Verizon to FCC: hey, you said ETFs were okay!

Chris Ziegler
C. Ziegler|12.18.09

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Verizon to FCC: hey, you said ETFs were okay!
Even though the FCC just gave Verizon until Monday to respond to its inquiries regarding the company's new $350 "advanced device" early termination fee, they've shown some hustle here and delivered their 77 (yes, seventy-seven) page response today. Here are the two big takeaways consumers are going to care about:
  • The company justifies the advanced device ETF a couple ways; it starts out by referring to some 2003 statements by the FCC in which the Commission says that it doesn't support the concept of customers breaking contracts and that carriers have a right to recoup those fees. Of course, that really doesn't drive to the point here, which is that Verizon's now charging two completely different ETFs based on a rather arbitrary line in the sand drawn by Verizon; to that end, the carrier says that the additional cost it incurs to procure the devices on its advanced list is greater than the difference between the two ETFs ($175) on average. It also says that it needs that extra guaranteed revenue to keep its broadband network up to snuff, since advanced devices are more likely to strain it.
  • Regarding the weirdness at the end of the contract -- where a customer still owes $120 23 months into a two-year deal -- Verizon says that it's still losing money (read: we should be thankful they're prorating at all). As an example, it says that its average loss for a customer canceling 12 months into a contract is about double the $230 prorated ETF on an advanced device, and that statistically speaking, customers are far more likely to cancel early on than late. While we don't doubt that, we think they're trying to divert the conversation here just a bit.
It's hard to say whether these responses are going to sate the FCC on the matter, but seeing how Verizon's showing no signs that it's interesting in changing its policies, this could still turn into a battle royale. Stay tuned -- something tells us this isn't the last we'll hear on the matter.

[Thanks, Daniel P.]

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