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Dec. 7, 2009

The Federal Communications Commission wants to know the rationale behind Verizon's increase in early termination fees for an advanced device, placing the wireless carrier in the hot seat.

Late Friday, FCC Wireless Telecommunications Bureau Chief Ruth Milkman sent a letter, posted on the FCC’s website to Verizon Wireless General Counsel Steve Zipperstein asking him to answer, by Dec. 17, a list of at least nine questions related to the ETFs and Verizon’s Mobile Internet service.

Specifically, the letter refers to various press reports that indicate Verizon Wireless actually doubled its ETFs for certain advanced devices on Nov. 15. The move comes as U.S. senators seek to set limits on ETFs through legislation.

The FCC letter also refers to another press report that raised additional questions about whether consumers are being charged for minimal, inadvertent use of Verizon’s mobile Web service.

Among the list of questions, the FCC is asking Verizon to explain and justify the cost differentials that Verizon pays for advanced devices over what it charges its customers, how the levels of ETFs, together with terms and conditions, relate to cost differentials, what kind of information the wireless carrier provides to prospective customers and when, as well as how customers can learn about the formula for prorating the ETF.

The FCC also wants to know the details of any trial period in which customers may discontinue service without being subject to the ETF.

In relation to mobile Web charges, the letter refers to a New York Times article suggesting customers may be charged $1.99 for inadvertently accessing Verizon’s Web service. The FCC wants to know if there’s a minimum data amount or level of access that actually triggers these charges and if so, the amount or level of access.

“Which mobile phones sold by Verizon have individual keys pre-programmed to provide for one-press access to various Mobile Web services? Is it correct that customers are charged for minimal, accidental usage by customers using these phones?” the FCC asks.

“In light of the Commission’s ongoing interest in the issues associated with ETFs and its pending proceeding regarding disclosure of billing information to consumers not just from Verizon but other wireless service providers as well, we seek a more complete understanding of these practices,” the FCC letter states.

Overall, the FCC has sent similar letters asking for additional details from other mobile service companies in the past, such as Google with its Google Voice service, as well as AT&T and Apple.

For its part, Verizon Wireless spokesman Jeffery Nelson said Friday the company fights “day-in, day-out to meet and exceed customers’ expectations. We do that by constantly improving how we do business.” He also noted that "nobody is required to pay an ETF. They can still buy a mobile phone at full price with no ETF, if that is what they wish to do."

As for the mobile Internet charges, “we’ve heard from very few customers who accidentally accessed their Web browsers, and we immediately credited them $1.99 per month for the problem. A few months ago we modified our service plans so when somebody accidentally turns on a data service they don’t want, and they quickly turn that service off, there’s no charge," added Nelson.

"Even if this happens a few times a month, there still shouldn’t be a charge on the bills,” said Nelson.

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Source: The Federal Communications Commission.