Genachowski questions Verizon ETF argument, hints at further action

LAS VEGAS--FCC Chairman Julius Genachowski said Verizon Wireless' response to the agency's inquiry into the carrier's revised early termination fee policy "raised more questions than it answered," comments that could pave the way for further action by the FCC on the topic.

FCC Chairman Julius GenachowskiIn December, the FCC sent a letter to Verizon asking the nation's largest carrier to explain its "advanced devices" ETF, which raises the pro-rated fee to $350 for devices including netbooks and some smartphones. In its response, filed in late December, Verizon argued the fees promote consumer choice and broadband deployment, and said ETFs allow it to "offer wireless devices at a substantial discount from their full retail price."

However, Verizon's response appears to have failed to mollify some FCC commissioners. Indeed, FCC Commissioner Mignon Clyburn described the carrier's response as "unsatisfactory."

During a press conference here at the Consumer Electronics Show, Genachowski did not specify what--if any--next steps the agency would take on the topic; however, he did say there is "real confusion" among consumers about wireless carriers' early termination fees. ETFs are generally imposed on consumers who sign up for one- or two-year service contracts, and are generally intended to prevent subscribers from canceling those contracts and reselling their phones--which are usually heavily subsidized by wireless carriers--for a profit.

Genachowski said the agency needs to research "what can be done to provide better and clearer information to consumers" about carriers' termination fees.

A Verizon representative was not immediately available to respond to Genachowski's comments.

In wide-ranging comments on a number of topics, Genachowski also addressed recent court action involving the agency's legal battle with Comcast, which centers on the agency's efforts to impose net neutrality guidelines on telecom companies. Although Genachowski declined to address the specifics of the case, he did reiterate his plans to codify and clarify the FCC's net neutrality guidelines. He also said the agency does indeed have the authority to impose net neutrality guidelines on telecom firms.

For more:
- see this Reuters article about Verizon
- see this Reuters article

Related Articles:
Verizon defends ETF, data usage fee policies
FCC gives Verizon an extension to explain ETF policy
Lawmakers, FCC target carriers' ETF policies

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