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Lawmaker disapproves of Verizon's ETF changes
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Sen. Amy Klobuchar (D-Minn.) said she will likely introduce legislation to prohibit wireless companies from unfairly raising early termination fees (ETFs). That decision was coupled with a letter Klobuchar sent to Verizon Wireless CEO Lowell McAdam expressing her disapproval of Verizon's decision to double its early termination fee to $350 starting Nov. 15 for consumers who purchase so-called "advanced devices."
"I remain concerned that ETFs--especially at these high prices--unfairly penalize consumers, bear little to no relationship to the cost of the handset device, and are anti-consumer and anti-competitive," she wrote in the letter. Verizon will pro-rate the new ETF at $10 per month.
In her letter, Klobuchar noted that in the last Congress, she introduced the Cell Phone Consumer Empowerment Act, which she said "would encourage transparency, competition, and quality service in the wireless market." In an interview with the Washington Post, Klobuchar said she will likely introduce a bill that will require operators to pro-rate ETFs so that a subscriber who cancels a two-year contract after the first year will only pay half the ETF.
Steven Zipperstein, Verizon Wireless' general counsel, said in a statement that consumers can choose to pay the full retail price for a phone and not sign a two-year contract. The "vast majority of our customers have chosen the contract model with subsidized handsets," he said. "This model has contributed to the widespread adoption of mobile devices across all segments of consumers."
For more:
- see this Washington Post article
- see this The Hill article
- see this Minneapolis Star Tribune article
Related Articles:
Droid Eris headlines Verizon's holiday handset blitz
Rumor Mill: Verizon to double ETF to $350 on 'advanced devices'
Verizon launches first Android phone, Motorola Droid
Article updated Nov. 10 to reflect Verizon's comment.
Comments
Posted by Anonymous | November 10, 2009 - 3:22pm
It may be a moot point anyhow since the industry is shifting rapidly from a postpaid to prepaid model. Consumers and economics may end up ending the practice before legislation will.
Posted by Anonymous | November 11, 2009 - 1:21pm
What consumers fail to realize is the wireless companies that continue to provide communication between them, their children, their employer etc....are for profit companies. Consumers continue to try and abuse the warranty, insurance and their own need to have the newest latest and greatest device. They expect the wireless company to absorb this cost.
Wireless companies employ thousands of people. These employees need their employer to stay profitable in order to stay employed.
Just food for thought.
Posted by Dylan | November 13, 2009 - 11:33am
Phil, I wanted to address the Verizon subscribers who would be affected by this increase of ETF because they are considering changing to another provider due to a high Verizon plan cost. We tend to think of wireless costs as fixed, but you can tinker with your current Verizon Wireless plan to optimize its features to best suit your usage and often generate significant savings in the process. I know this firsthand because I work in the consumer advocacy division of the company Validas, where we electronically audit and subsequently reduce the average cell bill by 22 percent through our website, http://www.fixmycellbill.com (and I'll add that 22 percent equates to over $450 per year for the average user). Put simply, Validas guards against frivolous and unnecessary charges that over-inflate a cell bill.
You can find out for free if fixmycellbill.com can modify your plan to better suit your individual needs by going to the website. For more info, check out Validas in the national news media, most recently on Fox News at http://www.myfoxtampabay.com/dpp/consumer/conlaw/lower_cell_phone_bills_072409 .
Good luck to everyone reading on cutting the wireless costs, especially in light of this unforgiving economy.
Dylan
Consumer Advocacy, fixmycellbill.com
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