Update 2: Google has now reportedly lowered the $350 fee to $150, and launched a support line for the phone at 888-48-NEXUS.
Update: The FCC has sent letters regarding early termination fees to Google, AT&T, Sprint, T-Mobile, and Verizon. In its letter to Google, it says:
...where new options may subject consumers to substantial ETFs, potentially from more than one entity, the Commission has a special interest in ensuring that consumers have a clear and complete understanding of the rates, terms, and conditions on which the communications services are being offered and the rationale for those rates, terms, and conditions. The combination of ETFs from Google and T-Mobile for the Nexus One is also unique among the four major national carriers. Consumers have been surprised by this policy and by its financial impact. Please let us know your rationale(s) for these combined fees, and whether you have coordinated or will coordinate on these fees and on the disclosure of their combined effect.
Original Article: Google made big waves in the mobile industry early in the year, and the effects of those waves are being felt quite hard by some users. The Nexus One's release has gotten off to kind of a rocky start.
The issues plaguing customers of the much-anticipated Google phone have been widely publicized. Most of the gripes have dealt with Google's customer service (or lack thereof) for the device, and trouble with 3G connections. More recently, however, complaints of outrageous early termination fees have popped up.
The trouble for users is that if they got the Nexus One with a two-year contract from T-Mobile, they end up having to pay about $550 to terminate early. The thing is, they have to pay T-Mobile's regular fee, but they also have to pay Google a fee. Needless to say, that has caught some people off guard.
Google's fee is a $350 "Equipment Recovery Fee". It applies to customers who cancel their contracts within the first 120 days.
According to Niraj Sheth with the Wall Street Journal's Digits Blog, "A Google spokeswoman said in a statement that the fee is "a way for the company to recoup the subsidy it gives to contract customers."
"'This is standard practice for third-party resellers of T-Mobile and other operators,' she said. A T-Mobile spokesman said that the carrier’s early termination fee is standard for its customers on contract."
While the combination of the aforementioned problems may not bode well for Google's reputation in the mobile industry at the moment, the good news for the company is that they are projected to come out on top in the smartphone race eventually. Crunchgear says Google and Android will "own the smartphone market" eventually. Time will tell if that is an accurate depiction of things to come, but for now, people just seem upset.