Confusion, Clarity

So, I can get an HTC One and a $50 gift card, for $100 plus a trade-in phone, only in-store at Best Buy, where the phone is locked to AT&T, with a 2-year agreement where the first 20 months include a credit payment on the phone, but where after 12 months the remaining payments can be waived if I buy a new phone and get into a new 2-year contract, and where I might be be able to pay an early termination fee to get out of the contract early?

Here's my problem: I don't have a PhD in economics. I'm totally incapable of evaluating the actual cost or value of such a statement.

On the other hand, I can pay $300 for a Nexus 4, without any carrier locking, no strings attached, get a no-contract T-Mobile plan, and in that can I can switch plans or stop service at any time at no cost,  I can sell my device or buy a new one whenever I want with no impact on my service contract?

Now that's something that I feel I can understand.

I'm not even talking about the actual details of the various plans, but it's clear that I can understand T-Mobile's plans better than AT&T's.

Thanks +T-Mobile for making things simple.

Edit: slightly tweaked the title.
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117 comments
 
T-Mobile also has dual modem support for GSM/HSPA+ whereas AT&T does not. Noticeably better bandwidth...
 
Confusion is a great way to keep customers: the more complicated the bill, the less easier it is to compare services, offers or promotions.

There should be no ties between the equipment and the service. You buy a car, you fill it up and insure it wherever you want.

The subsidies are a disguised "prison" for customers. Also, they give the false impression to people their devices are cheap, when in fact they cost a LOT!

If people would have to spend 500$-700$ upfront to get a smartphone, they would think twice or keep their devices for longer period.
 
I've been very happy with the prepaid $30/mo T-mobile plan with 100 minutes and 5GB data. Perfect for me.  Only two drawbacks (and I can live with them):

1) No roaming internationally, even at exorbitant prices for urgent calls while travel
2) Coverage leaves some to be desired outside of main areas, i.e. down hwy 1 / Half Moon Bay. 
Paul W.
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I'm shocked that you pay for phones. I'd have thought people would throw them at you with your job.
 
+Steve Rodrigue - The worse thing is they disguise what is essentially a loan as a subsidy. It is not, by definition, a subsidy. The carrier is loaning you a phone for two years, and you are required to make loan payments each month, hidden in your bill.

Once your phone is paid off, however, they still continue to charge you your loan payments bc they are hidden in your bill. Would you still like to make mortgage payments after you have paid off your house completely? T-mobile is working to separate the loan payment from the cellphone bill properly at least.
 
Gimmick works, unfortunately. 
 
+Mark Lastiwka : Exactly!  For example, I bought a Nexus 4 by myself and even if I would "clear" my loan with my carrier, I would not get even the smallest rebate to my monthly fee.

So all the customers are paying for it.

Actually, there is another problem: operators needs to buy devices in lot, they need to commit for thousands or hundreds of thousands units. They have to pay Sammy, Apple, Nokia upfront!  These stock takes place, they lost value over time, etc...  Operators needs to manage these inventories.

And since users want the latest and the greatest, the operators need to buy the SGS4 and the iPhone 5 in quantity. Apple and Samsung knows it: they charge a lot to them!
 
+Steve Rodrigue - Ya, I had to fight tooth and nail with my carrier in Canada (Rogers) in order to get that loan payment removed. I came with Nexus 4 and bitched that I shouldn't be paying the same as someone who got a subsidized phone is paying. In the end, what it took was a threat to go to one of the other carriers that was offering a BYOD "discount".
 
"One bill makes it larger and one bill makes it small and the bill AT&T sends you doesn't make any sense at all..."
 
+Paul W - This is for my personal phones and service, not for work.

Indeed, through work, I have plenty of devices and all the lines of service I need for them.
 
This is exactly why I ditched Verizon. Left them as soon as the nexus 4 came out and went with the $30 T-Mobile plan. Haven't regretted it once.
 
This is almost exactly what I've done though my wife already had +T-Mobile so have my Nexus 4 on our family plan. I'm looking forward to their new Jump upgrade system, which crushes AT&T Next and Verizon's Edge upgrade double dipping schemes. 
 
If only t-mo had network coverage as good as vzw....
 
+Jean-Baptiste Quéru Thoughts on JUMP? From an economics perspective, that service has customers pay a premium to remain in perpetual debt.
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Att don't give a crap about there customers only money 
 
I have Google Edition GS4 on its way for similar reasons! But I may stay with AT&T, though... 
 
The Nexus 4 is still an unbelievable deal, but beyond specs and performance, it's nice knowing that your phone is truly your phone. Never again will I buy a phone on subsidy.
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+Scott Ashley att hire morons don't there doing at store I have to help there customers how to use there smart I mean come on att u said you train those pple how to work on phone come on to work with u att I can't wait tell my 2 year is up doping ur sorry ass att
 
More people need to crunch the numbers.

On AT&T's 2-year contract you'll be paying $200 phone (SGS4) + 24 monthly payments of $100 ($40 base 450 minute plan, $30 3GB data add-on, $20 messaging add-on, fees, taxes, surcharges) which will be $2,600 total ownership cost.

On T-Mobile's similar prepaid plan you'd be spending $650 for the same phone, and $60 (all fees and taxes included) for the 2.5GB data with unlimited calling/texting for a total of $2,090 over the course of 2 years.  Over $500 saved, and that's with buying the phone outright!  You can easily afford another phone with the savings.

If you don't care about LTE speeds, regional MVNOs are even a better deal, as their monthly price for ~2GB HSPA+ data and unlimited calling/texting is $40-$45.  That's $650 + (24 * $45) = $1,730 for 2 years.  That's $900 saved over AT&T, and $360 saved over T-Mobile.
 
I have never understood the US cellphone pricing.  Not only is it really expensive compared to the UK, it's also overly complicated, quite clearly American consumers are also confused by it, often saying their phone was free when it quite clearly isn't, it's costing them hundreds of dollars a year.

For reference, in the UK, I pay £5 a month for unlimited data, unlimited landline calls, 100 "other" minutes and 100 SMS texts,  this is a "no-phone" contract pricing, so I bought a Nexus4 for £279.

It works out WAY cheaper than anything else out there, and means I can buy and sell phones as I wish to keep current - although the Nexus4 feels really upto date still - just needs Android 4.3 :-)
 
+T-Mobile is awesome and I have exactly the setup you are talking about. Nexus 4, T-Mobile prepaid ($30 plan here). It works insanely well.
 
Do you really have to buy Android phones?
 
+Sudhir Khanger - I've played around with other phones, but I'm so familiar with Android that nothing else feels right. Since I (obviously) use Android on my work devices, using the same thing at home makes switching less mentally jarring.
 
+Mark Gillespie Know what you mean, +Dmitriy Briskin did the calculations of $2600! Just looked and an SGS4 can be had here for £37 a month for pretty much unlimited calls, texts and data... only £888 overall. Considering buying the phone outright is ~£450, that's not a bad amount to be paying for that much service.
 
US Carrier pricing is painful in general, unfortunately...
T-Mobile
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+Jean-Baptiste Quéru  We appreciate the vote of support so much :) My team loves the work you do and please let us know if there is anything we can do to assist!

+Alex Yakavenka here is the link to our prepaid plans http://prepaid-phones.t-mobile.com/ They have some great options and please feel free to ask us any questions you may have!

Thank you for the support from many other commenters on this thread, please know we are always just a +TMobile mention away if you ever need us!

-Lauren
 
That is AWESOME I've never seen a carrier reply to a thread they've been mentioned in. So much win.
 
Where I live in Prescott T-Mobile essentially has no coverage, I'm stuck with Sprint for the meantime :(
 
+Jason Palaszewski +Jean-Baptiste Quéru  That was meant as a joke. Being an Android guy, you must be getting all the phones for testing and stuff.

On a serious note here is my experience. tl;dr - in good faith I can't support career locking and delayed or forgotten upgrades. I have a 16 GB Nexus 4 and I have tried pretty much all major careers and MVNOs. Your decision has to be based on cell phone network in your area. In my area cell phone network is okay to bad and worse when I enter any building which brought all careers to same level. I prefer MVNO (Straight Talk) because when service is poor why not go with the cheapest plan. I have everything unlimited for $49 including taxes. I use Google voice so I am not so worried about call log, voice mail transcription, etc.

Nexus 4 with MVNO = $350+(24*$49)=$1526
Any phone with ATT = $200+(24*$70 to $100) = $1880 to $2600.

Total price in 24 months = Price of the phone + (24 * cost of the monthly plan) - any one time rebate

I am tech savvy but am a basic user with basic needs. I am more than happy  and prefer stock Google hardware and stock Android. Let me know if I am not clear.

PS- This is all possible because of price tag of Nexus phone.
 
+Sudhir Khanger super clear. You could have also gone with Solavei for the same price and a 4GB data plan rather than ST's super shady soft data caps. 
 
I really can't wait until it becomes feasible for me to switch to T-Mobile.  Unfortunately, where I live, the only viable options are the AT&T, Verizon, and their MVNOs.  I'm likely switching to Red Pocket soon, I mourn the loss of the awesome Straight Talk and Net10 SIMs on AT&T's network.

There are many great things about where I live, choice in mobile service is sadly not one of them.
 
+Jason Palaszewski I used Solavei for a month or two. Since Solavei and Straight Talk both run T-mobile and Straight Talk is $5-$6 cheaper I choose Straight Talk. People say their is a soft-cap but I am but I am yet to be hit by one. I don't watch video or tether my phone, so, data cap has not been a problem.
 
+Drew Sanders Jump has handset insurance built into it though. They have the best upgrade program of all the big 4 carriers. That's if you are going to go the early upgrade route. Personally I don't ever see myself using anything but +Nexus devices. 
 
Economics are simple. In one case you paid $100 immediately and some kind of plan is being set for you, nothing more to do. In the other case you paid $300 immediately and you still need to shop more for a plan or something. So the second case is more work, for more money.

Whatever monthly bills you get later are irrelevant as they will come later so they only need to be addressed... later. 
 
+Jean-Baptiste Quéru Or you could just buy an unlocked HTC One outright and use it on both T-Mobile and AT&T as far as I know. That will also give you LTE on both carriers if I'm not mistaken. At the very least it should support AT&T. Of course, for those of us with a less fucked up carrier market it will work fully on all carriers.

I agree the carrier alternative you mention seems almost purposefully confusing though.
 
I am still using an 8-year old Motorola RAZR. I would love to get a smartphone, but I just can't justify buying into AT&T's or Verizon's bizarre plans (the only two carriers with service in my area). I already pay AT&T for two iPhones for my sons (I'm a nice Dad), but until they get their act straightened out (AT&T, that is, not my sons), I'll stick with paying $9.95 for an additional familytalk line for voice and $14.95 for a pre-paid iPad data plan (closer to about $20/month, as 250Mb usually doesn't last me a full month). If I could get an iPhone data plan from AT&T for $30/month, I'd buy myself an unlocked phone in a minute.
 
+Kiam Kweli I see the insurance angle, but most who sign up for JUMP are going to be using it for the upgrade. I think people are excited, and are just glossing over the fact that every payment made on a device amounts to nothing if you choose to upgrade. The end result is never ending debt, zero ownership of your device, and you pay a premium for that privilege. All it does is shift the shackles from the bill to the actual device.
 
AT&T believes, this 'upgrade anytime' concept is going to stimulate their business..but they're full of shit..because the American people read that and can't understand how great of a deal it is.  I have been questioning the AT&T upgrade model for years where I have  paid 1/3 of the price of a phone upfront, upgrade in 12 months add another 12 months onto a new 24 month contract, sell my old phone to pay for the new one, profit a hundred or more dollars, and then repeat next year.  This new model is really just simple economics...
and I know this....
and I'd explain it to you...
but I flunked that class....
but it's not my fault....
it was at 8:00 in the fucking morning.  

And there is absolutely nothing you can learn out of one blood shot eye at 8:00 in the morning. 

This has been a tribute to the truth as seen by Lewis Black
 
+Drew Sanders True, I was just pointing out that T-mobile > AT&T + Verizon upgrade options. Plenty of people bought devices through the Play Store. However the vast majority of cellphone users still purchase their devices through brick and mortar stores. As +Jean-Baptiste Quéru originally started at a former employer of myself and countless others. These upgrade programs effect millions since this is how americans get their devices. I'm just glad that one carrier is not bending over their customers and is giving them actual options.

This is all about leasing your device, make no mistake about it. Personally I'm not for it but at least the option is there in a fair manner. 
 
I'm not an accountant or economist, but I can tell you that if a deal is too complicated to figure out in your head, it's not a deal.
 
I'm also disappointed to find out now that I have a Nexus and I am not on contract at AT&T, that they do not offer reduced pricing for using a non subsidized phone.
 
That's the aim the marketers want to achieve: obfuscate the real ownership cost with as many different "offers" as possible and hope that some users will miss one of the clause.
 
I bought a One from T-Mobile (for the expanded radio frequencies), paid a small down payment with $20/mo for 24 months regular payment.

I unlocked the bootloader, S-Off and flashed the GE bootloader, which I believe should now make it identical to the GE One.
 
Yup .. The only thing tmo need to do now is improve coverage ... I would switch today if I had even 1 bar in my house!
 
I have been using unlocked devices for about 6 years, since the g1 on a monthly rolling contract.
 
I have a nexus 4 on t-mobile. The plan is super cheap, the HSPA+ service is excellent, and the phone is phenomenal.  It's the best value mobile phone setup in the US.
 
If you have the cash, it's a different story. The point with all these contracts is that some people can't pay 500 usd in advance, but can pay more in a course of two years. Banks, credits, interests, work on this basis, imo.
 
I thought all employees get nexus phones for free, they do in Seattle
 
+Eir Apps - That's exactly why T-Mobile offers 0% financing on phone purchases, still without locking you into a contract beyond the financing itself.

The numbers that several people quoted above suggest a cost difference of several hundred dollars, and if you attribute this to credit on part of a device that costs several hundred dollars itself, the resulting interest rate is far higher than what you can get with a basic credit card.
 
You americans have the most complicated and expensive mobile system of the world. Here in Europe (Spain) you can go two ways a contract between 8€ or 20€ that give you unlimited calls and 2gb of data. Or you can go prepaid and have 2cent /min and 1GB for 6€. Everything is gsm and you can switch to any phone you want, so the second hand market is huge. 
 
Thanks +T-Mobile for calling my state (Nebraska) and the states around it dust-bowl states and having pitiful coverage in the area.
 
+John Edwards I always get really confused when I see the GE acronym in reference to Google Edition. I work at General Electric and the GE acronym automatically makes me think of that, I always think we don't make cell phone software :P
 
+Derek Augustine it definitely depends on the specific city. However, we do have 4G in Nebraska. -Amanda
 
Coverage is the issue for me... I work in several counties (regularly) and the only method to efficiently conduct my work is to use the most expensive network-Verizon. I dislike Verizon, but I have to have coverage...
 
+Jean-Baptiste Quéru I agree that the cost difference in the initial post is ridiculous, but doing it across different phones makes it misleading since even if the carrier was fair most of the difference would be due to the sticker price difference between the N4 and the One - the N4 has always been a surprisingly cheap phone, even the previous Galaxy Nexus was $500+ whereas the N4 was $300+. You can obviously get a no strings attached HTC One as well, it'll just cost you $650+.
 
+Danny Holyoake I wish the US had the square miles the UK had. If that were the case, the costs of wireless service would be significantly cheaper.
 
+salman ali - That's right, but part of the difficulty is that the pricing on most phones on-contract is also so confusing. The difference between the on-contract and off-contract price isn't the same for all phones, it varies over time, and with various promotions and rebates it's hard to know how much you're going to actually pay upfront and how many hoops you'll have to go through to pay the advertised price, so those contracts make it hard to compare prices.

With straight upfront prices and therefore all phones on the same price scale, I feel that I can compare much better.
 
+T-Mobile I live in canada but when I travel to the US I use a t-mo sim and the $2 or $3/day pre-paid unlimited talk, text and data (DATA!) on my unlocked GSM Galaxy Nexus.

It was so simple to set up I was in a rush and only spent 10 minutes in the store to get it going.
 
+salman ali Actually the Galaxy Nexus was only $349 when bought through Google Play, same as the Nexus 4
 
+Dmitriy Briskin Also, if you don't care about minutes (or you are willing to go the VOIP route), but you do care about LTE, don't forget about T-Mobile's $30 plan: 5 GB of 4G data (LTE rolling out now, otherwise HSPA+ 42 is plenty fast), unlimited text, 100 minutes.
 
+Ben Bayes I do know about that plan, and it's awesome (especially if you use VoIP or Skype for calls.)  I was trying to compare similarly featured plans to make a point that prepaid is better than contract.
 
+John Barber carriers didn't pass on that price like they do with the N4 though. The best deal I could find here in Canada shortly after launch for a GN was $450.

I didn't buy directly from Google because the last time I did that, I still paid over $100 in customs duties (for a cheaper phone, the N1), plus waiting. Meanwhile I'm fairly sure even in Canada the N4 was available for about $350.

If you want to use playstore prices, the GE HTC One is also $650+ in the US isn't it?

I suppose to keep the comparison apples:apples the question is how much did US carriers charge for the GN, the N4 and the HTC One at their respective launches, and compare those to the crazily complicated plans for "subsidised" phones for the respective phones, which would make Jean's point more clearly about the confusing pricing. Changing both market and product adds confusion instead of clarity.
 
Problem is i get 50mbps down and 20 up using Verizons 4G LTE. T-Mobile have 3G yet ;)
 
I am in Vegas. LTE for Tmobile rocks. LTE  across the whole valley. 
 
Reason #1 why I switched to T-Mobile pre-paid and an N4 after TWELVE YEARS with +Verizon Wireless. And I'm saving $30 a month on my bill! VZW just doesn't get it. Period.
 
no one is saying the HTC One is cheaper than the nexus 4. It is widely speculated that google is making a very small margin on the n4 if not taking a loss on it for the downstream ad revenue generated. 

What matters is that the HTC One is an objectively superior phone, especially the GE versions. If you are on a strict budget, N4 + T mo is a great option. If you want the best phone with the best service, HTC One w/ GE Rom or Stock GE on ATT is the best bet.

Source - I ditched my N4 for a HTC One and flashed a GE Rom. 
 
+Michael Pahl I've gotten 15mbps down and 5mpbs up using T-Mobile 3G.  As far as I know, Verizon's 3G isn't even capable of that in best-case scenarios.

So if you have good T-Mobile 3G/HSPA+ signal, don't write it off as being remotely unusable.  It may not be as fast as LTE, but it's far better than Verizon's 3G was.
 
Now the issue is scrounging together $349 for a 16GB N4, because 8GB of memory is laughable, and trying to stay inside T-Mobile's 2GB/Month, which won't last for more than a couple of weeks.

I have Sprint, and would gladly ditch for a prepaid plan with a Nexus, but it's not black and white.

I'm just as confused as you are about AT&T and Verizon's new "upgrade" deals, but when you have what you have, and can't go anywhere else, that's the best you're going to get. 
 
Solavei $49/Month plan comes with unlimited web and first 4gb in 4g speeds. 
 
+Jean-Baptiste Quéru well, yes, if those calculations are correct, and if the "interest" is really so high, than it's a one-step-beyond economy. I guess such deals trick you into believing that you got off with a snatch, so you are being robbed but have a good feeling about it :-)
I live in Europe and the deals here are much simpler. The rates stay the same, you get a discount on the phone, and in turn you agree to loyalty of one or two years to the company.
 
+Matthew Snyder I was on Sprint for 15 years. I used the Nexus S 4G because Sprint offered it. I then upgraded to Galaxy Nexus because Sprint offered it. They don't offer Nexus 4 in CDMA so I left Sprint for TM. Oh yeah, I got the 8GB and its just fine. I have thousands of pictures and videos but none are stored on my phone yet they magically show up in my gallery.
 
+Andrew Dodd There are plenty of AT&T SIM cards for Net10 on eBay for $0.99 with free shipping. $45/month if you set up recurring payments for unlimited minutes and text, though you're now limited to 1.5GB per month. Blame AT&T for that...
 
+T-Mobile I am saddened that you only offer 2g/voice coverage in South Dakota (would have used the abbreviation but I didn't feel like getting into a squabble about what kind of coverage you have in San Diego)

Please expand your 3g/4g to the Dakotas and save us from the Verizon/AT&T oligopoly.
 
+Jarrod Davis Depends where you are  where i am its much better then ATT (recently swamped between them myself)
 
Hey +Eric Jackman :) You can let us know where you want to see more coverage here http://www.t-mobile-takeaction.com/ Lets us know where there is a demand, and where to plan more coverage!

+Zak Taccardi Are you having issues with Google Voice? We definitely support it! No info on Wallet as of yet though :)

Thanks again everyone for your continued support!

-Lauren
 
+T-Mobile "No info on Wallet"?

The company twitter has stated that it is not supported on carrier-branded phones because of ISIS.
 
I love +T-Mobile so much after trying all the other terrible carriers. I only use them indirectly through Solavei, but if people don't want solavei I ALWAYS recommend T-Mobile. Plus it helps that I am a stockholder :)
 
+Jean-Baptiste Quéru +T-Mobile ah, the benefits of living in urban areas. Us lil folk out in the boondocks sadly don't have all of those options and have to go with carriers and phones that make us feel ashamed. Hopefully in 5 years we'll have some T-Mobile service here. Until then, I'm going to willingly let Verizon confuse me and take my more of my money. :(

(And continue to praise +T-Mobile and wish I had their service here.)
Chris C
 
Communism at its finest
 
Whenever I tell people about the cost of my Nexus 4 and my t-mobile plan, they either blink and squint as if they can't comprehend such a deal exists, or they smirk as if they believe I'm leaving out a critical detail.

If people payed more attention to this, the entire carrier market could change for the better!
 
+T-Mobile I was referring to the full Google Voice integration that Sprint offers. It lets you have the same phone number for both your mobile number and your Google Voice account. That amazing feature made leaving Sprint very difficult.
 
I love what +T-Mobile is doing with the new plans, but sadly they aren't even a viable option where I live either. Bring a solid network to Long Island, New York! The T-Mobile site will show full coverage basically everywhere on the island but if you check something like opensignal you can easily see that's not true. In fact, the service is only slightly better than Sprint's, with all other major carriers having better service. I would switch in a minute if coverage was better.
 
I'd definitely love to have +T-Mobile service. If they could expand to smaller cities outside their current metro coverage that would be awesome. 
 
+Rafal Blaszkiewicz I have the 32GB CDMA, or "evil" Galaxy Nexus, and I've almost filled it up. 8GB is not even an option. 16GB, maybe, but that's cutting it close.

And, unless you luck out and live in a 4G area, which I guess is not something that we should be talking about, then the only possible way to avoid getting throttled or charged for overages is if you have constant access to Wi-Fi. Which I do not.

Even the $30/month prepaid deal sounds good, if it had more than 100 minutes. Relying on Google Voice on a spotty network is not a solution.

The Galaxy Nexus has blown my mind in ways I didn't think it would. I was very skeptical about the lack of expandable memory, but it proved to me that if companies can make devices with sufficient storage, it gives the device longer (shelf) life, and helps the user avoid a headache deciding on what they need to cut out to make room.

The N4 seems like an amazing device, but unless Google offers another option for more memory, then I will have to pass.

I would love to switch, but there's way too many "what ifs"

And, to be fair, even Apple has a 32GB iPhone.

 
+Jean-Baptiste Quéru Isn't Free Mobile doing in France what T-Mobile is doing in the US? As in also pushing people to get on board with a phone they bought themselves? (this is a real question, not a rhetoric one as I don't know all the details on the French market anymore)
 
+Phillip Maiden - Well, the beauty of the T-Mobile approach is that I don't need to worry about getting a phone right on the day I get a new service line. Today I'd probably stay with my trusty Nexus S for a little bit, it might still be good for another year, but if I had to get a brand new phone today I'd go for a Nexus 4 without any doubt.
 
+Phillip Maiden you can't really beat to affordability of the nexus 4/T-Mobile. I spent half an hour talking about this with someone at the bar yesterday who was completely unfamiliar with the nexus program.

The nexus 4 provides the most bang for your buck, period. It's a top of the line phone. You could also try selling it on eBay and get the new nexus 4 when it comes out later this year and you'll recover most of your losses.

T-Mobile has great service too, they just don't have coverage everywhere as well as AT&T or Verizon (yet). But if you have T-Mobile coverage in your area, you're not going to be able to find a better deal
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