FCC Takes Verizon To Task Over Early Termination Fees

The FCC sent a letter to Verizon on Friday asking why some subscribers who want to break their Verizon mobile device contracts are receiving $350 fees to do so.

Verizon on Nov. 15 said it would increase the early termination fee (ETF) for "advanced devices," described as those mobile phones with services, such as high-res cameras, mobile operating systems or WiFi, that are beyond what consumers can get with a basic cell phone. The ETF would go up from $175 to $350, according to a statement from Verizon at the time.

According to a copy of the FCC's letter obtained by Channelweb.com and available as a PDF download here, the FCC wants to know why Verizon is charging users that fee and how it's providing information to consumers about early termination fees and other charges in general.

Specifically, the letter asks nine questions about ETF and mobile use, including requests for details about how customers can discontinue service and whether the increase in ETF is because wholesale prices from manufacturers on "advanced devices" have also increased.

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"In light of the Commission's ongoing interest in the issues associated with ETFs and its pending proceeding regarding disclosure of billing information to consumers, we seek a more complete understanding of these practices," wrote Ruth Milkman, chief of the FCC's wireless communications bureau, and Mark Stone, acting chief of the FCC's consumer and governmental affairs bureau.

E-mail and phone requests for comment to Verizon Wireless spokespersons were not immediately returned.

Congress has recently turned its attention to ETF and how they affect consumers. Sen. Amy Klobuchar (D-Minn.) on Thursday introduced a bill that limits the amount mobile phone carriers can charge for ETF and would require those carriers to prorate the fees.

The issue has been a long-term project for Sen. Klobuchar, who in 2007 with Sen. Jay Rockefeller (D-W.Va.), first introduced the Cell Phone Consumer Empowerment Act to attempt to rein in the use of wireless providers' ETFs.