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FCC expands ETF inquiry, fires off letters to AT&T, Sprint, T-Mobile, and Google
Verizon might be getting picked on for introducing its whopper $350 "advanced device" ETF, but the FCC has decided that it wants answers from everyone on concerns that "there is no standard framework for structuring and applying ETFs throughout the wireless industry." The commission has sent letters (via fancy certified mail, in case you're wondering) to all of the other biggies -- AT&T, Sprint, and T-Mobile -- along with Google, asking a series of questions probing how each carrier's ETFs are determined and applied. Google gets roped in for its nasty equipment recovery fee, but all of the recipients share a common dubious distinction: the frickin' FCC -- a bureaucracy filled to the brim with lawyers and... well, bureaucrats -- can't figure out terms that everyday customers are expected to understand. Of course, most customers don't have the distinction of being able to send a certified letter to their carrier probing fees and require a prompt and complete response, so we're happy to see the feds get to the bottom of this. Sure, ETFs may ultimately prove to be completely justified in their current form considering the expense that carriers put up to subsidize hot hardware, it's true -- but regardless, it's in everyone's best interest to make sure they're spelled out in ways even FCC commissioners (and Engadget editors) can appreciate.
Verizon whittles $350 ETF 'advanced device' list a bit, FCC pressure paying off?
There hasn't been any official announcement by Verizon -- nor any recent public chatter between the carrier and the FCC -- but for whatever reason, Big Read has gone ahead and smacked some ten devices off its premium "advanced device" list that it had used to determine whether a particular phone qualified for the gargantuan $350 early termination fee. On the surface, it would appear that these guys might be looking to appease the feds now that even Chairman Genachowski is getting in on the offensive, but the more plausible scenario is that they're looking to restrict it to smartphones and netbooks alone -- the ten phones removed were all featurephones, including the Motorola Krave, Samsung Rogue, and a host of LGs. For buyers of high-end dumbphones, it's great news -- but for anyone who prefers WinMo, Android, or a mythical, non-existent CDMA iPhone, the fight continues.
Verizon unveils new FiOS bundles with symmetrical 35Mbps pipes, heftier ETFs
As expected, Verizon is rolling out a new line of FiOS bundles for this perennially broadband-starved nation, and bumping up its early termination fees in the process. The traditional ETF for the installation-heavy service has been at $179, but now it's rocketing to as high as $360 to break from these fur-lined shackles. The new bundles of course don't skimp on the goodies, particularly with the 35Mbps up / 35Mbps down symmetrical service that should be a boon to HD video chats, big torrents and medium-sized torrents. For a limited time you can get into the "Prime" triple-play bundle (TV, internet, phone) for $90 a month, though that price will bump up to $110 a month after a year. Sweet enough to calm your fears about a $360 early cancellation penalty? Verizon sure seems to hope so -- no matter what sort of condescending looks the FCC shoots its way.
Google imposes $350 early termination fee for subsidized Nexus One in addition to carrier's own ETF
Here's another reason to consider going the unlocked route with the Nexus One, in addition to having the AT&T (non-3G) and international GSM option. As a number of people have noticed, Google's got its own Early Termination Fee (ETF) equivalent, here called the Equipment Recovery Fee, in the terms of sale, to the tune of $350 if you cancel within the first 120 days. Sound familiar? It's because we saw it in a leak just before the new year. Here's the kicker, though: this is in addition to any fees imposed by the carrier -- not necessarily a problem on its own, but we just glanced at T-Mobile's terms of sale, and sure enough, there's an associated ETF up to $200. If we're reading this right, Nexus One owners who decide to end their service after the 14-day trial period is over but before four months have passed will be hit with upwards of $550 in fees -- more than if you bought the phone outright from the start, especially when you factor in the upfront $180. There hasn't been enough time for someone to tempt fate, but who knows -- come January 20th when early adopters' trial period ends, there might be some interesting stories abound.
Verizon to double ETFs on FiOS TV contracts
You might think that if only Verizon's FiOS service was available in your area, then life would be nearly perfect. And although FiOS offers some of the fastest internet in the US as well as some of the highest quality HD and a fantastic selection, it isn't all rosy over there. In fact the service has been riddled with billing issues since its launch in 2005 and in order to take advantage of some of the great promotional offers, you're forced to sign a two year contract. Up until January 16th 2010, that ETF has been $179, and according to DSL Reports on the 17th, that fee is set to go up to $360. That's not it though, as Verizon is expected to raise the price of services another $10 or $20 a month. You can of course avoid this by not signing a contract and going month to month, but of course this'll only work out saving you money if you end up canceling, and really if you had fiber to your home do you really think you'd cancel? Us either. Regardless, if you were thinking of switching to FiOS or taking advantage of a new promotion, we wouldn't waste any time getting it before the terms change next week. And as always be sure to read the fine print before signing anything.
FCC chairman echoes commissioner's sentiments, says Verizon's ETF response 'raised more questions than it answered'
FCC chairman and general ass-kicker Julius Genachowski is siding with his commissioner Mignon Clyburn this week, noting that Verizon's response to the Fed over its $350 "advanced device" early termination fee didn't really satisfy everyone's curiosity. He's not ready to talk about the FCC's next move in the case -- we're guessing another lengthy open letter is in order -- but he assured media on hand that "the bureau is looking into" the situation. In the meantime, just don't get tired of that Droid too fast, alright?
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.]
FCC extends deadline on Verizon's ETF response, lets it enjoy the weekend
They're not exactly calling off the hounds, but the FCC's standing down just a wee bit in its hunt to get to the bottom of Verizon's astronomical new $350 "advanced device" early termination fee; the original deadline for the carrier's responses was yesterday, December 17, but instead, the FCC will now be checking its mailbox on Monday. Even in the most extreme outcome, it'd likely be months or years before the FCC would actually go from an inquiry to applying pressure on Verizon to lower the fee. In the meantime, though, failure to respond to the questionnaire will probably result in an entertaining series of strong verbal admonishments and -- if Genachowski's in a feisty mood -- perhaps a flurry of punishing blows to Verizon's torso and upper body.
FCC gives Verizon the third degree over $350 'advanced device' ETF
Early termination fees have always represented the flipside of subsidized pricing -- the necessary evil that keeps free phones free. Thing is, they were tough enough to swallow at $175 or $200, but Verizon's recently gone for the jugular in a hell-bent effort to keep subscribers locked in by upping the fee on vaguely-defined "advanced devices" (read: any phone a power user would ever want) all the way up to a mind-bending $350. Turns out the FCC is as confused and worked up as everyone else, though, having fired off a 4-page communique to Verizon's veep of legal and external affairs today asking how customers are notified of the new ETF, how the prorating formula is calculated (hint: they don't like that you still pay $120 after 23 months of a 24-month contract), and how an "advanced device" comes to be, among other things. Riding on the letter are a few extra questions about inadvertent mobile web charges for customers that aren't signed up for a data plan, totaling nine paragraph-long queries that the feds want answered by December 17. Your move, Verizon. [Thanks, Daniel P.] %Gallery-79591%
Don't shop drunk: Verizon's $350 ETF is now live
Just a word of caution to anyone out there with an itchy credit card finger: signing up for a contract with Verizon just became a considerably more binding affair thanks to a big boost of its contract early termination fee from $175 to $350. Rumored for a few days now, the change became official as of yesterday, which means that anyone who bought an "advanced device" prior to the 14th is in the clear. The advanced device list can be found on Verizon's site, and as you might expect, it's a little broad and ridiculous -- winners like the Versa, Exilim, and Glyde are on there, so they're obviously not just referring to smartphones. They throw you a bone by reducing the ETF by a stout $10 for every month of the contract you successfully hurdle, but that still leaves you with a $120 ETF 23 months into a 24-month deal... so yeah, just be careful out there and don't do anything rash, alright?
Verizon looking to bump early termination fee to $350 on 'advanced' devices
You know what's worse than showing your Bitter Beer Face to the world after you passed on Apple's iPhone and let AT&T enjoy the spoils? Raising your early termination fee to stratospheric heights. Just over a year ago, we honestly though this whole ETF thing was headed in the right direction, as most of the major carriers (VZW included) sought to prorate contracts in order to lessen the charge as one's contract drew closer to an end. Now, however, Big Red is evidently gearing up to pull a 180, with the slide above showing a $350 ETF for "advanced" devices (read: probably anything deemed a smartphone). The newly hiked rate will go into effect on November 15th, and while that $350 will decrease by $10 per month over the life of the agreement, this pretty much guarantees that you won't be adding a line, disconnecting and then flipping that phone on eBay.
Sprint details proposed $14 million ETF class action settlement
It's a far cry from the $1.2 billion number that was bandied about at one point, but it looks like Sprint could still be taking a fairly sizable hit over those pesky early termination fees, at least if a proposed class action settlement plays out as it seems likely too. As Sprint itself announced today, the company's reached a $14 million settlement in the case, which will be placed in a common fund to be distributed accordingly to all the parties involved, which is where you come in (assuming you're a current of former Sprint, Nextel, or Sprint Nextel customer, that is). The short of it is that you can either sign on to the class action suit or opt out of it by hitting up the site linked below, and then you'll have to wait for the final approval hearing now scheduled for October 21st, which should actually settle the settlement once and for all. Details on the exact payout amounts to customers are buried in the documents on the settlement website, but it looks like the majority of customers will be receiving between $25 and $90 depending on their contract, plus some free bonus minutes.Read - Sprint ETF Settlement websiteRead - Sprint statement[Thanks to everyone who sent this in]
Sprint now facing $1.2 billion class-action suit over early termination fees
We told you it wasn't over, and now, that once "manageable" $73 million payment could possibly balloon to upwards of $1.2 billion. As predicted, the prior suit -- which was held in a California state court -- has led to a far reaching class-action lawsuit that could "potentially cost the company as much as $1.2 billion." The suit alleges that the $150 to $200 fees violated the Federal Communications Act and laws in every state of the country, and when summed from 1999 to 2008, they total a magical $1.2 billion. Things aren't looking great for Sprint on this one either, as lawyer Scott Bursor is running the show. Who's he? Just a guy who was involved in getting Verizon to fork over $21 million for the same thing earlier this year.[Via textually]
Sprint could implement prorated ETFs by year's end
While the other big boys in the US have already enacted prorated early termination fees, Sprint has still been holding out on its promise to follow suit. In fact, we've been waiting nearly a full year for its talk to be walked, and according to a recent interview with CEO Dan Hesse, the change could be made as early as December. Unfortunately, that's hardly concrete, as he also noted that the implementation was reliant on its billing software being updated, and anyone in the corporate world could tell you that something such as this could slip back for eternity with ease. We hate to make you rethink your decision to ink that new Sprint contract on the very same day the Touch Pro is released, but maybe a little patience would pay off in the long run. Or not -- hard to say.[Via phonescoop]
Verizon comes through with month-to-month plans
As expected, Verizon has announced today that its customers (and would-be customers) are welcome to sign up for month-to-month plans with no contract -- and thus, no early-termination fee -- involved, mimicking a move by AT&T earlier in the year. Of course, anyone taking advantage of the new plans won't be able to get in on carrier subsidies, but the trade-off is that if you decide to bolt for greener pastures, you won't be slapped with one of those nasty prorated charges. Oh, and before you give customer service a ring, take note: you'll need to fulfill the terms of your existing contract before jumping, natch.
Sprint loses early termination lawsuit, ordered to pay $73M -- but it's not over yet
Man, Sprint just can't catch a break lately -- the beleaguered wireless carrier was just told that it would have to pay some $73M in refunds to customers for improperly charging early-termination fees. The ruling, from a California state court, will basically set off a flood of similar cases if it stands -- but Sprint still has two weeks to respond to the ruling before Judge Bonnie Sabraw, and you can bet Yellow Swoosh will appeal if it loses in the end. Interestingly, Verizon was facing a similar lawsuit earlier this year and chose to quickly settle -- a lesson Sprint, with far less revenue and shrinking profits, might do well to learn from.[Thanks, Roger A]
Verizon settles ETF class action suit for $21 million
It's a far cry from the $1 billion potential pay-out we heard about initially, but it looks like Verizon will still be forking over a hefty chunk of cash as a result of that class action lawsuit over early termination fees -- $21 million, to be exact. Verizon still isn't about to admit to any wrong doing, however, with its spokesman saying simply that the suit "was a distraction," and that "this was a quick way to resolve it." As Dow Jones points out, the resolution of suits like these could well put a renewed focus on FCC Chairman Kevin Martin's efforts to curtail carriers' ability to charge ETF fees, which he hopes will eventually be governed by some national rules.[Via Phone Scoop]
T-Mobile details prorated ETF policy, dodges rotten vegetables
Why those T-Mobsters couldn't just fall into line with the rest of their national US carrier brethren, we don't know, but here's the skinny: yes, T-Mobile's going to prorate its early termination fees just as it promised to do last year, but the discount schedule is a little shady. Not until the last six months of a contract do you start to see any cash come off that $200 charge, when the ETF drops to $100. At three months it drops to $50, and with less than 30 days left on the contract, you pay the lesser of $50 or your remaining bill. In other words, assuming you're on a two-year plan, you don't see any benefit from this little arrangement until it's already three-quarters of the way spent. That's a far cry from the monthly discounts calculated by some of T-Mobile's competitors -- and likely a far cry from what Kevin has in mind, for that matter -- so with any luck this little scheme will fix itself eventually.[Via Phone Scoop]
FCC details ETF regulation proposal
Following prior comments that he supported standardization of early termination fees imposed by carriers, FCC head Kevin Martin went into detail last week at a public hearing on exactly what the Fed has in mind. As he's said before, he wants ETFs to be prorated -- which many carriers are now doing anyway -- and would like customers to be able to go over their first bill before deciding whether they want to slide out of their contract penalty-free. He also raises a point that the fee for breaking a contract on an expensive phone should be higher than that on a cheap or free phone; at first glance that seems logical, though we'd imagine that some of those "free on contract" phones actually end up costing more for a carrier to subsidize than handsets in the $50-and-up set. There's no indication yet that the FCC will actually end up wresting control of the nation's ETF policies, but the way Martin's talking, it certainly seems like they want to.[Via Phone Scoop]
Report says Nextel waived early termination fees for the government
Want to get around those costly, annoying fees the telcos hit you with if you break your cellphone contract early? Get a job with the US government. According to internal emails from Nextel which were uncovered by the Associated Press, the company debated whether it could charge the folks in power early termination fees (ETFs), with then-vice president Scott Wiener arguing that "the government will never, never accept such penalty amounts." Nextel ultimately decided to forgo the charges for Uncle Sam, while continuing to bilk its average users without as much as a batted eyelash. The FCC is currently taking a look at the fee situation -- let's see if they can give end users a fairer shake than the providers.[Thanks, Travis]
