…rambling on about cell phones an termination fees.

I’ve seen a story pop up a few times now on a proposal Verizon is making with the FCC over Early Termination Fees. The gist of it is that Verizon and other carriers want to re-word the rules so that the “fees” become “rates”. This would enable the charges to be controlled by the carriers without having any regulation by individual states. The carriers would plan to change these new rates to a determined figure which would be prorated for the remaining term of the contract. The idea also keeps the carriers from becoming involved in class actions over said fees. (at least, that’s what I’ve read)
I do not see where this move would be beneficial to the public.
A few years ago when I was selling phones and service, both Verizon and Cingular were already doing this. (If I remember correctly Verizon charged $175 and Cingular charged $250.) After reading these stories, I must assume that the reason these charges were already being prorated was due to something that Kentucky had already put into place.
A move to change fees to rates could potentially do more harm than good by eliminating a state’s regulatory power.
I hope the FCC figures that out.
…and as a side note, with regard to how early terminations were handled where I worked:
In an instance where a customer shopped an “agent” instead of a “corporate” location the customer might’ve faced contractual obligations with the agent in regards to an early termination. We were an agent.
When a customer terminated a contract within the first six months, our store was charged a “termination fee” of sorts; our commission earned for the sale was pulled. Not a good thing. The commission covered our equipment costs. We’d buy a phone at near-retail, then mark the price down to “contract-price” and cover the difference using commission. So, in an effort to recoup that cost should termination come, customers would enter into a separate agreement with us, in which they agreed to pay us a termination fee. (cheesed off several people–mainly those who were too busy playing with their new toy while terms were being explained.)
…and the point?
I dunno, I really can’t remember now.
—
http://edition.cnn.com/2008/TECH/ptech/05/21/cell.phone.fees.ap/
http://news.yahoo.com/s/ap/20080521/ap_on_bi_ge/cell_phone_fees
http://arstechnica.com/news.ars/post/20080521-wireless-industry-negotiates-to-duck-costly-class-actions.html