FCC member berates Verizon for termination fees

An FCC commissioner has sent an open letter to Verizon Wireless, scolding the carrier for its new early termination fees.

Mignon Clyburn,
FCC commissioner

(Credit: FCC)

Mignon Clyburn, one of five members of the Federal Communications Commission, was responding to the defense that Verizon sent the FCC last week about early termination fees, or EFTs.

"The company's answers...are unsatisfying and, in some cases, troubling. In particular, I am concerned about what appears to be a shifting and tenuous rationale for ETFs," she said in a statement (PDF) released Wednesday by the FCC. "No longer is the claim that ETFs are tied solely to the true cost of the wireless device; rather, they are now also used to foot the bill for 'advertising costs, commissions for sales personnel, and store costs.'"

Verizon's early termination fees recently climbed from $175 to $350 for smartphones and other "advanced devices." In early December, the FCC asked Verizon to explain itself.

Among its defenses, Verizon asserted that the fees enable the company to sell phones at lower upfront prices and to reduce losses if customers break their contracts early. The carrier also noted that it prorates the fees and that the additional revenue helps keep its broadband network strong.

Clyburn asserted that consumers already pay hefty amounts to carriers. "So when they are assessed excessive penalties, especially when they are near the end of their contract term, it is hard for me to believe that the public interest is being well served," she said.

"I am also alarmed by the fact that many consumers have been charged phantom fees for inadvertently pressing a key on their phones thereby launching Verizon Wireless's mobile Internet service. The company asserted in its response...that it 'does not charge users when the browser is launched,' but recent press reports and consumer complaints strongly suggest otherwise."

A Verizon representative told Bloomberg that the company will "take a good hard look at her concerns and address them in an appropriate fashion."

[nicmart]

I'm a Verizon customer. I don't like the termination fees one bit. But it is between Verizon and myself, and none of the government's business. Butt out.

[Lerianis4]

No, it is not just 'between you and Verizon' because our government has (rightly) realized that we need some things called CONSUMER PROTECTION LAWS and that sometimes... consumers aren't very smart. In fact, I would say that most of the people who are saying 'Butt out' have IQ's lower than 90 and don't realize how much they are being TAKEN ADVANTAGE OF by Verizon and other companies with these 'termination fees'.

Now, if they would PRO-RATE the termination fees.... THEN it would be okay for Verizon to have them, but they aren't doing that and are protesting doing that.

[BrandonTV]

Actually, it's the governments job to make sure we aren't getting horribly screwed; which is what Verizon likes to do. Republican.

[SiliconValleyJoe]

THis is the sort of mindless attitude that will set us backwards.

If you feel that way then you should not pay road tax or school tax or any tax right? Your personal and property safeties are your own business so government should butt out, right? You do not need 911 for police or fire nor air bags nor anti-lock brakes nor good highway signs nor anything you cannot do yourself, right?

It is extremely childish at best and completely ignorant and illogical at worst.

[mrwhse]

Actually it is YOUR job (not the government's) to make sure you aren't being taken advantage of. If you don't like the fees, then don't buy a phone from Verizon. It's not like low ETF s are a constitutional right.

[Random_Walk]

I actually agree to an extent - if you're idiot enough to sign on to such a contract, go for it.

[PineappleUnderTheSea]

Well, if it wasn't for the government, you'd likely still be stuck with Ma Bell as your only choice for cell phone service, paying 50 cents a minute for long distance calls and $1.00 on "local toll" calls, same as the old bullcrap they used to pull on landlines, and the next closest competitor would be trying to switch you over to their service without even telling you (happened to me several times on my land line before the government got involved), and even if you did switch, you'd be paying one cent less and you'd feel good about yourself that you got a heck of a deal.

I'm siding on the government's side on this one, thank you very much, I've been screwed over too many times by the tellcoms to believe in a fantasy that they can adequately self-regulate themselves.

[Nicholas Buenk]

It's not this simple, Verizon has best networks, and has some phones other carriers don't, which could really be illegal, product tie ins. Not so easy for the consumer to vote with their wallets on this issue, with all the other factors involved.

But Verizon is doing nothing wrong here, they are adjusting the termination fee merely to avoid taking a loss on todays $500 to $600 smart phones.

[stone21man]

The truth is that the ETF fees do pro rate every month. Read the terms and conditions that you agree to when you buy a cell phone. I would like to tell my bank that has my car loan that their fees suck but that is business. Plus the ETF only applies if YOU decide to break your contract that YOU agreed to.

[k2dave]

Verizon Wireless uses public airwaves (frequencies), the use of those frequencies are under the authority of the FCC.

[dennis_the_bug]

@mrwhse
Lets say all big 4 cellphone companies (ATT, Verizon, sprint, T-mobile) enforce $350 as ETF then where would you go for wireless connect. Are you gonna build one at your home? This is ridiculous that people think like that. I understand that government should not interfere too much but sometimes it is necessary. None of the wireless companies are putting money in the wireless technology. Look at Japan and China, they have far better network then ours and the wireless is cheaper too.

[solitare_pax]

I suppose there's a map for that - and 3G service.

Ho-ho-ho...

[disco-legend-zeke]

And who paid for that? Advertiser supported Television content. I have not run the numbers lately, but a couple decades ago, each person in the United States paid $2500 a year, built into the price of their Congressman, and other consumer items.

More fundamental to the equation of cancellation fees is the underlying nature of the contract, which is a purchase finance of the portable device. I believe that basing cancellation on payoff of the hardware involved, and a lower price.

Once hardware and service are clearly defined, the consumer can fit the provider's coverage map and data plan to the device (hint: 4G as WIMAX) and then pay for or finance the NetTop or dongle of their choice.

[supoman]

The company has a right to recoup some of the cost of a $500 smartphone. Why would anyone think this is absurd?

[sailinganfd]

This does not negate what you are saying, but I doubt that version pays retail.

[Random_Walk]

They have the right to charge whatever they think is fair, so long as the terms are spelled out clearly up-front. So far, the only note of the termination fee change is a fleeting tiny-font blurb that lasts far less than a second on most of Verizon's television commercials.

I'm very willing to wager that the ETF isn't given any sort of prominence or notice at the stores...

[TEHKI]

because it is absurd

[CyR00k]

The issue is the fact that the phones aren't worth $500 dollars to begin with. Additionally Americans are being charged 5 times the price for rate plans and getting, according to the CTIA, one-fifth the service as Europeans on networks owned and operated by the same companies. And, just like the fiasco with LCD monitors a few years ago it is likely the case that the handset manufacturers or telecoms (or both) are engaging in price fixing. All of the above are not only matters for the FCC but also the FTC.

[BACO6300]

I agree supoman, don't break your contract and you don't have to pay. Try breaking a contract on your morgage and see how expensive it can be when you loose your house. Ha Ha Ha,

[kalkap]

Recoup the cost of the phone yes...therefore prorate the difference of the phone cost to what the customer pays over time. We all pay crazy amounts every month to cover all the other b.s. they claim.

Now, the even bigger issue why the crazy high ETF's shouldn't be allowed is because its clearly in place to prevent customers from defecting when the phone company doesn't hold up their end of the bargain. It's not as easy as just don't sign with the company because the coverage and reliability of the networks are not there for any network other than Verizon...SO, how is this fair to the customer as there is NO other reliable choice?

[faceless128]

I don't find the ETF absurd at all, they probably pay around $350 in bulk for the devices, considering they normally retail for around $500-600 and that's a profitable markup. what is absurd is the ETF can still be so high after a 2 year contract is almost up...

[Dalkorian]

ETF's are nothing more than an incentive for the phone company to try to rape you harder. I guess there are some people who like getting raped though ...

[ballmerisanape]

Interesting.... Sounds like they are a little paranoid about losing customers. Almost as is if they advertised themselves as being better than the competition when they clearly aren't. Good thing about capitalism is companies like this will eventually lose. It might take a little while... but consumers will always navigate to the company that is the lesser of two evils.

[kalkap]

The problem is Verizon's network is head and shoulders above all the other networks right now. The other problem is that most consumers have a short term memory so by the time a viable alternative comes along the scenario will be completely different.

[Nicholas Buenk]

This is dumb. Why don't people realise that you lose money giving away $600 phones for $200 while people can quit early for only $175.

[Random_Walk]

...just one small problem: I'm very sure that Verizon, et al recoup their costs before the first year is even up.

...or did you think that the carriers paid full retail prices for handsets?

[BPMelvin]

Fine so charge smartphone people the fee not everyone. I put up with a phone with a display that didn't work for several months because to get a new one would be an early termination fee AND pay for a new phone.

Verizon is the only service that works where I live. So I really didn't have several options.

FWIW to those who are evoking the Republican party line. Last I heard interstate commerce regulation was an original purpose of the constitution. So "sticking their noses" in commerce is actually WHAT the government is SUPPOSED to do.

[Nicholas Buenk]

@Random_Walk They sell the hardware devices just like any other retailer just with a different payment plan, you expect them to only pay for their own costs? Have no margin on what they sell?

[Random_Walk]

"They sell the hardware devices just like any other retailer just with a different payment plan, you expect them to only pay for their own costs?"

Oh, I'm very sure they pull in a tidy profit before the first year as well. ;)

[Endbringer]

@BPMelvin

Just because the federal government has the power to regulate interstate commerce does not mean it has to or should in most cases. The purpose of that clause is to not let one state restrict or obstruct trade with another state. The corrupt SCOTUS of the 30s bastardized that clause to let the federal government be involved in anything, regardless if it is interstate or intrastate commerce.

[Knightro2]

@RandomWalk
As an ex employee of a wireless company I can say that for an average phone and an average voice plan...it takes them about 13 months to break even before making a profit on that particular person. This includes the subsidized cost of the phone, advertising, and start up costs. With a more expensive smart phone...granted the plan costs are a little higher but so is the subsidized loss so I would figure it would take them about the same time to break even.

[stone21man]

I have Verizon Wireless service and I as long as I don't cancel my contract then the ETF does not mean crap to me.

[Random_Walk]

...until they change the contract to something unfavorable to you, that is, and neglect to inform you in a manner that gets your attention in time to do something about it.

Or, it affects you when you discover a problem, and that customer service doesn't hold up to your expectations (or worse), in which case you either shut up and take it like a good little consumer, or you pay a big, fat ETF.

Or, you discover there's a hellishly better phone (of any brand) on another carrier (or yours fails to live up to expectations), but you're stuck with using yours for the next couple of years, period. Otherwise, you either pay a big ETF, or get your contract 'extended' by a couple more years if you try to upgrade to it in your current plan.

[Beagal22]

Verizon like many carriers ties the purchase of a phone to each plan. People with unlocked phones pay the same for their service regardless of the purchase of a phone (or another way to say it is that you are forced to purchase a "free" phone whether you need it or not). So each month you pay for a portion of the cost of the phone you are forced to purchase. So the first problem is that Verizon and other carriers tie the plans to the phone. If I had a choice and elected to purchase a phone as part of my plan, then the plan should clearly state what portion of my bill is for phone purchase. I would then fully expect for Verizon to recoup the balance of the cost of the phone that they expected to recoup over the plan. However, that is not what Verizon does. They charge a fixed fee regardless of the actual amount that they should be able to fairly recover for the "unamortized" cost of the phone. It is wrong to force people to buy phones and this wrong is compounded when the termination fee is not reasonably related to the unamortized cost of the phone. The government absolutely has the right to be concerned about the tying arrangement between phones and plans, and the restraint in trade that the termination fee imposes - particularly near the end of a plan term when the unamortized cost of the equipment is less than the termination fee imposed.

[Nicholas Buenk]

Good point.
But I figure they want to maintain the marketing illusion than the phone really cost $200. They want to hide it from people that the service plan actually pays for the hardware.

[ka7frz]

I just wonder how Verizon can change the terms of a contract without my approval. I understand that if I make any changes to my plan the 2 year term starts all over again. But if I make no changes, are they not in breach of contract? Where's a good lawyer when you need one?

[Random_Walk]

Legally, they cannot change a contract without your approval.

OTOH, they can change the terms, and you only have a limited period of time (90 days max?) to do something about it. Problem is, they don't really go out of their way to inform you of any changes, and you usually find out about them long after it's too late (unless you watch every scrap of your bill and the company's website like a hawk, which most folks obviously do not).

[richardk32]

or, they can include language such as "paying your next bill will constitute acknowledgement of and acceptance of these changes", buried within a dense paragraph set in 6 pt. Arial Condensed, on the back of your bill. Pay online? There will be small, non-descript link that just says "terms and conditions", not "changes in terms and conditions".

[duane534]

Before I start, I am employed by a competitor, BUT we have ETFs, too.

The BlackBerry Curve 83xx-series is sold by all major carriers. Why is it that Verizon "must" have twice the ETF as AT&T or T-Mobile when they all sell the phone at basically the same price point?

As far as their network is concerned, it is SUBSTANTIALLY less-expensive to deploy a CDMA network like Verizon's than their main GSM competitors, anyway.

Here's what it ACTUALLY is. I hear it day-in and day-out from people in my store every day. Verizon is expensive. Stupid expensive. Every month. If they didn't charge an ETF higher than what anyone would pay, they are guaranteed a huge cash flow in every month that can pay for their upcoming LTE conversion to give them a "real" 3G network in years ahead.

[poodlehead]

Don't know where you get the idea that CDMA is SUBSTATIALLY less expensive than GSM to deploy. But if you want to argue that CDMA is more efficient in its use of bandwidth then you might have a point. Now Verizon does spend SUBSTATIALLY more on its upkeep and expansion of said network so guess they are spending their money where it counts. And they do have a REAL 3G so don't know what you mean with that one. And so what if a competitor is willing to lose money on a phone is that smarter? If you don't want to pay an ETF then either don't sign a contract or buy the phone outright! Nobody is making these people sign a contract!

[Nicholas Buenk]

CDMA's 2.5mbit barely counts as real 3G, when much of the world is at 7.2mbit or even 21mbit, yes, twenity-one mbit. US networks are SLOW. Verizon is suck on a dead end technology and AT&T are too incompetent to upgrade their speed much.

[kalkap]

@nichilas buenk

Thats funny considering I just did a quick speed test on my Verizon CDMA phone and came back with 7.4 mbit so you might to try to get some better info before you try and make a point.

[Nicholas Buenk]

Must be a bug or other issue at play there, because Verizon has CDMA EDVO rev A which maxes out at 3mbit.
Verizon themselves says on their web page about the real world speeds to expect.
"typical speeds of 600 to 1.4Mbps."

[kalkap]

@ Nicholas Buenk

I think you are getting confused between Mbit and Mbyte

[Nicholas Buenk]

Uhh, no. You were probably on wifi when you did that test. :P

[monkeyfun14]

You sign a legal contract with this company stating that you will stay with them for 2 years.

This is a legal contract a ETF is a cheaper way if you think about it because considering you signed a contract stating that you agree to be a subscriber for 2 years they could turn around and take you to court and force you to either continue your service or make you pay for the rest of the months.

[duane534]

Because 800 MHZ anything is going to go farther than 1900 MHZ of the same. Putting up four towers will cost more than two.

What use of bandwidth? It's just packet data. At least, with GSM, you can do packet data and voice services simultaneously. Why would you have a PHONE that can do email, social networking, and GPS nav on a network that can't do email, social networking, and GPS nav when you're using the PHONE? That's what I was referring to.

And, nobody loses money. A $200 ETF that pro-rates down takes care of that. The question is why, all of a sudden, does ONE network need twice the ETF to cover costs on what is, for all intents and purposes, the EXACT same device?

T-Mobile customer buys a BB 8320 and breaks contract after one year in a two-year agreement...
Phone: $75
ETF: $100
TOTAL: $175

AT&T customer buys a BB 8310 and breaks contract after one year...
Phone: $75
ETF: $125
TOTAL: $200

VZW customer buys a BB 8330 and breaks contract after one year...
Phone: $130
ETF: $175
TOTAL: $305

Now, what exactly cost Verizon $130 that wasn't the case with T-Mobile?

[Nicholas Buenk]

GSM can work on 900mhz. And UMTS 3G can work on 850mhz. And will perform similar to 800mhz CDMA. Just because AT&T has crappy spectrum doesn't mean CDMA is cheaper. Infact FCC is partly to blame for not freeing the spectrum that GSM needs.

[Nicholas Buenk]

Also, a Blackberry 8300 actually costs $330 retail. That is mostly COMING OUT OF YOUR SERVICE PLAN. Verizons total price is quite reasonable considering the cost of the phone. I doubt T-Mobile and AT&T are making any profit in this scenario, just covering their costs.

[duane534]

AT&T's entire 3G network is 7.2 MB HSDPA. Check your facts.

[disco-legend-zeke]

this will work to their advantage since beam forming antenna arrays become cheaper as the photons get smaller.

ditto 60Ghz for public.

Remember that AT&T was a pioneer WI-FI hotspot provider. They understand that their Competition is GOOGLE.

[duane534]

Granted, but it doesn't change the fact that it's cheaper to have less towers to cover the same landmass. The FCC is to blame when it comes to the spectrum. What really needs to be done is get everyone one on the same frequencies so an international phone on the largest network in the country doesn't require radios for six frequencies and two protocols.

[goetz0166fried]

"?it's cheaper to have less towers" Don't you mean FEWER towers to be grammatically correct? LESS is used for Volume. Fewer is used for Numbers.

[duane534]

I thought the intent of the ETF WAS to cover costs, no more, no less.

[Nicholas Buenk]

I see nothing wrong with Verizon thinking they should get a normal level of margin on the hardware if someone decides to switch to another network.

[duane534]

Then, that's what they should have told the Commissioner, not acting like they're in between a rock and a hard place and have to charge a family of four $1400 to switch.

[azadam24]

Verizon would never do this, but it would be funny to have them respond to that letter by saying 'okay, your Christmas Miracle Wish is hereby granted - all ETF's are henceforth eliminated! All smartphones are now $600 or more! Yay! Put that in your stocking and enjoy!" Or better yet, have the FCC rep just GIVE a Verizon rep $175, and then Verizon give her back $600! What a deal!! Merry Christmas to all the clueless morons at the FCC!

[Random_Walk]

LOL! the first carrier stupid enough to try that stunt will suddenly find a boatload of customers leaving them in droves, and no new customers coming in.

[Nicholas Buenk]

@Random_Walk What if they had dramatically lower service plan rates though so that people could see they won't really be worse off?

[Random_Walk]

That's a pretty big "if", and I agree with the principle (pay for the phone up-front, then have the freedom).

OTOH, that difference would have to be very dramatic.

[Nicholas Buenk]

@Random_Walk It could not possibly be more than about $25 a month cheaper, considering what they need to pay for the hardware and make a good retail margin on the hardware.

[Nicholas Buenk]

More like, $15-$20 a month cheaper... Actually. If they are to charge $600 upfront and keep their current revenue.

[RetailGuy1]

Most smartphones are now $600 at full retail price with markup and all.. that means most smartphones only cost 450 - 500 for the carriers. Trust me... I get them at that price..

say the phone w/plan is $200
monthly service is about $90x6 months (mostly margin)
and Verizons EFT $350
and you get Total:$1090

thats $490 MORE than the phone.

You cant say "but the network it needs upgrades!" as that is a "sunk cost" and costs them the same for 2 users as 2,000
and no we are not there only source of revenue (cash flow)

[Nicholas Buenk]

Why shouldn't they get to make a decent margain on selling you hardware just like any other retail store would?

Also lets say you quit the first week. $200 for the phone, $350 for the ETF and $90 for the monthly rate. That's $640. Includes a week of service. And they pay $450 for the phone, so that's $190 to verizon after the cost of the phone, including a small part paying for their network infrastructure. It seems entirely reasonable to me.
With the original ETF, they'd only just be covering their costs or perhaps losing money in this scenario.

[thomasbrenneke]

The failure is on the consumer's end. Signing a contract with any mobile carrier means that you are agreeing to the terms and conditions set forth. This cry baby mentality that we are falling into where very few are willing to be held accountable for their decisions is part of the reason most industrialized nations are well ahead of us in just about every category, including mobile broadband.

The consumer has been enticed with a very low cost to have an expensive device. I think the main problem is that the carriers just need to be more up front about the early termination fees. If they are at fault for anything it is not always being completely clear with what they are having you sign up for -- and of course, this is where free markets have a tendency to fail.

[azadam24]

Thus I paid full price ($300) for my Motorola Evoke QA4 phone with Cricket, have unlimited EVERYTHING for $80/mo INCLUDING all taxes and fees, and guess whose network I roam on when, on those rare occasions, I am actually NOT in a Cricket market? Verizon! I'll pay full retail every single time for the latest phone for service like this. I don't travel all that much anyway so roaming isn't a huge deal, but I do understand the ludicrously easy-to-figure-out policy of umm, hmm, let's see. If I subsidize the cost of a $600 phone down to around $200 with the "hope" that your usage, along with the quality of our network and customer service, will keep you as a customer with us for a couple years (and hopefully longer), then I can recoup the initial investment and make a profit down the road. Capitalism, what a concept. And, as a consumer, if you don't like this, you can go to another carrier, Cricket, MetroPCS, Virgin Mobile, Boost, or pay full-price for the phone without a contract and with the 30-day return policy (even WITH a contract) and take your business elsewhere! Wow! As the previous poster said: free market (read: freedom of choice). I worked in wireless for over 10 years, and in the interest of customer service, nearly all major carriers will err on the side of the consumer to keep their churn rates low, but there were numerous occasions, where even I as a manager was instructed by upper management to "politely" tell the customer that we no longer wanted to conduct business with them. There are only so many thorns in your side you can take before you have to swing back, and wireless customers are the absolute dregs of humanity of the bunch. I haven't dropped a call with Cricket's network in Phoenix for over a year minimum, and I can promise you I would NOT call to WHINE about it if I did. Know what we used to tell our customers (back when I worked there, amongst other carriers)? Now bear in mind that Cricket is an UNLIMITED service... When people wanted bill credits for not paying their bill and then getting disco'ed for it and then saying "well I didn't get service for X days", (and I absolutely adored telling these deadbeats this) "Okay, 'sir/maam, have you ever been to an all-you-can-eat buffet (i.e. Luby's)?", "Yes, I have,", "Well, when you were done eating the all-you-can-eat buffet (and believe you me they looked the part), DID YOU ASK FOR A REFUND OF THE FOOD REMAINING ON THE BUFFET THAT YOU ***DID NOT*** EAT?!?!?! I will be more than happy to permanently disconnect your service at this time..." Some of those knuckle-dragging people actually UNDERSTOOD that reference and were stumped for a comeback. So to Verizon I say don't bow to the FCC, don't cave under pressure. Happy holidays to all!

[pjk0]

It's a reasonable point that some carriers charge lower ETF's for essentially the same devices.

However I just think that Verizon broke the ice on this first, since they are now the #1 network in the USA they're in a position to do things that the others can't, for marketshare reasons. If it flies for Verizon, I'd bet the rest of the carriers would follow.

However when it comes to the "pro-rating" - look at the fine print. The formula used by Verizon and most of the other carriers is not a simple linear pro-rating over the life of the contract. You still end up with a large fee even if you are right near the end of the contract. The FCC is aware of this and included these concerns in their original complaint over Verizon's new ETF.

I think this FCC commissioner is right to bring up these issues. There have been a lot of vendor practices that got out of hand during the previous adminstration's "never found a corporate practice we didn't like" regulatory vacuum.

[rdupuy11]

As much as I loved free-market ideals, the fact is, we dont' live in a society where people read the fine print, and finding that Verizon is uncompetitive in ETF fee's they leave the company in droves.

There will be virtually no backlash by consumers for these types of changes.

Furthermore, you can't have horrible, angry complaining about Verizon, on the backend, amount to anything either. All the carriers have terrible customer service, and are basically bullies.

I've listened to the complaints about cell phone providers.... the only thing I can conclude, is they are all equally bad, and never to sign a contract with any of them.

These FTC commissioners might as well do something. If Verizon doesn't like it, they need to sell used cars, because the public airwaves are under regulatory oversight....they must use those airwaves for the public good.

How soon do you forget.. ETF are suppose to cover part of the true cost of the phone only. Not anything else.. Remember that's why your paying $25 extra a month on your phone bill to cover the cost of the discounted phone they are giving you ( and most of the time only on there network)...

Here is my question.... If we paid the full price4 for the phone how much should your monthly bill be?
Remember that right now you are paying about one to three hundred dollars on a phone that full retail is 3 to 6 hundred dollars....

[dennis_the_bug]

"If we paid the full price4 for the phone how much should your monthly bill be?"
It remains the same. Asked ATT if they offer cheaper plan if I buy my own phone. anser is "No" If I have my own phone then I have to pay same for monthly plans or go for GO plans. In Asia/Europe, the new plans are based on per second usage instead of a minute and they also get better phones than us. We are getting ripped off by big 4. I think FCC should allow more competition by opening up the market and allowing companies from other countries.

[Nicholas Buenk]

@dennis_the_bug And that's the part that's the scam, that they don't separate phone cost from service cost in the monthly fee and expect you to pay the full fee whether you already have the hardware or not.
But the early termination fee is entirely fair.

[jleedw]

Verizon is the worse for phantom charges. I was charged for downloads to a phone that was cancelled, put in a drawer with the battery removed. That isn't a mistake that is outright fraud and theft. Why are they still in business?

[Inglonias]

Because they charge you for doing nothing?
That answers your question

They are sneaky, SNEAKY people. Don't trust them. [sarcasm] Also, they make lots of money, and are therefore bad guys.[/sarcasm]

[6arebetterthen1]

The FCC Commissioner is another example of Obamanation and his Thug politics.

LEAVE THE PRIVATE SECTOR ALONE!!!

[rdupuy11]

The problem is, the private sector is not working.

I was a huge fan of Ayn Rand and laisse faire politics. In fact, it doesn't have to be past tense, I still like the ideals.

But the vision Ayn Rand had, was that the private sector would work. It's just not working anymore. Verizon managers aren't sitting around in meetings, wondering what the public backlash might be for raising ETF fee's.

There just isn't any backlash. Supply and Demand doesn't really work in the Cell business.

You can increase demand with a hot phone -- no doubt the iPhone helped AT & T. But competing on service? Competing on accurate billing? Competing on clear contract terms? Competing on ETF fees?

We just don't have informed consumers.

The customer is always right? Noone believes that anymore... the customer is worthless and weak, and to be despised... I am so glad that an earlier commenter who worked for Cricket made his viewpoint clear.... he despised his own customers.

If the private sector worked, it could be left alone. It doesn't work anymore.