The FCC Takes an Official Stab at ETFs

12 06 2008

A while ago, I wrote a post (over at CapitolValely.net) about Representative Edward Markey’s (D – MA) proposal to introduce a Mobile Phone bill of rights.  One of the topics it would have addressed is the Early Termination Fee (ETF) that carriers make you pay to leave them before your contract is complete.

 

The FCC is looking at putting forward an official guideline for ETFs.  Here is the AP article about it.

 

The FCC wants ETFs to be based on phone value and to depreciate over the length of the contract.  AT&T and Verizon already do this, and Sprint has said they will (although it hasn’t happened yet).  According to Markey’s draft, the ETF would have to be cut by at least 50% once the contract is half-way over.  The FCC hasn’t given any hard numbers like that yet.

 

The FCC also wants to mandate a maximum contract length as well as extending the time during which you can cancel service without paying the fee – for most states/carriers it’s 30 days.  FCC Chairman Kevin Martin wants to extend the period until the customer has had time to receive and review the first bill, which may currently not be until after it’s too late to back out.

 

Sometimes, the FCC is overreacting to nipples and swearing and seems like a bunch of old prudes with way too much time on their hands.  Other times, it’s very clear (to me) why the Commission exists and I totally want to give Kevin Martin a big, cheesy high five.

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One response

19 06 2008
agfhome

One thing though, Alex. Martin’s proposal would pre-empt state laws which would have more strict requirements on ETFs. In essence, many states (and Chairman Markey’s bill) would be far more painful for them than the FCC order.

They’re basically giving away the bread so they can keep the oven.

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