FCC calls Verizon's logic for increased termination fees "troubling," says inquiry will continue

Earlier this month, the Federal Communications Commission launched an inquiry into Verizon Wireless' early termination fee for "advanced devices," which was increased to $350 in November.

Verizon responded to the inquiry last Friday, with a letter that cited various ways that "advanced devices" --essentially anything that we'd call a "smartphone" today-- are more costly for the network to offer. According to the company, any time a customer cancels his contract, Verizon Wireless still collects less than it's losing.

Today, Commissioner Mignon Clyburn responded to Verizon Wireless and said the letter was "Unsatisfying, and in some cases, troubling."

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"I am concerned about what appears to be a shifting and tenuous rationale for ETFs. No longer is the claim that ETFs are tied solely to the true cost of the wireless device; rather, they are now also used foot the bill for 'advertising costs, commissions for sales personnel, and store costs.' Consumers already pay high monthly fees for voice and data designed to cover the costs of doing business. So when they are assessed excessive penalties, especially when they are near the end of their contract term, it is hard for me to believe that the public interest is being well served," Commissioner Clyburn said today.

"These issues cannot be ignored," Clyburn continued. "Wireless communications are an essential part of our lives, linking us to our places of business, our communities, and our loved ones. The bottom line is that wireless companies can truly earn their desired long-term commitments from consumers by focusing primarily on developing innovative products, maintaining affordable prices, and providing excellent customer service. I look forward to exploring this issue in greater depth with my colleagues in the New Year."

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