AT&T: termination fees ultimately a great deal for consumers

[puertoblack2003]

Those early termination fees (ETFs) that consumers pay for switching cell phones in mid-contract are a great deal, an attorney for AT&T told the Federal Communications Commission yesterday. "ETF-backed term contracts give customers the ability to lower their monthly charges and upfront handset costs in exchange for their promise to pay monthly charges for the life of the contract or alternatively to pay the ETF in lieu of the remaining charges," Seamus C. Duffy explained to the FCC. Not only that, but "the overwhelming popularity of these rate plans has fueled the tremendous increase in wireless penetration, usage, and technical innovation documented by the [FCC's] annual reports on wireless competition."
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Ironically, the reason Duffy spoke before the Commission was because these allegedly popular plans have also fueled a veritable tsunami of state-level class action lawsuits across the country. He represents AT&T in several of them. The FCC held a full hearing to consider a wireless industry proposal that would essentially federalize the regulation of ETFs. Big Wireless would give consumers a break on these fees, which sometimes go as high as $200. In exchange, the FCC would send a note to the judges overseeing various state-level trials recommending that they shut them down, potentially saving wireless giants billions of dollars.

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