A California judge has ruled that Sprint Nextel must pay $73 million in refunds to its former customers in a lawsuit over early termination fees. However, a Sprint spokesman says that the ruling is tentative and the company has two weeks to come up with a response to this decision.
Consumer advocates are calling this preliminary decision a victory and saying that early termination fees unfairly restrict consumers from switching service. Wireless operators, meanwhile, say that ETFs are necessary because they subsidize a portion of the cost of the device and need to recoup those expenses.
This court decision comes at a time when the FCC is considering a nationwide ETF policy for carriers. Verizon has advocated that the commission adopt rules that are similar to what the operator has in place. For example, carriers should offer opt-out or trial periods for new contracts; provide pro-rated ETFs; and offer no ETFs for contract renewals unless the consumer gets a new device as part of the deal.
Verizon recently settled a similar suit for $21 million. The carrier didn't admit to any wrongdoing but said that $21 million, which is the maximum amount it was liable for, will be doled out to plaintiffs and will cover attorney's fees.
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