More Rogers iPhone Pricing News – Sneaky Details in the Fine Print

1 Jul ’08

Jevon posts on the iPhone’s ridiculous break fee: “Well, we’ve all been complaining that Rogers’ pricing hasn’t changed much with their new iPhone plans, but now I have proof that they have changed. Instead of a smaller fee like 200$ to break up, Rogers now locks you in for 220$ a MONTH, or $1100, whichever is more.” Yes, that’s right – $1100. My initially mild concern, which only recently mutated to alarm, has now flowered into something bordering on full-blown contempt. Update: as I now read the terms, it strikes me that this could actually be worse than even Jevon suggests. But they’re poorly drafted. I’ll try to parse them later today.

{ 4 comments… read them below or add one }

Rob Hyndman July 3, 2008 at 03:04

As I suspected – the draft has been corrected. Jevon has the details.

Reply

Rob Hyndman July 1, 2008 at 12:14

So many questions. Eg, if you only have two weeks left in your term, you’ve been a customer for at least 35 months and two weeks. If so, how could $1100 then be a reasonable termination fee? That’s simply grotesquely, nose-in-the-trough greedy.

Also, as you suggest, Mike – what sense does the “400” make? 400 months is absurd. $400 is illogical.

Also, why is the first sub-clause numbered (ii), and the second (iii), and why define it “EECF” when it describes the “Early Cancellation Fee”, and then why use the term “ECF”? ;)

Also, if the termination fee is supposed to reimburse Rogers for a loss, why isn’t this tied (on a declining over time basis) to the phone subsidy? I can understand a minimum term requirement as a way of compensating the operator for the phone subsidy, but imposing a long term enforced by a penalty that is not rationally related to the subsidy compensates Rogers for the loss of expected income over term – something many would think is an inappropriate use of a termination fee in a consumer context.

Perhaps I’m so jaded now that I simply can’t read this at it was intended to be read. But this makes no sense to me. My best guess is a first (and sloppy) draft, inadvertently made available to the public.

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mike July 1, 2008 at 11:26

The clause actually reads (in full)

The ECF is the greater of (ii) $1100 or (iii) $220 per month remaining in the service agreement, to a maximum of 400 (plus applicable taxes),

– first of all, its the greater of $1100 and $220 per month. If you terminate with 2 weeks to go in your term, ECF is $1100. If 35 month to go, ECF is $7700

– but the maximum is 400. Is that months or dollars? If its dollars, then the minimum of $1100 is meaningless. If its months, 33 years is… a long time.

Reply

Josh July 1, 2008 at 09:34

You think they would be avoiding those ambiguously placed commas by now…

Reply

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