Comment by op7 | Hacker News Reader

Comment by op7 | Hacker News Reader

I worked in the prepaid phone industry for 4 years so I have some insight on this. This is bad. The whole purpose of phones being locked for 6(now 12 at Mpcs) mo. is so that we are able to offer very decent phones to poor people who would otherwise not be able to afford the up front cost. Were talking about $200-500 phones being given away for completely FREE to new customers sold at a LOSS and we only HOPE to recover that money if they keep their service more than 6 months, for the $500 off iphones closer to 12. Every new prepaid customer who takes advantage of this-we are taking a massive gamble on wether or not this person will legitimately intend to pay their monthly bill, or if theyre just taking advantage of the initial subsidy and then cancelling service and selling the phones overseas or for parts. The industry consides this fraud. Frontline prepaid retailers already have to do some basic KYC on customers like checking IDs(which isnt a hard requirement) to make sure customers arent abusing the promos, because all it takes is a handful of abusers to cause serious economic harm to a particular stores which aleady operate on thin profit margins. If this change goes through expect prepaid/anonymous phones to go away(KYC and ID checking will kick into overdrive), people in poverty wont be able to get iPhones for $100 upfront anymore, expect hundreds more prepaid phone franchise stores to go out of business and thousands of people to lose their jobs, and for what? What is the benfit of this? So retail arbitragers can buy phones to export overseas at the expense of the American lower class even faster in 2 months rather than 6-12?

> people in poverty wont be able to get iPhones for $100 upfront anymore

And that's good - those who are financially constrained shouldn't be getting (enticed) into debt-traps by buying a brand-new high-priced device when really cheaper alternatives are available. Note that the article points out that Verizon already unlocks all their phones after 60 days due to a previous agreement with the FCC. So this has already been "tested" in the marketplace and Verizon hasn't wound up this business model of payment plans. The article also points out the consumer benefit of this FCC policy - once Verizon unlocks its phone, their customers have more freedom to try other services through trial eSims, while customers of AT&T and T-Mobile can't because of their (longer duration) locked phones.

Not for nothing, but those devices are generally sold interest free.

There's no functional difference between "If you're poor, you should save $50/month for the next 2 years, and when you do that, maybe then you can get that $1200 phone", versus "You can pay $50/month for the next 2 years and get that $1200 phone now", other than bias against the "financially constrained".

What happens when the $1200 phone breaks before it's paid off? Does the carrier replace it?

I prefer buying used phones so I don't have any experience with that...except the first phone I bought... I understood from Verizon that the phone was included in the plan. Turns out I owed $300 for a dumbphone at a time in my life where $300 was a lot more than I wanted to pay for a phone.

I replaced it with a used smartphone for $20 a year later.

It's not "bias", but being financially prudent - when you are financially constrained, you don't need a $1200 phone nor do you need to subscribe to a $50/month plan when cheaper options are available. Depending on your budget, you can get a feature phone for around $50 or a smart phone for around $100, and opt for a prepaid plan (the cheapest of which starts from $15/month with limited data).

You can not fill out job applications or participate in the modern economy with a feature phone

Feature phone? What year is this where the only options are a $1200 iPhone or a "feature phone"?

A person can walk into a Best Buy today and buy a carrier-agnostic, factory-unlocked Android phone -- new, in a retail box, with a warranty -- for less than $100. No strings, no contracts, no weird stuff. It's just an item that they have for sale in their store.

(Or, FFS: The last Android phone I bought new was $64.00, including tax and overnight delivery. It came with a 60-day carrier lock, but my carrier is cheap.)

I’m replying to this statement

> Depending on your budget, you can get a feature phone for around $50

I am computing comfortably on my GrapheneOS powered Pixel and Qubes OS powered Thinkpad.

Own AAPL, not Apple.

(on second thought...)

UK banned carrier locked phones outright [1] and poor people can afford phones just fine.

[1] https://www.bbc.co.uk/news/technology-54692179

So the industry sells the phones "at a loss", but it doesn't lose money on that, because it eventaully makes back the full cost and more, and if it doesn't make back the full cost it considers that "fraud". I don't understand how that's supposed to be doing poor people a favor if they still ultimately pay the full cost of the phone and the service.

This argument has so many holes you could drive a Cybertruck through it.

There are ample used phone markets selling iPhones and top-of-the-line Android devices (e.g. Back Market). No one needs to be on the latest and greatest. I still use an iPhone 13 and I have friends on phones as old as iPhone 11. None of us are part of the "American lower class". Smartphones are a highly mature technology and the improvements being made year on year are now vanishingly incremental, at best.

Further, there is no shortage of financing models available to American consumers. If anything, Buy Now Pay Later might be *too* available as an option.

So your argument is that a cell carrier can't be profitable without entrapping poor people into long contracts with debt.

Therefore we must legally protect the rights of businesses to exploit people.

They arent locked into any contract whatsoever at prepaid companies like MetroPCS, Cricket, Tracfone, Boost etc. These companies provide the phones as interest free loans and the businesses incur all the risk.

You know people can finance just about any purchase right?

People buy cars on finance all the time without needing to buy their cars through BP and signing an exlusive gas purchasing agreement with them. There's no reason for the phone to be tied to the carrier.

Finland the operators sell phones, either fully up front or with even 0% financing. Then contract is entirely separate deal, it might have or not have commitment.

Might miss some "discounts", but it really is entirely workable and reasonable model.

Poor people offen do not have access to credit lines, it's much easier and beneficial to just have cheap products available for those that need them. There's no reason phones should cost $1000 or more anyway, they aren't worth that much.

Yes, but 1000 phones aren't normally in the cards for poor people unless they're financing via carrier or using a tax refund. Before switching into software, I spent most of my mid-late 20s under the poverty line, I never had a high-end phone. But cheap android phones are readily available, here's one [0] for $100 USD that honestly looks like an absolutely fine phone.

IME people who are poor enough to not be able to get a contract with a carrier buy a phone at Walmart and then do prepaid carriers. This has the 'fun' side effect that they get a new number whenever they have to switch phone plans. These switches aren't deliberate, they just run out of money to keep up the old prepaid line, go a week or 3 without a phone, then sign up again. Porting the old number is too much work/time, so they just end up with a new phone number. Its just one of the shitty things about poverty.

[0] https://www.bestbuy.com/site/motorola-moto-g-play-2023-32gb-...

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