FCC to hold hearing on early termination fees

The Federal Communications Commission has scheduled a June 12 hearing to debate whether the agency should regulate early termination fees (ETFs) on cell phone contracts. According to The Washington Post, FCC Chairman Kevin Martin hopes to address growing consumer complaints over ETFs, which have become the subject of class action lawsuits in several states.

The FCC already is negotiating with several carriers on how it would assume federal oversight over EFTs, which currently are subject to state laws. The proposals include capping the fees at an undisclosed amount, requiring carriers to prorate ETFs, and prohibiting the providers from charging an ETF in the first 30 days of a customer's contract.

Though many carriers prorate their ETFs already, they are not required to do so. If the FCC assumes ownership of the fees, such policies would become compulsory for carriers. But in exchange, the new federal oversight would preempt the class action lawsuits.

Though Sen. Amy Klobuchar (D-Minn.) has proposed similar rules in her Cell Phone Consumer Empowerment Act, the Post reported that she is against FCC oversight, saying the states are the "best watchdogs" for the industry.

Carriers have long held that ETFs are a way for them to recoup costs for offering free or heavily discounted new phones to customers. The Cellular Telecommunications Industry Association, which represents carriers in Washington, supports ETFs for the same reason.

[gbreed07]

Early Termination fees are the biggest scams. The contract are written so only a lawyer understand the terms. The simple solution would the consumer has 30 days to cancel the contract; plain and simple.

[mdavis03]

How about cellphone companies just request that people who terminate their contracts early require the customer return the used cellphone to recoup those "heavy losses" that they seem to think they suffer. THEY GET THE CELLPHONES AT COST ANYWAY! It doesnt cost them anything to activate a cellphone or account, and it doesnt cost them anything to terminate an account. Just some of their time. My friend works for Alltel and its nice to hear some of the tales that he has about them screwing customers.

[dyetheskin]

lots of users have devices that would normally cost twice as much or more than the average ETF so would make no sense to hand in these devices to cover costs anyways.

[Renegade Knight]

Looking at Sprint and Verizon. Same phone. Similar (I'm assuming) ETF. Vastly differenet phone price. The fee's are not related to the subsidy anymore. They are duress for keeping us in contracts. I'm having a hard time finding a contract term that's not 2 years.

[omnichad]

What if I want to pay full price for a simple phone and not be locked into a contract? What's the ETF for then? The cell phone system's broken until I can activate a used cell phone and not be locked into a 2 year contract with an early termination fee that does *nothing* except lock me in to a provider (not even at a discount cost, like DSL companies try to do).

[kylebuttermore]

it would be awesome if they removed that fee, $200 to leave is BS!

[lavern]

don't sign the contract if you don't want the fees. Its pretty simple if you cancel early you will have to pay a fee. Pay full price for the phone and don't sign the contract or quit whining. People always want everything for free....jeez

[wwjackpot]

ETFs and 2 year contracts are why I use a prepay phone. No contract and if I don't want to keep it I just stop buying minutes.

[spectralfx]

Otherwise...perhaps the alternative is to not let anyone out of a contract they sign. You sign a contract, no one violates any part of the contract, everyone sticks with the contract till the end. I may just be talking crazy though...

ETF's are a part of the business...don't like 'em, don't sign up...

[Composer_1777]

People need to learm how to pay for things in this country. Prices in the U.S are extremely low compared to any 1st world country. with that said we should not be forced into 2 year contracts, pretty soon it will be 3 then 4 then we mine as well put more communist laws in place to get things cheaper. "It's better for the common good to let carriers run monopolies on cell phones and media, locking up everythin to only their service for years and years; just to keep the corporations happy and the lazy americans from caring." If you don't like a contract, you have no choice but to sign it anyway. The terms and conditions of contracts don't matter because there is no realistic choice or negotiation. So people who say "if you don't like the contract, don't sign it" are kidding themselves into thinking there is a realistic option.

[apilin]

good