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FCC Task Force Tackles AT&T, Google, Sprint, T-Mobile, Verizon

Article Comments  100+  

Jan 26, 2010, 2:00 PM   by Eric M. Zeman   @phonescooper

Today the Federal Communications Commission sent letters of inquiry to all four national wireless network operators — AT&T, Sprint, T-Mobile and Verizon Wireless — and Google over the use of early termination fees. The investigation is being headed by the FCC's new Consumer Task Force. FCC chairman Julius Genachowski said, "I commend the Commission staff for its ongoing and proactive examination of the consumer experience in the wireless marketplace. This inquiry is the first action by the FCC's Consumer Task Force, which was launched last week to tackle these kinds of issues. I look forward to reviewing the responses to the letters and the recommendations from staff regarding next steps." The FCC inquired into Verizon Wireless' recent ETF increase from $175 to $350 late last year and said that Verizon's answers about marketing and customer acquisition costs were troubling. Google was named because of the ETF it charges for Nexus One customers who choose to break their contracts.

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Comments

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This forum is closed.

Phone_Revenger

Jan 28, 2010, 4:51 PM

FCC needs to get with the damn program!

I have no faith in the FCC because of their recent actions. Look what's happened in the past 4 years:

-Sprint raises their text pay-per-use rate from 0.10 a text to 0.20 which is a 100% rate hike. Within weeks AT&T, Verizon and T-mobile increased their rate with little explanation. Then smaller carriers followed suit. FCC launches an investigation with almost no result and suddendly dropped the investation (many including myself feel it was a buy out)

-Carrier exclusivity increased. While exclusivity are nothing new, wireless carriers now use it as part of their sales pitch. Want an iPhone? have to go with AT&T. Want a Blackberry Storm? Have to go with Verizon. Want a Palm Pre? You have to go with Sprint. Want a G1? Have to go with T-m...
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I don't like the government having a heavy hand in business.
waldorfsalad

Jan 26, 2010, 6:51 PM

Proclamations

They use words like "tackle", as if they are doing something aggressively substantive. However, when Verizon provided this crew with the explanation they requested, they proclaimed: "We aren't satisfied with the answer". Now, they are sending letters to all the carriers, asking for explanations. What for? These are private business, doing nothing illegal. I guess they'll be more proclamations on the way.
It's what politicians do. Waste our money.
...
Chromemember

Jan 26, 2010, 2:20 PM

Stupid greedy ass Verizon

Ruin it for everyone else why don't you. There isn't a carrier more robbed with someone breaking contract like AT&T and the iPhone is but they don't have *special ETF's*.
let's see... the headline of the article outlines AT&T, google, sprint and T-moblie as well....

You're barking up the wrong tree.... Google is just as guilty (if not more so)

If it wasn't for innovation the industry wouldn't be where it is today...
(continues)
...
T-Mobile's shenanigans with the Nexus One are just as bad if not worse.
...
AT&T will have a special iPhone ETF soon enough. They are just waiting for the FCC to realize there is nothing they can do to stop ETF's from happening when tied to a handset discount.
...
Phone_Revenger

Jan 26, 2010, 4:45 PM

"I deserve a free phone!" No you don't....

-Do you deserve a new HDTV because you had the same sattelite/cable company for a long time?
-Do you deserve a new water heater because you pay your electric bill with the same company for years?
-Do you deserve free bread for shopping at Walmart for 5 years?

Answer: No

Wireless Providers offer "Wireless Services", they just slash the price off the phone to entice people to sign with them.
It's pretty black and white. You want a service, company provides the service, you pay for said service. It's basic economics, but what people will argue about is marketing, not economics. "Want a cheap phone? you have to stay with us. If you leave you have to pay it back"
If you still have difficulty understanding this simple concept, blame the...
(continues)
I agree with you 100%. Great Analogies.
One Question Though:
If you get the Nexus for $180 aren't you signing a contract with T-Mo??? Not that I'm defending them because to charge $200 w/o providing the subsidy is ridiculous.
...
Alright! This is the BEST post yet!
Amen to that one.
mbjupiter

Jan 27, 2010, 2:53 PM

well, this is it i guess.

I was wondering when the all-powerful US Government would decide to start messing with job, they killed Pittsburgh, they killed Detroit, and now they're coming for the wireless industry, who's ready to join me in the unemployment line when we see the fruits of FCC interference?
Hell no, I'll just start selling the babies that my many concubines will be carrying on the black market, I hear theres some good money to be made there....sigh
Desolationblade

Jan 27, 2010, 11:19 AM

the full retail price forces contracts

contracts need to go period. I personally haven't been under contract for years. I go to a retailer pay full price on 18 months no interest and set it up on a plan w.o a contract. Just like my bb bold 9700. My problem is if you take the cost of the handset that costs verizon or at&t and add the 175 fee for a bb curve it's still less then I pay. BB bold 9700 costs me 500. They pay BB 298.45. Add the 175 that's 473.45. So you literally pay their price plus cancelation fee for a nocontract price.... This needs to be lower.

both at&t and verizon profit hugely on monthly costs. About 35% of what a data text plan costs is straight profit after all admin operation sales and payroll expenses. So if the handset costs them 300, 325-350 would be muc...
(continues)
Thirty-five percent? SMS and MMS are pure profit. Don't believe the hype! This reminds me of when a local government builds a toll bridge and initially the toll is to pay for the bridge, but conveniently long after the bridge has been paid for they...
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...
trojandrew

Jan 26, 2010, 3:50 PM

Can the FCC *really* be that stupid?

I'm really trying to get to the root of this pile of horse crap. SURELY the FCC understands how the subsidized pricing model works right?

This whole situation leaves us only a few conclusions,

a) they really don't understand how it works and our country is doomed if politicians are actually *MORE* idiotic then we think they are or

b) they do understand and in a desperate move to swing public opinion of the federal government in general are trying to appeal to the "little guy" with this "take down the evil cell carriers" horse crap. Which would make them as corrupt as we already knew the government is.

Either way.... /facepalm
Laughing Laughing Laughing

Politicians can't balance a budget. Most know nothing about running a business. That's why they go into politics in the first place.
...
Better yet, this could be a great way for the government to sieze additional regulating powers over the industry. They can pander to the consumers by calling their efforts "enforcement of fairness", but who really wants fairness enforced by the gover...
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...
bluecoyote

Jan 26, 2010, 3:01 PM

No subsidies = bad thing

You pay the same price for your monthly rate whether or not your handset is subsidized.

So if you buy your handset full price

You're throwing hundreds of dollars

out the window.
he's got a point
...
You pay for service rendered. Carriers should not even be involved in selling handsets. That's where you get this sense of entitlement from in the first place. For a carrier to discount the price of a phone in order to entice a customer to use its ...
(continues)
...
So, in one post you argue that ETF's are bad, and in the next breath you post saying that subsidies are good. They go together, my friend. One is the consequence of the other. Without ETF's, there will be no subsidies.

I don't understand people ...
(continues)
...
No, your making it so that your a free consumer. That's what paying full retail is all about, not bein *binded* to a carrier.
Subsidies will never go away because wireless providers depend on releasing exclusive devices to entice new subscribers and retain existing ones. It's whoever's paying when it comes to handset manufacturers. This ETF thing is really a no brainer and t...
(continues)
...
I have been saying for years to do away with subsidies, just check most post over the years, The only sub I ever took was the first phone I got when I first signed up and that was over 8 years ago. I like it much better this way, I mean when a new pho...
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...
Actually T-mobile's pricing scale is different for people who get subsidies and people who get retail pricing. For their new play no contract unlimited = 49.99 while unlimited with 2 yr agreement is 59.99. Either way their gonna get their money.
murmermer

Jan 26, 2010, 2:30 PM

Stupid Greedy Ass Customers

Maybe if every welfare recipient didnt want a free iPhone then a free Droid 2 months later, we wouldn't be in this mess.

Last time I checked if I signed a contract and I broke the contract I was held to the penalty I signed for- even to the extent of a court case. The FCC sure does know how to throw reliability out the window.
*Clap*Clap*Clap*Clap*Clap*Clap*Clap*
Agreed.
If you don't like the terms of the contract, then don't sign it....and pay $500 for a phone.
Actually, back in the 'glory days' it used to be ETF = Subsidy. Now all of a sudden the ETF is covering all of the cost of losing you as a customer. Check the Nexus One's ridiculous ETF.
...
This is obviously a problem but occurs much less then you think, maybe 5% of the time. I personally pay the NONcontract price which Ill tell you is the price the CARRIER pays PLUS the ETF. Black Berry Bold 9700 is almost 300 dollars is the cost to r...
(continues)
...
donjonson410

Jan 27, 2010, 11:45 AM

Insurance?

What happens when the $500 phone you bought breaks, who would insure it? I personally enjoy going into a sprint repair center and getting my phone serviced at no charge. So if I don't buy my phone from sprint will Asurion set up a repair center? Or will I be stuck paying a deductible every time it takes a dump due to a defect? Or will I have to go through the manufacture which will take at least 3 weeks? It seems to me with No contracts, customer service would be ****.
I'm sure Asurion or some other company that offers 3rd party equipment protection/extended warranty coverage would be willing to underwrite coverage for you, for a price, provided you have some way to prove that you 1) actually have the phone you want...
(continues)
...
The monthly fee one pays Asurion goes straight to them. If the carrier model goes away, as long as you buy the phone new from the manufacturer you will still be able to purchase insurance within 15 days. Verizon and AT&T already offer full retail pu...
(continues)
Desolationblade

Jan 27, 2010, 4:46 PM

there is no nocontract deals

We had a sales meeting with all 4 reps. apparently u must go under contract with a new carrier for 12 months before you can activate any unlocked handset. u cannot just get a phone and go to at&t if ur not a customer. But after the 12 months u can add/subtract lines and phones w/o contracts. Unless ur me and can find ways to cancel tmobiler after 3 months w/o fees
60dollarcarcharger

Jan 26, 2010, 2:09 PM

here it comes! no more subsidies

I can't see why the wireless networks wouldn't strong arm this and say "fine, no more ETF's, no more phone subsidies, that $50 dollar phone will now be 250 bucks."

Then we can really give the consumers something to whine about right?

Is this a case of... be careful what you wish for?
FCC: Der.... Our 2 year old daughters say that things should be free without contracts... but you guys are charging money so YOU GUYS ARE WRONG! oh ... brb, gonna go watch Sponge Bob BECAUSE HE IS SO SMART.


World: WTF?
...
i know this is beating a dead horse but...companies already offer fones with no subsidy and no contract. are you suggesting consumers buy their phones directly from the manufacturer? *gasp*
...
This is GREAT news. All the carriers can cease subsidizing phones as a direct result of FCC meddling. There is no right to a cheap phone.
...
Here is an idea:

AT&T buys out T-Mobile and Verizon buys out Sprint. LTE and same frequency. No more subsidies. Phones retail from $250 to $600 a piece and consumers make their choices. Monthly rates are anywhere from $50 to $200 depending on numbe...
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...
muchdrama

Jan 26, 2010, 5:46 PM

Good for the FCC...

...I couldn't agree more with this investigation.
I can't wait to hear this
...
Everything has a balance
Business makes the world go round. when you think about it...why'd they tie the two together in the first place? Cuz the manufactuers wanted people to buy their phones....make a deal with providers. From there call centers an...
(continues)
Globhead

Jan 26, 2010, 4:34 PM

Why is Google the only 3rd-party seller named?

As usual, the FCC has no idea what it is doing.
I know, right? Wirefly, Amazon, Let'sTalk, & so many others should be on that list too.
...
Why in the hell is a phone manufacturer named? Because they're the one who, for some reason, decided to put an ETF on the phone they make. No other manufacturer does that.
...
VZW_insider

Jan 26, 2010, 8:12 PM

All Smoke and Mirrors

Let's be honest, this latest move against all the carriers is just smoke and mirrors by the FCC. Consumers are dissatisfied with every aspect of the American economy. Cars cost too much and aren't reliable enough or fuel efficient enough, CEO's make too much money, cable/satellite tv is a ripoff, my cell phone provider is robbing me blind.

The members of the FCC know exactly how the cell phone industry operates. They all know that a good portion of complaints are unfounded (not all), but think of the average consumer (not phonescoop member). Anyone in the industry knows what I'm talking about.
- I wanna a free phone
- The carrier should warranty the manufacturer's product or just give me whatever I want in exchange
- I am entitled a mo...
(continues)
 
 
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