Basically the carriers are making the standard libertarian argument, which makes sense. If you block locking, you already know what happens: we already know cell phone prices unlocked. The cell carriers are in essence capital providers and they know how to collect money from their customers.
It really doesn't. Libertarian arguments only make sense if you don't think about it too much, or are ignorant about the context and details, or you have a vested interest.
You can compare phone prices with countries where there is healthy competition and there is no or very limited blocking (France is a good example - you can buy phones outright, or get them on a payment plan that locks you on a more expensive monthly payment compared to the classic 20€ everything included including 20-150GB internet depending on the provider plan; after the initial period is over, you can do whatever you want). If you bother to look into the topic a little bit more than surface level, libertarian arguments usually fall apart easily.
If consumers paid out of pocket for their phones then they would be more picky about upgrading and plan prices. It would also make upselling shitty plan features harder so the carriers would loose a lot of money.
I like unlocked phones, and I buy my phones unlocked. But I agree with the sentiment here that we already know what the prices are for unlocked phones: manufacturers will sell them to you at that price, and telecom operators in the U.S. will universally allow you to bring your own, unlocked device free of charge. What the companies offering locked phones offer is an optional subsidy in exchange for a locked phone; while I'm sure there are reasonable arguments around e-waste that result in wanting some limits to locking, there is an obvious tradeoff in that the value of the subsidy diminishes as the allowed lock time diminishes. Mandating short limits to phone locks raises prices for poor people who can't afford unlocked phones. It's not always bad to do that — sometimes companies are taking advantage of poor people — but it's pretty true that will happen.
The potential regulation is about the government making phones unlock automatically after two months of purchase. The regulation isn't about banning discounts or sales.
Then I tell them they'd be better served by switching to an MVNO offering significantly better rates and they come back and tell me they're locked in for a while because they just financed new devices.
I'm souring on the ways we create systems where you have to be super savvy and walk on eggshells with how you use the service and utter the right incantations or else you get hosed.
Companies aren't going to repossess your phone the way it's worth it to repossess your car or house if you stop repaying your loan.
So it raises the overall price because the companies charge more in order to offset the losses of people who effectively steal the phones they never finished paying for.
Cheaper phones by definition have slimmer margins.
I find that markets that are financialized where the price of the good is obfuscated are less efficient. This is because efficient markets rely on price discovery. Healthcare is an excellent example of this.
If the major telcos only offer exorbitant interest rates, some other player will step in and offer the credit at better rates that fairly price the risk.
A better distinction is not small vs. large, but appreciating assets vs. depreciating. Houses tend to increase in value, so it's usually okay to finance (pandemics and market crashes are the exceptions) because you often make a profit when it's time to sell. Phones tend to decrease in value after purchase, so financing it just means you're losing even more money at the end. Phones are also fragile so it's common to break one and still have to make payments.
AT&T’s prepaid plans start at is 25$/month for unlimited calls & text, “Unlimited” data (After 16GB it degrades to 1.5mbps) + 10Gb tethering. Meanwhile their cheapest regular plan is 50$/month for worse service (4GB data).
Sure they don’t offer the best plans prepaid, but that’s basic price discrimination.
And in store there's clearly the price tag right beside the demo model.
So hard to see how its obsfucated like healthcare.
But I know linking to a PDF will put some people off. It's a fairly short response this time as well.
----
>handsets that are free or heavily discounted off the manufacturer's suggested retail price.
You do it by increasing contract prices and being able to collect a phone if you don't stay with the often 2-year contract for stuff like this. The final price is also much more expensive than buying outright.
This is a bit silly in am age where phone tech has plateaued and you can often get last year flagships for half the price at launch. Consumers don't need the newest phone at all.
>T-Mobile’s current unlocking policies also help T- Mobile combat handset theft and fraud by sophisticated, international criminal organizations.
All androids and iphones have built in find - my - phone features these days, as well as the ability to wipe remotely. Phones are one of the least useful things to try and steal these days as a result, up there with a credit card. You can still get info and pawn off a wiped phone, but I don't see what T-Mobile does to prevent that further.
>because the proposal would force providers to reduce the line-up of their most compelling handset offers. T
Sprint already was reducing lineups, even before the acquisition. And they don't really subsidize anymore. That's why I started buying my own phones. The T-Mobile store was just the Galaxy/IPhone store, featuring overly expensive otter cases.
>T-Mobile maintains that the Commission lacks authority to adopt the proposed rule
They really pulling off the Chevron defense (assumedly, it's in another document) with no hesitation, huh? I guess we'll see how that goes. I'm not going to pretend I know the full ramifications of how it will affect the FCC.
>however, a provider subject to FCC-imposed asymmetric regulation on handset unlocking seeks to modify its commitments
Sounds like a horrible loophole to extend the policy as long as possible. So, no. They don't even provide much of an argument for when and where and what should be modified.
-----
Clickbait or not, I'm not really liking the arguments either way.
Sure, let’s just ignore the disastrous adware, bloatware etc that also “subsidize” these cheaper phones, to say nothing of the actual capabilities or user experience of said devices.
I even paid straight up for my current Laptop, some $2700. The only things in my life I threw a down payment on are furniture: my bed, my kitchen chair setup, and my patio furniture.
With a prepaid plan, you credit the operator, because you pay upfront, and the service is rendered after it, and ceases if your balance goes below zero.
With regular plans, the operator credits you, and you can be late with your payment for many days before the operator ceases servicing you.
So it's a month worth if credit, plus a different risk profile.
Also, it's market segmentation: the prepaid plan is the gateway drug %)
These systems rely on intentionally leaving people in the dark to manufacture legitimacy under the guise that well-educated consumers can avoid the hidden fees and restrictions. It's the expected end state when these shady schemes are allowed to exist.
Same as what stops you breaking a contract and not paying any other debt: They'll start the collections process on you.
Never again.
I guess the carriers still make money because once habituated, especially if they've never done the port-number-to-new-carrier thing, people stay in the high priced plan longer than necessary. Like the three years until they've truly paid the above-market price for the phone, and are now eligible for another "free" phone which they may not even take advantage of.
For what it's worth, carrier locking phones has been illegal here for some years (and any phone from the locked era had to be unlocked for free for the asking after the law was changed) and it hasn't changed anything in terms of these rent-to-buy type carrier plans. So I don't know what the fuss is about. A contract is a contract.
Or is there some carrier that sells the expensive $1000+ phones on prepaid plans?
There may be a really good reason for a not well-off family to get a new and advanced phone from the phone company, for a small monthly payment. They can't afford the upfront cost, and will pay more for a depreciating asset. On the other hand, they now may have a phone with a great camera to record their kid's school graduation, or other such event that only occurs once. Or they may finally use a smartphone with 4G / 5G to have good-quality video calls with some faraway friends or kin, which were a pain with their old phone. Etc.
This still beats buying a new phone with a credit card, at 29.95% APR.
It wasn't cheaper than all alternatives. There were a bunch of virtual operators offering better monthly rates than the big networks but I've personally had bad experiences with network deprioritization on them. Depends very much on your individual circumstance, I'm in NYC and the network is clearly pretty saturated.
The locked phones are usually sub $250 and have some kind of finacial gimmick to get the sticker price lower. Often it will be some carrier specific model name. Just sort by price low to high and you'll find them.
I'm not all sure this is a good thing, but I can see the argument for why it might result in lower interest rates on phones.
None of this is going to matter to people with good credit.
The infographic also seems pretty wrong, FWIW, especially considering that many US plans are uncapped and thus price/GB depends on usage. (There are sometimes, but not always, throttles past large amounts of usage eg 50GB/month, but since most of these plans cost less than $50/month, it seems extremely unlikely that most people are paying $6/GB as the website is claiming.) Verizon's "Visible" brand, for example, offers plans for $25/month with "unlimited" (soft cap at 60GB) data, for an effective $0.41/GB assuming you use up to the throttle limit. Even non-unlimited plans can be quite cheap; T-Mobile, for example, offers prepaid data plans for as little as $1/GB.
I had three free phones, service for 3 lines was 120$/mo. Phones were paid for up front and got ~60$ off each that in bill credits for 24 months.
The math came out exactly right
If you were going to buy a plan from AT&T anyways at $60/month, they are willing to give you a $800 phone for “free” if they can lock you into a 2 year contract.
Buying your own phone for $800 and paying $60/month isn’t a better deal but it does give you flexibility to drop the carrier whenever you want.
Consumers can decide.
Banning a consumer option sounds anti-consumer, not pro.
A similar psychological thing is going on in both cases I feel - some minority will manage to emerge winners due to a mixture of persistence, intelligence, luck, greed, etc. And the majority will get squeezed, or else how would such large percentages of marketing budgets continue to be pumped into club card and subscription schemes.
The rule is about unlocking, not deals.
The carriers say this is bad for consumers.
Both those can be true and the current headline captures that.
ATT, Verizon, and Tmobile are selling many many expensive phones, locked, on 24 momth payment plans, literally hundreds of possible configurations of dozens of models.
This is generally strictly true, but most people don't move on to the next deal once they've paid off their device, and end up paying more than they would have had they bought the device outright, device+plan cost considered.
I thought the US had made a similar change banning that kind of co-mingling of charges.
Miraculously, carriers simply started offering "tabs" or other language where you pay the subsidized phone cost as an addition to your plan bill for the contract period, with a clause that if you cancel early you still have to pay up the difference.
Arguments in favour of locking are nothing but corporate apologia and business crying wolf.
I’m switching over to Lucky when I have the mindspace to do it.
That's the problem with small debts, and why phone locking was a clever solution -- if the phone becomes useless when you stop paying, people will actually pay it off when they wouldn't have before.
What happens is the overall price goes up to offset those losses, even when it's not explicitly labeled as such. That's just basic economics. Empirically.
Did you add this time you spent into those totals? I think if you did, your math would come out differently. Personally, if I even feel the need to do any math like this, the answer is already "no, I can't afford this".
If they already have a bad credit score, then the carrier giving them an expensive phone without upfront payment is kinda on the carrier.
I think there's probably a significant net benefit to society from forcing carriers to unlock phones by default. If you're overseas, or need to temporarily use another carrier - you can.
If a carrier is not willing to carry the risk that someone who has bad credit might break the contract for an expensive phone - then I think perhaps that's not such a bad thing.
I don't see why its different than a car really. While some dealerships are adding GPS trackers nowadays, there is nothing stopping you from buying a car on credit and driving it to Mexico and hiding it in a locked garage. It's going to be very difficult to buy another car if you do that though, and that's enough of a deterrence for most people as they have to continue living their lives and eventually buy a new car.
Between Reno and Las Vegas it's pretty stark, huge holes in Verizon's coverage and a few 3G CDMA only towers, while AT&T has strong band 14 coverage, and T-Mobile has slightly better coverage than Verizon but also lets you roam onto AT&T.
Meanwhile in the San Juans the situation is dire on Verizon, with only one tower just on Orcas Island. AT&T has a handful of towerd, two on Orcas and then they force roam everyone onto T-Mobile who has dozens of local towers.
So long as you are on AT&T or T-Mobile with roaming you'll have the best coverage possible, but if your stuck on Verizon it seems your in for a rough ride these days.
It's possible there are some obscure features that may not work properly but for general usage as far as phone calls, texting, data usage, I've never heard of anyone having any issues with their Canadian phone internationally, besides maybe the cost of roaming.If you have a source from recent times that says this, I'd like to see it.
As far as minimal competition goes, there is not an infinite amount of cellphone carriers in the US either that will give you a phone on credit, especially if you have bad credit. I'm sure there are existing ways you can scam phones out of carriers too if you are fine with being banned from the carrier and/or torching your credit.
The only thing I'd get excited about in a new phone is a faster CPU.
Some companies do better in this regard. For example, Samsung provides four major updates, whereas the last mid-range Motorola I owned only gave me one. By the time I receive the fourth update on my current phone, I'll probably be dealing with bigger issues, like the battery not holding a charge—or worse. I wish phones were more serviceable, but that’s just not the case. Still, at mid-range prices, I’m fine with replacing it when it’s on its last legs.
If you're inclined, though, most Android phones allow you to unlock the bootloader and tinker with the software as much as you want.
If this isn't obviously the case, the "normal" plans are subsidizing phone sales. This means that you're almost certain to be better off with a vendor that doesn't offer this or at least offers it in a way that isn't dishonest.
At the end of the day, even if what you say is true making use of this deal makes things worse for everyone because it is part of a larger strategy. Inevitably you will be squeezed for more money than you otherwise would, sometimes it just takes a while.
To your credit, just stick with the subsidized phone deal, and then don't upgrade when it's paid off. At that point, your phone is now technically unlocked