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[ NNSquad ] Cancelling Nexus One triggers TWO "early termination fees"?


With all the controversies about cell carrier early termination fees 
(ETF), Verizon's recent doubling of their ETF in some cases, and
general confusion regarding the topic, it appears that Google's Nexus
One and T-Mobile *may* have further muddied the waters.

I say *may* because my hope is that the issue being reported by
observers below is a misinterpretation of a situation, not an accurate
analysis.

The problem *appears* to be this.  Contractual terms for buying a
subsidized Nexus One through T-Mobile seem to indicate that if you
want to cancel service and return the phone within a few months (after
the brief trial period), you must pay Google the associated difference
between what you paid T-Mobile for the subsidized phone and the cost
of an unlocked (unsubsidized) phone.

This makes basic sense so far.  

The problem is that this is seemingly not exclusive of T-Mobile's own 
significant ETF.

Normally, when you buy a subsidized phone, the carrier ETF is designed
to recover the additional cost of the phone (beyond what you paid the
carrier directly for the phone at the start of the contract) when
you cancel early.

But it *appears* that in the Nexus One case, if you cancel early on,
you end up having paid:

1) The subsidized cost of the phone (paid to T-Mobile)
2) The cost of the Nexus One minus the amount you paid to T-Mobile
   for the phone (paid to Google)
AND
3) The T-Mobile early termination fee 

In this sort of cancellation sequence, (2) would not normally exist.
It appears that you end up paying handsomely more than the actual cost
of the phone if you buy a subsidized phone through T-M and cancel
within a few months.

It could perhaps be argued that this "premium" extra payment can
somehow be justified, but at first glance it's a particularly unusual
arrangement.

I hope that we see additional clarification about this soon.

http://bit.ly/79kJci  (Android Phone Fans)

--Lauren--
NNSquad Moderator