The Technology Liberation Front - Latest Comments in The Technology Liberation Front » Archive » Cell Phone Contracts & Contradictions

Re: The Technology Liberation Front » Archive » Cell Phone Contracts & Contradictions

cordblomquist — Mon, 16 Jun 2008 17:33:45 -0000

Cory, I agree that customers could derive the same benefits from installment plans, but would such plans work in the market alongside phones tied to contracts?

Imagine customers are faced with these choices:

1) An $800 iPhone that requires $199 down payment and 24 monthly payments of $25. This phone is not tied to a plan.

2) A $199 iPhone that is tied to a $60 a month data plan.

I think the average consumers is still going to go for the second option simply because it seems cheaper. Voice and data plans for the phone are going to run around $50 anyway, so few customers would see the advantage of paying $25 + $50 when they could pay $60 per month and not be faced with the intimidating $800 price tag.

Even if the phone were cheaper and it worked out that a monthly plan was worse for consumers many might still opt for the phone married to the contract because they aren't met with an initial price tag that's so high.

I agree with you that the government should not be propping up failed anti-unlocking schemes. DRM, anti-unlocking software, and other such restrictions placed on technologies in order to get them to jive with existing business plans should be allowed in a free-market, but government should not come to the rescue of Apple when it’s schemes fail just as it shouldn’t prop-up the DRM on Blu-Ray players or anything else.

I think DRM is going to go the way of the dinosaur along with DHM—digital handset management. But shouldn’t we let it do so on its own? I believe that the market will find its way to open cell phones, but I think there could also be a place for DHM devices for many years to come. Why not let all market niches be filled instead of demanding that everyone conform to the business model that best suites the needs of the uber-geeks?

Re: The Technology Liberation Front » Archive » Cell Phone Contracts & Contradictions

Cory Doctorow — Sat, 14 Jun 2008 15:35:45 -0000

As Tim Wu has pointed out, if there's a positive externality (more ready access to more powerful handsets) that arises from handset subsidy, then exactly the same externality could arise from phones sold on the installment plan -- without forcing consumers to accede to having their most personal technology locked against them.

The problem with handset locking is that it requires enforcement -- at public expense -- to prevent handset unlocking. It's not a "natural market" -- it's one that requires extraordinary incursions into the marketplace by government. It asks a regulator to place a heavy thumb on the scales in favor of this model.

Re: The Technology Liberation Front » Archive » Cell Phone Contracts & Contradictions

MikeT — Thu, 12 Jun 2008 14:02:55 -0000

cannot should be "should not be able to"

Re: The Technology Liberation Front » Archive » Cell Phone Contracts & Contradictions

MikeT — Thu, 12 Jun 2008 14:02:30 -0000

Or cripple it.

I don't object to them refusing to activate it without a service, what I object to is the idea that if you get it activated one way or another, and they didn't have a written contractual agreement with you on how you would use it, they cannot legally cripple or shut off your property.

Re: The Technology Liberation Front » Archive » Cell Phone Contracts & Contradictions

MikeT — Thu, 12 Jun 2008 14:00:59 -0000

It would be better to have a policy in place that says that if Apple does not get a written contract with its users, it cannot render their phone unusable based on a user's relationship with AT&T. Meaning that if Apple doesn't have a written contract with me that I signed at the Apple Store, and my plan runs out after a year, and I want to use my iPhone as a more capable iPod Touch, Apple cannot just shut off my property.

Re: The Technology Liberation Front » Archive » Cell Phone Contracts & Contradictions

Don Marti — Thu, 12 Jun 2008 13:50:09 -0000

Counterexample: Pre-breakup AT&T wasn't allowed to license Unix to customers, so the variety of Unix options on the market was huge.