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FCC Queries Carriers on Termination Fees

To say that the FCC is taking a more proactive stance toward wireless carriers under new chairman Julius Genachowski than under his predecessor, Kevin Martin, is like saying a cheetah could outrun a snail. Just about any level of activity would outdo Martin’s hands-off policy.

Nevertheless, consumer activists will be encouraged to find that today the FCC – in the persons of consumer bureau chief Joel Gurin and Ruth Milkman, the wireless bureau chief – sent a letter to the four major wireless carriers in the U.S., plus Google Inc. (GOOG), inquiring about their early-termination fees.

“This inquiry follows last week’s launch of the FCC’s Consumer Task Force, which was established to promote cross-agency collaboration on the Commission’s consumer agenda,” the agency said in a statement.

The questions are not designed to force carriers to justify their practices, just to find out to what degree customer are clearly informed about what they’re getting into when they sign a wireless calling plan.

“We … believe it is essential that consumers fully understand what they are signing up for – both in the short term and over the life of the contract – when they accept a service plan with an early termination fee,” Gurin and Milkman wrote.

The new inquiry follows a similar action last year, when the FCC sought answers from Verizon Wireless (VZ) when it raised early-termination fees on certain smartphone plans to $350. In response, Verizon claimed, “This ETF structure is fair and reasonable for several reasons.”

They may have their reasons, but the FCC is apparently out to make sure that they’re fair.


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