What is so hard to understand here? Yes, the ETF was increased for certain smartphones. They were also lowered for non-smartphones. The smartphone is a much more expensive device, so why shouldn't there be a differential in the ETF? Why should someone that is not purchasing a smartphone be saddled with the same ETF as someone that opts to buy a smartphone?

The bottom line is that all U.S. based cellular providers subsidize the consumer purchase of the handset in exchange for agreeing to a 2 year contract. Without the ETF, what is to stop someone from buying a device at a subsidized rate and turning around and canceling the service and selling the device for a nice little profit?

The point of the ETF is to ensure that the cellular provider is able to recoup the handset subsidy over the term of the agreed upon contract. And if you need to terminate early, you know upfront at the time you purchase the device what the ETF is. Further, if you don't like paying an ETF or being locked into a contract, you can purchase an unsubsidized phone and simply pay for service month to month with no contractual obligation. Pretty simple.

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