early-termination fees

Aside from the cost of the device and the expensive monthly plan, you might have to face an additional charge just for the privilege of getting a smartphone.

According to a document found by the Boy Genius Report, Verizon Wireless has raised its $175 early termination fee to a whopping $350 specifically for "advanced devices," which probably includes all smartphones. The termination fee won't stay at $350 however: the sum will decrease by $10 for every month of service.

This isn't exactly painting Verizon Wireless in a positive light here, though we suspect it's just … Read more

Try as I might, I can't get that worked up about carrier exclusivity. If a cell phone carrier and a manufacturer want to pair up and offer a handset for a certain period, I'm not going to oppose it purely on principle. Granted, such deals may not be fair to absolutely everyone, but I'd argue that there are much bigger problems with how the U.S. wireless industry operates.

Yet, a few U.S. Senators don't appear to agree. On July 7, a few weeks after a Senate committee grilled national carrier reps on device exclusivity, Sen. Herb Kohl (D-Wis.) wrote letters to both the federal Communications Commission and the Justice Department's antitrust division asking the agencies to investigate the issue and suggest possible regulatory proposals.

"The practice of large cell phone companies gaining exclusive deals to the most in-demand cell phones is a serious barrier to competition," Kohl wrote. "Consumers are unlikely to obtain cell phone service from companies if they cannot obtain desired handsets."

I'm no carrier lackey, but I find it fascinating that Congress is just now noticing that carrier exclusivity exists. The practice, which is hardly unique to the United States, has been around for a long time. So from where is the sudden interest coming?

… Read more

Class action suits against carrier early termination fees (ETFs) are nothing new, but now it appears one case may come to an end.

Though it has yet to be approved by the court, T-Mobile has proposed a settlement in an $11.5 million class action suit filed in August 2008 in the U.S. District Court for the District of New Jersey. The suit alleges that T-Mobile broke federal and state laws when charging the ETFs.

The settlement would cover T-Mobile subscribers who were charged a flat-rate ETF from July 23, 1999 to February 19, 2009, or those whose service … Read more

It's been almost a year since a judge in Alameda County, Calif., ruled that Sprint Nextel's early-termination fees are illegal, and yet Sprint and every other major U.S. wireless operator still charges customers a fee for canceling their services before a contract expires.

So what gives? Why are these pesky early-termination fees still around if they are against the law?

That's a good question and one that many readers have asked me over the past year. Because I get so many questions about these fees, I decided to put together this FAQ to help people understand … Read more

Q: I was wondering why U.S. carriers have not picked up Nokia's N-series phones. Why wouldn't a carrier like AT&T or T-Mobile want such high-end handsets to attract customers? - Zoheb

A: There are a few answers, Zoheb, but they all boil down to money. More so than in other countries the cell phone market in the United States has long centered on the service rebate. Carriers discount phones to attract customers and their contracts, while customers are trained to expect free or discounted handsets. While this dynamic is beginning to change due to the growing popularity of unlocked phones, service rebates largely rule the day here.

Though the rebates have their upside--customers can get $200 knocked off the price of a nice smartphone--they have their downsides as well. And I'm not talking about service contracts. Rather, the widespread use of service rebates has helped to "dumb down" the cell phone selection in the United States. With notable exceptions, carriers tend to keep their phones below $300 to make them as affordable as possible.

The problem with the N-series phones is that they cost well over $500 (the fancy Nokia N96 is $776 unlocked). So even with a service rebate they're going to remain pretty expensive. Sure, there will be customers like yourself who will be willing to buy one, but that's not enough incentive for a carrier to buy a several thousand of them. Instead, they're going to pick handsets that will sell in the biggest numbers.

We also have to remember that the N-series phones are complicated with a lot of different features. U.S. carriers tend to be in the driver's seat when it comes to choosing phones for their lineups. They have a lot of say in how the phone looks and what features it has. Thanks to the iPhone and the T-Mobile G1 this is also beginning to change, but they still like to exert their control. I'd wager than the N-series phones are simply too complicated for U.S. carriers. There are too many parts and features that the carriers can't control. Also, I'm sure that carriers haven't figured out how to monetize all the services on a handset like the N96. That's yet a another deterrent against picking it up.… Read more

Sprint will change course and start prorating early termination fees, the company's CEO said Tuesday. In an interview with the Associated Press, CEO Dan Hesse said the carrier could initiate the practice as early as December, after updating its billing software.

Sprint has been the lone holdout of the major carriers in trimming ETFs as customers near the end of their two-year contract. T-Mobile started prorating fees in June following the lead of Verizon Wireless and AT&T.

Though ETFs have long been the been the bane of consumers, carriers maintain that they are a way for them … Read more

Verizon Wireless is offering cell phone subscribers the chance to go month-to-month with their cell phone service without signing a pesky contract.

The second largest wireless operator in the U.S. announced Monday that it will offer month-to-month service for all its current wireless plans. Monthly subscribers will pay the same rates as those with long-term contracts, but month-to-month customers won't be required to sign contracts.

This means that month-to-month customers won't have to pay an early termination fee if they decide to quit Verizon's service and go elsewhere. In exchange for not being bound to a … Read more

Q: I'm curious as to whether Bluetooth headsets also emit radiation, which could prove harmful to one's health. What can you tell me about this? - Craig

A: Bluetooth headsets do emit radiation, but they do it at a much lower power than a cell phone. In fact, it's so low that it's almost negligible. Keep in mind that while cell phones need to connect to a tower that could be a couple of miles away, a headset has an effective range of just 30 feet. However, if the prospect of Bluetooth radiation really worries you, … Read more

Verizon Wireless agreed to pay $21 million to settle a lawsuit filed by customers who claim the company's early termination fees are excessive and unfair.

Details of the settlement aren't public. But a Verizon spokeswoman said that the settlement will put to rest claims filed by customers in California as well as customers who are part of a nationwide class action lawsuit.

Verizon denied any wrongdoing. And the spokeswoman pointed out that Verizon Wireless was the first cell phone operator in the U.S. to establish a pro-rated early termination fee that decreases over the time of the … Read more