FCC T’d Off Re: ETFs
The battle over the Early Termination Fee (ETF) rages on. As consumers, we’ve long been frustrated by the high cost of breaking free from your cell phone contract, which, depending on your cell phone plan provider, could cost you upwards of $250 or more. We scored a small victory when Verizon began prorating ETFs, effectively giving you a discount on your ETF the longer you got into your contract. But then we the cell phone users suffered another setback when Verizon rolled out its jacked up ETFs to compensate for the high cost of subsidizing super fancy smartphones (like the Droid). While it’s easy to write off Verizon’s behavior as par for the course for moneygrubbing evil corporations, we now even see Google (motto: “Don’t be evil”) working in a $350 “equipment recovery fee” into their contracts for Google Nexus One customers who change their mind about the latest HTC Android superphone. With T-Mobile sliding in its usual $200 ETF, you’re looking at a $550 penalty for ditching your 2-year service agreement.
On the one hand, the cell phone companies do have a right to enforce their contracts. A deal’s a deal, bud, and you signed the dotted line. And it’s mighty rude to promise someone you’ll be with them forever (or at least 24 months) just to get the free smartphone and then sneak off to be with some other cellular provider.
The FCC isn’t convinced though, and they are asking questions. They’ve been noticing the recent spate of civil lawsuits against cell phone companies for their supposedly unfair ETFs and they want some answers. Namely, they want to know what exactly is the cell phone companies’ rationale for charging ETFs. Plus, they want the industry to come to an agreement on what ETFs are fair and how much they should be. Some kind of framework for disclosing ETFs is also likely in order.
As part of the FCC probe, the agency has requested ETF data and explanations from AT&T, Verizon, Google, Sprint-Nextel and T-Mobile. How this pans out remains to be seen. On the one hand, we may see less offers for free smartphones with new contracts. But on the other, we might also be more free to flit from cell phone provider to cell phone provider without worrying about losing a half a grand in ETFs.
Which would you prefer? A world where smartphones and cell phones were free with a contract? Or would you rather pay more upfront and not be locked in by early termination fees? Tell us your opinion in the comments.
Related posts:
- Cell Phone Contracts: Considerations Before You Sign One
- Three Money-Saving Ways to Upgrade your Cell Phone (with or without Contract Extensions)
- How to Cancel Your Nextel Contract without Paying an Early Termination Fee
- Consumer Reports Ratings for Cell Phone Plans Providers
- Google Voice Tests Number Porting, for a Price
- What Is a Hybrid Cell Phone Plan?
- How to Run a Cell Phone Business without Ripping Off Your Customers
- Free Cell Phone Offers, Are They Really Free?
- FCC Interrogates Verizon About Increased Early Termination Fees
- An Explanation of 3G Roaming
Tags: early termination fees, FCC