Yeah, that’s right. Google. I know they’re selling a mobile phone now, but Google isn’t a service provider. Well, we can all rest assured—a little—the FCC’s letter to Google acknowledges that T-Mobile is the service provider. However, T-Mobile received a letter of its own. So why single out Google of all the hardware providers? (Just wait.)

After all, Apple makes the iPhone, and you can buy directly from its website. Google’s webstore offers you the choice of an unlocked phone without a plan or a (cheaper) phone with a T-Mobile plan (Verizon and Vodaphone are still slated for spring). Apple’s iPhone store doesn’t offer any choice but to buy the phone with an AT&T data plan (that I can see, without giving my info).

But there’s something that Google does that Apple doesn’t. The unlocked Nexus One is $529, but when you buy it with a T-Mobile plan, the price drops to $179. However, if you cancel your contract in the first 120 days of service, the Terms of Sale state that in addition to T-Mobile’s early termination fee, you’ll also be subject to an “equipment recovery fee”—the $350 subsidy on the phone price.

To my knowledge, when you buy a discounted phone from other mobile carriers, they don’t charge that subsidy on top of their ETF. In fact, that was part of Verizon’s initial justification of its high early termination fee to the FCC. (A justification the FCC found “unsatisfying, and in some cases, troubling.”)

The FCC’s look at Google may be prompted by consumer complaints (they aren’t saying), but it still shows an impressive level of sophistication in the modern marketplace. (Let’s face it—after looking at the way federal commissions handle the Internet, it doesn’t take much to impress me.)

Google, Verizon, Sprint, T-Mobile and AT&T have until February 23 to respond.

What do you think? Will the FCC knock down early termination fees—and if they do, will phone subsidies from mobile carriers be a thing of the past?

Comments

The AP is of the belief that the repackaging of their stories and the use of their stories by news aggregators online is something that needs to be paid for. I am not against anyone trying to make money on their business. We are a capitalistic society for now at least. It’s the vilifying of people who use these stories that is the trouble here. The Internet is an open forum of sorts and the ability to have so many more people see your work is part of the appeal. By closing the door to those who will not pay for the right to use AP ‘stories’ they are certainly drawing a line in the sand.

I like Larry Dignan’s take over at ZDNet. He contends that the AP is actually running the risk of exposing their shortcomings rather than solidifying their perceived leadership position in the journalistic food chain. Dignan says

So the Associated Press is mad and isn’t going to take it anymore. It’s eyeing news aggregators who are stealing a few paragraphs and failing to link to it as an authoritative source.

Be careful what you wish for AP. Bloggers and news aggregators are a smart bunch and if AP isn’t careful the whole world will soon know about its dirty little secret: Much of it is rehash from statements of some sort.

What else can you say to that? Sounds to me as if the AP may be crying wolf to some degree. If they are literally doing what they accuse bloggers and the search engines of doing then it may be best to let sleeping dogs lie. Of course, if you are a blogger and you are not linking to your sources please stop it. While I realize that my sources rarely if ever go to the AP I always include the story source for my posts. It’s a courtesy that is part of the Internet culture. You would want the same from someone else.

Comments

An eBay discount on listing fees coupled with management sticking by changes to its policies left the situation between sellers and eBay as it was before the strike.

Depending on the source, eBay either witnessed listings fall to the range of 13 million, as USA Today reported (via DealsCart), or had no change, according to an eBay spokesperson.

Unfortunately for the protesters, eBay behaved as predicted and kept the hotly-disputed fee increases in place. Sellers believe these punish people who sell in small lots, even as eBay courts higher volume dealers.

That summarizes eBay’s strategy for growth. They have targeted volume and are willing to give up some discounts in exchange for receiving more listings. In other words, eBay settled for a smaller piece of the pie, but they want a much larger pie on the table.

The end of the protest leaves small sellers with the need to take a hard look at what they want to do next. If eBay’s fees make selling on the site an unwelcome proposition, places like Amazon.com or Overstock may represent a welcoming alternative.

In August 2006, a smaller scale UK-based protest called for Google to create an auction alternative. That has yet to happen, although Google has the pieces in place to put something together between its Base and Checkout products.

On February 20th, sellers can look for listing fees to get slashed by 25 to 50 percent.  Final value fees will be raised as a result, but this arrangement should make losses on unsold items much less significant.

Also, a statement promises, "eBay will begin increasing search exposure for the listings of sellers with the best buyer satisfaction ratings."  Sellers with the worst ratings will be correspondingly punished, which should encourage good behavior and improve the site’s reputation.

A trickle of other updates is expected, as well, and all in all, this looks like a good way for the new CEO, John Donahoe, to begin his reign.  The improvements may not create an immediate turnaround – sellers and buyers aren’t likely to come running back from Amazon and other competitors – but if everything works as planned, eBay may see some old faces return, and should see a lot more of its current users.

This is neither a random guess nor a confirmed business plan, but Scott Wingo writes, "It seems some top sellers are getting calls from TSAMs [Top Seller Account Managers] outlining in general the fee changes that are evidently going to be announced next week with eBay’s earnings."

Upfront listing fees may be reduced, and bulk discounts could also go into effect.  This will encourage sellers to dump many more items onto the site, with eBay standing to gain from higher post-sale fees.  But it’ll also risk annoying would-be buyers.

"If you haven’t FIRST fixed finding, the site is flooded with fixed-price items, thus your auction-listings are starved of traffic and get into a death-spiral," predicts Wingo.  Also, "The fraudsters love low listing fees, this gives them the ability to just completely hammer the site with all kinds of wacky stuff."

We tend to agree; it’s hard to imagine that many appealing items were held back due to a dollar or so in routine charges.  Still, this sort of change in the fee structure could create a short-term revenue boost, and that’ll be difficult for eBay to ignore.  Hat tip to Henry Blodget.