FCC Chairman questions Verizon on early cancellation fees
The chairman of the Federal Communications Commission said Friday that Verizon Wireless's recent response to the FCC's query into contract cancellation fees "raised more questions than answered them."
Verizon said last month that it decided to increase its early termination fees, known as ETFs, in order to compensate for subsidies it provides for more expensive smartphones. The nation's largest wireless operator also said the ETFs reflected costs for marketing and store operations -- a practice consumer groups say should not trickle down to consumers.
"What strikes me is that there are very real levels of consumer confusion in the market place," said Julius Genachowski during a press conference at the Consumer Electronics Show. But he didn't disclose plans for what the agency plans to do in response to Verizon's letter.
The FCC last month asked Verizon why it decided to raise its ETFs for smartphones by $200, to $350 from $150. The agency is reviewing competition in the wireless industry that includes early termination fees and exclusive handset partnerships between carriers and device makers. In a federal report on consumer complaints about cell phone service, the biggest frustrations came from contracts with their providers and cancellation fees.
-- Cecilia Kang
January 8, 2010; 10:53 PM ET
Categories: Early Termination Fees , Verizon
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