FCC questions Verizon's early termination fees
Wants info on 'accidental' data charges too
US regulators are demanding that Verizon Wireless explain why it's doubling early termination fees for smartphone customers and why subscribers without a data plan are charged for inadvertently accessing its mobile web service.
The Federal Communications Commission (FCC) sent an open letter on Friday to the country's largest mobile phone company asking it to provide details on the policies.
Last month, Verizon hiked the early termination fee for "advanced devices" from $175 to $350.
Verizon had said that the extra charge was needed to help recoup costs of free or discounted smartphones.
The FCC wants to know what information about the higher early termination fee is provided to prospective customers, and whether customers are provided a grace period in which they can discontinue the service without being hit with the full $350 charge.
Verizon's policy does let customers who agree to pay full price for a smartphone to avoid paying a full early termination fee. Smartphones such as the BlackBerry or Droid that are discounted under a service contract are subject to the $350 fee for bailing out early.
The FCC also requested that Verizon provide details on its policy of charging customers $1.99 for accidentally accessing Verizon Wireless's Mobile Web without a data plan.
The Commission points to a recent report in the New York Times that suggested the company is using shady tactics to profit from customers who accidentally push a dedicated Mobile Web button on Verizon phones. The NYT article cites a person who claims to work for Verizon admitting that the company purposefully places the button in a location where customers are likely to inadvertently activate it. Any data sent over the mobile web network results in a minimum charge of $1.99.
Verizon was given until December 17 to respond to the FCC. A copy of the letter is available here (PDF) ®
Re: equipment cost vs time
As a VZW customer, I can attest that the fee is actually pro-rated based on the length left on the contract. The problem is that the pro-ration scale is way off base.
Not sure about the issues with the Storm. I would guess there's a map for that?
equipment cost vs time
If it were really about recovering equipment costs, the fees would be pro-rated for the amount of time left on the contract.. $350 might be not unreasonable on a contract that started a month ago (based on the roughly $500 these things cost unlocked and the $150-200 that consumers kick in up front), and a whittling away of about $30 a month. But $350 at the end of things is $30 of equipment and $320 of "We own you, you little worm".
It's never been done before...
Company comes up with wheeze to screw it's customers.