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Google Cuts Nexus One Termination Fees

Responding to complaints from users – and a nudge from the Federal Communications Commission – Google Inc. (GOOG) has slashed the early-termination fee on its Nexus One handset by more than half.

The “equipment recovery” fee for returning one of the new devices, based on Google’s Android mobile operating system, was originally $350. Added to the $200 charged by T-Mobile, the sole operator for the device, that brought the total charge for returning a Nexus One to $550, an eye-popping bill even by the lofty standards of U.S. wireless carriers. The penalty from Google has been cut to $150.

Last month the FCC sent a letter to the four major wireless carriers in the U.S., plus Google, 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 were 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,” consumer bureau chief Joel Gurin and Ruth Milkman, the wireless bureau chief.

Google has faced a series of razzberries from users who have bought one of the highly anticipated Googlephones, centering around spotty 3G coverage and lousy customer support as well as the stiff fees. The search giant also said today it has added a customer support line – staffed by live human beings – for Nexus One users.

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

Verizon has not lowered its fees.


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