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T-mobile US in invisible handset handcuff contract smackdown

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T-Mobile USA's no-restriction contract turns out to have restrictions, and while they might seem obvious to some the state Attorney General in Washington feels they weren't obvious enough.

The tariffs are designed to separate airtime and handset subsidy, which T-mobile described as coming without a two-year commitment. But while that may be true of the airtime component, the instalment scheme for the handset is still a 24-month deal and anyone dropping off T-Mobile's network will have to pay off the remaining balance.

A month after the launch the Washington AG's Office has decided such contracts can't claim to have "no restrictions" and that shoppers will need to be properly warned about the cost of early termination, which T-Mobile has agreed to do.

Shoppers who jumped in early are entitled to a refund, and should call 611 if they want one, though they'll have to return the handset too.

Despite taking only a month the investigation racked up costs of more than $26,000 - which T-Mobile will have to pay, the while providing staff training and a new FAQ page as detailed in the ruling.

Handset subsidies have driven the explosive development of mobile technology: Apple's early attempts to sell the iPhone without them demonstrated how impossible that is, but their value to the operators has diminished as manufacturers like Apple have taken a bigger role in servicing customers.

The first step towards getting rid of subsidies is to make them obvious, which is what T-Mobile (and O2's Refresh tariff in the UK) are trying to do. T-Mobile's effort will continue: it will just lose the "no restrictions" label and looks likely be copied by everyone else who wants customers to be clear what they're paying for. ®

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