Plan to Trim Cell Phone Termination Fees Not Necessarily Good News

CNET News, Associated Press

Jim Manico

May 21, 2008

1 Min Read
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The FCC is considering legislation that would cap the amount cell phone operators charge customers for early termination of their contracts, but comes at the expense of those who are already involved in litigation with those companies.Of note, the legislation would enable the FCC to regulate, not eliminate, what wireless carriers charge, which can be as much as $200 per customer. (Carriers maintain that those fees are a way to recoup the costs for offering free or heavily discounted new phones.) Fees would be prorated based on how long a customer has stayed with the contract. The FCC's proposal would also absolve customers from paying a termination fee in the first 30 days of their contract or for up to 10 days after they receive their first bill.

Carriers are being offered some concessions, too. The proposal lets carriers off the hook in a number of early-termination fee-related class action lawsuits that customers have filed in several states. That's where consumer advocates take issue, equating the legislation to a "get-out-of-court-free card" for the nation's largest cell phone carriers that would save them hundreds of millions of dollars in unreturned early-termination fees now in litigation.

The FCC has not commented.CNET News, Associated Press

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Jim Manico

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