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  1. #1
    K7AAY Treo 650/Cing & Nokia9300/TMo johnbartley's Avatar
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    Major US GSM carriers sued over subsidy locks

    There's been a bit of chatter recently on the <a href="http://groups.google.com/groups?q=alt.cellular">alt.cellular newgsgroups</a> over the North American industry practice of 'subsidy locks' on cellphones. This practice is designed to prevent <a href="http://www.wirelessweek.com/article/CA236975?ticker=CYCL&type=stockwatch">churn</a>. However, looking at current <a href="http://www.instat.com/press.asp?Sku=IN0401297WI&ID=933">US churn rates</a> of (5%/quarter times 4 quarters/year) 20%, it seems ineffectual.

    Now, a consumer watchdog group, the <a href="http://www.consumerwatchdog.org/corporate/pr/pr004332.php3">Foundation for Taxpayer and Consumer Rights</a> is taking the Big Three US GSM carriers (ATT Wireless, Cingular and T-Mobile) to court in LA over the practice with a class action lawsuit. Minor carriers have not yet been included, perhaps through lack of California jurisdiction.

    Given that, adjusting for exchange rates, European carriers sell the same or comparable instruments for around the same prices *without* the subsidy locks, this issue seems like it could be a winner.

    US carriers never have been able to create a convincing argument why their users should be chained to the carrier by their handset, although carrier PR reps do <a href="http://www.americasnetwork.com/americasnetwork/article/articleDetail.jsp?id=97994">allege it's not illegal</a>. However, PR folks don't determine what's legal. Last time I checked, that's up to the judge.

    For this, and for their <a href="http://www.consumerwatchdog.org/corporate/pr/pr003945.php3">previous suit against Nextel for billing fraud</a>, my hat's off to the FTCR!
    John Bartley K7AAY | http://celdata.cjb.net | http://kiloseven.blogspot.com

  2. #2
    Registered User shackrat's Avatar
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    Thumbs up Excellent!

    It's about time someone stood up to these sleezy, greedy wireless carriers! The idea of a subsidy lock isn't in itself a bad idea, it's a way for the carriers to protect their investment in the subscriber. However, the problem arises when carriers refuse to remove the locks once the terms of the service contract have been fulfilled, and that's just wrong.

    In my opinion, once your contract has run out, meaning you have fulfilled the committment, the phone should be yours to do with as you please. The same should hold true for early termination in which you pay an early termination fee. After all, the idea of the fee is to discourage customers from cancelling until the carriers subsidy has been recouped. Hence, if you are forced to pay the fee, then you should be entitiled to have your equipment unlocked.

    Well, it doesn't work that way right now and that is one of the things that needs to be addressed. The next issue that needs attention is the high costs for wireless data. Where on earth do these carriers get off charging $20 a month for 8MB of data. How much is 8 megs? I roughly measured it today and even with caching, I used that up surfing pdaPhoneHome in about 20 minutes. Ouch! I won't pay it, and I suspect many others won't either.

    Apologies for getting off topic.
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  3. #3
    K7AAY Treo 650/Cing & Nokia9300/TMo johnbartley's Avatar
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    Re: Excellent!

    Originally posted by shackrat
    <snip>
    The next issue that needs attention is the high costs for wireless data. Where on earth do these carriers get off charging $20 a month for 8MB of data. How much is 8 megs? I roughly measured it today and even with caching, I used that up surfing pdaPhoneHome in about 20 minutes. Ouch! I won't pay it, and I suspect many others won't either.
    <snip>
    Well, that's why I bought an unlocked dub-ya, and bought T-Mobile's all-you-can-download $30/mo plan. Only way to go, folks.
    John Bartley K7AAY | http://celdata.cjb.net | http://kiloseven.blogspot.com

  4. #4
    Registered User CLEAmber's Avatar
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    Don't CDMA carriers do the same thing? Why aren't they being sued?
    Amber. I'm finally converged, and lovin' it!

  5. #5
    K7AAY Treo 650/Cing & Nokia9300/TMo johnbartley's Avatar
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    Because it is so much easier for GSM customers to move from system to system. They don't have to register the ESN with the carrier; all they need do is move the SIM card.

    Yes, if I were Sprint, I would worry about this, because they're the next carrier "up against the wall when the revolution comes" {/obligatory Hitchhiker's Guide reference}. I sure would like to see a no-rules knock down drag-out between Claire and the doors on the HEART OF GOLD {/obligatory Hitchhiker's Guide reference} as to which can sound the most obsequious.

    On the other hand, Nextel comes out smelling like a rose (How do they keep doing that?) because no other major carrier uses iDEN instruments (Mike en Canada and SouthernLinc just don't count.)
    John Bartley K7AAY | http://celdata.cjb.net | http://kiloseven.blogspot.com

  6. #6
    Registered User shackrat's Avatar
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    Lightbulb True..

    Originally posted by CLEAmber
    Don't CDMA carriers do the same thing? Why aren't they being sued?
    But it isn't as big of a deal with the CDMA carriers, since with GSM the whole idea of the SIM card is to pop in a new card when you change carriers. CDMA has no such mechanism, and most CDMA carrier swon't just let you activate any phone on their network.

    Verizon Wireless is an exception in this area. They don't lock their phones, and usually will allow you to activate any CDMA phone on their network, even if they haven't ever sold it, however, if the rulling goes against the carriers Sprint and the smaller CDMA carriers will most likely be the next targets.
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  7. #7
    Registered User CLEAmber's Avatar
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    That sounds like the same thing to me. It should not be up to them whether to LET you activate a phone on their network. If you have a device that is compatible with their service, you should be able to use it, period. I hope that this is successful and they do target Sprint next!
    Amber. I'm finally converged, and lovin' it!

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