user-owned vs network-owned

Posted Oct 1, 2015 11:03 UTC (Thu) by Wol (subscriber, #4433)
In reply to: user-owned vs network-owned by giraffedata
Parent article: The Internet of criminal things

The UK term for this is "hire purchase". The device is hired for the duration of the contract. At the end of the contract the user owns the device, and if they wish to terminate the contract as you say they have to pay the remains of the purchase price.

Not to be confused with (although it often is) lease purchase, where the user typically puts a big slab of the price up front as an initial payment. Ownership of the device then transfers to the user at the end of the contract, but before then the user can return the device and walk away.

Then of course, we have contract leases (like our car) where we pay over three years for a brand new car, then at the end of that time we hand it back and enter a new contract for a new car.

The tax treatment of all these variants is capricious and arbitrary, and it would be nice if you didn't have to play tax games when trying to work out which option is best.

Cheers,
Wol

user-owned vs network-owned

Posted Oct 1, 2015 16:20 UTC (Thu) by giraffedata (guest, #1954) [Link] (1 responses)

I'll bet all of those are legally distinct from these US phone contracts because in these hiring variations, legal title to the phone during the contract period would be in the network operator, whereas in the US phone contracts, it is in the subscriber. With enough provisions in the contract, the difference can be practically tiny, but it can still matter with things such as where one of the parties declares bankruptcy, dies, gets divorced, or owes the government money.

Incidentally, I was being abstract when I said in the case of early termination the customer has to "refund to the service provider the discount he received ..." It's actually characterized by the parties as an "early termination fee" or "early termination penalty" and the ones I've seen are a fixed amount regardless of how much time is left on the contract and the contract doesn't mention a purpose for it.

US technology service providers have plenty of experience retaining ownership of the terminal device and know the benefits and costs of that, and wireless telephone service providers seem to have deliberately avoided that model.

user-owned vs network-owned

Posted Oct 1, 2015 19:45 UTC (Thu) by dlang (guest, #313) [Link]

in the last year, the situation in the us has changed so that now the purchase of the phone is separate from the service, and if they are tied together, the remaining amount owed on the phone is what needs to be paid if you want is unlocked to use it elsewhere.