Communications Law Bulletin, November 2007 - Part 2
Mondaq Business Briefing › United States Law Articles in English (2007)
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Communications Law Bulletin, November 2007 - Part 2
All Four Major Wireless Carriers Will Prorate Early Termination Fees
Sprint Nextel and T-Mobile recently joined AT&T and Verizon in announcing that they would also prorate the early termination fees ("ETFs") they impose on customers who cancel service prior to expiration of their term contracts. As noted in the September and October Bulletins, the FCC and consumers have become increasingly critical of the carriers' early termination policies and these recent announcements are viewed by some in the industry as an effort to prevent increased FCC oversight of wireless carriers. Sprint Nextel and T-Mobile have yet to announce exactly how they will prorate their ETFs, although analysts expect them to follow Verizon's lead. Verizon's ETF, which starts at $175, will be reduced by $5 for each month a customer remains on a contract. Reaction to the announcements has been mixed. Representatives of the wireless industry say that the changes demonstrate that the wireless marketplace is competitive. Consumer representatives cite ETFs as only one of several potential costs that prevent customers from switching to the carrier of their choice, and therefore of limited effect. The FCC has not commented on these most recent announcements, nor has it indicated whether it will follow through on earlier statements that it would initiate an industry-wide investigation into ETF practices for all telecommunications providers. California Regulatory Activity The California Public U...See the full content of this document
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