Verizon Wireless Prorates Fairness In Prorated ETFs

from the gee-thanks dept

Verizon Wireless got a bit of praise a few months back when it announced it would start prorating the early-termination fees it charges customers who break their contracts before they expire. Operators use ETFs to ensure they recoup the subsidies they pay to make handsets cheap for users to buy, but the ETF doesn't drop as subscribers get closer to the end of the contract, which seems a bit unfair. Now, Eric writes in to point out that Verizon's finally released the details of the ETF changes, and as you might expect, they're not quite as fantastic as people would have hoped. The changes came into force Nov. 16 -- and will only apply to contracts signed on or after that date. Furthermore, the ETF only drops by $5 per month rather than proportionally to the length of the contract. While it's a step in the right direction, it seems a lot less benevolent than originally thought, and keeps the deck stacked strongly in the operators' favor. Perhaps a better solution would be to charge an ETF in line with the subsidy on each handset, then prorate that proportionally over the life of the contract.
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  1. identicon
    Anonymous Wireless Worker, 17 Nov 2006 @ 7:19pm

    Phone subsidies

    I've worked as a customer care rep. at 3 of the "Big Four" providers and most of the people I work with hate the Equipment subsidies. They attract new customers to make "Churn" look good to the stockholders and then you're almost out of your contract and a new customer gets a better price than you on the phone. Very frustrating but all too common. But there are MANY ways to get out of an ETF and they are usually listed on the terms & conditions. Anonymous is right that most will waive it if you move out of their coverage area. Verizon does have a large one but their map is still just an estimate of coverage and says so in the fine print. Another way is telling the provider that you've died. Most will adjust it w/o proof. But I hate the ETF as much as other consumers and Verizon is moving forward if not fast enough.
    As an answer to Ironics question on taxes: Verizon didn't charge the taxes, the government did. The reason they're not a part of your contract is that your contract is with Verizon, not the government. I understand that wireless taxes can suck. The 3 states that have the lowest tax are Mass, New Hamphshire and Oregon and the highest are; California, New York and Texas.

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