What Would A Cellular World Without ETFs Look Like?

As Congress continues to look into early termination fees (ETFs) charged by cellular carriers for leaving a contract before its date of maturity, it would be interesting to explore imagine a world without such penalties.

Financially, carriers expect a customer to stick around for the entire length of their contract, most often providing the incentive to enter into such a contract by subsidizing the upfront cost of a handset. If a subscriber wishes to duck out early, an ETF is assessed for essentially breaking this contract. But what if Congress passed a bill that would outlaw the use of ETFs altogether? If that were to happen, I would expect a colossal change in the cellular industry, one that would bring a contract-free cellular environment.

How so? If carriers don’t have the legal capacity to charge ETFs that penalize the customer for breaking a contract, the need to enter into a contract for cellular service would cease to exist altogether. The end result would be a cellular environment that centers around contract-free, pre-paid cellular service without ETFs.

But don’t get your hopes up just yet, since the possibility of Congress completely outlawing ETFs is very low to say the least.

Posted in Celluar, ETF, Hypothetical