Google Says Nexus One $350 'ERF' Is Necessary
Google sells the Nexus One directly to consumers, with or without a T-Mobile contract. The Nexus One costs $529 without a contract and comes unlocked. In order to receive a subsidized price of $179 (for new customers), T-Mobile requires a two-year contract. It has come to light that customers wishing to break their Nexus One contract early will not only have to pay an early termination fee to T-Mobile ($200 in first 18 months), but also an "equipment recovery fee" of $350 to Google. Those who break their contract in the first 120 days will pay a total fine of $550, which is more than the full retail price of the Nexus One. Today, Google defended its ERF as a method to recapture some of the subsidies it gives contract customers. A Google spokesperson said, "This is standard practice for third-party resellers of T-Mobile and other operators." This $550 far surpasses Verizon's $350 ETF, and the $175 ETFs levied by other network operators.
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