FCC Not Buying Verizon's Excuses For $350 ETF

Verizon will have some explaining to do in 2010 regarding its outlandish early termination fees, but so far, the Federal Communications Commission isn't buying it.

Verizon was pummeled with criticism from users earlier this year when the company doubled customers ETFs from $175 to a whopping $350, should they decide to switch carriers or prematurely terminate their wireless contract on their "advanced devices."

The mobile telecom giant attempted to do some backpeddling last Friday, as it handed over a 77-page document to the FCC that provided a laundry list of reasons why its exorbitant ETFs were legitimate, and even necessary.

Among the cited reasons for the price hike was that it costs more to obtain "advanced device" models, which are more resource intensive and place a higher burden on network bandwidth. Because it costs more to sustain advanced devices such as smartphones, Verizon has more to lose when customers cancel their plans before their contract expires, it claimed.

The FCC, however, was having none of it. FCC Commissioner Mignon Clyburn reprimanded Verizon, finding that its lame excuses were "unsatisfying, and in some cases, troubling." Clyburn went on to say that it was unreasonable of Verizon to expect users to pay such high fees simply for breaking a contract.

In particular, Clyburn expressed strong concern for the rationale behind the high ETFs.

"No longer is the claim that ETFs are tied solely to the true cost of the wireless device; rather, they are now also used to foot the bill for 'advertising costs, commissions for sales personnel, and store costs," she wrote. "So when they are assessed excessive penalties, especially when they are near the end of the contract term, it is hard for me to believe that the public interest is being well served."

Clyburn also expressed a healthy modicum of doubt that Verizon customers weren't being charged for inadvertently using features on their phone not included in their plan.

"The company asserted in its response to the Bureau that it 'does not charge users when the browser is launched,' but recent press reports and consumer complaints strongly suggest otherwise," she wrote.

Clyburn concluded her statements by saying she "looks forward to exploring the issue in greater depth," suggesting that Verizon's ETF issue will be far from over in 2010.

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