A week ago, I postulated that because of the Federal Communications Commission’s (FCC) dissatisfaction with Verizon’s answers regarding their recently double Early Termination Fees (ETFs), they may just decide to look into ETFs across the board. To be honest, I didn’t think it would come about this soon, but that’s just what has happened. The FCC is now requesting all four major wireless carriers explain their ETF policies, and how those policies are relayed to customers. But it doesn’t stop there. It wasn’t just Verizon’s poor answers to the FCC’s request for information that prompted the industry-wide inquiry. Google may have accelerated the government agency’s action with the release of the Nexus One.
All four major carriers have had to answer for ETFs at one time or another, and some have been the targets of class action lawsuits because of them. The latest issue with Verizon was that when they answered the FCC’s request for information, they let slip that the doubled ETFs weren’t only going toward phone subsidies, as the major carriers have long insisted, but were also being put toward other business-related expenses like sales commissions and retail store overhead. This didn’t sit well with the FCC. It doesn’t—or shouldn’t—sit well with consumers, either.
But what brought this questionable practice into greater relief recently was Google’s decision to charge a $350 Early Recovery Fee if a customer cancels their service within the first 120 days of purchase, in addition to the $200 ETF T-Mobile charges when a Nexus One user cancels their standard two-year contract early. So if someone buys a Nexus One with the two-year T-Mobile plan, then decides to cancel it a week later for whatever reason, they will have to pay $550 in fees just to get out of the contract. No other handset maker or wireless carrier charges this extra fee over and above the usual ETF.
Apparently, that was a big enough red flag for the FCC to step things up and ask all four carriers, and Google, to explain their ETFs. All five companies have until February 23 to respond.
It will be very interesting to see how Google responds. In some arenas, like Internet search, they’re used to setting the standards and requiring others to fall in line with their policies or be penalized. The FCC was probably going to take a look at ETFs across the board anyway. But by entering the wireless arena, and immediately changing the rules to their liking, Google may very well have sped up the process. They may also find themselves on the penalized end of things for a change.
Share this Post
Subscribe and Follow
Subscribe to the Going Cellular feed via RSS and follow Going Cellular on Twitter!
{ 0 comments… add one now }