The Google Nexus One Termination Fee Problem

On January 13, 2010 By tolstoy Topic: Advocacy, Consumer, Googlephone

It is a big problem. You buy a subsidized smartphone and if you choose to end the contract, you pay damages not only to the carrier (T-Mobile) but also to the seller (Google)

What does the Nexus Fine Print actually say? Lockergnome goes through it,

Nexus One owners who decide to end their service after the 14-day trial period is over but before four months have passed will be hit with upwards of $550 in fees

That means,
You pay Google a so-called Equipment Recovery Fee of $ 350.
And you pay T-Mobile an Early Termination Fee (ETF) of $200.

Add this $550 to the $179 you paid earlier, and you pay more than the price of an unsubsidized Nexus One when you terminate the contract before the contract period ends.

How does Google justify this double penalty?
Strangely, a Google spokeswoman explains via a statement that the Equipment Rental Fee is a way for the company to recoup the subsidy it gives to contract customers.
Huh? One thought the carrier was giving a subsidy to customers an thus the low price.

Something has gotta give.

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