Verizon Wireless recently defended its decision to raise smartphone early termination fees, saying the increase is necessary as consumers pay less for their mobile devices.
The Federal Communications Commission (FCC) launched an official investigation into the matter after VZW increased its ETFs up to $350, citing several different reasons for the price increase.
"This pricing structure enables Verizon Wireless to offer wireless devices at a substantial discount from their full retail price," Verizon wrote in its letter to the FCC. "By reducing up-front costs to consumers, this pricing lowers the barriers to consumers to obtaining mobile broadband devices. It thus enables more consumers, including those of more limited means, access to a range of exciting, state-of-the-art broadband services and capabilities."
After years of complaining from mobile subscribers, the FCC in August launched a formal investigation into the big four wireless providers -- Verizon, AT&T, Sprint-Nextel and T-Mobile -- investigating SMS charges, hidden charges, ETFs, and other questionable business practices.
The Government Accountability Office (GAO) issued a report that indicated ETFS were one of the top four criticisms consumers have against wireless providers.
I applaud the FCC for launching an investigation, but many consumers -- including myself -- feel that an investigation is meaningless if there are no punishments rendered.
Wireless providers should be able to dump a provider if service is spotty, or the company isn't able to attract mobile phone manufacturers -- AT&T's 3G coverage, for example, has frustrated many consumers who are locked into two-year contracts. At the very least, companies should be required to clearly outline when and how consumers are able to get out of the ETFs, if there is a legitimate reason available.
In 2010 and beyond, I hope the FCC actually punishes the wireless industry when they work together to push around consumers. If not, an official investigation, regardless of how long it lasts, seems like a waste.
