Skip to main content

FCC Commissioner Slams Verizon Early Termination Fees

motorola-droid
Image used with permission by copyright holder

Sure, Verizon Wireless might be making great hay out of its expansive 3G coverage maps, but at least one new feature of Verizon mobile service has left some consumers with a bad taste in their mouths: early termination fees ranging from $175 to $350 for users who want to get out of their mobile contracts before they expire—with higher fees going to smartphones. And the feeds have at least on member of the Federal Communications Commission riled up too, with Commissioner Mignon Clyburn calling Verizon’s justifications for the fees “unsatisfying and, in some cases, troubling.”

The FCC has asked Verizon Wireless why it recently increased early termination fees; the company responded that the fees subsidize the costs of high-end handsets as well as the higher customer support and advertising costs involved in bringing those phones to market. When customers get out of their contracts early, Verizon Wireless winds up eating a portion of those costs that would have been paid back over the lifetime of a customers’ contract.

Commissioner Clyburn clearly wasn’t impressed, noting that Verizon Wireless is no longer claiming early termination fees are based on the true cost of the mobile device, but are now being used to cover costs associated with advertising, sales commissions, and store costs. “Consumers already pay high monthly fees for voice and data designed to cover the costs of doing business,” Clyburn wrote in a statement (PDF). “So when they are assessed excessive penalties, especially when they are near the end of their contract term, it is hard for me to believe that the public interest is being well served.”

Verizon’s Mobile Web browser also drew Clyburn’s ire. The application carries a usage fee for tapping into Web sites; although Verizon Wireless claims users don’t get charged for merely launching the application, Clyburn notes “many consumers have been charged phantom fees for inadvertently pressing a key on their phones thereby launching Verizon Wireless’s mobile Internet service.”

Clyburn’s concerns about termination and usage fees echoes consumer sentiment: although smartphones are the fastest growing segment of the mobile phone market, it’s not secret that times are tough and many consumers are trying to make their mobile dollars stretch as far as possible. In that environment, Verizon’s steep termination fees and gotcha billing for Web access casts Verizon in a predatory light: instead of trying to develop innovating products and services that earn customers’ loyalty, Verizon seems to be focussed on wringing dollars from consumers at every opportunity…even if those opportunities tread dangerously close to regulatory lines.

Editors' Recommendations

Geoff Duncan
Former Digital Trends Contributor
Geoff Duncan writes, programs, edits, plays music, and delights in making software misbehave. He's probably the only member…
T-Mobile is leaving AT&T and Verizon in the 5G dust
The T-Mobile logo on a smartphone.

Ookla has just published its latest market report revealing where U.S. mobile carriers and smartphone manufacturers stand in terms of providing the best 5G and 4G/LTE services.

Not surprisingly, T-Mobile remained in the top spot during the fourth quarter of 2022, eclipsing its rivals when it comes to median download speeds. What may be more surprising is that T-Mobile has increased its lead, clocking in at 151.37Mbps overall and 216.56Mbps for 5G, breaking the 200Mbps barrier for median 5G speeds across all bands for the first time.

Read more
Verizon’s cheapest 5G unlimited plan just got even cheaper
Verizon banner splashed across iPhone screen.

Verizon is one of the top service providers in the world, and now it's sweetening the deal on its cheapest unlimited 5G plan. Currently, Verizon offers a handful of different service options, with the Welcome Unlimited plan being its cheapest.

An end-of-the-year deal, however, is reducing the price of the Welcome Unlimited plan even further by $5 per month per line — making it one of the cheapest unlimited 5G plans on the market.

Read more
Is 5G dangerous for airplanes? Here’s what pilots and the FAA say
Aircraft among clouds descending for a landing.

After months of wrangling with the aviation industry, AT&T and Verizon finally got the green light to go live with their new C-Band 5G rollouts earlier this year. While both carriers had to make some concessions to placate fears that the new spectrum would interfere with aircraft instruments, some pilots are now wondering if those were enough.

Throughout most of 2021, the Federal Aviation Administration (FAA) and key aviation industry stakeholders argued that the frequencies used by the new C-band spectrum sat perilously close to those occupied by critical aircraft instruments, such as radar altimeters. The Federal Communications Commission (FCC), AT&T, and Verizon disagreed — citing studies conducted by the government regulator that showed little to no risk.

Read more