AT&T Decides to Prorate Termination Fee

Following a similar move by Verizon Wireless in January of last year, AT&T said Wednesday that it will change its policies to reduce early termination fees and change their contracts without penalty.

Like Verizon's new method, termination fees will be prorated and based on how much time is remaining in the contract. Additionally, fees for changing calling plans will be reduced.

The new prorated fees take effect in "early 2008," although the company is not providing specifics on how it will work as of yet.

The subject of termination fees has been one of contention among consumers, who see the flat-rate fees -sometimes as high as $200- as anti-choice. The fees have gotten the attention of lawmakers as well, and that may be one of the reasons why carriers are beginning to budge on the topic.

The two other major nationwide carriers -- T-Mobile and Sprint -- still have flat rate fees for canceling customers. However, with the two largest carriers now opting for prorated fees, there is added impetus for the two carriers to follow suit.