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Home : News : iPhone Termination Fee Making Lawmakers Upset

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AniPhone making a Skype call

iPhone Termination Fee Making Lawmakers Upset

Jul 12, 2007 by J. Frank Wilson
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Apple’s iPhone has enjoyed favorable reviews since its recent debut, but it got some criticism on Capitol Hill in Washington this week. AT&T’s iPhone termination tee is in particular making everyone upset.

The Apple phones, which cost between $500 and $600—are usable only on AT&T Inc.’s wireless network and will remain that way until 2012. Even though the phones become expensive paperweights if customers quit AT&T’s wireless plan, the company will still charge a $175 early termination fee, said Rep. Edward J. Markey, D-Mass., chairman of a House subcommittee on telecommunications and the Internet.

Markey described the phone as a “Hotel California service. You can check out any time you like, but you can never leave—you’re stuck with your iPhone and you can’t take it anywhere.”


Timothy Wu, a law professor at Columbia University and commentator on technology issues, described the cell phone industry as “spectrum-based oligopoly” where customers have given up their property rights.

“Imagine buying a television that stopped working if you decided to switch to satellite,” Wu said. “Or a toaster that died if you switched from Potomac Power to ConEd.”

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J. Frank Wilson
J. Frank Wilson

Frank Wilson is a retired teacher with over 30 years of combined experience in the education, small business technology, and real estate business. He now blogs as a hobby and spends most days tinkering with old computers. Wilson is passionate about tech, enjoys fishing, and loves drinking beer.

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Category: News, Technology Tag: iPhone
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