iPhone Termination Fee Making Lawmakers Upset

Apple’s iPhone has enjoyed favorable reviews since its recent debut, but it got some criticism on Capitol Hill in Washington this week.

The phones, which cost between $500 and $600—are usable only on AT&T Inc.’s wireless network and will remain that way until 2012. Even though the phones become expensive paperweights if customers quit AT&T’s wireless plan, the company will still charge a $175 early termination fee, said Rep. Edward J. Markey, D-Mass., chairman of a House subcommittee on telecommunications and the Internet.

Markey described the phone as a “Hotel California service. You can check out any time you like, but you can never leave—you’re stuck with your iPhone and you can’t take it anywhere.”

Timothy Wu, a law professor at Columbia University and commentator on technology issues, described the cell phone industry as “spectrum- based oligopoly” where customers have given up their property rights.

“Imagine buying a television that stopped working if you decided to switch to satellite,” Wu said. “Or a toaster that died if you switched from Potomac Power to ConEd.”

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4 Comments on “iPhone Termination Fee Making Lawmakers Upset”

Trent Says:

Imagine, getting what you paid for? The terms were well known prior to anyone buying the iPhone. It wasn’t like consumers didn’t have any time to mull over whether to buy the phone or not.

Are you serious, lawmakers find this important enough to discuss? They obviously have nothing better to do!?

Sigh…

Gary Falkes Says:

I guess the fee sucks, but I think that it sucks even more that if you don’t stick with the AT&T network you can’t use an iphone. That’s mean.

Garner Says:

Imagine not being able to use you’re satellite receiver if you switched from DirecTV to Dish Network or Hughes… oh wait… thats how it works.
How about imagining less government and allowing the free market to run. Let’s all imagine smarter consumers who read contracts before getting in.

Geary Bean Says:

Well, if you got enough money to buy an ipod for 400-500, then what problem should one have paying the disconnect fee. sheesh, get real. over priced phone , over priced service fee. Been dealing with it for years. I read my contract BEFORE I BOUGHT into it. It is true, tho…… ya can’t cure stupid.

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