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Verizon Early-Termination Fees Under Scrutiny in D.C.

A U.S. senator from Minnesota is trying to get Congress to crack down on cell phone companies’ early-termination fees.

Sen. Amy Klobuchar introduced the Cell Phone Consumer Empowerment Act this week and sent a letter to Verizon Wireless CEO Lowell McAdam, criticizing the company for its idea to double smartphone plan cancellation fees. Klobuchar also wrote the FCC, urging a review of Verizon’s decision.

Last Thursday, Verizon Wireless announced that beginning Nov. 15, the company will increase its penalty to $350 for certain subscribers who leave contracts early.

“These fees are anti-consumer and anti-competitive and they bear little to no relationship to the cost of the handset device,” said Klobuchar, who sits on the Senate Commerce Committee.

In the letter to Verizon, Klobuchar argues that the fees are anti-competitive and anti-consumer. In the FCC letter, she urged the agency to consider the competitive and economic impact the doubling of the fee will have on wireless customers.

This isn’t the first attempt at a Cell Phone Consumer Empowerment Act. The bill encourages fairness, transparency and quality service in the wireless market. Among other pro-consumer measures, the bill would require wireless carriers to pro-rate their Early Termination Fees so that, at a minimum, a consumer exiting a two-year contract after the end of the first year would have to pay only half the termination fee.


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