Google, carriers respond to FCC's ETF inquiry
updated 09:20 pm EST, Tue February 23, 2010
Google and 4 networks defend cancel fees
Google as well as all four major US carriers have today responded to the FCC's inquiry into early termination fees (ETFs). The search firm is the strongest objector and argues that it doesn't belong in an investigation associated with carriers. It also believes that the Nexus One was designed to change the phone sale model in the US by taking it away from carriers and that it had planned to drop its controversial equipment recovery fee before the FCC began asking about the unusual $350 (now $150) charge for those who quit a contract early.
The high price is justified by Google subsidizing the Android phone through a commission it pays to T-Mobile for every new contract customer. If a customer leaves within 120 days but after the 14-day trial period, T-Mobile demands that commission back from Google on top of its usual cancellation fees.
T-Mobile itself defends its ETF by noting that its Even More Plus plans change the payment model for phones and let users quit at any point without a penalty.
Other responses to the FCC take similar tones. Verizon has largely ignored the FCC's objections to its original response and maintains the same point of view, which not only excuses its surprise smartphone ETF hike to $350 as necessary for phones but also as a means of supporting Verizon's other costs. Sprint is uncertain about its attitude towards ETFs and is mulling the possibility of a multi-tiered system that charges different fees for different situations, while AT&T defends itself by noting that it has offered contract-free phones for years and sold some phones with the option of prepaid service.
It's not clear at this stage how the FCC will address the responses, although the inquiries started in part by Commissioner Mignon Clyburn have staunchly argued against any justification of ETFs for costs beyond subsidized phones and have called for prorated fees that are directly proportionate to the time spent on on a contract. Verizon's prorating system takes little enough off the ETF that a customer can pay as much as $120 even 23 months into a 24-month contract.
Fresh-Faced Recruit
Joined: Feb 2009
Early termination fees are an excuse
Early termination fees are an excuse to get more profits out of the consumer, even though the customer is not happy with the service. There should be No termination fees period. If the service expectations aren't met for the consumer than they should not be forced to pay for something they don't want. If you go to the store an buy something and find out you don't want it, would you want to pay a termination fee to bring it back? I think most would say NO!