Terminating Early-Termination Penalties
For all the grief I give the wireless-phone industry, it has at least shown the occasional willingness to drop some of its least-admired business practices.
Not all these moves--for example, the "wireless number portability" that lets you take your cell-phone number with you when you change carriers--have been strictly voluntary. But the net effect has still been more constructive change than we've seen in, say, the subscription-TV business.
The latest cellular annoyance that may go the way of the rotary-dial telephone is the early termination fee. These charges--$175 at AT&T and Verizon, $200 at Sprint and T-Mobile--usually exceed the cost of several months of service, and so a lot of disgruntled customers have suffered in silence.
Last summer, though, Verizon Wireless announced that it would lower this charge for people farther along in their contracts.
Neither AT&T, Sprint nor T-Mobile, however, offered details on how much of a break they'd give customers. If they follow Verizon's precedent, it may not add up to much. That carrier knocks $5 off the initial $175 fee for each month you're in your contract. So by the time this discount could yield a substantial break on that penalty, you'd be almost through with the contract anyway--and especially if you'd only signed a one-year deal.
It's not that I don't welcome more lenient contract-cancellation policies--anything that lowers barriers to customer choice can only improve the wireless-phone market. But you'll still be better off if you can avoid getting stuck in an unwelcome contract in the first place: Research each carrier's coverage before you pick out a phone; see what other customers in your area think; compare plans, phones and service features carefully (don't overlook pre-paid options if you won't use the phone much); and use the free-trial period every carrier offers to make sure that you've made the right call.
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