WASHINGTON – Google Inc. has lowered by $200 the fee it charges customers who break a standard two-year contract for its new Nexus One phone on the T-Mobile USA Inc. network.
The Google fee was dropped to $150 from $350, but customers who break a contract on the phone will still have to pay an early termination fee of $200 to T-Mobile.
The lower “equipment recovery fee” on the Nexus One, which took effect on Jan. 4, will apply to customers who break their contract after the 14-day trial period but before 120 days. Customers who break the contract after 120 days will not have to pay any fee.
Google also lowered the equipment recovery fee for existing T-Mobile customers who upgrade to the Nexus One from another handset and then break their contract to $50 from $250.
The Nexus One phone costs $179 for customers who sign up for a two-year plan with T-Mobile, or $529 for those who purchase an unlocked phone that can be used with any GSM wireless network, including T-Mobile’s.
Google’s decision to lower the equipment recovery fee comes amid a Federal Communications Commission inquiry into early termination fees across the wireless industry. Last month, the agency sent letters letters to AT&T Inc., Verizon Communications Inc., Sprint Nextel Corp., T-Mobile and Google seeking information about their approaches to early termination fees.
Among other things, the FCC is asking about the size of the fees and the rationale for them. It also wants to know whether carriers prorate such fees if a cancellation comes closer to the end of a contract and whether they offer trial periods that allow new customers to cancel service without being charged a fee.
The agency is also asking why customers who use Google’s Nexus One phone on the T-Mobile network have to pay fees to both companies if they break a contract.
T-Mobile said the decision to lower the equipment-recovery fee is unrelated to the FCC inquiry, however, and is instead part of an ongoing effort that began before the agency launched its investigation.
“We have been looking for ways to improve our customers’ experience, so we were able to work with T-Mobile to find a better solution for our customers,” Google said in a statement.
Late last year, the FCC sent a letter to Verizon Wireless asking why the company recently doubled early termination fees on smart-phone contracts to as much as $350 from $175. Verizon says it pays device manufacturers more for those phones and bakes subsidies for those devices into the monthly service fees. The company says the termination fees help it recoup costs if a contract is broken.

BURLINGTON, Mass. – Speech-recognition software maker Nuance Communications Inc. said Monday it narrowed its loss in the fiscal first quarter as revenue in the company’s two largest divisions, health care and dictation, and mobile and enterprise, increased.
For the three months that ended Dec. 31, Nuance said it lost $4.3 million, or 2 cents per share. In the same period last year, the company lost $26.3 million, or 11 cents per share.
Excluding costs related to acquisitions and other special items, Nuance said it earned 29 cents per share. That’s two cents better than Wall Street was expecting, according to a Thomson Reuters poll.
Revenue jumped 21 percent to $263 million from $216.8 million in the year-ago quarter.
Adding back $21.6 million lost to an accounting treatment linked to the company’s acquisitions, revenue was $284.6 million in the latest quarter. Analysts, who typically don’t consider one-time accounting charges or gains in their estimates, had expected $268.9 million.
Nuance said its health care and dictation business revenue rose 6 percent to $121.2 million, excluding some gains related to acquisitions. On the same adjusted basis, its enterprise and mobile business revenue jumped 13 percent to $127.6 million.

Last week I wrote about reports that some Windows 7 users are experiencing anomalies with battery life, or at least how Windows 7 reports remaining battery life. The issue seemed worthy of exploring, but not big enough to cause any significant damage to Microsoft’s flagship desktop operating system.

The official statement from Microsoft last week was:

“Microsoft has been made aware that some computers running Windows 7 receive a warning that the battery needs to be replaced when the battery is new or in good health. In conjunction with our hardware partners, we are investigating this issue. The warning received on some computers using Windows 7 uses firmware information (information about hardware status provided by the PC itself) to determine if battery replacement is needed. We are working with our partners to determine the root cause of what appear to be erroneous warnings and will update the TechNet forum with information and guidance as it becomes available.

The battery notification is new functionality in Windows 7, so the notification itself should not be an indication that customers are having this issue. Windows Vista and Windows XP did not display notifications when it was time to replace the battery. Customers who have already confirmed their battery is fine should contact Microsoft technical assistance for help.”

Then, over the weekend I received a status update from a Microsoft source that asked to remain anonymous since the statement was unofficial:

“We’ve had 8 million pre-release testers on old hardware, 60 million PCs, and now this report of battery problems on old hardware is surfacing. This appears to be a very limited issue–aside from the discussion in the forum you noted in your story, we have yet to see any official reports or open tickets come in through tech support call centers. In testing on this issue the root cause appears to be actual battery performance or failure, which Windows 7 is reporting (via the notification), but not causing. So the notifications appear to be working as they were designed to do from what we’re seeing. Microsoft has extensive testing, QA and support efforts and has multiple groups looking deeper at this issue, along with our OEM partners, to ensure that it is, in fact, the anomaly that it appears to be at present.”

That update was followed with a similar declaration by Steven Sinofksy, president of the Windows Division for Microsoft, in a blog post on the Engineering Windows 7 blog:

“Using all the tools at our disposal including contacting customers reporting this issue on forums, customer service communications, partnerships with our PC makers, and of course the telemetry in Windows 7, we have been monitoring reports and discussions regarding this new feature, trying to separate reports of the designed behavior from those that might indicate an issue with Windows 7. In the latter cases we are trying to understand the scope of applicability and obtain hardware on which to reproduce a faulty behavior.   To date all such steps indicate that we do have customers seeing reports of battery health issues and in all cases we have investigated Windows 7 has simply accurately detected a failing battery. ”

Sinofsky does more than simply deny responsibility or pass the buck, though. He provides an in-depth explanation of how the hardware, the battery, and the operating system work together to determine and report on the condition of the battery.

The crux of the problem may lie in simply misunderstanding an alert that is new to Windows 7. Sinofsky explains:

“Windows 7 makes use of a feature of modern laptop batteries which have circuitry and firmware that can report to Windows the overall health of the battery. This is reported in absolute terms as Watt-hours (W-hr) power capacity. Windows 7 then does a simple calculation to determine a percentage of degradation from the original design capacity. In Windows 7 we set a threshold of 60 percent degradation (that is the battery is performing at 40 percent of its designed capacity) and in reading this Windows 7 reports the status to you. At this point, for example, a battery that originally delivered 5 hours of charge now delivers, on average, approximately 2 hours of charge. The Windows 7 notification is a battery meter icon and notification with a message “Consider replacing your battery”. This notification is new to Windows 7 and not available in Windows Vista or Windows XP.”

So, to sum it up, the Windows 7 battery issue seems to boil down to Windows 7 correctly reporting that the battery is performing at less than 40 percent of its specified capacity, but alarming users who have been using Windows XP or Windows Vista and believed the battery to be functioning as designed.

Looked at from that perspective, it seems that Windows 7 is actually just doing its power management and battery life capacity reporting job too well, and that users who don’t like the new warning message would prefer not to be reminded that the battery is slowly dying.

Tony Bradley tweets as @Tony_BradleyPCW, and can be contacted at his Facebook page.