FCC may cap early termination fees

Sue Marek — Wed, 21 May 2008 11:49:51 -0400

According to the Associated Press, the FCC is quietly negotiating with wireless carriers to reduce termination fees that carriers charge customers when they cancel their contracts. Many carriers still charge customers $175 for quitting their service contract early. The FCC is supposedly proposing that wireless carriers give customers up to 30 days after they sign a cell phone contract or until 10 days after they receive their first bill to cancel their service without penalty.

The plan would not put an end to all early termination fees, however but would reduce the fees based upon how long the customer sticks with the contract. In exchange for agreeing with the plan, wireless carriers would not be held accountable in state courts when they are sued by angry customers over the termination fees.

Many operators already pro-rate their early termination fees, a practice first championed by Verizon Wireless back in 2006. T-Mobile, Sprint, AT&T and Verizon Wireless have all said that they will pro-rate their fees.

For more details:
- see this AP story

Related stories:
T-Mobile USA to pro-rate ETFs, too. See this T-Mobile story.
AT&T changes ETF policy. Read this AT&T story.
Verizon makes good on ETF promise. See this Verizon article.