Not a free market

Cell phone contracts last for two years. The problem is that I usually get a new phone every year, because I am pretty hard on cell phones. When it is time to get a new phone, unless you are close to the end of your contract, the phone company wants you to pay full price for the replacement, and with the advent of smart phones, this is usually around $700 or so.

So what I did in the past was that I had two lines sharing the same account. With this method on Verizon, all you do at upgrade time is sign a new two year contract with Verizon. Now you have a year old phone with a year left on the contract, and a new phone with a two year contract. You put the SIM card that you are using in the new phone, and then sell the old one, usually for $200-300. Now you have two phones, for which you must pay the $40 a month "smart phone access fee," even though you are only using one of them.

You could just pay the early termination fee, but that is $240, if you still have a year on the contract. To solve this, you tell the Verizon people that you are switching that old smart phone out for an old "dumb" phone. Dumb phones only have a $10 per month fee, meaning that this will only cost you $120.

I did this for years, until I dropped my phone and broke it, only six months after I bought it. Now here I was, with no phone, and no upgrade available for at least 4 months. Along comes Verizon, explaining to me that the new "Edge Up" program would allow me to get a new phone now, and since the Edge program was a purchase agreement, I would no longer be contractually obligated for service. So I signed on the dotted line, content that my phone bills would go down by $30 a month, because I would no longer have to maintain two lines. Once my second contract ran out in December, I would cancel it and only maintain a single line.

The salesman assured me that I would be able to do this. I looked over the contract, and sure enough, the contract appeared to say that as well.

December comes, and they tell me that I cannot shut down the second line without paying the entire price of the phone, which was double what the Edge contract was for. I went to the store and argued with the manager and the very same salesman that sold me the phone. They pointed to the arbitration clause, which reads that Verizon, in their sole discretion, gets to define what the terms of the contact mean, and if you disagree with them, you waive your rights to sue, and must settle in arbitration, using their arbitrators. I told the salesman that they were dishonest and were ripping people off. His reply? "you signed it"

In other words, we gotcha. Yes, I signed it. That doesn't make it any less dishonest to bury a weasel clause in a 17 page contract.

So now, I have to switch my number so I can lower the one I am currently using to "dumb" phone status, and my cell bill for a single phone is now $140 a month. This may be the end of my journey with Verizon. American cell phone companies are a ripoff. $140 a month for phone service? I was just talking with people from other countries, and most countries pay less than $40 a month for unlimited talk, text, and data. Sure, you have to buy your own phone, but there are no early termination fees, no contracts, and you can switch carriers as you please.

These contracts are distorting the market, and there is no real choice or competition in the cell phone market.