RUSH: Hey, I have a quick question. This is a little bit of a trick question. I shouldn’t have said that. I’m curious what you people think about this. Everybody has a cell phone, right? A lot of people have more than one cell phone. What are your thoughts on early cancellation fees of your contract? For example, when the first iPhone came out I got a bunch of them to give away to staff members, and some of them said, ‘I can’t. I just signed a contract with T-Mobile or I just signed a contract with Verizon or whatever, and I still got like 18 months. It’s a $175 cancellation fee.’ ‘Okay. You want to stick with that, fine. I’ll give the iPhone to somebody else.’ ‘Well, wait a minute,’ and then they started cursing the early cancellation fee, the contract. If you get an iPhone you gotta sign a two-year contract with AT&T. If you get any cell phone you gotta sign some sort of contract.
There was a hearing yesterday in Washington, the FCC. The Republican-controlled FCC. The pro-regulation Republican administration FCC, and they adopted a position that these early cancellation fees are just not fair. Early termination fees, ETFs is what they’re officially called, early termination fees. ‘They’re just not fair. They’re just not right. They just screw the customer, Rush. The customer goes in, buys the phone, and then after maybe six months wants to get out, can’t afford to without this large –‘ but wait, didn’t you sign a contract? ‘Yes, but it’s still not fair because they’ve got me roped into a service I don’t want.’ Well, no, because all these have a 30-day return policy. You can use the phone for 30 days, if you don’t like it, you’ve got 30 days to take it back, get your money back and then you’re out of the contract. They may sell you a $300 phone or $200 phone for 15 or 20 bucks or whatever, ’cause they really want you to sign up for the service. It’s the service they want. It isn’t going to be long before these phones are going to be free, or practically free.
But, at any rate, consumer activists have been lobbying the FCC on the behalf of those of you who think you should not have to honor the contract you’ve signed with the cellular provider that you chose. And so the consumer activist is actually not a consumer activist. The consumer activist is just another leftist who is using consumers ostensibly for the real purpose of expanding the regulatory power of government. There were consumer activists at the FCC hearing yesterday, and of course they were whining and crying and they were talking about predatory contractual services required by cellular companies, and they took advantage of unwitting people, didn’t fully tell ’em what they were signing. Yes they do because everybody knows. And if they don’t, they find out, if they try to get out of the contract, there’s a cancellation charge. So one of the things proposed by the so-called consumer activists was that consumers be forced, while buying a phone, to read every page and sign every page of the contract that the cellular service requires one signature on. This would elongate and expand the whole process of buying a cellular phone, and people aren’t going to want to mess with this and do this. I know they do that with mortgages. You really don’t go to your mortgage, ‘I don’t like this.’
The point is, there are plenty of options for people who do not want to sign two-year contracts with a cell provider. Do you know what the options are? Well, one of the things that you can do is show up and get one of these phones, what are they called, track phones or virgin mobile phones at a Wal-Mart or a 7-Eleven or something, the pay as you go phone and you throw it away when it’s finished. It’s got a number and so forth, but there’s no contract with it. Now, the carriers will offer discounts if you sign up long-term. Early termination fees are an efficient means of enforcing the deal. But the point that I’m trying to make is the consumer activists make you think they’re looking out for you when they’re not. It’s no more than animal rights people are just nothing but leftists trying to eliminate your freedom. Consumer activists, in large part, are simply doing what they can to get the power of government more involved in every little transaction you make under the premise that every transaction you make with whatever corporation, they’re out to screw you. They’re out to defraud you and to fool you, and to mistreat you, and so forth and so on. Yet they hide under this banner here of consumer activists.
So what we end up with is more federal regulation over the simple transaction of buying a cell phone and service. More federal regulation. This stuff is hideous. How many of you knew this happened yesterday? How many of you knew that there were hearings at the FCC on early termination fees? I doubt that you knew, and if you bothered to read the New York Times today on page Z-75 you might have read about it, but the New York Times story is as biased as anything else, ’cause I know what went on at the meeting. Here’s what they wrote: ‘The chairman of the Federal Communications Commission laid out a plan Thursday to regulate the high fees that cellular phone companies charge consumers for canceling their contracts early. FCC Chairman Kevin Martin’s proposal was similar to an industry plan put forward last month. Martin said he was skeptical ongoing class-action lawsuits would adequately resolve for consumers all the pending issues about the unpopular fees. The chairman made his comments at a public hearing. Martin joked that his wife, apparently unhappy about the fees, had volunteered to testify at the hearing. He also criticized the fees, saying that ‘in practice, it can leave people locked into a service that they really want to leave.’ They signed a contract, they’ve got 30 days to determine whether or not they like the service. If you really want to leave, pay the fee! You made a deal. You signed a contract. But now, see, this is the same thing that’s happening in the mortgage lending crisis, predatory lenders, predatory cell phone service companies screwing the little guy, not telling them what all’s in the fine print. This is not fine print stuff. Anyway, folks, I don’t want to make a mountain out of a molehill here, but it’s a clear illustration, a great example of how even a Republican administration can sit around and love the notion of more regulation over virtually any kind of transaction that we might have in our daily lives.
RUSH: Here’s Barbara in Lawrence, Kansas. Hi, Barbara. Nice to have you on the EIB Network.
CALLER: Rush, thanks for having me. I sure do enjoy and learn from you a whole bunch!
RUSH: Well, thank you.
CALLER: I am calling about the business with the telephone contract, and at one point you said one of the suggestions was that people be forced to sit and read and initial or sign each page of the contract.
RUSH: That’s right. That’s what the consumer activists want. The consumer advocates want the consumers who buy a phone to read every page and initial it after they’ve read it, to make sure that the phone company can’t screw ’em.
CALLER: That’s right. They don’t want ’em to be ‘victims,’ right? And all I could think of as a former teacher is, that if you gave ’em the dadgum contract, a lot of people now wouldn’t know what they meant anyway, and so we could hold ’em in that victim situation because, ‘Bless their hearts, they weren’t taught to read properly.’
RUSH: Well, even if they have been taught to read properly, reading a legal contract sometimes is daunting anyway, with all the wherefores, whereases, how comes, why nots.
CALLER: I agree with that. I agree with that a hundred percent. But even people with a reasonable level of reading capacity, you know, can now read them. But what I’m saying is they’re getting reduced by the teachers union on levels of comprehension and, you know, we’re going to keep everybody in that victim status as long as we can. It irritates the stew out of me.
RUSH: It irritates the stew out of you, did you say?
CALLER: Yes, it does.
RUSH: Yeah me, too, even though I don’t eat stew. But I know what you mean. It is a frustrating thing. Look, I’m glad you called, Barbara. Thanks so much.