Ede <ted@mbunix.mitre.org> (08/24/90)
>In California, it is no longer legal to market cellular phones and >require activation as a condition of sale. I know this is a dumb question, but what's the logic behind the law? >And that (with variations), friends, is how cellular phones are sold >in California. And is Massachusetts, that's how it's done too. Fretter and Highland regularly sell Novatel transportables for under $200, and other cellular phones for as low as $79. And they get a kickback of $200-$400 depending on how hard up either Cellular One or Nynex are. When I bought my phone, I was obligated to use Cellular One for three months. I signed a slip saying I would pay Highland $300 if I dumped service before the end of the three month period. My mom bought a phone. That week Fretter had the better deal, and she was forced onto Nynex for three months. She stuck with it for about six months, but when Nynex raised basic service almost $20/month, she called Cellular One. Within two days they set up service and, at no charge, went to her office to reprogram the phone. (Heck, they saved the original $300, that'll pay for bus fare to just about anyone's office!) Sure, it's a bit of a scam, but who cares, I don't need a law to protect me from it, I knew the deal before I went to the store. Saving the $300 made it economically feasible for me to buy a phone. It was well worth sticking with a company for two or three months. And with two carriers in most areas, it's hardly a problem. If you're looking to buy a phone, and you don't like the carrier that the store is pushing, just go to their competition. They're sure to be pushing the other carrier. I think the people that are doing most of the complaining are the shops that specialize in cellular phones. They can't do the business that the department stores do. Either they can't get the same sizeable kickbacks, or choose not to apply it to the price of the phone, and now they can no longer compete. I have a hard time feeling sorry for them. Ted Ede -- ted@mbunix.mitre.org -- The MITRE Corporation -- Burlington Road linus!mbunix!ted -- Bedford MA, 01730 -- Mail Stop B090 -- (617) 271-7465
john@bovine.ati.com (John Higdon) (08/24/90)
Ede <ted@mbunix.mitre.org> writes: > I think the people that are doing most of the complaining are the > shops that specialize in cellular phones. They can't do the business > that the department stores do. Either they can't get the same sizeable > kickbacks, or choose not to apply it to the price of the phone, and > now they can no longer compete. I have a hard time feeling sorry for > them. In California, the whole flap over hardware tied to service arrangements came about from the squealing of service "resellers". These are middlemen who buy up banks of numbers from the provider and then work in conjunction with retailers. These agreements came up at the beginning of cellular service in the area, but seem to be on the wane. Resellers were complaining that they were being squeezed out, having to share more and more of their kickbacks with the retailer so that their "customers" could remain competitive with those doing business directly with the provider. What really hurt were those retail operations that were operated by the provider directly. As you might expect, if it were up to the provider, you would be given a phone for free if they could expect a certain level of usage in return. John Higdon | P. O. Box 7648 | +1 408 723 1395 john@bovine.ati.com | San Jose, CA 95150 | M o o !