updated 09:55 am EDT, Mon May 26, 2008
ATT Quietly Pro-rates ETFs
AT&T has without fanfare begun pro-rating its early termination fees for contracts, Unwired View notes. The plan reduces the penalty for canceling service from its normal $175 by $5 increments for each month of active service. Subscribers ending service the month before their contracts expire will each pay $60 to back out; a more realistic scenario where a user withdraws halfway through a two-year agreement will cost $115.
The option is only available to AT&T customers who have signed up for service or renewed their subscription on or after the 25th, according to the report.
AT&T's move follows up on initial plans set out in mid-October and is believed in part to be a reaction both to plans by competitors as well as to pressure from the US Senate and the FCC that would mandate pro-rated fees as well as give subscribers the choice of canceling services penalty-free within their first month.
High cancelation fees have often been cited as an evidence of unfair competition by consumer advocates and have been cited as a detriment to customers looking to switch carriers for the iPhone; until recently, virtually all major US carriers had flat-rate early termination fees that made it expensive either to switch to AT&T or else to back out in the event the iPhone proved disappointing.