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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

By washingtonpost.com Editors  |  January 8, 2010; 10:53 PM ET
Categories:  Early Termination Fees , Verizon  
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Comments

Cell phones need public service commission regulation. NOW!

Posted by: Peggy_M | January 9, 2010 6:25 AM | Report abuse

Verizon get on your horse and get it worked out with Google for the Nexus One! I have money I am ready to put in your pocket! Or, shall I give the money to AT&T's iPhone if you make me wait more than a 2-3 weeks?

Lee Wifflestin

Posted by: leewifflestin | January 9, 2010 6:41 AM | Report abuse

Verizon has consistently dissembled on the topic of early cancel fees. I was charged $175 for two phones months after the company said it would pro-rate the cancel fee. That was baloney and they had gotcha caveats that prevented this from happening in my case, on standard contracts obtained @ a Costco.
I boycott Verizon and urge others to as well. Anything else would be better than these crooks.

Posted by: nancyjeanmail | January 9, 2010 6:51 AM | Report abuse

$350 is outrageous, but at least Verizon reduces the fee as you progress through the contract, which is logical, since you are paying off the phone during that time. However, they don't reduce it proportionally, so after 23 months you still have $140+ ETF. And other providers, such as AT&T, charge you the ENTIRE fee even if you cancel only one month shy of 2 years. These companies need to be regulated. Or, better yet, Google should destroy their business model.

Posted by: qaz1231 | January 9, 2010 1:45 PM | Report abuse

Verizon has been robbing the people for 80 years. Been sued by the FEDS at least 10 times. They have had their chance and blew it. Close them down. Pull their FCC license. Even their FIOS is a pathetic joke. I cannot tell you how many people I have heard this from. Verizon thinks marketing is the key to he11 with service. I have actually watched people sit in the phone for 4 hours arguing with Verizon and transferred at least 10 times. If you want good service go to AT&T.

Posted by: askgees | January 9, 2010 7:14 PM | Report abuse

$350 is outrageous, but at least Verizon reduces the fee as you progress through the contract, which is logical, since you are paying off the phone during that time. However, they don't reduce it proportionally, so after 23 months you still have $140+ ETF. And other providers, such as AT&T, charge you the ENTIRE fee even if you cancel only one month shy of 2 years. These companies need to be regulated. Or, better yet, Google should destroy their business model.

Posted by: qaz1231 | January 9, 2010 1:45 PM | Report abuse


I guess you are just too stup1d to realize the reason the costs are as high as they are is regulation fees and other taxes. If Google was to become a telecommunications company then they would be no different than the rest as they would be required to charge the customers the same fees. Try keeping up. Google is simply creating an OS for phones that run on others networks. Does anyone educated in the past 20 years actually have an education???? AMAZING!!!!!!!!! I guess you can't fix stup1d.

Posted by: askgees | January 9, 2010 7:19 PM | Report abuse

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