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It looks Verizon Wireless may be bowing to pressure from the Federal Communications Commission’s inquiry into its new $350 Early Termination Fee.
The wireless carrier has reduced the number of devices that will be subject to the new fee, according to a story published by Wireless Week on Tuesday.
In November, Verizon Wireless announced it was increasing its $175 early termination fee to a whopping $350 for “advanced devices,” such as smartphones. Verizon is also prorating this fee, which decreases by $10 for every month of service over the life of the two-year contract.
In early December, the FCC sent a letter to Verizon asking the company to explain why the new fee is necessary and how it will be implemented. Verizon has provided some preliminary answers. The FCC hasn’t made any official comments on Verizon’s answers, but early indications suggest the FCC isn’t satisfied with Verizon’s initial answers.
“Verizon’s response to the FCC [on early termination fees] has raised more questions than it has answered,” FCC chairman Julius Genachowski said last week during a press briefing at the 2010 CES trade show in Las Vegas. “What strikes me is that there is a very real level of consumer confusion around these fees.”
Now Verizon has discreetly cut 10 handsets from the list of handsets that would trigger the $350 if a contract was cancelled early. In its filing with the FCC in December, Verizon listed several multimedia phones, such as the Motorola Krave and the Samsung Rogue, as devices that would also be subject to a $350 ETF. This current list only names smartphones.
Perhaps, Verizon is attempting to make its justification for such a hefty fee more palatable to regulators. The company said previously it was increasing the fee to cover increased costs of these new advanced phones. But for years, critics have said they believe the Early Termination Fees are anticompetitive tools that discourage customers from switching providers and even generate revenue for the companies that use them.
