Monday, March 1, 2010

Verizon, AT&T, Sprint, T-Mobile and Google Defend ETFs

Several weeks ago, the FCC sent out letters of inquiry to major wireless carriers and Google to ask for explanations regarding the controversial early termination fee or ETF charged on wireless contract terminations.

Well, all four major U.S network operators (AT&T, Sprint, T-Mobile and Verizon Wireless) together with Google has responded to the FCC's wireless contract inquiry. Here are the highlights of the companies' defense of the ETF:

  • customers are well-informed about ETFs before committing to wireless contracts
  • consumers are aware that they have plenty of choice, given the wide range of pre-paid providers also serving the market
  • customers have a minimum of 14 days to test products at the onset of their contracts before the ETF becomes mandatory.
  • the mobile phone industry is highly competitive, and ETFs are needed to recoup fees that go towards customer acquisition and equipment subsidies.
  • Verizon plans to clearly put ETFs on device cost labels, and emphasized that reduction of number of handsets on its "advanced devices" list, which require a $350 fee (compared to the standard fee of $175)
  • Google defended the equipment recovery fee it is charging Nexus One customers who break their T-Mobile contracts because it says T-Mobile pays it a commission for each customer T-Mobile acquires through Google. Google passes that commission on to the customer in the form of a device subsidy.
Well, it's the FCC's turn to respond to the united defense put up by Google and the major US carriers. Let's see if the commission stands firm in its policy of defending the welfare of US consumers.

That's it for this post. Tune in to this blog for more update on this wireless contract issue.

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