Google Slashes Nexus One Phone Fees but why are They Still Cheaper for Europeans?

Have you wanted to try out the Google Nexus OnePhone but were concerned about early termination fees? The good news is that Google informed the U.S. Federal Communications Commission (FCC), on Tuesday, that they’ve slashed their previously insulting termination fees. Google has also updated their Terms of Sale page for the Nexus One. After reviewing the terms laid out therein, though, what was unchanged in the Terms of Sale become more interesting than the changes themselves.

Though Google has not specifically stated so, the reduction in penalty is most likely the result of letters sent, by the FCC, to Google and wireless carriers, asking for an explanation of their respective early termination fee policies. The FCC’s purpose appears to have been to obtain enough data to determine how each carrier’s policy compares, since no industry standard currently exists. While companies like Verizon have submitted justifications to the FCC, Google did not. Instead they quietly reduced the fees and notified the FCC of the change. With the reduction, Google may have successfully avoided further scrutiny (at least temporarily) regarding their current policy. The important point is that the fees were reduced. With the reduction, though, are customers the winner? Well, the answer is both yes and no. A review of the updated Terms of Sale yields several inconsistencies regarding how United States (US) and European Union (EU) customers are treated.

The good news is that, yes, Google has slashed the previously ridiculous price of $350 for termination, within 120 days, to $150. Here’s how it works:

• New T-Mobile Line of Service: Cancellation/downgrade of service within 120-days of activation = $150.00 Equipment Recovery Fee
• Existing T-Mobile Line of Service: Cancellation/downgrade of service within 120-days of activation = $50.00 Equipment Recovery Fee
• News and Existing T-Mobile Line of Service: Cancellation/downgrade of service within 14-days of activation = No Equipment Recovery Fee

The bad news is a bit more complicated. The Maintaining Carrier Service section, of the Terms of Sale, does not specifically mention EU Customers. The Return/Refund Policy; Right of Cancellation section, on the other hand, does specifically mention EU customers. Here’s how it works:

• Return of Device by US (California) customers: Returned within 30-days of receipt = $45.00 Restocking/Refurbishing Fee, plus full refund, minus initial shipping fees
• Return of Device by US (All other states) customers: Returned within 14-days of receipt = $45.00 Restocking/Refurbishing Fee, plus full refund, minus initial shipping fees
• Return of Device by EU customers: Returned within 14-days of receipt = $0.00 Restocking/Refurbishing Fee plus full refund, plus initial shipping fees

If the customer is to understand this correctly (which seems to be made intentionally difficult), the two sections tell the customer that there is a Google fee for canceling the line of service, another fee for  returning the device, and potential carrier cancellation fees.  The worst part isn’t that there are fees involved. Its understood that there are labor costs associated with receiving returned devices, having them checked, and restocked as refurbished units. It seems illogical, though, that Google (or any other company) would have grace periods with different duration (California vs. the rest of the US) and different fee policies (US vs. EU).

While it is common knowledge that the EU provides more comprehensive laws that protect customer rights (in this case, the EU Distance Selling Directive), it is hard to understand that if Google can absorb the cost for those customers why they cannot do the same for US customers. To further complicate the matter, California residents have more time to return the device, than do the rest of US residents. Google’s Terms of Sale are their legal protection. With this, there is no quarrel. Like US credit card companies are being required to do, though, wireless carriers and device vendors should also be required to simplify the terms of service, to ensure customers are treated fairly, across the board.

There seems to be no reason why Google cannot apply the same policy of a “zero restocking/refurbishing fee, plus initial shipping fees” to both US and EU residents. Additionally, if Google can allow up to 30-days for California residents to return the device, they should be able to, again, do the same for all US and EU residents. The overriding point here is that Google and device vendors should consider state and national laws, before drafting their Terms of Sale. In this manner, when they write them, the document can provide customers world-wide, with terms that reflect a combination of the most lenient time-frames and cost-effective fee structures of all states and nations, in which they plan to sell their product.

This specific scenario applies only to Google Nexus One/T-Mobile customers. If one were to look at each carrier and vendor’s policy, the same inconsistencies are likely to be found. Hopefully, that is exactly what the FCC is really trying to find out, via their requests for information and in order to provide US customers with the buying and selling protection they deserve. If enough T-Mobile and Google Nexus One customers bring the issue to the forefront, perhaps that is exactly what can happen.

Justin E. Gehrke is the founder and owner of Geek Shui Living. As a right and left-brained geek, he writes Tech articles for MWD and his own site, Geek Shui Living. You can also follow his Tech commentary and random geek ramblings, via Twitter, at @GeekShui

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