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May 22, 2008

The FCC is apparently considering making some changes to the fees consumers have to pay when they cancel a mobile phone service contract, according to a report by the Associated Press.

Wireless carriers charge consumers up to $175 for canceling their service contracts early.

However, recently there have been moves within the industry to regulate early termination fees (ETFs).

The Federal Communications Commission is considering a proposal that would give consumers up to thirty days after they signup with a service contract or until ten days after they receive their first bill to cancel the mobile service without any fee.

Additionally, the FCC wants to cap ETFs and prorating them based on how many months a customer has left on his or her contract.

The proposal also seeks to end the numerous court battles between wireless carriers and the states, by reclassifying ETFs as part of mobile phone rates and therefore regulated by the FCC, not each state.

Currently, states cannot control rates, but do have some say over service contracts terms and conditions, including cancellation fees.

Carriers have recently taken steps in reducing ETFs. Verizon Wireless already prorates customers’ fees that cancel their contracts early, and AT&T has said it also will soon start prorating fees.

Service providers have long argued that the fees are necessary to offset the cost of subsidized wireless handsets.

According to the report, Verizon Wireless submitted the plan and other leading wireless carriers don't seem to oppose it.

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Source: T-Mobile USA.