FCC Seeks More Info On ETFs
The FCC Tuesday said it is seeking information from wireless providers on the fees they impose on customers for terminating their wireless contracts early. In letters to AT&T, Google, Sprint Nextel, T-Mobile, and Verizon Wireless, the FCC said it was seeking information about whether the providers' customers are being "adequately" informed about these early termination fees (ETFs).
"We recognize that wireless carriers may have various rationales for ETFs," Consumer Bureau Chief Joel Gurin and Wireless Bureau Chief Ruth Milkman said in the letters. "At the same time, these fees are substantial (and in some cases are increasing) and have an important impact on consumers' ability to switch carriers." They added that the commission is exploring ways to improve consumer information and transparency about communications services and fees, including ETFs.
Among the dozen questions the agency is seeking answers to include whether the fees apply to all service plans, the amount of the fees for each plan, and how much of a discount the firms provide on wireless phones in exchange for signing a service contract. Verizon Wireless has come under fire for its decision in November to double the ETF on some smart phone contracts. Milkman sought information from the firm in December on the fee increase.
Chris Guttman-McCabe of CTIA, the wireless industry's trade group, said in a statemetn that wireless carriers agree on the need for transparency and disclosure so that consumers understand the terms of their contracts. However, he added that he hopes the FCC recognizes that ETFs are part of a "rate structure that allows wireless carriers to, among other things, subsidize phone purchases."
Free Press Policy Counsel Chris Riley praised the FCC for "continuing to press for more information about the widespread anticompetitive practice of restricting consumer freedom through shockingly high early termination fees." Sen. Amy Klobuchar, D-Minn., and other senators introduced legislation in December that would set limits on ETFs.
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