SIM cards for Freerunner (was Free Runner price vs iphone 3G price)

[Joe Pfeiffer]

Kevin Dean writes:
>On Wed, Jun 11, 2008 at 7:35 PM, Joe Pfeiffer <joseph at pfeifferfamily.net> wrote:
>>
>> Because the price of the "free" phone is bundled into the price of the
>> contract.
>
>I don't think so. The only thing that changes in the deal is the
>profit margin of the company. The costs of the mobile carrier also
>indirectly include the costs of electricity but if I said "I'm not
>buying electricity from you so I shouldn't pay the mark up from
>electricity" I would just sound really really stupid. I'm well aware
>that the mobile providers pays for the phone and as a cost of doing
>business, charges more for their products.

Well, yes, you would -- they can't offer their service if they don't
buy electricity.  The can offer their service without buying the phone
they "give" me.

>>  If I don't get a phone, I shouldn't have to pay for one.
>
>Walk into T-Mobile or AT&T and  buy a phone and sign up for a
>contract. Write down how much you pay. Walk out, put that phone in
>your car and walk back into the store and sign up for the same
>contract without a phone. Write THAT price down. Compare and you'll
>see they're the same.

That's my objection.

>You're not arguing you shouldn't have to pay for a phone, you're
>arguing that you should be allowed to dictate the level of profit
>someone else's company is able to make on transactions.

Very close, but not exactly (I mentioned hair-splitting in my last
message).  They, of course, have the right to adopt any pricing
strategy they want, and they've done so.  I, of course, have the right
to argue that their strategy is not to the interest of this particular
consumer, on the grounds that they are bundling goods and services
together that I feel should be separate.  And I'm doing exactly that.

I feel like I'm back on my high school debating team.

>> Not quite -- you're also committed to pay the inflated price long
>> enough to pay for the phone,
>
>And as long as that company pays taxes. And as long as that company
>advertises. And as long as that company complies with minimum wage
>laws.

Well, no.  Whether they comply with the law (including taxes etc) has
nothing whatever to do with how long I pay my contract.  One hopes
that their pricing structure enables them to do that, but it doesn't
appear anywhere on my bill.

>I am aware that when a company spends money, in order to be profitable
>they will reclaim those costs they will increase the price of their
>products. I have no problem with a company making profit. In fact, I
>would strongly PERFER it because companies that provide me services
>tend to vanish when they don't make money.

Oh, yes, I want them to make money for exactly the reasons you state.
I don't want to pay for more of their profits than somebody who wants
a subsidized phone, however.

>> or pay for the phone under the guise of
>> an "early termination" fee.
>
>You entered into the contract of your own free will. Entering into
>that contract is merely claiming that your word has value. Why do you
>complain about agreeing to something and then being held to that
>agreement? The terms are stated up front, if you find them
>disagreeable negotiate the terms. If you can't, don't enter into the
>agreement.

There's a couple of issues being entangled here.  I don't object to
anything you state in your paragraph above.  I do object to the lack
of the option I prefer.

>The termination fee covers the loss to the company's profit margin
>when you fail to complete your payment agreement. They do this so that
>it's easier for customers to get cellular service. The cost of putting
>up towers, hiring support staff, providing them with bathrooms,
>purchasing computers, hiring programmers and engineers and all of that
>is not small. To recoup that cost, they need to make a certain amount
>of money. Putting a phone in the hands of people who don't have phones
>ALSO costs money, and they need to ensure that if that customer fails
>to generate profit for them, they will not face a loss from doing
>business with that customer.

Yes, yes, yes.  I really do understand all that.  It has nothing
whatever to do with whether a customer really ought to be able to pay
less to get a SIM card with no phone than a SIM card with phone.