[vonmoltke]

Except they charge me the same rate if I already have my device as the person in the long-term contract, just without the early termination fee. If they have structured the locked-in person's contract to cover hardware costs then they have structured mine for that as well, despite the fact that I didn't get hardware from them. Therefore, I am paying part of the hardware costs for the people who buy phones from the provider; i.e. I am subsidizing them.

Furthermore, early termination fees are constant for all contracts. The person who got the $150 phone has the same termination fee as the person who got the $600 phone. Thus again, someone is subsidizing someone else.

[maxerickson]

I'm pretty sure that people using paid for hardware are just more profitable than people that are still paying for hardware. But they make income on all the people.

And the fees aren't necessarily the same for cheaper phones:

https://www.verizonwireless.com/landingpages/return-policy/