Early termination fee 'deal' brewing

[David Farber <dave () farber net>]

Begin forwarded message:

> From: Kurt Albershardt <kurt () nv net>
> Date: May 21, 2008 2:22:45 PM EDT
> To: David Farber <dave () farber net>
> Subject: Early termination fee 'deal' brewing

> <http://news.wired.com/dynamic/stories/C/CELL_PHONE_FEES>
>
> May 21, 11:28 AM EDT
>
> Cell phone users may get break on fees
>
> By JOHN DUNBAR
> Associated Press Writer
>
>
> WASHINGTON (AP) -- The government is quietly negotiating to help  
> cell phone customers avoid expensive fees when they cancel contracts  
> with wireless companies, The Associated Press has learned.
>
> Cell phone companies routinely charge customers $175 or more for  
> quitting their service early. Under a proposal to the Federal  
> Communications Commission, the wireless industry would give  
> consumers the opportunity to cancel service without any penalty for  
> up to 30 days after they sign a cell phone contract or until 10 days  
> after they receive their first bill.
>
> The proposal also would cap such fees and reduce them month by month  
> over the course of a contract based on how long customers have left,  
> according to people familiar with the offer speaking on condition of  
> anonymity because the FCC has not accepted it. The plan would not  
> abolish cancellation fees entirely and would not refund such fees to  
> anyone who paid them.
>
> In exchange for the government's approval, the agreement would let  
> cell phone companies off the hook in state courts where they are  
> being sued for billions of dollars by angry customers. If approved  
> by the FCC, the proposal also would take away the authority of  
> states to regulate the charges, known as early termination fees.
>
> Lawyers representing customers who are suing over the fees are  
> strongly opposed.
>
> "It's Christmas in May for the companies," said Pamela Gilbert, an  
> attorney with Cuneo Gilbert & LaDuca, a Washington D.C.-based law  
> firm working on one of the class action lawsuits against the  
> industry. She said if the FCC agreed to the proposal, it would save  
> cell phone companies hundreds of millions of dollars.
>
> "The people left holding the bag are the millions of people who paid  
> illegal ETFs (termination fees) and now will never get their money  
> back," she said.
>
> The nation's No. 2 wireless company, Verizon Wireless, offered the  
> proposal to the FCC for its review after high-level meetings with  
> senior FCC officials. It did so in consultation with other leading  
> wireless companies, whose executives indicated they would not oppose  
> its provisions, people familiar with the offer told the AP.
>
> The FCC declined to comment.
> ...



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