phone is lined with gold to make it twice as expensive?

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Oranges w/ Cheese
January 13, 2010 4:30 PM
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The ETF continues through the life of the contract. This is only in effect for the first 4 months of the contract (120 days) to prevent people from taking them and selling them on ebay or other sources.

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YouDidWhatNow?
January 13, 2010 3:18 PM
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Two reasons - first, most people can't do math. Second, in some (many?) cases, ETFs and such fees appear to not be rationalized in terms of actual $ figures such as one might expect.

Both of which are reasons why I personally would like to see cell phone subsidies regulated out of existence. For that matter, ink jet printer subsidies too.

Sell the device for a reasonable retail price, and then sell the service at a price that makes sense for the service. Everything up front and in the open, and then you don't have issues like these.

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shanelee24
January 13, 2010 11:42 PM
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One problem with that..........consumers are pushing the trend. I work for AT&T, and I can promise you one thing. If we took away the option to subsidise people would flip out. Bear in mind, you never have to sign a contract. Just pay msrp for your blackberry. Fair enough? That's an option you have.

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YouDidWhatNow?
January 14, 2010 11:45 AM
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Yup. I'm saying take that option away. The reason consumers would \"flip out\" is becuase they can't do, or can't be bothered to do, basic math. I'm sorry, but you really don't have a right to be ignorant of what you're doing - such that you want to get a subsidized phone and the whine about an ETF later. I'm afraid you're going to need to rub your two brain cells together and generate an original thought once in a while.

Eliminate subsidies, and the ETFs at the same time. Pricing should be as simple and transparent as possible. If people whine, let them whine. You can choose to either STFU and purchase a phone and a plan with the transparent pricing, or you can choose not to. Either way, stop trying to have your cake and eat it too.

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dblevins
January 13, 2010 3:44 PM
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... And knock off not disclosing the nickel and dimes fees (that add up like $5 and $10) in the price of service so we can compare services realistically.

Hasn't the wireless fone carriers primed the market enough? I seem to see about every other driver, and EVERY teenager, with a phone in their ear so they must be making a fortune. Oh I forgot, the CXXs have to have multi-million $ bonuses.

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Scuba Steve
January 13, 2010 3:26 PM
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With this, the horrible customer service, and the lack of apps, or harddrive space, I wouldn't touch this smartphone with a ten foot pole.

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3 replies
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otherguy
January 14, 2010 6:34 PM
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Poke around and you will find that Tmo's customer satisfaction with customer service is the highest in the industry.

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legwork
January 13, 2010 3:49 PM
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The app selection isn't bad at all, and things are multiplying like bunnies.

Hey, don't forget the early Apple and AT&T iPhone fail. That was quite painful.

I'd still put any android phone more in the tech user category vs. an iPhone, but it's still a remarkably similar situation to what Apple, AT&T, and their customers went through. G does have a challenge ahead, not possessing an equivalent to the Apple Store support channel.

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JEveryman
January 14, 2010 3:47 PM
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I have had nothing but a pleasant experience with T-Mobile customer service. HTC reps seem pretty annoyed, but TMO has been excellent, and all of this ETF stuff was in the smaller print (Not quite fine print) when you get approved for the subsidy.

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Linger
January 13, 2010 4:31 PM
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You authorize Google to charge the Equipment Recovery Fee directly to your credit card, or other payment method used to purchase the Nexus handheld device, upon cancellation of your wireless plan.

What would stop you from using a prepaid credit card, cash, or money order? How would they recover the money then?

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3 replies
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teletone
January 13, 2010 8:41 PM
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you can only use a credit card. The phone is not available in stores. The prepaid card might work, but I'm sure if they charge it, the company you got the card through is going to come looking for you...

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Scatter
January 13, 2010 8:05 PM
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Nothing I guess as long as you don't mind having your account sent to collections and your credit rating going to shit.

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Sunflower1970
January 13, 2010 4:49 PM
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Wow. That's quite a fee. Seems they are wanting to push people to be buying the unlocked phone instead of the subsidized version....

(I bought mine unsubsidized...and love it. Won't look back...)

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eirrom
January 13, 2010 4:50 PM
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I'm really amazed how badly this Nexus One roll out has gone. I expected near perfection from Google. I thought this might rival the roll out of the iPhone. I was way off.

This might forever tarnish the Google brand. Big misstep!
The ETF is sweet too!

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smgoller
January 13, 2010 5:50 PM
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It's really simple. DON'T BUY SUBSIDIZED PHONES. If the Nexus One isn't worth $580 shipped to you, don't buy it. Bottom line. Why is this even news? I bought one, unsubsidized, because I think the phone is worth it. The article is disingenuous because it implies that there is no way to buy a Nexus One without a contract. I expected more from the Consumerist.

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tinmanx
January 13, 2010 5:57 PM
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I really wanted a Nexus One, but it's way too expensive without contract. I figure Google would give us a cheap phone in exchange for our private info, but I guess wrong.

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CompyPaq
January 13, 2010 7:40 PM
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Nothing new here. If you cancel an iPhone contract, then Apple and AT&T will charge you the full price of the phone.

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gellenburg
January 13, 2010 7:57 PM
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What's even more funny is T-Mobile's un-contracted plans are — on average — $20/ month cheaper than their contracted plans.

I love my Google Nexus One, but it doesn't take a rocket scientist to realize that you're much better off paying for, and financing, the phone yourself rather than pay approximately 20% interest to finance it through T-Mobile.

Don't kid yourself, the phone is not subsidized any way you slice it.

It is, however, unlocked.

Both the $530 phone (which you can pretty much have any plan you want, including one without voice or without data if you so desire), or the $180 phone (which requires a minimum of an $80/ month plan) are unlocked.

That in and of itself is a game changer.

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KrispyKrink
January 13, 2010 9:20 PM
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Funny, I don't recall this outrage being posted about Amazon or someone like Wirefly. By a BlackBerry from either and cancel service before 180 days are up, not only does the carrier charge you the $200 ETF, but Amazon and Wirefly will charge you up to $300 for the phone.

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1 replies
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otherguy
January 14, 2010 6:35 PM
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That is because there are other ways you can obtain that device. For this device there is only one way- and that way is with these absurd provisions that they have imposed.

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DustoMan
January 13, 2010 10:37 PM
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Hate to break it to you guys, but Amazon Wireless has the same kind of fee. Not as much as Google's, but they do have a fee that kicks in if you don't keep you account active 120 days after purchase. So this is nothing new, move along and find some other way to criticize Google. Like Microsoft, I haven't seen an anti-Microsoft article on Consumerist as of late. I think we are about due for one.

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brianguyy
January 14, 2010 12:51 AM
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Good info. now, buy the unlocked version (duh).

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Conformist138
January 14, 2010 5:32 AM
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Ultimately, like if or not, these are contracts. You sign them, they are binding, so read them. Ask questions. Really do some research and decide if you're willing to abide by the terms. No one is forcing you to jump on the newest tech the moment it comes out. As consumers, we can't complain about \"shady practices\" if we signed a document spelling these things out. Sales people can be pushy, so push back: I will not sign a contract I have not read or that I don't understand.

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chowder Snarky Today
January 14, 2010 8:23 AM
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Didn't Verizon just get nailed for trying to charge people a ridiculous amount of money to break their contracts. These carriers have had it way too good for to long with charges and fees...really like to see the government go after them and explain their fee structures and force them to cap their fees such as this one.

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johnfrombrooklyn
January 15, 2010 10:05 AM
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Let me see here. You buy an iPhone and if the phone craps out you can at least go to a \"genius\" and get some help in person. Or get help on the phone. You buy a Google phone and you send an email and cross your fingers for 48 hours hoping they answer it. Yeah. As much as my iPhone annoys me sometimes, I think I'll keep it. Why would anyone buy a phone and have no access to customer support?

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iamgeometry
March 27, 2011 7:07 PM
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Thats why before you go to a third party cell phone carrier (such as best buy, amazon and the sorts)...make sure you read the terms are aware that those third party carries have their own contract. Thats not t mobiles fault. I work at t mobile. When someone calls to tell me they are looking to set up t mobile service with another party, I personally will read them the terms and conditions I have on file for that company. I tell them about the extra fees and contract and urge them that its not a safe decision. But they always say.. \"hey, I'm getting a $500 phone for $.05...fuck off!\".
Do you know why companies like amazon and best buy can sell t-mobile phones for up to $200 less than t-mobile, themselves? It's not because they are nice. It's not because they get a great deal. it's because they make up for it by charging you every time you breath.

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iamgeometry
March 27, 2011 7:08 PM
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Thats why before you go to a third party cell phone carrier (such as best buy, amazon and the sorts)...make sure you read the terms are aware that those third party carries have their own contract. Thats not t mobiles fault. I work at t mobile. When someone calls to tell me they are looking to set up t mobile service with another party, I personally will read them the terms and conditions I have on file for that company. I tell them about the extra fees and contract and urge them that its not a safe decision. But they always say.. \"hey, I'm getting a $500 phone for $.05...fuck off!\".
Do you know why companies like amazon and best buy can sell t-mobile phones for up to $200 less than t-mobile, themselves? It's not because they are nice. It's not because they get a great deal. it's because they make up for it by charging you every time you breath.

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