January 28 2010|07.58 PM UTC

Tony Adam

FCC questions early termination fees by wireless carriers and Google

Category: News, WirelessTags: , , ,


On Tuesday, the FCC (Federal Communications Commission) sent inquiries to AT&T, Verizon Wireless, Sprint and T-Mobile, the four main wireless carriers, along with Google regarding Early Termination Fees (ETFs) and questioning their necessity.

The FCC remarks that there is no standard framework throughout the wireless industry for applying ETFs to customers. Because of this, the FCC has sent a set of standard questions asking about their “approach” and “implementation” to ETFs by the wireless carriers.

“In the interest of clarifying these important issues, we are now writing simultaneously to multiple companies to ask a standard set of questions on approaches to ETFs and their implementation. This is an essential step to ensuring that consumers have the information that helps them make informed choices in a competitive marketplace.”

View Original FCC Release

The FCC has brought Google into the inquiry because they are charging customers an “equipment recovery fee” for cancelling their Nexus One. As we pointed out in our blog post, this could cost the consumer up to $550 due to this fee and T-Mobile ETFs.

BillShrink says ‘bravo’ to the FCC. At a time when 80% of cell phone owners overpay on their wireless bills, it is obvious that some clarity is needed.

Back in August, BillShrink submitted to the FCC a list of our recommendations (PDF) about the need for more transparency and simplicity in cell phone bills and fees. People are overpaying for services, are locked into contracts, and simply do not understand their phone bills. It’s time for reform in the industry.

Specifically, we stated that carriers should provide detail of current, prorated termination costs with each billing cycle so people understand what fees will be incurred should they cancel their contract. Prorating should also be consistent across all carriers by taking contract length time and dividing it by the fee.

The FCC has requested that the carriers and Google respond to the questions by Feb. 23, but there is an odd twist to this. The FCC noted that their ETF answers may be confidential. What?! What happened to transparency and disclosure?

Tell us what you think of the FCC’s latest move to question wireless carriers on early termination fees?

And, if you want to find out how much you could be saving on your Cell Phone Plans, we attempt to break the barriers and simplify the details for you!

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