All Eyes On FCC’s June 12 Public Hearing On ETFs

By Dee Chisamera
14:17, June 2nd 2008
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All Eyes On FCC’s June 12 Public Hearing On ETFs

The June 12 public hearing FCC plans to hold on early termination fees (ETFs)will be a disputed one for sure, as consumer advocates prepare to respond to what they consider to be a way for carriers to escape the multimillion dollar lawsuits filed against them by unhappy customers.

Verizon, together with other wireless carriers, proposed in a FCC filing the regulation of early termination fees, which, if approved, would grant customers 30 days after they sign a cell phone contract or 10 days after they receive their first bill to cancel the agreement with the service provider.

Customers are now charged around 200$ for early cancelation of the contract, but under this proposal, they would have 30 days after they sign the contract to reconsider the deal, with no penalty involved.

Furthermore, phone companies would have to reduce fees depending on how long the customer has been in a contract (the longer the contract stays valid, the lower the terminating fees).

However, despite the fact that consumers constantly complain about the unusually large early termination fees, which sometime go as high as $200, approving the carriers' proposal would be like giving them an “get-out-of-court free card,” as Chris Murray, senior counsel for Consumers Union told the Associated Press last month.

Consumer advocates believe that by approving the proposal, FCC would take the customers’ only weapon in case of abuse, restricting their right to take the matter to court.

Cell phone companies said they apply cancelation fees in order to recover the cost of cell phones, which they subsidize under long-term contracts.

However, consumers have complained of large fees, saying that carriers use them in order to discourage customers from switching to another carrier. Phone companies have been sued multiple times for applying what consumers call “unreasonable fees.”



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