Cell Phone Early Termination Fees Illegal? (in the US)

[OilersBaby]

They are on their way to becoming illegal. I have wanted to cancel my cell phone contract with Sprint and get IPhone with Verizon but it costs $150 per line to cancel and both my husband and I are on it...so this would be great!!

http://tech.yahoo.com/blogs/null/99655

[fredr123]

I think it's a case of penalty vs. liquidated damages for breach of contract. Imposing a penalty for breaking a contract, generally, is not legal and usually unenforceable. However, if you provide some sort of formula for calculating damages in the event of a breach then you can argue it's actually a liquidated damages clause. Liquidated damages, provided they are reasonable and not punitive, are often upheld. Lloyd Duhaime has some good (and accessible) information on contract law on his website (there's also a brief albeit concise discussion of the relevant principles from the Alberta Court of Appeal here).

From what I read earlier, Sprint Nextel was charging customers $150-200 for breaking their contract earlier. There was no connection between that fee and actual revenue lost (i.e., damages) as a result of the breach. This is probably why many providers charge you a fee based on how many months you might have left on your contract.

[ken0042]

I added the tagline to the subject just to clarify; as we all know the cell industry in the US can be very different than in Canada.

[Boblobla]

Originally Posted by ken0042

I added the tagline to the subject just to clarify; as we all know the cell industry in the US IS WAY BETTER.

FIXED.

[HOOT]

Why is it WAY better?

[Boblobla]

Originally Posted by HOOT

Why is it WAY better?

Better coverage
More Options
Substantially Cheaper
Better Phones

just off the top of my head.

[HOOT]

Originally Posted by Boblobla

Better coverage
More Options
Substantially Cheaper
Better Phones

just off the top of my head.

They have better coverage because they have less area to cover with 250,000,000 more people in that smaller area.

What options are you reffering to? I can't think of anything I see on commercials that they offer than none of Telus/Bell/Rogers don't have.

Substantially? Really? I would say they are cheaper but not THAT much. You also have to consider customer base vs costs compared to Canadain companies.

Better phones by what 3-6 months? So what we have to wait a bit, if anything that is a blessing because they are the biggest test market for our phones so we have less issues with our. ie. iPhone v 1.0

I don't get everyones love affair for the US cell industry, when I talk to people down there they have almost the same complaints as people up here.

[Boblobla]

I have a love affair with the Japanese cell phones industry tbqh.

By options I meant on the phones themselves and providers. Just walking around stores down there selection is much better.

It is much cheaper there because there are so many more people.

I could be wrong but I though the delay was longer than 3-6 months to get newer models.

[HOOT]

Originally Posted by Boblobla

I have a love affair with the Japanese cell phones industry tbqh.

By options I meant on the phones themselves and providers. Just walking around stores down there selection is much better.

It is much cheaper there because there are so many more people.

I could be wrong but I though the delay was longer than 3-6 months to get newer models.

Well who doesn't. They are the leaders in the industry and if we could have their phones/features I would probably cry a little

Sorry to derail the thread, I just don't see the huge gap anymore that some still see, maybe its just me...I will shut up about this now.

[HotHotHeat]

Originally Posted by HOOT

They have better coverage because they have less area to cover with 250,000,000 more people in that smaller area.

What options are you reffering to? I can't think of anything I see on commercials that they offer than none of Telus/Bell/Rogers don't have.

Substantially? Really? I would say they are cheaper but not THAT much. You also have to consider customer base vs costs compared to Canadain companies.

Better phones by what 3-6 months? So what we have to wait a bit, if anything that is a blessing because they are the biggest test market for our phones so we have less issues with our. ie. iPhone v 1.0

I don't get everyones love affair for the US cell industry, when I talk to people down there they have almost the same complaints as people up here.

Give me a break. Every time there's a mobile phone related question you seem to take the most ridiculous position and blindly defend it. There is absolutely no comparison to be made between the US and Canada when it comes to the cell phone landscape. Zero. Why? It has a little concept called competition in place.

[HOOT]

Originally Posted by HotHotHeat

Give me a break. Every time there's a mobile phone related question you seem to take the most ridiculous position and blindly defend it. There is absolutely no comparison to be made between the US and Canada when it comes to the cell phone landscape. Zero. Why? It has a little concept called competition in place.

nm...the fact you ignore the fact that the US has 272,000,000 customers vs. Canada's 20,000,000 prove a lot.

Your probably right a 1/4 of a BILLION people wouldn't make a difference to any businesses price points

[Hemi-Cuda]

what i find interesting is what going to happen when Shaw gets into the wireless market. in the last employee update meetings we were told that Shaw was successful in it's wireless bid and will definitely be getting into cellphones in the future, but the most interesting news was that JR Shaw was adamant about keeping the company tradition of no contracts. from what i gathered, Shaw will enter the market slowly with cheap phones aimed at the base users who simply want a phone for a very low monthly cost. Telus has already taken a huge hit from their customer base with Shaw's digital phone, i can only imagine how much worse it would get for them if the same thing happened to their wireless customers

[I_H8_Crawford]

Originally Posted by Hemi-Cuda

what i find interesting is what going to happen when Shaw gets into the wireless market. in the last employee update meetings we were told that Shaw was successful in it's wireless bid and will definitely be getting into cellphones in the future, but the most interesting news was that JR Shaw was adamant about keeping the company tradition of no contracts. from what i gathered, Shaw will enter the market slowly with cheap phones aimed at the base users who simply want a phone for a very low monthly cost. Telus has already taken a huge hit from their customer base with Shaw's digital phone, i can only imagine how much worse it would get for them if the same thing happened to their wireless customers

Koodo already has that marketshare, so Shaw will be in for a major fight unless Koodo lets the Telus influence affect them and they decide to start charging a SAF, etc.

As for the competition thing, to be fair to Canada, there is some more competition now in the marketplace. Companies like Virgin Mobile and Koodo offer all their plans with no SAF, Solo has followed suit now as well - and according to howardforums, Virgin will be launching a Blackberry sometime soon, so hopefully there will be better data rates as well.

The new guys (Koodo & Virgin) have also introduced new ways to handle the termination fees - Koodo's makes the most sense, IMO - you want to leave, you pay off the remaining subsidy of the phone you picked up, and that's it. But Virgin is hardly draconian with $10/month for every month remaining with no minimum charge (and the 3 year contract allows for larger subsidies on the phones).

Hopefully eventually these new companies (and yes I am fully aware Koodo is owned fully by Telus - but tell that to the Telus reps and salespeople who HATE Koodo!) will force the big 3 to come back to reality and stop ripping off customers as much.

[HotHotHeat]

Originally Posted by HOOT

nm...the fact you ignore the fact that the US has 272,000,000 customers vs. Canada's 20,000,000 prove a lot.

Your probably right a 1/4 of a BILLION people wouldn't make a difference to any businesses price points

Are you saying Canada is not a profitable market? Otherwise I fail to see your point. The only difference population makes is the networks have to be able to handle more traffic. I don't see how a city with a million people in Canada is different from a city with a million the US, or anywhere else for that matter. The US has more people, so the coverage is more widespread. The density in major Canadian cities is the same as anywhere else...

This telecom industry made argument that Canada is SOOO expensive to build and maintain cell phone networks because of population is complete BS. Canada's network is simply built on a smaller scale in the US....Which shockingly enough also costs less.

[OilKiller]

Originally Posted by HOOT

nm...the fact you ignore the fact that the US has 272,000,000 customers vs. Canada's 20,000,000 prove a lot.

Your probably right a 1/4 of a BILLION people wouldn't make a difference to any businesses price points

So?

We as consumers should suffer because there are not enough people here for Canadian companies to make enough money? Is that what you are saying?

Let the U.S. companies in then.

Same goes for satellite and cable companies and broadcasters.

[calculoso]

Originally Posted by HOOT

nm...the fact you ignore the fact that the US has 272,000,000 customers vs. Canada's 20,000,000 prove a lot.

Your probably right a 1/4 of a BILLION people wouldn't make a difference to any businesses price points

And you're ignoring the fact that those 1/4 of a BILLION people would need a greater infrastructure than what Rogers (etc) needs to provide for Canadians.

Take a look at this map of Rogers cell towers in Ontario. Notice the MUCH MUCH MUCH greater concentration in the Toronto area, where the greater population density is, compared to other areas (zoom out to compare).

http://www.arcx.com/sites/RogersGoogle.htm

Now imagine the same Ontario land area with the population density of Toronto and imagine how this map would look. Now imagine the costs associated with it.

[Shawnski]

Originally Posted by HotHotHeat

Are you saying Canada is not a profitable market? Otherwise I fail to see your point. The only difference population makes is the networks have to be able to handle more traffic. I don't see how a city with a million people in Canada is different from a city with a million the US, or anywhere else for that matter. The US has more people, so the coverage is more widespread. The density in major Canadian cities is the same as anywhere else...

This telecom industry made argument that Canada is SOOO expensive to build and maintain cell phone networks because of population is complete BS. Canada's network is simply built on a smaller scale in the US....Which shockingly enough also costs less.

Care to provide your background to be able to make these statements? How long have you been in the industry?

I have a very, very hard time taking your statements seriously when you can't even navigate a website to find a C-Train time, let alone on an industry as complex as this one.